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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
/ X / QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1993
OR
/___/ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-5728
ROLLINS TRUCK LEASING CORP.
(Exact name of registrant as specified in its charter)
DELAWARE 51-0074022
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Rollins Plaza, Wilmington, Delaware 19803
(Address of principal executive offices) (Zip Code)
(302) 426-2700
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No _____
The number of shares of the registrant's common stock outstanding as of
December 31, 1993 was 30,432,509.
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FORM 10-Q Page 2 of 7
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with the instructions to Form 10-Q and do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
three months ended December 31, 1993 are not necessarily indicative of the
results that may be expected for the year ended September 30, 1994. These
statements should be read in conjunction with the financial statements and notes
thereto included in the Company's Annual Report on Form 10-K for the year ended
September 30, 1993.
ROLLINS TRUCK LEASING CORP.
CONSOLIDATED STATEMENT OF EARNINGS
($000 Omitted Except for Per Share Amounts)
Three Months Ended
December 31,
1993 1992
Operating revenues $107,444 $100,095
Operating expenses 43,928 42,401
Depreciation, net of gain on disposition
of property and equipment 29,314 27,255
Selling and administrative expenses 9,577 9,717
Interest expense, net 8,429 8,225
91,248 87,598
Earnings before income taxes 16,196 12,497
Income taxes 6,722 4,999
Net earnings $ 9,474 $ 7,498
Earnings per share $ .31 $ .24
Average common shares and equivalents
outstanding (000) 30,879 30,749
Dividends paid per common share $ .05 $ .045
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FORM 10-Q Page 3 of 7
ROLLINS TRUCK LEASING CORP.
CONSOLIDATED BALANCE SHEET
($000 Omitted)
December 31, September 30,
ASSETS 1993 1993
Current assets
Cash $ 17,983 $ 15,081
Accounts receivable, net of allowance
for doubtful accounts of: December-
$1,398; September-$1,620 50,469 48,917
Inventory of parts and supplies 8,840 8,679
Prepaid expenses 12,561 10,147
Deferred income taxes 6,617 7,331
Total current assets 96,470 90,155
Equipment on operating leases, at cost,
net of accumulated depreciation of:
December-$294,370; September-$289,836 541,577 543,396
Other property and equipment, at cost,
net of accumulated depreciation of:
December-$44,351; September-$43,674 125,762 124,170
Notes receivable - Matlack, Inc. 6,000 6,000
Excess of cost over net assets of
businesses acquired 12,076 12,131
Other assets 4,957 5,309
$786,842 $781,161
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 5,506 $ 5,153
Accrued liabilities 35,921 38,310
Income taxes payable 3,367 -
Current maturities of long-term debt 193 209
Total current liabilities 44,987 43,672
Equipment financing obligations 421,328 427,307
Long-term debt 887 922
Deferred income taxes 85,896 83,352
Other liabilities 8,729 9,158
Commitments and contingent liabilities
See Part II Legal Proceedings
Shareholders' equity
Common stock, $1 par value,
50,000,000 shares authorized; issued
and outstanding: December-30,432,509;
September-30,362,903 30,432 30,363
Capital in excess of par value 35,257 35,016
Retained earnings 159,326 151,371
Total shareholders' equity 225,015 216,750
$786,842 $781,161
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FORM 10-Q Page 4 of 7
ROLLINS TRUCK LEASING CORP.
CONSOLIDATED STATEMENT OF CASH FLOWS
($000 Omitted)
Three Months Ended
December 31,
1993 1992
Cash flows from operating activities:
Net earnings $ 9,474 $ 7,498
Reconciliation of net earnings to
net cash flows from operating activities:
Depreciation and amortization 31,310 28,945
Current and deferred income taxes 6,625 4,466
(Increase) decrease in accounts and
notes receivable (1,552) 4,642
(Decrease) in accounts payable and
accrued liabilities (2,036) (1,065)
Net gain on sale of property and equipment (1,941) (1,635)
Other, net (2,339) (3,261)
Net cash flows from operating activities 39,541 39,590
Cash flows from investing activities:
Purchase of property and equipment (47,348) (44,538)
Proceeds from sale of property and equipment 17,948 19,763
Net cash flows used in investing activities (29,400) (24,775)
Cash flows from financing activities:
Proceeds of equipment financing 11,749 32,999
Repayment of equipment financing (17,728) (52,907)
Repayment of long-term debt (51) (714)
Payments of dividends (1,519) (1,359)
Proceeds of stock options exercised 310 318
Net cash flows used in financing activities (7,239) (21,663)
Net increase (decrease) in cash 2,902 (6,848)
Cash beginning of period 15,081 17,563
Cash end of period $17,983 $10,715
Supplemental information:
Interest paid $ 7,054 $ 8,343
Income taxes paid $ 97 $ 532
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FORM 10-Q Page 5 of 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations: Three Months Ended December 31, 1993 vs. Three Months
Ended December 31, 1992
Revenues increased by $7,349,000 (7.3%) as full-service lease, commercial
rental and dedicated contract carriage revenues all improved over the same
quarter last year. The commercial rental utilization remained strong during the
first quarter of this year, reflecting continued confidence in the economy and
greater demand for transportation services.
Operating expenses increased by $1,527,000 (3.6%) reflecting the increase
in revenues. Operating expenses as a percentage of revenues decreased to 40.9%
in 1993 from 42.4% in 1992 mainly due to lower vehicle maintenance, insurance
and bad debt expenses.
Depreciation expense increased by $2,059,000 (7.6%) due to the increased
investment in equipment on operating leases and transportation service
facilities offset in part by higher gains on the sale of equipment.
Selling and administrative expenses decreased by $140,000 (1.4%). Selling
and administrative expenses were 8.9% of revenues in 1993 and 9.7% of revenues
in 1992.
Interest expense increased by $204,000 (2.5%) due to an increase in
borrowings related to the purchase of additional equipment offset in part by
lower average interest rates and the reduction of higher interest rate debt.
The estimated effective income tax rates for fiscal years 1994 and 1993
were 41.5% and 40.0%, respectively.
Net earnings increased by $1,976,000 (26.4%) to $9,474,000 or $.31 per
share from $7,498,000 or $.24 per share in fiscal 1993. The increase in net
earnings was due mainly to the increased revenues and the lower operating cost
ratio offset in part by higher depreciation.
Liquidity and Capital Resources
The Company's cash flow from operations and the proceeds from the sale of
equipment were sufficient to fund the purchase of property and equipment of
$47,348,000 during the quarter ended December 31, 1993. The Company's principal
subsidiary, Rollins Leasing Corp., has a $75,000,000 revolving credit facility
of which $49,500,000 was available at December 31, 1993. This facility was
increased to $100,000,000 on January 5, 1994 providing an additional $25,000,000
of available borrowing capacity on that date. In addition, the Company has a
current shelf registration statement under which it can sell an additional
$200,000,000 of Collateral Trust Debentures. Based on its access to the public
debt market and relationships with its current lending institutions and others
who have expressed an interest in providing financing, the Company expects to
continue to be able to obtain financing for its capital asset purchases at
market rates and under satisfactory terms and conditions.
Otherwise, there have been no material changes in the Company's financial
condition and its liquidity and capital resources since September 30, 1993. For
further details, see page 4 of the Company's 1993 Annual Report on Form 10-K.
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FORM 10-Q
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There are no material legal proceedings, other than ordinary routine
litigation incidental to the business, to which the Company or any of its
subsidiaries is a party.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
None.
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FORM 10-Q Page 7 of 7
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DATE: January 25, 1994 Rollins Truck Leasing Corp.
(Registrant)
/s/ John W. Rollins, Jr.
John W. Rollins, Jr.
President and Chief Operating Officer
/s/ Patrick J. Bagley
Patrick J. Bagley
Vice President-Finance and Treasurer
Chief Financial Officer
Chief Accounting Officer
