FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended September 28, 1996
Commission file number 1-2936
SCHWERMAN TRUCKING CO.
(Exact name of registrant as specified in its charter)
Wisconsin 39-0767397
------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P. O. Box 1601, 611 South 28 Street, Milwaukee, WI 53201
---------------------------------------------------------
(Address of principal executive offices) (Zip Code)
414/671-1600
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 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
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Outstanding at
Class October 31, 1996
----- -----------------
Common, $1 par value 422,089
<PAGE>
SCHWERMAN TRUCKING CO. AND SUBSIDIARIES
INDEX
Page No.
PART I. Financial Information:
Consolidated Condensed Balance Sheet at
September 28, 1996 and March 30, 1996 3
Consolidated Condensed Statements of Income
for the three months and six months ended
September 28, 1996 and September 23, 1995 4
Consolidated Condensed Statements of Cash Flows
for the six months ended September 28, 1996
and September 23, 1995 5
Notes to Consolidated Condensed Financial Statements 6
Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II. Other Information 9
<PAGE>
<TABLE>
SCHWERMAN TRUCKING CO. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
<CAPTION>
SEPTEMBER 28, MARCH 30,
ASSETS 1996 1996
------------- -----------
(Unaudited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 106,312 $ 113,476
Accounts receivable (less allowances of
$40,000) 6,366,349 4,033,387
Other accounts and notes receivable 440,475 801,451
Operating supplies and parts 1,117,915 1,072,286
Tires in service 849,367 741,079
Prepaid expenses 526,722 620,267
Other current assets 261,025 258,661
----------- -----------
9,668,165 7,640,607
----------- -----------
Property, plant and equipment at cost 60,316,859 55,498,489
Less accumulated depreciation and amortization (36,394,360) (34,528,615)
----------- -----------
23,922,499 20,969,874
----------- -----------
Receivable from parent and affiliates 1,190,363 589,972
Other non-current assets 1,564,957 1,409,482
----------- -----------
$36,345,984 $30,609,935
=========== ===========
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities:
Current portion of long-term debt $ 3,471,557 $ 3,042,540
Accounts payable 2,090,547 2,043,522
Accrued liabilities 4,058,376 3,600,518
Income taxes payable 402,854 31,755
Deferred income taxes - current 328,230 328,230
----------- -----------
10,351,564 9,046,565
----------- -----------
Long-term debt 14,009,726 11,098,695
Deferred income taxes 2,111,025 1,746,025
Other non-current liabilities 727,519 710,610
Stockholders' Equity
Preferred stock 1,497,470 1,497,470
Common stock 422,089 422,089
Additional paid-in capital 232,792 232,792
Retained earnings 6,993,799 5,855,689
----------- -----------
9,146,150 8,008,040
----------- -----------
$36,345,984 $30,609,935
=========== ===========
<FN>
The accompanying notes are an integral part of the
condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
SCHWERMAN TRUCKING CO. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
<CAPTION>
--Three Months Ended-- --Six Months Ended--
Sept. 28, Sept. 23, Sept. 28, Sept. 23,
1996 1995 1996 1995
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues
Operating revenues $16,643,766 $15,840,452 $31,395,068 $31,135,879
Equip. and other rentals 227,115 205,987 434,745 422,788
Other 562,066 583,836 1,093,108 1,173,867
----------- ----------- ----------- -----------
17,432,946 16,630,275 32,922,921 32,732,534
----------- ----------- ----------- -----------
Operating Expenses
Salaries, wages and fringe
benefits 7,807,161 7,391,259 14,818,348 14,588,069
Fuel and fuel taxes 1,806,470 1,519,527 3,409,094 3,075,600
Parts, repairs and tires 1,089,063 1,013,604 1,978,064 1,967,288
Insurance and workers'
compensation 1,099,108 1,051,844 2,089,355 2,172,961
Depreciation and amort. 1,060,368 913,969 2,097,515 1,802,889
Purchased transportation 1,033,642 1,400,614 2,088,755 2,739,820
Rent expense 164,900 286,667 344,207 589,261
Other operating expenses 1,787,509 1,474,420 3,468,263 3,000,418
(Gain) loss on disposal
of property, plant and
equipment, net (13) (3,150) (2,628) (26,752)
----------- ---------- ----------- ------------
15,848,208 15,048,754 30,290,973 29,909,554
----------- ---------- ----------- ------------
Operating income 1,584,738 1,581,521 2,631,948 2,822,980
Interest expense, net 359,392 317,010 711,426 674,743
----------- ---------- ----------- ------------
Income before income taxes 1,225,346 1,264,511 1,920,522 2,148,237
Federal & state income taxes 466,000 480,000 730,000 816,000
---------- ---------- ----------- ------------
Net Income 759,346 784,511 1,190,522 1,332,237
Dividends on preferred shrs (26,206) (26,206) (52,412) (52,412)
----------- ---------- ----------- ------------
Net income applicable common
shares $ 733,140 $ 758,305 $ 1,138,110 $ 1,279,825
=========== ========== =========== ============
Weighted Average Number of
Common Shares Outstanding 422,089 422,089 422,089 422,089
=========== ========== =========== ============
Net Income Per Common Share $ 1.74 $ 1.79 $ 2.70 $ 3.03
=========== ========== =========== ============
<FN>
The accompanying notes are an integral part of the
condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
SCHWERMAN TRUCKING CO. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
------Six Months Ended------
September 28, September 23,
1996 1995
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,190,522 $ 1,332,237
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation and amortization 2,097,515 1,802,889
Provision for deferred income taxes 365,000 408,000
(Gain) loss on disposal of
property, plant and equipment (2,628) (26,752)
Change in assets and liabilities:
Accounts and notes receivable (1,971,986) (1,194,005)
Operating supplies and parts (45,629) (55,896)
Tires in service, prepaid expenses
and other current assets (17,107) 13,051
Receivable from parent and affiliates (600,391) (115,513)
Other noncurrent assets (155,475) (186,028)
Accounts payable 47,025 (109,025)
Accrued liabilities 457,858 152,955
Income taxes payable 371,099 312,980
Other noncurrent liabilities 16,909 49,939
----------- -----------
Net cash provided by (used in)
operating activities 1,752,712 2,384,832
----------- -----------
Cash flows from investing activities:
Proceeds from sale of property,
plant and equipment 29,928 65,120
Payments for property, plant and equipment (908,056) (1,896,948)
----------- -----------
Net cash provided by (used in)
investing activities (878,128) (1,831,828)
----------- -----------
Cash flows from financing activities:
Proceeds from long-term debt 1,815,166 1,676,544
Payments of long-term debt (2,644,502) (1,993,402)
Preferred stock dividends (52,412) (52,412)
----------- -----------
Net cash provided by (used in)
financing activities (881,748) (369,270)
----------- -----------
Increase (decrease) in cash & cash equivalents (7,164) 183,734
Cash and cash equivalents:
Beginning of year 113,476 87,702
----------- -----------
End of quarter $ 106,312 $ 271,436
=========== ===========
Cash paid (received) during the year for:
Interest $ 691,880 $ 649,818
Income taxes $ (6,099) $ 95,020
<FN>
The accompanying notes are an integral part of the
condensed consolidated financial statements.
</TABLE>
<PAGE>
SCHWERMAN TRUCKING CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. CONDENSED FINANCIAL STATEMENTS
In the opinion of management, the accompanying unaudited consolidated
condensed financial statements contain all adjustments (consisting of
only normal recurring accruals) necessary to present fairly the
consolidated financial position of Schwerman Trucking Co. and
Subsidiaries as of September 28, 1996 and March 30, 1996, and the
consolidated results of operations for the three months and six months
ended September 28, 1996 and September 23, 1995 and changes in financial
position for the six months then ended.
The results of operations for the three months and six months ended
September 28, 1996 and September 23, 1995 are not necessarily indicative
of the results to be expected for a full year.
Certain information and financial statement disclosures normally
included in financial statements prepared in accordance with Generally
Accepted Accounting Principles have been condensed or omitted pursuant
to S.E.C. rules and regulations. The Company believes that the
disclosures made are adequate to make the information not misleading.
These financial statements should be read in conjunction with the
financial statements and notes thereto included in the Company's Form 10-
K for the year ended March 30, 1996.
2. STATEMENT OF CASH FLOWS
The Company had non-cash property, plant and equipment additions
totaling $4,169,000 and $3,603,000 for the six months ended September
28, 1996 and September 23, 1995, respectively, which were financed
through capital leases and equipment obligations.
<PAGE>
Management's Discussion and Analysis of Financial Condition
and Results of Operations
RESULTS OF OPERATIONS
Revenues for the three months ended September 28, 1996 were approximately
$803,000 or 4.8% higher than the comparable three-month period of 1995.
Revenues for the six months ended September 28, 1996 increased
approximately $190,000 or .6% compared to the same period of 1995. The
increase in revenue is due to an increase in the number of miles traveled
for the quarter and year to date and an increase in the average payload
compared to the prior year. The Company has opened two new terminals in
March 1996, and the revenues generated at these terminals has more than
offset the softness experienced at the Company's other terminals.
The Company's customers are shippers or consignees of dry and liquid
commodities. During fiscal 1996, 65% of the Company's shipments were dry
cement and, consequently, the Company's business is very seasonal. Dry and
liquid chemicals, fertilizers and food products account for a large portion
of the remaining commodities.
Operating expenses increased by approximately $799,000 or 5.3% in the
current quarter and increased by $381,000 or 1.3% for the six months ended
year to date compared to the same periods of 1995. The increase in
operating expenses is due to the increase in volume, the increase in
depreciation expense and the increase in fuel expense.
Salaries, wages and fringe benefits increased $416,000 or 5.6% and $230,000
or 1.6% for the three months and six months ended September 28, 1996,
respectively, compared to the same periods of 1995 as a result of the
increase in volume and higher health, welfare and pension costs.
Fuel and fuel taxes increased $287,000 or 18.9% and $333,000 or 10.8% for
the current quarter and year to date for fiscal 1996, respectively,
compared to the same periods of 1995 as a result of the increase in the
number of miles traveled and higher fuel prices.
Depreciation and amortization increase $146,000 or 16.0% and $295,000 or
16.3% for the three months and six months ended September 28, 1996,
respectively, compared to the same periods of 1995 as a result of the
purchase of 63 new tractors in April 1996.
Purchased transportation decreased $367,000 or 26.2% and $651,000 or 23.8%
for the current quarter and year to date for fiscal 1996, respectively,
compared to the same periods of 1995 as a result of the reduced number of
owner operators leased on to the Company.
Rent expense decreased $122,000 or 42.5% and $245,000 or 41.6% for the
current quarter and year to date for fiscal 1996, respectively, as compared
to the same periods of 1995 as a result of renting fewer tractors and
trailers in 1996 and as a result of lower rental rates on some equipment
rented in the current year as compared to the prior year.
Other operating expenses increased $313,000 or 21.2% and $468,000 or 15.6%
for the three months and six months ended September 28, 1996, respectively,
compared to the same periods of 1995 as a result of the increase in volume,
the increased cost of hiring and screening drivers, an increase in
communication costs and higher toll charges.
<PAGE>
FINANCIAL CONDITION
Total current assets increased $2,028,000 at September 28, 1996 as compared
to March 30, 1996 primarily as a result of the seasonal increase in
accounts receivable offset in part by a drop in other accounts and notes
receivable due to a payment received in April 1996. Property, plant and
equipment increased $4,818,000 from 1996 fiscal year end primarily as a
result of the tractors and trailers delivered in April 1996. The $600,000
increase in the receivable from parent since March 30, 1996 is also
seasonal in nature.
Accrued liabilities increased $458,000 at September 28, 1996 as compared to
March 30, 1996 primarily as a result of the seasonal nature of the
Company's business. The $371,000 and $366,000 increase in income taxes
payable and noncurrent deferred income taxes, respectively, from 1996
fiscal year and is a result of intra period tax allocation and the seasonal
nature of the Company's business.
Total notes payable and long-term debt was $17,481,000 and $14,141,000 at
September 28, 1996 and March 30, 1996, respectively. The $3,340,000 net
increase in debt is the result of $5,984,000 in new obligations to finance
the equipment additions and seasonal working capital needs less the
reduction resulting from making the scheduled debt payments.
CASH FLOWS
The Company had a net decrease in cash of $7,000 for the six months ended
September 28, 1996 versus a $184,000 net increase for the six months ended
September 23, 1995. Cash provided by operating activities decreased by
$632,000 for the six months ended September 28, 1996 as compared to the
same period of 1995 primarily as a result of lower net income in the
current year and an increase in cash requirements for working capital.
Cash used in investing activities decreased $953,000 in the current year as
compared to 1995 primarily as a result of fewer cash purchases of trailers
in the current year. Cash used in financing activities increased $512,000
primarily as a result of making the scheduled payments. The Company has
paid $52,000 in preferred stock dividends for the six months ended
September 28, 1996, representing the required dividends for two quarters.
<PAGE>
PART II - OTHER INFORMATION
Item 3. Defaults Upon Senior Securities
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - Exhibit 27. Financial Data Schedule
(b) Reports on Form 8-K - November 1, 1996, reporting the
reorganization of the Company's Sales Department and
the resignation of the Vice President - Sales, a
Director of the Company.
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SCHWERMAN TRUCKING CO.
(Registrant)
DATE: November 8, 1996 BY: Jack F. Schwerman
Jack F. Schwerman
Chairman of the Board,
President and Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Mar-30-1996
<PERIOD-START> Mar-31-1996
<PERIOD-END> Sep-28-1996
<CASH> 106312
<SECURITIES> 0
<RECEIVABLES> 3406349
<ALLOWANCES> (40000)
<INVENTORY> 1117915
<CURRENT-ASSETS> 9668165
<PP&E> 60316859
<DEPRECIATION> (36394360)
<TOTAL-ASSETS> 36345984
<CURRENT-LIABILITIES> 10351564
<BONDS> 14009726
<COMMON> 422089
0
1497470
<OTHER-SE> 6996799
<TOTAL-LIABILITY-AND-EQUITY> 36345984
<SALES> 32922921
<TOTAL-REVENUES> 32922921
<CGS> 0
<TOTAL-COSTS> 30290973
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<INCOME-PRETAX> 1920522
<INCOME-TAX> 730000
<INCOME-CONTINUING> 1190522
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1190522
<EPS-PRIMARY> 2.70
<EPS-DILUTED> 2.70
</TABLE>
