Item 6. Selected Financial Data
Operations 1995 1994 1993 1992 1991*
Net Sales $153,267,079 $137,575,675 $137,682,172 $137,945,037 $144,398,339
Gross Profit $ 38,237,699 $ 34,610,393 $ 32,574,737 $ 33,470,920 $ 34,901,796
Income before
cumulative
effect of
change in an
accounting
principle $ 1,890,032 $ 1,457,613 $ 782,592 $ 553,918 $ 136,408
Cumulative
effect of change
in an accounting
principle $ 0 $ (99,735)$ 0 $ 0 $ 0
Net Income $ 1,890,032 $ 1,357,878 $ 782,592 $ 553,918 $ 136,408
Common Stock
Primary Income Per Share:
Income before
cumulative
effect of
change in an
accounting
principle $ .36 $ .28 $ .15 $ .11 $ .03
Cumulative effect
of change
in an accounting
principle $ .00 $ (.02) $ .00 $ .00 $ .00
Net Income $ .36 $ .26 $ .15 $ .11 $ .03
Weighted Average
Number Shares
Outstanding 5,295,523 5,260,100 5,184,038 5,184,038 5,186,656
Fully Diluted Income Per Share:
Income before cumulative
effect of
change in an
accounting
principle $ .34 $ .28 $ .15 $ .11 $ .03
Cumulative effect
of change in an
accounting
principle $ .00 $ (.02) $ .00 $ .00 $ .00
Net Income$ .34 $ .26 $ .15 $ .11 $ .03
Weighted Average
Number Shares
Outstanding 5,769,480 5,260,100 5,184,038 5,184,038 5,186,656
Financial Data
Total Assets$ 51,370,810 $41,847,897 $40,118,711 $ 42,433,989 $44,446,081
Long Term
Liabilities $ 25,726,157 $18,268,139 $18,155,037 $ 21,040,025 $21,443,640
* Certain prior year balances have been reclassified to
conform with the current year presentation.
Report of Independent Accountants
To the Board of Directors
and Shareholders of
Travel Ports of America, Inc.
In our opinion, the financial statements listed in the
accompanying index present fairly, in all material respects,
the financial position of Travel Ports of America, Inc. at
April 30, 1995 and 1994, and the results of its operations
and its cash flows for each of the three years in the period
ended April 30, 1995, in conformity with generally accepted
accounting principles. These financial statements are the
responsibility of the Company's management; our
responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of
these statements in accordance with generally accepted
auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the
overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion
expressed above.
As discussed in Note 1, in 1994 the Company adopted the
provisions of SFAS No. 109 "Accounting for Income Taxes."
PRICE WATERHOUSE LLP
Rochester, New York 14604
July 11, 1995
TRAVEL PORTS OF AMERICA, INC.
Balance Sheet
April 30,
1995 1994
Assets
Current assets:
Cash and cash equivalents $ 7,593,798 $ 1,177,400
Accounts receivable, less
allowance for doubtful
accounts
($214,000 in 1995
and $207,000 in 1994) 3,683,235 3,018,092
Notes receivable 332,655 86,699
Inventories 5,790,823 4,572,142
Prepaid and other
current assets 532,904 514,789
Deferred taxes - current 381,900 436,100
Total current assets 18,315,315 9,805,222
Notes receivable due
after one year 1,390,600 1,689,277
Property, plant and
equipment, net 27,052,462 25,725,081
Cost in excess of underlying
net asset value of
acquired companies 2,032,686 2,096,876
Other assets 2,579,747 2,531,441
$ 51,370,810 $ 41,847,897
Liabilities and Shareholders' Equity
Current liabilities:
Note payable $ 1,752,000
Current portion of
long-term debt $ 2,360,015 2,256,795
Accounts payable 6,897,323 4,894,227
Accounts payable -
affiliate 597,100 372,893
Accrued compensation 1,335,305 1,074,504
Accrued sales and fuel tax 1,047,649 1,456,013
Accrued expenses and other
current liabilities 1,057,679 1,106,739
Income taxes payable 247,057
Total current liabilities 13,295,071 13,160,228
Long-term debt 20,328,957 17,551,139
Convertible senior
subordinated debentures 4,650,000
Preferred income taxes 747,200 717,000
Total liabilities 39,021,228 31,428,367
Commitments and contingencies (Note 11)
Shareholders' equity:
Common stock, $.01 par value
Authorized - 10,000,000 shares
Issued and outstanding -
5,209,924 shares in
1995 and 5,184,038
shares in 1994 52,099 51,841
Additional paid-in capital 3,767,741 3,727,979
Retained earnings 8,529,742 6,639,710
Total shareholders equity 12,349,582 10,419,530
$ 51,370,810 $ 41,847,897
The accompanying notes are an integral part of these
financial statements.
TRAVEL PORTS OF AMERICA, INC.
Statement of Income
Year ended
April 30,
1995 1994 1993
Net sales and operating revenues (including
consumer excise taxes of $35,356,000 in 1995,
$31,270,000 in 1994 and
$29,273,000 in 1993) $ 153,267,079 $137,575,675 $137,682,172
Cost of goods sold (including purchases from
an affiliate of $18,833,000 in
1995, $18,228,000
in 1994 and $15,383,000 in 1993) 115,029,380 102,965,282 105,107,435
Gross profit 38,237,699 34,610,393 32,574,737
Operating expenses 29,386,240 27,122,941 26,260,676
General and administrative expenses 3,805,780 3,569,441 3,234,885
Interest expense 2,290,904 1,618,341 1,889,970
Other income, net (265,857) (188,243) (181,486)
35,217,067 32,122,480 31,204,045
Income before income taxes and cumulative
effect of change in an
accounting principle 3,020,632 2,487,913 1,370,692
Provision for income taxes 1,130,600 1,030,300 588,100
Income before cumulative effect of change
in an accounting principle 1,890,032 1,457,613 782,592
Cumulative effect of change in an accounting
principle (99,735)
Net income $ 1,890,032 $ 1,357,878 $ 782,592
Earnings per share - primary:
Income before cumulative effect
of change
in accounting principle $ .36 $ .28 $ .15
Cumulative effect of change in accounting
principle .00 (.02) .00
Net income $ .36 $ .26 $ .15
Earnings per share - fully diluted:
Income before cumulative effect of change
in accounting principle $ .34 $ .28 $ .15
Cumulative effect of change in accounting
principle .00 (.02) .00
Net income $ .34 $ .26 $ .15
The accompanying notes are an integral part of these
financial statements.
TRAVEL PORTS OF AMERICA, INC.
Statement of Changes in Shareholders Equity
Additional Total
Common paid-in Retained shareholders
stock capital earnings equity
Balance at April 30, 1992 $51,841 $ 3,727,979 $4,499,240 $ 8,279,060
Net income 782,592 782,592
Balance at April 30, 1993 51,841 3,727,979 5,281,832 9,061,652
Net income 1,357,878 1,357,878
Balance at April 30, 1994 51,841 3,727,979 6,639,710 10,419,530
Net income 1,890,032 1,890,032
Exercise of options 258 39,762 40,020
Balance at April 30, 1995 $52,099 $ 3,767,741 $8,529,742 $12,349,582
The accompanying notes are an integral part of these
financial statements.
TRAVEL PORTS OF AMERICA, INC.
Statement of Cash Flows
Year ended April 30,
1995 1994 1993
Operating activities:
Net income $1,890,032 $1,357,878 $782,592
Cumulative effect of change in
an accounting principle 99,735
Depreciation and amortization 2,439,513 2,359,947 2,332,492
Provision for losses on
accounts receivable 7,051 30,517 64,968
Provision for (benefit of) deferred
income taxes 84,400 (38,906) 5,300
Loss (gain) on sale of assets 27,462 (234,485) (350,494)
Provision for inventory obsolescence 58,601
Writedown of assets to fair market value 50,000 200,000 182,023
Changes in operating assets and
liabilities -
Accounts receivable (672,194) (449,116) 250,865
Notes receivable (29,792)
Inventories (1,277,282) (183,546) (157,742)
Prepaid and other current assets (18,115) (49,273) 93,226
Accounts payable 2,227,303 1,269,037 (310,652)
Accrued compensation 260,801 92,360 (382,714)
Accrued sales and fuel tax (408,364) (669,189) 216,757
Accrued expenses and other current
liabilities (49,060) 177,303 95,435
Changes in income taxes
receivable/payable (247,057) (15,253) (99,372)
Changes in other non-current assets (429,606) 26,772 (157,246)
Net cash provided by operating
activities 3,913,693 3,973,781 2,565,438
Investing activities:
Expenditures for property, plant
and equipment (3,732,736) (1,358,891) (1,205,856)
Acquisition of leasehold interest (2,075,000)
Decrease (increase) in other assets 200,000 (200,000)
Proceeds from sale/disposal of property,
plant and equipment 133,870 366,512 689,500
Net proceeds received from notes
receivable 82,513 228,131 241,067
Net cash used in
investing activities (3,316,353) (3,039,248) (275,289)
Financing activities:
Net short-term (payments) borrowings (1,752,000) (286,000) 208,000
Principal payments of long-term debt (7,618,962) (3,051,926) (3,382,929)
Proceeds from long-term borrowings 10,500,000 2,500,000 800,000
Proceeds from convertible senior
subordinated debentures 4,650,000
Exercise of stock options 40,020
Net cash provided by (used in)
financing activities 5,819,058 (837,926) (2,374,929)
Net increase (decrease) in cash
and equivalents 6,416,398 96,607 (84,780)
Cash and equivalents - beginning of year 1,177,400 1,080,793 1,165,573
Cash and equivalents - end of year $ 7,593,798 $ 1,177,400 $ 1,080,793
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the year:
Interest paid $ 2,200,881 $ 1,625,628 $ 1,899,644
Income taxes paid, net $ 1,396,100 $ 1,046,085 $ 687,997
The accompanying notes are an integral part of these
financial statements.
TRAVEL PORTS OF AMERICA, INC.
Notes to Financial Statements
April 30, 1995
NOTE 1 - THE COMPANY AND ITS ACCOUNTING POLICIES:
The Company is primarily engaged in the operation of travel
plazas and has thirteen full service plazas and one mini
plaza located in the states of New York, Pennsylvania, New
Jersey, Indiana, North Carolina and New Hampshire. A
significant portion of the Company's sales and receivables
are with companies in the trucking and related industries.
Certain amounts in the prior years' financial statements have
been reclassified to conform with the current year
presentation.
The Company's significant accounting policies follow.
Allowance for doubtful accounts
Accounts receivable are reviewed on a regular basis and the
allowance for doubtful accounts is adjusted to reserve for
specific accounts believed to be uncollectible. In addition,
a general reserve is provided on remaining accounts
receivable to cover potential problems not yet apparent,
based upon historical loss information.
Inventories
Inventories are stated at the lower of cost or market. Cost
is determined on the first-in, first-out (FIFO) method.
Property, plant and equipment
Property, plant and equipment are stated at cost less
accumulated depreciation and amortization. Depreciation is
provided on the straight-line basis over the estimated useful
lives of the related assets as follows: land improvements -
15 years; buildings and improvements - 15 to 31 years; and
equipment and fixtures - 3 to 15 years. Leasehold
improvements are amortized over the remaining term of the
applicable leases or their estimated useful lives, whichever
is shorter. Expenditures for maintenance and repairs are
charged to expense as incurred. Major improvements are
capitalized.
Cost in excess of underlying net asset value of acquired
companies
The Company amortizes cost in excess of underlying net asset
value of companies acquired over 40 years. The amount
presented on the balance sheet is net of accumulated
amortization of $534,918 and $470,728 at April 30, 1995 and
1994, respectively. Amortization expense for the years ended
April 30, 1995, 1994 and 1993 was $64,190, $67,434 and
$71,972, respectively.
Deferred financing costs
Deferred financing costs included within other assets are
being amortized on a straight-line basis over the term of the
related debt. Amortization expense for the years ended 1995,
1994 and 1993 was $183,544, $107,125 and $72,402,
respectively.
Earnings per share
Primary earnings per share is computed by dividing net income
by the weighted average number of common and, when
applicable, common equivalent shares outstanding during the
period. Weighted average shares used in the computation were
5,295,523 in 1995, 5,260,100 in 1994 and 5,184,038 in 1993.
Fully diluted earnings per share include the dilutive impact
of common equivalent shares and the convertible debentures.
Weighted average shares used in the computation were
5,769,480 in 1995, 5,260,100 in 1994 and 5,184,038 in 1993.
Cash flows statement
For purposes of this statement, the Company considers all
highly liquid instruments with a maturity of three months or
less to be cash equivalents.
During fiscal 1994, the Company sold one of its travel plazas
and received as partial consideration a note receivable in
the amount of $1,425,000.
Income taxes
In May 1993, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 109, "Accounting for Income
Taxes." The adoption of SFAS No. 109 changed the Company's
method of accounting for income taxes from the deferred
method (APB 11) to an asset and liability approach.
Previously the Company deferred the past tax effects of
timing differences between financial reporting and taxable
income. The asset and liability approach requires the
recognition of deferred tax liabilities and assets for the
expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of other
assets and liabilities. The adoption of SFAS No. 109 was
recognized in the financial statements as the cumulative
effect of a change in accounting principle and resulted in a
$99,735 unfavorable impact on 1994 earnings.
NOTE 2 - ACQUISITIONS AND DISPOSALS:
On June 15, 1995, the Company sold its Fairplay, South
Carolina facility to an unrelated third party at net book
value. The Company received a mortgage on the property for a
portion of the purchase price. The sale will not have a
significant impact on future operations.
On April 30, 1994, the Company acquired a leasehold interest
in a full service travel plaza in Greenland, New Hampshire
from a bankruptcy court. In conjunction with this
acquisition, the Company also purchased $75,000 in inventory.
Simultaneously, the Company entered a twenty-year operating
lease for the facility with a third party unrelated to the
seller. The leasehold interest will be amortized over the
life of the lease. The Company made a cash payment for this
acquisition amounting to less than 5% of its total assets.
In August of 1993, the Company sold its Allentown,
Pennsylvania facility. The Company received as consideration
a cash down payment and a $1,425,000 note receivable. This
sale had no significant impact on operations.
During 1993, the Company ceased operations at one facility
and the related assets were disposed of with no significant
impact on operations.
NOTE 3 - INVENTORIES:
Major classifications of inventories are as follows:
1995 1994
At first-in, first-out (FIFO) cost:
Petroleum products $1,467,754 $956,313
Store merchandise 1,708,595 1,497,499
Parts for repairs and tires 2,138,790 1,689,606
Other 475,684 428,724
$ 5,790,823 $ 4,572,142
The FIFO value of inventory approximates the current
replacement cost.
NOTE 4 - PROPERTY, PLANT AND EQUIPMENT:
Major classifications of property, plant and equipment are as
follows:
1995 1994
Land $6,520,112 $6,362,594
Land improvements 7,415,110 7,056,191
Buildings and improvements 18,074,104 17,621,875
Equipment and fixtures 10,561,679 9,271,878
Leasehold improvements 1,536,711 1,347,906
Construction in progress 1,024,099 31,824
45,131,815 41,692,268
Less - Allowance for depreciation
and amortization (18,079,353)(15,967,187)
$ 27,052,462 $25,725,081
These amounts include property, plant and equipment under a
capital lease as follows:
1995 1994
Building $706,031 $706,031
Land improvements 243,969 243,069
950,000 950,000
Less - Accumulated amortization (616,820)(593,630)
$ 333,180 $356,370
The leased assets relate to an agreement with the Livingston
County Industrial Development Agency under which the Agency's
bond proceeds were used to acquire, construct and equip an
operating facility in Dansville, New York. The Company has
the option to buy the facility for $1 at the end of the lease
term, February 2000. Lease amortization amounted to $23,190
for each of the years 1995, 1994 and 1993, and is included in
depreciation expense.
NOTE 5 - OTHER ASSETS:
At April 30, 1995 and 1994, other assets primarily consist of
a leasehold interest in a full service travel plaza in
Greenland, New Hampshire. Other assets at April 30, 1995 and
1994 also include financing costs. The leasehold interest
represents the amount paid by the Company for the rights to
operate a full service plaza under the terms of a twenty-year
lease. The leasehold interest is being amortized over the
life of the lease (Note 6).
NOTE 6 - LEASES:
The Company leases four of its operating facilities and its
home office under various terms from 3 to 20 years. Certain
of the operating leases contain renewal options for periods
beyond their original terms at specified rates of payment and
four of the leases include purchase options exercisable at
future dates. The Company has also entered into various
leases of equipment and property used in operations and
related office space with various lease periods and renewal
options.
At April 30, 1995, future minimum payments required under
non-cancelable leases are as follows:
Operating Capital
1996 $1,531,048 $67,115
1997 1,411,895 63,077
1998 1,202,748 59,041
1999 825,059 55,001
2000 827,098 50,965
Future 6,065,141 11,315
$ 11,862,989 306,514
Less - Amount representing
interest (57,929)
Present value of net minimum
lease payments $248,585
Rental expense applicable to operating leases, net of
sublease income of $361,600, $275,100, and $269,000 amounted
to $1,180,600, $1,037,800, and $1,128,800 for 1995, 1994 and
1993, respectively.
NOTE 7 - DEBT:
Long-term debt consists of the following:
1995 1994
Mortgage loans:
Due 2001, prime plus 1.000% $ 411,061 $ 505,556
Due 2003, prime plus .875% 1,100,009 1,233,341
Due 2004, prime plus .875% 2,858,379 3,185,028
Due 2005, prime plus .875% 3,574,942 3,941,644
Term loans:
Due 1996, prime plus 1.250% 6,193,383
Due 1997, prime plus 1.000% 1,531,724 1,656,763
Due 1999, fixed rate of 9.650% 2,291,670 2,500,000
Due 2002, fixed rate of 10.120% 10,424,544
Obligation under capital lease, 8.250% 248,585 296,090
Other long-term debt, various
rates and maturities 248,058 296,129
22,688,972 19,807,934
Less - Portion due within one year, including
amounts for capital lease of $47,500 in
1995 and 1994 (2,360,015) (2,256,795)
$ 20,328,957 $17,551,139
The prime interest rate was 9.00% and 6.75% at April 30, 1995
and 1994, respectively.
During June 1994, the Company entered into a $2,500,000 term
loan at 9.65%. Proceeds from this loan were used to finance
the acquisition and renovation of the Greenland, New
Hampshire facility. The loan requires monthly payments of
principal and interest through May 1999 with a lump sum
payment in June 1999.
During September 1994, the Company entered into a $10,500,000
term loan at 10.12%. Proceeds from this loan were used to
refinance an existing prime plus 1.25% term loan, refinance a
prime plus 1% note payable under a bank line of credit and
finance capital additions at various facilities. The loan
requires monthly payments of principal and interest through
August 2002 with a lump sum payment in September 2002.
The Company's primary lending institution has renewed its
commitment for the Company's existing line of credit through
August 31, 1995. The line of credit is now limited to the
lesser of $2,750,000 or the sum of 80% of the Company's
accounts receivable under 90 days old, plus 45% of the
Company's inventory. The maximum balance outstanding on this
line of credit during 1995 was $1,752,000. At April 30, 1995,
the Company had utilized $200,000 of its available line of
credit as collateral for various letters of credit.
None of the debt agreements outstanding during 1995 require
material compensating balances or commitment fees.
Substantially all assets of the Company have been pledged to
secure the outstanding borrowings.
Certain loan agreements require that the Company maintain
specified minimums with regard to net worth, current maturity
coverage and the incurrence of additional indebtedness. In
addition, the Company cannot declare dividends without the
consent of its primary lender. The Company is in compliance
with such requirements and restrictions.
Long-term debt requirements excluding capital leases, over
the next five years are as follows: 1996 - $2,312,500; 1997 -
$2,420,000; 1998 - $2,425,600; 1999 - $2,636,700 and 2000 -
$2,779,300.
NOTE 8 - CONVERTIBLE SENIOR SUBORDINATED DEBENTURES:
During January 1995, the Company issued $4,650,000 of 8.5%
convertible senior subordinated debentures due January 15,
2005 together with warrants to purchase 93,000 additional
shares of the Company's common stock. No principal
repayments are required until January 2001. Commencing in
January 2001, the Company is required to redeem, on an annual
basis, 20% of the outstanding balance of debentures at par.
Interest is payable on a quarterly basis. The debentures are
subordinate to all other indebtedness and may be converted at
the bondholders' option into 1,550,000 shares of the
Company's common stock at $3.00 per share. The debentures
are callable at the discretion of the Company after January
15, 1998, at a redemption price equal to 109% of the
principal amount outstanding as of January 15, 1998, and
gradually decreasing to 100% of the principal amount
outstanding at maturity on January 15, 2005.
The warrants are exercisable at any time through their
expiration date of January 2005 at an exercise price of $3.60
per share.
NOTE 9 - INCOME TAXES:
The provision for income taxes consists of the following:
1995 1994 1993
Current provision:
Federal $806,900 $770,600 $441,500
State 239,300 298,700 141,300
1,046,200 1,069,300 582,800
Deferred provision (benefit):
Federal 67,200 2,400 16,000
State 17,200 (41,400) (10,700)
84,400 (39,000) 5,300
$ 1,130,600 $1,030,300 $ 588,100
The reconciliation of the federal statutory income tax rate
to the effective income tax rate is as follows:
1995 1994 1993
Per cent Per cent Per cent
of of of
income income income
before before before
Amount taxes Amount taxes Amount taxes
Statutory federal
rate $1,027,000 34.0% $845,900 34.0% $466,000 34.0%
State income
taxes, net of
federal
benefit 172,200 5.7 156,900 6.3 93,200 6.8
Amortization of
goodwill 21,800 .7 22,900 .9 24,500 1.8
Meals and
entertainment 20,100 .7 4,200 .2 3,200 .2
Expenditures
not deductible for
book (40,500) (1.3)
Excess tax
reserve (70,700) (2.4)
Other 700 400 1,200
Effective
tax rate $ 1,130,600 37.4% $1,030,300 41.4% $ 588,100 42.9%
A summary of the deferred income tax assets and liabilities are as
follows:
1995 1994
Assets
Bad debt reserve $81,900 $84,700
Vacation accrual 57,600 60,400
Inventory basis difference 110,600 80,100
Book accruals not currently
deductible for tax 131,800 210,900
$ 381,900 $436,100
Liabilities
Depreciation $ 747,200 $717,000
The Company had an Alternative Minimum Tax Credit carryforward of
approximately $203,000 at April 30, 1993 which was utilized to
reduce regular federal income tax payable in 1994. Prior to 1994,
deferred taxes were provided for significant timing differences
primarily consisting of depreciation, accruals and allowances not
deductible for tax purposes and alternative minimum tax credits.
NOTE 10 - SHAREHOLDERS' EQUITY:
The Company has three common stock incentive plans for officers
and other key employees. The first plan, established in 1987,
provides for the issuance of up to 180,000 shares of common stock
of which 5,436 options are available for future grant as of April
30, 1995. The second plan, established in 1992, provides for the
issuance of up to 100,000 shares of common stock of which 1,002
options are available for future grant as of April 30, 1995. The
third plan, established in 1994, provides for issuance of up to
200,000 shares of common stock of which 14,500 options are
available for future grant as of April 30, 1995. Provisions of
the plans are similar. Options may be granted at prices not less
than the fair market value at the date of grant and expire no
later than ten years after the date of grant. A summary of
changes in outstanding stock options is as follows:
Prices during
fiscal years 1995 1994 1993
Outstanding at
beginning of year $1.44 - $2.50 345,248 184,250 188,500
Granted $1.44 - $2.50 113,500 192,998
Exercised $1.50 - $2.12 (25,886)
Canceled $1.62 - $2.12 (10,124) (32,000) (4,250)
Outstanding at
the end of year $1.44 - $2.50 422,738 345,248 184,250
Shares available
for grant 20,938 124,314 85,312
During 1995, warrants for 93,000 shares were issued in conjunction
with the issuance of $4,650,000 of convertible senior subordinated
debentures (Note 8).
During September 1986, shareholders approved the issuance of
non-qualified stock options to the former preferred shareholders
enabling them to purchase an aggregate of 1,000,000 shares of
common stock at $4.75 per share, the fair market value of the
common stock at the date of grant. The options became exercisable
at the rate of 20% per year on a cumulative basis beginning in
fiscal 1989 and had a duration of ten years. During 1994, the
Company repurchased the options for $100,000. This amount was
recorded as general and administrative expense in the Statement of
Income.
NOTE 11 - COMMITMENTS AND CONTINGENCIES:
United Petroleum Marketing Inc. and United Petroleum Realty Corp.,
a petroleum retailer and real estate company, initiated a suit
against the Company alleging damages of $2,395,000, claiming that
the Company violated the Agreement of Sale and various other
agreements relating to the sale of twenty-three gasoline stations
in 1987. Although the Company is unable to predict with certainty
the outcome of the aforementioned matter, management believes this
claim is without merit and that it is unlikely that any liability
it may incur would have an adverse effect on the financial
condition or results of operations of the Company.
The Company is subject to other legal proceedings and claims which
have arisen in the ordinary course of its business and have not
been finally adjudicated. These actions, when concluded and
determined, will not, in the opinion of management, have a
material adverse effect upon the financial position of the
Company.
The Company plans to construct a new facility near Erie,
Pennsylvania. Construction of the facility is currently scheduled
to begin during August 1995. The total cost of this facility is
expected to approximate $7,000,000 and is expected to be financed
through a combination of cash generated from operations and bank
financing.
NOTE 12 - RELATED PARTY TRANSACTIONS:
The Company has a long-term contract, which extends through
December 1995, with a petroleum distributor owned by a shareholder
director for the supply of gasoline and diesel fuel to certain
motor plazas. Purchases from this company were $18,833,000 in
fiscal 1995, $18,228,100 in fiscal 1994, and $15,383,000 in fiscal
year 1993. At April 30, 1995 and 1994, $568,600 and $347,900,
respectively, were owed to this supplier under contract terms
calling for payment within fifteen days.
The Maybrook, New York motor plaza is leased from a realty company
owned by two individuals, one of whom is a shareholder director of
the Company. The lease covers a period through March 2004 at
which time the Company has the option to purchase the facility for
$3,500,000. Annual rentals under the lease are $450,000.
The Company pays a shareholder director, fees and bonuses for
consulting, management and other services rendered to the
Company. These fees and bonuses amounted to approximately
$204,800, $239,000 and $188,000 for the years 1995, 1994 and
1993, respectively.
Item 8. Financial Statement and Supplementary Data
A capsule summary of the Companys unaudited quarterly
net sales, gross profit, net income and earnings per share
for the years ended April 30, 1995, 1994 and 1993 is
presented below.
First Second Third Fourth Total
1995 Quarter Quarter Quarter Quarter Year
Net Sales $38,175,726 $39,075,621 $37,529,063 $38,486,669 $153,267,079
Gross Profit $ 9,778,327 $10,092,832 $ 9,246,917 $ 9,119,623 $ 38,237,699
Net Income $ 561,250 $ 714,111 $ 286,917 $ 327,754 $ 1,890,032
Net Income Per Share
Primary $ 0.11 $ 0.14 $ 0.05 $ 0.06 $ 0.36
Fully
Diluted $ 0.11 $ 0.14 $ 0.05 $ 0.06 $ 0.34
First Second Third Fourth Total
1994 Quarter Quarter Quarter Quarter Year
Net Sales $34,380,334 $34,574,038 $32,661,421 $35,959,882 $137,575,675
Gross Profit $ 8,971,090 $ 8,732,120 $ 7,812,943 $ 9,094,240 $ 34,610,393
Net Income Before Cumulative Effect of Change in an
Accounting
Principle $ 555,277 $ 523,361 $ 101,761 $ 277,214 $ 1,457,613
Change in Accounting
Principle $ (99,735)$ 0 $ 0 $ 0 $ (99,735)
Net Income $ 455,542 $ 523,361 $ 101,761 $ 277,214 $ 1,357,878
Net Income Per Share Before Cumulative Effect of Change in an
Accounting
Principle $ 0.11 $ 0.10 $ 0.02 $ 0.05 $ 0.28
Change in Accounting
Principle $ (0.02)$ 0.00 $ 0.00 $ 0.00 $ (0.02)
Net Income Per Share
Primary $ 0.09 $ 0.10 $ 0.02 $ 0.05 $ 0.26
Fully
Diluted $ 0.09 $ 0.10 $ 0.02 $ 0.05 $ 0.26
First Second Third Fourth Total
1993 Quarter Quarter Quarter Quarter Year
Net Sales $32,673,009 $35,161,794 $33,137,541 $36,709,828 $137,682,172
Gross Profit $ 7,845,563 $ 8,316,296 $ 7,850,181 $ 8,562,697 $ 32,574,737
Net Income $ 100,007 $ 252,105 $ 221,849 $ 208,631 $ 782,582
Net Income Per Share
Primary $ 0.02 $ 0.05 $ 0.04 $ 0.04 $ 0.15
Fully
Diluted $ 0.02 $ 0.05 $ 0.04 $ 0.04 $ 0.15
PART IV
Item 14. Exhibits, Financial Statement Schedules on Form 10-K
Item 14(a)(1), 14(a)(2) and 14(d):
The following financial statement and financial
statement schedules are filed as a part of Item 8 of this
Report:
Report of Independent Accountants
Balance Sheet for the years ended April 30, 1995 and
1994
Statement of Income for the years ended April 30, 1995,
1994 and 1993
Statement of Changes in Shareholders' Equity for the
years ended April 30, 1995, 1994 and 1993
Statement of Cash Flows for the years ended April 30,
1995, 1994 and 1993
Notes to Financial Statements
Financial Statement Schedules for years ended April 30,
1995, 1994 and 1993
Selected Quarterly Financial Information (Unaudited)
All other schedules are not submitted because they are
not applicable or not required under Regulation S-X or
because the required information is included in the financial
statements or notes thereto.
Item 14(b):
During the fourth quarter of fiscal 1995, a Current
Report on Form 8-K, dated February 15, 1995, was filed with
the Commission.
Item 14(a)(3) and 14(c):
See Index to Exhibits
INDEX TO EXHIBITS
(3) Articles of Incorporation and By-laws
Exhibit 3-a and exhibit 3-b to the Company's
Registration Statement on Form S-18, File No. 33-7870-
NY are incorporated herein by reference with respect to
the Restated Certificate of Incorporation and By-laws
of the Company.
3-c Certificate of Amendment of Certificate
of Incorporation changing the name of the Corporation,
is incorporated herein by reference to Exhibit 3-c of
the Company's report on Form 10-K dated July 27, 1993.
(4) Instruments defining the rights of security holders,
including indentures
The Exhibits referenced under (3) of this Index to
Exhibits are incorporated herein by reference.
Exhibit 4-a, Form of Common Stock Certificate, to
the Company's Registration Statement on Form S-18, File
No. 33-7870-NY is incorporated herein by reference with
respect to instruments defining the rights of security
holders.
Exhibit 4-c, Form of Indenture dated as of January
24, 1995, between Travel Ports of America, Inc. and
American Stock Transfer and Trust Company, as Trustee,
with respect to up to $5,000,000 principal amount of
8.5% Convertible Senior Subordinated Debentures due
January 15, 2005 is incorporated by reference to
Exhibit 4-c to the Companys Current Report on Form 8-K
dated February 15, 1995.
Exhibit 4-d, Form of Warrant to purchase Common
Stock is incorporated by reference to Exhibit 4-d to
the Companys Current Report on Form 8-K dated February
15, 1995.
(9) Voting trust agreements
None
(10) Material contracts
10.1 The following material contracts are incorporated
herein by reference to the Company's Registration
Statement on Form S-18, File No. 33-7870-NY:
10-a Employee Incentive Stock Option Plan
10-b Lease dated as of March 1, 1980, between the
Company and Livingston County Industrial
Development Agency for the Dansville, New York
facility.
10-c Sublease dated as of March 30, 1984, between
the Company and Maybrook Realty for the Maybrook,
New York facility.
10-d Sublease dated March 14, 1984, between the
Company and Ryder Truckstops, Inc. ("Ryder") for
part of the Mahwah, New Jersey facility.
10-e Sublease dated March 14, 1984, between the
Company and Ryder for part of the Mahwah, New
Jersey facility.
10-f Lease dated February 1, 1973, between
Truckstop Corporation of America, Inc. ("TCA") and
E. Elwood Moore and Francis Moore, together with
Assignments to the Company, dated March 14, 1984
for part of the Mahwah, New Jersey facility.
10-u Unbranded Distillate Sales Agreement dated
January 2, 1986, between the Company and W.W.
Griffith Oil Co., Inc.
10-v Purchase and Sales Contract for the Belmont,
New York facility dated February 7, 1986, between
the Company and W.W. Griffith Oil Co., Inc.
10.2 Lease, dated December 1, 1988, amended January 10,
1989, between the Company and Christ T. Panos is
incorporated herein by reference to Exhibit 2 (b) and
(c) to the Company's Current Report on Form 8-K dated
January 20, 1989, as amended by Form 8-K dated March
21, 1989.
10.3 Real estate mortgage dated January 5, 1989,
executed and delivered by the Company as security for
the Mortgage payable to Fleet Bank N.A. is incorporated
herein by reference to Exhibits 2 (n), 2 (p) and 2 (q)
to the Company's Amended Current Report on Form 8-K
dated March 21, 1989.
10.4 Mortgage Agreement dated December 1989 executed
and delivered by the Company as security for the
Mortgage payable to Fleet Bank N.A. relating to the
construction of the Greencastle, Pennsylvania facility
is incorporated herein by reference to Exhibit 10 (e)
of the Company's report on Form 10-K dated August 10,
1990.
10.5 Credit Agreement dated June 1988 executed and
delivered by the Company as security for the Mortgage
payable to Fleet Bank N.A. is incorporated herein by
reference to Exhibit 10 (f) of the Company's report on
Form 10-K dated August 10, 1990.
10.6 Term Loan Note dated January 28, 1991, executed
and delivered by the Company as security for the
Mortgage payable to Fleet Bank N.A. is incorporated
herein by reference to Exhibit 4 (c) of the Company's
report on Form 10-Q dated March 14, 1991.
10.7 1991 Employee Incentive Stock Option Plan is
incorporated herein by reference to Appendix "A" of the
Proxy Statement issued for the October 29, 1991, Annual
Meeting of Stockholders.
10.8 Term Loan Note dated July 29, 1992, executed and
delivered by the Company as security for the Mortgage
payable to First Eastern Bank is incorporated herein by
reference to Exhibit 10-j of the Company's report on
Form 10-K dated July 27, 1993. This Exhibit replaces
the commitment letter of February 3, 1992, from First
Eastern Bank for a term loan that was incorporated as
Exhibit 10-j of the Company's report on Form 10-K dated
July 23, 1992.
10.9 1993 Employee Incentive Stock Option Plan is
incorporated herein by reference to Appendix A of the
Proxy Statement issued for the October 26, 1993, Annual
Meeting of Stockholders.
10.10 Lease dated May 31, 1991 and amended June 17,
1992, between the Company and Townline Associates is
incorporated herein by reference to Exhibit 10.10, page
50 of the Companys report on Form 10-K dated July 27,
1994.
10.11 Lease dated November 20, 1987, amended April
21, 1993, and April 29, 1994, between the Company and
Siegel Limited Partnership is incorporated herein by
reference to Exhibit 10.11, page 91 of the Companys
report on Form 10-K dated July 27, 1994.
10.12 Term Loan Note dated June 30, 1994, executed
and delivered by the Company as security for the
Mortgage payable to Fleet Bank of New York is
incorporated herein by reference to Exhibit 10.12, page
120 of the Companys report on Form 10-K dated July 27,
1993.
10.13 Restated and Amended Credit Agreement,
Revolving Line Note and Term Loan Note, all dated
September 29, 1994, executed and delivered by the
Company to Fleet Bank of New York is incorporated
herein by reference to Exhibit 10.13, page 14 of the
Companys report on Form 10-Q dated November 28, 1994.
(11) Statement re computation of per share earnings
Computation of Per Share Earnings is set forth in
Exhibit (11) on page 44 of this report.
(12) Statement re computation of ratios
Not applicable
(13) Annual report to security holders
Not applicable
(16) Letter re change in certifying accountant
Not applicable
(18) Letter re change in accounting principles
Not applicable
(19) Previously unfiled documents
None
(22) Subsidiaries of Registrant
Exhibit (22) on page 44 of this report.
(23) Published report regarding matters submitted to vote of
security holders
None
(24) Consents of experts and counsel
Not applicable
(25) Power of Attorney
Not applicable
(28) Additional exhibits
None
(29) Information from reports furnished to state insurance
regulatory agencies
None
Exhibit 11
Computation of Primary Per Share Earnings
Total Options Common
Below Market Average Average Equivalent
Quarter Ended Price Option Price Market Price Shares
7/31/94 390,748 $1.83 $2.23 70,447
10/31/94 388,248 $1.83 $2.17 61,187
1/31/95 423,248 $1.87 $2.44 99,243
4/30/95 422,748 $1.87 $2.54 111,519
Total of Four Quarters 342,396
Average common stock equivalents outstanding during year
ended 4/30/95 85,599
Average number of shares outstanding during year ended
4/30/95 5,209,924
Total weighted average shares outstanding
5,295,523
Net Income for year ended 4/30/95
$1,890,032
Net Income per common and common equivalent shares
$.36
Computation of Fully Diluted Per Share Earnings
Total Options Common
Below Market Average Ending Equivalent
Quarter Ended Price Option Price Market Price Shares
7/31/94 390,748 $1.83 $2.44 97,713
10/31/94 388,248 $1.83 $2.38 89,418
1/31/95 423,248 $1.87 $2.50 107,019
4/30/95 422,748 $1.87 $2.75 135,741
Total of Four Quarters 429,891
Average common stock equivalents outstanding during year
ended 4/30/95 107,473
Common stock equivalents due to assumed conversion of
convertible debentures 451,890
Average number of shares outstanding during year ended
4/30/95 5,209,924
Total weighted average shares outstanding 5,769,287
Net Income for year ended 4/30/95 $1,890,032
Interest on 8.5% convertible debentures, after tax 67,452
$1,957,404
Net Income per common and common equivalent shares
$.34
Exhibit 22
Subsidiaries of the Registrant for the year ended April 30, 1995
The Company has no parent. As of April 30, 1992, all
subsidiaries have filed for certificates of dissolution and
all activity has been recorded by the Company for the year
ended April 30, 1995.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of
the Securities Exchange Act of 1934, Travel Ports of
America, Inc., has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
TRAVEL PORTS OF AMERICA, INC.
By: /S/ John M. Holahan
July 27, 1994 John M. Holahan, President
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed by the following
persons in the capacities and on the date indicated below.
Signature Title Date
/S/ E. Philip Saunders Chairman of the Board and
E. Philip Saunders Chief Executive Officer July 28, 1995
/S/ John M. Holahan President and Chief July 28, 1995
John M. Holahan Operating Officer
/S/ William Burslem III Vice President, Secretary and
William Burslem III and Chief Financial Officer July 28, 1995
/S/ William A. DeNight Director July 28, 1995
William A. DeNight
/S/ John O. Eldredge Director July 28, 1995
John O. Eldredge
/S/ Dante Gullace Director July 28, 1995
Dante Gullace
/S/ John F. Kendall Director July 28, 1995
John F. Kendall
