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 JUNE 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 August 9, 1996, 17,302,230 shares of common stock, $.001 par value were
outstanding.
Indicate by check 4 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 4 No
<PAGE>
INTERPOOL, INC. AND SUBSIDIARIES
INDEX
Page No.
Part I - Financial Information:
Introduction to Financial Statements ............................. 3
Consolidated Balance Sheets
June 30, 1996 and December 31, 1995 .............................. 4
Consolidated Statements of Income
For the Three Months and Six Months ended June 30, 1996 and 1995 . 5
Consolidated Statements of Cash Flows
For the Six Months ended June 30, 1996 and 1995 .................. 6
Consolidated Statements of Stockholders' Equity
For the Six Months ended June 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 4: Submission of Matters to a Vote of Security Holders ... 12
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>
June 30, December 31,
1996 1995
---- ----
<S> <C> <C>
ASSETS
Cash and short-term investments ............................................. $ 46,274 $ 40,208
Marketable securities ....................................................... 9,595 30,453
Accounts and notes receivable, less allowance of $1,817 and $2,099 .......... 27,341 25,785
Net investment in direct financing leases ................................... 237,104 202,576
Other receivables, net ...................................................... 16,772 8,831
Leasing equipment, at cost .................................................. 625,177 609,869
Less--accumulated depreciation and amortization.............................. 96,873 86,249
------- -------
Leasing equipment, net.................................................. 528,304 523,620
Other assets................................................................. 19,960 20,127
-------- --------
Total assets............................................................. $885,350 $851,600
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses ....................................... $ 18,579 $ 18,653
Income taxes
Current .................................................................. 1,000 581
Deferred.................................................................. 11,594 9,517
------- --------
Total income taxes ....................................................... 12,594 10,098
Deferred income ............................................................. 1,294 1,142
Debt and capital lease obligations:
Due within one year ...................................................... 61,431 71,104
Due after one year........................................................ 525,284 499,998
-------- -------
586,715 571,102
Minority interest in equity of subsidiaries ................................. 581 3,915
Stockholders' equity:
Preferred stock, par value $.001 per share, 239,946 at June 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
$75,841 at June 30, 1996 and 676,000 shares authorized,
674,360 outstanding, liquidation preference $67,436 at December 31, 1995 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......................................................... 95,079 83,342
Net unrealized gain on marketable securities.............................. 338 70
-------- -------
Total stockholders' equity............................................. 265,587 246,690
-------- -------
Total liabilities and stockholders' equity.......................... $885,350 $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 Six Months Ended
June 30, June 30,
1995 1996 1995 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES.................................................... $36,431 $31,484 $71,610 $59,179
COSTS AND EXPENSES:
Lease operating and administrative expenses ................ 6,957 7,192 14,519 14,626
Depreciation and amortization of leasing equipment ......... 8,048 6,884 15,985 12,869
Gain on sale of leasing equipment........................... (173) (188) (444) (619)
Interest expense, net....................................... 10,228 9,271 20,081 16,332
Non-recurring charge........................................ - - 2,392 -
------ ------ ------ ------
25,060 23,159 52,533 43,208
------ ------ ------ ------
Income before taxes ........................................ 11,371 8,325 19,077 15,971
Provision for income taxes.................................. 1,900 1,350 3,550 2,575
------ ------- ----- -----
NET INCOME.................................................. $9,471 $6,975 $15,527 $13,396
====== ====== ======= =======
NET INCOME PER SHARE:
Primary.................................................. $0.47 $0.40 $0.89 $0.77
Fully diluted............................................ $0.45 $0.37 $0.86 $0.71
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING:
Primary.................................................. 17,728 17,333 17,645 17,340
Fully diluted............................................ 20,981 20,226 20,806 20,240
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these statements.
<PAGE>
INTERPOOL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income .................................................................. $15,527 $13,396
Adjustments to reconcile net income to net cash provided by Operating
activities:
Non-recurring charge ...................................................... 2,392 -
Depreciation and amortization ............................................. 16,318 13,198
Gain on sale of leasing equipment ......................................... (444) (619)
Collections on direct financing leases .................................... 37,142 21,731
Income recognized on direct financing leases .............................. (14,229) (8,894)
Provision for uncollectible accounts ...................................... 378 429
Changes in assets and liabilities:
Accounts and notes receivable ........................................... (1,917) (1,592)
Other receivables ....................................................... (907) 801
Other assets ............................................................ (293) (2,395)
Accounts payable and accrued expenses ................................... 2,175 (59)
Income taxes payable .................................................... 2,370 1,467
Deferred income ......................................................... 152 354
Minority interest in equity of subsidiaries.............................. 34 235
Net cash provided by operating activities.............................. 58,698 38,052
------ ------
Cash flows from investing activities:
Acquisition of leasing equipment .......................................... (25,551) (95,760)
Proceeds from dispositions of leasing equipment ........................... 4,331 3,700
Investment in direct financing leases ..................................... (55,204) (62,102)
Sales of marketable securities and other investing activity................ 14,218 8,642
Net cash used for investing activities .................................. (62,206) (145,520)
-------- ---------
Cash flows from financing activities:
Proceeds from issuance of debt ............................................ 59,034 103,079
Payments of debt and capital lease obligations ............................ (43,421) (24,256)
Cash dividends paid........................................................ (6,039) -
Net cash provided by financing activities................................ 9,574 78,823
Net increase (decrease) in cash and short-term investments .............. 6,066 (28,645)
Cash and short-term investments, beginning of period......................... 40,208 69,112
Cash and short-term investments, end of period............................... $46,274 $40,467
======= =======
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.
<PAGE>
- - INTERPOOL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 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 income ................. 15,527
Net unrealized gain on
Marketable Securities ...... 268
Trac Lease minority
interest acquisition ..... 84 6,892
Cash dividends declared:
Preferred stock .......... (2,060)
Common stock ............. (1,730)
--- --- ------ --- -------- ------- -----
Balance, June 30, 1996....... 758 $1 17,302 $17 $170,152 $95,079 $338
</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
and 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 six months ended June 30, 1996 and 1995, cash paid for interest was
approximately $21,269 and $18,890, respectively. Cash paid for income taxes was
approximately $1,253 and $1,190, respectively.
Note 3 -- Other contingencies and commitments:
At June 30, 1996, the Company had outstanding purchase commitments for
equipment of approximately $35,000.
<PAGE>
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.
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 six months ended June 30, 1996
and 1995 revenues from direct financing leases were $14.2 million (20% of
revenues) and $8.9 million (15% of revenues), respectively.
Three Months Ended June 30, 1996 compared to Three Months Ended June 30, 1995
Revenues
The Company's revenues increased to $36.4 million for the three months ended
June 30, 1996 from $31.5 million in the three months ended June 30, 1995, an
increase of $4.9 million or 16%. The increase is primarily due to increased
leasing revenues generated by an expanded container and chassis fleet size.
Revenues for the three months ended June 30, 1996 were $20.0 million for the
Interpool Limited international container division and $16.4 million for the
domestic intermodal division. This compared to $15.6 million for the Interpool
Limited international container division and $15.9 million for the domestic
intermodal division for the three months ended June 30, 1995.
<PAGE>
Lease Operating and Administrative Expenses
The Company's lease operating and administrative expenses decreased to $7.0
million for the three months ended June 30, 1996 from $7.2 million in the three
months ended June 30, 1995, a decrease of $.2 million. The decrease was due to
lower lease operating expenses primarily resulting from less repair expense in
the chassis operations somewhat offset by higher administrative costs resulting
from inflation.
Depreciation and Amortization
The Company's depreciation and amortization expenses increased to $8.0
million in the three months ended June 30, 1996 from $6.9 million in the three
months ended June 30, 1995, an increase of $1.1 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 the same at $.2
million in both the three months ended June 30, 1996 and June 30, 1995.
Interest Expense, Net
The Company's net interest expense increased to $10.2 million in the three
months ended June 30, 1996 from $9.3 million in the three months ended June 30,
1995, an increase of $.9 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 $1.9 million from $1.4
million due to higher taxable income.
Net Income
As a result of the factors described above, the Company's net income
increased to $9.5 million in the three months ended June 30, 1996 from $7.0
million in the three months ended June 30, 1995. For the three months ended June
30, 1996 the Interpool Limited international container division contributed $7.3
million to net income while the domestic intermodal division contributed $2.2
million. This compares to the three months ended June 30, 1995 where the
Interpool Limited international container division contributed $5.7 million to
net income while the domestic intermodal division contributed $1.3 million. The
1995 results for the domestic intermodal division includes $.6 million of
interest expense net of taxes on subordinated notes which were exchanged for
preferred stock in September 1995.
Six Months Ended June 30, 1996 compared to Six Months Ended June 30, 1995
Revenues
The Company's revenues increased to $71.6 million for the six months ended
June 30, 1996 from $59.2 million in the six months ended June 30, 1995, an
increase of $12.4 million or 21%. The increase is primarily due to increased
leasing revenues generated by an expanded container and chassis fleet size.
Revenues for the six months ended June 30, 1996 were $38.9 million for the
Interpool Limited international container division and $32.7 million for the
domestic intermodal division. This compared to $29.4 million for the Interpool
Limited international container division and $29.8 million for the domestic
intermodal division for the six months ended June 30, 1995.
<PAGE>
Lease Operating and Administrative Expenses
The Company's lease operating and administrative expenses decreased to $14.5
million for the six months ended June 30, 1996 from $14.6 million in the six
months ended June 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 somewhat offset by higher administrative costs resulting
from inflation.
Depreciation and Amortization
The Company's depreciation and amortization expenses increased to $16.0
million in the six months ended June 30, 1996 from $12.9 million in the six
months ended June 30, 1995, an increase of $3.1 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 $.4 million in
the six months ended June 30, 1996 from $.6 million in the six months ended June
30, 1995. Interest Expense, Net The Company's net interest expense increased to
$20.1 million in the six months ended June 30, 1996 from $16.3 million in the
six months ended June 30, 1995, an increase of $3.8 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 $1.8 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 $3.6 million from $2.6
million due to higher taxable income. The effective tax rate increased to 18.6%
in the first six months of 1996 from 16.1% due to the non-recurring charge in
1996 which is not deductible for tax purposes.
Net Income
As a result of the factors described above, the Company's net income
increased to $15.5 million in the six months ended June 30, 1996 from $13.4
million in the six months ended June 30, 1995. For the six months ended June 30,
1996 the Interpool Limited international container division contributed $13.8
million to net income while the domestic intermodal division contributed $4.1
million excluding the non-recurring charge of $2.4 million mentioned above. This
compares to the six months ended June 30, 1995 where the Interpool Limited
international container division contributed $10.7 million to net income while
the domestic intermodal division contributed $2.7 million. The 1995 results for
the domestic intermodal division includes $1.1 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.
<PAGE>
The Company generated cash flow from operations of $58.7 million and $38.1
million in the first six months of 1996 and 1995, respectively, and net cash
provided by financing activities was $9.6 million and $78.8 million for the
first six months of 1996 and 1995, respectively. The Company has purchased the
following amounts of equipment: $80.8 million for the six months ended June 30,
1996 and $157.9 million for the six months ended June 30, 1995.
The Company has a $150.0 million revolving credit facility with a group of
commercial banks; on June 30, 1996, no loans were 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 June 30, 1996, the
Company had available lines of credit of $70.0 million under various facilities,
under which $15.8 million was outstanding. Interest rates under these facilities
ranged from 6.2% to 9.0%. At June 30, 1996, the Company had total debt
outstanding of $586.7 million. Subsequent to June 30, 1996 the Company has
continued to incur and repay debt obligations in connection with financing its
equipment leasing activities.
As of June 30, 1996, commitments for capital expenditures totaled
approximately $35.0 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
The Company held an annual meeting of stockholders on May 30, 1996, at
which the following matters were voted upon:
1. Election of three directors.
2. Approval of appointment of Arthur Andersen LLP as independent
auditors for the fiscal year ending December 31, 1996.
3. Amendments to the Company's Restated Certificate of
Incorporation to increase number of authorized shares of common
stock.
4. Amendment to the Company's 1993 Stock Option Plan for Executive
Officers and Directors to increase the number of shares reserved
for option grants.
<PAGE>
The results of the meeting were as follows:
Total Outstanding Shares: 17,302,730
Total Shares Voted: 16,881,572 (97.57%)
<TABLE>
<CAPTION>
Votes For Votes Against Votes Abstained Unvoted
<S> <C> <C> <C> <C>
Director 1 16,671,968 209,604
Director 2 16,671,968 209,604
Director 3 16,671,968 209,604
Proposition 2 16,879,112 210 2,250
Proposition 3 13,497,658 2,971,612 11,860 400,442
Proposition 4 13,874,022 2,594,208 12,900 400,442
</TABLE>
Item 5. Other Information
On June 18, 1996, the Company announced that its wholly owned
subsidiary, Interpool Limited, had filed a registration statement
with the Securities and Exchange Commission for an initial public
offering of the common stock of Interpool Limited representing a
minority interest in Interpool Limited. On August 9, 1996 the
proposed public offering was postponed due to market conditions. As a
result, Interpool Limited continues to be a wholly owned subsidiary
of the Company. The Company believes that its existing capital and
liquidity is sufficient to fund its business plans for continued
growth of its international container leasing and domestic intermodal
equipment leasing business conducted by the Company and its
subsidiaries.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit 99: (1) Press Release 5/30/96
(2) Press Release 6/13/96
(3) Press Release 6/18/96
(4) Press Release 7/22/96
(5) Press Release 8/9/96
(b) Reports on Form 8-K: None
<PAGE>
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: August 13, 1996 \s\Martin Tuchman
-----------------------------------
Martin Tuchman
Chief Executive Officer
Dated: August 13, 1996 \s\William Geoghan
-----------------------------------
William Geoghan
Controller
<PAGE>
INDEX TO EXHIBIT
Filed with Interpool, Inc.
Report on Form 10-Q for the Quarter Ended June 30, 1996
Exhibit No.
99 1) Press Release dated May 30, 1996
2) Press Release dated June 13, 1996
3) Press Release dated June 18, 1996
4) Press Release dated July 22, 1996
5) Press Release dated August 9, 1996
<PAGE>
Interpool, Inc. Reports Postponement Of Interpool Limited Planned Public
Offering
PRINCETON, N.J., August 9, 1996--Interpool, Inc. (NYSE: IPX) announced today
that the planned initial public offering of common stock of Interpool Limited,
its wholly-owned subsidiary, has been postponed due to market conditions.
Management's decision to postpone the offering reflects the belief of the
company and the managing underwriters that new issue market conditions at the
present time do not adequately reflect the value of Interpool Limited.
Interpool, Inc. stated that its existing capital and liquidity are more than
sufficient to fully fund its business plans for continued growth of the
international container leasing business conducted by Interpool Limited and the
domestic intermodal equipment leasing business conducted by Interpool,
Inc. and its other subsidiaries.
CONTACT: Raoul J. Witteveen
(212) 916-3261
Interpool, Inc. Reports Record 2nd Quarter Earnings -- Net Income Per Share
Increases 22%
PRINCETON, N.J., July 22, 1996 -- Interpool, Inc. (NYSE: IPX) reported today
that 1996 second quarter net income per share on a fully diluted basis rose 22%
to 45 cents per share as compared with 37 cents per share for the same period in
1995. Revenues during the second quarter of 1996 were $36,431,000, up 16% from
$31,484,000 in 1995.
For the six months ended June 30, 1996, income before non-recurring charges rose
to $17,919,000 from $13,396,000 in the same period a year ago. Revenues for the
six months ended June 30, 1996 rose to $71,610,000, up 21% from $59,179,000 in
1995. On a fully diluted basis, Interpool Inc.'s net income per share rose 21%
to 86 cents in the first half of 1996 compared with 71 cents in 1995. Martin
Tuchman, Chairman and Chief Executive Officer, noted that last month the
company's wholly-owned subsidiary, Interpool Limited, filed a registration
statement with the Securities and Exchange Commission relating to a proposed
initial public offering of newly issued shares representing approximately 22% of
Interpool Limited's common stock. Upon consummation of the offering, without
giving consideration to an over-allotment option to be granted to underwriters,
Interpool, Inc. would continue to own approximately 78% of Interpool Limited's
common stock. As previously announced, Interpool Limited intends to use
approximately $41 million of the net proceeds of the offering to repay debt owed
to Interpool, Inc. The offering, being managed by Donaldson Lufkin & Jenrette
Securities Corporation, Smith Barney, Inc. and Furman Selz LLC, is expected to
be completed in August 1996.
In order to improve investor understanding of Interpool, Inc.'s separate
businesses -- the international container leasing business, conducted by
Interpool Limited and the domestic intermodal equipment leasing business,
conducted by Interpool, Inc. and its other subsidiaries, financial data is being
presented separately for each business, as well as on a consolidated basis.
During the second quarter of 1996, the Interpool Limited international container
division contributed $7,255,000 to consolidated net income, while the domestic
intermodal division contributed $2,216,000. Revenues for the second quarter of
1996 were $19,979,000 from the Interpool Limited internatio nal container
division and $16,452,000 from the domestic intermodal division.
During the six month period ended June 30, 1996, the Interpool Limited
international container division contributed $13,835,000 to Interpool, Inc.'s
consolidated net income. The domestic intermodal division contributed $4,084,000
to Interpool, Inc.'s consolidated income before non-recurring charge s for the
six month period. Revenues for the six month period ended June 30, 1996 were
$38,865,000 from the Interpool Limited international container division and
$32,745,000 from the domestic intermodal division.
Commenting on second quarter results, Mr. Tuchman, stated that, "the company's
continued strong performance in the second 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, Int erpool, Inc.'s
common stock represents an extremely attractive value, and we anticipate that
members of our senior management will begin increasing their personal
shareholdings in the company." When asked whether Interpool, Inc. would consider
initiating a stock buy-back program, Mr. Tuchman adde d, "although the company
has no such present plans, we would consider that in the future as one of the
alternatives for enhancing shareholder value."
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. The company added approximately 18,000
TEUs (twenty-foot-equivalent units) to its container fleet du ring the second
quarter, bringing the total container fleet to approximately 278,000 container
TEUs, in addition to the chassis fleet of approximately 54,000 units. Interpool
leases its containers and chassis to over 200 customers, including most of the
world's 20 largest international container sh ipping lines.
A registration statement relating to Interpool Limited's securities has been
filed with the Securities and Exchange Commission but has not yet become
effective. Interpool Limited's securities may not be sold nor may offers to buy
be accepted prior to the time the registration statement becomes eff ective.
This press release shall not constitute an offer to sell or the solicitation of
an offer to buy, nor shall there be any sale of these securities in any state in
which such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such state.
INTERPOOL, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except amounts per share)
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1996 1995 (1) 1996 1995 (1)
------ ------ ------ ------
<S> <C> <C> <C> <C>
REVENUES $ 36,431 $ 31,484 $ 71,610 $ 59,179
LEASE OPERATING AND
ADMINISTRATIVE EXPENSES 6,957 7,192 14,519 14,626
DEPRECIATION AND
AMORTIZATION OF
LEASING EQUIPMENT 8,048 6,884 15,985 12,869
GAIN ON SALE OF
LEASING EQUIPMENT (173) (188) (444) (619)
-------- ------- -------- --------
EARNINGS BEFORE INTEREST
AND TAXES 21,599 17,596 41,550 32,303
INTEREST EXPENSE , NET 10,228 9,271 20,081 16,332
-------- ------- -------- --------
INCOME BEFORE TAXES AND
NON-RECURRING CHARGE 11,371 8,325 21,469 15,971
PROVISION FOR INCOME TAXES 1,900 1,350 3,550 2,575
-------- ------- -------- --------
INCOME BEFORE
NON-RECURRING CHARGE 9,471 6,975 17,919 13,396
NON-RECURRING CHARGE (2) - - 2,392 -
-------- ------- -------- --------
NET INCOME $9,471 $6,975 $15,527 $13,396
======== ======= ======== ========
NET INCOME PER SHARE:
PRIMARY $0.47 $0.40 $0.89 $0.77
FULLY DILUTED $0.45 $0.37 $0.86 $0.71
WEIGHTED AVERAGE
SHARES OUTSTANDING:
PRIMARY 17,728 17,333 17,645 17,340
FULLY DILUTED 20,981 20,226 20,806 20,240
<FN>
(1) In September 1995, subordinated notes were exchanged for preferred stock. If
those notes had been exchanged on January 1, 1995 interest expense would
have been $887 and $1,774 lower for the three months and six months ended
June 30, 1995. The provision for income taxes would have been $337 and $674
lower for the three months and six months ended June 30, 1995; and therefore
net income would have been $550 and $1,100 higher for the three months and
six months ended June 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 computation of net income
per share in prior periods.
</FN>
</TABLE>
INTERPOOL LIMITED
INTERNATIONAL CONTAINER DIVISION OF INTERPOOL, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except amounts per share)
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1996 1995 1996 1995
------ ------ ------ ------
<S> <C> <C> <C> <C>
REVENUES $ 19,979 $ 15,584 $ 38,865 $ 29,347
LEASE OPERATING AND
ADMINISTRATIVE EXPENSES 1,524 840 3,249 1,929
DEPRECIATION AND
AMORTIZATION OF
LEASING EQUIPMENT 4,373 3,612 8,641 6,831
GAIN ON SALE OF
LEASING EQUIPMENT (103) (133) (249) (536)
-------- ------- -------- --------
EARNINGS BEFORE
INTEREST AND TAXES 14,185 11,265 27,224 21,123
INTEREST EXPENSE , NET 6,551 5,296 12,689 9,857
-------- ------- -------- --------
INCOME BEFORE TAXES 7,634 5,969 14,535 11,266
PROVISION FOR INCOME TAXES 379 300 700 575
-------- ------- -------- --------
NET INCOME $7,255 $5,669 $13,835 $10,691
======= ======= ======== ========
CONTRIBUTION TO
INTERPOOL, INC. NET INCOME $7,255 $5,669 $13,835 $10,691
======== ======= ======== ========
</TABLE>
DOMESTIC INTERMODAL DIVISION OF INTERPOOL, INC.
STATEMENTS OF INCOME
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1996 1995 (1) 1996 1995 (1)
------ ------ ------ ------
<S> <C> <C> <C> <C>
REVENUES $ 16,452 $ 15,900 $ 32,745 $ 29,832
LEASE OPERATING AND
ADMINISTRATIVE EXPENSES 5,433 6,352 11,270 12,697
DEPRECIATION AND
AMORTIZATION OF
LEASING EQUIPMENT 3,675 3,272 7,344 6,038
GAIN ON SALE OF
LEASING EQUIPMENT (70) (55) (195) (83)
-------- ------- -------- --------
EARNINGS BEFORE
INTEREST AND TAXES 7,414 6,331 14,326 11,180
INTEREST EXPENSE , NET 3,677 3,975 7,392 6,475
-------- ------- -------- --------
INCOME BEFORE TAXES 3,737 2,356 6,934 4,705
PROVISION FOR INCOME TAXES 1,521 1,050 2,850 2,000
-------- ------- -------- --------
INCOME BEFORE
NON-RECURRING CHARGE (2) $2,216 $1,306 $4,084 $2,705
======== ======= ======== ========
<FN>
(1) In September 1995, subordinated notes were exchanged for preferred stock. If
those notes had been exchanged on January 1, 1995 interest expense would
have been $887 and $1,774 lower for the three months and six months ended
June 30, 1995. The provision for income taxes would have been $337 and $674
lower for the three months and six months ended June 30, 1995; and therefore
net income would have been $550 and $1,100 higher for the three months and
six months ended June 30, 1995.
(2) The non-recurring non-cash charge of $2,392 during the first quarter of 1996
is considered a corporate charge.
</FN>
</TABLE>
CONTACT: Raoul J. Witteveen
(212) 916-3261
PRINCETON, N.J., June 18, 1996 -- Interpool, Inc. (NYSE:IPX) announced today
that its wholly-owned subsidiary, Interpool Limited, has filed a registration
statement with the Securities and Exchange Commission relating to a proposed
initial public offering of 7.65 million primary shares of Interpool Limited's
common stock at an offering price in the range of $14-16 per share.
Upon consummation of the offering, public investors would own approximately 7.65
million shares, or 22.4% of Interpool Limited's common stock, and Interpool,
Inc. would continue to own 26.5 million shares, or 77.6% of Interpool Limited's
common stock.
Interpool, Inc has two separate business -- the international container leasing
business, conducted by Interpool Limited, and the domestic intermodal equipment
leasing business, conducted by Interpool, Inc. and its other subsidiaries.
The total gross proceeds to Interpool Limited from the offering are expected to
be approximately $115 million. Interpool Limited intends to use approximately
$85 million of the net proceeds from the offering to repay borrowings, including
approximately $41 million owed to its parent, Interpool, In c. The balance of
the net proceeds from the offering will be used by Interpool Limited for working
capital and general corporate purposes. The principal purpose of the offering is
to increase Interpool Limited's equity capital base and facilitate its future
access to low-cost capital through the p rivate and public capital markets.
Martin Tuchman, chairman and chief executive officer of Interpool, Inc. and
Interpool Limited, said, "From the perspective of the parent company, raising
capital for Interpool Limited through the sale of a minority interest has
substantial benefits because it enables Interpool Limited to attract ca pital at
the lowest cost. The expected valuation of Interpool Limited will increase the
per share book value of Interpool, Inc., and should also result in a higher
market valuation for Interpool, Inc." Tuchman added, "As a result of the
repayment of the $41 million of intercompany debt, Interpool, Inc. will be
well-positioned with $70 million in cash at the parent company to continue its
conservative growth strategy as the world's second largest lessor of container
chassis and to take other steps to enhance shareholder value."
Interpool Limited's 7.65 million share offering will be managed by Donaldson,
Lufkin & Jenrette Securities Corp., Smith Barney Inc. and Furman Selz L.L.C. It
is anticipated that the underwriters will be granted an over-allotment to
purchase an additional 1.15 million shares. The offering is expec ted to be
completed in August 1996.
Interpool Limited, which is incorporated under the laws of Barbados, is one of
the world's leading lessors of cargo containers used in worldwide trade,
primarily to international shipping lines. In addition to the activities of its
subsidiary Interpool Limited, Interpool, Inc., through its subsidia ry Trac
Lease, Inc., is the world's second largest lessor of container chassis to
international shipping lines, and also leases domestic containers, trailers and
related transportation equipment to the railroad industry for use in the United
States.
CAPSULE FINANCIAL INFORMATION
In order to improve investor understanding of Interpool, Inc.'s separate
businesses -- the international container business conducted by Interpool
Limited and the domestic intermodal equipment leasing business conducted by
Interpool, Inc. and its other subsidiaries -- Interpool, Inc.'s financial
information will now be presented on a separate basis for each business. The
following table presents selected items for Interpool Limited and the domestic
intermodal leasing business from Interpool Inc.'s consolidating income statement
for the year ended December 31, 1995 and the three months ended March 31, 1996:
INCOME STATEMENT DATA
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
INTERPOOL INC.
-------------------------------------------------
YEAR ENDED International Domestic
DECEMBER 31, 1995 Container Intermodal Interpool
(ACTUAL) Division Division Inc.
(Interpool Limited) (All Other) (Consolidated)
<S> <C> <C> <C>
Revenues $ 64,170 $ 63,755 $127,925
Operating cash flow 56,119 16,663 72,782
Operating income (EBIT) 45,311 25,441 70,752
Income before
extraordinary and
nonrecurring items 22,556 6,989 29,545
Weighted average shares
outstanding -- -- 20,556
lncome per share before
extraordinary and
nonrecurring items
-- fully diluted $ 1.10(1) -- $ 1.51
</TABLE>
<TABLE>
<CAPTION>
INTERPOOL INC.
-------------------------------------------------
THREE MONTHS ENDED International Domestic
MARCH 31, 1996 Container Intermodal Interpool
(ACTUAL) Division Division Inc.
(Interpool Limited) (All Other) (Consolidated)
<S> <C> <C> <C>
Revenues $ 18,886 $ 16,293 $ 35,179
Operating cash flow 21,279 4,032 25,311
Operating income (EBIT) 13,039 6,912 19,951
Income before
extraordinary and
nonrecurring items 6,580 1,868 8,448
Weighted average shares
outstanding -- -- 20,589
lncome per share before
extraordinary and
nonrecurring items
-- fully diluted $ 0.32(1) -- $ 0.41
<FN>
(1) Interpool Limited's net income divided by Interpool, Inc.'s weighted average
shares outstanding.
</FN>
</TABLE>
The following table presents selected items from the consolidating balance sheet
of Interpool Inc. as of March 31, 1996 and as adjusted to give effect to the
offering by Interpool Limited:
BALANCE SHEET DATA
(In thousands)
<TABLE>
<CAPTION>
INTERPOOL INC.
-------------------------------------------------
MARCH 31 1996 (ACTUAL) International Domestic
Container Intermodal Interpool
Division Division Inc.
(Interpool Limited) (All Other) (Consolidated)
<S> <C> <C> <C>
Cash short-term
investments and
marketable securities $ 26,104 $ 26,670 $ 52,774
Total assets(2) 533,612 346,334 879,946
Funded debt(2) 356,026 234,717 590,743
Equity 108,325 149,614 257,939
Book value per share(3) -- -- $12.55
</TABLE>
<TABLE>
<CAPTION>
INTERPOOL INC.
-------------------------------------------------
MARCH 31, 1996 International Domestic
(AS ADJUSTED) Container Intermodal Interpool
Division Division Inc.
(Interpool Limited) (All Other) (Consolidated)
<S> <C> <C> <C>
Cash short-term
investments and
marketable securities $ 46,704 $ 68,079 $ 114,783
Total assets(2) 554,212 387,743 941,955
Funded debt(2) 312,435 234,717 547,152
Minority interest
in Interpool Limited 47,919
Equity 213,925 149,614 315,620
Book value per share(3) -- -- $15.36
</TABLE>
A registration statement relating to these securities has been filed with the
Securities and Exchange Commission but has not yet become effective. These
securities may not be sold nor may offers to buy be accepted prior to the time
the registration statement becomes effective. This press release shall not
constitute an offer to sell or the solicitation of an offer to buy nor shall
there be any sale of these securities in any state in which s uch offer
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such state.
(2) Excludes inter-company debt.
(3) Assumes full conversion of Interpool Inc.'s outstanding convertible
preferred stock.
CONTACT: Interpool Inc.,
Raoul J. Witteveen, 212/916-3264
Interpool To Commence Cash Dividends On Common Stock
PRINCETON, N.J., June 13, 1996 -- Interpool Inc. (NYSE: IPX), which leases
intermodal dry cargo containers and container chassis, today announced that it
intends to pay a cash dividend of 5 cents per share on July 15, 1996 to all
holders of its common stock. The cash dividend will be payable to common
stockholders of record on July 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 second quarter ending June 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 260,000 TEU
container fleet, its chassis fleet has approximately 54,000 c hassis. Interpool
leases its containers and chassis to over 200 customers, including nearly all of
the world's 25 largest international container shipping lines.
CONTACT: Interpool Inc.
Raoul J. Witteveen, 212/986-3388
INTERPOOL DECLARES CASH DIVIDEND ON ITS 5 3/4% CUMULATIVE
CONVERTIBLE PREFERRED STOCK
Princeton, NJ. May 30, 1996 -- 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%
Cumulative Convertible Preferred Stock payable on June 15, 1996 to holders of
record on June 5, 1996.
Future 1996 dividends, as declared, will be payable quarterly in arrears on
September 15 and December 15. The dividend in the amount of $1.4375 per share
computed by dividing the annual 5 3/4% dividend rate by four, will be paid for
the period commencing March 16, 1996 through June 15, 1996.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 46,000
<SECURITIES> 9,595
<RECEIVABLES> 29,158
<ALLOWANCES> 1,817
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 625,177
<DEPRECIATION> 96,873
<TOTAL-ASSETS> 885,350
<CURRENT-LIABILITIES> 82,304
<BONDS> 525,284
0
1
<COMMON> 17
<OTHER-SE> 265,569
<TOTAL-LIABILITY-AND-EQUITY> 885,350
<SALES> 71,610
<TOTAL-REVENUES> 71,610
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 32,452
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 20,081
<INCOME-PRETAX> 19,077
<INCOME-TAX> 3,550
<INCOME-CONTINUING> 15,527
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15,527
<EPS-PRIMARY> 0.89
<EPS-DILUTED> 0.86
</TABLE>
