SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
Commission File No. 0-25506
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
PST VANS, INC.
(Exact name of registrant as specified in this charter)
Utah 87-0411704
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1901 West 2100 South
Salt Lake City, UT 84119
(Address of Principal Executive Offices)
(Zip Code)
Registrant's telephone number, including area code: 801-975-2500
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.
YES X NO
----------- -----------
The number of shares outstanding of Registrant=s Common Stock, par value $0.001
per share, as of October 31, 1997, was 4,239,945 shares.
<PAGE>
PST VANS, INC.
INDEX
PART I, FINANCIAL INFORMATION
Page
Number
------
Item 1. Financial Statements
Condensed Balance Sheets as of September 30, 1997
(unaudited) and December 31, 1996....................................... 1
Condensed Statements of Operations (unaudited) for
the Three and Nine Months periods ended September 30, 1997
and September 30, 1996.................................................. 2
Condensed Statements of Cash Flows (unaudited) for the
Nine Month periods ended September 30, 1997 and September 30,
1996.................................................................... 3
Notes to Condensed Financial Statements................................. 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations..................................... 6
PART II, OTHER INFORMATION
Item 1. Legal Proceedings................................................... *
Item 2. Changes in Securities............................................... *
Item 3. Defaults Upon Senior Securities..................................... *
Item 4. Submission of Matters to a Vote of Security Holders................. *
Item 5. Other Information................................................... *
Item 6. Exhibits and Reports on Form 8-K.................................... 10
*No Information Submitted Under This Caption
<PAGE>
<TABLE>
PST VANS, INC.
CONDENSED BALANCE SHEETS
ASSETS
<CAPTION>
September 30, December 31,
1997 1996
------------ -----------
(unaudited)
CURRENT ASSETS:
<S> <C> <C>
Cash $ 2,019,640 $ 4,098,361
Receivables, net 16,984,814 14,607,292
Prepaid expenses and other 3,149,370 3,258,669
Inventories and operating supplies 631,661 689,875
Deposits 362,535 353,437
------------ ------------
Total current assets 23,148,020 23,007,634
------------ ------------
PROPERTY AND EQUIPMENT, net 48,711,706 58,116,763
GOODWILL, net 8,408,178 8,612,150
OTHER ASSETS, net 325,635 523,539
------------ ------------
TOTAL ASSETS $ 80,593,539 $ 90,260,086
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Line of Credit $ 5,309,805 $ 0
Current portion of long-term obligations 1,188,602 1,388,581
Current portion of capitalized lease
obligations 23,969,432 18,708,614
Accounts payable 4,053,565 4,140,985
Current portion of accrued claims payable 4,817,840 5,456,316
Accrued liabilities 3,464,735 2,469,915
------------ ------------
Total current liabilities 42,803,979 32,164,411
------------ ------------
LONG-TERM ACCRUED CLAIMS PAYABLE,
net of current portion 1,638,691 1,429,227
------------ ------------
LONG-TERM OBLIGATIONS, net of current portion 2,177,926 1,986,214
------------ ------------
CAPITALIZED LEASE OBLIGATIONS,
net of current portion 16,957,334 32,907,995
------------ ------------
STOCKHOLDER'S EQUITY:
Common stock 4,240 4,217
Additional paid-in capital 49,828,247 49,759,238
Accumulated deficit (32,816,878) (27,991,216)
------------ ------------
Total stockholders' equity 17,015,609 21,772,239
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 80,593,539 $ 90,260,086
============ ============
</TABLE>
See accompanying notes to condensed financial statements
1
<PAGE>
<TABLE>
PST VANS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
------------------------------ ------------------------------
September 30, September 30, September 30, September 30,
1997 1996 1997 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
REVENUES $ 35,760,263 $ 36,297,413 $ 105,596,782 $ 110,961,630
------------- ------------- ------------- -------------
COST AND EXPENSES:
Salaries, wages and benefits 11,073,127 10,820,348 32,573,589 32,860,728
Purchased transportation 166,130,358 7,779,282 18,980,948 24,908,947
Fuel and fuel taxes 5,420,846 5,114,328 16,315,505 15,428,120
Depreciation and amortization 3,002,657 3,263,477 9,164,195 9,950,253
Insurance and claims 3,944,489 1,894,238 8,979,185 7,110,398
Revenue equipment lease expense 1,970,832 1,837,571 5,556,919 6,064,963
Maintenance 2,387,938 2,032,899 6,208,561 5,717,257
General supplies and expense 1,810,090 1,374,371 4,513,179 4,239,349
Taxes and licenses 734,301 793,971 2,154,247 2,549,636
Communications and utilities 726,013 831,492 2,248,339 2,577,582
Amortization of goodwill 67,991 67,991 203,972 203,972
(Gain) Loss on disposition
of assets 303,597 (329,678) 273,236 (1,585,561)
------------- ------------- ------------- -------------
37,572,239 35,480,290 107,171,875 110,025,644
------------- ------------- ------------- -------------
OPERATING INCOME (LOSS) (1,811,976) 817,123 (1,575,093) 935,986
------------- ------------- ------------- -------------
OTHER INCOME (EXPENSES):
Interest expense (1,144,038) (1,188,172) (3,347,916) (3,845,904)
Other income (expense) 55,698 24,222 97,347 114,638
------------- ------------- ------------- -------------
(1,088,340) (1,163,950) (3,250,569) (3,731,266)
------------- ------------- ------------- -------------
LOSS BEFORE
PROVISION FOR INCOME TAXES (2,900,316) (346,827) (4,825,662) (2,795,280)
PROVISION FOR INCOME TAXES -- -- -- --
------------- ------------- ------------- -------------
NET LOSS $ (2,900,316) $ (346,827) $ (4,825,662) $ (2,795,280)
============= ============= ============= =============
NET LOSS PER COMMON SHARE $ (0.68) $ (0.08) $ (1.14) $ (0.66)
------------- ------------- ------------- -------------
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 4,239,945 4,212,862 4,231,299 4,210,568
------------- ------------- ------------- -------------
</TABLE>
See accompanying notes to condensed financial statements
2
<PAGE>
<TABLE>
PST VANS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Nine Months Ended September 30,
-------------------------------
1997 1996
-------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net loss $ (4,825,662) $ (2,795,280)
Adjustments to reconcile net loss to net
cash provided by operating activities -
Depreciation and amortization 9,368,167 10,154,225
Provision for losses on accounts receivable 766,848 960,687
(Gain) loss on sale of property and equipment 273,236 (1,585,561)
Increase in receivables (3,144,370) (816,945)
Increase in deposits (9,098) (448,923)
Decrease in prepaid and other expenses 109,453 564,862
Decrease (increase) in inventories and operating supplies 58,061 (12,772)
Decrease in other assets, net 197,903 227,019
Increase (decrease) in accounts payable (87,420) 128,937
Increase (decrease) in accrued claims payable (429,012) 332,506
Increase (decrease) in accrued liabilities 394,821 (477,484)
------------ ------------
Total adjustments 7,498,589 9,026,551
------------ ------------
Net cash flows provided by operating activities 2,672,927 6,231,271
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment (2,384,482) (1,149,741)
Proceeds from sale of property and equipment 2,888,297 4,097,996
------------ ------------
Net cash flows provided by investing
activities 503,815 2,948,255
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in line of credit 5,309,805 --
Proceeds from long-term debt 1,597,325 --
Principal payments on long-term obligations (1,541,782) (1,342,610)
Principal payments on capitalized lease obligations (10,689,843) (8,024,856)
Proceeds from issuance of common stock, net 69,032 27,970
------------ ------------
Net cash flows used in
financing activities (5,255,463) (9,339,496)
------------ ------------
NET DECREASE IN CASH (2,078,721) (159,970)
CASH AT BEGINNING OF PERIOD 4,098,361 4,249,981
------------ ------------
CASH AT END OF PERIOD $ 2,019,640 $ 4,090,011
============ ============
</TABLE>
See accompanying notes to condensed financial statements
3
<PAGE>
PST VANS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended September 30,
-------------------------------
1997 1996
------------- --------------
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION:
Cash paid for -
Interest $ 3,410,232 $ 3,875,478
Income taxes 35,633 85,395
SUPPLEMENTAL SCHEDULE OF NONCASH
INVESTING AND FINANCING ACTIVITIES:
Equipment disposed of as satisfaction
of capitalized lease obligations $ 932,690 --
See accompanying notes to condensed financial statements
4
<PAGE>
PST VANS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
Note 1. Financial Information:
The accompanying condensed financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and 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 Company believes the following disclosures
are adequate to make the information presented not misleading. In the opinion of
Management, all adjustments (consisting of normal recurring adjustments)
considered necessary for a fair presentation have been included. Results of
operations for interim periods are not necessarily indicative of results for a
full year. These condensed financial statements and notes thereto should be read
in conjunction with the Company's financial statements and notes thereto,
included in the Company's Form 10-K for the year ended December 31, 1996.
Note 2. Income Taxes:
Income taxes for the interim periods are based upon the Company's estimated
effective annual tax rates. The Company's effective tax rate (income tax expense
divided by income before provision for income taxes) was zero for the three and
nine months ended September 30, 1997, and zero for the three and nine months
ended September 30, 1996, respectively, as a result of the Company not recording
any benefit on its year-to-date pre-tax losses.
Note 3 Recent Accounting Pronouncement
In February 1997, the Financial Accounting Standards Board released Statement of
Financial Accounting Standards No. 128 "Earnings Per Share" (SFAS 128). This
statement specifies the computation, presentation, and disclosure requirements
for earnings per share (EPS) for financial statements issued for all periods
ending after December 15, 1997. SFAS 128 simplifies the standards for computing
EPS previously found in APB Opinion No. 15 and replaces the presentation for
Primary EPS and Fully Diluted EPS. When the Company incurs a loss, common stock
equivalents are not included in the calculation of the weighted average number
of shares outstanding as they would be anti-dilutive. The adoption of SFAS 128
is not expected to have a significant impact on the Company's calculation of its
net loss per common share.
5
<PAGE>
PST VANS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Results of Operations
Comparison of the Three Months Ended September 30, 1997 to the Three Months
Ended September 30, 1996
Revenues decreased by 1.5% to $35.8 million for the three months ended September
30, 1997, compared to $36.3 million for the three months ended September 30,
1996. The decline in revenues resulted primarily from a 2.6% decrease in average
revenue equipment to 1147 tractors for the three months ended September 30,
1997, compared to 1177 tractors for the three months ended September 30, 1996.
Revenues in the three months ended September 30, 1997, were positively affected
by rate increases averaging 1.5% implemented during the second quarter of 1997.
The decrease in revenue equipment was due primarily to a shortage of qualified
independent contractors which management believes will continue in the fourth
quarter of 1997 and 1998.
Operating costs and expenses were 105.1% of revenues for the three months ended
September 30, 1997, compared to 97.7% of revenues for the three months ended
September 30, 1996. The increase in operating costs and expenses in the quarter
ended September 30, 1997, as a percent of revenue, resulted primarily from an
approximately $2.0 million increase in insurance claims expense, and a loss on
the disposition of assets of approximately $300,000 compared to a gain on the
disposition of assets of approximately $300,000 in the three months ended
September 30, 1996, as discussed below.
Salaries, wages and benefits increased to 31.0% of revenues for the three months
ended September 30, 1997, compared to 29.8% of revenues for the three months
ended September 30, 1996 and purchased transportation decreased to 17.1% of
revenues for the three months ended September 30, 1997, compared to 21.4% of
revenues for the three months ended September 30, 1996. These changes resulted
primarily from the reduction in independent contractor revenue equipment as
described above. Independent contractors are under contract with the Company and
are responsible for their own salaries, wages and benefits, fuel, maintenance
and depreciation. Independent contractor costs are classified as purchased
transportation expenses.
Fuel and fuel taxes increased to 15.2% of revenues for the three months ended
September 30, 1997, compared to 14.1% of revenues for the three months ended
September 30, 1996, as a result of increased fuel prices and the Company having
no fuel secured under guaranteed price contracts during the third quarter of
1997 due to higher contract fuel prices during the three months ended September
30, 1997. In order to reduce the vulnerability of the Company to rapid increases
in the price of fuel, the Company has historically entered into purchase
contracts with fuel suppliers from time to time for a portion of its estimated
fuel requirements at guaranteed prices. As of September 30, 1997, the Company
had entered into various agreements with fuel suppliers to purchase
approximately 17% of its estimated fuel needs during the fourth quarter of 1997
and 6% of its fuel needs during the first quarter of 1998 at a guaranteed price.
The Company has also implemented fuel surcharges to many of its customers.
Although this arrangement helps reduce the Company's vulnerability to rapid
increases in the price of fuel, the Company will not benefit from a decrease in
the price of fuel to the extent of its commitment to purchase fuel under these
contracts. Management expects the cost of fuel to remain high through the fourth
quarter, but anticipates that the purchase contracts and fuel surcharges will
help offset some of the increase in the cost of fuel.
Maintenance expense increased to 6.7% of revenues for the three months ended
September 30, 1997, compared to 5.6% of revenues for the three months ended
September 30, 1996, as a result of increased maintenance costs associated with
an older tractor and trailer fleet, and repairs on tractors that have exceeded
factory warrantees. The average age of Company owned tractors increased to 2.4
years during the three months ended September 30, 1997 compared to 1.5 years for
the three months ended September 30, 1996.
Insurance and claims increased to 11.0% of revenues for the three months ended
September 30, 1997, from 5.2% of revenues for the three months ended September
30, 1996, primarily as a result of increases in insurance claims reserves of
approximately $2,400,000 following recent adverse developments in certain claims
which occurred during a period when the Company's insurance deductibles ranged
from $325,000 to $500,000. Effective July 1, 1997, the Company significantly
reduced its liability insurance deductible and effective November 1, 1997,
placed damage coverage at a low deductible on company owned tractors which will
increase the premium, but in Management's opinion will reduce overall costs from
6
<PAGE>
recent levels experienced by the Company. Management continues to review
accidents to determine what actions may be taken to reduce future claims costs.
Communications and utilities decreased to 2.0% of revenues for the three months
ended September 30, 1997, compared to 2.3% of revenues for the three months
ended September 30, 1996, primarily as a result of the Company discontinuing use
of a cellular on-board communications system in its fleet of tractors. The
Company is currently installing the "Qualcomm" satellite on-board communications
system in its tractors. The use of the "Qualcomm" system generally enhances the
Company's ability to track loads, service customers and communicate with drivers
and monitor drivers. Installation of the "Qualcomm" system is expected to be
completed in the fourth quarter of 1997. Management believes that the savings
that should be realized from better equipment utilization should exceed the cost
of the "Qualcomm" system.
General supplies and expenses increased to 5.1% of revenues for the three months
ended September 30, 1997, compared to 3.8% of revenues for the three months
ended September 30, 1996, primarily because of an increase in the allowance for
doubtful accounts due an increase in accounts receivable that had aged to over
60 days. The increased aging in accounts receivable was due to an electronic
data processing problem that occurred during the third quarter and was resolved
in the fourth quarter
Loss on disposition of assets was $303597 for the three months ended September
30, 1997 as compared to a gain of $329,678 for the three months ended September
30, 1996. This change was because of accrued disposition costs of approximately
$600,000 related to tractors to be returned to the lessor at the expiration of
their leases.
As a consequence of the items discussed above, the Company incurred a loss
before provision for income taxes for the three months ended September 30, 1997,
of $2,900,316 compared to a loss before provision for income taxes of $346,827
for the three months ended September 30, 1996.
The Company's effective tax rate (income tax expense divided by income before
income taxes) was zero for the three months ended September 30, 1997, and for
the three months ended September 30, 199, as a result of the Company not
recording any benefit on its pretax loss.
Comparison of the Nine Months Ended September 30, 1997 to the Nine Months Ended
September 30, 1996
Revenues decreased by 4.8% to $105.6 million for the nine months ended September
30, 1997, compared to $111.0 million for the nine months ended September 30,
1996. The decrease in revenues was a result of a 8.9% decrease in the average
number of tractors to 1149 for the nine months ended September 30, 1997,
compared to 1261 for the nine months ended September 30, 1996, offset by an
increase in rates averaging 1.5% and a 3.0% increase in average miles per
tractor. The decrease in revenue equipment was due primarily to a shortage of
qualified independent contractors.
Operating costs and expenses were 101.5% of revenues for the nine months ended
September 30, 1997, compared to 99.2% of revenues for the nine months ended
September 30, 1996. The increase in operating costs and expenses in the nine
months ended September 30, 1997, as a percent of revenue, resulted primarily
from an approximately $2.0 million increase in insurance claims expense, and a
loss on the disposition of assets of approximately $300,000 compared to a gain
on the disposition of assets of approximately $1.6 million for the nine months
ended September 30, 1996, as discussed below.
Salaries, wages and benefits increased to 30.8% of revenues for the nine months
ended September 30, 1997, compared to 29.6 % for the nine months ended September
30, 1996, and purchased transportation decreased to 18.0% of revenue for the
nine months ended September 30, 1997, compared to 22.4% for the nine months
ended September 30, 1996. These changes resulted primarily from the reduction in
independent contractor revenue equipment as described above. Independent
contractors are under contract with the Company and are responsible for their
own salaries, wages and benefits, fuel, maintenance and depreciation.
Independent contractor costs are classified as purchased transportation
expenses.
Fuel and fuel taxes, net of fuel surcharges, increased to 15.5% of revenues for
the nine months ended September 30, 1997, compared to 13.9% of revenues for the
nine months ended September 30, 1996, as a result of a higher percentage of
miles driven with Company tractors and an increase in fuel costs partially
offset with fuel surcharges billed to customers and fuel purchase contracts.
Management expects the cost of fuel to remain high through the remainder of the
year.
7
<PAGE>
Maintenance increased to 5.9% of revenues for the nine months ended September
30, 1997, compared to 5.2% of revenues for the nine months ended September 30,
1996, as a result of increased maintenance costs associated with an older
tractor and trailer fleet, and repairs on tractors that have exceeded factory
warrantees. The average age of Company owned tractors increased to 2.2 years
during the nine months ended September 30, 1996, compared to 1.3 years for the
nine months ended September 30, 1996.
Insurance and claims increased to 8.5% of revenues for the nine months ended
September 30, 1997, from 6.4% of revenues for the nine months ended September
30, 1996, primarily as a result of increases in insurance claims reserves of
approximately $4,100,000 following adverse developments IN 1997 in certain
claims which occurred during a period when the Company's insurance deductibles
ranged from $325,000 to $500,000. The Company recently significantly reduced its
liability insurance deductible and placed damage coverage at a low deductible on
company owned tractors which will increase the premium, but in Management's
opinion should help to reduce overall costs from recent levels as previously
discussed. Management continues to review accidents to determine what actions
may be taken to reduce future claims costs.
General supplies and maintenance increased to 4.3% of revenue for the nine
months ended June 30, 1997, compared to 3.8% of revenues for the nine months
ended September 30, 1996, as a result of an increase in the allowance for
doubtful accounts due an increase in accounts receivable that had aged to over
60 days. The increased aging in accounts receivable was due to an electronic
data processing problem that occurred during the third quarter and was resolved
in the fourth quarter
Taxes and licenses decreased to 2.1% of revenues for the nine months ended
September 30, 1997, compared to 2.3% of revenues for the nine months ended
September 30, 1996, primarily as a result of decrease in the weighted average
number of company owned tractors during the nine months ended September 30,
1997.
Communications and utilities decreased to 2.1% of revenues for the nine months
ended September 30, 1997, compared to 2.3% of revenues for the nine months ended
September 30, 1996, primarily as a result of the Company discontinuing use of a
cellular on-board communications system in its fleet of tractors. The Company is
currently installing the "Qualcomm" satellite on-board communications system in
its tractors. The use of the "Qualcomm" system generally enhances the Company's
ability to track loads, service customers and communicate with drivers and
monitor drivers. Installation of the "Qualcomm" system is expected to be
completed in the fourth quarter of 1997.
Loss on disposition of assets was $273,236 for the nine months ended September
30, 1997 as compared to a gain of $1,585,561 for the nine months ended September
30, 1996. This change was because of accrued disposition costs of approximately
$600,000 related to tractors to be returned to the lessor at the expiration of
their leases, and as a result of the Company selling its older trailers during
the first nine months of 1996.
As a consequence of the items discussed above, the Company incurred a loss
before provision for income taxes for the nine months ended September 30, 1997,
of $4,825,662, compared to a loss before provision for income taxes of
$2,795,280 for the nine months ended September 30, 1996.
The Company's effective tax rate (income tax expense divided by income before
income taxes) was zero for the nine months ended September 30, 1997, and for the
nine months ended September 30, 1996, as a result of the Company not recording
any benefit on its pretax loss.
Liquidity and Capital Resources
The Company's sources of liquidity have been funds provided by operations,
leases on revenue equipment and revolving lines of credit.
The Company has a $11.5 million working capital line of credit with Congress
Financial Corporation (Northwest) which expires August 1999. The Company
anticipates that use of the line will be primarily for insurance related letters
of credit as well as providing any short term cash requirements. As of September
30, 1997 the Company has utilized $10.3 million of this line of credit, $5.0
million for insurance related letters of credit, and $5.3 million of short term
cash borrowings. The Congress Agreement restricts the payment of dividends and
is secured by accounts receivable.
The Company also has a credit facility with the Bank of New York for issuance of
letters of credit up to $5.8 million which expires December 31, 1997. As of
September 30, 1997, the Company had used $5.8 million of this facility,
principally for letters of credit in favor of the Company's insurance carrier.
As outstanding letters of credit issued under this credit facility are not
8
<PAGE>
renewed, the maximum commitment available under this credit facility will be
reduced by the amount of the expiring letters of credit. This credit facility
had loan covenants which obligated the Company to maintain a required level of
profitability and cash flow. On March 21, 1997, the Company and The Bank of New
York entered into an amendment to this credit facility to delete certain
financial covenants and add covenants requiring certain levels of tangible net
worth for periods through and including December 31, 1997. The Company may be
required to seek additional amendments of the revolving credit facility with The
Bank of New York in the future based on actual operating results. The amendment
also shortened the expiration date of the credit facility from December 31, 1998
to December 31, 1997. Management believes that following the expiration of the
credit facility with The Bank of New York, the Company will be able to satisfy
its anticipated insurance related letter of credit requirements, including the
insurance related letter of credit requirements which are currently being met
with letters of credit under the credit facility with The Bank of New York,
under its working capital line of credit with Congress Financial Corporation
(Northwest) or new credit facilities. There can be no assurance, however, that
the Congress Financial Corporation (Northwest) credit facility will be
sufficient to satisfy the Company's insurance related letter of credit
requirements or that the Company will be able to obtain additional or new credit
facilities on terms favorable to the Company, if at all.
Net cash provided by operating activities totaled approximately $2.7 million for
the nine months ended September 30, 1997. Net cash provided by investing
activities (primarily selling of equipment) amounted to $0.5 million for the
nine months ended September 30, 1997. Net payments on debt and capitalized lease
obligations was $5.2 million for the nine months ended September 30, 1997.
The Company expects capital expenditures for the remainder of 1997 to be
approximately $3.5 million primarily for an onboard communication system. During
the first nine months of 1997, the Company acquired $2.2 million of equipment,
comprised primarily of trailers that the Company was leasing.
Management believes that commitments available under the Company's lines of
credit will be sufficient to meet the Company's capital requirements through
1997 However , the Company's business is capital intensive and will require the
Company to seek additional debt and possibly equity capital to enable the
Company to maintain a modern fleet. The Company's ability to obtain such
financing could be affected by its operating results to the extent the Company
continues to operate at a loss. In addition, the Company's need for additional
equity or debt financing to meet its operational needs will be accelerated if
the Company continues to operate at a loss. Whether such capital will be
available on favorable terms, or at all, will depend on the Company's future
operating results, prevailing economic and industry conditions and other factors
over which the Company has little or no control.
Seasonality
In the trucking industry, revenues generally show a seasonal pattern as
customers reduce shipments during and after the winter holiday season and its
attendant weather variations. Operating expenses also tend to be higher during
the cold weather months, primarily due to poorer fuel economy and increased
maintenance costs.
Inflation
Inflation can be expected to have an impact on the Company's operations. The
effect of inflation has been minimal over the past three years.
This quarterly report on Form 10-Q may be deemed to contain certain
forward-looking statements. These statements are subject to known and unknown
risks and uncertainties, including decreased demand for freight, slower than
anticipated economic conditions, shortages of drivers and such other risks as
are identified and discussed herein and in the Company's filings with the
Securities and Exchange Commission. These known and unknown risks and
uncertainties could cause the Company's actual results in future periods to be
materially different from any future performance suggested herein.
9
<PAGE>
PART II, OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
--------
Exhibit 27.1 - Financial Data Schedule
(b) Reports on Form 8-K
-------------------
None
10
<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 thereto duly authorized.
PST VANS, INC.
Date: November 14, 1997 By: \s\ Kenneth R. Norton
----------------------------------
Kenneth R. Norton
Chief Executive Officer
By: \s\ Neil R. Vos
----------------------------------
Neil R. Vos
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
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