<PAGE> 1
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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 March 31, 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: 0-24180
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MTL INC.
- - --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
FLORIDA 59-3239073
- - --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3108 Central Drive Plant City, FL 33567
- - --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(813) 754-4725
- - --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
- - --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
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
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS.
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
[ ] Yes [ ] No
APPLICABLE ONLY TO CORPORATE USERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at March 31, 1996
- - ------------------------------------- ----------------------------------
(Common stock, $.01 par value) 4,518,883
<PAGE> 2
MTL INC. AND SUBSIDIARIES
INDEX
Page No.
Part I Financial Information
Item 1 Financial Statements (unaudited)
Condensed consolidated balance sheets -
March 31, 1996 and December 31, 1995 1
Condensed consolidated statements of income -
three months ended March 31, 1996 and 1995 2
Condensed consolidated statements of cash flows -
three months ended March 31, 1996 and 1995 3
Notes to condensed consolidated financial statements 4
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations
Management's discussion and analysis of financial
condition and results of operations 5 - 6
Part II Other Information
Item 1 Legal Proceedings 7
Item 6 Exhibits - None
Signatures 8
<PAGE> 3
FORM 10-Q
PART 1 - FINANCIAL INFORMATION
MTL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
------------ ------------
(Unaudited) *
<S> <C> <C>
Current Assets
Cash $57 $322
Accounts receivable 26,619 24,579
Allowance for doubtful accounts (1,090) (1,019)
Current maturities of other receivables 763 970
Notes receivable 315 202
Inventories 494 457
Prepaid expenses 2,504 1,616
Prepaid tires 3,250 3,258
Income tax receivable 271 492
Deferred income taxes 2,830 2,737
Other 194 193
---------- ---------
Total current assets 36,207 33,807
Property, Plant and Equipment 158,586 156,785
Less - accumulated depreciation and amortization (51,888) (48,885)
---------- ---------
106,698 107,900
Other Assets 5,860 4,033
---------- ---------
$148,765 $145,740
========== =========
LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities
Current maturities of indebtedness $5,752 $6,373
Accounts payable and accrued expenses 6,282 7,609
Independent contractors payable 4,133 2,899
Other current liabilities 4,121 3,858
---------- ---------
Total current liabilities 20,288 20,739
Long term debt, less current maturities 40,442 40,236
Capital lease obligations, less current maturities 1,668 2,235
Other long term obligations 4,155 3,622
Deferred income taxes 20,108 18,850
Commitments and contingent liabilities
Stockholders' Equity
Common stock 45 45
Other stockholders' equity 62,059 60,013
---------- ---------
Total stockholders' equity 62,104 60,058
---------- ---------
$148,765 $145,740
========== =========
</TABLE>
* Condensed from audited financial statements.
The accompanying notes are an integral part of these condensed financial
statements.
-1-
<PAGE> 4
FORM 10-Q
PART 1 - FINANCIAL INFORMATION
MTL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three months ended
March 31,
1996 1995
------- ----------
<S> <C> <C>
Operating Revenues
Transportation $46,712 $41,532
Other 4,308 4,098
------- ------
51,020 45,630
------- -------
Operating Expenses
Purchased transportation 33,144 28,818
Depreciation and amortization 2,763 2,313
Other operating expenses 10,951 10,647
Gain on sale of property
and equipment 0 (79)
------- -------
Operating income 4,162 3,931
Interest expense, net 780 797
Other expense (44) 20
------- -------
Income before taxes 3,426 3,114
Income taxes 1,390 1,274
------- -------
Net income $2,036 $1,840
======= =======
Weighted average number of
shares outstanding 4,558 4,536
Net income per share $0.45 $0.41
</TABLE>
The accompanying notes are an integral part of these condensed financial
statement.
-2-
<PAGE> 5
FORM 10-Q
PART 1 - FINANCIAL INFORMATION
MTL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three months ended March 31,
1996 1995
---------- -----------
<S> <C> <C>
Cash provided by (used for)
Operating activities:
Net income $2,036 $1,840
Adjustments for non cash charges 3,928 2,948
Changes in assets and liabilities (2,070) (1,865)
------ ------
Net cash provided by operating activities 3,894 2,923
Investing activities:
Repayment from (Advance to) investee 63 9
Capital expenditures (3,545) (8,245)
Proceeds from asset dispositions 295 881
------ ------
Net cash used for investing activities (3,187) (7,355)
Financing activities:
Proceeds from issuance of long term debt 1,000 5,612
Payment of obligations (1,982) (1,539)
Issuance of common stock - net 10 0
------ ------
Net cash (used in) provided by financing activities (972) 4,073
Net decrease in cash (265) (359)
Cash, beginning of period 322 723
------ ------
Cash, end of period $57 $364
====== ======
Cash payments for:
Interest $896 $805
Income taxes $4 $280
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
-3-
<PAGE> 6
FORM 10-Q
PART 1 - FINANCIAL INFORMATION
MTL INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
March 31, 1996
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Basis of Presentation
The accompanying unaudited condensed, consolidated financial statements of
MTL INC. (the "Company") have been prepared in accordance with the
instructions to Form 10-Q and do not include all of the information and
notes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. For further information, refer to the
consolidated financial statements and notes thereto for the year ended
December 31, 1995, included in the Company's Form 10-K dated March 27,
1996.
Operating results for the quarter ended March 31, 1996 are not necessarily
indicative of the results that may be expected for the entire fiscal year.
2. SUBSEQUENT EVENT:
In May 1996, the Company intends to complete the acquisition of Levy
Transport Ltd. (Levy), a Canadian transporter of bulk liquids, by purchasing
all the stock of Levy. The acquisition will be accounted for as a purchase,
with the excess of the acquisition cost over the fair value of Levy's net
assets being assigned to goodwill. In conjunction with the acquisition, the
Company will enter into a five-year employment agreement with the former
owner of Levy to be president of Levy.
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<PAGE> 7
FORM 10-Q
PART 1 - FINANCIAL INFORMATION
MTL INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
FIRST QUARTER 1996 COMPARED TO THE FIRST QUARTER 1995
The Company's operating results are affected by the shipments for the bulk
chemical industry. Shipments of chemical products are in turn affected by many
other industries, including consumer and industrial products, automotive, paint
and coatings and paper, and tend to vary with changing economic conditions. The
Company also participates in the shipment of bulk food products through its
food-grade division. The volume of food products and certain other consumer
products tends to be subject to fewer fluctuations due to swings in economic
activity.
For the quarter ended March 31, 1996, revenue totaled $51.0 million, an 11.8%
increase over revenue of $45.6 million for the same period in 1995. The
Company attributes its increased revenues to continued strength in chemical
industry shipments nationwide, as well as MTL's success in implementing its
private carriage conversion strategy.
For the quarter ended March 31, 1996, operating income totaled $4.2 million,
representing a 5.9% increase compared to $3.9 million for the same period in
1995. This increase is primarily due to the increase in sales as the Company's
operating ratio has not changed materially.
Net interest expense decreased slightly to $780,000 in the quarter ended March
31, 1996, from $797,000 in the quarter ended March 31, 1995.
Pretax income for the quarter ended March 31, 1996, totaled $3.4 million, a 10%
increase compared to $3.1 million for the same period in 1995. Pretax income
increased primarily due to the increase in operating income year to year.
For the quarter ended March 31, 1996, the Company's net income and earnings per
share were $2.0 million and $0.45 respectively, compared to $1.8 million and
$0.41 respectively for the same period in 1995. Weighted average shares
outstanding increased from 4,536,000 in the first quarter of 1995 to 4,558,000
in the first quarter of 1996. As of March 31, 1996, a total of 4,518,883
shares were outstanding.
5
<PAGE> 8
FORM 10-Q
PART 1 - FINANCIAL INFORMATION
MTL INC. AND SUBSIDIARIES
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of liquidity are funds provided by operations and
borrowings under various credit arrangements with financial institutions. Net
cash provided by operating activities totaled $3.9 million for the three month
period ending March 31, 1996 versus $2.9 million for the same period in 1995.
Cash used in financing activities totaled $0.97 million during the three month
period ending March 31, 1996, compared to $4.1 million provided by financing
activities during the comparable period in 1995. This difference is
attributable to decreased borrowing in 1996.
Capital used for investing activities totaled $3.2 million for the three month
period ended March 31, 1996, compared to $7.4 million used for the comparable
1995 period. Capital was used primarily to acquire additional revenue
equipment to expand the Company's operations.
The Company maintains a $50,000,000 unsecured revolving credit facility with a
group of banks maturing in May of 1998. As of March 31, 1996, the Company has
available $38.0 million under this revolving credit facility. In February of
1996, the Company closed on a $25,000,000 10 year fixed rate, unsecured,
private placement of debt which was used to pay down the unsecured revolving
credit facility.
The Company's management believes that the available borrowings under the loan
agreement, together with available cash and internally generated funds, will
be sufficient to fund MTL's continued growth and meet its working capital
requirements for the foreseeable future.
6
<PAGE> 9
FORM 10-Q
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings
Reference is made to Item 3. on page 10 of the Company's Form 10-K
for the year ended December 31, 1995. There have been no material
changes in the Company's legal proceedings since this filing.
- 7 -
<PAGE> 10
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.
MTL INC.
-----------------------------------------
(Registrant)
April 29, 1996 /s/ CHARLES J. O'BRIEN, JR.
- - ------------------------------- -----------------------------------------
CHARLES J. O'BRIEN, JR., (CEO, PRESIDENT)
(DULY AUTHORIZED OFFICER)
April 29, 1996 /s/ RICHARD J. BRANDEWIE
- - ------------------------------- -----------------------------------------
RICHARD J. BRANDEWIE, (TREASURER)
(PRINCIPAL FINANCIAL OFFICER)
-8-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF MTL INC. FOR THE THREE MONTHS ENDED MARCH 31, 1996, AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 57
<SECURITIES> 0
<RECEIVABLES> 27,697
<ALLOWANCES> 1,090
<INVENTORY> 494
<CURRENT-ASSETS> 36,207
<PP&E> 158,586
<DEPRECIATION> 51,888
<TOTAL-ASSETS> 148,765
<CURRENT-LIABILITIES> 20,288
<BONDS> 0
0
0
<COMMON> 45
<OTHER-SE> 62,059
<TOTAL-LIABILITY-AND-EQUITY> 148,765
<SALES> 46,712
<TOTAL-REVENUES> 51,020
<CGS> 0
<TOTAL-COSTS> 46,858
<OTHER-EXPENSES> (44)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 780
<INCOME-PRETAX> 3,426
<INCOME-TAX> 1,390
<INCOME-CONTINUING> 2,036
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,036
<EPS-PRIMARY> 0.45
<EPS-DILUTED> 0.45
</TABLE>
