Part 1. Financial Information.
Item 1. Financial Statements.PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
MAYFLOWER GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three months ended Six months ended
June 30, June 30,
------------------ ----------------
(In thousands, March 31,
except per share data) 1994 1993 - ----------------------------------------------------------1994 1993
------------------ -----------------
(Unaudited)
Operating revenues:
Contract Services $ 73,91568,317 $ 65,32959,021 $142,232 $124,350
Transit 94,783 87,642
----------------------
168,698 152,971117,046 109,588 211,829 197,230
-------- -------- -------- --------
185,363 168,609 354,061 321,580
-------- -------- -------- --------
Operating expenses:
Contract Services 63,172 54,22264,480 54,714 130,767 112,212
Transit 79,518 74,315
General and administrative 21,469 21,158
----------------------114,281 107,158 211,899 199,050
Corporate expenses 176 120 430 425
-------- -------- -------- --------
Operating profit 4,539 3,2766,426 6,617 10,965 9,893
Other income (expense):
Interest income 257 521241 667 498 1,188
Interest expense (2,127) (2,241)(2,274) (2,072) (4,401) (4,313)
Other, net (11) (122)
----------------------(53) (57) (64) (179)
-------- -------- -------- --------
Income before federal income
taxes 2,658 1,434and extraordinary
loss 4,340 5,155 6,998 6,589
Provision for federal income
taxes 1,006 509
----------------------1,597 1,807 2,603 2,316
-------- -------- -------- --------
Income before extraordinary loss 2,743 3,348 4,395 4,273
Extraordinary loss on early
retirement of debt --- (549) --- (549)
-------- -------- -------- --------
Net income $ 1,6522,743 $ 925
======================2,799 $ 4,395 $ 3,724
======== ======== ======== ========
Weighted average shares
outstanding 12,757 12,70812,705 12,713 12,741 12,706
Earnings per shareshare:
Income before extra-
ordinarary loss $ .13.22 $ .07
======================.26 $ .34 $ .33
Extraordinary loss --- (.04) --- (.04)
-------- -------- -------- --------
Net income $ .22 $ .22 $ .34 $ .29
======== ======== ======== ========
See notes to condensed consolidated financial statements.
MAYFLOWER GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
As of As of
MarchJune 30, December 31, December 3
(Dollars in thousands) 1994 1993
- -------------------------------------- ---------------------------------- ------------
(Unaudited)
Assets :
Current assets:
Cash $ 6,0527,516 $ 6,093
Receivables:
Trade receivables 75,98769,502 74,136
Accrued unbilled accounts receivable 15,50826,186 16,845
Other 16,92418,504 15,814
Less allowance for possible
collection losses (6,446)(6,492) (6,174)
---------------------------------- ---------
Total receivables 101,973107,700 100,621
Equipment and inventory held for resale 12,13413,538 8,911
Deferred income taxes 13,23013,883 13,230
Prepaid expenses and deposits 8,7079,082 8,147
---------------------------------- ---------
Total current assets 142,096151,719 137,002
Property and equipment:
Land 2,175 2,175
Buildings and improvements 16,72816,806 16,273
Revenue equipment 122,360125,731 117,561
Other operating equipment and improvements 9,85010,726 9,072
Less accumulated depreciation (35,004)(39,261) (30,334)
---------------------------------- ---------
Net property and equipment 116,109116,177 114,747
Intangible assets 52,29351,534 53,372
Other assets 18,91218,891 17,556
---------------------------------- ---------
$ 329,410338,321 $ 322,677
============= =================== =========
Liabilities and shareholders' investment:
Current liabilities:
Current maturities of long- termlong-term debt $ 2,6822,707 $ 2,276
Trade accounts payable 37,66538,962 39,141
Accrued expenses and deposits:
Liabilities on unbilled shipments 8,63314,016 9,026
Reserve for self- insuredself-insured claims 30,35328,546 28,940
Salaries and withholding taxes 11,55111,033 6,755
Other 10,65811,288 11,667
---------------------------------- ---------
Total current liabilities 101,542106,552 97,805
Noncurrent liabilities:
Long-term debt, less current maturities 96,60295,931 95,407
Deferred income taxes 29,96328,914 29,963
Reserve for self- insuredself-insured claims,
less current portion 11,21014,010 11,210
Accrued postretirementpost retirement benefits cost 5,7525,815 5,621
Shareholders' investment:
Common shares; no par value; 30,000,000
authorized; issued and outstanding:
12,662,52912,662,562 in 1994 and 12,662,403
in 1993 73,88373,898 73,865
Retained earnings 10,45813,201 8,806
---------------------------------- ---------
Total shareholders' investment 84,34187,099 82,671
---------------------------------- ---------
$ 329,410338,321 $ 322,677
============= =================== =========
See notes to condensed consolidated financial statements.
MAYFLOWER GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
ThreeSix Months Ended March 31,June 30,
-------------------------
(Dollars in thousands) 1994 1993
- ----------------------------------------- --------------------------------------- ----------
(Unaudited)
Net cash provided by (used in):
Operating activities $5,908 $8,041$ 13,375 $ 11,791
Investing activities (7,550) (1,646)(12,909) (14,536)
Financing activities 1,601 (12,528)
----------------------------
(41) (6,133)957 9,893
--------- ---------
1,423 7,148
Cash and cash equivalents-beginningequivalents- beginning of quarterperiod 6,093 9,449
------------------------------------- ---------
Cash and cash equivalents- end of quarter $6,052 $3,316
============ ============period $ 7,516 $ 16,597
========= =========
Operating activities:
Net income $1,652 $925$ 4,395 $ 3,724
Add items not affecting cash:
Depreciation 4,856 4,4899,828 8,912
Amortization and other 1,204 1,6992,380 3,199
Deferred income taxes (1,703) ---
Extraordinary loss --- 871
Changes in certain working capital items:
Receivables (1,352) 1,280(7,079) (8,477)
Equipment and inventory held for
resale (3,223) (8,021)(4,627) (12,101)
Prepaid expenses and deposits (560) 903(935) 130
Trade accounts payable (1,476) 6,546(180) 9,865
Reserve for self- insuredself-insured claims 1,413 1,1562,406 418
Other accrued expenses and deposits 3,394 (936)
----------------------------8,890 5,250
--------- ---------
Net cash provided by operating activities $5,908 $8,041
============ ============$ 13,375 $ 11,791
========= =========
Investing activities:
Purchases of property and equipment ($6,621) ($1,578)$ (12,680) $ (4,961)
Proceeds from disposaldisposals of property
and equip., less gains included in net income 402 531equipment 1,423 1,302
Increase in other noncurrent assets
and noncurrent liabilities (1,331) (599)
----------------------------(1,652) (10,877)
--------- ---------
Net cash used in investing activities ($7,550) ($1,646)
============ ============$ (12,909) $ (14,536)
========= =========
Financing activities:
Proceeds from long- termlong-term debt $2,218 $4,130$ 2,268 $ 89,440
Payment of long- termlong-term debt (617) (10,058)(1,311) (70,077)
Net change in revolving credit agreeementsagreements --- (6,600)
----------------------------(9,470)
--------- ---------
Net cash provided by (used in)
financing activities $1,601 ($12,528)
============ ============$ 957 $ 9,893
========= =========
See notes to condensed consolidated financial statements.
MAYFLOWER GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
1. BASIS OF PRESENTATION
The unaudited condensed consolidated financial statements presented
herein are prepared pursuant to the rules and regulations of the Securities and
Exchange Commission for interim financial reporting. Certain information and
footnote disclosures normally included in annual financial statements prepared
in accordance with generally accepted accounting principles are condensed,
incorporated by reference or omitted, as allowed by the rules and regulations.
Management of the Company believes the interim financial statements include
all adjustments, including normal recurring adjustments, necessary for a fair
presentation of the financial condition and results of operations for the
interim periods presented. Reference is made to the Notes to Consolidated
Financial Statements included in the Company's 1993 Report on Form 10-
K10-K for a
summary of significant accounting policies and other information, the
substance of which has not changed materially as of March 31,June 30, 1994, unless
otherwise noted herein. Certain amounts within the 1993 Condensed
Consolidated Financial Statements are reclassified to conform with the 1994
presentation.
2. OPERATING PROFIT
Operating profit by segment is as follows (dollars in thousands):
Three months ended March 31,Six months ended
June 30, June 30,
1994 1993 --------------------1994 1993
------------------ ------------------
Contract Services $ 7,628 $ 7,831$3,837 $4,307 $11,465 $12,138
Transit (2,835) (4,250)2,765 2,430 (70) (1,820)
Corporate expenses (254) (305)
--------------------(176) (120) (430) (425)
------ ------ ------- -------
$6,426 $6,617 $10,965 $ 4,539 $ 3,276
====================9,893
====== ====== ======= =======
3. COMMITMENTS AND CONTINGENCIES
Contract Services and Transit are involved from time to time in various
actions that are incidental to the ordinary course of their businesses,
including property damage and personal injury claims. Management believes
that the disposition of these matters will not have a material adverse effect
on the financial position of the Company.
4. PROVISION FOR FEDERAL INCOME TAXES
For 1994 andEXTRAORDINARY LOSS
In May 1993, effective rates that differed from the U.S. federal
statutory rates were used in recording federal tax expense. TheCompany refinanced its primary reasons for this difference are the nondeductibility of amortization of
certain intangible assets and the increasedebt facilities. This
refinancing resulted in the U.S. federal statutory ratewrite-off of $549,000 of deferred debt costs, net of
tax, which has been accounted for as an extraordinary loss.
5. AMENDMENT TO ARTICLES OF INCORPORATION
At the Company's annual meeting of shareholders in April 1994, upon the
recommendation of the Board of Directors, the shareholders of the Company
amended the Corporation's Articles of Incorporation (Articles) . The
amendment: (1) eliminated the prohibition on the issuance of classes of capital
stock without voting rights, (2) authorized a separate and single class of
5,000,000 shares of preferred stock issuable in series, and (3) granted the
Board of Directors the authority to 35%determine and state the designations and
relative preferences, limitations, voting rights, if any, and other rights of
each such series by filing an amendment to the Articles. All shares of
preferred stock of the same series must be identical with each other in all
respects. As of the date of the filing of this Form 10-Q, no preferred stock
has been issued.
6. STOCK PLANS
1994 from 34%Restricted Stock Plan - At the Company's annual meeting of
shareholders in 1993.April 1994, the shareholders of the Company also approved
the Board of Directors' (Board) decision to establish the 1994 Restricted Stock
Plan (Plan). The Plan authorizes the Company to issue 500,000 shares of
restricted common stock, no par value, to officers and other key employees of
the Company and its subsidiaries. The Compensation Committee (Committee)
of the Board will determine the individuals to whom shares will be granted and
will determine the terms of the grants, including the number of shares to be
awarded, the required holding period before restrictions on transferability
lapse, and other restrictions the Committee deems advisable. Grantees of
shares under the Plan shall be entitled to exercise full voting rights and
receive all dividends and other distributions paid with respect to those
shares. As of the date of the filing of this Form 10-Q, no shares have been
granted under the Plan.
Stock Option Plans - At the Company's annual meeting of shareholders in
April 1994, the shareholders of the Company also approved an amendment to
one of the Company's stock option plans. The amendment increases the
number of shares of common stock issuable under the option plans to 560,000
shares. Concurrent with this approval, the Committee granted to directors of
the Company and certain officers and key employees of the Company and its
subsidiaries options to acquire 152,000 shares of common stock at an exercise
price of $8.625 per share.
7. AMENDED FINANCING AGREEMENT
In June 1994, the Company amended the financing agreement used by
Contract Services to finance the acquisition of new school buses. The
amended financing agreement, which now extends through December 1995,
provides an additional $15 million borrowing capacity and slightly reduced
interest rates.
8. INVESTMENT BANKING FIRM RETAINED
The Company's Board of Directors has retained an investment banking
firm to explore alternatives to enhance shareholder value. These alternatives
may include the possibility of a sale, a spin-off to shareholders of one or both
of the Company's principal subsidiaries, or a combination with one or more
businesses complementary to the Company's existing operations. No decision
has been made as to whether, when, or in what form a transaction will take
place.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31,JUNE 30, 1994 COMPARED WITH
THREE MONTHS ENDED MARCH 31,JUNE 30, 1993
Operating revenues for the three monthssecond quarter ended March 31,June 30, 1994 totaled
$168.7were
$185.4 million, or an increase of 10.3%10% over operating revenues of $153.0$168.6 million
during the firstsecond quarter last year. Net income for the three months ended
March 31,June 30, 1994 was $1.7$2.7 million, comparedor $.22 per share, which was comparable to $925,000the
$2.8 million, or $.22 per share, recorded for the same period in 1993. Results
for the second quarter of 1993 include an extraordinary charge of $549,000, or
$.04 per share, for the early retirement of debt. Operating profits for the
1994 second quarter dropped slightly to $6.4 million from $6.6 million for the
comparable period in 1993.
Contract Services
Contract ServicesServices' operating revenues for the three months ended March 31,June 30,
1994 were $73.9$68.3 million compared to $65.3versus $59 million for the same period in 1993, an
increase of 13.1%15.8%. Public Transportation revenues increased $7.3$7.5 million, or
48.4%46%, to $22.4 million. This growth is
attributable$23.8 million primarily due to revenues earned from new customer contracts for
paratransit services and an acquisition in September 1993continued expansion of a publicthis business.
School transportation company located in North Carolina. School Transportation revenues increased $1.3$1.8 million, or 2.6%4.1%, to $51.5$44.5 million
due largelyprincipally as a result of improved pricing on new contracts as compared to
price increases.previously expired arrangements.
Operating profit for the three months ended March 31,June 30, 1994 was $7.6$3.8 million,
a net decrease of $200,000$500,000 from the same period in 1993. AlthoughWhile Public
Transportation gross margin increased by $1 million, a $1.2 million decrease in
School Transportation gross margin increased approximately
$600,000 and a $225,000 increase in general and
administrative expenses were lower by
$200,000, a decrease of $1.0 millionmore than offset this improvement.
The increase in Public Transportation gross margin
more than offset these favorable items.
The School Transportation gross margin increase was due principally to
increased revenues from the continued expansion of this business and
reductionsreduced accident costs. Offsetting these favorable results was a reduction in
insurance, fuel and driver
operating costs. The decrease in gross margin contributions from PublicSchool Transportation business wasprofit due to operational difficulties in two major
operations, higher start-up costs on a new contract,vehicle maintenance expenses and
an increase in driver wage and related costs, vehicle maintenance expenses and
insurance claims over the comparable period in 1993.
Significant steps have been taken to improve results in Public
Transportation throughout the remainder of this year. Increased pricing
will be effective in the third quarter at one of the larger troubled
operations. The other major service contract with less than desirable
results is scheduled to expire in December 1994. Re-pricing of that
business will be closely reviewed before a decision is made to rebid it.
Management believes the profitability of the new contract will improve
because start-up costs have been reduced.provision for self-insured claims.
Transit
Transit's operating revenues for the three months ended March 31,June 30, 1994
increased $7.5 million, or 6.8%, to $117 million. Operating profits for the
1994 second quarter were $2.8 million compared to $2.4 million in 1993. Both of
Transit's key operating divisions, Household Goods and Special
Transportation Services, posted improved operating revenues and margins for
the second quarter. General and administrative expenses for the quarter
remained flat with prior years.
Household Goods' revenues for the second quarter of 1994 were $94.8$78.5
million compared to $74 million in 1993. While the volume of shipments
decreased slightly from the prior year, a 6.5% increase in the average price
earned per shipment resulted in an increase of $7.1 million, or 8.1%, over$700,000 in line haul and related
revenues. The improvement in the comparable periodaverage price is due to both a 6% general
tariff increase effective March 28, 1994 and the shift from lower priced
government and military shipments to higher priced C.O.D. and corporate
account business. The military and government business has declined industry
wide in 1993. Line haul revenues, the largest component of
Transit revenues, increased $3.2 million, or 6.1%, during the three months
ended March 31, 1994 as compared to last year.1993 resulting in an overall reduction in the
number of shipments. Revenues earned from line haul forMoving and Storage business, a component
of the Household Goods division, increased 9.4%$3.8 million primarily as a result
of the start-up of a new agency in Los Angeles and the acquisition of an
existing agency located in Philadelphia.
Second quarter 1994 operating revenues for the Special Transportation
Services (STS) division were $33.5 million compared to $30.2 million in 1993, an
increase of $3.3 million, or over 10%. Principally all of this revenue increase
occurred in STS's Electronics and Trade Show business and is due to a 5.1%
increase in the number of shipments and a 5.4% increase in the average price
earned per shipment.
While a nominal increase in shipments was realized
during the first quarter of 1994, a significant change in the mix of
shipments (from government and military to COD and corporate
accounts) was the major factorOperating profit for the significant improvement in average
line haul price earned per shipment. Line haul revenues earned for the
Electronics & Trade Show division were flat in comparison to 1993.
Transit's operating loss for the three monthssecond quarter ended March 31,June 30, 1994 was $2.8
million compared to an operating loss of $4.2 million foror $400,000 more than the same period in 1993. Due to the seasonal nature of Transit's business, the first
quarter normally results in a loss.last year. Operating profit was
favorably affectedimpacted by a $1.0 million$350,000 gross margin improvement in the Household
Goods division Transit's largest operating division,due to higher revenues, reduced maintenance expenses, and an increase of
approximately $300,000 in operating profits realized by Transit's
insurance operations compared to the first quarter of 1993.
The improvement of $1.0 million in the Household Goods division
gross margin compared to the first quarter of 1993 was the result of higher
revenues,a
greater emphasis on fleet management and a reduction in net
cargo claims and insurance expenses.management. The heightened emphasis on fleet
management increased driver productivity and retention resulting in reduced
driver recruiting and training costs. Despite the growth in revenues, overhead costsOperating margins for all other areas
combined remained flat.
General and administrative expenses during the firstsecond quarter did not
vary significantly compared to the same period in 1993. Transit is experiencingcontinuing
to experience favorable results from cost containment programs and
organizational changes implemented in the latter part of 1993.
Management anticipates these positive trends will continue.
Interest Income and Interest Expense
Interest income for the three months ended March 31,June 30, 1994 was $257,000$241,000
compared to $521,000$667,000 for the same period in 1993, a decrease of $264,000.$426,000. This
decrease is primarily a result of a change in financing arrangements of
Transit's equipment sales and financing subsidiary. In December 1993, this
subsidiary began selling to various financial institutions installment notes
receivable recorded from sales of equipment by this subsidiary. Previously,
these notes receivable were financed directly by the Company resulting in the
recording of interest income. Beginning in 1994, the positive interest margin
is recorded as a component of operating profit.
Interest expense for the three months ended March 31,June 30, 1994 was $2.1$2.3 million,
a decreasean increase of $114,000$200,000 from the comparable period in 1993. This decreaseincrease is
primarily due to increased borrowings by Contract Services for new bus
acquisitions in the latter half of 1993 partially offset by a reduction in
interest expense due to the change in financing arrangements of Transit's
equipment sales and financing subsidiary.
SIX MONTHS ENDED JUNE 30, 1994 COMPARED WITH SIX
MONTHS ENDED JUNE 30, 1993
Operating revenues for the six months ended June 30, 1994 totaled $354.1
million, an increase of 10.1% over operating revenues of $321.6 million for the
first six months in 1993. Net income for the six month period ended June 30,
1994 was $4.4 million, or $.34 per share, compared to $3.7 million, or $.29 per
share, for the same period in 1993. The 1993 results include an extraordinary
charge of $549,000, or $.04 per share, for the early retirement of debt.
Operating profits for this period improved to $11 million, up from $9.9 million
in 1993.
Contract Services
Contract Services' operating revenues for the six months ended June 30,
1994 were $142.2 million, up from $124.4 million for the same period in 1993,
an increase of 14.3%. Public Transportation revenues increased $14.8 million,
or 47.1%, to $46.2 million primarily due to continued expansion of this
business. Revenues from School Transportation business increased $3.1 million,
or 3.3%, to $96 million, largely as a result of improved pricing on new
contracts as compared to previously expired arrangements.
Operating profit for the six months ended June 30, 1994 was $11.5 million, a
decrease of $675,000 from the same period in 1993. Public Transportation
gross margin was largely unchanged from 1993 while School Transportation
gross margin decreased by $600,000. General and administrative expenses
were flat with 1993 levels.
The Public Transportation gross margin remained unchanged even
though revenues increased. Continued business growth and reduced
accident costs contributed favorably to operating margins. However,
difficulties in two major operations, increased vehicle maintenance expenses
and high start-up costs on a new contract, offset these favorable items.
The gross margin decrease from School Transportation business was due
primarily to an increase in the provision for self-insured claims and higher
vehicle repairs and driver related costs. Increased revenues and reduced fuel
prices offset a portion of these unfavorable decreases.
Transit
Transit's operating revenues for the six months ended June 30, 1994
increased by $14.6 million, or 7.4%, to $211.8 million. Operating profits
for the six month period were at break-even compared to a loss of $1.8 million
in 1993. Both of Transit's key operating divisions, Household Goods and Special
Transportation Services, posted improved operating revenues.
Household Goods' revenues for the first half of 1994 were $138.8 million,
an increase of $9.9 million over the prior year. While the volume of shipments
declined slightly from the prior year, a 7.3% increase in the average price
earned per shipment more than offset this volume decrease. Improvement in
the average price earned per shipment is due to both the 6% general tariff
increase effective March 28, 1994 and the shift from lower priced government
and military shipments to higher priced C.O.D. and corporate account
business. The military and government business has declined industry wide in
1994 as compared to 1993 resulting in the overall decline in the number of
shipments. Revenues from Transit's Moving and Storage business, a
component of the Household Goods division, also increased primarily as a
result of the start-up of a new agency in Los Angeles and the acquisition of an
existing agency located in Philadelphia.
Revenues for the first half of 1994 for the Special Transportation Services
(STS) division were $63.4 million compared to $58.6 million for the same period
in 1993, an increase of $4.8 million, or 8.2%. Revenues from the Electronics
and Trade Show business increased $2.8 million to $48.4 million, primarily as a
result of an increase in the number of shipments.
Operating loss for the six months ended June 30, 1994 was only $70,000,
compared to a $1.8 million loss in the same period last year. Due to the
seasonal nature of Transit's business, losses are normally posted early in the
year. Operating profit was favorably impacted by a $1.7 million gross margin
improvement in the Household Goods division. This improvement was the
result of higher revenues and greater emphasis on fleet management. The
heightened emphasis on fleet management increased driver productivity and
retention resulting in reduced driver recruiting and training costs. Gross
margins from STS and other revenues combined were flat in comparison to
prior years.
General and administrative expenses in 1994 did not vary significantly
compared to the same period in 1993. Transit is continuing to experience
favorable results from cost containment programs and organizational changes
implemented in the latter part of 1993.
Interest Income and Interest Expense
Interest income for the six months ended June 30, 1994 was $500,000
compared to $1.2 million for the same period in 1993, a decrease of $700,000.
This decrease is primarily a result of a change in financing arrangements of
Transit's equipment sales and financing subsidiary. In December 1993, this
subsidiary began selling to various financial institutions installment notes
receivable recorded from sales of equipment by this subsidiary. Previously,
these notes receivable were financed directly by the Company resulting in the
recording of interest income. Beginning in 1994, the positive interest margin
is recorded as a component of operating profit.
Interest expense for the six months ended June 30, 1994 was $4.4 million,
an increase of $88,000 from the comparable period in 1993. Of the increase,
$500,000 is due to new Contract Services debt incurred in September, 1993 for
the purchase of new buses. Offsetting the increase is a reduction in interest
expense of $388,000 due to the change in the financing arrangements of
Transit's equipment sales and financing subsidiary as described above.explained earlier.
Seasonality
Peak business levels for Contract Services occur during the traditional
school months of September through May. For example, during 1993
approximately 86% of Contract Services' revenues were generated during these
nine months.
At Transit, proportionately more household goods moves occur during
the summer months. During 1993, for example, approximately 45% of the
Household Goods division's revenues were generated during the months of
June through September.
Due to the seasonal impact of revenue being generated by each of the
Company's two operating subsidiaries as discussed above, the Company
historically realizes higher net income in the second and fourth quarters than
in the first and third quarters of the year.
Liquidity and Capital Resources
Total cash decreasedincreased by $41,000$1.4 million from December 31, 1993 to March 31,June 30,
1994. Operating activities contributed $5.9$13.4 million and financing activities
provided $1.6 million$957,000 during the threesix month period. This was offset by the use of
cash in investing activities of $7.6$12.9 million.
The $5.9$13.4 million in cash provided by operations was primarily due to
$7.7$14.9 million provided by net income, after adding back items not affecting
cash. Net cash of $1.8$1.5 million was used for working capital purposes. Cash
was used to finance the increase of $7.1 million in accounts receivable
resulting from the Company's revenue growth and $4.6 million to fund
necessary inventory purchases at Contract Services which are being spread more evenly over
1994 compared to 1993, and to reduce trade accounts payable.Services. Offsetting these uses of
cash, other accrued expenses hashave increased $8.9 million during the threesix month
period due to increased federal tax liabilities on accrued unbilled accounts receivable and
accrued payroll.
For the threesix months ended March 31,June 30, 1994, the Company used $7.6$12.9 million,
net, for investing activities. The Company used $6.6$12.7 million for the purchase
of property and equipment, primarily the purchase of school buses by Contract
Services and, to a lesser extent, trailers by Transit.
The Company has working capital of $40.6$45.2 million at March 31,June 30, 1994, which
is comparable to$6 million more than the working capital at December 31, 1993. This increase
is primarily due to increased receivables resulting from revenue growth. The
Company also has $15.1$15 million available under its revolving credit facility at
March 31,June 30, 1994. Total debt at March 31,June 30, 1994, was $99.3$98.6 million compared to $97.7
million at December 31, 1993, representing a $1.6
million$900,000 increase in total debt
during the threesix months ended March 31,June 30, 1994. During the quarter,first six months, the
Company received $1.6 million,$900,000, net, from an
equipment obligationthe facility used to financeacquire certain
bus purchases ofbuses at Contract Services.
At March 31,June 30, 1994, the Company has committed to approximately $30$23 million
in capital expenditures during 1994. This includes $1 million for 50 trailers
by Transit and $29$22 million, or 729approximately 350 units, for school and public
transit buses by Contract Services. In acquiring these assets, the Company
will consider various available leasing alternatives and utilize funds available
under existing financing arrangements.
The Company has also
entered into discussions with one of its existing lenders to expand the
facility for additional financing needs.
The Company believes cash flow from operations combined with existing
financing arrangements and other financing sources currently being
negotiated will be more than adequate to fund short and long- termlong-term cash
requirements.
PART II- OTHER INFORMATIONII-OTHER INFORMATION.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
At the Company's Annual Meeting of Shareholders held in April 1994, the
following matters were voted on:
(i) The adoption of the Mayflower Group, Inc. 1994 Restricted Stock Plan
was approved by a vote of 9,060,911 for, and 10,504 against, and 3,198
abstaining.
(ii) The amendment of the 1992 Director Stock Option Plan was
approved by a vote of 9,052,220 for, and 18,805 against, and 3,588 abstaining.
(iii) The adoption of amendments to the Articles of Incorporation of
Mayflower Group, Inc. was approved by a vote of 6,619,577, and 331,027
against, and 5,138 abstaining, and 2,118,871 not voting.
(iv) The appointment of Coopers & Lybrand, independent public
accountants, as auditors for the Company for the fiscal year ending December
31, 1994 was ratified by a vote of 9,069,270 for, and 3,420 against, and 1,923
abstaining.
(v) Members of the Board of Directors were elected as follows:
For Withheld
R.M. Hills 9,061,631 12,982
P.J. Lewis 9,061,631 12,982
L.R. Scott 9,061,631 12,982
M.L. Smith 9,061,257 13,323
S.M. Stone 9,060,431 14,182
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits. The following exhibit is filed as a part of this Quarterly Report
on Form 10-Q:
Exhibit Page in
Number Exhibit - ------- -------------------------this filing
11 CalculationComputation of Earnings Per Share E-1
(b) Reports on Form 8-K.
The Company filed no reports on Form 8-K during the quarter.
SIGNATURE
The registrant has duly caused this report to be signed on its behalf by the
undersigned duly authorized.
MAYFLOWER GROUP, INC.
Date: May 13,August 12, 1994 By: /s/ Ronald W. Martin
- ------------------ ------------------------ ------------------------------
Ronald W. Martin,
Vice-President
FinanceVice President-Finance and
Chief Accounting Officer
EXHIBIT 11
STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
FOR THE THREE AND SIX MONTHS ENDED MARCH 31,JUNE 30, 1994
AND MARCH 31, 1993
(In thousands, except per share data):
Three months ended March 31,Six months ended
June 30, June 30,
1994 1993 --------------------1994 1993
------------------ ------------------
Primary: (1)
Average shares outstanding 12,663 12,646 12,663 12,646
Net effect of options to
purchase common stock -
based on the treasury
stock method using
estimated market price 94 62
--------------------
12,757 12,708
====================42 67 78 60
------ ------ ------ ------
12,705 12,713 12,741 12,706
====== ====== ====== ======
Net Income $1,652 $ 925
====================2,743 $ 2,799 $ 4,395 $ 3,724
======= ======= ======= =======
Earnings Per Share $.13 $.07
====================
$ .22 $ .22 $ .34 $ .29
======= ======= ======= =======
(1) Fully diluted earnings per share do not differ from primary earnings per
share.