SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996
Commission file number 1-11862
INTERPOOL, INC.
(Exact name of registrant as specified in the charter)
Delaware13-3467669
(State or other jurisdiction of(I.R.S. Employer
incorporation or organization)Identification Number)
211 College Road East, Princeton, New Jersey 08540
(Address of principal executive office) (Zip Code)
(609) 452-8900
(Registrant's telephone number including area code)
As of November 8, 1996, 17,302,230 shares of common stock, $.001 par value were
outstanding.
Indicate by check X 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 for the
past 90 days Yes X No
<PAGE>
INTERPOOL, INC. AND SUBSIDIARIES
INDEX
Page No.
Part I - Financial Information:
Introduction to Financial Statements ....................... 3
Consolidated Balance Sheets
September 30, 1996 and December 31, 1995 ................... 4
Consolidated Statements of Income
For the Three Months and Nine Months ended
September 30, 1996 and 1995 ............................. 5
Consolidated Statements of Cash Flows
For the Nine Months ended September 30, 1996 and 1995 ...... 6
Consolidated Statements of Stockholders' Equity
For the Nine Months ended September 30, 1996 ............... 7
Notes to Consolidated Financial Statements ................. 8 - 9
Management's Discussion and Analysis of
Financial Condition and Results of Operations .............. 9 - 12
Part II - Other Information:
Item 5: Other Information ............................... 13
Item 6: Exhibits and Reports on Form 8-K ................ 13
Signatures.................................................. 14
Exhibits ................................................... 15
<PAGE>
PART I - FINANCIAL INFORMATION
INTERPOOL, INC. AND SUBSIDIARIES
FINANCIAL STATEMENTS
The condensed financial statements of Interpool, Inc. and Subsidiaries
(the "Company") included herein have been prepared by the registrant, without
audit, pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations, although the Registrant believes that the disclosures are adequate
to make the information presented not misleading. It is suggested that these
condensed financial statements be read in conjunction with the financial
statements and the notes thereto included in the Company's latest Annual Report
on Form 10-K. These condensed financial statements reflect, in the opinion of
management, all adjustments (consisting only of normal recurring adjustments)
necessary to present fairly the results for the interim periods. The results of
operations for such interim periods are not necessarily indicative of the
results for the full year.
<PAGE>
INTERPOOL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
<S> <C> <C>
ASSETS
Cash and short-term investments ............................................. $ 36,323 $ 40,208
Marketable securities ....................................................... 10,717 30,453
Accounts and notes receivable, less allowance of $2,012 and $2,099 .......... 25,680 25,785
Net investment in direct financing leases ................................... 250,549 202,576
Other receivables, net ...................................................... 16,973 8,831
Leasing equipment, at cost .................................................. 623,303 609,869
Less--accumulated depreciation and amortization.............................. (103,539) (86,249)
--------- --------
Leasing equipment, net................................................... 519,764 523,620
Other assets................................................................. 21,413 20,127
--------- --------
Total assets............................................................. $881,419 $851,600
========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses ....................................... $ 20,062 $ 18,653
Income taxes
Current ................................................................. 1,000 581
Deferred................................................................. 12,931 9,517
------- -------
Total income taxes ...................................................... 13,931 10,098
Deferred income ............................................................. 1,627 1,142
Debt and capital lease obligations:
Due within one year ..................................................... 68,223 71,104
Due after one year....................................................... 503,671 499,998
--------- -------
571,894 571,102
Minority interest in equity of subsidiaries ................................. 523 3,915
Stockholders' equity:
Preferred stock, par value $.001 per share, 239,946 at September 30, 1996
and 324,000 at December 31, 1995 authorized, none issued .............. - -
5 3/4% Cumulative Convertible Preferred stock, par value $.001 per share;
760,054 shares authorized, 758,414 outstanding, liquidation preference
$75,841at September 30, 1996 and 676,000 shares authorized,
674,360 outstanding, liquidation preference $67,436 at December 31, 19951 1 1
Common stock, par value $.001 per share; 100,000,000 shares
authorized, 17,302,230 outstanding .................................... 17 17
Paid-in capital .......................................................... 170,152 163,260
Retained earnings......................................................... 103,010 83,342
Net unrealized gain on marketable securities.............................. 202 70
------- -------
Total stockholders' equity............................................. 273,382 246,690
------- -------
Total liabilities and stockholders' equity.......................... $881,419 $851,600
======== =========
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of these balance sheets
INTERPOOL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES.................................................... $37,482 $33,582 $109,092 $92,761
COSTS AND EXPENSES:
Lease operating and administrative expenses ................ 7,866 7,831 22,385 22,457
Depreciation and amortization of leasing equipment ......... 8,084 7,395 24,069 20,264
..........................Gain on sale of leasing equipment (49) (105) (493) (724)
Interest expense, net....................................... 9,745 9,402 29,826 25,734
Non-recurring charge........................................ - - 2,392 -
------- ------- ------- -------
25,646 24,583 78,179 67,731
Income before provision for income taxes
and extraordinary gain ................................. 11,836 9,059 30,913 25,030
Provision for income taxes.................................. 1,950 1,475 5,500 4,050
------ ----- ------ ------
Income before extraordinary gain............................ 9,886 7,584 25,413 20,980
Extraordinary item - gain on early retirement of debt,
net of tax expense of $1,683............................ - 2,422 - 2,422
------ ------ ------ ------
NET INCOME.................................................. $9,886 $10,006 $25,413 $23,402
====== ======= ======= =======
Income per share before extraordinary gain:
Primary.................................................. $0.49 $0.43 $1.39 $1.20
Fully diluted............................................ $0.47 $0.39 $1.32 $1.10
Income per share on extraordinary gain:
Primary.................................................. NA $0.14 NA $0.14
Fully diluted............................................ NA $0.12 NA $0.12
NET INCOME PER SHARE:
Primary.................................................. $0.49 $0.57 $1.39 $1.34
Fully diluted............................................ $0.47 $0.51 $1.32 $1.21
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING (in Thousands):
Primary.................................................. 17,848 17,564 17,713 17,415
Fully diluted............................................ 21,167 20,507 21,003 20,507
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these statements.
INTERPOOL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income .................................................................. $25,413 $23,402
Adjustments to reconcile net income to net cash provided by Operating
activities:
Non-recurring charge (Extraordinary gain).................................... 2,392 (2,422)
Depreciation and amortization ............................................... 24,671 20,753
Gain on sale of leasing equipment ........................................... (493) (723)
Collections on direct financing leases ...................................... 57,923 35,426
Income recognized on direct financing leases ................................ (21,803) (14,342)
Provision for uncollectible accounts ........................................ 556 623
Changes in assets and liabilities:
Accounts and notes receivable ............................................... (451) (4,031)
Other receivables ........................................................... (1,108) (222)
Other assets ................................................................ (2,090) (7,929)
Accounts payable and accrued expenses ....................................... 3,738 (1,768)
Income taxes payable ............................................ 3,706 2,779
Deferred income ............................................................. 485 (387)
Minority interest in equity of subsidiaries............... 34 305
------ ------
Net cash provided by operating activities.................................... 92,973 51,464
------ ------
Cash flows from investing activities:
Acquisition of leasing equipment ............................................ (33,141) (143,467)
Proceeds from dispositions of leasing equipment ............................. 6,198 4,560
Investment in direct financing leases ....................................... (75,707) (82,696)
Sales of marketable securities and other investing activity. 12,960 8,376
------- -------
Net cash used for investing activities ...................................... (89,691) (213,227)
-------- ---------
Cash flows from financing activities:
Proceeds from issuance of debt .............................................. 66,180 172,022
Payments of debt and capital lease obligations .............................. (65,388) (33,709)
Cash dividends paid...................................................... (7,959) -
-------- -------
Net cash provided (used) by financing activities............................. (7,167) 138,313
-------- -------
Net decrease in cash and short-term investments ............................. (3,885) (23,450)
Cash and short-term investments, beginning of period......................... 40,208 69,112
------- -------
Cash and short-term investments, end of period............................... $36,323 $45,662
======= =======
Supplemental schedule of non-cash financing activities:
Acquisition of subsidiary common and preferred stock in exchange for
Company's 5 3/4% Cumulative Convertible Preferred Stock ..................... $6,892 -
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these statements.
INTERPOOL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
(Dollars and shares in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Net
Unrealized
Shares of Shares of Gain on
Preferred Par Capital Par Paid-In Retained Marketable
Stock Value Stock Value Capital Earnings Securities
--------- ----- ------- ----- ------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1995........ 674 $1 17,302 $17 $163,260 $83,342 $70
Net income25,413
Net unrealized gain on
Marketable Securities....... 132
Trac Lease minority
interest acquisition........ 84 6,892
Cash dividends declared:
Preferred stock............ (3,150)
Common stock............... (2,595)
---- --- ------ --- -------- --------- ----
Balance, September 30, 1996....... 758 $1 17,302 $17 $170,152 $103,010 $202
==== == ====== === ======== ========= ====
</TABLE>
The accompanying notes to consolidated financial statements are an
integral part of these statements.
<PAGE>
INTERPOOL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Unaudited)
Note 1 -- Nature of operations and basis of consolidation:
A. Nature of operations:
The Company and its subsidiaries conduct business principally in a single
industry segment, the leasing of intermodal dry cargo containers, chassis and
other transportation related equipment. The Company leases its containers
principally to international container shipping lines located throughout the
world. The customers for the Company's chassis are a large number of domestic
companies, many of which are domestic subsidiaries or branches of international
shipping lines. Equipment is purchased directly or acquired through conditional
sales contracts and lease agreements, many of which qualify as capital leases.
The Company's accounting records are maintained in United States dollars and
the consolidated financial statements are prepared in accordance with accounting
principles generally accepted in the United States.
B. Basis of consolidation:
The consolidated financial statements include the accounts of the Company and
subsidiaries more than 50% owned. All significant intercompany transactions have
been eliminated.
C. Net income per share:
Primary net income per share is computed by deducting preferred dividends and
in 1996 adding the non-recurring charge described in Note 4 to net income to
arrive at income attributable to common stockholders. This amount is then
divided by the weighted average number of shares outstanding during the period
adjusted for the dilutive effect of stock options. Shares issuable upon the
conversion of the new 5 3/4% cumulative convertible preferred stock and the 5
1/4% convertible exchangeable subordinated notes have been added to the weighted
average shares outstanding and interest expense net of tax effect on the notes
has been added to net income in the fully diluted earnings per share
computation.
D. Reclassifications:
Certain reclassifications have been made to the 1995 amounts in order to
conform to the 1996 presentation.
Note 2 -- Cash flow information:
For the nine months ended September 30, 1996 and 1995, cash paid for interest
was approximately $31,208 and $29,407, respectively. Cash paid for income taxes
was approximately $1,785 and $1,324, respectively.
Note 3 -- Other contingencies and commitments:
At September 30, 1996, the Company had outstanding purchase commitments for
equipment of approximately $40,000. Under certain of the Company's leasing
agreements, the Company, as lessee, may be obligated to indemnify the lessor for
loss, recapture or disallowance of certain tax benefits arising from the
lessor's ownership of the equipment.
The Company is engaged in various legal proceedings from time to time
incidental to the conduct of its business. In the opinion of management, the
Company is adequately insured against the claims relating to such proceedings,
and any ultimate liability arising out of such proceedings will not have a
material adverse effect on the financial condition or results of operations of
the Company.
Note 4 -- Acquisition of subsidiary minority interest:
On March 15, 1996, pursuant to the terms of an Agreement of Merger between
Trac Lease, Inc. ("Trac Lease") and Trac Lease Merger Corp., a newly formed
wholly owned subsidiary (the "Trac Merger"), the Company issued an aggregate of
24,390 shares of its 5 3/4% Cumulative Convertible Preferred Stock ("Interpool
Preferred Stock") to Thomas P. Birnie and Graham Owen, both officers of Trac
Lease and the aggregate 25,000 shares of Common stock representing 12.5% of the
outstanding common stock of Trac Lease owned by Messrs. Birnie and Owen were
cancelled. Following the Trac Merger, Interpool, Inc. now holds 100% of the
outstanding shares of common stock of Trac Lease. Pursuant to the terms of the
Trac Merger, the Company also issued 59,664 shares of its Interpool Preferred
Stock to The Ivy Group and the 2,500 shares of Trac Preferred Stock having a
stated value of $2,500 plus accrued, cumulative dividends of $2,392 owned by The
Ivy Group were cancelled. Following the Trac Merger, no shares of Trac Lease
Preferred Stock remain outstanding.
The Trac Merger was accounted for under the purchase method of accounting.
The cumulative dividends on the Trac Preferred Stock were recorded as a
non-recurring charge in the first quarter of 1996. Such charge had no impact on
net income per share in the first quarter because unpaid dividends on the Trac
Preferred Stock were included in the computation of net income per share in
prior periods.
Note 5 -- Costs of subsidiary initial public offering ("IPO"):
The Company has incurred expenses in connection with the preparation of an
IPO of its subsidiary, Interpool Limited. Costs incurred amounting to $1,500
have been accrued during the nine months ended September 30, 1996 and are
included in Other assets at September 30, 1996. Subsequent to September 30, 1996
the Company withdrew the IPO and the costs incurred will be charged to the
income statement in the fourth quarter of 1996.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
The Company generates revenues through leasing transportation equipment,
primarily dry cargo containers and container chassis. Most of the Company's
revenues are derived from payments under operating leases and income earned
under finance leases, under which the lessee has the right to purchase the
equipment at the end of the lease term. In the nine months ended September 30,
1996 and 1995 revenues from direct financing leases were $21.8 million (20% of
revenues) and $14.3 million (15% of revenues), respectively.
Three Months Ended September 30, 1996 compared to Three Months Ended September
30, 1995
Revenues
The Company's revenues increased to $37.5 million for the three months ended
September 30, 1996 from $33.6 million in the three months ended September 30,
1995, an increase of $3.9 million or 12%. The increase is primarily due to
increased leasing revenues generated by an expanded container and chassis fleet
size. Revenues for the three months ended September 30, 1996 were $20.2 million
for the Interpool Limited international container division and $17.3 million for
the domestic intermodal division. This compared to $16.8 million for the
Interpool Limited international container division and $16.8 million for the
domestic intermodal division for the three months ended September 30, 1995.
Lease Operating and Administrative Expenses
The Company's lease operating and administrative expenses increased to $7.9
million for the three months ended September 30, 1996 from $7.8 million in the
three months ended September 30, 1995, an increase of $.1 million. The increase
was due to higher administrative costs resulting from inflation offset by lower
lease operating expenses primarily resulting from less repair expense in the
chassis operations.
Depreciation and Amortization
The Company's depreciation and amortization expenses increased to $8.1
million in the three months ended September 30, 1996 from $7.4 million in the
three months ended September 30, 1995, an increase of $.7 million.
The increase was due to an increased fleet size.
Gain on Sale of Leasing Equipment
The Company's gain on sale of leasing equipment remained essentially the same
in both the three months ended September 30, 1996 and September 30, 1995.
Interest Expense, Net
The Company's net interest expense increased to $9.7 million in the three
months ended September 30, 1996 from $9.4 million in the three months ended
September 30, 1995, an increase of $.3 million. The issuance of additional debt
and lease financing necessary to fund capital expenditures contributed to the
increased interest expense which was partially offset by the reduction of
interest expense of $.9 million due to the exchange of preferred stock for
subordinated notes consummated in September 1995.
Provision for Income Taxes
The Company's provision for income taxes increased to $2.0 million from $1.5
million due to higher taxable income. The effective tax rate of 16% was the same
for both the three months ended September 30 1996 and 1995.
Extraordinary item in 1995
An extraordinary gain of $2.4 million, net of taxes, resulted from the
consummation on September 29, 1995, of the exchange of $66.4 million of
Interpool's 5 1/4% Convertible Exchangeable Subordinated Preferred Notes due
2018 for new 5 3/4% Cumulative Convertible Preferred Stock with a liquidation
preference of $66.4 million.
Net Income
As a result of the factors described above, the Company's net income
decreased to $9.9 million in the three months ended September 30, 1996 from
$10.0 million in the three months ended September 30, 1995. For the three months
ended September 30, 1996 the Interpool Limited international container division
contributed $7.6 million to net income while the domestic intermodal division
contributed $2.3 million. This compares to the three months ended September 30,
1995 where the Interpool Limited international container division contributed
$5.8 million to net income while the domestic intermodal division contributed
$1.8 million. The 1995 results for the domestic intermodal division includes $.5
million of interest expense net of taxes on subordinated notes which were
exchanged for preferred stock in September 1995.
Nine Months Ended September 30, 1996 compared to Nine Months Ended September 30,
1995
Revenues
The Company's revenues increased to $109.1 million for the nine months ended
September 30, 1996 from $92.8 million in the nine months ended September 30,
1995, an increase of $16.3 million or 18%. The increase is primarily due to
increased leasing revenues generated by an expanded container and chassis fleet
size. Revenues for the nine months ended September 30, 1996 were $59.1 million
for the Interpool Limited international container division and $50.0 million for
the domestic intermodal division. This compared to $46.2 million for the
Interpool Limited international container division and $46.6 million for the
domestic intermodal division for the nine months ended September 30, 1995.
Lease Operating and Administrative Expenses
The Company's lease operating and administrative expenses decreased to $22.4
million for the nine months ended September 30, 1996 from $22.5 million in the
nine months ended September 30, 1995, a decrease of $.1 million. The decrease
was due to lower lease operating expenses primarily resulting from less repair
expense in the chassis operations mostly offset by higher administrative costs
resulting from inflation.
Depreciation and Amortization
The Company's depreciation and amortization expenses increased to $24.1
million in the nine months ended September 30, 1996 from $20.3 million in the
nine months ended September 30, 1995, an increase of $3.8 million.
The increase was due to an increased fleet size.
Gain on Sale of Leasing Equipment
The Company's gain on sale of leasing equipment decreased to $.5 million in
the nine months ended September 30, 1996 from $.7 million in the nine months
ended September 30, 1995.
Interest Expense, Net
The Company's net interest expense increased to $29.8 million in the nine
months ended September 30, 1996 from $25.7 million in the nine months ended
September 30, 1995, an increase of $4.1 million. The issuance of additional debt
and lease financing necessary to fund capital expenditures contributed to the
increased interest expense which was partially offset by the reduction of
interest expense of $2.6 million due to the exchange of preferred stock for
subordinated notes consummated in September 1995.
Non-recurring charge
During the first quarter of 1996, Interpool, Inc. acquired the minority
interest in the common stock of its subsidiary, Trac Lease, Inc., and the
outstanding shares of preferred stock of Trac Lease, in exchange for preferred
stock of Interpool. Interpool now owns 100% of the equity of Trac Lease. The
acquisition of Trac Lease preferred stock and its related accrued, cumulative
dividends resulted in a non-recurring, non-cash charge in the amount of $2.4
million. Such charge has no impact on net income per share because the effect of
unpaid dividends was included in the computation of net income per share in
prior periods.
Provision for Income Taxes
The Company's provision for income taxes increased to $5.5 million from $4.1
million due to higher taxable income. The effective tax rate increased to 18% in
the first nine months of 1996 from 16% due to the non-recurring charge in 1996
which is not deductible for tax purposes.
Extraordinary item in 1995
An extraordinary gain of $2.4 million, net of taxes, resulted from the
consummation on September 29, 1995, of the exchange of $66.4 million of
Interpool's 5 1/4% Convertible Exchangeable Subordinated Preferred Notes due
2018 (representing 98% of the then outstanding Notes) for new 5 3/4% Cumulative
Convertible Preferred Stock with a liquidation preference of $66.4 million.
Net Income
As a result of the factors described above, the Company's net income
increased to $25.4 million in the nine months ended September 30, 1996 from
$23.4 million in the nine months ended September 30, 1995. For the nine months
ended September 30, 1996 the Interpool Limited international container division
contributed $21.5 million to net income while the domestic intermodal division
contributed $6.3 million excluding the non-recurring charge of $2.4 million
mentioned above. This compares to the nine months ended September 30, 1995 where
the Interpool Limited international container division contributed $16.5 million
to income before extraordinary gain while the domestic intermodal division
contributed $4.5 million. The 1995 results for the domestic intermodal division
includes $1.6 million of interest expense net of taxes on subordinated notes
which were exchanged for preferred stock in September 1995.
Liquidity and Capital Resources
The Company uses funds from various sources to finance the acquisition of
equipment for lease to customers. The primary funding sources are cash provided
by operations, borrowings, generally from banks, the issuance of capital lease
obligations and the sale of debt securities. In addition, the Company generates
cash from the sale of equipment being retired from the Company's fleet. In
general, the Company seeks to meet debt service requirements from the leasing
revenue generated by its equipment.
The Company generated cash flow from operations of $93.0 million and $51.5
million in the first nine months of 1996 and 1995, respectively, and net cash
provided (used) by financing activities was ($7.2) million and $138.3 million
for the first nine months of 1996 and 1995, respectively. The Company has
purchased the following amounts of equipment: $108.8 million for the nine months
ended September 30, 1996 and $226.2 million for the nine months ended September
30, 1995.
The Company has a $150.0 million revolving credit facility with a group of
commercial banks; on September 30, 1996, $12.0 million was outstanding. The term
of this facility extends until May 31, 1997 (unless the lender elects to renew
the facility) at which time 25% of the amount then outstanding becomes due with
the remaining 75% of the total facility becoming payable in equal monthly
installments over a five year period. In addition, as of September 30, 1996, the
Company had available lines of credit of $55.0 million under various facilities,
under which $8.2 million was outstanding. Interest rates under these facilities
ranged from 6.2% to 9.0%. At September 30, 1996, the Company had total debt
outstanding of $571.9 million. Subsequent to September 30, 1996 the Company has
continued to incur and repay debt obligations in connection with financing its
equipment leasing activities.
As of September 30, 1996, commitments for capital expenditures totaled
approximately $40.0 million. The Company expects to fund such capital
expenditures from the Company's operations, borrowings under its available
credit facilities and additional funds raised through the sale of its debt
securities in the private and/or public markets.
The Company believes that cash generated by continuing operations, together
with amounts available to be borrowed under existing credit facilities and the
issuance of debt securities in the appropriate markets will be sufficient to
finance the Company's working capital needs for its existing business, planned
capital expenditures and expected debt repayments over the next twelve months.
The Company anticipates that long-term financing will continue to be available
for the purchase of equipment to expand its business in the future. In addition,
from time to time, the Company explores new sources of capital both at the
parent and subsidiary levels.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
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
Subsequent to September 30, 1996, the Company announced the withdrawal
of the registration statement previously filed with the Securities and
Exchange Commission for a proposed initial public offering of common
stock of the Company's wholly owned subsidiary, Interpool Limited.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit 99: (1) Press Release 8/29/96 (2) Press Release 9/24/96 (3)
Press Release 10/09/96 (4) Press Release 10/21/96
(b) Reports on Form 8-K: None
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.
INTERPOOL, INC.
Dated: November 8, 1996 \s\Martin
Tuchman
Martin Tuchman
Chief Executive Officer
Dated: November 8, 1996 \s\William
Geoghan
William Geoghan
Controller
<PAGE>
INDEX TO EXHIBIT
Filed with Interpool, Inc.
Report on Form 10-Q for the Quarter Ended September 30, 1996
Exhibit No.
99 1) Press Release dated August 29, 1996
2) Press Release dated September 24, 1996
3) Press Release dated October 9, 1996
4) Press Release dated October 21, 1996
August 29, 1996
Interpool declares cash dividend on its 5-3/4 percent cumulative convertible
preferred stock
PRINCETON, N.J.--Interpool Inc. (NYSE: IPX), one of the world's leading lessors
of intermodal dry cargo containers and the second largest lessor of intermodal
container chassis in the United States, reported today that its board of
directors has declared a cumulative cash dividend on its 5-3/4 percent
cumulative convertible preferred stock payable on Sept. 15 to holders of
record on Sept. 5.
The dividend in the amount of $1.4375 per share computed by dividing the annual
5-3/4 percent dividend rate by four, will be paid for the period commencing June
16 through Sept. 15.
CONTACT: Interpool Inc.
Raoul J. Witteveen, 212/916-3261
September 24, 1996
The cash dividend will be payable to common stockholders of record on Oct. 1,
1996.
Interpool stated that the aggregate amount of this dividend is expected to be
approximately $865,000.00. The amount of the dividend is based upon Interpool's
anticipated earnings for the third quarter ending Sept. 30, 1996.
Interpool, originally founded in 1968, is one of the world's leading lessors of
intermodal dry cargo containers and is the second largest lessor of intermodal
container chassis in the United States. In addition to Interpool's 278,000 TEU
container fleet, its chassis fleet has approximately 54,000 chassis. Interpool
leases its containers and chassis to over 200 customers, including nearly all of
the world's 20 largest international container shipping lines.
CONTACT: Interpool Inc., New York
Raoul J. Witteveen, 212/986-3388
October 9, 1996
Interpool reports withdrawal of registration statement for Interpool Limited
proposed public offering
PRINCETON, N.J.--Interpool Inc. (NYSE: IPX) announced today that its
wholly-owned subsidiary, Interpool Limited, has withdrawn its registration
statement previously filed with the Securities and Exchange Commission for a
proposed initial public offering of common stock of Interpool Limited.
Martin Tuchman, chairman and chief executive officer of Interpool Inc., stated
that "with its recently renewed revolving credit facility, Interpool has a
combined total of $240 million in cash, marketable securities and unused credit
lines. This will enable the company to fully fund the continued
growth anticipated for its international container leasing business conducted
by Interpool Limited."
Interpool, originally founded in 1968, is one of the world's leading lessors of
intermodal dry cargo containers and is the second largest lessor of intermodal
container chassis in the United States. Interpool leases its containers and
chassis to over 200 customers, including nearly all of the world 's 20 largest
international container shipping lines.
CONTACT: Interpool Inc.
Raoul J. Witteveen, 212/916-3261
October 21, 1996
Interpool Reports Record 3rd Quarter Income Per Share Before Extraordinary Gain,
For Increase Of 21 Percent
PRINCETON, N.J.--Interpool Inc. (NYSE: IPX) reported today that 1996 third
quarter income per share on a fully diluted basis, before extraordinary gain,
rose 21 percent to 47 cents per share as compared with 39 cents per share for
the same period in 1995.
Revenues during the third quarter of 1996 were $37,482,000, up 12 percent from
$33,582,000 in 1995.
For the nine months ended Sept. 30, 1996, income before extraordinary gain and
non-recurring charge rose to $27,805,000 from $20,980,000 in the same period a
year ago. Revenues for the nine months ended Sept. 30, 1996 rose to
$109,092,000, up 18 percent from $92,761,000 in 1995. On a fully dilute d basis,
Interpool Inc.'s income per share before extraordinary gain rose 20 percent to
$1.32 for the nine months ended Sept. 30, 1996 compared with $1.10 in 1995.
The company conducts its international container leasing business through its
subsidiary Interpool Limited, while the domestic intermodal equipment leasing
business, is conducted by Interpool Inc. and its other subsidiaries. During the
third quarter of 1996, the Interpool Limited international con tainer division
contribution to consolidated income rose 32 percent to $7,635,000, while the
domestic intermodal division contribution declined 4 percent (on a pro-forma
comparable basis) to $2,251,000. Revenues for the third quarter of 1996 from the
Interpool Limited international container divis ion rose 20 percent to
$20,237,000 while revenues from the domestic intermodal division rose 3 percent
to $17,245,000.
During the nine month period ended Sept. 30, 1996, the Interpool Limited
international container division contribution to consolidated income rose 30
percent to $21,470,000, while the domestic intermodal division contribution rose
3 percent (on a pro-forma comparable basis) to $6,335,000. Revenues
for the nine month period ended Sept. 30, 1996 rose 28 percent to $59,102,000
from the Interpool Limited international container division while revenues from
the domestic intermodal division rose 7 percent to $49,990,000.
Martin Tuchman, chairman and chief executive officer commented that the
company's fully diluted income per share before extraordinary gain was a
record, and was the direct result of the continued expansion of Interpool's
container and chassis fleets during 1995 and 1996. During the past 12 months,
the company's container fleet has grown to approximately 286,000 container TEUs
(20-foot-equivalent units) from 228,000 TEUs, with container utilization at 97
percent, while the chassis fleet has grown to approximately 54,000 units from
52,000 units, with chassis utilization at 93 percent. Tuchma
n noted that Interpool continues to build shareholder value, with its book value
rising to over $273 million at the end of the third quarter.
Tuchman reiterated his comments from July 1996 and stated that, "the company's
continued strong performance in the third quarter reflects the success of our
long-term leasing strategy, as well as the strength of the underlying value of
our business. We believe that at current trading levels, Inter pool Inc.'s
common stock represents an extremely attractive value, and we anticipate that
members of our senior management will continue to increase their personal
shareholdings in the company during the remainder of this year."
Interpool, originally founded in 1968, is one of the world's leading lessors of
intermodal dry cargo containers and is the second largest lessor intermodal
container chassis in the United States. Interpool leases its containers and
chassis to over 200 customers, including nearly all of the world's 20 largest
international container shipping lines.
INTERPOOL, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except amounts per share)
(Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPT. 30, SEPT. 30,
1996 1995 (1) 1996 1995 (1)
------ ------ ------ ------
REVENUES $37,482 $33,582 $109,092 $92,761
LEASE OPERATING AND
ADMINISTRATIVE EXPENSES 7,866 7,831 22,385 22,457
DEPRECIATION AND
AMORTIZATION OF
LEASING EQUIPMENT 8,084 7,395 24,069 20,264
(GAIN) ON SALE OF
LEASING EQUIPMENT (49) (105) (493) (724)
-------- ------- -------- --------
EARNINGS BEFORE INTEREST
AND TAXES 21,581 18,461 63,131 50,764
INTEREST EXPENSE, NET 9,745 9,402 29,826 25,734
-------- ------- -------- --------
INCOME BEFORE TAXES,
EXTRAORDINARY GAIN AND
NON-RECURRING CHARGE 11,836 9,059 33,305 25,030
PROVISION FOR INCOME TAXES 1,950 1,475 5,500 4,050
-------- ------- -------- --------
INCOME BEFORE EXTRAORDINARY
GAIN AND NON-RECURRING
CHARGE 9,886 7,584 27,805 20,980
EXTRAORDINARY ITEM-GAIN ON
EARLY RETIREMENT OF DEBT,
NET OF TAX EXPENSE OF $1,683 - 2,422 - 2,422
NON-RECURRING CHARGE (2) - - 2,392 -
-------- ------- -------- --------
NET INCOME $9,886 $10,006 $25,413 $23,402
======== ======= ======== ========
INCOME PER SHARE BEFORE
EXTRAORDINARY GAIN:
PRIMARY $0.49 $0.43 $1.39 $1.20
FULLY DILUTED $0.47 $0.39 $1.32 $1.10
INCOME PER SHARE ON
EXTRAORDINARY GAIN:
PRIMARY NA $0.14 NA $0.14
FULLY DILUTED NA $0.12 NA $0.12
NET INCOME PER SHARE:
PRIMARY $0.49 $0.57 $1.39 $1.34
FULLY DILUTED $0.47 $0.51 $1.32 $1.21
WEIGHTED AVERAGE
SHARES OUTSTANDING:
PRIMARY 17,848 17,564 17,713 17,415
FULLY DILUTED 21,167 20,507 21,003 20,507
(1) In September 1995, subordinated notes were exchanged for preferred stock. If
those notes had been exchanged on Jan. 1, 1995 interest expense would have
been $868 and $2,642 lower for the three months and nine months ended Sept.
30, 1995. The provision for income taxes would have been $330 and $1,004
higher for the three months and nine months ended Sept. 30, 1995; and
therefore net income would have been $538 and $1,638 higher for the three
months and nine months ended Sept. 30, 1995. Fully diluted net income per
share would not change because the above mentioned effects were included in
the fully diluted earnings per share calculation.
(2) Represents a non-cash and non-recurring charge for accumulated dividends of
its subsidiary, Trac Lease, Inc., which resulted from the acquisition of the
outstanding preferred stock of Trac Lease, Inc. through the issuance of
Interpool, Inc. preferred stock. Such charge has no impact on net income per
share because unpaid dividends were included in the computation of net
income per share in prior periods.
CONTACT: Interpool, Inc.
Raoul J. Witteveen, 212/916-3261
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<PERIOD-END> Sep-30-1996
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