<PAGE>
EXHIBIT 99.A.9
[KLLM Logo]
Presentation to the Board of Directors
May 25, 2000
The information contained in this information package should be considered
confidential and should not be used
for any purposes other than the Board of Directors' consideration of this
transaction.
Morgan Keegan & Company, Inc.
Investment Banking
50 North Front Street
19th Floor
Memphis, TN 38103
(901) 524-4100
<PAGE>
Table of Contents [KLLM Logo]
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Methodology......................................... Tab A
Transaction Overview................................ Tab B
Company Overview.................................... Tab C
Financial Review.................................... Tab D
1. Historical Financial Performance
2. Projected Financial Performance
Valuation Methods................................... Tab E
1. Comparable Company Analysis
2. Mergers and Acquisition Analysis
3. Discounted Cash Flow Analysis
4. Premium Analysis
Summary Valuation................................... Tab F
Appendices.......................................... Tab G
1. Comparable Company Analysis - Detailed Schedules
2. Mergers and Acquisition Analysis - Detailed Schedules
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Morgan Keegan & Company, Inc.
<PAGE>
Methodology [KLLM Logo]
--------------------------------------------------------------------------------
In conducting our analysis, Morgan Keegan:
. Participated in discussions with various members of management and
representatives of KLLM Transport Services, Inc. ("KLLM" or the "Company")
concerning KLLM's historical and current operations, financial condition and
prospects and strategic objectives.
. Reviewed historical financial and operating data that was furnished to us by
KLLM relating to its business.
. Reviewed internal financial analyses, financial and operating forecasts,
reports and other information prepared by officers and representatives of
KLLM. Projected financial information presented in this report was provided
by management of the Company and is represented as management's opinion of
the Company's performance.
. Reviewed certain publicly available information with respect to certain other
companies in lines of business that we believe to be generally comparable to
those of the Company, including the trading markets for such other companies'
securities.
. Reviewed certain publicly available information concerning the financial
terms of certain other transactions that we deemed relevant to our inquiry.
. Analyzed the value of projected cash flows of the Company.
. Reviewed the financial terms of the draft Plan and Agreement of Merger among
Low Acquisition Corp. and KLLM Transport Services, Inc.
. Undertook such other studies, analyses and investigations, and considered
such other information, as we deemed relevant.
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Morgan Keegan & Company, Inc. Page 1
<PAGE>
Transaction Overview [KLLM Logo]
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In August 1999, the Company engaged Morgan Keegan & Company to act as its
financial advisor to consider strategic alternatives, including a potential sale
of the Company, with a view to enhance stockholder value. The Board authorized
Morgan Keegan to solicit potential bids to acquire the Company and prepare a
memorandum containing certain confidential information about the company. On
behalf of the Company, Morgan Keegan contacted 20 to 25 potential bidders,
including Prime, Inc. and its principal, Mr. Robert Low. Of the 20 to 25
parties contacted, nine entered into confidentiality agreements with the Company
and were furnished copies of the memorandum. None of the nine companies
submitted an offer to buy the Company. Mr. Low declined to execute a
confidentiality agreement at that time and did not receive a copy of the
memorandum. Morgan Keegan attempted several times thereafter to get Mr. Low to
begin negotiations regarding acquiring the Company.
In a series of open market purchases between September 1999 and December 1999,
Robert Low or his affiliates acquired beneficial ownership of 289,600 shares of
the Company's common stock, representing approximately 7.1% of the Company's
outstanding common stock. On February 10, 2000, Mr. Low purchased an additional
250,000 shares from an institutional investor in an open market transaction
facilitated by a third party broker dealer, bringing Mr. Low's total stock
ownership to 539,600 shares, representing approximately 13.2% of the Company's
outstanding shares of common stock. On February 14, 2000, Mr. Low met with Jack
Liles, Chairman of the Board, President, and Chief Executive Officer of the
Company, to discuss, in general terms, the possible acquisition of the Company
by Mr. Low. At the meeting, Mr. Liles indicated that he would not sell the
Company for less than book value, or approximately $12 per share, a 100% premium
over the then current trading price of the Company's stock. On March 16, 2000,
Mr. Low indicated in a Schedule 13D filing that he was interested in acquiring
the company for $7.60 per share, representing a 25% premium over the then
current trading price of the Company's stock.
At a board meeting on March 20, 2000, Mr. Liles indicated his interest in making
a competing bid for the Company. On March 23, 2000, the Company's board of
directors considered the price per share indicated in Mr. Low's offer and
concluded that the price was inadequate in light of Mr. Liles' intent to present
a competing offer to purchase the Company. On the same day, the Company's board
established a special committee to review future offers presented to the
Company. On April 12, 2000, Mr. Low commenced an all cash tender offer for the
Company's stock at $7.75 a share. On April 19, 2000, Mr. Liles submitted a bid
of $8.25 per share. The Special Committee established a deadline of May 5, 2000
for both Mr. Liles and Mr. Low to submit a proposed definitive merger agreement
setting forth their highest and best price they were willing to pay along with
any conditions to their offer. On May 5, 2000, both Mr. Liles and Mr. Low
submitted proposed merger agreements providing for a purchase price of $8.25 per
share. Between May 5, 2000 and May 8, 2000 the Special Committee received a
series of bids and counter-bids from Mr. Low and Mr. Liles. On May 8, 2000, the
Special Committee accepted an offer of $9.25 per share from Mr. Low after Mr.
Liles stopped his bidding at $9.00 per share. On May 15, 2000, Mr. Low sent a
letter to Morgan Keegan lowering his bid to $8.75 per share. As a result,
another round of negotiations commenced with Mr. Low and Mr. Liles. On May 18,
2000 Mr. Liles submitted an unconditional offer of $8.80 per share; however, he
rescinded this offer the following day. As a result, Mr. Low lowered his offer
to $7.75 per share. After further negotiations, Mr. Low increased his offer to
$7.80.
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Morgan Keegan & Company, Inc. Page 2
<PAGE>
Transaction Overview [KLLM Logo]
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At $7.80 per share, the transaction represents an enterprise value of
$79.0 million calculated as follows:
Value of Equity: 4,101,468 x $8.05 = $32.0 million
Net Debt as of March 31, 2000: $47.0 million
This equates to enterprise value multiples of:
.33x revenues for the last twelve months ended March 31, 2000
3.9x earnings before interest, depreciation and taxes
("EBITDA") for the last twelve months ended March 31, 2000
60.0x earnings before interest and taxes ("EBIT") for the
last twelve months ended March 31, 2000
This equates to equity value multiples of:
Non-meaningful multiple of net income for last twelve months
due to net loss
.64x book value as of March 31, 2000
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Morgan Keegan & Company, Inc. Page 3
<PAGE>
Company Overview [KLLM Logo]
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. The Company is a truckload carrier that specializes in temperature-controlled
transportation services for major shippers in the food industry. In addition,
the Company operates Vernon Sawyer, a dry van division that represented less
than 20% of consolidated sales for the year ended December 31, 1999.
. The Company operates nationwide from its strategically located headquarters
in Richland, Mississippi and terminals in Atlanta, Georgia; Bastrop,
Louisiana; Fontana, California; Portage, Indiana; and Carlisle, Pennsylvania.
. The Company has established carrier relationships with Fresh Express,
Pillsbury, Proctor & Gamble, Kraft, Kroger Company, and other major
customers.
. As of December 31, 1999, the Company operated 1,682 tractors, including 1,422
Company-operated tractors and 260 owner-operated tractors, and 2,741
trailers.
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Morgan Keegan & Company, Inc. Page 4
<PAGE>
Valuation Methods [KLLM logo]
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Financial Highlights
Revenues Fiscal 1995-2001P
($ in thousands)
(graphic appears here)
Year Revenue
---- -------
1995 $239,685
1996 246,222
1997 240,766
1998 228,988
1999 234,595
2000P 244,941
2001P 251,065
EBIT and Operating Ratio Fiscal 1995 - 2001P
($ in thousands)
(graphic appears here)
Year EBIT Operating Ratio
---- ---- ---------------
1995 $6,513 97.3%
1996 6,702 97.3
1997 144 99.9
1998 5,642 97.5
1999 2,470 98.9
2000P 6,155 97.5
2001P 7,908 96.9
Shares and EPS Fiscal 1995 - 2001P
(Shares in thousands)
(graphic appears here)
Year Shares EPS
---- ------ ---
1995 4,479 $ 0.12
1996 4,372 0.18
1997 4,358 (3.38)
1998 4,341 0.42
1999 4,117 (0.19)
2000P 4,101 0.35
2001P 4,100 0.55
EBITDA and EBITDA Margin Fiscal 1995 - 2001P
($ in thousands)
(graphic appears here)
Year EBITDA EBITDA Margin
---- ------ -------------
1995 $20,568 11.9%
1996 28,757 11.7
1997 21,576 9.0
1998 23,912 10.4
1999 20,773 8.9
2000P 25,750 10.5
2001P 27,993 11.1
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Morgan Keegan & Company, Inc. Page 5
<PAGE>
Valuation Methods [KLLM logo]
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KLLM Transport Services, Inc.
Balance Sheet as of March 31, 2000
(Dollars in Thousands)
<TABLE> <CAPTION>
<S> <C> <C> <C>
Current Assets Liabilities and Stockholder's Equity
Cash $ 1,618 Current Liabilities
Receivables, net 23,677 Notes payable to banks $ 2,569
Inventories - at cost 715 Accounts payable and accrued expenses 17,722
Prepaid expenses and other 5,611 Accrued claims expense 11,733
Deferred income taxes 5,101 ---------
----------
Total current assets 36,722 Total current liabilities 32,024
Property and Equipment 155,028 Deferred income taxes payable 13,283
Less accumulated depreciation and amortization (50,464) Long term debt 46,000
---------- Total stockholders' equity 49,979
Property and equipment, net 104,564
Total assets $ 141,286 Total liabilities and stockholder' equity $141,286
========== =========
</TABLE>
Balance Sheet Highlights
------------------------
. Net debt (interest-bearing debt less cash) as of March 31, 2000 was $46,951
. At March 31, 2000, there were 4,101,468 shares of common stock outstanding
. Net book value per share: $12.19
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Morgan Keegan & Company, Inc. Page 6
<PAGE>
Valuation Methods [KLLM logo]
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KLLM Transport Services, Inc.
Historical Income Statements
For Year Ended December 31
(Dollar in thousands except per share data)
<TABLE><CAPTION>
----------------- ------------------ ------------------
1995 1996 1997
----------------- ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
Revenue from trucking operations $239,685 100.0% $246,222 100.0% $210,766 100.0%
Operating Expenses
Salaries, Wages and benefits 69,706 29.1 71,318 29.0 75,748 31.5
Operating supplies and expenses 66,414 27.7 69,859 28.4 62,828 26.1
Insurance claims, taxes and licenses 11,773 4.9 14,227 5.8 17,751 7.4
Depreciation and amortization 23,017 9.6 21,872 8.9 21,432 8.9
Purchased transportation and equipment rent 53,370 22.3 54,272 22.0 51,692 21.5
Other 10,481 4.4 9,629 3.9 10,986 4.6
(Gain) loss on sale of revenue equipment (1,589) (0.7) (1,657) (0.7) 185 0.1
----------------- ------------------ ------------------
Total operating expenses 233,172 97.3 239,520 97.3 240,622 99.9
----------------- ------------------ ------------------
Operating income (loss) from continued operations 6,513 2.7 6,702 2.7 144 0.1
Non-Recurring Items and discontinued operations
Operating revenues from discontinued operations 10,466 4.3 3,319 1.4
Discontinued operations expenses (10,818) (4.4) (4,228) (1.8)
Impairment of long lived assets* (15,754) (6.5)
Restructuring charge (1,906) (0.8)
----------------- ------------------ ------------------
Subtotal 0 0.0 (352) (0.1) (18,569) (7.7)
----------------- ------------------ ------------------
Operating income (loss) after non-recurring items 6,513 2.7 6,350 (18,425) (7.7)
Other (income) expenses
Gain on sale of property
Interest and other income 32 0.0 59 0.0 68 0.0
Interest and other expense (5,554) (2.3) (4,783) (2.0) (4,363) (1.8)
----------------- ------------------ ------------------
Subtotal (5,522) (2.3) (4,724) (1.9) (4,295) (1.8)
----------------- ------------------ ------------------
Earnings (loss) from operations before taxes 991 0.4 1,626 0.7 (22,720) (9.4)
Income tax expense (benefit) 473 0.2 721 0.3 (8,000) (3.3)
----------------- ------------------ ------------------
Net Income (loss) from continuing operations before taxes $ 518 0.2 $ 905 0.4 % $(14,720) (6.1)
----------------- ------------------ ------------------
After tax loss from non-recurring items $ (1,065) (0.4) $ (139) (0.1)
Net earnings (loss) $ (547) (0.2) $ 766 0.3 % $(14,720) (6.1)
================= ================== ==================
Diluted Earnings per Share $ (0.12) $ 0.18 $ (3.38)
Diluted Shares Outstanding 4,479 4,372 4,358
-----------------------------------------------------------------------------------------------------------------------------------
Operating Income $ 6,513 2.7 % $ 6,702 2.7 % $ 144 0.1 %
Depreciation and Amortization 22,055 9.2 22,055 9.0 21,432 8.9
----------------- ------------------ ------------------
EBITDA $ 28,568 11.9 % $ 28,757 11.7 % $ 21,576 9.0 %
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE> <CAPTION>
----------------- ------------------ ------------------
1998 1999 LTM 3/DD
----------------- ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
Revenue from trucking operations $228,988 100.0 % $234,595 100.0 % $ 236,857 100.0 %
Operating Expenses
Salaries, Wages and benefits 73,143 31.9 83,655 35.7 $ 85,146 35.9
Operating supplies and expenses 56,938 24.9 58,392 24.9 61,165 25.8
Insurance claims, taxes and licenses 13,729 6.0 10,585 4.5 10,187 4.3
Depreciation and amortization 18,270 8.0 18,303 7.8 18,821 7.9
Purchased transportation and equipment rent 50,840 22.2 51,424 21.9 50,698 21.4
Other 11,657 5.1 10,797 4.6 10,567 4.5
(Gain) loss on sale of revenue equipment (1,231) (0.5) (1,031) (0.4) $ (1,044) (0.4)
----------------- ------------------ ------------------
Total operating expenses 223,346 97.5 232,125 98.9 235,540 99.4
----------------- ------------------ ------------------
Operating income (loss) from continued operations 5,642 2.5 2,470 1.1 1,317 0.6
Non-Recurring Items and discontinued operations
Operating revenues from discontinued operations
Discontinued operations expenses
Impairment of long lived assets
Restructuring charge
----------------- ------------------ ------------------
Subtotal 0 0.0 0 0.0 0 0.0
----------------- ------------------ ------------------
Operating income (loss) after non-recurring items 5,642 2.5 2,470 1.1 1,317 0.6
Other (income) expenses
Gain on sale of property 858 0.4
Interest and other income 87 0.0 58 0.0 101 0.0
Interest and other expense (3,551) (1.6) (3,403) (1.5) (3,543) (1.5)
----------------- ------------------ ------------------
Subtotal (2,606) (1.1) (3,345) (1.4) (3,442) (1.5)
----------------- ------------------ ------------------
Earnings (loss) from operations before taxes 3,036 1.3 (875) (0.4) (2,125) (0.9)
Income tax expense (benefit) 1,200 0.5 (330) (0.1) (805) (0.3)
------------------ ------------------ ------------------
Net Income (loss) from continuing operation before taxes $ 1,836 0.8 % $ (545) (0.2) % $ (1,320) (0.6)
------------------ ------------------ ------------------
After tax loss from non-recurring items $ (247) (0.1) % (247) (0.1)
Net earnings (loss) $ 1,836 0.8 % $ (792) (0.3) $ (1,567) (0.7)
================== ================== ==================
Diluted Earrings per Share $ 0.42 $ (0.19) $ (0.38)
Diluted Shares Outstanding 4,341 4,117 4,101
-----------------------------------------------------------------------------------------------------------------------------------
Operating Income $ 5,642 2.5 % $ 2,470 1.1 % $ 1,317 0.6 %
Depreciation and Amortization 18,270 8.0 18,303 7.8 18,821 7.9
------------------ ------------------ ------------------
EBITDA $ 23,912 10.4 % $ 20,773 8.9 % $ 20,138 8.5 %
-----------------------------------------------------------------------------------------------------------------------------------
* Impairment of long lived assets has been reclassified from an operating expense to a non-recurring item.
</TABLE>
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Morgan Keegan & Company, Inc. Page 7
<PAGE>
Valuation Methods [KLLM logo]
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KLLM Transport Services, Inc
Historical Income Statements
(Dollars in thousands except per share data)
<TABLE> <CAPTION>
Quarter Ended Quarter Ended
------------------ ------------------
03/31/2000 04/02/1999
------------------ ------------------
<S> <C> <C> <C> <C>
Revenue from trucking operations $ 57,593 100.0 % $ 55,331 100.0 %
Operating Expenses
Salaries, Wages and Benefits 20,833 36.2 19,342 35.0
Operating supplies and expenses 15,919 27.6 13,146 23.8
Insurance claims, taxes and licenses 2,745 4.8 3,143 5.7
Depreciation and amortization 4,885 8.5 4,367 7.9
Purchased transportation and equipment rent 11,625 20.2 12,351 22.3
Other 2,449 4.3 2,679 4.8
(Gain) loss on sale of revenue equipment (130) (0.2) (117) (0.2)
------------------ ------------------
Total operating expenses 58,326 101.3 54,911 99.2
------------------ ------------------
Operating income (loss) from continued operations (733) (1.3) 420 0.8
Other (income) expenses
Interest and other income 51 8
Interest and other expense (943) (1.6) (803) (1.5)
------------------ ------------------
Subtotal (892) (1.5) (795) (1.4)
------------------ ------------------
Earnings (loss) from operations before taxes (1,625) (2.8) (375) (0.7)
Income tax expense (benefit) (625) (1.1) (150) (0.3)
------------------ ------------------
Net Income (loss) from continuing operations before taxes $ (1,000) (1.7) $ (225) (0.4)
------------------ -----------------
After tax loss from non-recurring items
Net earnings (loss) $ (1,000) (1.7) $ (225) (0.4)
================== =================
Diluted Earnings per Share $ (0.24) $ (0.05)
Diluted Shares Outstanding 4,101 4,373
-------------------------------------------------------------------------------------------------------
Operating Income $ (733) (1.3) % $ 420 0.8 %
Depreciation and Amortization 4,885 8.5 4,367 7.9
----------------- ----------------
EBITDA $ 4,152 7.2 % $ 4,787 8.7 %
-------------------------------------------------------------------------------------------------------
</TABLE>
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Morgan Keegan & Company, Inc. Page 8
<PAGE>
Valuation Methods [KLLM Logo]
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Historical Income Statement Highlights
--------------------------------------
. Revenues decreased at a average compound annual rate of .2% between 1995
and 1999. During that period, the largest increase in revenue was 2.7% in
1996 and the largest decrease in revenue was 4.9% in 1998. For 1999,
revenue increased by 2.4% from the previous year.
. From 1995 to 1997, KLLM's operating ratio ranged between 97.3% and 99.9%.
During 1999 the operating ratio increased from 97.5% to 98.9%. For the
quarter ended March 31, 2000, the operating ratio was 101.3%.
. Depreciation and amortization expense was 7.8% of revenue in 1999, while in
1995 it was 9.6% of revenues. Depreciation and amortization did not change
significantly as a percent of revenue during 1999 compared to the prior
year.
. From 1995 to 1999, operating income from continued operations or earnings
before interest and taxes ("EBIT") ranged from a high of $6.7 million in
1996 to a low of $144,000 in 1997. For 1999, operating income was
approximately $2.5 million. For the last twelve months ended March 31,
2000, operating income was $1.3 million.
. Earnings before interest, taxes and depreciation and amortization
("EBITDA") decreased at an average compound annual rate of 7.8% from $28.8
million in 1995 to $20.8 million in 1999. For the last twelve months ended
March 31, 2000, EBITDA was $20.1 million.
. The Company has shown a profit in only two of the last five years. The
cumulative net loss for the last five years was $13.5 million. The net loss
and loss per share was $792,000 and $.19, respectively, in 1999. For the
quarter ended March 31, 1999 the net loss and loss per share were $1.0
million and $.24, respectively.
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Morgan Keegan & Company, Inc. Page 9
<PAGE>
Valuation Methods [KLLM Logo]
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KLLM Transport Services, Inc.
Projected Income Statements
Fiscal Year Ended December 31
(Dollars in thousands except per share data)
<TABLE>
<CAPTION>
----------------- ----------------- ----------------- ----------------- ----------------
2000P 2001P 2002P 2003P 2004P
----------------- ----------------- ----------------- ----------------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues $244,941 100.0 % 251,065 100.0 % 261,108 100.0 % 271,552 100.0 % 282,414 100.0 %
Operating Expenses
Salaries, wages and benefits 85,565 34.9 87,245 34.7 90,605 34.7 93,550 34.5 96,868 34.3
Operating supplies and expenses 60,286 24.6 60,256 24.0 62,666 24.0 64,901 23.9 67,497 23.9
Insurance, taxes and licenses 10,223 4.2 10,545 4.2 10,967 4.2 11,406 4.2 11,862 4.2
Depreciation and amortization 19,595 8.0 20,085 8.0 20,888 8.0 21,724 8.0 22,592 8.0
Purchased transportation 52,772 21.5 54,481 21.7 56,660 21.7 58,926 21.7 61,283 21.7
Other 10,345 4.2 10,545 4.2 10,967 4.2 11,406 4.2 11,862 4.2
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
Total operating expenses 238,786 97.5 243,157 96.9 252,753 96.8 261,912 96.5 271,965 96.3
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
Operating income 6,155 2.5 7,908 3.1 8,355 3.2 9,640 3.5 10,449 3.7
Other expenses (40) (0.0) (50) (0.0) (52) (0.0) (54) (0.0) (56) (0.0)
Interest expense 3,800 1.6 4,200 1.7 4,439 1.7 4,616 1.7 4,801 1.7
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
Total Other (Income) Expense 3,760 1.5 4,150 1.7 4,387 1.7 4,562 1.7 4,745 1.7
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
Income Before Provision for Taxes 2,395 1.0 3,758 1.5 3,968 1.5 5,078 1.9 5,705 2.0
Provision for Income Taxes 958 0.4 1,503 0.6 1,587 0.6 2,031 0.7 2,282 0.8
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
Net Income $ 1,437 0.6 % $ 2,255 0.9 % $ 2,381 0.9 % $ 3,047 1.1 % $ 3,423 1.2 %
======== ===== ======== ===== ======== ===== ======== ===== ======== =====
Diluted Earnings per Share $ 0.35 $ 0.55 $ 0.58 $ 0.74 $ 0.83
Diluted Shares Outstanding 4,100 4,100 4,100 4,100 4,100
------------------------------------------------------------------------------------------------------------------------------------
Operating Income $ 6,155 2.5 % $ 7,908 3.1 % $ 8,355 3.2 % $ 9,640 3.5 % $ 10,449 3.7 %
Depreciation and Amortization 19,595 8.0 20,085 8.0 20,888 8.0 21,724 8.0 22,592 8.0
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
EBITDA $ 25,750 10.5 % $ 27,993 11.1 % $ 29,243 11.2 % $ 31,363 11.5 % $ 33,042 11.7 %
======== ===== ======== ===== ======== ===== ======== ===== ======== =====
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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Morgan Keegan & Company, Inc. Page 10
<PAGE>
Valuation Methods [KLLM Logo]
--------------------------------------------------------------------------------
Projected Income Statement Highlights
-------------------------------------
. Revenue is projected to increase from $234.6 million to $282.4 million from
1999 to 2004, which represents a compound annual growth rate of 3.8%.
. EBIT is projected to increase from $2.5 million to $10.4 million from 1999
to 2004, which represents a compound annual growth rate of 33.4%.
. EBITDA is projected to increase from $20.8 million to $33.0 million from
1999 to 2004, which represents a compound annual growth rate of 9.7%.
. Earnings per share is projected to increase from ($.19) to $.83 from 1999
to 2004.
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Morgan Keegan & Company, Inc. Page 11
<PAGE>
Valuation Methods [KLLM Logo]
--------------------------------------------------------------------------------
Comparable Company Analysis
---------------------------
Overview
. Analyzed a group of publicly traded companies similar to the Company based on
a variety of criteria.
. Compared the Company's financial performance with the performance of the
group of comparable companies.
. Derived industry multiples by analyzing the specific comparable company
multiples.
. Applied the industry multiples to the Company's results for the last twelve
months ended March 31, 2000 to derive an implied range of equity value and
price per share.
. Due to KLLM's low EBIT and net loss for the last twelve months ended March
31, 2000, valuations based on these financial measures indicate a negative
equity value. As an alternative, 2000 projections were used to derive an
implied range of equity and price per share in the future. These derived
future values were then discounted to the present value using the Company's
cost of equity capital.
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Morgan Keegan & Company, Inc. Page 12
<PAGE>
Valuation Methods [KLLM Logo]
--------------------------------------------------------------------------------
. Comparable Company Analysis - Summary
-------------------------------------
(Detailed analysis is included as an appendix)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
Comparable Company Analysis
------------------------------------------------------------------------------------------------------------------------------------
Based on LTM (3/31) Results Based on 2000P Results
--------------------------------------- -----------------------------------------------------
Applicable Enterprise Equity Share Enterprise Equity Share Discounted(1)
Multiples LTM Value Value Value 2000P Value Value Value Price/Shr
--------------------------------------- -----------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Temperature-Controlled
Carriers
Revenues 0.2 x $236,857 $47,371 $ 420 $ 0.10 $244,941 $ 48,988 $ 2,037 $ 0.50 $ 0.42
EBITDA 3.3 x $ 20,138 $66,455 $19,504 $ 4.76 $ 25,750 $ 84,975 $38,024 $ 9.27 $ 7.82
EBIT 7.3 x $ 1,317 $ 9,614 NM NM $ 6,155 $ 44,932 NM NM NM
Net Income 6.6 x $ (1,567) NA NM NM $ 1,437 NA $ 9,484 $ 2.31 $ 1.95
Tangible Book Value 0.6 x $ 49,979 NA $30,987 $ 7.56 $ 52,404 NA $32,490 $ 7.92 $ 6.68
Dry Van and Flatbed
Carriers
EBITDA 4.5 x $ 20,138 $90,621 $43,670 $10.65 $ 25,750 $115,875 $68,924 $16.81 $14.17
EBIT 8.6 x $ 1,317 $11,326 NM NM $ 6,155 $ 52,933 $ 5,982 $ 1.46 $ 1.23
Net Income 10.0 x $ (1,567) NA NM NM $ 1,437 NA $14,370 $ 3.50 $ 2.95
Tangible Book Value 1.3 x $ 49,979 NA $64,973 $15.84 $ 52,404 NA $68,125 $16.61 $14.01
-----------------------------------------------------------------------------------------------------------------------------------
(1) Discounted at the Company's cost of equity of 18.6%. For calculation, refer to discounted cash flow analysis.
</TABLE>
Net Debt $46,951
Shares Outstanding 4,101
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Morgan Keegan & Company, Inc. Page 13
<PAGE>
Valuation Methods [KLLM logo]
--------------------------------------------------------------------------------
Comparable Company Analysis
---------------------------
Conclusion
. Morgan Keegan determined the market value and the adjusted market value of
each comparable company and calculated trading multiples based on revenue,
EBITDA, EBIT and tangible book value.
. Trading multiples of the comparable company group as a whole were deemed more
meaningful than multiples of any particular company.
. Valuations based on multiples of EBITDA for temperature-controlled carriers
and multiples of revenues for dry van carriers produced implied valuations
well in excess of the other methods and were not relied on in valuing the
Company for the following reasons. EBITDA multiples for the temperature-
controlled comp group deviated significantly. In addition, this comp group
was relatively small as it contained only three companies. As an alternative,
EBIT and EBITDA multiples for Marten Transport, the most profitable company
in the temperature-controlled comp group, were used. The median revenue
multiple for dry van carriers was not relied on due to the relative
difference in profitability between KLLM and most dry van carriers.
Therefore, making the aforementioned adjustments, the analysis produced an
implied value range of between $.10 and $7.82 per share based on the
multiples of the comparable temperature-controlled carriers group and between
$1.23 and $15.84 per share based on the multiples of the comparable dry van
carriers group.
--------------------------------------------------------------------------------
Morgan Keegan & Company, Inc. Page 14
<PAGE>
Valuation Methods [KLLM logo]
--------------------------------------------------------------------------------
Mergers and Acquisitions Analysis
---------------------------------
Overview
. Searched databases and news articles for acquisitions of trucking companies.
. Selected those transactions with available financial information.
. Derived valuation multiples by comparing the prices paid in these
transactions to the Company's financial information for the last twelve
months ended March 31, 2000 to derive an implied range of equity value and
price per share.
. Due to KLLM's low EBIT and net loss for the last twelve months ended March
31, 2000, valuations based on these financial measures indicated a negative
equity value. Alternatively, 2000 projections were used to derive an implied
range of equity and price per share in the future. These derived future
values were then discounted to the present value using the Company's cost of
equity capital.
--------------------------------------------------------------------------------
Morgan Keegan & Company, Inc. Page 15
<PAGE>
Valuation Methods [KLLM logo]
--------------------------------------------------------------------------------
Mergers & Acquisitions Analysis - Summary
-----------------------------------------
(Detailed analysis is included as an appendix)
Mergers & Acquisitions Analysis
<TABLE>
<CAPTION>
Based on LTM (3/31) Results Based on 2000P Results
---------------------------------------- ----------------------------------------------------------
Median Enterprise Equity Share Enterprise Equity Share Discounted
Multiples LTM Value Value Value 2000P Value Value Value Price/Share(1)
--------- -------- ---------- ------- ------ -------- ---------- ------- ------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues 0.4x $236,857 $ 94,743 $47,792 $11.65 $244,941 $ 97,976 $51,025 $12.44 $10.49
EBDITA 5.0x $ 20,138 $100,690 $53,739 $13.10 $ 25,750 $128,750 $81,799 $19.95 $16.82
EBIT 11.2x $ 1,317 $ 14,750 NM NM $ 6,155 $ 68,936 $21,985 $ 5.36 $ 4.52
Net Income 13.0x $ (1,567) NA NM NM $ 1,437 NA $18,681 $ 4.56 $ 3.84
</TABLE>
(1) Discounted at the Company's cost of equity of 18.6%. For calculation, refer
to discounted cash flow analysis.
Net Debt $46,951
Shares Outstanding 4,101
--------------------------------------------------------------------------------
Morgan Keegan & Company, Inc. Page 16
<PAGE>
Valuation Methods [KLLM logo]
--------------------------------------------------------------------------------
Mergers and Acquisitions Analysis
----------------------------------
Conclusion
. Transaction multiples vary for the following reasons:
. Differences in pre-transaction operating performance
. Other hidden or intangible assets not apparent in historical operating
performance
. Other deal specific factors
. The analysis resulted in an implied range of $3.84 to $16.82 per share based
on the median multiples from the comparable mergers and acquisitions
transactions.
--------------------------------------------------------------------------------
Morgan Keegan & Company, Inc. Page 17
<PAGE>
Valuation Methods [KLLM logo]
--------------------------------------------------------------------------------
Discounted Cash Flow Analysis
-----------------------------
Overview
. Relies on projections of future cash flows provided by the Company.
. Terminal value is calculated by applying a terminal multiple to the Company's
unlevered free cash flow in 2004.
. Annual cash flows and the terminal value are discounted at various weighted
average cost of capital (WACC) rates.
. Considers a range of terminal multiples and weighted average cost of capital
(WACC) rates.
--------------------------------------------------------------------------------
Morgan Keegan & Company, Inc. Page 18
<PAGE>
Valuation Methods [KLLM logo]
--------------------------------------------------------------------------------
KLLM Transport Services, Inc.
Discounted Cash Flow Analysis
(Dollars in Thousands)
<TABLE>
<CAPTION>
For the Year Ended December 31,
----------------------------------------------------
2000P 2001P 2002P 2003P 2004P Terminal
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Revenue $244,941 $251,065 $261,108 $271,552 $282,414
Operating Expenses:
Operating Expenses Excluding Depreciation 219,191 223,072 231,865 240,188 249,373
Depreciation & Amortization 19,595 20,085 20,888 21,724 22,592
-------- -------- -------- -------- --------
Total Operating Exp. 238,786 243,157 252,753 261,912 271,965
-------- -------- -------- -------- --------
EBIT 6,155 7,908 8,355 9,640 10,449
Income Taxes(1) 2,462 3,163 3,342 3,856 4,180
-------- -------- -------- -------- --------
After-Tax EBIT $ 3,693 $ 4,745 $ 5,013 $ 5,784 $ 6,270
Capital Expenditures (18,615) (19,081) (19,844) (20,638) (21,462)
Depreciation & Amortization 19,595 20,085 20,888 21,724 22,592
Increase in Working Capital (310) (184) (301) (313) (326)
-------- -------- -------- -------- --------
Unlevered Free Cash Flow $ 4,363 $ 5,565 $ 5,756 $ 6,557 $ 7,074 $42,443
Discount Period 0.64 1.64 2.64 3.64 4.64 4.64
Discount Factor 1.08 1.20 1.35 1.51 1.70 1.70
PV of Cash Flow $ 4,058 $ 4,619 $ 4,263 $ 4,334 $ 4,172 $25,034
--------------------------------------------------- -----------------------------
Weighted Avg. Cost of Capital 12.06% PV of Cash Flows $46,480
Terminal Multiple 6.00 Less Net Debt 46,951
--------------------------------------------------- -------
Equity Value $ (471)
-----------------------------
</TABLE>
Notes:
------
(1) Taxes computed using a 40% tax rate.
--------------------------------------------------------------------------------
Morgan Keegan & Company, Inc. Page 19
<PAGE>
Valuation Methods [KLLM logo]
--------------------------------------------------------------------------------
KLLM Transport Services, Inc.
Weighted Average Cost of Capital Calculation ("WACC")
<TABLE>
<S> <C> <C>
Cost of Equity: 18.6%
Risk free rate 6.85% 5 year Treasury
Market risk premium 8.10% Per Ibbotson Associates 2000 Yearbook
Size premium 3.60% Per Ibbotson Associates 2000 Yearbook - expected com-beta small cap premium of
5.1%, plus industry premium of -1.5% for motor freight, transportation &
warehousing.
Assumed beta 1.00 The S&P's beta was used. KLLM's beta as reported by Bloomberg is currently .47.
After-tax Cost of Debt:
KLLM's assumed borrowing rate 8.50%
Tax rate 40.00%
After-tax cost of debt 5.10%
Net Debt to Total Capital Ratio:
(as of December 31, 1999)
Net debt $47,489
Shareholder's equity $50,967
-------
Total capital $98,456
KLLM's net debt to total capital
ratio 48.23%
------------------------------------------------
WACC 12.06%
------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
Morgan Keegan & Company, Inc. Page 20
<PAGE>
Valuation Methods [KLLM logo]
--------------------------------------------------------------------------------
KLLM Transport Services, Inc.
Discounted Cash Flow -- Equity Value and Share Price Sensitivity Analysis
(Dollars in Thousands)
Implied Equity Values
Unlevered Free Cash Flow Terminal Multiple
-----------------------------------------------------
5.0 5.5 6.0 6.5 7.0
----------------------------------------------------------------
11.06% $(3,244) $(1,069) $ 1,105 $ 3,280 $ 5,454
----------------------------------------------------------------
WACC 12.06% (4,643) (2,557) (471) 1,615 3,701
----------------------------------------------------------------
13.06% (5,979) (3,977) (1,975) 27 2,029
----------------------------------------------------------------
14.06% (7,255) (5,333) (3,411) (1,490) 432
----------------------------------------------------------------
15.06% (8,475) (6,629) (4,784) (2,938) (1,092)
----------------------------------------------------------------
Shares Outstanding: 4,101 (in thousands)
Implied Share Values
Unlevered Free Cash Flow Terminal Multiple
----------------------------------------------------
5.0 5.5 6.0 6.5 7.0
---------------------------------------------------------------
11.06% $(0.79) $(0.26) $ 0.27 $ 0.80 $ 1.33
---------------------------------------------------------------
WACC 12.06% $(1.13) $(0.62) $(0.11) $ 0.39 $ 0.90
---------------------------------------------------------------
13.06% $(1.46) $(0.97) $(0.48) $ 0.01 $ 0.49
---------------------------------------------------------------
14.06% $(1.77) $(1.30) $(0.83) $(0.36) $ 0.11
---------------------------------------------------------------
15.06% $(2.07) $(1.62) $(1.17) $(0.72) $(0.27)
---------------------------------------------------------------
--------------------------------------------------------------------------------
Morgan Keegan & Company, Inc. Page 21
<PAGE>
Valuation Methods [KLLM logo]
-------------------------------------------------------------------------------
Discounted Cash Flow Analysis
-----------------------------
Conclusion
. The DCF valuation is dependent upon a number of factors:
. The validity of management's projections
. Terminal multiple
. Discount rate
. This analysis resulted in an implied range of less than zero to $1.33 per
share.
--------------------------------------------------------------------------------
Morgan Keegan & Company, Inc. Page 22
<PAGE>
Valuation Methods [KLLM logo]
-------------------------------------------------------------------------------
Premium Analysis
----------------
Overview
. Analyzed the premiums paid for all completed mergers and acquisitions of
publicly traded trucking companies since January 1, 1997 with total
consideration up to $500 million.
. Analyzed the premiums paid for all completed non-financial institution and
non-technology mergers and acquisitions of publicly traded companies with
transaction values between $25 million and $100 million.
. Analyzed the premiums paid over the target's stock price one day, one week
and one month prior to the announcement date. For premium analysis purposes,
the announcement date is March 16, which is the date that Mr. Low announced
in his 13D filing his intention to acquire the Company for $7.60 per share.
. Compared these premiums to the premium offered pursuant to the transaction.
. Derived an implied price per share based on the median premiums paid in these
transactions.
--------------------------------------------------------------------------------
Morgan Keegan & Company, Inc. Page 23
<PAGE>
Valuation Methods [KLLM logo]
--------------------------------------------------------------------------------
Monthly Volume and Closing Price Graph
For the Twelve Months Prior to May 1, 2000
[GRAPH APPEARS HERE]
Month Volume(1) Closing Price
------- ---------- -------------
May 99 50,000 $6.75
June 99 750,000 5.75
July 99 25,000 5.94
Aug 99 100,000 5.00
Sept 99 75,000 4.88
Oct 99(2) 475,000 4.75
Nov 99 250,000 6.16
Dec 99 150,000 4.75
Jan 00 150,000 5.25
Feb 00 900,000(3) 5.50
Mar 00 500,000(4) 6.94
Apr 00 400,000 8.13
-------------
(1) Approximate
(2) Mr. Low acquired beneficial ownership of 289,600 shares
between October 1999 and December 1999
(3) Mr. Low acquired 250,000 shares in February 2000
(4) On March 16, 2000, Mr. Low announced his intent to acquire
the Company for $7.60 per share
--------------------------------------------------------------------------------
Morgan Keegan & Company, Inc. Page 24
<PAGE>
Valuation Methods [KLLM logo]
--------------------------------------------------------------------------------
Volume at Various Price Ranges
For the Twelve Months Prior to Announcement Date
[GRAPH APPEARS HERE]
Price Range Volume (1)
----------- ----------
$4.00 - $4.49 50,000
$4.50 - $4.99 500,000
$5.00 - $5.49 400,000
$5.50 - $5.99 850,000
$6.00 - $6.49 700,000
$6.50 - $6.99 700,000
$7.00 and above 350,000
--------
(1) Approximate
--------------------------------------------------------------------------------
Morgan Keegan & Company, Inc. Page 25
<PAGE>
Valuation Methods [KLLM logo]
-------------------------------------------------------------------------------
Premium Analysis
----------------
Premium Analysis of Public Trucking Company Transactions Announced Since
1/1/97 with Total Consideration up to $500 Million
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Premium
-------------------------------
1 day 1 week 4 weeks
Date Date Deal Offer prior to prior to prior to
Announced Effective Target Name Acquiror Name Value (mil) Price/Share ann. date ann. date ann. date
---------- ---------- ------------------------- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
02/11/1998 06/10/1998 MLT Inc. Sombrero Acquisition Corp. 250.1 40.00 37.931 38.528 56.098
06/01/1998 08/28/1998 PST Vans Inc. US Xpress Enterprises Inc. 83.9 7.47 32.8 35.818 10.667
06/07/1999 09/30/1999 Jevic Transportation Inc. Yellow Corp 194.5 14.00 30.233 45.455 51.351
-----------------------------------------------------------------------
Medium 32.8% 38.5% 51.4%
-----------------------------------------------------------------------
KLLM Closing Price $6.1250 $5.5625 $6.5000
----------------------------------------------------------------------
Implied Share Price $8.13 $7.71 $9.84
----------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
Morgan Keegan & Company, Inc. Page 26
<PAGE>
Valuation Methods [KLLM logo]
--------------------------------------------------------------------------------
Premium Analysis
----------------
Premium Analysis of Selected Transactions Announced Since 1/1/99 with Total
Consideration between $25 and $100 Million
<TABLE>
Premium
---------------------------------
Offer 1 day 1 week 4 weeks
Date Date Deal Price/ prior to prior to prior to
Announced Effective Target Name Acquiror Name Value (mil) Share ann. date ann. date ann. date
--------- ---------- ------------------------ ------------------------- ----------- ------ --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
11/24/1998 03/24/1999 Besicorp Group Inc BGI Acquisition LLC 111.8 36.97 11.2 11.6 6.4
07/27/1999 12/27/1999 Asahi-America Inc Asahi Organic Chemical 28.6 9.55 36.4 36.4 23.2
06/18/1999 07/26/1999 Durakon Industries Inc Littlejohn & Co LLC 101.2 16.00 32.6 29.3 24.9
12/03/1998 04/05/1999 Back Bay Restaurants
Group Inc. SRC Holdings 38.9 10.25 12.3 13.9 28.1
01/19/1999 03/24/1999 Audits & Surveys
Worldwide Inc United Information Group 43.2 3.24 32.9 36.4 29.6
08/26/1998 01/08/1999 Toastmaster Inc Salton/Maxim Housewares Inc 101.2 7.00 3.7 21.7 36.6
12/03/1998 01/19/1999 Valley Forge Corp Key Components LLC 82.9 19.00 49.0 46.2 40.7
02/17/1999 08/27/1999 Doughtie's Foods Sysco Corp 25.4 17.00 28.3 23.6 42.4
02/04/1998 03/15/1999 Spice Entertainment
Cos Inc Playboy Enterprises Intl Inc 108.8 6.25 17.6 17.6 42.8
05/14/1999 09/23/1999 United Foods Inc Pictsweet LLC 23.8 3.50 40.0 27.3 43.6
11/09/1999 01/19/2000 Percon Inc PSC Inc 59.5 15.00 11.6 13.2 44.6
01/07/1999 02/24/1999 Defiance Inc General Chemical Group Inc 57.8 9.50 43.4 43.4 46.2
01/19/1999 04/09/1999 AG Associates Inc Steag AG(Ruhrkohle AG) 34.6 5.50 25.7 33.3 49.2
03/15/1999 05/30/1999 Haskel International Inc Investor Group 65.4 12.90 42.3 49.6 51.8
03/11/1999 08/26/1999 LAI Worldwide Inc TMP Worldwide Inc 74.2 9.23 38.0 25.2 53.8
04/26/1999 08/19/1999 Bridgeport Machines Inc Goldman Industrial Group Inc 57.0 10.00 67.5 77.8 53.8
05/26/1999 08/04/1999 Golden Genesis Co Kyocera International Inc 40.5 2.33 24.3 28.6 55.3
03/10/1999 07/29/1999 Morgan Products Ltd Andersen Corp 41.4 4.00 23.1 45.5 60.0
02/09/1999 07/08/1999 Coffee People Inc
(Second Cup) Diedrich Coffee Inc 31.7 2.92 145.5 94.3 60.8
05/10/1999 07/29/1999 CMC Industries Inc ACT Manufacturing Inc 60.4 7.59 24.0 42.9 66.4
--------------------------------------------------------
Median 30.5% 31.3% 44.1%
--------------------------------------------------------
--------------------------------------------------------
KLLM Closing Price $6.1250 $5.5625 $6.5000
--------------------------------------------------------
--------------------------------------------------------
Implied Share Price $ 7.99 $ 7.30 $ 9.37
--------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
Morgan Keegan & Company, Inc. Page 27
<PAGE>
Valuation Methods [KLLM logo]
--------------------------------------------------------------------------------
Conclusion
. The offer price of $7.80 per share represents a premium of:
49.7% to the average closing price for September 1999 ($5.21), which was
the month when Mr. Low started accumulating shares of KLLM in the open
market;
28.7% to the price paid ($6.06) by Mr. Low on February 10, 2000 for 250,000
shares purchased from an institutional investor;
27.3% to the closing price on March 15, 2000 of $6.125 per share, which was
the day before Mr. Low's announced in his 13D filling his intention to
acquire the Company for $7.60 per share;
40.2% to the closing price on March 9, 2000 of $5.5625, which was one week
prior to announcement date;
20.0% to the closing price on February 17, 2000 of $6.50, which was four
weeks prior to announcement date.
. Implied price per share of $8.13, $7.70 and $9.84 for one day, one week and
four weeks prior to announcement date, respectively, based on the premiums
paid in the trucking transactions.
. Implied price per share of $7.99, $7.30 and $9.37 for one day, one week and
four weeks prior to announcement date, respectively, based on the premiums
paid in the selected transactions with consideration between $25 million and
$100 million. Technology and financial institutions transactions were
excluded from these transactions.
--------------------------------------------------------------------------------
Morgan Keegan & Company, Inc. Page 28
<PAGE>
Valuation Methods [KLLM logo]
--------------------------------------------------------------------------------
Summary Valuation
Summary of Indicated Ranges of Value
------------------------------------
The preparation of a fairness opinion is a complex process and is not
necessarily susceptible to partial analysis or summary description. Morgan
Keegan believes that its analyses must be considered as a whole and that
selecting portions of its analyses and of the factors considered by it, without
considering all analyses and factors, could create a misleading view of the
processes underlying the Morgan Keegan opinion. No company or transaction used
in the analysis performed by Morgan Keegan as a comparison is identical to KLLM
or the contemplated transaction. In addition, Morgan Keegan may have given
various analyses more or less weight than other analyses, and may have deemed
various assumptions more or less probable than other assumption, so that the
range of valuation resulting from any particular analysis described below should
not be taken to be Morgan Keegan's view of the actual value of KLLM.
The following table sets forth the indicated ranges of equity value as outlined
in the previous analyses.
Valuation Method Indicative Value Per Share Range
--------------------------------------------------------------------------------
Comparable Company Analysis/(1)/
Temperature-Controlled Carriers $0.10 -- $ 7.82
Dry Van Carriers $1.23 -- $15.84
Mergers and Acquisitions Analysis $3.84 -- $16.82
Discounted Cash Flow Analysis Negative -- $ 1.33
Premium Analysis
Trucking Company Transactions $7.70 -- $ 9.84
Other Selected Transactions $7.30 -- $ 9.37
(1) Excluding certain multiples for temperature-controlled carriers and day van
carriers. Refer to conclusion section of Comparable Company Analysis.
--------------------------------------------------------------------------------
Morgan Keegan & Company, Inc. Page 29
<PAGE>
APPENDICES
--------------------------------------------------------------------------------
Morgan Keegan & Company, Inc. Page 30
<PAGE>
Refrigerated Truckload Carriers
Comparable Company Analysis Morgan Keegan & Company, Inc.
(Dollars in Thousands, Except Per Share)
--------------------------------------------------------------------------------
<TABLE>
Share Year Adjusted
Company's Price ----------------- Shares Market Net Market
Latest Financials Ticker 05/25/2000 High Low Outst. Value Debt(1) Value(2)
--------------------- ------ ---------- -------- ------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Frozen Food Express FFEX 2-3/4 8-5/16 2-1/2 16,497 $45,367 $24,887 $ 70,254
12/31/1999
Marten Transport, Ltd. MRTN 13-3/8 16 9-1/2 4,249 $56,834 $77,230 $134,064
03/31/2000
Simon Transportation SIMN 5-11/16 6-3/4 4 6,287 $35,756 $11,905 $ 47,661
03/31/2000
KLLM Transport Services KLLM 6-13/16 10 4 4,101 $27,938 $46,951 $ 74,889
03/31/2000
</TABLE>
<TABLE>
Latest Twelve Months*(3) E.P.S.
-------------------------------------------------------- --------------------------------
Tangible
Company's Net Book 1999 Cal 2000 Cal
Latest Financials Revenues EBITDA EBIT Income Value LTM Act.(5) Est.(4)
---------------------- -------- ------- --------- -------- -------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Frozen Food Express $372,149 $ 2,050 $(11,514) $(9,637) $83,121 $(0.59) $(0.07) $0.22
12/31/1999
Marten Transport, Ltd. $230,762 $40,091 $ 18,312 $ 8,659 $60,381 $ 1.98 $ 1.92 $2.08
03/31/2000
Simon Transportation $215,899 $ 3,716 $ (856) $(1,416) $55,883 $(0.23) $(0.56) NA
03/31/2000
KLLM Transport Services $236,857 $20,138 $ 1,317 $(1,567) $49,979 $(0.38) $(0.19) $0.35
03/31/2000
</TABLE>
*Asche Transportation was not included in the model because it did not file its
most recent 10-K due to accounting problems at one of its subsidiaries.
--------------------------------------------------------------------------------
(1) Short-term debt, long-term debt (including capitalized lease obligations),
and preferred stock minus cash and marketable securities.
(2) Market value of equity plus net debt.
(3) Income statement data excludes extraordinary items & non-recurring items.
(4) Mean estimates obtained from First Call & Nelson Information, Inc.
(5) Actual calendar year results obtained from First Call.
<TABLE>
Ratios Growth
----------------------------------------------------------------- ---------------------
Net Return on Net Debt Sales Net Income
Company Oper. EBITDA EBIT Income Latest to Total 5-Year 5-Year
Name Ratio Margin Margin Margin Equity Capital CAGR CAGR
------------------------------- ----------- --------- -------- -------- ---------- ---------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Frozen Food Express 103.1% 0.6% NM NM NM 23.0% 6.2% NM
Marten Transport, Ltd. 92.1% 17.4% 7.9% 3.8% 14.3% 56.1% 12.3% 14.0%
Simon Transportation 100.4% 1.7% NM NM NM 17.6% 29.1% NM
-------------------------------
COMBINED:
----------------------------------------------------------------------------------------------------------------------------------
Low 92.1% 0.6% 7.9% 3.8% 14.3% 17.6% 6.2% 14.0%
Mean 98.5% 6.5% 7.9% 3.8% 14.3% 32.2% 15.9% 14.0%
High 103.1% 17.4% 7.9% 3.8% 14.3% 56.1% 29.1% 14.0%
Median 100.4% 1.7% 7.9% 3.8% 14.3% 23.0% 12.3% 14.0%
----------------------------------------------------------------------------------------------------------------------------------
KLLM Transport Services 99.4% 8.5% 0.6% NM NM 48.4% 0.5% NM
</TABLE>
<TABLE>
Multiple of Adj. Market Value Multiple of Market Value
--------------------------------- ------------------------------------------------------
Company Net LTM 1999 Cal 2000 Cal Book
Name Revenues EBITDA EBIT Income EPS EPS EPS Value
---------------------- -------- ------- --------- -------- -------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Frozen Food Express 0.19 x 34.3 x NM x NM x NM x NM x 12.5 x 0.55 x
Meten Transport, Ltd. 0.58 x 3.3 x 7.3 x 6.6 x 6.7 x 7.0 x 6.4 x 0.94 x
Simon Transportation 0.22 x 12.8 x NM x NM x NM x NM x NA x 0.64 x
---------------------
COMBINED:
---------------------
Low 0.2 x 3.3 x 7.3 x 6.6 x 6.7 x 7.0 x 6.4 x 0.55 x
Mean 0.3 16.8 7.3 6.6 6.7 7.0 9.5 0.71
High 0.6 34.3 7.3 6.6 6.7 7.0 12.5 0.94
Median 0.2 12.8 7.3 6.6 6.7 7.0 9.5 0.64
-----------------------------------
KLLM Transport Services 0.32 x 3.7 x NM x NM x NM x NM x 19.5 x 0.56 x
</TABLE>
--------------------------------------------------------------------------------
Morgan Keegan & Company, Inc. Page 31
<PAGE>
Dry Van Truckload Carriers
Comparable Company Analysis Morgan Keegan & Company, Inc.
(Dollars in Thousands, Except Per Share)
--------------------------------------------------------------------------------
<TABLE>
Shares Year Adjusted
Company/ Price ----------------- Shares Market Net Market
Latest Financials Ticker 05/25/2000 High Low Outst.(1) Value Debt(2) Value(3)
--------------------- ------ ---------- -------- ------- --------- ------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Cannon Express, Inc. AB 1-7/8 3-5/8 1-3/8 3,193 $ 5,987 $ 51,051 $ 57,038
12/31/1999
Covenant Transport, Inc. CVTI 10-3/8 18-15/16 9-13/16 14,916 $154,758 $ 143,669 $ 298,427
12/31/1999
Heartland Express HTLD 17-3/8 19-3/8 12-3/8 25,367 $440,744 $(118,134) $ 322,610
03/31/2000
Intrenet, Inc. INET 1-7/16 3-1/4 1-1/4 13,872 $ 19,941 $ 29,284 $ 49,225
12/31/1999
J.B. Hunt JBHT 15-11/16 18-1/16 10-1/2 35,639 $559,007 $ 315,033 $ 874,120
12/31/1999
Knight Transportation KNGT 16-1/8 22 10-3/4 15,278 $246,353 $ 7,859 $ 254,212
12/31/2000
LandAir LAND 4-1/4 6-1/4 3-1/8 6,004 $ 25,516 $ 22,233 $ 47,749
03/31/2000
Landstar System, Inc. LSTR 51 69-3/4 32-3/4 9,240 $471,220 $ 44,770 $ 515,990
03/25/2000
MS Carriers MSCA 21-1/16 32-3/4 19-1/2 12,439 $262,000 $ 241,352 $ 503,351
12/31/1999
PAM Transportation PTSI 9-15/16 12-7/8 8 8,531 $ 84,782 $ 74,331 $ 159,113
12/31/1999
Swift Transportation SWFT 14-11/16 24 11-13/16 64,593 $948,708 $ 112,960 $1,061,668
03/31/2000
Transit Group, Inc. TRGP 1-1/16 6-7/8 1-15/16 31,824 $ 33,813 $ 186,159 $ 219,972
12/31/1999
Transport Corp. of America TCAM 5-3/4 17-3/16 4-3/4 8,319 $ 47,832 $ 140,528 $ 188,360
12/31/1999
U.S. Xpress Enterprises XPRSA 7-1/2 12-3/4 5-1/8 16,159 $121,195 $ 182,179 $ 303,374
12/31/1999
USA Truck, Inc. USAK 6-5/8 9-5/8 6-1/8 9,267 $ 61,395 $ 73,263 $ 134,658
12/31/1999
Werner Enterprises, Inc. WERN 13 22-1/4 12-1/4 47,042 $611,546 $ 104,632 $ 716,178
12/31/1999
</TABLE>
<TABLE>
Latest Twelve Months'(4) E.P.S.
---------------------------------------------------------- --------------------------------
Tangible
Company/ Net Book 1999 Cal 2000 Cal
Latest Financials Revenues EBITDA EBIT Income Value LTM Act.(6) Est.(5)
--------------------- ---------- -------- --------- -------- --------- ------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Cannon Express, Inc. $ 90,665 $ 10,934 $ 858 $ (234) $ 18,291 $(0.07) NA NA
12/31/1999
Covenant Transport, Inc. $ 472,741 $ 78,348 $ 42,690 $22,277 $141,523 $ 1.48 $ 1.68 $1.56
12/31/1999
Heartland Express $ 265,097 $ 64,188 $ 47,077 $34,701 $169,972 $ 1.20 $ 1.13 $1.29
03/31/2000
Intrenet, Inc. $ 284,800 $ 5,521 $ 752 $(2,125) $ 15,459 $(0.16) NA NA
12/31/1999
J.B. Hunt $2,045,073 $227,247 $ 77,430 $31,909 $401,386 $ 0.89 $ 0.89 $1.12
12/31/1999
Knight Transportation $ 151,490 $ 40,090 $ 25,910 $15,464 $ 84,078 $ 1.02 $ 1.02 $1.21
12/31/2000
LandAir $ 133,055 $ 12,576 $ (1,031) $(2,390) $ 41,827 $(0.39) $(0.30) $0.25
03/31/2000
Landstar System, Inc. $1,403,654 $ 96,009 $ 83,900 $46,801 $ 71,777 $ 4.72 $ 4.55 $5.32
03/25/2000
MS Carriers $ 620,414 $119,194 $ 56,793 $30,587 $235,210 $ 2.39 $ 2.41 $2.55
12/31/1999
PAM Transportation $ 207,381 $ 43,274 $ 24,455 $11,269 $ 44,454 $ 1.33 $ 1.33 $1.25
12/31/1999
Swift Transportation $1,117,812 $167,757 $114,720 $65,383 $385,201 $ 1.00 $ 1.02 $1.06
03/31/2000
Transit Group, Inc. $ 355,526 $ 26,820 $ 12,964 $ 4,380 $(34,100) $ 0.15 $ 0.04 $0.20
12/31/1999
Transport Corp. of America $ 285,585 $ 46,786 $ 21,071 $ 8,570 $ 48,647 $ 1.00 $ 1.21 $1.60
12/31/1999
U.S. Xpress Enterprises $ 708,212 $ 62,791 $ 32,777 $12,124 $ 91,366 $ 0.82 $ 0.77 $0.89
12/31/1999
USA Truck, Inc. $ 166,363 $ 34,428 $ 15,837 $ 8,642 $ 70,108 $ 0.92 $ 0.92 $0.72
12/31/1999
Werner Enterprises, Inc. $1,052,333 $202,156 $102,201 $60,011 $494,772 $ 1.26 $ 1.26 $1.32
12/31/1999
</TABLE>
--------------------------------------------------------------------------------
(1) Shares outstanding includes in-the-money options using the treasury stock
method.
(2) Short-term debt, long-term debt (including capitalized lease obligations),
and preferred stock minus cash and marketable securities.
(3) Market value of equity plus net debt.
(4) Income statement data excludes extraordinary items & non-recurring items.
(5) Mean estimates obtained from First Call & Nelson Information, Inc.
(6) Actual CY 1999 EPS according to First Call.
--------------------------------------------------------------------------------
Morgan Keegan & Company, Inc. Page 32
<PAGE>
Dry Van Truckload Carriers Morgan Keegan & Company, Inc.
Comparable Company Analysis
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratios Growth
----------------------------------------------------------------- ---------------------
Net Return on Net Debt Sales Net Income
Company Oper. EBITDA EBIT Income Latest to Total 4-Year 4-Year
Name Ratio Margin Margin Margin Equity Capital CAGR CAGR
------------------------------- ----------- --------- -------- -------- ---------- ---------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Cannon Express, Inc. 99.1% 12.1% 0.9% NM NM 73.6 % 4.8% NM
Covenant Transport, Inc. 91.0% 16.6% 9.0% 4.7% 15.7% 50.4 % 27.2% 24.5%
Heartland Express 82.2% 24.2% 17.8% 13.1% 20.4% (227.9)% 8.0% 12.6%
Intrenet, Inc. 99.7% 1.9% 0.3% NM NM 59.5 % 7.3% NM
J.B. Hunt 96.2% 11.1% 3.8% 1.6% 7.9% 44.0 % 10.9% NM
Knight Transportation 82.9% 26.5% 17.1% 10.2% 18.4% 8.5 % 28.2% 27.8%
Land Air 100.8% 9.5% NM NM NM 34.7 % 10.7% NM
Landstar System, Inc. 94.0% 6.8% 6.0% 3.3% 44.5% 29.9 % 7.1% 16.5%
MS Carriers 90.8% 19.2% 9.2% 4.9% 13.0% 50.6 % 16.8% 23.5%
PAM Transportation 88.2% 20.9% 11.8% 5.4% 21.1% 58.2 % 22.7% 22.4%
Swift Transportation 89.7% 15.0% 10.3% 5.8% 16.7% 22.4 % 23.4% 30.5%
Transit Group, Inc. 96.4% 7.5% 3.6% 1.2% 5.6% 70.4 % NM NM
Transport Corp. of America 92.6% 16.4% 7.4% 3.0% 11.4% 65.2 % 18.6% 7.9%
U.S. Xpress Enterprises 95.4% 8.9% 4.6% 1.7% 7.5% 53.0 % NM NM
USA Truck, Inc. 90.5% 20.7% 9.5% 5.2% 12.3% 51.1 % 12.9% 9.4%
Werner Enterprises, Inc. 90.3% 19.2% 9.7% 5.7% 12.1% 17.5 % 16.3% 13.3%
--------------
Combined:
-----------------------------------------------------------------------------------------------------------------------------------
Low 82.2% 1.9% 0.3% 1.2% 5.6% (227.9)% 4.8% 7.9%
Mean 92.5% 14.8% 8.1% 5.1% 15.9% 28.8 % 15.3% 18.8%
High 100.8% 26.5% 17.8% 13.1% 44.5% 73.6 % 28.2% 30.5%
Median 91.8% 15.7% 9.0% 4.9% 13.0% 50.5 % 14.6% 19.5%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Multiple of Adj. Market Value Multiple of Market Value
------------------------------------------- ---------------------------------------------
Company Net LTM 1999 Cal 2000 Cal Book
Name Revenues EBITDA EBIT Income EPS EPS EPS Value
------------------------------- ----------- --------- -------- -------- ---------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Cannon Express, Inc. 0.63x 5.2x NMx NMx NMx NAx NAx 0.33x
Covenant Transport, Inc. 0.63x 3.8x 7.0x 6.9x 7.0x 7.0x 6.7x 1.09x
Heartland Express 1.22x 5.0x 6.9x 12.7x 14.4x 15.4x 13.5x 2.59x
Intrenet, Inc. 0.17x 8.9x NMx NMx NMx NA NA 1.29x
J.B. Hunt 0.43x 3.8x 11.3x 17.5x 17.6x 17.6x 14.0x 1.39x
Knight Transportation 1.68x 6.3x 9.8x 15.9x 15.9x 15.8x 13.3x 2.93x
Land Air 0.36x 3.8x NMx NMx NMx NMx 17.0x 0.61x
Landstar System, Inc. 0.37x 5.4x 6.2x 10.1x 10.8x 11.2x 9.6x 6.57x
MS Carriers 0.81x 4.2x 8.9x 8.6x 8.8x 8.7x 8.3x 1.11x
PAM Transportation 0.77x 3.7x 6.5x 7.5x 7.5x 7.5x 8.0x 1.91x
Swift Transportation 0.95x 6.3x 9.3x 14.5x 14.7x 14.4x 13.9x 2.46x
Transit Group, Inc. 0.62x 8.2x 17.0x 7.7x 7.0x 26.6x 5.3x NMx
Transport Corp. of America 0.66x 4.0x 8.9x 5.6x 5.8x 4.8x 3.6x 0.98x
U.S. Xpress Enterprises 0.43x 4.8x 9.3x 10.0x 9.2x 9.7x 8.4x 1.33x
USA Truck, Inc. 0.81x 3.9x 8.5x 7.1x 7.2x 7.2x 9.2x 0.88x
Werner Enterprises, Inc. 0.68x 3.5x 7.0x 10.2x 10.3x 10.3x 9.8x 1.24x
--------------
Combined:
-----------------------------------------------------------------------------------------------------------------------------------
Low 0.2x 3.5x 6.2x 5.6x 5.8x 4.8x 3.6x 0.33x
Mean 0.7 5.1 9.0 10.3 10.5 12.0 10.0 1.78
High 1.7 8.9 17.0 17.5 17.6 26.6 17.0 6.57
Median 0.6x 4.5x 8.9x 10.0x 9.2x 10.3x 9.4x 1.29x
------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
NA-Not Available NM-Not Meaningful (1) Compound annual growth rates for sales and net income are calculated from 1993-1997.
</TABLE>
--------------------------------------------------------------------------------
Morgan Keegan & Company, Inc. Page 33
<PAGE>
Mergers and Acquisitions in the Trucking Industry
(Dollars in Millions)
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
Trailing 12 Month Financials of Acquired (in $ M M)
Adjusted ---------------------------------------------------
Date Acquiror Market Net Market Net Book
Effective Target Value Debt Value Revenues EBITDA EBIT Income Value
--------- -------- ------ ----- -------- -------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Jan-00 Trimac Transportation
DSI Transports $ 68.3 $11.7 $ 80.0 $149.1 $ 3.7
Nov-99 Covenant Transport, Inc.
Harold Ives Trucking Co. $ 22.8 $22.2 $ 45.0 $115.0
Sep-99 Transit Group
Fox Midwest Transport Inc. $ 5.0 $ 0.0 $ 5.0 $ 38.0
Jul-99 Yellow Corporation
Jevic Transportation $161.0 $39.0 $200.0 $237.0 $ 33.4 $ 17.8 $ 9.6 $ 77.9
Jun-99 Skynet Holdings
Pony Express Delivery
Services, Inc. $ 4.8 $ 6.8 $ 11.6 $138.0 $ (9.4) $(11.6) $(13.2) $(27.4)
May-99 U.S. Trucking, Inc.
Prime Cos, Inc. $ 1.9 $ 0.0 $ 1.9 $ 8.4
Mar-99 Transit Group Inc.
Kat Inc. $ 4.2 $ 0.0 $ 4.2 $ 20.0
Mar-99 Knight Transportation Inc.
Action Delivery Service Inc. $ 2.0 $ 0.0 $ 2.0 $ 5.6
Jan-99 KTI Inc.
AFA Group $ 10.5 $ 5.5 $ 16.0 $ 11.0
Jan-99 Pam Transportation Services
Decker Transport Inc. $ 14.0 $14.0 $ 28.0 $ 48.5 $ 3.6 $ 0.6 $ 0.1 $ 6.2
Jan-99 Transit Group
Priority Transportation $ 4.8 $ 0.0 $ 4.8 $ 23.5
Jan-99 Transit Group Inc.
Priority Transportation Inc. $ 4.8 $ 0.0 $ 4.8 $ 23.5
Nov-98 USFreightways Corp.
Golden Eagle Group $ 30.2 $ 4.8 $ 35.1 $ 96.7 $ 1.4 $ 0.7 $ 0.4 $ 10.3
Aug-98 U.S. Xpress Enterprises
PST Vans $ 23.0 $52.7 $ 75.7 $144.9 $ 14.3 $ 2.3 $ (2.0) $ 9.5
May-98 U.S. Xpress Enterprises
Victory Express, Inc. $ 51.0 $ 2.0 $ 53.0 $ 62.5 $ 13.4 $ 4.7 $ 2.8 $ 24.7
May-98 Celadon Group
Gerth Transport $ 19.2 $ 35.0
Dec-97 Boyd Bros. Transportation
Welborn Transport $ 6.5 $ 3.2 $ 9.7 $ 29.5 $ 2.2 $ 1.3 $ 0.7 $ 4.0
</TABLE>
<TABLE>
<CAPTION>
Adjusted Market Value as a Market Value as a
Multiple of: Multiple of:
--------------------------------------- ------------------
Net
Revenues EBITDA EBIT Income
-------- ------- ------ ------
<S> <C> <C> <C> <C> <C>
Jan-00 Trimac Transportation
DSI Transports 0.5 x NA NM NA
Nov-99 Covenant Transport, Inc.
Harold Ives Trucking Co. 0.4 x NA NA NA
Sep-99 Transit Group
Fox Midwest Transport Inc. 0.1 x NA NA NA
Jul-99 Yellow Corporation
Jevic Transportation 0.8 x 6.0 x 11.2 x 16.8 x
Jun-99 Skynet Holdings
Pony Express Delivery
Services, Inc. 0.1 x NM NA NM
May-99 U.S. Trucking, Inc.
Prime Cos, Inc. 0.2 x NA NA NA
Mar-99 Transit Group Inc.
Kat Inc. 0.2 x NA NA NA
Mar-99 Knight Transportation Inc.
Action Delivery Service Inc. 0.4 x NA NA NA
Jan-99 KTI Inc.
AFA Group 1.5 x NA NA NA
Jan-99 Pam Transportation Services
Decker Transport Inc. 0.6 x 7.8 x NA NM
Jan-99 Transit Group
Priority Transportation 0.2 x NA NA NA
Jan-99 Transit Group Inc.
Priority Transportation Inc. 0.2 x NA NA NA
Nov-98 USFreightways Corp.
Golden Eagle Group 0.4 x NM NM NM
Aug-98 U.S. Xpress Enterprises
PST Vans 0.5 x 5.3 x NM NM
May-98 U.S. Xpress Enterprises
Victory Express, Inc. 0.8 x 4.0 x 11.3 x 18.0 x
May-98 Celadon Group
Gerth Transport 0.5 x NA NA NA
Dec-97 Boyd Bros. Transportation
Welborn Transport 0.3 x 4.5 x 7.5 x 9.6 x
</TABLE>
--------------------------------------------------------------------------------
Morgan Keegan & Company, Inc. Page 34
<PAGE>
Mergers and Acquisitions in the Trucking Industry (Continued)
(Dollars in Millions)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
Trailing 12 Month Financials of Acquired (in $ M M)
Adjusted ---------------------------------------------------
Date Acquiror Market Net Market Net Book
Effective Target Value Debt Value Revenues EBITDA EBIT Income Value
--------- -------- ------ ----- -------- -------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Oct-097 Investor Group
JB Hunt Transport Services
(Flatbed Unit) $ 40.0 $ 75.0
Oct-97 Covenant Transport, Inc.
Bud Meyer Truck Lines, Inc. $ 5.2 $ 45.0
Sep-97 Transit Group, Inc.
Carroll Fulmer Group, Inc. $ 28.1 $ 0.0 $ 28.1 $ 69.3 $ 1.6 $ 0.8 $ 0.2 $ 2.3
Sep-97 Celadon Group, Inc.
GE Industrial Control Systems $ 8.0 $ 25.0
Aug-97 Transit Group, Inc.
Service Express, Inc. /
Capital Warehouse $ 9.9 $ 0.0 $ 9.9 $ 21.3 $ 3.7 $ 0.6 $(0.1) $ 2.2
Jul-97 BT Industries AB
Raymond Corporation $246.2 $99.0 $345.2 $305.5 $31.7 $31.2 $15.0 $128.7
Jul-97 Heartland Express
A&M Express $ 14.0 $17.0 $ 31.0 $ 28.0 $ 5.8 $ 2.4 $ 1.5 $ 10.0
Jul-97 Ameritruck Distribution Corp.
Tran-Star, Inc. $ 2.6 $30.0 $ 32.6 $ 68.5 $ 6.9 $(1.2) $(2.3) $ 0.1
May-97 Dynamex, Inc.
Road Runner Transportation, Inc. $ 14.1 $ 0.0 $ 14.1 $ 22.7 $ 1.5 $ 0.5 $ 0.1 $ 1.9
May-97 Ameritruck Distribution Corp.
Monfort Transport./Lynn Transport. $ 15.0 $ 0.0 $ 15.0 $ 88.2 $11.0 $ 5.9 $ 2.4 $ 3.6
May-97 Golder, Thoma, Cressey, Rauner
Cardinal Freight Carriers $ 38.0 $ 0.0 $ 38.0 $ 76.1 $ 7.6 $ 1.5 $ 1.0
May-97 Central Freight
Viking Freight $ 43.0 $ 8.0 $ 51.0
May-97 Ampace Corp
Bar J Enterprises $ 4.3
Apr-97 Fleet Equity Partners
Roadrunner Freight Systems $ 75.0
Apr-97 Swift Transportation
Direct Transit Inc. $ 3.0
Feb-97 Transit Group
Rainbow Trucking $ 4.5 $ 12.5
Adjusted Market Value as a Market Value as a
Multiple of: Multiple of:
Date Acquiror Net
Effective Target Revenues EBITDA EBIT Income
--------- -------- -------- ------ ---- ------------------
<S> <C> <C> <C> <C> <C>
Oct-097 Investor Group
JB Hunt Transport Services
(Flatbed Unit) 0.5 x NA NA NA
Oct-97 Covenant Transport, Inc.
Bud Meyer Truck Lines, Inc. NA NA NA NA
Sep-97 Transit Group, Inc.
Carroll Fulmer Group, Inc. 0.4 x NM NM NM
Sep-97 Celadon Group, Inc.
GE Industrial Control Systems 0.3 x NA NA NA
Aug-97 Transit Group, Inc.
Service Express, Inc. /
Capital Warehouse 0.5 x 2.7 x NM NM
Jul-97 BT Industries AB
Raymond Corporation 1.1 x 10.9 x 11.1 x 16.4 x
Jul-97 Heartland Express
A&M Express 1.1 x 5.3 x 12.9 x 9.3 x
Jul-97 Ameritruck Distribution Corp.
Tran-Star, Inc. 0.5 x 4.7 x NM NM
May-97 Dynamex, Inc.
Road Runner Transportation, Inc. 0.6 x 9.3 x NM NM
May-97 Ameritruck Distribution Corp.
Monfort Transport./Lynn Transport. 0.2 x 1.4 x NM 6.2 x
May-97 Golder, Thoma, Cressey, Rauner
Cardinal Freight Carriers 0.5 x 5.0 x NM 40.0 x
May-97 Central Freight
Viking Freight NM NA NA NA
May-97 Ampace Corp
Bar J Enterprises NA NA NA NA
Apr-97 Fleet Equity Partners
Roadrunner Freight Systems NA NA NA NA
Apr-97 Swift Transportation
Direct Transit Inc. NA NA NA NA
Feb-97 Transit Group
Rainbow Trucking 0.4 x NA NA NA
High 1.5 x 10.9 x 12.9 x 40.0 x
Low 0.1 x 1.4 x 7.5 x 6.2 x
Mean 0.5 x 5.6 x 10.8 x 16.6 x
Median 0.4 x 5.0 x 11.2 x 13.0 x
-------------------------------------------------------------------------------------
Page 35
</TABLE>
