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 June 30, 1998
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 August 7, 1998, was 4,269,482 shares.
<PAGE>
PST VANS, INC.
INDEX
PART I, FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Page
Number
Item 1. Financial Statements ------
<S> <C>
Condensed Balance Sheets as of June 30, 1998 (unaudited)
and December 31, 1997 1
Condensed Statements of Operations (unaudited) for the Three and
Six Months Ended June 30, 1998 and June 30, 1997 2
Condensed Statements of Cash Flows (unaudited) for the
Six Months Ended June 30, 1998 and June 30, 1997 3
Notes to Condensed Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 7
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 12
Item 6. Exhibits and Reports on Form 8-K 12
</TABLE>
*No Information Submitted Under This Caption
<PAGE>
PST VANS, INC.
CONDENSED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
June 30,
1998 Decenber 31,
(unaudited) 1997
------------ ------------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 531,522 $ 1,282,255
Receivables, net 18,530,380 17,087,038
Deposits 475,867 343,867
Inventories and operating supplies 508,056 726,853
Prepaid expenses and other 1,201,343 3,097,538
------------ ------------
Total current assets 21,247,168 22,537,551
------------ ------------
PROPERTY AND EQUIPMENT, net 51,250,744 48,265,324
------------ ------------
GOODWILL, net 8,204,205 8,340,187
------------ ------------
OTHER ASSETS, net 306,405 332,632
------------
$ 81,008,522 $ 79,475,694
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Line of credit $ 7,691,880 $ 4,762,493
Current portion of long-term obligations 7,002,587 3,037,018
Current portion of capitalized lease obligations 16,278,324 23,599,973
Accounts payable 3,346,328 7,306,459
Current portion of accrued claims payable 2,964,494 3,990,958
Accrued liabilities 2,689,710 3,271,718
------------ ------------
Total current liabilities 39,973,323 45,968,619
------------ ------------
LONG-TERM ACCRUED CLAIMS PAYABLE,
net of current portion 901,486 1,257,429
------------ ------------
LONG-TERM OBLIGATIONS, net of current portion 8,295,726 3,985,909
------------ ------------
CAPITALIZED LEASE OBLIGATIONS,
net of current portion 13,661,598 10,752,721
------------ ------------
STOCKHOLDERS' EQUITY:
Common stock 4,254 4,240
Additional paid-in capital 49,847,277 49,812,539
Accumulated deficit (31,675,142) (32,305,763)
Total stockholders equity 18,176,389 17,511,016
------------ ------------
$ 81,008,522 $ 79,475,694
============ ============
</TABLE>
See accompanying notes to condensed financial statements
1
<PAGE>
PST VANS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
REVENUES $ 35,173,947 $ 35,313,910 $ 70,880,355 $ 69,836,519
------------ ------------ ------------ ------------
COST AND EXPENSES:
Salaries, wages and benefits 9,562,959 10,634,717 19,624,992 21,500,462
Purchased transportation 8,936,015 6,017,745 17,424,498 12,850,590
Fuel and fuel taxes 3,999,410 5,521,031 8,575,997 10,894,659
Depreciation and amortization 2,812,385 3,129,253 5,659,123 6,161,538
Insurance and claims 2,396,658 2,163,238 4,563,277 5,034,696
Revenue equipment lease expense 284,316 1,743,539 1,218,907 3,586,087
Maintenance 2,788,275 1,993,707 5,342,102 3,820,623
General supplies and expense 1,632,485 1,441,666 3,151,865 2,703,089
Taxes and licenses 699,575 700,687 1,410,276 1,419,946
Communications and utilities 317,600 627,288 809,471 1,522,326
Amortization of goodwill 67,992 67,990 135,983 135,981
(Gain) Loss on disposition of assets (7,281) 23,826 (59,954) (30,361)
------------ ------------ ------------ ------------
35,490,389 34,064,687 67,856,537 69,599,636
------------ ------------ ------------ ------------
OPERATING INCOME 1,683,558 1,249,223 3,023,818 236,883
------------ ------------ ------------ ------------
OTHER INCOME (EXPENSES):
Interest expense (1,264,978) (1,077,654) (2,399,123) (2,203,878)
Other income (expense) 13,257 12,161 30,925 41,649
------------ ------------ ------------ ------------
(1,251,721) (1,065,493) (2,368,198) (2,162,229)
------------ ------------ ------------ ------------
INCOME (LOSS) BEFORE
PROVISION FOR INCOME TAXES 431,837 183,730 655,620 (1,925,346)
PROVISION FOR INCOME TAXES (25,000) -- (25,000) --
------------ ------------ ------------ ------------
NET INCOME (LOSS) $ 406,837 $ 183,730 $ 630,620 $ (1,925,346)
============ ============ ============ ============
NET INCOME (LOSS) PER SHARE -
BASIC $ 0.10 $ 0.04 $ 0.15 $ (0.46)
============ ============ ============ ============
NET INCOME (LOSS) PER SHARE -
DILUTED $ 0.09 $ 0.04 $ 0.14 $ (0.46)
============ ============ ============ ============
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING-BASIC 4,253,527 4,227,215 4,253,152 4,226,880
============ ============ ============ ============
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING-DILUTED 4,360,977 4,227,215 4,360,602 4,226,880
============ ============ ============ ============
</TABLE>
See accompanying notes to condensed financial statements
2
<PAGE>
PST VANS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
1998 1997
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 630,620 $ (1,925,346)
------------ ------------
Adjustments to reconcile net income (loss) to net
cash provided by operating activities -
Depreciation and amortization 5,795,106 6,297,519
Provision for losses on accounts receivable 73,243 235,652
Gain on sale of property and equipment (59,954) (30,361)
Increase in accounts receivable (1,516,585) (560,036)
Decrease (increase) in deposits (132,000) 32,955
Decrease in prepaid and other expenses 1,896,195 930,025
Decrease in inventories and operating supplies 218,797 36,155
Decrease in other assets, net 26,227 236,792
Decrease in accounts payable (3,960,131) (476,804)
Decrease in accrued claims payable (1,382,407) (98,552)
Increase (decrease) in accrued liabilities (582,007) 236,344
------------ ------------
Total adjustments 376,484 6,839,689
------------ ------------
Net cash flows provided by operating activities 1,007,104 4,914,343
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment (8,787,978) (2,367,673)
Proceeds from sale of property and equipment 203,388 1,400,038
------------ ------------
Net cash flows used in investing
activities (8,584,590) (967,635)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in line of credit, net 2,929,387 1,661,634
Proceeds from long-term obligations 10,756,584 74,601
Principal payments on long-term obligations (2,481,198) (1,276,953)
Principal payments on capitalized lease obligations (4,412,772) (6,413,176)
Proceeds from issuance of common stock, net 34,752 27.660
------------ ------------
Net cash flows provided by (used in) financing activities 6,826,753 (5,926,234)
------------ ------------
NET DECREASE IN CASH (750,733) (1,979,526)
CASH AT BEGINNING OF PERIOD 1,282,255 4,098,361
------------ ------------
CASH AT END OF PERIOD $ 531,522 $ 2,118,835
============ ============
</TABLE>
See accompanying notes to condensed financial statements
3
<PAGE>
PST VANS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended June 30,
1998 1997
------------ ------------
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION:
Cash paid for -
Interest $ 2,418,024 $ 2,261,248
Income taxes 17,840 17,434
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, 1997.
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 5.8% for the three
months ended June 30, 1998, 3.8% for the six months ended June 30, 1998, as a
result of the benefit of loss carry-forwards from prior years. The Company's
effective tax rate was zero for the three and six months ended June 30, 1997,
respectively, as a result of the Company not recording any benefit on its
year-to-date pre-tax loss.
5
<PAGE>
PST VANS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
Note 3. Basic and Diluted Earnings Per Share:
The following table sets forth for the periods indicated the calculation of net
earnings per share included in the Company's Condensed Statement of Operations:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------- -------------------------
June 30, June 30,
------------------------- -------------------------
1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Numerator:
Net Income (Loss) $ 406,837 $ 183,730 $ 630,620 $(1,925,346)
=========== =========== =========== ===========
Denominator:
Denominator for basic earnings
per share -
weighted-average shares 4,253,527 4,227,215 4,253,152 4,226,880
Effect of dilutive securities:
Employee stock options 107,450 -- 107,450
----------- ----------- ----------- -----------
Denominator for diluted earnings per
share - adjusted weighted-average
shares 4,360,977 4,227,215 4,360,602 4,226,880
=========== =========== =========== ===========
</TABLE>
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.
Note 4. Subsequent Event
On July 7, 1998, PST entered into an Agreement and Plan of Merger with U.S.
Xpress Enterprises, Inc. ("Enterprises") pursuant to which PST will be merged
with and into a wholly owned subsidiary of Enterprises. Subject to stockholder
approval, each outstanding share of PST common stock will be converted into the
right to receive 0.2381 shares of Enterprises Class A common stock plus $2.71 in
cash.
6
<PAGE>
PST VANS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Overview
On July 7, 1998, PST entered into an Agreement and Plan of Merger with U.S.
Xpress Enterprises, Inc. ("Enterprises") pursuant to which PST will be merged
with and into a wholly owned subsidiary of Enterprises. Subject to stockholder
approval, each outstanding share of PST common stock will be converted into the
right to receive 0.2381 shares of Enterprises Class A common stock plus $2.71 in
cash. A meeting of stockholders is scheduled to be held on August 28, 1998 to
vote on the Agreement and Plan of Merger.
The following discussion as it relates to capital needs and operations
independent of consummation of the merger with Enterprises will be applicable
only in the event the merger is not consummated.
Results of Operations
Comparison of the Three Months Ended June 30, 1998 to the Three Months Ended
June 30, 1997
Revenues decreased by 0.4% to $35.2 million for the three months ended June 30,
1998 compared to $35.3 million for the three months ended June 30, 1996. This
revenue reduction resulted primarily from a 2.3 % decrease in revenue equipment
utilization as measured in average miles per tractor per day, offset by a 1.6%
increase in revenue equipment as the average number of tractors increased to
1,126 for the three months ended June 30, 1998 compared to 1,105 for the three
months ended June 30, 1997. The decrease in equipment utilization was primarily
caused by inefficiencies and driver turnover related to conversion to a new
information technology system during the second quarter of 1998 .
Operating costs and expenses were 95.2% of revenues for the three months ended
June 30, 1998, compared to 96.5% of revenues for the three months ended June 30,
1997. Operating costs and expenses in the quarter ended June 30, 1998, as a
percent of revenue, were positively affected primarily by decreased driver wages
and benefits, decreased fuel and fuel taxes, and decreased revenue equipment
lease expense, offset by increased purchased transportation expense and
increased maintenance costs.
Salaries, wages and benefits decreased to 27.2 % of revenues for the three
months ended June 30, 1998 as compared to 30.1% of revenues for the three months
ended June 30, 1997, due primarily to a decrease in the percent of total miles
driven by Company drivers compared to independent contractors during the two
periods. Purchased transportation expense increased to 25.4% of revenues for the
7
<PAGE>
three months ended June 30, 1998 as compared to 17.0% of revenues for the three
months ended June 30, 1997, for the same reason. 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
decreased to 11.4% of revenues for the three months ended June 30, 1998,
compared to 15.6% of revenues for the three months ended June 30, 1997, as a
result of a higher percentage of miles driven by independent contractors and
decreased fuel prices. In order to reduce the Company's vulnerability 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 (see liquidity and capital
resources). As of June 30, 1998, the Company had entered into various contracts
with fuel suppliers to purchase approximately 12% of its estimated fuel needs
through December 31, 1998. The Company has also implemented fuel surcharges to
many of its customers. Management anticipates that the purchase contracts and
fuel surcharges will lessen the impact of any increase in the cost of fuel.
Revenue equipment lease expense decreased to 0.8% of revenues for the three
months ended June 30, 1998 from 4.9% of revenues for the three months ended June
30, 1997, primarily due to the retirement of 196 leased tractors during December
1997, January 1998 and February 1998.
Maintenance expense increased to 7.9% of revenues for the three months ended
June 30, 1998, compared to 5.6% for the three months ended June 30, 1997, 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 2.9 years at June 30,
1998 compared to 2.1 years at June 30, 1997.
Communications and utilities expense decreased to 0.9% of revenues for the three
months ended June 30, 1998, compared to 1.9% of revenues for the three months
ended June 30, 1997, primarily as a result of the Company changing onboard
communication systems in its fleet of tractors.
As a result of the items discussed above, the Company generated income before
provision for income taxes for the three months ended June 30, 1998 of $431,837
compared to income before provision for income taxes of $183,730 for the three
months ended June 30, 1997.
The Company's effective tax rate (income tax expense divided by income before
income taxes) was 5.8% for the three months ended June 30, 1998, as a result of
the benefit of loss carry-forwards from prior years. The Company's effective tax
rate was zero for the three months ended June 30, 1997, as a result of the
Company not recording any benefit on its year-to-date pre-tax losses.
Comparison of the Six Months Ended June 30, 1998 to the Six Months Ended June
30, 1997
Revenues increased by 1.5% to $70.9 million for the six months ended June 30,
8
<PAGE>
1998 compared to $69.8 million for the six months ended June 30, 1997. This
revenue increase resulted primarily from a 4.0% improvement in equipment
utilization as measured in miles per truck per day, offset by a 1.9% decrease in
revenue equipment as the average number of tractors decreased to 1,116 for the
six months ended June 30, 1998 compared to 1,138 for the six months ended June
30, 1997.
Operating costs and expenses were 95.7% of revenues for the six months ended
June 30, 1998 compared to 99.7% of revenues for the six months ended June 30,
1997. Operating costs and expenses for the six months ended June 30, 1998, as a
percent of revenue, were positively affected primarily by decreased driver wages
and benefits, decreased fuel and fuel taxes, and decreased revenue equipment
lease expense, offset by increased purchased transportation expense and
increased maintenance costs.
Salaries, wages and benefits decreased to 27.7% of revenues for the six months
ended June 30, 1998 compared to 30.8 % for the six months ended June 30, 1997,
and purchased transportation increased to 24.6% for the six months ended June
30, 1998 as compared to 18.4% for the six months ended June 30, 1997 due
primarily to a decrease in the percent of total miles driven by Company drivers
compared to independent contractors during the two periods. Company miles
decreased due to a higher percentage of independent contractor tractors to total
tractors. 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 decreased to 12.1% of revenues for the six months ended June
30, 1998, compared to 15.6% of revenue for the six months ended June 30, 1997,
as a result of a lower percentage of miles driven with Company tractors and
lower fuel prices.
Revenue equipment lease expense decreased to 1.7% of revenues for the six months
ended June 30, 1998 from 5.1% of revenues for the six months ended June 30,
1997, primarily due to the retirement of 196 leased tractors during December
1997, January 1998 and February 1998.
Maintenance expense increased to 7.5% of revenues for the six months ended June
30, 1998, compared to 5.5% for the six months ended June 30, 1997, 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 2.9 years at June 30, 1998
compared to 2.1 years at June 30, 1997.
Communications and utilities expense decreased to 1.1% of revenues for the six
months ended June 30, 1998, compared to 2.2% of revenues for the six months
ended June 30, 1997, primarily as a result of the Company changing onboard
communication systems in its fleet of tractors.
As a consequence of the items discussed above, the Company generated income
before provision for income taxes for the six months ended June 30, 1998 of
$655,620 compared to a loss before provision for income taxes of $(1,925,346)
for the six months ended June 30, 1996.
9
<PAGE>
The Company's effective tax rate (income tax expense divided by income before
income taxes) was 3.8% for the six months ended June 30, 1998, as a result of
the benefit of loss carry-forwards from prior years. The Company's effective tax
rate was zero for the six months ended June 30, 1997, as a result of the Company
not recording any benefit on its year-to-date pre-tax losses.
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 $14 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 June 30,
1998 the Company has utilized $12.7 million of this line of credit, $5.0 million
for insurance related letters of credit, and $7.7 million of short-term cash
borrowings. The Congress Agreement restricts the payment of dividends and is
secured by accounts receivable. On June 4, 1998, this line of credit was
increased to $14 million from $11.5 million.
The Company also has a credit facility with the Bank of New York for issuance of
letters of credit up to $4.8 million. As of June 30, 1998, the Company had used
all of this facility for letters of credit in favor of one of the Company's
insurance carriers. As outstanding letters of credit issued under this credit
facility are not renewed, the maximum commitment available under this credit
facility will be reduced by the amount of the expiring letters of credit. The
Company intends 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.
PST's credit facility with the Bank of New York expired on May 15, 1998 and PST
is thus in default under its credit facility; however, the Bank of New York has
allowed the letters of credit to remain outstanding while PST continues
negotiations with third parties to reduce or eliminate the outstanding balances.
Net cash provided by operating activities totaled approximately $1.0 million for
the six months ended June 30, 1998. Net cash used for investing activities
(primarily used for the acquisition of capital equipment offset by proceeds from
selling of equipment) amounted to $8.6 million for the six months ended June 30,
1998. Net cash provided by proceeds from long-term obligations and increased
borrowings under the Company's line of credit amounted to $13.7 million for the
six months ended June 30, 1998. Payments on debt and capitalized lease
obligations were $6.9 million for the six months ended June 30, 1998.
The Company expects capital expenditures for the remainder of 1998 to be
10
<PAGE>
approximately $8 million, primarily for additional trailers. During the first
six months of 1998, the Company acquired $8.8 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
1998. 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. 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.
11
<PAGE>
PART II, OTHER INFORMATION
INDEX
Item 5. Other Information
If a shareholder desiring to raise a proposal at the next annual
meeting of shareholders does not seek inclusion of the proposal in
the Company's proxy statement and fails to notify the Company at
least 45 days prior to the month and day of mailing of the prior
year's proxy statement, management proxies will be allowed to use
their discretionary voting authority when the proposal is raised at
the annual meeting, without any discussion of the proposal in the
proxy statement.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Sequential
Exhibit No. Description Page No.
- --------------------------------------------------------------------------------
10.14 Third Amendment to Congress Financial Corp. Filed herewith
(Northwest) Credit Facility
10.15 Agreement and Plan of Merger *
27 Financial Data Schedule Filed herewith
-------------------
* Incorporated by reference to the indicated exhibits in the U.S. Xpress
registration statement on Form S-4.
(b) Reports on Form 8-K
-----------------------
None
12
<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.
Date: August 14, 1998 By: /s/ Kenneth R. Norton
---------------------------------
Kenneth R. Norton
Chief Executive Officer
Date: August 14, 1998 By: /s/ Neil R. Vos
---------------------------------
Neil R. Vos
Chief Financial Officer and
Principal Financial Officer
13
<PAGE>
THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT
This Third Amendment to Loan and Security Agreement (this
"Amendment"), dated as of June 4, 1998, is made by and between PST Vans, Inc., a
Utah Corporation ("Borrower"), and Congress Financial Corporation (Northwest),
an Oregon corporation ("Lender"), for the purpose of amending their Loan and
Security Agreement (with Addendum) dated August 6, 1996, as it has previously
been amended (the "Loan Agreement"). All capitalized terms not otherwise defined
in this Amendment have the meanings given to those terms in the Loan Agreement.
TERMS AND CONDITIONS
For valuable consideration, including the mutual covenants set
forth below, Borrower and Lender have agreed as follows:
1. Section 1.17 of the Loan Agreement is amended to read as follows:
"1.17 "Maximum Credit" shall mean the amount of
$14,000,000."
2. Subsection 2.1(a) of the Loan Agreement is amended to read as
follows:
"(a) Subject to, and upon the terms and conditions
contained herein, Lender agrees to make Revolving Loans to
Borrower from time to time in amounts requested by Borrower up
to the amount equal to the sum of:
"(i) Eight-five percent (85%) of the Net
Amount of Eligible Accounts, less
"(ii) Any Availability Reserves."
3. Section 3.5 of the Loan Agreement is amended to read as follows:
"'3.5 Unused Line Fee. Borrower shall pay to Lender
monthly an unused line fee at a rate equal to one-quarter
percent (.25%) per annum calculated upon the amount by which
$11,200,000 exceeds the average daily principal balance of the
outstanding Revolving Loans and Letter of Credit
Accommodations during the immediately preceding month (or part
thereof) while this Agreement is in effect and for so long
thereafter as any of the Obligations are outstanding, which
fee shall be payable on the first day of each month in
arrears."
4. For the accommodations reflected in this Amendment, Borrower agrees
to pay Lender a fee in the sum of $25,000.
5. To induce Lender to accept this Amendment, Borrower makes the
following representations, warranties and covenants:
<PAGE>
(a) Each and every recital, representation and warranty
contained in the Loan Agreement is correct as of the date of this
Amendment.
(b) No event has occurred or is continuing which constitutes
or would, with the giving of notice, the passage of time, or both,
constitute an Event of Default under the Loan Agreement.
(c) There has been no material adverse change in Borrower's
business or financial condition or prospects since the date of
Borrower's most recent audited annual financial statement furnished to
Lender.
(d) Borrower shall pay all expenses, including attorney fees,
which Lender incurs in connection with the preparation of this
Amendment and any related documents.
6. Except as specifically provided above, the Loan Agreement and all
related agreements and documents shall remain fully valid, binding and
enforceable according to their terms.
7. We hereby waive and discharge any and all defenses, claims,
counterclaims and offsets which we may have against you and which have arisen or
accrued through the date of this Amendment. We acknowledge that you and your
employees, agents and attorneys have made no representations or promises to us
except as specifically reflected in this Amendment and in the written agreements
which have been previously executed.
BORROWER: PST VANS, INC.
By /s/ Neil R. Vos
-------------------------------------------
Title CFO
----------------------------------------
LENDER CONGRESS FINANCIAL CORPORATION
(NORTHWEST)
By /s/ Drew Stawin
Title VP
----------------------------------------
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 531522
<SECURITIES> 0
<RECEIVABLES> 19417646
<ALLOWANCES> (887266)
<INVENTORY> 508056
<CURRENT-ASSETS> 21247168
<PP&E> 76523922
<DEPRECIATION> (25273178)
<TOTAL-ASSETS> 81008522
<CURRENT-LIABILITIES> 39973323
<BONDS> 0
0
0
<COMMON> 4254
<OTHER-SE> 18172135
<TOTAL-LIABILITY-AND-EQUITY> 81008522
<SALES> 0
<TOTAL-REVENUES> 70880355
<CGS> 0
<TOTAL-COSTS> 67856537
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (2399123)
<INCOME-PRETAX> 655620
<INCOME-TAX> (25000)
<INCOME-CONTINUING> 630620
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 630620
<EPS-PRIMARY> .148
<EPS-DILUTED> .145
</TABLE>
