Page 1 of 7
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, 1994
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)
(Former name of registrant)
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, 1994 was 45,824,856.
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, 1994 are not
necessarily indicative of the results that may be expected for the year
ended September 30, 1995. 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, 1994.
ROLLINS TRUCK LEASING CORP.
CONSOLIDATED STATEMENT OF EARNINGS
($000 Omitted Except for Per Share Amounts)
Three Months Ended
December 31,
1994 1993
Operating revenues $119,079 $107,444
Operating expenses 46,595 43,928
Depreciation, net of gain on disposition
of property and equipment 32,677 29,314
Selling and administrative expenses 10,705 9,577
Interest expense, net 10,042 8,429
100,019 91,248
Earnings before income taxes 19,060 16,196
Income taxes 7,551 6,722
Net earnings $ 11,509 $ 9,474
Earnings per share $ .25 $ .21*
Average common shares and equivalents
outstanding (000) 46,322 46,319*
Dividends paid per common share $ .04 $ .033*
* Adjusted for the three-for-two common stock split distributed on
September 15, 1994.
<PAGE>
<PAGE>
FORM 10-Q Page 3 of 7
ROLLINS TRUCK LEASING CORP.
CONSOLIDATED BALANCE SHEET
($000 Omitted)
December 31, September 30,
ASSETS 1994 1994
Current assets
Cash $ 20,952 $ 15,094
Accounts receivable, net of allowance for
doubtful accounts of: December-$1,771;
September-$1,770 53,530 52,031
Inventory of parts and supplies 8,064 8,558
Prepaid expenses 18,294 12,726
Refundable income taxes - 2,571
Deferred income taxes 8,656 11,472
Total current assets 109,496 102,452
Equipment on operating leases, at cost,
net of accumulated depreciation of:
December-$322,274; September-$313,582 661,016 637,768
Other property and equipment, at cost,
net of accumulated depreciation of:
December-$52,908; September-$51,122 152,583 146,618
Note receivable - Matlack, Inc. (including
$900 due within one year) 6,000 6,000
Excess of cost over net assets of
businesses acquired 11,846 11,903
Other assets 4,842 4,976
$945,783 $909,717
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities (excluding equipment
financing obligations)
Accounts payable $ 6,882 $ 7,205
Accrued liabilities 39,680 40,114
Income taxes payable 5,576 -
Current maturities of long-term debt 143 146
Total current liabilities 52,281 47,465
Equipment financing obligations 520,615 498,365
Long-term debt 745 782
Other liabilities 10,024 8,898
Deferred income taxes 101,077 103,010
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-45,824,856;
September-45,770,678 45,825 45,771
Capital in excess of par value 20,432 20,319
Retained earnings 194,784 185,107
Total shareholders' equity 261,041 251,197
$945,783 $909,717
<PAGE>
FORM 10-Q Page 4 of 7
ROLLINS TRUCK LEASING CORP.
CONSOLIDATED STATEMENT OF CASH FLOWS
($000 Omitted)
Three Months Ended
December 31,
1994 1993
Cash flows from operating activities:
Net earnings $ 11,509 $ 9,474
Reconciliation of net earnings to
net cash flows from operating activities:
Depreciation and amortization 35,480 31,310
Current and deferred income taxes 9,029 6,625
(Increase) in accounts and notes receivable (1,499) (1,552)
(Decrease) in accounts payable and
accrued liabilities (757) (2,036)
Net gain on sale of property and equipment (2,746) (1,941)
Other, net (3,814) (2,339)
Net cash flows from operating activities 47,202 39,541
Cash flows from investing activities:
Purchase of property and equipment (77,649) (47,348)
Proceeds from sale of property and equipment 15,759 17,948
Net cash flows used in investing activities (61,890) (29,400)
Cash flows from financing activities:
Proceeds of equipment financing 41,795 11,749
Repayment of equipment financing (19,545) (17,728)
Repayment of long-term debt (39) (51)
Payments of dividends (1,832) (1,519)
Proceeds of stock options exercised 167 310
Net cash flows from (used in)
financing activities 20,546 (7,239)
Net increase in cash 5,858 2,902
Cash beginning of period 15,094 15,081
Cash end of period $ 20,952 $ 17,983
Supplemental information:
Interest paid $ 7,677 $ 7,054
Income taxes (recovered) paid $ (1,478) $ 97
<PAGE>
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, 1994 vs. Three
Months Ended December 31, 1993
Revenues increased by $11,635,000 (10.8%) 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, indicating continued
confidence in the economy and greater demand for transportation services.
The substantial revenue improvement in dedicated contract carriage services
reflected the continuation of a distinct trend to outsource transportation
requirements.
Operating expenses increased by $2,667,000 (6.1%) reflecting the increase
in revenues. Operating expenses as a percentage of revenues decreased to
39.2% in 1994 from 40.9% in 1993 mainly due to lower maintenance costs on
new equipment and continued expense control efforts.
Depreciation expense increased by $3,363,000 (11.5%) 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 increased by $1,128,000 (11.8%).
Selling and administrative expenses remained relatively stable and were
9.0% of revenues in 1994 and 8.9% of revenues in 1993.
Interest expense increased by $1,613,000 (19.1%) due to increased
borrowings related to the purchase of additional equipment and higher
average interest rates on floating rate debt.
The effective income tax rates for the three months ended December 31,
1994 and 1993 were 39.6% and 41.5%, respectively.
Earnings increased by $2,035,000 (21.5%) to $11,509,000 or $.25 per share
from $9,474,000 or $.21 per share in fiscal 1994. The increase in net
earnings was due mainly to the increased revenues and lower operating cost
ratio offset in part by higher depreciation and interest expense.
Liquidity and Capital Resources
The Company's property and equipment purchases of $77,649,000 during the
first quarter of fiscal 1995 were financed with its cash flow from
operations, the proceeds of equipment sales and borrowings under its
revolving credit facility.
The Company's principal subsidiary, Rollins Leasing Corp., has a
$100,000,000 revolving credit facility of which $44,500,000 was available
at December 31, 1994. On September 21, 1994, the Company arranged for the
private placement of $100,000,000 of 8.27% Series N Collateral Trust
Debentures due March 15, 2002. Closing will occur on March 15, 1995 with
the proceeds used to refinance certain existing indebtedness and for new
equipment purchases committed for in the Spring of 1995.
FORM 10-Q Page 6 of 7
At December 31, 1994, the Company could sell an additional $140,000,000
of Collateral Trust Debentures under its current shelf registration
statement. Based on its access to the debt markets and relationships with
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 equipment and facility 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, 1994.
For further details, see page 4 of the Company's 1994 Annual Report to
Shareholders on Form 10-K for the year ended September 30, 1994.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There are no material legal proceedings to which the Company or any of
its subsidiaries is a party. Certain subsidiaries of the Company are
involved in ordinary routine litigation incidental to the operation of its
business.
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.
On October 13, 1994, a report on Form 8-K was filed disclosing that
effective at the close of business September 30, 1994, Michael B. Kinnard
was appointed Vice President-General Counsel and Secretary to Rollins Truck
Leasing Corp. Mr. Kinnard succeeds John C. Peet, Jr., who previously held
the same positions and whose resignation was accepted effective at the
close of business September 30, 1994.
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, 1995 Rollins Truck Leasing Corp.
(Registrant)
_____________________________________
John W. Rollins, Jr.
President and Chief Operating Officer
_____________________________________
Patrick J. Bagley
Vice President-Finance and Treasurer
Chief Financial Officer
Chief Accounting Officer
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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, 1995 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
[ARTICLE] 5
<TABLE>
<S> <C>
[PERIOD-TYPE] QTR-1
[FISCAL-YEAR-END] SEP-30-1995
[PERIOD-END] DEC-31-1994
[CASH] 20,952,000
[SECURITIES] 0
[RECEIVABLES] 55,301,000
[ALLOWANCES] (1,771,000)
[INVENTORY] 8,064,000
[CURRENT-ASSETS] 109,496,000
[PP&E] 813,599,000
[DEPRECIATION] (375,182,000)
[TOTAL-ASSETS] 945,783,000
[CURRENT-LIABILITIES] 52,281,000
[BONDS] 0
[COMMON] 45,825,000
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[OTHER-SE] 215,216,000
[TOTAL-LIABILITY-AND-EQUITY] 945,783,000
[SALES] 119,079,000
[TOTAL-REVENUES] 119,079,000
[CGS] 79,272,000
[TOTAL-COSTS] 79,272,000
[OTHER-EXPENSES] 10,705,000
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 10,042,000
[INCOME-PRETAX] 19,060,000
[INCOME-TAX] 7,551,000
[INCOME-CONTINUING] 11,509,000
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] 11,509,000
[EPS-PRIMARY] .25
[EPS-DILUTED] .25
</TABLE>
