<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
DATE OF REPORT: APRIL 14, 1998
(Date of earliest event reported)
U.S. XPRESS ENTERPRISES, INC.
(Exact name of Registrant as specified in its charter)
NEVADA 0-24806 62-1378182
(State of (Commission File No.) (IRS Employer
incorporation) Identification No.)
2931 SOUTH MARKET STREET, CHATTANOOGA, TENNESSEE 37410
(Address of principal executive offices, including zip code)
(423) 697-7377
(Registrant's telephone number, including area code)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
------ ------------------------------------
On January 29, 1998, U.S. Xpress Enterprises, Inc. (the "Company")
completed the acquisition of privately-held Victory Express, Inc. for $51
million in cash and the assumption of approximately $2 million in debt. The
acquired company will be operated by existing management as the Victory division
of the Company's U.S. Xpress, Inc. subsidiary. Victory Express, Inc. is a
truckload carrier based in Ohio with annual revenue of approximately $65
million. The acquisition was financed with proceeds from a recently consummated
$200 million long-term unsecured line of credit facility arranged through a
syndicate of banks.
The Company operates through two subsidiaries: U.S. Xpress, Inc. and
CSI/Crown, Inc., U.S. Xpress, Inc. is a national truckload carrier that operates
over 3,500 tractors providing time-definite and expedited services in the United
States, Canada and Mexico; regional truckload services in the Midwest, Southeast
and Western United States; and logistics services that specialize in serving the
air-freight industry. CSI/Crown, Inc. provides logistics services to the
floorcovering industry, including national and local distribution, freight
consolidation and warehousing services.
The foregoing description does not purport to be complete and is
qualified in its entirety by reference to the Asset Purchase Agreement and the
Credit Agreement filed with the 8-K dated February 13, 1998 as Exhibits 10.1
and 10.2.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
------ ---------------------------------
(a) Financial Statements of Business Acquired:
Report of Independent Auditors
Balance Sheets as of December 31, 1997 and 1996
Statements of Income for the years ended December 31, 1997
and 1996
Statements of Retained Earnings for the years ended
December 31, 1997 and 1996
Statements of Cash Flows for the years ended December 31, 1997
and 1996
Notes to Financial Statements
(b) Pro Forma Financial Information:
Pro Forma Condensed Balance Sheet as of December 31, 1997
Pro Forma Statement of Income for the year ended December 31, 1997
Notes to Pro Forma Financial Statements
2
<PAGE>
(c) Exhibits:
Exhibit No. Description
- ---------- -----------
10.1* Stock Purchase Agreement dated as of December 24, 1997 by and
between U.S. Xpress Enterprises, Inc. and Richard H. Schaffer,
Richard H. Schaffer Irrevocable Trust dated December 24, 1991 and
Richard H. Schaffer Irrevocable Non-Withdrawal Trust dated
December 24, 1991.
10.2* Credit Agreement dated as of January 15, 1998 among U.S. Xpress
Enterprises, Inc., Wachovia Bank, N.A., NationsBank, N.A.,
BankBoston, N.A., SunTrust Bank, Chattanooga, N.A. and the banks
listed therein.
* Filed with 8-K dated February 13, 1998
3
<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 hereunto duly authorized.
U.S. XPRESS ENTERPRISES, INC.
(Registrant)
By: /s/ Ray M. Harlin
----------------------------
Name: Ray M. Harlin, Executive
Vice President, Chief
Financial Officer
Date: April 14, 1998
4
<PAGE>
[HAMMERMAN, GRAF, HUGHES & COMPANY, INC. LETTERHEAD APPEARS HERE]
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Shareholders
Victory Express, Inc.
We have audited the accompanying balance sheets of Victory Express, Inc.
as of December 31, 1997 and 1996, and the related statements of income, retained
earnings and cash flows for the years then ended. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Victory Express,
Inc. as of December 31, 1997 and 1996, and the results of its operations and its
cash flows for the years then ended in conformity with generally accepted
accounting principles.
/s/ Hammerman, Graf, Hughes & Co.
-------------------------------------
Dayton, Ohio
February 12, 1998
<PAGE>
VICTORY EXPRESS, INC.
BALANCE SHEETS
December 31, 1997 and 1996
1997 1996
----------- -----------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 1,448,137 $ 1,733,639
Trade accounts receivable 8,770,942 7,874,964
Other receivables 128,584 547,410
Inventory 559,823 448,007
Prepaid expenses 158,279 161,454
----------- -----------
Total current assets $11,065,765 $10,765,474
----------- -----------
PROPERTY AND EQUIPMENT
Leased building $ 2,400,000 $ 2,400,000
Improvements to leasehold property 2,427,803 2,427,803
Revenue equipment 53,908,736 55,320,364
Furniture and fixtures 1,400,703 1,440,412
Equipment and other 816,696 847,474
----------- -----------
$60,953,938 $62,436,053
Less accumulated depreciation and
amortization 29,338,919 26,386,302
----------- -----------
$31,615,019 $36,049,751
----------- -----------
OTHER ASSETS $ 189,269 $ 234,512
----------- -----------
$42,870,053 $47,049,737
=========== ===========
See Independent Auditor's Report.
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 4,239,806 $ 1,751,030
Accrued expenses and taxes 3,894,531 3,238,887
Current portion of long-term debt
(Note 3) 1,442,546 3,895,523
Current portion of capital lease
(Note 4) 52,317 41,203
----------- -----------
Total current liabilities $ 9,629,200 $ 8,926,643
----------- -----------
CAPITAL LEASE OBLIGATION (Note 4) $ 1,878,813 $ 1,920,016
Less current portion (52,317) (41,203)
----------- -----------
$ 1,826,496 $ 1,878,813
----------- -----------
LONG-TERM DEBT
Mortgage payable (Note 3) $ - $ 1,033,445
Installment loans payable (Note 3) 1,442,546 10,243,402
Less current portion (1,442,546) (3,895,523)
----------- -----------
$ - $ 7,381,324
----------- -----------
OTHER LIABILITIES $ 1,582,500 $ 1,216,000
----------- -----------
DEFERRED INCOME TAX (Note 7) $ 5,107,694 $ 5,319,094
----------- -----------
$18,145,890 $24,721,874
----------- -----------
SHAREHOLDERS' EQUITY
Common stock, $200 stated value;
150 shares issued; 134.5 shares
outstanding $ 30,000 $ 30,000
Retained earnings 25,094,163 22,697,863
Less treasury stock, 15.5 shares,
at cost (400,000) (400,000)
----------- -----------
$24,724,163 $22,327,863
----------- -----------
$42,870,053 $47,049,737
=========== ===========
</TABLE>
<PAGE>
VICTORY EXPRESS, INC.
STATEMENTS OF INCOME
Years Ended December 31, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
Operating revenues $ 65,251,150 $ 65,033,904
------------ ------------
Operating expenses
Salaries, wages, and employee
benefits (Note 5) $ 28,015,328 $ 28,313,070
Operating and general supplies
and expenses 15,553,705 15,775,212
Depreciation and amortization 8,643,333 9,692,112
Operating taxes and licenses 5,402,979 5,811,152
Insurance and claims 2,467,470 1,907,056
Communications and utilities
(Note 6) 887,612 875,381
Other 193,600 172,684
------------ ------------
Total operating expenses $ 61,164,027 $ 62,546,667
------------ ------------
Operating income $ 4,087,123 $ 2,487,237
Other income (expense)
Gain on sale of property and
equipment 1,051,247 1,758,613
Interest expense (853,168) (1,558,902)
Interest income 65,971 41,962
Miscellaneous income 6,407 928
------------ ------------
Income before income taxes $ 4,357,580 $ 2,729,838
Income tax provision (Note 7) (1,853,680) (1,142,087)
------------ ------------
Net income $ 2,503,900 $ 1,587,751
============ ============
</TABLE>
See Independent Auditor's Report.
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
VICTORY EXPRESS, INC.
STATEMENTS OF RETAINED EARNINGS
Years Ended December 31, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
Balance at beginning of year $ 22,697,863 $ 21,190,812
Net income 2,503,900 1,587,751
------------ ------------
$ 25,201,763 $ 22,778,563
Dividends paid (107,600) (80,700)
------------ ------------
Balance at end of year $ 25,094,163 $ 22,697,863
============ ============
</TABLE>
See Independent Auditor's Report.
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
VICTORY EXPRESS, INC.
STATEMENTS OF CASH FLOWS
Years Ended December 31, 1997 and 1996
1997 1996
------------ ------------
OPERATING ACTIVITIES
Net income $ 2,503,900 $ 1,587,751
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 8,711,488 9,878,088
(Decrease) in deferred income tax (211,400) (699,545)
Gain on sale of property and
equipment (1,051,247) (1,758,613)
Changes in operating assets
and liabilities:
(Increase) in trade accounts
receivable (895,978) (1,696,680)
Decrease in other receivables 418,826 4,767
(Increase) decrease in inventory (111,816) 222,741
Decrease in prepaid expenses
and taxes 3,175 67,462
Decrease (increase) in other
assets 45,243 (30,996)
Increase in accounts payable,
accrued expenses, and
other liabilities 3,510,920 1,710,893
------------ ------------
NET CASH PROVIDED BY
OPERATING ACTIVITIES $ 12,923,111 $ 9,285,868
============ ============
See Independent Auditor's Report.
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
1997 1996
----------- ------------
INVESTING ACTIVITIES
Purchase of property and equipment $(6,429,229) $(13,229,471)
Proceeds from sale of property and
equipment 3,203,721 5,990,249
----------- ------------
NET CASH USED IN INVESTING
ACTIVITIES $(3,225,508) $ (7,239,222)
----------- ------------
FINANCING ACTIVITIES
Proceeds from short-term borrowings $ - $ 11,501,593
Proceeds from long-term debt - 12,777,305
Principal payments on short-term debt - (11,501,593)
Principal payments on long-term debt (9,834,302) (13,923,920)
Principal payments on capital lease (41,203) (32,446)
Dividends paid (107,600) (80,700)
----------- ------------
NET CASH USED IN FINANCING
ACTIVITIES $(9,983,105) $ (1,259,761)
----------- ------------
(Decrease) increase in cash and
cash equivalents $ (285,502) $ (786,885)
Cash and cash equivalents at
beginning of year 1,733,639 946,754
----------- ------------
Cash and cash equivalents at
end of year $ 1,448,137 $ 1,733,639
=========== ============
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Note 1 Summary of Significant Accounting Policies
The following accounting principles and practices of the Company
are set forth to facilitate the understanding of the data
presented in the financial statements.
Business Activity
-----------------
The Company is a truckload carrier with operations throughout
the United States.
Revenue Recognition
-------------------
Operating revenues and related expenses are recognized on the
shipping date.
Cash and Cash Equivalents
-------------------------
For purposes of the statements of cash flows, the Company
considers all highly liquid investments purchased with a
maturity of three months or less to be cash equivalents.
Trade Accounts Receivable
-------------------------
The Company considers accounts receivable to be fully
collectible. Accordingly, no allowance for doubtful accounts is
considered necessary at year-end. If amounts become
uncollectible, they will be charged to operations when that
determination is made. Bad debt expense was $8,687 and $4,949
during 1997 and 1996, respectively. Concentrations of credit
risk on accounts receivable are limited due to the large number
of customers and their dispersion across different industries
and geographic locations.
Inventory
---------
Inventory consists of replacement parts, tires, fuel, and
supplies and is stated on the balance sheets at cost. The cost
of tires on newly acquired revenue equipment is expensed when
the equipment is placed in service. Replacement tires withdrawn
from inventory are expensed at the time of withdrawal.
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
Note 1 Summary of Significant Accounting Policies (Continued)
Property and Equipment
----------------------
Property and equipment are carried at cost and are depreciated
over their estimated useful lives using the straight-line method
for book purposes as required by ICC regulations, and straight-
line, double-declining-balance, and accelerated methods for tax
purposes. Amortization of the capital lease expense is included
in depreciation.
Expenditures for repairs and maintenance are expensed as
incurred and expenditures for major renovations are capitalized.
Gains and losses on disposal of equipment are recognized in the
period of disposition.
Use of Estimates
----------------
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect certain reported
amounts and disclosures. Accordingly, actual results could
differ from those estimates.
Note 2 Note Payable
The Company has available a $2,500,000 unsecured line of credit
through National City Bank. The line calls for interest at the
LIBOR rate plus 1.25 percent. No amounts had been drawn on the
line at December 31, 1997 or 1996. In addition, at December 31,
1997, the Company has $1,635,000 issued under standby letters of
credit at National City Bank.
Note 3 Long-Term Debt
The Company has a multiple draw term loan at National City Bank
secured by revenue equipment. This loan bears interest at a
fluctuating rate based on the Base Commercial Rate less 1/4
percent or the Libor rate, if so elected by the Company under
the loan provisions. The interest rate in effect at December 31,
1997 was 7.06875%. Principal payments of $316,738 are due
monthly. The loan matures on September 1, 1999.
13
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
Note 3 Long-Term Debt (Continued)
Payment obligations on the long-term debt are as follows:
Year Ending
December 31 Obligation
------------- ------------
1998 $ 1,442,546
Note 4 Capital Lease
The Company has a lease that expires December 31, 2007, with its
majority shareholder for the Company headquarters. At the
inception of the lease, the minimum rental payments were $36,000
per month. The lease was renegotiated in 1996, with future
monthly rental payments of $41,683 until the end of the lease.
During 1997 and 1996, the lease payments amounted to $500,196.
The following is a schedule by year of future minimum rental
payments required under the lease:
Minimum
Rental
Year Ending Requirement
----------------------------------------------------------
1998 $ 500,196
1999 500,196
2000 500,196
2001 500,196
2002 500,196
2003 and thereafter 2,459,297
-----------
Total minimum lease payments $ 4,960,277
Less amounts representing interest 3,081,464
-----------
Total obligation $ 1,878,813
Less current portion 52,317
-----------
Long-term capital lease obligation $ 1,826,496
===========
As of December 31, 1997, the total cost and accumulated
amortization of the building under the capital lease were
$2,400,000 and $769,278, respectively ($2,400,000 and $693,088
at December 31, 1996). Interest expense related to the capital
lease for 1997 and 1996 was $458,993 and $467,750, respectively.
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
Note 5 Employees' Retirement Plan
Employees of the Company who meet certain eligibility
requirements participate in a qualified profit sharing plan.
Contributions to the plan are determined by the Board of
Directors and for 1997 and 1996 amounted to $400,000 for each
year. All plan administration expenses including legal,
accounting, and investment management fees are paid by the
Company.
Note 6 Communications Expense
Communications expense includes depreciation of communications
equipment in the amount of $68,155 and $185,976 for 1997 and
1996, respectively.
Note 7 Income Taxes
Deferred income taxes reflect the net effects of temporary
differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts
used for income tax purposes. Significant components of the
Company's deferred tax position at December 31, 1997 are as
follows:
Items resulting in deferred tax
liabilities:
Tax depreciation in excess of
book depreciation $ 6,603,815
Items resulting in deferred tax
benefits:
Book insurance claims payable in
excess of tax insurance claims
payable (1,288,368)
Book capital lease in excess of
tax operating lease deductions
for facility (138,858)
Book accrued vacation in excess
of tax vacation payable (68,895)
------------
$ 5,107,694
============
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
Note 7 Income Taxes (Continued)
The provision for federal and state income taxes is as follows:
1997 1996
----------- -----------
Currently payable:
Federal $ 1,689,239 $ 1,541,751
State 375,841 299,881
----------- -----------
$ 2,065,080 $ 1,841,632
----------- -----------
Deferred:
Federal $ (332,456) $ (632,623)
State 121,056 (66,922)
----------- -----------
$ (211,400) $ (699,545)
----------- -----------
$ 1,853,680 $ 1,142,087
=========== ===========
Deferred state taxes increased due to the increase in state tax
rates applied to the cumulative deferred tax components.
Note 8 Contingencies
The Company is a defendant in lawsuits which have arisen in the
normal course of operations. In the opinion of management,
adequate provisions have been recorded in accrued expenses in
the financial statements for all such risks.
Note 9 Supplementary Disclosures of Cash Flow Information
Cash paid during the year for:
1997 1996
------------ ------------
Interest $ 853,168 $ 1,558,902
Income taxes 1,831,986 1,468,741
Note 10 Concentration of Risk
The Company maintains a checking account balance in excess of
the federally insured deposit limitation at all times.
Note 11 Subsequent Events
In January, 1998 one hundred percent of the Company's stock was
acquired by U.S. Xpress Enterprises, Inc.
16
<PAGE>
PRO FORMA FINANCIAL INFORMATION
In January 1998, US Xpress Enterprises ("US Xpress") acquired all of the
outstanding capital stock of Victory Express for $51 million and the assumption
of liabilities and other acquisition related costs.
The following Pro Forma Financial Information is based on the historical
financial statements of US Xpress and adjusted to give effect to the
acquisition. The Pro Forma Consolidated Statement of Operations for the year
ended December 31, 1997, give effect to the acquisition as if it had occurred on
January 1, 1997. The Pro Forma Consolidated Balance Sheet gives effect to the
acquisition as if it had occurred on December 31, 1997. In opinion of
management, the historical consolidated financial statements of US Xpress and
Victory Express reflect all adjustments, which are of a normal recurring nature,
to present fairly US Xpress and Victory Express's financial position and results
of operations as of and for the twelve months ended December 31, 1997. The pro
forma adjustments are based upon available information and certain assumptions
that management believes are reasonable.
The acquisition was accounted for using the purchase method of accounting. The
total purchase price for the acquisition has been allocated to tangible and
identifiable intangible assets and liabilities based upon management's
preliminary estimates of their fair value with the excess of purchase price over
fair value of assets acquired allocated to goodwill. The allocation of the
purchase price for the acquisition is subject to revision when additional
information concerning asset and liability valuations is obtained. In
management's opinion, the asset and liability valuations for the acquisition
will not be materially different from the pro forma information presented. For
purposes of presenting pro forma results, no changes in revenues and expenses
have been made to reflect the results of any modification to operations that
might have been made had the acquisition been consummated on the assumed
effective date of the Acquisition. The pro forma expenses include the recurring
cost which are directly attributable to the acquisition, such as interest
expense, depreciation expense and amortization of goodwill.
The Pro Forma Financial Information does not purport to represent what US
Xpress's results of operations or financial position would actually have been
had the acquisition in fact occurred on January 1, 1997 or to project the
Company's results of operations or financial position for or at any future
period or date.
17
<PAGE>
<TABLE>
<CAPTION>
U.S. XPRESS ENTERPRISES, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1997
(IN THOUSANDS)
PRO FORMA
ADJUSTING
US XPRESS VICTORY (A) ENTRIES PROFORMA
ASSETS ----------- --------- ------------ -------------
- -------------------------------------------
CURRENT ASSETS:
<S> <C> <C> <C> <C>
CASH AND CASH EQUIVALENTS $ 2,734 $ 715 $ 3,449
CUSTOMER RECEIVABLES, NET OF ALLOWANCE 58,496 8,029 66,525
OTHER RECEIVABLES 9,085 91 9,176
NOTES RECEIVABLES
PREPAID INSURANCE AND LICENSES 1,488 133 1,621
OPERATING AND INSTALLATION SUPPLIES 4,213 508 4,721
DEFERRED INCOME TAXES 3,092 3,092
OTHER CURRENT ASSETS 508 508
--------- ---------
TOTAL CURRENT ASSETS 79,616 9,476 89,092
--------- -------- ---------
PROPERTY AND EQUIPMENT, NET 136,055 30,847 2,312 (D) 169,214
--------- -------- ---------
OTHER ASSETS:
GOODWILL, NET 12,593 25,343 (E) 37,936
OTHER 5,513 120 5,633
--------- -------- ---------
TOTAL OTHER ASSETS 18,106 120 43,569
--------- -------- ------- ---------
TOTAL ASSETS $ 233,777 $ 40,443 27,655 $ 301,875
========= ======== ======= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
- -------------------------------------------
CURRENT LIABILITIES:
ACCOUNTS PAYABLE $ 8,634 $ 2,125 10,759
ACCRUED WAGES AND BENEFITS 4,325 929 5,254
CLAIMS AND INSURANCE ACCRUALS 5,750 2,842 750 (B) 9,342
OTHER ACCRUED LIABILITIES 5,200 1,419 6,619
CURRENT MATURITIES OF LONG-TERM DEBT 10,894 10,894
--------- -------- ------- ---------
TOTAL CURRENT LIABILITIES 34,803 7,315 42,868
--------- -------- ------- ---------
LONG-TERM DEBT, NET OF CURRENT MATURITIES 52,120 3,000 51,300 (C) 106,420
--------- -------- ---------
DEFERRED INCOME TAXES 17,352 5,108 625 (F) 23,085
--------- -------- ---------
OTHER LONG-TERM LIABILITIES 1,009 1,009
--------- ---------
STOCKHOLDERS' EQUITY:
COMMON STOCK 150 30 (30)(G) 150
ADDITIONAL PAID-IN CAPITAL 85,942 85,942
RETAINED EARNINGS 42,634 25,390 (25,390)(G) 42,634
TREASURY STOCK (400) 400 (G)
NOTES RECEIVABLE FROM STOCKHOLDERS (233) (233)
--------- -------- ------- ---------
TOTAL STOCKHOLDERS' EQUITY 128,493 25,020 (25,020) 128,493
--------- -------- ------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 233,777 $ 40,443 27,655 $ 301,875
========= ======== ======= =========
</TABLE>
(SEE ACCOMPANYING NOTES TO PROFORMA FINANCIAL INFORMATION)
18
<PAGE>
U.S. XPRESS ENTERPRISES, INC.
PRO FORMA CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
ADJUSTMENTS
FOR THE
US XPRESS VICTORY (A) ACQUISITION PRO FORMA
----------- --------- ------------- -------------
<S> <C> <C> <C> <C>
OPERATING REVENUE $ 433,835 $ 65,251 $ 499,086
----------- --------- ------------ ---------
OPERATING EXPENSES:
SALARIES, WAGES AND BENEFITS 177,055 28,015 (588) (D) 204,482
FUEL AND FUEL TAXES 68,740 9,482 78,222
VEHICLE RENTS 28,031 3,060 31,091
DEPRECIATION & AMORTIZATION, NET OF GAIN 11,584 7,592 725 (B) 19,901
ON SALE
PURCHASED TRANSPORTATION 34,351 34,351
OPERATING EXPENSE & SUPPLIES 27,872 4,633 32,505
INSURANCE PREMIUMS & CLAIMS 14,395 2,467 16,862
OPERATING TAXES & LICENSES 6,734 1,324 8,058
COMMUNICATIONS & UTILITIES 7,192 888 8,080
GENERAL & OTHER OPERATING 26,772 2,652 29,424
----------- --------- --------- ---------
TOTAL OPERATING EXPENSES 402,726 60,113 137 462,976
----------- --------- --------- ---------
INCOME FROM OPERATIONS 31,109 5,138 137 36,110
OTHER INCOME AND (EXPENSES):
INTEREST EXPENSE (5,552) (787) (3,640) (C) (9,979)
OTHER INCOME (EXPENSE) 35 6 41
----------- --------- --------- ---------
(5,517) (781) (3,640) (9,938)
INCOME BEFORE INCOME TAX PROVISION 25,592 4,357 (3,503) 26,172
INCOME TAX PROVISION 10,230 1,854 (1,401) (E) 10,683
----------- --------- --------- ---------
NET INCOME $ 15,362 $ 2,503 $ (2,102) $ 15,489
=========== ========= ========= =========
EARNINGS PER SHARE - BASIC $ 1.17 $ 1.18
=========== =========
WEIGHTED AVERAGE SHARES - BASIC 13,126 13,126
=========== =========
EARNINGS PER SHARE - DILUTED $ 1.16 $ 1.17
=========== =========
WEIGHTED AVERAGE SHARES - DILUTED 13,236 13,236
=========== =========
</TABLE>
(SEE ACCOMPANYING NOTES TO PROFORMA FINANCIAL INFORMATION)
19
<PAGE>
NOTES TO PRO FORMA FINANCIAL INFORMATION
- ---------------------------------------------
<TABLE>
<CAPTION>
PRO FORMA STATEMENTS OF OPERATIONS:
- ---------------------------------------------
<S> <C>
(A) REFECTS THE RESULTS OF OPERATIONS OF VICTORY FOR THE YEAR ENDED DECEMBER 31, 1997
(B) TO RECORD THE AMORTIZATION OF GOODWILL RELATED TO THE ACQUISITION AND ADJUST DEPRECIATION
(C) TO RECORD THE INTEREST EXPENSE RELATED TO THE DEBT INCURRED TO FINANCE THE ACQUISITION.
(D) TO RECORD REDUCTION IN SALARY OF MAJORITY SHAREHOLDER OF VICTORY TO $200,000.
(E) TO RECORD TAX EFFECT OF PROFORMA ADJUSTMENTS.
PRO FORMA CONSOLIDATED BALANCE SHEET:
- ---------------------------------------------
(A) VICTORY'S BALANCE SHEET AS OF DECEMBER 31, 1997
(B) TO ADJUST CERTAIN LIABILITIES TO FAIR VALUE.
(C) TO RECORD DEBT INCURRED TO FINANCE THE $51,000,000 PURCHASE PRICE AND $300,000 IN COST RELATED TO ACQUISITION.
(D) TO ADJUST REVENUE AND SERVICE EQUIPMENT TO FAIR VALUE.
(E) TO RECORD GOODWILL
(F) TO RECORD DEFERRED TAX EFFECT RELATED TO PROFORMA ACQUISITION ADJUSTMENTS.
(G) TO ELIMINATE EQUITY OF VICTORY EXPRESS
</TABLE>
20
