UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ---------- to ---------------
Commission file number 0-23210
TRISM, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3491658
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4174 Jiles Road, Kennesaw, Georgia 30144
Address of principal executive offices) (Zip Code)
770-795-4600
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. X Yes No
As of October 31, 1996, 5,733,137 shares of TRISM, INC.'s common
stock, par value $.01 per common share were outstanding.
<PAGE>
TRISM, INC.
TABLE OF CONTENTS
Part I FINANCIAL INFORMATION Page
Item 1. Financial Statements 1
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations 5
Part II OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 6. Exhibits and Reports on Form 8-K 10
<PAGE>
<TABLE>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
TRISM, INC.
Consolidated Balance Sheets
(In Thousands)
(Unaudited)
<CAPTION>
September 30, December 31,
1996 1995
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,586 $ 643
Restricted and insurance deposits 1,293 1,120
Accounts receivable, net 56,783 44,830
Materials and supplies 2,319 2,307
Prepaid expenses 19,162 16,282
Current portion of deferred income taxes 3,390 3,421
------- -------
Total current assets 84,533 68,603
Property and equipment, net 117,591 119,043
Property held for sale 10,391 10,486
Other assets 27,708 20,639
------- -------
Total assets $240,223 $218,771
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable $ 2,500 $ --
Accounts payable 19,334 18,901
Equipment payable -- 635
Claims and insurance accruals 5,715 5,808
Accrued liabilities 10,822 6,008
Current maturities of long-term debt 12,160 9,230
Total current liabilities 50,531 40,582
Long-term debt 143,048 128,417
Claims, insurance accruals and other 6,193 6,317
Deferred income taxes 6,421 8,348
Total liabilities 206,193 183,664
------- -------
Stockholders' equity (deficit):
Common stock; $.01 par; 10,000,000
shares authorized; 5,899,137
shares issued at September 30, 1996,
and December 31, 1995 59 59
Additional paid-in capital 37,086 37,086
Loans to stockholders (368) (368)
Accumulated deficit (1,198) (121)
Treasury stock, at cost, 166,000 shares at
September 30, 1996 and December 31, 1995 (1,549) (1,549)
Total stockholders' equity 34,030 35,107
------ ------
Total liabilities and stockholders'
equity $240,223 $218,771
======= =======
See accompanying notes to the consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
TRISM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Revenues $80,166 $67,658 $232,434 $197,863
------ ------ ------- -------
Operating expenses:
Salaries, wages and
fringe benefits 28,426 24,989 84,508 74,210
Operating supplies and
expenses 11,220 9,252 34,318 26,975
Purchased
transportation 14,986 10,102 42,818 26,032
Operating taxes
and licenses 7,221 6,253 21,504 18,396
Depreciation 4,612 4,662 14,227 13,535
Amortization of
prepaid leases -- 377 652 1,354
General supplies
and expenses 4,661 3,597 13,278 10,782
Claims and insurance 2,516 2,093 7,416 6,585
Communications and
utilities 1,472 1,283 4,519 3,740
Amortization of
intangibles 152 198 496 585
Loss (Gain) on sale
of equipment 43 (11) 18 (201)
----- ----- ---- -----
Total operating
expenses 75,309 62,795 223,754 181,993
------ ------ ------- -------
Operating income 4,857 4,863 8,680 15,870
Interest expense (3,635) (3,364) (10,604) (10,563)
Other income
(expense), net 2 (40) (231) 72
----- ----- ------ ------
Income (loss) before
income taxes 1,224 1,459 (2,155) 5,379
Income tax expense
(benefit) 610 254 (1,078) 1,598
----- ----- ----- -----
Net income (loss) $ 614 $ 1,205 $(1,077) $3,781
====== ====== ====== =====
Earnings (loss)
per common share $ .11 $ .21 $ (.19) $ .65
Number of shares used
in computation of
earnings (loss) per
common share 5,734 5,802 5,734 5,814
===== ===== ===== =====
See accompanying notes to the consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
TRISM, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<CAPTION>
Nine Months Ended September 30,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $(1,077) $3,781
Adjustments to reconcile net
income (loss) to net cash
provided by operating
activities:
Depreciation 14,227 13,535
Amortization of
prepaid operating leases 652 1,355
Amortization and write-off
of intangibles and goodwill 965 1,036
Loss (Gain) on sale of assets 18 (201)
Deferred income taxes (1,078) 1,598
Provision for uncollectible receivables 662 398
Changes in:
Accounts receivable (13,115) (6,166)
Prepaid expenses (3,845) (330)
Accounts payable 433 6,258
Claims and insurance accruals (217) (168)
Accrued liabilities 4,064 3,875
Other 249 145
Net cash provided by (used in)
operating activities 1,938 25,116
----- ------
Cash flows from investing activities:
Refund (purchase) of restricted deposits (173) 2,610
Proceeds from sale of property and equipment 5,555 1,021
Proceeds from sale of property held for sale -- 290
Purchases of property and equipment (17,983) (21,402)
Collection (issuance) of notes receivable (1,372) 416
Payment for purchase of companies,
net of cash acquired (2,886) (3,362)
----- -----
Net cash used in investing activities (16,859) (20,427)
------ ------
Cash flows from financing activities:
Net proceeds under revolving credit
agreement 8,104 1,872
Repayment of long-term debt (7,843) (15,819)
Purchase of treasury stock -- (996)
Issuance of treasury stock -- 22
Proceeds from issuance of long-term debt 15,603 5,474
Net cash provided by (used in) financing
activities 15,864 (9,447)
------ -----
Increase (decrease) in cash and cash
equivalents 943 (4,758)
Cash and cash equivalents, beginning
of period 643 6,177
------ ------
Cash and cash equivalents, end of period $ 1,586 $ 1,419
====== =======
Supplemental cash flow information:
Cash paid during the period for:
Interest (net of $444,392 and
$25,408 capitalized in 1996
and 1995, respectively) $ 7,991 $ 7,967
====== =======
Income taxes $ 73 $ 201
Property sold in exchange for
notes receivable $ -- $ 560
====== ======
See accompanying notes to the consolidated financial statements.
</TABLE>
<PAGE>
TRISM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Accounting Policies
The 1995 Annual Report on Form 10-K for TRISM, Inc. includes a
summary of significant accounting policies and should be read in
conjunction with this Form 10-Q. The statements for the periods presented
are condensed and do not contain all information required by generally
accepted accounting principles to be included in a full set of financial
statements. In the opinion of management, all adjustments (consisting of
only normal recurring adjustments) necessary to present fairly the
financial position as of September 30, 1996 and December 31, 1995 and the
results of operations and cash flows for the three and nine months ended
September 30, 1996 and 1995 have been included. The results of operations
for any interim period are not necessarily indicative of the results of
operations to be expected for the entire year. Certain prior year data has
been reclassified to conform to current year presentation.
2. Long-Term Debt
On November 8, 1996, the Company executed a waiver and amendment to
the revolving credit and security agreement ("Agreement") to expand its
borrowing base, amend certain financial covenants, and waive certain
financial covenants for which the Company was not in compliance at
September 30, 1996. The Company previously modified the Agreement on March
20, 1996 and August 13, 1996 to provide borrowings up to $25 million and
extend its maturity to April 1998.
3. Acquisition
On August 30, 1996, the Company acquired the business and certain
assets of the Special Commodities division of J.B. Hunt Transport, Inc.
("Hunt") for $7.4 million. The acquisition price included payment for
certain customer lists, goodwill, a covenant not to compete and
approximately 250 trailers. The Company financed the acquisition price
with $4.9 million of equipment debt and a $2.5 million note payable to
Hunt. The Company also granted options to Hunt for the purchase of 300,000
shares of TRISM, Inc. stock at $6.50 per share, with a term of five years.
The options are not transferable by Hunt and are immediately exercisable.
4. Contingencies
Under CERCLA and similar state laws, a transporter of hazardous
substances may be liable for the costs of responding to the release or
threatened release of hazardous substances from disposal sites if such
transporter selected the site for disposal. Because it is the Company's
practice not to select the sites where hazardous substances and wastes will
be disposed, the Company does not believe it will be subject to material
liability under CERCLA and similar laws. Although the Company has been
identified as a "potentially responsible party" (PRP), solely because of
its activities as a transporter of hazardous substances, at two sites, the
Company does not believe it will be subject to material liabilities at such
sites.
The EPA has designated an area of several hundred square miles of
Missouri as a potential Superfund site. The Company's Joplin, Missouri
terminal is within the boundaries of this area, however, the Company has
not been designated as a PRP. The Company believes that it has no
liability with respect to this site and that it would have strong defenses
to any action for cost recovery, as neither it nor its predecessors created
the conditions which are the cause of the environmental problems at the
site.
The Company is a party to routine litigation incidental to its
business, primarily involving claims for personal injury or property
damages incurred in the transportation of freight. The Company is not aware
of any claims or threatened claims that might have a material adverse
affect on the Company's consolidated operating results, financial position,
cash flow or liquidity.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction
with the Company's Consolidated Financial Statements and notes.
RESULTS OF OPERATIONS
QUARTER ENDED SEPTEMBER 30, 1996 COMPARED WITH QUARTER ENDED SEPTEMBER 30,
1995
REVENUES
Operating revenues increased by $12.5 million, or 18.5 percent,
compared with 1995. Approximately $9.1 million, or 72.8%, of the increase
was attributable to acquisitions made during 1995. The following table
presents a comparison of revenues by market group.
<TABLE>
<CAPTION>
1996 1995
Operating Operating
(In thousands) Revenues Ratio Revenues Ratio
<S> <C> <C> <C> <C>
Heavy Haul $46,190 92.3% $44,477 92.7%
Secured Materials 25,840 91.1% 23,703 92.3%
Trism Transport 9,116 102.3% -- --
Logistics 1,175 107.7% 1,385 102.4%
Eliminations and
other (2,155) -- (1,907) --
----- ----- ----- -----
$80,166 93.9% $67,658 92.8%
====== ===== ====== =====
</TABLE>
OPERATING INCOME
Operating income was $4.9 million on $80.2 million of revenues in
1996, compared to $4.9 million on $67.7 million of revenues in 1995
resulting in an operating ratio of 93.9% and 92.8%, respectively.
Excluding the effect of Trism Transport (acquired October, 1995), revenue
per total mile increased to $1.471 in 1996 from $1.406 in 1995. The
operating ratio was negatively impacted in 1996 by financing new and
replacement tractors and trailers with operating leases and higher fuel
prices which were partially offset by fuel surcharges to customers.
HEAVY HAUL revenues grew by 3.9% in 1996 over 1995. Revenue per total
mile increased to $1.475 in 1996 from $1.439 in 1995 as a result of an
increase in the Company's loaded mile ratio which improved to 85.6% from
83.5%. The operating ratio improved from 92.7% in 1995 to 92.3% in 1996
but was negatively impacted by higher fuel prices and financing new and
replacement equipment with operating leases.
SECURED MATERIALS revenues increased by 9.0% in 1996 over 1995.
Revenue per total mile increased to $1.464 in 1996 from $1.356 in 1995,
primarily due to an improvement in freight mix in 1996. The volume of
hazardous materials freight increased by 11.1%. This increase in hazardous
materials freight allowed Secured Materials to lower its dependence on low
yielding freight all kinds (back-haul freight) to 23% in 1996 from 32% in
1995. Freight rates for hazardous materials are approximately 20% to 30%
higher than freight all kinds rates. These factors coupled with a
reduction in indirect costs as a percentage of revenues offset increased
driver pay, higher fuel costs and increased purchased transportation costs
and resulted in an operating ratio of 91.1% in 1996 compared to 92.3% in
1995.
<PAGE>
TRISM TRANSPORT revenues relate to the acquisition of certain assets
of Eastern Flatbed as of October 1, 1995. Trism Transport's revenue per
mile, average length of haul and cost structure is markedly different from
Heavy Haul and Trism Secured. Revenue per mile for the third quarter of
1996 was $1.123 with an average length of haul of 470 miles. Trism
Transport's operating results were negatively impacted by higher fuel costs
and lower than expected asset utilization due to an increase in competition
for drivers.
LOGISTICS revenues relate to the acquisition of Kavanagh and
Associates in March 1995.
EXPENSES
The following table sets forth operating expenses as a percent of
operating revenues and the related variance from 1996 to 1995.
<TABLE>
<CAPTION>
QUARTER ENDED SEPTEMBER 30, INCREASE
1996 1995 (DECREASE)
<S> <C> <C> <C>
Salaries, wages and
fringe benefits 35.5% 36.9% (1.4)%
Purchased transportation 18.7% 14.9% 3.8 %
Operating supplies and expenses 14.0% 13.7% 0.3 %
Operating taxes and licenses 9.0% 9.2% (0.2)%
General supplies and expenses 5.8% 5.3% 0.5 %
Claims and insurance 3.1% 3.1% --
Depreciation 5.7% 6.9% (1.2)%
Amortization of prepaid leases -- 0.6% (0.6)%
Communications and utilities 1.8% 1.9% (0.1)%
Gain on sale of equipment 0.1% --% 0.1 %
Amortization of intangibles 0.2% 0.3% (0.1)%
---- ---- ----
93.9% 92.8% 1.1 %
===== ==== ====
</TABLE>
Salaries, wages and fringe benefits increased by $3.4 million in 1996
compared to 1995. Approximately $2.4 million of the increase was in
driver wages and fringe benefits, which related to a 14.1% increase in 1996
total company driver miles over 1995. The increase in non-driver
compensation relates to a 9% increase in non-driver employees primarily due
to the October, 1995 acquisition of Eastern Flatbed.
Purchased transportation costs increased by $4.9 million in 1996 over
1995. This category includes the following expenditure types:
(In thousands) 1996 1995
Independent contractors $ 4,292 $ 4,523
Sub-contractor carriers 7,015 4,557
Tractor and trailer lease 3,679 1,022
------- ------
$14,986 $10,102
====== ======
Independent contractor capacity decreased to an average of 190 units
in 1996 from 217 units in 1995. Sub-contractor carrier expense increased
with revenues, which are primarily attributed to Trism Transport and
special project revenues related to hazardous materials shipments. The
increase in lease expense results from financing new replacement tractors
and trailers with operating leases in 1996.
The change in mix of owned versus leased tractors and trailers caused
the reduction in depreciation expense as a percentage of revenue.
<PAGE>
NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED WITH NINE MONTHS ENDED
SEPTEMBER 30, 1995
REVENUES
Operating revenues increased by $34.6 million, or 17.5 percent,
compared with 1995. Approximately $27.5 million, or 79.5%, of the increase
was attributable to acquisitions made during 1995. The following table
presents a comparison of revenues by market group.
<TABLE>
<CAPTION>
1996 1995
Operating Operating
(In thousands) Revenues Ratio Revenues Ratio
<S> <C> <C> <C> <C>
Heavy Haul $136,985 93.7% $133,250 91.9%
Secured Materials 72,371 95.7% 68,623 90.6%
Trism Transport 25,753 102.7% -- --
Logistics 4,078 103.6% 2,765 101.8%
Eliminations and other (6,753) -- (6,775) --
------ ----- ------ -----
$232,434 96.3% $197,863 92.0%
======= ===== ======= ======
</TABLE>
OPERATING INCOME
Operating income declined to $8.7 million in 1996 from $15.9 million
in 1995. Excluding the effect of Trism Transport (acquired October 1995),
revenue per total mile dropped to $1.426 in 1996 from $1.436 in 1995.
This decrease in revenue quality resulted in a $1.3 million reduction in
operating income. Higher fuel costs accounted for $1.6 million of the
change in operating income. Increased purchased transportation costs
resulting from financing new replacement tractors and trailers with
operating leases in 1996, principally explains the remaining decrease from
1995 to 1996. These factors negatively impacted the operating ratio of
each market group.
EXPENSES
The following table sets forth operating expenses as a percent of
operating revenues and the related variance from 1996 to 1995.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, INCREASE
1996 1995 (DECREASE)
<S> <C> <C> <C>
Salaries, wages and
fringe benefits 36.4% 37.5% (1.1)%
Purchased transportation 18.4% 13.2% 5.2 %
Operating supplies and
expenses 14.8% 13.6% 1.2 %
Operating taxes and licenses 9.3% 9.3% -- %
General supplies and expenses 5.7% 5.5% 0.2 %
Claims and insurance 3.2% 3.3% (0.1)%
Depreciation 6.1% 6.8% (0.7)%
Amortization of prepaid leases 0.3% 0.7% (0.4)%
Communications and utilities 1.9% 1.9% -- %
Gain on sale of equipment -- (0.1)% 0.1 %
Amortization of intangibles 0.2% 0.3% (0.1)%
---- --- ---
96.3% 92.0% 4.3 %
==== ==== ====
</TABLE>
<PAGE>
Salaries, wages and fringe benefits increased by $10.3 million in 1996
compared with 1995. Approximately $7.4 million of the increase was in
driver wages and fringe benefits, which related to a 14.8% increase in 1996
total company driver miles over 1995. The increase in non-driver
compensation related to the acquisition of Kavanagh, C.I. Whitten Transfer
Co. and Eastern Flatbed, offset by a one time charge of $.4 million in 1995
relating to the Separation and Consulting Agreement between the Company and
its former President, Chief Executive Officer and Director of the Company.
Purchased transportation costs increased by $16.8 million in 1996
over 1995. This category includes the following expenditure types:
(In thousands) 1996 1995
Independent contractors $14,630 $ 12,408
Sub-contractor carriers 19,003 11,322
Tractor and trailer lease 9,185 2,302
------- ------
$42,818 $26,032
====== ======
Independent contractor capacity increased to an average of 226 units
in 1996 from 197 units in 1995, mostly related to acquired companies.
Sub-contractor carrier expense increased with revenues, which are primarily
attributed to Kavanagh Logistics and Trism Transport. The increase in
lease expense results from financing new replacement tractors and trailers
with operating leases in 1996.
For 1996, operating supplies and expenses increased on a percentage of
revenue basis by 1.2%. This increase related principally to higher fuel
costs per gallon and lower miles per gallon due to the severe winter
weather in the first quarter 1996. This variance caused operating cost to
increase by $2.9 million in 1996 over 1995. The Company implemented fuel
surcharges during April 1996, and has recovered $1.3 million to help defray
the increase in fuel prices.
The change in mix of owned versus leased tractors and trailers caused
the reduction in depreciation expense as a percentage of revenue.
CONTINGENCIES
Under CERCLA and similar state laws, a transporter of hazardous
substances may be liable for the costs of responding to the release or
threatened release of hazardous substances from disposal sites if such
transporter selected the site for disposal. Because it is the Company's
practice not to select the sites where hazardous substances and wastes will
be disposed, the Company does not believe it will be subject to material
liability under CERCLA and similar laws. Although the Company has been
identified as a "potentially responsible party" (PRP), solely because of
its activities as a transporter of hazardous substances, at two sites, the
Company does not believe it will be subject to material liabilities at such
sites.
The EPA has designated an area of several hundred square miles of
Missouri as a potential Superfund site. The Company's Joplin, Missouri
terminal is within the boundaries of this area, however, the Company has
not been designated as a PRP. The Company believes that it has no
liability with respect to this site and that it would have strong defenses
to any action for cost recovery, as neither it nor its predecessors created
the conditions which are the cause of the environmental problems at the
site.
The Company is a party to routine litigation incidental to its
business, primarily involving claims for personal injury or property
damages incurred in the transportation of freight. The Company is not aware
of any claims or threatened claims that might have a material adverse
affect on the Company's consolidated operating results, financial position,
cash flow or liquidity.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
For the first nine months of 1996 net cash provided by operating
activities decreased $23.2 million when compared with the first nine months
of 1995. Approximately $7.0 million of the decrease is attributable to
increased revenue volume and the resulting increase in accounts receivable.
Another $5.5 million of the decrease is due to additional accounts
receivable related to the acquisition of Eastern Flatbed in October 1995.
The remainder is primarily attributable to the loss sustained by the
Company during 1996.
In the first nine months of 1996, the Company purchased $12.5 million
of new equipment, paid $5.5 million related to the construction of the new
terminal in Georgia and repaid scheduled debt obligations of $7.8 million.
Approximately $8.4 million of the revenue equipment was financed by the
issuance of long-term debt. The Company acquired an additional $26.1
million of revenue equipment under operating leases and $1.6 million under
a capital lease.
The Company obtained $7.2 million under a sale-leaseback of revenue
equipment in August 1996. Approximately $4.9 million of these proceeds
were used to fund the acquisition of Hunt with the remaining financing
provided by the seller in the form of a non-interest bearing note payable
of $2.5 million.
On November 8, 1996, the Company executed a waiver and amendment to
the revolving credit and security agreement ("Agreement") to expand its
borrowing base, amend certain financial covenants, and waive certain
financial covenants for which the Company was not in compliance at
September 30, 1996. The Company previously modified the Agreement on March
20, 1996 and August 13, 1996 to provide borrowings up to $25 million and
extend its maturity to April 1998.
Management believes that funds to be generated from future operations,
cash available under its revolving credit agreement, proceeds from
equipment financing, and proceeds from the sale of revenue equipment will
be sufficient to meet the Company's planned capital expenditures, scheduled
debt payments and working capital needs for 1996. There can be no
assurance, however, that such sources will be adequate for the Company's
needs, or that any necessary additional financing will be available, if at
all, in amounts required or on terms satisfactory to the Company.
CAPITAL EXPENDITURES
A breakdown of capital expenditures is set forth in the following
table (in thousands):
<TABLE>
<CAPTION>
Projected Actual
For the Year For the Nine
Ending Months Ended
December 31, September 30,
1996 1996 1995
<S> <C> <C> <C>
Structures and improvements $5,500 $5,472 $1,649
Revenue equipment 10,000 9,975 18,050
Satellite tracking devices
and other equipment 3,155 2,536 1,703
------ ----- -----
18,655 17,983 21,402
Revenue equipment acquired
under capital or
operating leases 27,739 27,739 11,239
------- ------ ------
Total capital expenditures $46,394 $45,722 $32,641
====== ====== ======
Depreciation expense $18,459 $14,227 $13,535
</TABLE>
INFLATION AND FUEL COSTS
Inflation can be expected to have an impact on the Company's earnings;
however, the effect of inflation has been minimal over the past three
years. An extended period of inflation or increase in fuel costs would
adversely affect the Company's results of operations unless freight rates
could be increased.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is a party to certain legal proceedings incidental to its
business, primarily involving claims for personal injury or property damage
arising from the transportation of freight. The Company does not believe
that any claims or threatened claims of which it is aware are likely to
materially and adversely affect the Company's financial condition.
The Company obtained resolution on the following lawsuits during the
third quarter of 1996:
ROY A. REESE V. TRISM SPECIALIZED CARRIERS, INC. AND TRI-STATE MOTOR
TRANSIT CO. was a lawsuit pending in the Circuit Court of Jefferson County,
Alabama. It arose from a lease, transfer and consulting agreement between
the Company and Mr. Reese (and his wholly owned corporation) dated August
24, 1992. Plaintiff alleged breach of contract, promissory fraud,
conversion and conspiracy claims arising from the Company's termination of
the contract. The Company maintained that it properly terminated the
contract because of misrepresentations and non-performance by plaintiff and
his company. The Company successfully defended this lawsuit at a jury
trial in August, 1996.
NATIONAL COUNCIL ON COMPENSATION INSURANCE V. MCGIL SPECIALIZED
CARRIERS, INC. (MCGIL) AND AAA TRUCK LEASE AND SALES, INC. (AAA), AN
AFFILIATE OF MCGIL, arose from agreements between AAA and two employee-
leasing companies for years prior to the Company's acquisition of McGil
(now known as Trism Specialized Carriers, Inc.) in August 1991. The
plaintiff filed suit against the employee leasing companies, McGil, AAA and
several other transportation companies alleging violations of the Racketeer
Influenced and Corrupt Organizations Act. The Company maintains that AAA
properly performed under the terms of the agreements with the employee-
leasing companies. However, in order to avoid extensive additional legal
expense, the Company has agreed to a settlement of $450,000 payable over
the next two years. This liability has been provided for in the September
30, 1996 financial statements.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits
The following exhibit is filed as part of this report:
Designation Nature of Exhibit
11 Computation of earnings per
common share
B. Reports on Form 8-K
During the quarter covered by this report there were no reports on
Form 8-K filed.
Items 2, 3, 4 and 5 of Part II were not applicable and have been
omitted.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
TRISM, INC.
November 14, 1996 By: James M. Revie
DATE James M. Revie
Director, Chairman of the Board and
Chief Executive Officer
November 14, 1996 By: James G. Overley
DATE James G. Overley
Senior Vice President of
Finance, Chief Financial Officer
and Treasurer
<PAGE>
TRISM, INC.
EXHIBIT INDEX
Exhibit Number Description
11 Computation of earnings per common share
27 Financial Data Schedule
<PAGE>
[MULTIPLIER] 1,000
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net income (loss) $614 $1,205 $(1,077) $3,781
Weighted average number of shares
Primary:
Average common
shares outstanding 5,733 5,733 5,733 5,765
Common share equiva-
lents resulting from
assumed exercise of
stock options 1 69 1 49
----- ----- ----- -----
5,734 5,802 5,734 5,814
====== ===== ===== =====
Fully diluted:
Average common
shares outstanding 5,733 5,733 5,733 5,765
Common share equiva-
lents resulting
from assumed
exercise of stock
options 1 56 1 49
----- ----- ----- -----
5,734 5,789 5,734 5,814
===== ===== ===== =====
Earnings (loss) per common share:
Primary $.11 $.21 $(.19) $.65
Fully diluted .11 .21 (.19) .65
Primary earnings per common share are computed by dividing net income,
by the weighted average number of common shares and common share
equivalents outstanding. Common share equivalents are computed using the
treasury stock method. Under the treasury stock method, an average market
price is used to determine the number of common share equivalents for
primary earnings per common share. The higher of the average or the end of
period market price is used to determine the number of common share
equivalents for fully diluted earnings per common share.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1996
<PERIOD-END> SEP-30-1996 SEP-30-1996
<CASH> 1,586 1,586
<SECURITIES> 0 0
<RECEIVABLES> 56,783 56,783
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 84,533 84,533
<PP&E> 169,278 169,278
<DEPRECIATION> 51,687 51,687
<TOTAL-ASSETS> 240,223 240,223
<CURRENT-LIABILITIES> 50,531 50,531
<BONDS> 143,048 143,048
0 0
0 0
<COMMON> 59 59
<OTHER-SE> 33,971 33,971
<TOTAL-LIABILITY-AND-EQUITY> 240,223 240,223
<SALES> 80,166 232,434
<TOTAL-REVENUES> 80,166 232,434
<CGS> 0 0
<TOTAL-COSTS> 75,309 223,754
<OTHER-EXPENSES> (2) 231
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 3,635 10,604
<INCOME-PRETAX> 1,224 (2,155)
<INCOME-TAX> 610 (1,078)
<INCOME-CONTINUING> 614 (1,077)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 614 (1,077)
<EPS-PRIMARY> .11 (.19)
<EPS-DILUTED> .11 (.19)
</TABLE>
