<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) March 31, 1996
AMPACE CORPORATION
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware
- -------------------------------------------------------------------------------
(State or other jurisdiction of incorporation)
0-25352 36-3988574
- -------------------------------------------------------------------------------
(Commission File Number) (I.R.S. Employer
Identification No.)
130 Mabry Hood Road, Suite 220
Knoxville, Tennessee 37922
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(423) 691-5799
- -------------------------------------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
N/A
- -------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
<PAGE> 2
BACKGROUND OF THE TRANSACTION
Effective March 31, 1996, the registrant, Ampace Corporation, completed
the acquisition of all of the outstanding shares of the issued and outstanding
capital stock of Amanday Express, Inc. from Carl A. Cheshire and Elizabeth B.
Cheshire.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
In accordance with the instructions to Form 8-K, the required financial
information is attached hereto within the designated filing period.
(a) Financial Statements of Business Acquired. The following
financial statements for Amanday Express, Inc. are filed with this report,
pursuant to Item 7(a) of Form 8-K:
(i) balance sheet at December 31, 1995 (audited); and
(ii) statements of operation for the years ended December
31, 1995 and 1994 (audited).
(b) Pro Forma Financial Information. The following pro forma
financial statements for the combination of the registrant and Amanday Express,
Inc. are filed with this report pursuant to Item 7(b) of Form 8-K:
(i) balance sheet at December 31, 1995; and
(ii) statement of operation for the year ended December 31,
1995.
-2-
<PAGE> 3
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.
AMPACE CORPORATION
Date May 28, 1996 BY: /s/ Bruce W. Jones
---------------------------------------
Bruce W. Jones, Chief Financial Officer
(Signature)
-4-
<PAGE> 4
AMANDAY EXPRESS, INC.
Financial Statements
December 31, 1994 and 1995
(With Independent Auditors' Report Thereon)
<PAGE> 5
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Amanday Express, Inc.:
We have audited the accompanying balance sheet of Amanday Express, Inc. as of
December 31, 1995, and the related statements of operations, stockholders'
equity, and cash flows for each of the years in the two-year period 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 audits.
We conducted our audits 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 audits provide 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 Amanday Express, Inc. as of
December 31, 1995 and the results of its operations and its cash flows for each
of the years in the two-year period then ended in conformity with generally
accepted accounting principles.
KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Little Rock, Arkansas
April 17, 1996
<PAGE> 6
AMANDAY EXPRESS, INC.
Balance Sheet
December 31, 1995
<TABLE>
<S> <C>
ASSETS
------
Current assets:
Cash and cash equivalents (note 3) $ 114,711
Accounts receivable, less allowance for doubtful accounts of $14,961 444,201
Net investment in sales-type leases (note 2) 138,195
Current portion of due from stockholders (note 6) 44,418
Due from employees 1,895
Prepaid expenses 26,809
----------
Total current assets 770,229
----------
Property and equipment, at cost (notes 3 and 4):
Revenue and service equipment 3,817,579
Land 48,961
Buildings and improvements 307,907
Furniture and office equipment 41,645
----------
Total property and equipment 4,216,092
Less accumulated depreciation and amortization 1,580,687
----------
Net property and equipment 2,635,405
----------
Due from stockholders, excluding current portion (note 6) 177,670
Net investment in sales-type leases (note 2) 162,650
----------
$3,745,954
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Current installments of long-term debt (note 3) 209,367
Current installments of obligations under capital leases (note 4) 452,552
Trade accounts payable 126,066
Accrued expenses 14,356
Deposits 27,800
Income taxes payable 1,434
----------
Total current liabilities 831,575
Long-term debt, excluding current installments (note 3) 537,645
Obligations under capital leases, excluding current installments (note 4) 867,256
Deferred income taxes (note 5) 60,336
----------
Total liabilities 2,296,812
----------
Stockholders' equity (note 6):
Common stock, $100 par value. Authorized 1,000 shares,
issued and outstanding 406 shares 40,600
Retained earnings 1,408,542
----------
Total stockholders' equity 1,449,142
Commitments and contingencies (notes 4 and 6)
----------
$3,745,954
==========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 7
AMANDAY EXPRESS, INC.
Statements of Operations
Years ended December 31, 1994 and 1995
<TABLE>
<CAPTION>
1994 1995
---- ----
<S> <C> <C>
Operating revenues $7,816,586 7,789,058
---------- ---------
Operating expenses:
Salaries, wages and employee benefits 2,219,210 2,431,697
Purchased transportation 1,543,598 1,906,615
Fuel 1,146,888 892,983
Depreciation and amortization 634,213 709,097
Rent (note 4) 152,098 100,329
Operating supplies and expenses 622,267 449,946
Insurance and claims 532,971 533,141
Operating taxes and licenses 58,324 76,595
General and administrative expenses 44,407 69,929
Communication and utilities 34,114 31,905
---------- ---------
Total operating expenses 6,988,090 7,202,237
---------- ---------
Operating income 828,496 586,821
---------- ---------
Other income (deductions):
Interest income 26,039 34,137
Interest expense (154,701) (175,651)
Gain on sale of equipment 86,324 198,501
Other, net 79,367 73,204
---------- ---------
37,029 130,191
---------- ---------
Income before income taxes 865,524 717,012
Income taxes (note 5) 341,943 280,210
---------- ---------
Net income $ 523,581 436,802
========== =========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 8
AMANDAY EXPRESS, INC.
Statements of Stockholders' Equity
Years ended December 31, 1994 and 1995
<TABLE>
<CAPTION>
Common stock Total
----------------- Retained stockholder's
Shares Amount earnings equity
------ ------ -------- -------------
<S> <C> <C> <C> <C>
Balances at December 31, 1993 406 $40,600 463,014 503,614
Dividends - - (14,855) (14,855)
Net income - - 523,581 523,581
--- ------- --------- ---------
Balances December 31, 1994 406 40,600 971,740 1,012,340
Net income - - 436,802 436,802
--- ------- --------- ---------
Balances at December 31, 1995 406 $40,600 1,408,542 1,449,142
=== ======= ========= =========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 9
AMANDAY EXPRESS, INC.
Statements of Cash Flows
Years ended December 31, 1994 and 1995
<TABLE>
<CAPTION>
1994 1995
---- ----
<S> <C> <C>
Operating activities:
Net income $ 523,581 436,802
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 634,213 709,097
Deferred income taxes 37,002 26,720
Gain on disposal of property and equipment (86,324) (198,501)
Changes in operating assets and liabilities:
Accounts receivable (105,151) (162,263)
Due from employees 6,305 (855)
Prepaid expenses - 3,041
Trade accounts payable (758) 7,224
Accrued expenses (32,687) 11,709
Deposits 27,650 (16,350)
Income taxes payable 115,559 (151,778)
---------- --------
Net cash provided by operating activities 1,119,390 664,846
---------- --------
Investing activities:
Collections of amounts due from stockholders 77,819 27,475
Advances to stockholders - (173,237)
Proceeds from sale of property and equipment 23,900 378,758
Purchases of property and equipment (424,866) (305,880)
Collections of net investment in sales-type leases 39,075 96,501
---------- --------
Net cash provided (used) by investing activities (284,072) 23,617
---------- --------
Financing activities:
Dividends paid (14,855) -
Proceeds from long-term debt 117,820 -
Principal payments on long-term debt (389,823) (452,744)
Principal payments on capital lease obligations (294,818) (387,493)
---------- --------
Net cash used in financing activities (581,676) (840,237)
---------- --------
Net increase (decrease) in cash and cash equivalents 253,642 (151,774)
Cash and cash equivalents at beginning of period 12,843 266,485
---------- --------
Cash and cash equivalents at end of period $ 266,485 114,711
---------- --------
Supplementary disclosure of cash flow information:
Interest paid $ 154,701 175,651
Income taxes paid 189,382 405,268
Acquisition of equipment for long-term debt - 893,967
Acquisition of equipment through capital leases 1,369,561 298,204
Sale of equipment through sales-type leases 223,027 167,363
========== ========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 10
AMANDAY EXPRESS, INC.
Notes to Financial Statements
December 31, 1994 and 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Amanday Express, Inc. ("Company") is an irregular route, common and contract
motor carrier specializing in dry van full truckload transportation
services. Significant accounting policies are as follows:
(a) Use of Estimates
Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the
disclosure of contingent assets and liabilities to prepare these
financial statements in conformity with generally accepted accounting
principles. Actual results could differ from those estimates.
(b) Revenue Recognition
Revenue is recognized when the goods are delivered to the customer. Costs
and related expenses are recorded as incurred.
(c) Leasing Operations
The Company's leasing operations consist of leases of revenue and
service equipment to owner/operator drivers. The leases are
classified as sales-type leases. The leases expire over the next
three years.
(d) Property and Equipment
Equipment under capital leases is stated at the lower of the present value
of minimum lease payments at the beginning of the lease term or fair
value at the inception of the lease. Depreciation on property and
equipment is calculated on the straight-line method over each asset's
estimated useful life, 3 - 5 years for revenue and service equipment,
10 - 40 years for building and improvements, and 3 - 7 years for
furniture and equipment. Amortization of equipment under capital
leases is provided on the straight-line method over the shorter of
the lease term or estimated useful lives of the assets.
(e) Income Taxes
The Company accounts for income taxes under the asset and liability
method. Deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and
liabilities and their respective tax bases and operating loss and tax
credit carryforwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income
in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.
(Continued)
<PAGE> 11
2
AMANDAY EXPRESS, INC.
Notes to Financial Statements
(f) Cash Equivalents
The Company considers all highly liquid investments with maturities
of three months or less when acquired to be cash equivalents.
(g) Credit Risk
Two customers accounted for approximately 58% and 59% of the
Company's revenues for the years ended December 31, 1994 and 1995,
respectively.
Financial instruments which potentially subject the Company to
concentrations of credit risk consist primarily of trade receivables.
Other than the above mentioned major customers, concentrations of
credit risk with respect to trade receivables are limited due to the
number of customers and range of industries which they represent. The
Company does not require collateral or security from its customers.
The amount of loss should customers fail to pay the receivables is
limited to the notional amount of such receivables.
2. NET INVESTMENT IN SALES-TYPE LEASES
The following are the components of the net investment in sales-type
leases as of December 31, 1995:
<TABLE>
<S> <C>
Minimum lease payments to be received in:
1996 $158,391
1997 112,650
1998 38,648
--------
Total minimum lease payments to be received 309,689
Estimated residual values of leased property,
unguaranteed 26,650
Less unearned income (35,494)
--------
Net investment in sales-type leases 300,845
Less current portion (138,195)
--------
$162,650
========
</TABLE>
3. DEBT
(a) Notes Payable
At December 31, 1995 the Company had a $200,000 revolving line of credit
arrangement with a bank which was terminated on March 29, 1996.
Borrowings under the line of credit are due on demand, bear interest
at .50% over the bank's prime rate, are secured by real estate, and
are guaranteed by the Company's stockholders. At December 31, 1995,
there were no borrowings outstanding under the line of credit. The
Company also has a $15,000 letter of credit outstanding at December
31, 1995 which is secured by a certificate of deposit of the same
amount.
(Continued)
<PAGE> 12
3
AMANDAY EXPRESS, INC.
Notes to Financial Statements
(b) Long-term debt
Long-term debt consists of the following at December 31, 1995:
<TABLE>
<S> <C>
Note payable in monthly installments of $22,250
plus interest at 9.42% with the balance due July
1999, collateralized by revenue equipment having
a depreciated cost of $760,581 $740,312
8.75% equipment note payable in monthly
installments through November 1997 6,700
--------
747,012
Less current maturities 209,367
--------
$537,645
========
</TABLE>
Aggregate annual maturities of long-term debt as of December 31, 1995 are
as follows: 1996 - $209,367; 1997 - $229,621; 1998 - $248,537; and,
1999 -$59,487.
4. LEASES
The Company is obligated under various capital leases for certain revenue
and service equipment that expire at various dates during the next three
years. At December 31, 1995, the gross amount of property and equipment
and related accumulated amortization recorded under capital leases were
as follows:
<TABLE>
<S> <C>
Revenue and service equipment $2,068,787
Less accumulated amortization 804,566
----------
$1,264,221
==========
</TABLE>
Amortization of assets held under capital leases is included with
depreciation expense. All operating leases expired in 1995
Future minimum payments under capital leases as of December 31, 1995 are:
<TABLE>
<S> <C>
1996 $ 539,809
1997 742,983
1998 181,200
----------
Total minimum lease payments 1,463,992
Less amount representing interest 144,184
----------
Present value of net minimum capital
lease payments 1,319,808
Less current installments of obligations
under capital leases 452,552
----------
Obligations under capital leases, excluding
current installments $ 867,256
==========
</TABLE>
(Continued)
<PAGE> 13
4
AMANDAY EXPRESS, INC.
Notes to Financial Statements
5. INCOME TAXES
Income tax expense consists of:
<TABLE>
<CAPTION>
1994 1995
---- ----
<S> <C> <C>
Current:
Federal $244,380 202,675
State 60,561 50,815
-------- -------
Total current 304,941 253,490
-------- -------
Deferred:
Federal 29,671 21,426
State 7,331 5,294
-------- -------
Total deferred 37,002 26,720
-------- -------
$341,943 280,210
======== =======
</TABLE>
Income tax expense differs from the amounts computed by applying the U.S.
Federal income tax rate of 34 percent to income before income taxes as a
result of the following:
<TABLE>
<CAPTION>
1994 1995
---- ----
<S> <C> <C>
Computed "expected" tax expense $294,278 243,784
State income taxes, net of Federal benefit 44,809 37,032
Other, net 2,856 (606)
-------- -------
$341,943 280,210
======== =======
</TABLE>
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at
December 31, 1995 are presented below:
<TABLE>
<S> <C>
Deferred tax assets:
Capitalized leases $21,743
Bad debts 5,852
-------
Total gross deferred tax assets 27,595
-------
Deferred tax liabilities:
Investment in sales-type leases 69,384
Property and equipment 18,547
-------
Total deferred tax liabilities 87,931
-------
Net deferred tax liabilities $60,336
=======
</TABLE>
(Continued)
<PAGE> 14
5
AMANDAY EXPRESS, INC.
Notes to Financial Statements
In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the
deferred tax assets will not be realized. The ultimate realization of
deferred tax assets is dependent upon the generation of future taxable
income during the periods in which those temporary differences become
deductible. Management considers the scheduled reversal of deferred tax
liabilities, projected future taxable income, and tax planning strategies
in making this assessment. Taxable income for the years ended December 31,
1994 and 1995 was $657,079 and $736,488, respectively. Based upon the
level of historical taxable income and projections for future taxable
income over the periods which the deferred tax assets are deductible,
management believes it is more likely than not that the Company will
realize the benefits of these deductible differences. Accordingly, no
valuation allowance for deferred tax assets has been established at
December 31, 1995.
6. COMMITMENTS AND CONTINGENCIES
The Company is involved in certain claims and pending litigation arising from
the normal conduct of business. Based on the present knowledge of the
facts, and in certain cases, opinions of outside counsel, management
believes the resolution of claims and pending litigation will not have a
material adverse effect on the financial condition of the Company.
On February 29, 1996, the Company, its stockholders and Ampace Corporation
("Ampace") entered into an agreement whereby Ampace would acquire all of
the outstanding shares of the Company from its stockholders. The
acquisition closed effective March 31, 1996 at which time the Company
effectively became a wholly-owned subsidiary of Ampace. In connection with
the acquisition, Ampace entered into a five year noncompete agreement with
the stockholders of the Company. Pursuant thereto, the stockholders will
receive consideration of $77,400 per year for each year of the agreement.
Payments will be made in annual installments with the first payment due at
closing.
In connection with the acquisition, the amounts due from stockholders have
been restructured into a non interest bearing note receivable payable in
five equal annual installments with such payments to be offset against the
noncompete payments referred to above. Accordingly, $44,418 of such
amounts have been classified as current in the accompanying balance sheet.
7. FAIR VALUES OF FINANCIAL INSTRUMENTS
Fair values of cash and cash equivalents, accounts receivable and trade
accounts payable approximates carrying value because of the short maturity
of these instruments. Fair values of net investment in sales-type leases
are based upon the present value of future cash flows discounted at rates
currently offered by the Company for similar leases. The fair value of due
from stockholders is not readily determinable due to the related party
nature of the receivable. Fair values of fixed rate debt are based upon
the present value of future cash flows discounted at rates currently
offered to the Company for similar debt instruments of comparable
maturities by Company's bankers. Fair values of obligations under capital
leases are estimated by discounting the future minimum payments under
capital leases at rates currently offered to the Company for similar
leases with comparable terms.
(Continued)
<PAGE> 15
6
AMANDAY EXPRESS, INC.
Notes to Financial Statements
The estimated fair values of the Company's financial instruments at
December 31, 1995 are summarized as follows:
<TABLE>
<CAPTION>
Carrying Estimated
amount fair value
-------- ----------
<S> <C> <C>
Cash and cash equivalents $ 114,711 114,711
Accounts receivable 444,201 444,201
Net investment in sales-type leases 300,845 301,540
Trade accounts payable 126,066 126,066
Long-term debt 747,012 757,601
Obligations under capital leases 1,319,808 1,305,227
========== =========
</TABLE>
<PAGE> 16
PRO FORMA CONDENSED FINANCIAL DATA
(UNAUDITED)
The following unaudited Pro Forma Condensed Financial Data gives effect to the
acquisition of all of the outstanding capital stock of Amanday Express, Inc.
("Amanday") by Ampace Corporation ("Company") in exchange for $2,000,000
(consisting of 275,000 shares of common stock of the Company, cash of
$1,000,000, and a note payable of $100,000). The Company also incurred $54,561
of costs associated with the acquisition. The pro forma condensed financial
data has been prepared using the purchase method of accounting. Accordingly,
the purchase price has been allocated to Amanday's net assets based upon
estimated fair values.
The unaudited Pro Forma Condensed Balance Sheet is derived from the balance
sheets of the Company and Amanday as of December 31, 1995 and assumes that the
acquisition of Amanday was consummated on December 31, 1995. The unaudited Pro
Forma Condensed Statement of Operations is derived from the statements of
operations of the Company and Amanday for the year ended December 31, 1995 and
assumes that the acquisition of Amanday was consummated on January 1, 1995.
The unaudited pro forma condensed financial data should be read in conjunction
with the financial statements and related notes thereto of the Company and
Amanday.
The pro forma information does not purport to be indicative of the results that
would actually have been obtained if the acquisition had occurred on the dates
indicated or of the results that may be obtained in the future. The proforma
information is presented for comparative purposes only. The pro forma
adjustments described in the accompanying notes are based upon estimates
derived from information currently available. The ultimate recording of the
transactions will be based on actual timing, appraisals, costs, and evaluations
which may result in differences from the proforma adjustments presented.
<PAGE> 17
UNAUDITED PROFORMA CONDENSED BALANCE SHEET
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Assets Ampace Amanday Adjustments(1) Proforma
------ ------ ------- -------------- --------
<S> <C> <C> <C> <C>
Current Assets:
Cash and cash equivalents $ 1,395,640 114,711 (1,000,000) 510,351
Accounts receivable, net 3,226,986 444,201 - 3,671,187
Prepaid expenses and
other current assets 1,025,059 211,317 - 1,236,376
----------- --------- ---------- ----------
Total current assets 5,647,685 770,229 (1,000,000) 5,417,914
Property and equipment, net 11,422,900 2,635,405 718,692 14,776,997
Other assets 1,330,597 340,320 163,224 1,834,141
----------- --------- ---------- ----------
$18,401,182 3,745,954 (118,084) 22,029,052
=========== ========= ========== ==========
Liabilities and
Stockholders' Equity
--------------------
Current liabilities:
Current installments of
long-term debt and
obligations under capital
leases 4,017,663 661,919 - 4,679,582
Accounts payable and
accrued expenses 1,149,779 169,656 54,561 1,373,996
----------- --------- ---------- ----------
Total current
liabilities 5,167,442 831,575 54,561 6,053,578
Long-term debt and obligations
under capital leases, excluding
current installments 6,517,681 1,404,901 91,596 8,014,178
Deferred income taxes 378,154 60,336 284,901 723,391
Stockholders' equity:
Common stock 280 40,600 (40,572) 308
Additional paid-in capital 6,575,902 - 899,972 7,475,874
Retained earnings (deficit) (238,277) 1,408,542 (1,408,542) (238,277)
----------- --------- ---------- ----------
Total stockholders' equity 6,337,905 1,449,142 (549,142) 7,237,905
----------- --------- ---------- ----------
$18,401,182 3,745,954 (118,084) 22,029,052
=========== ========= ========== ==========
</TABLE>
(1) For proforma purposes, the excess of the purchase price of Amanday over
its book value has been allocated to the following assets and liabilities,
based upon fair value of such assets and liabilities.
<TABLE>
<S> <C>
Land $ 25,639
Buildings 50,181
Revenue and service equipment 642,872
Due from stockholders 1,272
Goodwill 161,952
Obligations under capital leases 8,404
Deferred income taxes (284,901)
---------
$ 605,419
=========
</TABLE>
<PAGE> 18
UNAUDITED PROFORMA CONDENSED STATEMENT OF OPERATION
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
Ampace Amanday Adjustments(1) Proforma
----------- --------- -------------- --------
<S> <C> <C> <C> <C>
Operating revenues $21,241,626 7,789,058 - 29,030,684
Operating expenses 21,025,683 7,202,237 225,512 (2) 28,453,432
----------- --------- ----------- ----------
Operating income 215,943 586,821 (225,512) 577,252
Other income (deductions), net (661,076) 130,191 (45,468)(3) (576,353)
----------- --------- ----------- ----------
Income (loss) before income
taxes (445,133) 717,012 (270,980) 899
Income taxes (benefit) (207,245) 280,210 (82,524)(4) (9,559)
----------- --------- ----------- ----------
Net income (loss) $ (237,888) 436,802 (188,456) 10,458
=========== ========= =========== ==========
Earnings per share $ (.09) -
=========== ==========
Average shares outstanding 2,588,434 300,000(5) 2,888,434
=========== =========== ==========
</TABLE>
(1) For proforma purposes, the excess of the purchase price of Amanday over its
book value has been allocated to the following assets and liabilities,
based upon fair value of such assets and liabilities. Buildings and
revenue and service equipment are being amortized over their estimated
useful lives or remaining lease term, whichever is shorter. Goodwill is
being amortized over 15 years.
<TABLE>
<S> <C>
Land $25,639
Buildings 50,181
Revenue and service equipment 642,872
Due from stockholders 1,272
Goodwill 161,952
Obligations under capital leases 8,404
Deferred income taxes (284,901)
----------
$ 605,419
==========
</TABLE>
(2) To adjust for depreciation and amortization of the
purchase price allocated to property and equipment and goodwill.
(3) To adjust for reduction of interest income on the $1,000,000
cash paid, net of interest income on the note due from stockholders.
(4) To adjust for the tax effect of other proforma adjustments.
(5) Weighted average shares include the 275,000 shares issued in connection
with the acquisition plus the 25,000 shares contingently issuable.
