UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13E-3
RULE 13e-3 TRANSACTION STATEMENT
Under Section 13(e) of the Securities Exchange Act of 1934
(Amendment No. 1)
US 1 Industries, Inc.
(Name of the Issuer)
US 1 Industries, Inc.
Trucking Investment Co. Inc.
US 1 Merger Corp.
Harold E. Antonson
Michael E. Kibler
(Name of Persons Filing Statement)
Common Shares, without par value
(Title of Class of Securities)
903369106
(CUSIP Number of Class of Securities)
US 1 Industries, Inc. 336 West US 30, Suite 201 Valparaiso, Indiana 46385 | Harold E. Antonson 336 West US 30, Suite 201 Valparaiso, Indiana 46385 |
Trucking Investment Co. Inc. 336 West US 30, Suite 201 Valparaiso, Indiana 46385 | Michael E. Kibler 336 West US 30, Suite 201 Valparaiso, Indiana 46385 |
(Name, Address and Telephone Numbers of Person Authorized to Receive Notices and
Communications on Behalf of Persons Filing Statement)
Copies to:
Troutman Sanders LLP 600 Peachtree Street, N.E. Atlanta, GA 30308 Attn: W. Brinkley Dickerson, Jr. | Bose McKinney & Evans LLP 111 Monument Circle Indianapolis, Indiana 46204 Attn: Jeffrey B. Bailey |
This statement is filed in connection with (check the appropriate box).
| x | a. | The filing of solicitation materials or an information statement subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the Securities Exchange Act of 1934. |
| ¨ | b. | The filing of a registration statement under the Securities Act of 1933. |
| ¨ | c. | A tender offer. |
| ¨ | d. | None of the above. |
Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies: ¨ Check the following box if the filing is a final amendment reporting the results of the transaction: ¨ | ||
Calculation of Filing Fee
Transaction Valuation* | Amount of Filing Fee** | |
| $9,523,436.54 | $1,105.67 |
| ¨ | Check the box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
| Amount Previously Paid: | $1,105.67 |
| Form or Registration No.: | Schedule 14A — Preliminary Proxy Statement |
| Filing Party: | US 1 Industries, Inc. |
| Date Filed: | March 18, 2011 |
| * | The proposed maximum aggregate value of the transaction, for purposes only of calculating the filing fee, is $9,523,436.54 which is the sum of (1) product of the 6,527,578 shares of Common Stock outstanding as of March 17, 2011 that are proposed to be converted into the right to receive the merger consideration, multiplied by the merger consideration of $1.43 per share, plus (2) $189,000, which is the maximum aggregate amount to be paid to holders of options in exchange for the cancellation of their options. The filing fee, calculated in accordance with Exchange Act Rule 0-11(c)(1) and the December 2010 revised SEC Filing Fee for Transactional filings, equals the proposed maximum aggregate value of the transaction multiplied by .00011610 ($116.10 per million dollars). |
| ** | The filing fee, calculated in accordance with Exchange Act Rule 0-11(c)(1) and the December 2010 revised SEC Filing Fee for Transactional filings pursuant to the Securities Exchange Act of 1934, which equals .00011610 ($116.10 per million dollars) multiplied by the total Transaction Valuation. |
TABLE OF CONTENTS
| INTRODUCTION | 1 |
| Item 1. Summary Term Sheet. | 2 |
| Item 2. Subject Company Information. | 2 |
| Item 3. Identity and Background of Filing Person. | 2 |
| Item 4. Terms of the Transaction. | 3 |
| Item 5. Past Contacts, Transactions, Negotiations and Agreements. | 3 |
| Item 6. Purposes of the Transaction and Plans or Proposals. | 4 |
| Item 7. Purposes, Alternatives, Reasons and Effects. | 5 |
| Item 8. Fairness of the Transaction. | 6 |
| Item 9. Reports, Opinions, Appraisals and Negotiations. | 7 |
| Item 10. Source and Amounts of Funds or Other Consideration. | 8 |
| Item 11. Interest in Securities of the Subject Company. | 8 |
| Item 12. The Solicitation or Recommendation. | 8 |
| Item 13. Financial Statements. | 9 |
| Item 14. Persons/Assets, Retained, Employed, Compensated or Used. | 9 |
| Item 15. Additional Information. | 9 |
| Item 16. Exhibits. | 10 |
| SIGNATURES | 11 |
INTRODUCTION
This Amendment No. 1 to the Rule 13E-3 Transaction Statement on Schedule 13E-3 (this “Amendment”) is being filed with the Securities and Exchange Commission (the “Commission”) jointly by US 1 Industries, Inc., an Indiana corporation (the “Company”), the issuer of the common stock, without par value (the “Common Stock”), that is subject to the Rule 13e-3 transaction, Harold E. Antonson (“Antonson”), Michael E. Kibler (“Kibler,” and, together with Antonson, the “Rollover Shareholders”), Trucking Investment Co. Inc., an Indiana corporation (“Parent”), and US 1 Merger Corp., an Indiana corporation and wholly-owned subsidiary of Parent (“Merger Sub,” and, together with the Parent and the Rollover Shareholders, the “Acquisition Parties” and, together with the Company, the “Filing Party” and each a “Filing Party”).
This Amendment relates to the transactions contemplated by the Agreement and Plan of Merger, dated as of February 18, 2011 (the “Merger Agreement”), by and among the Company, Parent, Merger Sub and the Rollover Shareholders. Concurrently with the filing of this Amendment, the Company is filing with the Commission a revised preliminary Proxy Statement (the “Preliminary Proxy Statement”) on Schedule 14A pursuant to Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), relating to a special meeting of the shareholders of the Company at which the shareholders of the Company will consider and vote upon a proposal to adopt the Merger Agreement and approve the merger contemplated thereby. The adoption of the Merger Agreement is subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, including the adoption of the Merger Agreement and approval of the merger by the affirmative vote of the holders of a majority of the shares of Common Stock outstanding as of the close of business on the record date for the special meeting. If the merger is consummated, Merger Sub will merge with and into the Company and the Company will continue as the surviving corporation and a wholly owned subsidiary of Parent. Upon the completion of the merger, each outstanding share of Common Stock will be converted into the right to receive $1.43 in cash, without interest and less any applicable withholding taxes, except for shares of Common Stock held by shareholders who perfect appraisal rights in accordance with Indiana law and except for shares of Common Stock held by Parent (including the shares to be contributed to Parent by the Rollover Shareholders), Merger Sub, the Company or any subsidiary of the Company. The Rollover Shareholders have agreed to contribute, immediately prior to the completion of the merger, in the aggregate, 7,715,830 shares of Company common stock to Parent in exchange for shares of Parent common stock.
The cross-references below are being supplied pursuant to General Instruction G to Schedule 13E-3 and show the location in the Preliminary Proxy Statement of the information required to be included in response to the items of Schedule 13E-3. The information contained in the Preliminary Proxy Statement, including all annexes thereto, is incorporated in its entirety herein by this reference, and the responses to each item in this Amendment are qualified in their entirety by the information contained in the Preliminary Proxy Statement. As of the date hereof, the Preliminary Proxy Statement is in preliminary form and is subject to completion or amendment. Capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Preliminary Proxy Statement.
All information contained in this Amendment concerning each Filing Party has been supplied by such Filing Party.
- 1 -
Item 1. Summary Term Sheet.
Item 1001 of Regulation M-A:
The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER”
Item 2. Subject Company Information.
Item 1002 of Regulation M-A:
| (a) | Name and Address. The Company’s name and the address and telephone number of its principal executive office are as follows: |
US 1 Industries, Inc.
366 West US Highway 30
Valparaiso, Indiana 46385
(219) 476-1300
| (b) | Securities. The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference: |
“SECURITIES OWNERSHIP”
“TRADING MARKET AND PRICE FOR SHARES”
The exact title of the subject class of equity securities is “US 1 Industries, Inc. common shares, without par value.”
| (c) | Trading Market and Price. The information set forth in the Preliminary Proxy Statement under the following caption is incorporated herein by reference: |
“TRADING MARKET AND PRICE FOR SHARES”
| (d) | Dividends. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference: |
“TRADING MARKET AND PRICE FOR SHARES”
| (e) | Prior Public Offerings. Not applicable. |
| (f) | Prior Stock Purchases. The information set forth in the Preliminary Proxy Statement under the following caption is incorporated herein by reference: |
“PRIOR PURCHASES OF SHARES”
Item 3. Identity and Background of Filing Person.
Item 1003 of Regulation M-A:
| (a) | Name and Address. US 1 Industries, Inc. is the subject company. The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference: |
“THE PARTIES”
“WHERE YOU CAN FIND MORE INFORMATION”
| (b) | Business and Background of Entities. The information set forth in the Preliminary Proxy Statement under the following caption is incorporated herein by reference: |
- 2 -
“THE PARTIES”
| (c) | Business and Background of Natural Persons. The information set forth in the Preliminary Proxy Statement under the following caption is incorporated herein by reference: |
“THE PARTIES”
Item 4. Terms of the Transaction.
Item 1004 of Regulation M-A:
| (a) | Material Terms. The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference: |
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER”
“SPECIAL FACTORS”
“INFORMATION CONCERNING THE SPECIAL MEETING”
“THE MERGER AGREEMENT”
“RIGHTS OF DISSENTING SHAREHOLDERS”
“ANNEX A—Agreement and Plan of Merger”
“ANNEX C—Voting Agreement”
“ANNEX D—Contribution Agreement”
| (c) | Different Terms. The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference: |
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER”
“SPECIAL FACTORS—Purposes and Structure of the Merger”
“SPECIAL FACTORS—Certain Effects of the Merger”
“SPECIAL FACTORS—Interests of Certain Persons in the Merger”
“THE MERGER AGREEMENT—Treatment of Shares of Common Stock and Equity Awards”
“THE MERGER AGREEMENT—Covenants”
“RIGHTS OF DISSENTING SHAREHOLDERS”
“ANNEX A—Agreement and Plan of Merger”
“ANNEX C—Voting Agreement”
“ANNEX D—Contribution Agreement”
| (d) | Appraisal Rights. The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference: |
“RIGHTS OF DISSENTING SHAREHOLDERS”
“ANNEX E—Section 23-1-44 of the Indiana Business Corporation Law”
| (e) | Provisions For Unaffiliated Security Holders. The information set forth in the Preliminary Proxy Statement under the following caption is incorporated herein by reference: |
“SPECIAL FACTORS—Provisions for Unaffiliated Shareholders”
| (f) | Eligibility for Listing or Trading. Not applicable. |
Item 5. Past Contacts, Transactions, Negotiations and Agreements.
Item 1005 of Regulation M-A:
| (a) | Transactions. The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference: |
“SUMMARY TERM SHEET”
- 3 -
“SPECIAL FACTORS—Background”
“SPECIAL FACTORS—Recommendation of the Special Committee and the Board”
“SPECIAL FACTORS—Interests of Certain Persons in the Merger”
“RELATED PARTY TRANSACTIONS”
| (b)-(c) | Significant Corporate Events; Negotiations or Contacts. The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference: |
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING”
“SPECIAL FACTORS—Background”
“SPECIAL FACTORS—Recommendation of the Special Committee and the Board”
“SPECIAL FACTORS—Fairness of the Merger; Reasons for the Recommendation of the Special Committee and the Board”
“SPECIAL FACTORS—Purposes and Structure of the Merger”
“SPECIAL FACTORS—Interests of Certain Persons in the Merger”
“SPECIAL FACTORS—Financing of the Merger”
“THE MERGER AGREEMENT”
“PRIOR PURCHASES OF SHARES”
“ANNEX A—Agreement and Plan of Merger”
| (e) | Agreements Involving the Subject Company’s Securities. The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference: |
“SPECIAL FACTORS—Background”
“SPECIAL FACTORS—Fairness of the Merger; Reasons for the Recommendation of the Special Committee and the Board”
“SPECIAL FACTORS—Certain Effects of the Merger”
“SPECIAL FACTORS—Interests of Certain Persons in the Merger”
“SPECIAL FACTORS—Financing of the Merger”
“INFORMATION CONCERNING THE SPECIAL MEETING—Required Vote; Calculation of the Vote; Abstentions and Broker Non-Votes”
“THE PARTIES”
“THE MERGER AGREEMENT”
“SECURITIES OWNERSHIP”
“ANNEX A—Agreement and Plan of Merger”
“ANNEX C—Voting Agreement”
“ANNEX D—Contribution Agreement”
Item 6. Purposes of the Transaction and Plans or Proposals.
Item 1006 of Regulation M-A:
| (b) | Use of Securities Acquired. The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference: |
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING”
“SPECIAL FACTORS—Purposes and Structure of the Merger”
“SPECIAL FACTORS—Certain Effects of the Merger”
“SPECIAL FACTORS—Interests of Certain Persons in the Merger”
“THE MERGER AGREEMENT—The Merger”
“THE MERGER AGREEMENT—Treatment of Shares of Common Stock and Equity Awards”
“ANNEX A—Agreement and Plan of Merger”
“ANNEX D—Contribution Agreement”
| (c)1-8 | Plans. The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference: |
- 4 -
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING”
“SPECIAL FACTORS—Background”
“SPECIAL FACTORS—Purposes and Structure of the Merger”
“SPECIAL FACTORS—Certain Effects of the Merger”
“SPECIAL FACTORS—Plans for the Company After the Merger”
“SPECIAL FACTORS—Interests of Certain Persons in the Merger”
“SPECIAL FACTORS—Financing of the Merger”
“THE MERGER AGREEMENT”
“ANNEX A—Agreement and Plan of Merger”
Item 7. Purposes, Alternatives, Reasons and Effects.
Item 1013 of Regulation M-A:
| (a) | Purposes. The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference: |
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING”
“SPECIAL FACTORS—Background”
“SPECIAL FACTORS—Recommendation of the Special Committee and the Board”
“SPECIAL FACTORS—Fairness of the Merger; Reasons for the Recommendation of the Special Committee and the Board”
“SPECIAL FACTORS—Purposes and Structure of the Merger”
“SPECIAL FACTORS—Certain Effects of the Merger”
“SPECIAL FACTORS—Plans for the Company After the Merger”
“SPECIAL FACTORS—Conduct of the Business of the Company if the Merger is Not Consummated”
| (b) | Alternatives. The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference: |
“SPECIAL FACTORS—Background”
“SPECIAL FACTORS—Purposes and Structure of the Merger”
“SPECIAL FACTORS—Fairness Opinion of Cambridge Partners”
“SPECIAL FACTORS—Fairness of the Merger; Reasons for the Recommendation of the Special Committee and the Board”
“SPECIAL FACTORS—Plans for the Company After the Merger”
“SPECIAL FACTORS—Conduct of the Business of the Company if the Merger is Not Consummated”
“SPECIAL FACTORS—Fairness Opinion of Cambridge Partners”
| (c) | Reasons. The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference: |
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING”
“SPECIAL FACTORS—Background”
“SPECIAL FACTORS—Recommendation of the Special Committee and the Board”
“SPECIAL FACTORS—Fairness of the Merger; Reasons for the Recommendation of the Special Committee and the Board”
“SPECIAL FACTORS—Purposes and Structure of the Merger”
“SPECIAL FACTORS—Fairness Opinion of Cambridge Partners”
“SPECIAL FACTORS—Certain Effects of the Merger”
“SPECIAL FACTORS—Plans for the Company After the Merger”
“SPECIAL FACTORS—Conduct of the Business of the Company if the Merger is Not Consummated”
“ANNEX B—Opinion of Cambridge Partners & Associates, Inc.”
- 5 -
| (d) | Effects. The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference: |
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING”
“SPECIAL FACTORS—Background”
“SPECIAL FACTORS—Fairness of the Merger; Reasons for the Recommendation of the Special Committee and the Board”
“SPECIAL FACTORS—Purposes and Structure of the Merger”
“SPECIAL FACTORS—Certain Effects of the Merger”
“SPECIAL FACTORS—Plans for the Company After the Merger”
“SPECIAL FACTORS—Conduct of the Business of the Company if the Merger is Not Consummated”
“SPECIAL FACTORS—Interests of Certain Persons in the Merger”
“SPECIAL FACTORS—Financing of the Merger”
“SPECIAL FACTORS—Federal Income Tax Consequences of the Merger”
“SPECIAL FACTORS—Accounting Treatment”
“SPECIAL FACTORS—Fees and Expenses”
“THE MERGER AGREEMENT”
“RIGHTS OF DISSENTING SHAREHOLDERS”
“ANNEX A—Agreement and Plan of Merger”
“ANNEX E—Section 23-1-44 of the Indiana Business Corporation Law”
Item 8. Fairness of the Transaction.
Item 1014 of Regulation M-A:
| (a) | Fairness. The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference: |
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING”
“SPECIAL FACTORS—Background”
“SPECIAL FACTORS—Recommendation of the Special Committee and the Board”
“SPECIAL FACTORS—Fairness of the Merger; Reasons for the Recommendation of the Special Committee and the Board”
“SPECIAL FACTORS—Purposes and Structure of the Merger”
“SPECIAL FACTORS—Fairness Opinion of Cambridge Partners”
“ANNEX B—Opinion of Cambridge Partners & Associates, Inc.”
| (b) | Factors Considered in Determining Fairness. The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference: |
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING”
“SPECIAL FACTORS—Background”
“SPECIAL FACTORS—Recommendation of the Special Committee and the Board”
“SPECIAL FACTORS—Fairness of the Merger; Reasons for the Recommendation of the Special Committee and the Board”
“SPECIAL FACTORS—Purposes and Structure of the Merger”
“SPECIAL FACTORS—Fairness Opinion of Cambridge Partners”
“SPECIAL FACTORS—Certain Effects of the Merger”
“SPECIAL FACTORS—Conduct of the Business of the Company if the Merger is Not Consummated”
“SPECIAL FACTORS—Interests of Certain Persons in the Merger”
“ANNEX B—Opinion of Cambridge Partners & Associates, Inc.”
The analysis materials of Cambridge Partners & Associates, Inc. used in connection with its analysis of the fairness of the Merger are attached hereto as Exhibits (c)(2) and (c)(3) and incorporated herein by reference.
- 6 -
| (c) | Approval of Security Holders. The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference: |
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING”
“INFORMATION CONCERNING THE SPECIAL MEETING—Required Vote; Calculation of Vote; Abstentions and Broker Non-Votes”
“THE MERGER AGREEMENT—Conditions to the Merger”
“ANNEX A—Agreement and Plan of Merger”
| (d) | Unaffiliated Representative. The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference: |
“SPECIAL FACTORS—Background”
“SPECIAL FACTORS—Fairness of the Merger; Reasons for the Recommendation of the Special Committee and the Board”
“SPECIAL FACTORS—Fairness Opinion of Cambridge Partners”
“SPECIAL FACTORS—Provisions for Unaffiliated Shareholders”
“ANNEX B—Opinion of Cambridge Partners & Associates, Inc.”
| (e) | Approval of Directors. The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference: |
“SUMMARY TERM SHEET”
“SPECIAL FACTORS—Background”
“SPECIAL FACTORS—Fairness of the Merger; Reasons for the Recommendation of the Special Committee and the Board”
“SPECIAL FACTORS—Recommendation of the Special Committee and the Board”
“SPECIAL FACTORS—Fairness of the Merger; Reasons for the Recommendation of the Special Committee and the Board”
| (f) | Other Offers. The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference: |
None.
Item 9. Reports, Opinions, Appraisals and Negotiations.
Item 1015 of Regulation M-A:
| (a)-(b) | Report, Opinion or Appraisal; Preparer and Summary of the Report, Opinion or Appraisal. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference: |
“SPECIAL FACTORS—Background”
“SPECIAL FACTORS—Fairness of the Merger; Reasons for the Recommendation of the Special Committee and the Board”
“SPECIAL FACTORS—Recommendation of the Special Committee and the Board”
“SPECIAL FACTORS—Fairness Opinion of Cambridge Partners”
“ANNEX B—Opinion of Cambridge Partners & Associates, Inc.”
The analysis materials of Cambridge Partners & Associates, Inc. used in connection with its analysis of the fairness of the Merger are attached hereto as Exhibits (c)(2) and (c)(3) and incorporated herein by reference.
- 7 -
| (c) | Availability of Documents. |
The reports, opinions or appraisal referenced in this Item 9 will be made available for inspection and copying at the principal executive offices of US 1 Industries, Inc. during regular business hours by any interested holder of Shares or any representative who has been so designated in writing and copies may be obtained by requesting them in writing or by telephone from US 1 Industries, Inc. at the address provided under the caption “INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE” in the Preliminary Proxy Statement, which is incorporated herein by reference.
Item 10. Source and Amounts of Funds or Other Consideration.
Item 1007 of Regulation M-A:
| (a)-(d) | Source of Funds; Conditions; Expenses; Borrowed Funds. The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference: |
“SUMMARY TERM SHEET”
“SPECIAL FACTORS—Interests of Certain Persons in the Merger”
“SPECIAL FACTORS—Financing of the Merger”
“SPECIAL FACTORS—Fees and Expenses”
“THE MERGER AGREEMENT—Conditions to the Merger”
“THE MERGER AGREEMENT—Expenses”
“ANNEX A—Agreement and Plan of Merger”
Item 11. Interest in Securities of the Subject Company.
Item 1008 of Regulation M-A:
| (a) | Securities Ownership. The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference: |
“SPECIAL FACTORS—Interests of Certain Persons in the Merger”
“THE PARTIES”
“SECURITIES OWNERSHIP”
| (b) | Securities Transactions. The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference: |
“SPECIAL FACTORS—Interests of Certain Persons in the Merger”
“PRIOR PURCHASES OF SHARES”
“ANNEX A—Agreement and Plan of Merger”
“ANNEX D— Contribution Agreement”
Item 12. The Solicitation or Recommendation.
Item 1012 of Regulation M-A:
| (d) | Intent to Tender or Vote in a Going-Private Transaction. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference: |
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER”
“SPECIAL FACTORS—Background”
“SPECIAL FACTORS—Recommendation of the Special Committee and the Board”
“SPECIAL FACTORS—Fairness of the Merger; Reasons for the Recommendation of the Special Committee and the Board”
“SPECIAL FACTORS—Interests of Certain Persons in the Merger”
“SPECIAL FACTORS—Voting Intentions of the Directors and Executive Officers of the Company”
“INFORMATION CONCERNING THE SPECIAL MEETING—Required Vote; Calculation of Vote; Abstentions and Broker Non-Votes”
ANNEX C—Voting Agreement
ANNEX D—Contribution Agreement
- 8 -
| (e) | Recommendation of Others. The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference: |
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING”
“SPECIAL FACTORS—Background”
“SPECIAL FACTORS—Recommendation of the Special Committee and the Board”
“SPECIAL FACTORS—Fairness of the Merger; Reasons for the Recommendation of the Special Committee and the Board”
“SPECIAL FACTORS—Recommendation of the Special Committee and the Board”
“SPECIAL FACTORS—Voting Intentions of the Directors and Executive Officers of the Company”
“THE MERGER AGREEMENT—Representations and Warranties”
Item 13. Financial Statements.
Item 1010 of Regulation M-A:
| (a) | Financial Information. The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference: |
“SUMMARY CONSOLIDATED FINANCIAL INFORMATION”
“WHERE YOU CAN FIND MORE INFORMATION”
“SUMMARY CONSOLIDATED FINANCIAL STATEMENTS—Ratio of Earning to Fixed Charges”
| (b) | Pro Forma Information. Not applicable. |
| (c) | Summary Information. The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference: |
“SPECIAL FACTORS—Background”
“SUMMARY CONSOLIDATED FINANCIAL INFORMATION”
“WHERE YOU CAN FIND MORE INFORMATION”
“SUMMARY CONSOLIDATED FINANCIAL STATEMENTS—Ratio of Earning to Fixed Charges”
Item 14. Persons/Assets, Retained, Employed, Compensated or Used.
Item 1009 of Regulation M-A:
| (a)-(b) | Solicitations or Recommendations; Employees and Corporate Assets. The information set forth in the Preliminary Proxy Statement under the following captions is incorporated herein by reference: |
“INFORMATION CONCERNING THE SPECIAL MEETING—Proxy Solicitation”
“SPECIAL FACTORS—Interests of Certain Persons in the Merger”
“SPECIAL FACTORS—Fees and Expenses”
Item 15. Additional Information.
Item 1011 of Regulation M-A:
| (b) | Other Material Information. The entirety of the Preliminary Proxy Statement, including all annexes thereto, is incorporated herein by reference. |
- 9 -
Item 16. Exhibits.
Item 1016 of Regulation M-A:
| (a)(1) | Preliminary Proxy Statement for the Special Meeting of the Shareholders of US 1 Industries, Inc. (incorporated herein by reference to the Schedule 14A filed with the Securities and Exchange Commission on March 18, 2011). |
| (a)(2) | Form of Proxy Card filed with the Commission (incorporated herein by reference to the Preliminary Proxy Statement). |
| (a)(3) | Form of Letter to Shareholders filed with the Commission (incorporated herein by reference to the Preliminary Proxy Statement). |
| (a)(4) | Form of Notice of Special Meeting of Shareholders filed with the Commission (incorporated herein by reference to the Preliminary Proxy Statement). |
| (a)(5) | Press release, dated February 18, 2011, issued by US 1 Industries, Inc. (incorporated herein by reference to Exhibit 99.1 of the Current Report on Form 8-K filed with the Commission by US 1 Industries, Inc. on February 18, 2011).* |
| (b)(1) | Term Sheet from US Bank Asset Based Finance, dated September 10, 2010.* |
| (b)(2) | Amended and Restated Loan Agreement, dated as of March 10, 2002, by and among U.S. Bank National Association and Carolina National Transportation Inc., Gulf Line Transport Inc., Five Star Transport, Inc., Cam Transport, Inc., Unity Logistic Services, Inc., ERX, Inc., Friendly Transport, Inc., Transport Leasing, Inc., Harbor Bridge Intermodal, Inc., Patriot Logistics, Inc., Liberty Transport, Inc., Keystone Lines Corporation, and US 1 Industries, Inc. and amendments thereto through September 28, 2011 (incorporated by reference to Exhibits 10.12, 10.3 and 10.14 of the Company’s Form 10-Q filed on November 14, 2005, from the Company’s Form 10-Q filed on August 14, 2007, from Exhibit 10.1 of the Company’s Form 8-K filed on December 24, 2008, from Exhibit 10.1 of the Company’s Form 8-K filed on July 29, 2009, from the Company’s Form 10-K filed on March 16, 2010 and from the Company’s Form 10-Q filed on November 15, 2010). |
| (c)(1) | Opinion of Cambridge Partners & Associates, Inc. (incorporated herein by reference to Annex B of the Preliminary Proxy Statement).* |
| (c)(2) | Analysis Materials of Cambridge Partners & Associates, Inc. in Connection with Fairness Evaluation. |
| (c)(3) | Financial Projections Prepared by Management of US 1 Industries, Inc. |
| (d)(1) | Agreement and Plan of Merger, dated as of February 18, 2011, by and among US 1 Industries, Inc., Trucking Investment Co. Inc., US 1 Merger Corp., Harold E. Antonson and Michael E. Kibler (incorporated herein by reference to Annex A to the Preliminary Proxy Statement).* |
| (d)(2) | Voting Agreement, dated as of February 18, 2011, by and among Trucking Investment Co. Inc., Harold E. Antonson and Michael E. Kibler (incorporated herein by reference to Annex C to the Preliminary Proxy Statement).* |
| (d)(3) | Contribution Agreement, dated as of February 18, 2011, by and among Trucking Investment Co. Inc., Harold E. Antonson and Michael E. Kibler (incorporated herein by reference to Exhibit D to the Preliminary Proxy Statement).* |
| (f)(1) | Section 23-1-44 of the Indiana Business Corporation Law (incorporated herein by reference to Annex E to the Preliminary Proxy Statement).* |
* Previously filed
- 10 -
SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
Dated: April 18, 2011
| US 1 Industries, Inc. | ||
| By: | /s/ Harold E. Antonson | |
| Name: Harold E. Antonson | ||
| Title: Chief Financial Officer | ||
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
Dated: April 18, 2011
| Trucking Investment Co. Inc. | ||
| By: | /s/ Harold E. Antonson | |
| Name: Harold E. Antonson | ||
| Title: Chief Financial Officer | ||
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
Dated: April 18, 2011
| US 1 Merger Corp. | ||
| By: | /s/ Harold E. Antonson | |
| Name: Harold E. Antonson | ||
| Title: Chief Financial Officer | ||
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
Dated: April 18, 2011
| /s/ Harold E. Antonson | |
| Harold E. Antonson |
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
Dated: April 18, 2011
| /s/ Michael E. Kibler | |
| Michael E. Kibler |
-11-
Exhibit Index
| (a)(1) | Preliminary Proxy Statement for the Special Meeting of the Shareholders of US 1 Industries, Inc. (incorporated herein by reference to the Schedule 14A filed with the Securities and Exchange Commission on March 18, 2011). |
| (a)(2) | Form of Proxy Card filed with the Commission (incorporated herein by reference to the Preliminary Proxy Statement). |
| (a)(3) | Form of Letter to Shareholders filed with the Commission (incorporated herein by reference to the Preliminary Proxy Statement). |
| (a)(4) | Form of Notice of Special Meeting of Shareholders filed with the Commission (incorporated herein by reference to the Preliminary Proxy Statement). |
| (a)(5) | Press release, dated February 18, 2011, issued by US 1 Industries, Inc. (incorporated herein by reference to Exhibit 99.1 of the Current Report on Form 8-K filed with the Commission by US 1 Industries, Inc. on February 18, 2011).* |
| (b)(1) | Term Sheet from US Bank Asset Based Finance, dated September 10, 2010.* |
| (b)(2) | Amended and Restated Loan Agreement, dated as of March 10, 2002, by and among U.S. Bank National Association and Carolina National Transportation Inc., Gulf Line Transport Inc., Five Star Transport, Inc., Cam Transport, Inc., Unity Logistic Services, Inc., ERX, Inc., Friendly Transport, Inc., Transport Leasing, Inc., Harbor Bridge Intermodal, Inc., Patriot Logistics, Inc., Liberty Transport, Inc., Keystone Lines Corporation, and US 1 Industries, Inc. and amendments thereto through September 28, 2011 (incorporated by reference to Exhibits 10.12, 10.3 and 10.14 of the Company’s Form 10-Q filed on November 14, 2005, from the Company’s Form 10-Q filed on August 14, 2007, from Exhibit 10.1 of the Company’s Form 8-K filed on December 24, 2008, from Exhibit 10.1 of the Company’s Form 8-K filed on July 29, 2009, from the Company’s Form 10-K filed on March 16, 2010 and from the Company’s Form 10-Q filed on November 15, 2010). |
| (c)(1) | Opinion of Cambridge Partners & Associates, Inc. (incorporated herein by reference to Annex B of the Preliminary Proxy Statement).* |
| (c)(2) | Analysis Materials of Cambridge Partners & Associates, Inc. in Connection with Fairness Evaluation. |
| (c)(3) | Financial Projections Prepared by Management of US 1 Industries, Inc. |
| (d)(1) | Agreement and Plan of Merger, dated as of February 18, 2011, by and among US 1 Industries, Inc., Trucking Investment Co. Inc., US 1 Merger Corp., Harold E. Antonson and Michael E. Kibler (incorporated herein by reference to Annex A to the Preliminary Proxy Statement).* |
| (d)(2) | Voting Agreement, dated as of February 18, 2011, by and among Trucking Investment Co. Inc., Harold E. Antonson and Michael E. Kibler (incorporated herein by reference to Annex C to the Preliminary Proxy Statement).* |
| (d)(3) | Contribution Agreement, dated as of February 18, 2011, by and among Trucking Investment Co. Inc., Harold E. Antonson and Michael E. Kibler (incorporated herein by reference to Exhibit D to the Preliminary Proxy Statement).* |
| (f)(1) | Section 23-1-44 of the Indiana Business Corporation Law (incorporated herein by reference to Annex E to the Preliminary Proxy Statement).* |
Exhibit (b)(1)
| US1 Industries, Inc. and subsidiaries |
| TERM SHEET |
| September 10, 2010 |
| BORROWERS: | US1 Industries, Inc. and subsidiaries (“the Borrowers”). It is anticipated that the borrowers and legal structure will be consistent with the current US Bank Credit Facility. | |
| LENDER: | US Bank Asset Based Finance, (the “Lender”). | |
| FACILITY: | Up to a three-year $25,000,000 revolving credit facility with all extension of credit subject to availability as described below. | |
| SECURITY: | All loans shall be secured by a first lien on all cash, accounts receivable, and proceeds thereof of Borrowers. | |
| LIMITED GUARANTEES: | Limited personal guarantees from Mr. Michael Kibler and Mr. Harold Antonson in the amount of $3,000,000 each will be required. | |
| AVAILABILITY: | Up to eighty-five percent (85%) of eligible billed accounts receivable not more than seventy-five (75) days from invoice date and up to 75% of eligible unbilled accounts receivable aged not more than seven (7) days from the date of service. | |
| INTEREST RATE: | Thirty (30) day Libor + 3.75%. | |
| UNUSED FEE: | An unused line fee equal to one-half of one percent (.50%) per annum of the unused portion of the revolving credit facility, will be due and payable monthly in arrears. | |
| CLOSING FEE: | One-quarter of one percent (0.25%) payable to Lender at closing. | |
| COLLATERAL | ||
| MANAGEMENT FEE: | One hundred dollars per month per borrowing base. It is anticipated with the current loan structure that the collateral management fee will be $100 x 22 co-borrowers, or $2,200 per month. | |
| FIELD EXAMINATION: | As a part of this proposed financing package, the Lender has conducted a collateral and financial field examination. Subsequent to loan approval and funding, the Lender will conduct semi-annual field examinations. The per diem costs of a field examiner is $850 (based on an 8-hour day), plus any "out-of-pocket" expenses, including but not limited, to travel, lodging, meals, etc. |
| COLLATERAL | ||
| PROCEEDS: | All collateral proceeds are to be collected in a post office box(es) set up for that purpose (lockbox) and deposited into a U.S. Bank "blocked" account. Said proceeds will be credited to Borrower’s loan account in the blocked account (conditional upon final collection). | |
| REPORTING: | Monthly internally prepared financial statements, and annual fiscal year-end financial statements audited by an independent certified public accounting firm. | |
| Monthly aging of Borrower's open accounts receivable and open accounts payable reconciled to the general ledger, financial statements and Borrowing Base Certificate. | ||
| At least weekly reporting of sales, collections and non-cash charges via a Borrowing Base Certificate. | ||
| Financial projections thirty (30) days prior to the fiscal year-end for the following fiscal year. | ||
| All other information as the Bank may reasonably request. | ||
| OPENING AVAILABILITY: | A minimum opening availability of $3,000,000 will be required at close. This is after payment of transaction fees and other costs associated with this credit facility (including A/P greater than 60 days past due unless approved in advance by Lender). | |
| DISTRIBUTIONS: | Shareholder distributions will be limited to allow for payment of shareholder tax liabilities. | |
| FINANCIAL COVENANTS: | Lender will require financial covenants that will include, but not necessarily be limited to, a Fixed Charge Coverage test to be measured quarterly on a trailing twelve month basis of not less than 1.15x, and a limit on annual capital expenditures not to exceed $600,000 per annum. | |
| EXPENSES: | Borrower shall reimburse Lender for all costs and expenses (“Due Diligence Expenses”) incurred by the Bank in connection with its due diligence and examinations associated with this requested financing, including, but not limited to, any legal, field examination, and background check costs, and all out-of-pocket expenses for the Bank’s personnel associated therewith, including, but not limited to, travel, lodging, meals, etc. |
This Term Sheet is provided for discussion purposes only and does not constitute an offer, agreement, or commitment to lend. It is intended only as an indication of the Lenders interest in pursuing those steps which may lead to such a commitment. A final commitment is subject to a number of steps, including completion of due diligence procedures, appropriate credit approvals, the satisfactory review and execution of mutually-acceptable loan documentation, and such other terms and conditions as determined by the Lender.
Exhibit (b)(2)
ISSUE 27 - 1
PREPARED FOR US1 INDUSTRIES, INC.
FAIRNESS OPINION OF US1 INDUSTRIES, INC.
EXECUTIVE SUMMARY
PREPARED BY CAMBRIDGE PARTNERS & ASSOCIATES
COMPANY BACKGROUND
US 1 Industries, Inc., is a holding company that owns subsidiary operating companies, most of which are interstate trucking companies operating in 48 states.
US 1 was incorporated in California under the name Transcon Incorporated on March 3, 1981.
During 2009, Operating Subsidiaries, utilized the services of approximately 168 agents. No agent has accounted for more than 10% of revenue during 2009, 2008 or 2007. The Company, through its subsidiaries, shipped freight for approximately 1,000 customers in 2009, none of which accounted for more than 10% of the Company's revenues.
At December 31, 2009, the Operating Subsidiaries had approximately 89 full-time employees.
[1] Per share value ascribed based on market value of a 13.3% interest in American Inter- Fidelity Exchange (AIFE). Refer to accompanying valuation schedules for AIFE.
[2] Based on book equity values
[3] Real Estate. Incremental impact on value not captured in valuation approaches. Difference between realizable value from net offer and capitalized net rental income reflected in value indications via the income and market approaches.
| MARKET VALUE | WTD | |||||||
| MARKET TRANSACTION APPROACH INDICATION (ROUNDED) | 25,000 | 25 | % | |||||
| MARKET COMPARABLE APPROACH INDICATION (ROUNDED) | 29,000 | 25 | % | |||||
| INCOME APPROACH INDICATION (ROUNDED) | 28,000 | 50 | % | |||||
| BUSINESS ENTERPRISE VALUE-Optimal Working Capital | 27,500 | |||||||
| LESS: OPTIMAL WORKING CAPITAL @ 11.0% of Sales | 21,745 | |||||||
| ADD: EXISTING DEBT-FREE WORKING CAPITAL | 22,791 | |||||||
| VALUE OF INVESTED OPERATING CAPITAL | 29,000 | |||||||
| ADD: TOTAL NON-OPERATING ASSETS (NET) | 530 | [3] | ||||||
| INDICATED VALUE OF INVESTED CAPITAL | $ | 30,000 | ||||||
| LESS: LONG TERM DEBT | (10,000 | ) | ||||||
| INDICATED VALUE OF EQUITY - TOTAL CONTROL BASIS | $ | 19,530 | ||||||
| LESS: INDICATED VALUE OF MINORITY INTEREST | 953 | [2] | ||||||
| INDICATED VALUE OF COMMON EQUITY - TOTAL CONTROL BASIS | 18,577 | |||||||
| DIVIDED BY: NUMBER OF COMMON SHARES OUTSTANDING | 14,243 | |||||||
| INDICATED VALUE PER COMMON SHARE | $ | 1.30 | ||||||
| PLUS: INDICATED VALUE OF AIFE CONTRIBUTION TO US1 INDUSTRIES INTEREST ON PER SHARE BASIS | 0.11 | [1] | ||||||
| INDICATED VALUE PER COMMON SHARE W/ AIFE CONTRIBUTION | $ | 1.42 | ||||||
| ISSUE 27-2 |
| PREPARED FOR US1 INDUSTRIES, INC. |
| FAIRNESS OPINION OF US1 INDUSTRIES, INC. |
| MARKET APPROACH - TRANSACTION METHOD |
| ($ 000's) |
| TTM [1] | 5YWA | |||||||
| ADJUSTED PRE-TAX CASH FLOW (EBITDA) | $ | 3,983 | $ | 3,411 | ||||
| MARKET MULTIPLES | 6.0 | 6.0 | ||||||
| LESS: DISCOUNT FOR COMPANY SPECIFIC FACTORS (-10.0%) | (0.6 | ) | (0.6 | ) | ||||
| ADJUSTED MARKET MULTIPLE - CONTROL BASIS | 6.6 | 6.6 | ||||||
| VALUE INDICATION - CONTROL BASIS | 26,285 | 22,511 | ||||||
| VALUE INDICATION (ROUNDED) | 26,000 | 23,000 | ||||||
| WEIGHTS | 50.0 | % | 50.0 | % | ||||
| WEIGHTED INDICATION | $ | 13,000 | $ | 11,500 | ||||
| VALUE INDICATION - MARKET TRANSACTION METHOD (Rounded) | $ | 25,000 | ||||||
REMARKS
[1] TTM - Trailing 12 Months; 5YWA - 5 Years Weighted Average
| Multiples | |||||
| AVERAGE | 5.6 | ||||
| 1ST QUARTILE | 4.5 | ||||
| 2ND QUARTILE (MEDIAN) | 5.8 | ||||
| 3RD QUARTILE | 6.8 | ||||
| MAXIMUM | 9.3 | ||||
| SELECTED | 6.0 | ||||
| ISSUE 27-3 |
| PREPARED FOR US1 INDUSTRIES, INC. |
| FAIRNESS OPINION OF US1 INDUSTRIES, INC. |
| MARKET APPROACH - GUIDELINE COMPANY METHOD |
| ($ 000's) |
| TTM | 5YWA | |||||||
| ADJUSTED PRE-TAX CASH FLOW (EBITDA) | $ | 3,983 | $ | 3,411 | ||||
| MARKET MULTIPLES | 10.0 | 11.0 | ||||||
| LESS: DISCOUNT FOR COMPANY SPECIFIC FACTORS (25.0%) | 2.5 | 2.8 | ||||||
| ADJUSTED MARKET MULTIPLE - CONTROL BASIS | 7.5 | 8.3 | ||||||
| VALUE INDICATION - CONTROL BASIS | 29,869 | 28,139 | ||||||
| VALUE INDICATION (ROUNDED) | 30,000 | 28,000 | ||||||
| WEIGHTS | 50.0 | % | 50.0 | % | ||||
| WEIGHTED INDICATION | $ | 15,000 | $ | 14,000 | ||||
| VALUE INDICATION - GUIDELINE COMPANY METHOD | $ | 29,000 | ||||||
REMARKS
[1] TTM - Trailing 12 Months; 5YWA - 5 Years Weighted Average
| AVERAGE | 9.8 | 12.3 | ||||||
| MEDIAN | 10.2 | 11.1 | ||||||
| HIGH | 13.3 | 19.0 | ||||||
| LOW | 5.4 | 7.8 | ||||||
| SELECTED | 10.0 | 11.0 |
| PREPARED FOR US1 INDUSTRIES, INC. |
| FAIRNESS OPINION OF US1 INDUSTRIES, INC. |
| DISCOUNTED NET CASH FLOW - SENSITIVITY ANALYSIS |
| ($ 000's) |
| INCOME APPROACH INDICATION (ROUNDED) | 28,000 |
SENSITIVITY ANALYSIS - VALUE INDICATION
Long Term Revenue Growth
| $ | 28,000 | 0.5 | % | 1.5 | % | 2.5 | % | 3.5 | % | 4.5 | % | |||||||||||||
| Discount Factor | 17.0 | % | 23,000 | 24,000 | 24,000 | 25,000 | 26,000 | |||||||||||||||||
| 16.5 | % | 24,000 | 25,000 | 25,000 | 26,000 | 27,000 | ||||||||||||||||||
| 16.0 | % | 25,000 | 25,000 | 26,000 | 27,000 | 28,000 | ||||||||||||||||||
| 15.5 | % | 26,000 | 26,000 | 27,000 | 28,000 | 29,000 | ||||||||||||||||||
| 15.0 | % | 27,000 | 27,000 | $ | 28,000 | 29,000 | 31,000 | |||||||||||||||||
| 14.5 | % | 28,000 | 28,000 | 29,000 | 31,000 | 32,000 | ||||||||||||||||||
| 14.0 | % | 29,000 | 30,000 | 31,000 | 32,000 | 34,000 | ||||||||||||||||||
| 13.5 | % | 30,000 | 31,000 | 32,000 | 34,000 | 36,000 | ||||||||||||||||||
| 13.0 | % | 31,000 | 32,000 | 34,000 | 35,000 | 38,000 |
| ISSUE 27-5 |
| PREPARED FOR US 1 INDUSTRIES, INC. |
| VALUATION OF AMERICAN INTER-FIDELITY EXCHANGE |
| EXECUTIVE SUMMARY |
| PREPARED BY CAMBRIDGE PARTNERS & ASSOCIATES |
REMARKS
[1] There were non-operating assets of "OTHER INVESTED ASSETS - INDIANA TRUCKER' EXCHANGE " in the amount of $1,020M and non-operating liability of $126M as of the valuation date.
[2] Minority discount calculated based on control premium of 20% for insurance industry based on Mergerstat data.
[3] Allocable percentage of interest of AIFE to US 1 calculated based on underwriting profit by management.
| MARKET VALUE | WTD | ||||||||||
| COST APPROACH INDICATION [1] | $ | 12,900 | 33 | % | |||||||
| MARKET TRANSACTION APPROACH INDICATION (ROUNDED) | 13,900 | 33 | % | ||||||||
| MARKET COMPARABLE APPROACH INDICATION (ROUNDED) | 12,700 | 33 | % | ||||||||
| BUSINESS ENTERPRISE VALUE | 13,200 | ||||||||||
| [1] | ADD: NON-OPERATING ASSETS (LIABILITIES) | 893 | |||||||||
| MARKET VALUE OF INVESTED CAPITAL | $ | 14,100 | |||||||||
| LESS: LONG TERM DEBT | 0 | ||||||||||
| MARKET VALUE OF EQUITY - TOTAL CONTROL BASIS | $ | 14,100 | |||||||||
| [2] | LESS: DISCOUNT FOR LACK OF CONTROL (MINORITY) 16.7% | 2,400 | |||||||||
| MARKET VALUE OF COMMON EQUITY - MARKETABLE MINORITY INTEREST | 11,700 | ||||||||||
| [3] | TIMES: ALLOCABLE PERCENTAGE TO US 1 INDUSTRIES (Rounded) 13.3% | $ | 1,600 | ||||||||
| DIVIDED BY: NUMBER OF COMMON SHARES OUTSTANDING OF US 1 INDUSTRIES | 14,243 | ||||||||||
| MARKET VALUE OF AIFE CONTRIBUTION TO US1 INDUSTRIES INTEREST ON PER SHARE BASIS | $ | 0.11 | |||||||||
| PREPARED FOR US 1 INDUSTRIES, INC. |
| VALUATION OF AMERICAN INTER-FIDELITY EXCHANGE |
| MARKET APPROACH - MARKET TRANSACTION METHOD |
| ($ 000's) |
| TTM [1] | ||||
| EQUITY BOOK VALUE | $ | 12,870 | ||
| MARKET MULTIPLES | 1.2 | |||
| LESS: DISCOUNT [2](10.0%) | 0.1 | |||
| ADJUSTED MARKET MULTIPLE - CONTROL BASIS | 1.1 | |||
| VALUE INDICATION - CONTROL BASIS | 13,899 | |||
| WEIGHTED INDICATION | $ | 13,900 | ||
| EQUITY VALUE INDICATION - MARKET TRANSACTION METHOD (Rounded) | $ | 13,900 | ||
REMARKS
[1] TTM - Trailing 12 Months
[2] Discount for size and customer concentration.
| AVERAGE | 1.2 | |||
| 1ST QUARTILE | 0.6 | |||
| 2ND QUARTILE (MEDIAN) | 1.2 | |||
| 1ST QUARTILE | 1.6 | |||
| MAXIMUM | 2.9 | |||
| SELECTED | 1.2 |
| PREPARED FOR US 1 INDUSTRIES, INC. |
| VALUATION OF AMERICAN INTER-FIDELITY EXCHANGE |
| MARKET APPROACH - GUIDELINE COMPANY METHOD |
| ($ 000's) |
| TTM [1] | ||||
| BOOK EQUITY CAPITAL | $ | 12,870 | ||
| MARKET MULTIPLES | 1.1 | |||
| LESS: DISCOUNT FOR COMPANY SPECIFIC FACTORS [2] (10.0%) | 0.1 | |||
| ADJUSTED MARKET MULTIPLE - CONTROL BASIS | 1.0 | |||
| VALUE INDICATION - CONTROL BASIS | 12,741 | |||
| EQUITY VALUE INDICATION - GUIDELINE COMPANY METHOD | $ | 12,700 | ||
REMARKS
[1] TTM - Trailing 12 Months.
[2] Discount for size, customer concentration, etc.
| AVERAGE | 1.2 | |||
| MEDIAN | 1.1 | |||
| HIGH | 2.5 | |||
| LOW | 0.5 | |||
| SELECTED | 1.1 |
| PREPARED FOR US1 INDUSTRIES, INC. |
| FAIRNESS OPINION OF US1 INDUSTRIES, INC. |
| MARKET TRANSACTIONS |
| Deal | Sale Date | Seller | Seller's Description | Exclusions | ||||
| 1 | 11-Jul-97 | Carolina Pacific Distributors Inc. | Shipping / Trucking Services From Coast to Coast | |||||
| 2 | 31-Jan-95 | Choctaw Brokerage Inc. and Choctaw Express | Truckload Motor Carrier Providing Transportation Services | |||||
| 25-Jan-05 | Circle D Transport Inc. | Provides Transportation Services to the Oilfield Industry | Trucking company specializing in the oil/gas industry | |||||
| 4-Jun-08 | Badger Transport, Inc. | Transportation of Wind Energy Components | Company description doesn't appear to be in line with the subject company's core business. | |||||
| 15-Aug-97 | Capital Warehouse Inc. | Truckload Carrier / Warehouse | Trucking company specializing in the oil/gas industry | |||||
| 9-Dec-98 | Pilot Transport, Inc. | Provides Transportation of Automobiles | Trucking company specializing in the oil/gas industry | |||||
| 14-Apr-99 | Mid-Cal Express, Inc. | Truckload Carrier that Transports a Range of Commodities | Negative EBITDA | |||||
| 3 | 19-Jul-99 | R & M Enterprises and Williams Truck | Trucking Company | |||||
| 4 | 12-Oct-06 | Volunteer Trucking, Inc. | OTR and LTL Trucking | |||||
| 11-Jan-99 | MPG Transco Ltd. | Provides Transportation of Automobiles | Trucking company specializing in the oil/gas industry | |||||
| 26-Jul-99 | RailLink, Ltd. | Provides Freight Transportation Services | Company description doesn't appear to be in line with the subject company's core business. | |||||
| 8-Aug-08 | NA | Oilfield Trucking | Trucking company specializing in the oil/gas industry | |||||
| 3-Feb-98 | NA | Solid Waste Transportation | Company description doesn't appear to be in line with the subject company's core business. | |||||
| 28-Feb-98 | Petro-Chemical Transport, Inc. | Transportation, Petroleum Products | Trucking company specializing in the oil/gas industry | |||||
| 13-Jan-00 | Conex Global Logistics Services, Inc. | Interrelated Freight Services to Include Trucking and Rail | Company description doesn't appear to be in line with the subject company's core business. | |||||
| 5-Mar-02 | Stony's Trucking Company | Local and Long-Distance Hauling of Various Products | Negative EBITDA | |||||
| 1-Jan-05 | Formula Transport Ltd. | Provides Oilfield Trucking and Related Services to the Oil and Gas Industry | Trucking company specializing in the oil/gas industry | |||||
| 29-Apr-05 | H.L. Powell Ltd. | Provides Oilfield Trucking and Related Services to the Oil and Gas Industry | Trucking company specializing in the oil/gas industry | |||||
| 1-Mar-07 | NA | Bulk Crude Oil Transportation | Trucking company specializing in the oil/gas industry | |||||
| 29-Jan-98 | Victory Express Inc. | Truckload Carrier | Company description doesn't appear to be in line with the subject company's core business. | |||||
| 1-Nov-99 | CARCO Carrier Corporation | Irregular Route, Common and Contract Motor Carrier | Company description doesn't appear to be in line with the subject company's core business. | |||||
| 5 | 7-Apr-04 | NA | Trucking | |||||
| 6 | 1-Jul-98 | North Star Transportation, Inc. | Transportation; General Commodities | |||||
| 29-Apr-05 | Swanberg Bros. Trucking Ltd. | Provides Oilfield Trucking and Related Services to the Oil and Gas Industry | Trucking company specializing in the oil/gas industry | |||||
| 7 | 14-Sep-06 | Star Transportation, Inc. | Short-to-Medium Haul Dry Van Regional Truckload Carrier | |||||
| 8 | 28-Aug-98 | PST Vans, Inc. | Trucking Services (see notes) | |||||
| 17-Aug-06 | CD&L, Inc. | Full-Service Provider of Delivery Services | Company description doesn't appear to be in line with the subject company's core business. | |||||
| 9 | 23-Aug-07 | Contract Freighters, Inc. | Truckload Carrier | |||||
| 10 | 30-Nov-01 | Arnold Industries, Inc. | Provides Trucking and Warehousing Services | |||||
| 11 | 24-May-05 | USF Corporation | Regional and Inter-Regional Delivery and Transportation |
| PREPARED FOR US1 INDUSTRIES, INC. |
| FAIRNESS OPINION OF US1 INDUSTRIES, INC. |
| GUIDELINE COMPANIES DESCRIPTIONS |
| Company | Ticker | Headquarters | Description | Exclusions | ||||
| US1 INDUSTRIES | USOO | Valparaiso, IN | US 1 Industries, Inc. is a holding company, which through its subsidiaries, carries all forms of freight transported by truck, including trucking services such as containerized, refrigerated and flatbed transportation. | Subject Company | ||||
| CON-WAY | CNW | San Mateo, CA | Con-way, Inc. provide transportation, logistics and supply-chain management services for a wide range of manufacturing, industrial and retail customers. It has divided into five reporting segments: Freight, Logistics, Truckload, Vector and Other. | LTL transportation. Company with significant investment in "revenue equipment" (e.g. trucks) | ||||
| LANDSTAR SYSTEM | LSTR | Jacksonville, FL | Landstar System, Inc is engaged as a transportation & logistics services company, providing transportation capacity & related transportation services to shippers throughout the United States and to a lesser extent in Canada. | |||||
| UNIVERSAL TRUCKLOAD SVCS | UACL | Warren, MI | Universal Truckload Services, Inc. is a non-asset based provider of transportation services to shippers throughout the United States and in the Canadian provinces of Ontario and Quebec. | |||||
| AUTOINFO | AUTO | Boca Raton, FL | AutoInfo, Inc. is a non-asset based transportation services company, which through its wholly-owned subsidiaries, provides transportation capacity & related transportation services to shippers throughout the United States, & to a lesser extent, Canada. | Over the Counter security | ||||
| HUB GROUP A | HUBG | Downers Grove, IL | Hub Group, Inc. is an asset light freight transportation management company, which offers intermodal, truck brokerage and logistics services. | Third party logistic provider | ||||
| CH ROBINSON WORLDWIDE | CHRW | Eden Prairie, MN | CH Robinson Worldwide, Inc. is a third party logistics company, which provides freight transportation services and logistics solutions to companies of all sizes, in a variety of industries. | Third party logistic provider | ||||
| PACER INTERNATIONAL INC | PACR | Dublin, OH | Pacer International, Inc. is an asset-light North American transportation and logistics services provider. The Company focuses on delivering an integrated door-to-door intermodal product to the end-shipper/beneficial cargo owners, along with complementary logistics services. | Third party logistic provider | ||||
| EXPRESS-1 EXPEDITED SLTNS | XPO | Saint Joseph, MI | Express-1 Expedited Solutions, Inc. is a transportation services organization, focused upon transportation services. Its business units are Express-1, Concert Group Logistics and Bounce Logistics. | |||||
| RADIANT LOGISTICS INC | RLGT | Bellevue, WA | Radiant Logistics, Inc. is a non-asset based logistics company providing domestic and international freight forwarding services through a network, which includes a combination of company owned and exclusive agent offices across North America. | |||||
| WLG INC | WLGI | Des Plaines, IL | WLG Inc. (WLG) is an international, non-asset based logistics company that provides air and ocean freight forwarding, contract logistics, customs brokerage and other supply chain management services to its customers from its offices in Hong Kong, the People's Republic of China, Australia, the United States, the United Kingdom and through a worldwide network of independent cargo agents. | Pink Sheet |
| PREPARED FOR US 1 INDUSTRIES, INC. |
| VALUATION OF AMERICAN INTER-FIDELITY EXCHANGE |
| MARKET TRANSACTIONS METHOD - SELECTED TRANSACTIONS |
| Deal | Sale Date | Seller | Seller's Description | Exclusion | ||||
| 1 | 31-Dec-98 | Heritage Insurance Company | Property and Casualty Insurance | |||||
| 2 | 5-Apr-02 | American Country Holdings, Inc. | Specialty Property and Casualty Insurer and Provides Premium Financing and Collateralized Loans | |||||
| 30-Aug-02 | Barry Scott Companies, Inc. | Provides Auto Insurance through Twenty Agencies | Negative Multiple | |||||
| 3 | 31-Dec-98 | Guardian Insurance Company | Automobile and Liability Insurance | |||||
| 15-Feb-07 | NA | Property/Casualty Insurance Agency and Employee Benefits TPA | Outlier | |||||
| 26-Jan-05 | FLF, Inc. (d/b/a Diversified Risk Insurance Brokers, Inc.) | Commercial Property and Casualty Insurance Broker | Outlier | |||||
| 16-Apr-02 | Milne Scali & Company | Owns and Operates General Property and Casualty Insurance Agencies | Outlier | |||||
| 24-Sep-99 | North East Insurance Company | Property and casualty insurer | Multiple not reported | |||||
| 4 | 1-Jan-03 | Phoenix Indemnity Insurance Company | Provides Stock Property and Casualty Insurance | |||||
| 5 | 13-Nov-09 | Advocate, MD Financial Group Inc. | Provides Property/Casualty Insurance and other Insurance Services | |||||
| 19-Sep-00 | Gibraltar Casualty Company | Direct Excess and Surplus Lines Insurance Company | Description | |||||
| 30-Jan-06 | Texas General Agency, Inc. and affiliates | Property and Casualty Insurance Products | Outlier | |||||
| 6 | 3-Oct-05 | Financial Pacific Insurance Group, Inc. | Commercial Property, Casualty, and Surety Lines of Insurance | |||||
| 7 | 2-Jul-07 | Capital City Holding Company, Inc. and affiliated corporations | Insurance Holding Company | |||||
| 8 | 29-Jul-97 | American Country Insurance Company | Property and Casualty Insurance | |||||
| 9 | 7-Jun-98 | Milbank Insurance Company | Insurance | |||||
| 3-Aug-05 | NCRIC Group, Inc. | Property and Casualty Insurance Company | Negative Multiple | |||||
| 10 | 10-Apr-07 | Preserver Group, Inc. | Property and Casualty Insurance (Private Passenger Automobile and Homeowners' Insurance) | |||||
| 11 | 17-Feb-98 | CapMAC Holdings, Inc. | Provides Financial Guaranty Insurance | |||||
| 12 | 4-Jan-02 | Capitol Transamerica Corporation | Underwrites Property, Casualty, Fidelity, and Surety Insurance | |||||
| 13 | 30-Apr-08 | North Pointe Holdings Corporation | Property and Casualty Insurance Holding Company | |||||
| 14 | 30-Jun-08 | SCPIE Holdings Inc. | Provides Insurance and Reinsurance Products through Subsidiaries | |||||
| 15 | 23-Aug-01 | Front Royal, Inc. | Commercial Property and Casualty Insurance | |||||
| 16 | 13-Nov-09 | Specialty Underwriters’ Alliance, Inc. | Specialty Commercial Property and Casualty Insurance Products |
| ISSUE 28-3 |
| PREPARED FOR US 1 INDUSTRIES, INC. |
| VALUATION OF AMERICAN INTER-FIDELITY EXCHANGE |
| MARKET TRANSACTIONS METHOD - SELECTED TRANSACTIONS |
| Deal | Sale Date | Seller | Seller's Description | Exclusion | ||||
| 17 | 1-Jul-10 | Vanliner Group, Inc. | Provides Insurance for the Moving and Storage Industry | |||||
| 4-Jan-06 | MEEMIC Insurance Company and MEEMIC Insurance Services Corporation | Insurance | Multiple not reported | |||||
| 18 | 20-Oct-08 | Darwin Professional Underwriters, Inc. | Property and Casualty Insurance Holding Company | |||||
| 19 | 25-Jan-05 | Penn-America Group, Inc. | Insurance Holding Company | |||||
| 20 | 11-Dec-07 | James River Group, Inc. | Owns and Manages Specialty Property and Casualty Insurance Companies | |||||
| 21 | 31-Jul-08 | ProCentury Corporation | Property and Casualty Insurance Holding Company | |||||
| 22 | 31-Oct-08 | AmCOMP, Inc. | Property and Casualty Insurer | |||||
| 23 | 6-Mar-00 | Foremost Corporation of America | Provides Property and Casualty Insurance | |||||
| 24 | 22-Nov-00 | HSB Group, Inc. | Commercial Insurance, Global Special Risk Insurance, Engineering Services and Investments | |||||
| 24-Nov-09 | Virgin Mobile USA, Inc. | National Provider of Predominantly Prepaid Wireless Communications Services | Negative Multiple | |||||
| 25 | 1-Dec-08 | Philadelphia Consolidated Holding Corp. | Property and Casualty Insurance Holding Company | |||||
| 26 | 4-Jun-08 | Commerce Group, Inc., The | Property and Casualty Insurance Holding Company | |||||
| 27 | 1-Jun-01 | CGU Corporation | Engaged in Underwriting and Risk Placement of Property and Casualty Insurance | |||||
| 28 | 22-Sep-08 | Safeco Corporation | Property and Casualty Insurance Holding Company |
| PREPARED FOR US 1 INDUSTRIES, INC. |
| VALUATION OF AMERICAN INTER-FIDELITY EXCHANGE |
| GUIDELINE COMPANIES METHOD - SELECTED COMPANY DESCRIPTIONS |
| Company | Ticker | Headquarters | Description | Exclusions | ||||
| BALDWIN & LYONS B | BWINB | Indianapolis, IN | The company through its divisions and subsidiaries, specializes in marketing and underwriting property and casualty insurance and the assumption of property reinsurance mainly insuring against catastrophes. | |||||
| FIRST ACCEPTANCE | FAC | Nashville, TN | First Acceptance Corporation is a retailer, servicer and underwriter of non-standard personal automobile insurance based in Nashville, Tennessee. It writes non-standard personal automobile insurance in 12 states. | |||||
| PROGRESSIVE | PGR | Mayfield Village, OH | Progressive Corporation is an insurance holding company, whose subsidiaries provides personal and commercial automobile insurance and other property-casualty insurance and related services throughout the United States. | |||||
| MERCURY GENERAL | MCY | Los Angeles, CA | Mercury General Corporation and its subsidiaries are engaged in writing automobile insurance in a number of states, mainly California. It also writes homeowners, mechanical breakdown, fire, umbrella, and commercial automobile and property insurance. | |||||
| GAINSCO | GAN | Dallas, TX | Gainsco, Inc., through its subsidiaries, is engaged in the property and casualty insurance business focusing on the nonstandard personal auto market. | |||||
| ASSURANCEAMERICA | ASAM | Atlanta, GA | An insurance holding company underwrites and distributes nonstandard private passenger automobile insurance. | |||||
| SAFETY INSURANCE GROUP | SAFT | Boston, MA | The Company is a provider of private passenger automobile insurance in Massachusetts. It also offers a portfolio of property and casualty insurance products, including commercial automobile, homeowners, dwelling fire, umbrella and business owner policies. | |||||
| INFINITY PROPERTY | IPCC | Birmingham, AL | A holding company which through subsidiaries provides personal automobile insurance with a concentration on nonstandard auto insurance. | |||||
| AFFIRMATIVE INS HOLDINGS | AFFM | Addison, TX | The Company is a distributor and producer of non-standard personal automobile insurance policies and related products and services for individual consumers in targeted geographic areas. | |||||
| 21ST CENTURY HOLDING | TCHC | 21st Century Holding Company is an insurance holding company, which, through its subsidiaries & its contractual relationships with its independent agents, controls substantially all aspects of the insurance underwriting, distribution and claims processes. | Core business not related to automobile insurance | |||||
| ACE | ACE | ACE Ltd is a Swiss-incorporated holding company with its subsidiaries, is a global insurance and reinsurance organization and serve the property and casualty insurance needs of businesses of all sizes in a range of industries. | Core business not related to automobile insurance | |||||
| ALLEGHANY | Y | Alleghany Corporation is engaged, through Alleghany Insurance Holdings LLC and its subsidiaries, RSUI, CATA, Darwin and EDC, in the property and casualty and surety insurance business. | Core business not related to automobile insurance | |||||
| ALLIED WORLD ASSURANCE | AWH | Allied World Assurance Holdings Ltd, through its wholly-owned subsidiaries provides property and casualty insurance and reinsurance on a worldwide basis through operations in Bermuda, the United States, Ireland, Switzerland and the United Kingdom. | Core business not related to automobile insurance | |||||
| ALLSTATE | ALL | The Allstate Corporation is engaged in the personal property and casualty insurance business and the life insurance, retirement and investment products business. | Core business not related to automobile insurance | |||||
| ALTERRA CAPITAL HOLDINGS | ALTE | Alterra Capital Holdings Limited provides diversified specialty insurance and reinsurance products to corporations, public entities, property and casualty insurers, and life and health insurers. | Core business not related to automobile insurance | |||||
| AMERICAN FINANCIAL GROUP | AFG | American Financial Group, Inc. is a holding company which through its subsidiaries, is engaged mainly in property and casualty insurance. | Core business not related to automobile insurance | |||||
| AMERICAN INTL GROUP | AIG | American International Group is a holding company, through its subsidiaries, is engaged in insurance and insurance related activities in the United States and abroad. | Core business not related to automobile insurance |
| ISSUE 28-4 |
| PREPARED FOR US 1 INDUSTRIES, INC. |
| VALUATION OF AMERICAN INTER-FIDELITY EXCHANGE |
| GUIDELINE COMPANIES METHOD - SELECTED COMPANY DESCRIPTIONS |
| Company | Ticker | Headquarters | Description | Exclusions | ||||
| AMERICAN SAFETY INSURANCE | ASI | American Safety Insurance Holdings Ltd is an insurance and reinsurance company which provides customized products and solutions to small and medium-sized businesses in industries. | Core business not related to automobile insurance | |||||
| AMERISAFE | AMSF | Amerisafe Inc. is a holding Company which markets and underwrites workers' compensation insurance through its insurance subsidiaries. | Core business not related to automobile insurance | |||||
| AMTRUST FINANCIAL SVCS | AFSI | An insurance holding company through its subsidiaries provides specialty property and casualty insurance. | Core business not related to automobile insurance | |||||
| ASPEN INSURANCE HOLDINGS | AHL | Aspen Insurance Holdings Ltd is a Bermuda holding company which operates in the global markets for property and casualty insurance and reinsurance. | Core business not related to automobile insurance | |||||
| ASSURED GUARANTY | AGO | Assured Guaranty, Ltd. is a holding company, which through its operating subsidiaries provides credit enhancement products to the public finance, structured finance and mortgage markets. | Core business not related to automobile insurance | |||||
| AXIS CAPITAL HOLDINGS | AXS | Axis Capital Holdings Ltd through its subsidiaries, provides a range of insurance and reinsurance products to insureds and reinsureds worldwide operations with main locations in Bermuda, the United States and Europe. | Core business not related to automobile insurance | |||||
| BALDWIN & LYONS A | BWINA | Baldwin & Lyons, Inc. through its divisions and subsidiaries, specializes in marketing and underwriting property and casualty insurance and the assumption of property reinsurance mainly insuring against catastrophes. | Core business not related to automobile insurance | |||||
| BANCINSURANCE | BCIS | N/A | Core business not related to automobile insurance | |||||
| BERKSHIRE HATHAWAY A | BRKA | Berkshire Hathaway Inc. is a holding company, whose subsidiaries are engaged in a number of business activities, including property and casualty insurance and reinsurance, utilities and energy, finance, manufacturing, service and retailing. | Core business not related to automobile insurance | |||||
| BERKSHIRE HATHAWAY B | BRKB | Berkshire Hathaway Inc. is a holding company, whose subsidiaries are engaged in a number of business activities, including property and casualty insurance and reinsurance, utilities and energy, finance, manufacturing, service and retailing. | Core business not related to automobile insurance | |||||
| CHUBB | CB | The Chubb Corporation is a holding company with subsidiaries mainly engaged in the property and casualty insurance business. | Core business not related to automobile insurance | |||||
| CINCINNATI FINANCIAL CORP | CINF | Cincinnati Financial Corporation's main business is property casualty insurance marketed through independent insurance agents in 37 states. It has four segments Commercial lines property casualty,Life, personal lines property casualty and Investments. | Core business not related to automobile insurance | |||||
| CNA FINANCIAL | CNA | CNA Financial Corporation serves a variety of customers, including small, medium and large businesses; associations; professionals; and groups and individuals with a range of insurance and risk management products and services. | Core business not related to automobile insurance | |||||
| CNA SURETY | SUR | CNA Surety Corporation is an insurance holding company which provides surety and surety-related products in North America and to be the surety of choice for its customers, independent agents and brokers. | Core business not related to automobile insurance | |||||
| DONEGAL GROUP A | DGICA | Donegal Group, Inc. is an insurance holding company whose insurance subsidiaries offer personal and commercial lines of property and casualty insurance to businesses and individuals in 18 Mid-Atlantic, Midwestern and Southeastern states. | Core business not related to automobile insurance | |||||
| DONEGAL GROUP B | DGICB | Donegal Group, Inc. is an insurance holding company whose insurance subsidiaries offer personal and commercial lines of property and casualty insurance to businesses and individuals in 18 Mid-Atlantic, Midwestern and Southeastern states. | Core business not related to automobile insurance | |||||
| EMC INSURANCE GROUP | EMCI | EMC Insurance Group Inc. conducts operations in property and casualty insurance and reinsurance through its subsidiaries. It focuses on the sale of commercial lines of property and casualty insurance to small and medium-sized businesses. | Core business not related to automobile insurance |
| ISSUE 28-4 |
| PREPARED FOR US 1 INDUSTRIES, INC. |
| VALUATION OF AMERICAN INTER-FIDELITY EXCHANGE |
| GUIDELINE COMPANIES METHOD - SELECTED COMPANY DESCRIPTIONS |
| Company | Ticker | Headquarters | Description | Exclusions | ||||
| EMPLOYERS HOLDINGS | EIG | The Company is a provider of worker's compensation insurance focused on select small businesses engaged in low to medium hazard industries. | Core business not related to automobile insurance | |||||
| ENDURANCE SPECIALTY HLDGS | ENH | Endurance Specialty Holdings, Ltd. is a holding company through its subsidiary provides property and casualty insurance and reinsurance on a worldwide basis. | Core business not related to automobile insurance | |||||
| ENSTAR GROUP | ESGR | Enstar Group Ltd was formed to acquire and manage insurance and reinsurance companies in run-off, and to provide management, consulting and other services to the insurance and reinsurance industry. | Core business not related to automobile insurance | |||||
| ERIE INDEMNITY A | ERIE | Erie Indemnity Company provides sales, underwriting and policy issuance services to the policyholders of Erie Insurance Exchange. It also operates as a property/casualty insurer through its three wholly-owned subsidiaries. | Core business not related to automobile insurance | |||||
| FIRST MERCURY FINANCIAL | FMR | N/A | Core business not related to automobile insurance | |||||
| FPIC INSURANCE GROUP | FPIC | FPIC Insurance Group, Inc. operates in the medical professional liability insurance sector of the property and casualty insurance industry as an insurance carrier that bears underwriting risks. | Core business not related to automobile insurance | |||||
| FREMONT MICH INSURACORP | FMMH | N/A | Core business not related to automobile insurance | |||||
| HANOVER INSURANCE GROUP | THG | Hanover Insurance Group, Inc. is a holding company, whose main business operations include insurance products and services in three property and casualty operating segments. | Core business not related to automobile insurance | |||||
| HARLEYSVILLE GROUP | HGIC | Harleysville Group Inc. is an insurance holding company, which through its subsidiaries, engages in the property and casualty insurance business on a regional basis. | Core business not related to automobile insurance | |||||
| HARTFORD FIN SRVCS GRP | HIG | Hartford Financial Services Group, Inc. is an insurance and financial services company providing investment products, individual life, group life and group disability insurance products and property and casualty insurance products in the United States. | Core business not related to automobile insurance | |||||
| HCC INSURANCE | HCC | HCC Insurance Holdings Inc. provides property and casualty, surety, and group life, accident and health insurance coverages and related agency and reinsurance brokerage services to commercial customers and individuals. | Core business not related to automobile insurance | |||||
| HILLTOP HOLDINGS | HTH | Hilltop Holdings Inc. provides fire and homeowners insurance to low value dwellings and manufactured homes in Texas and other areas of the south, southeastern and southwestern United States through its casualty insurance holding company, NLASCO, Inc. | Core business not related to automobile insurance | |||||
| HOMEOWNERS CHOICE | HCII | Homeowners Choice, Inc. through its subsidiaries provides property and casualty homeowners insurance, condominium-owners insurance, and tenants insurance to individuals owning property in Florida. | Core business not related to automobile insurance | |||||
| HORACE MANN EDUCATORS | HMN | Horace Mann Educators is an insurance holding company through its subsidiaries markets and underwrites personal lines of property and casualty insurance, retirement annuities and life insurance in the United States of America. | Core business not related to automobile insurance | |||||
| KINGSWAY FINANCIAL SVCS | KFS | Kingsway Financial Services, Inc. provides innovative insurance solutions to manage speciality risks for individuals and businesses in the United States and, until the disposition of JEVCO, in Canada. | Core business not related to automobile insurance | |||||
| LOEWS | L | Loews Corporation through its subsidiaries is engaged in commercial property & casualty insurance, operation of offshore oil & gas drilling rigs, production of natural gas and liquids, operation of interstate natural gas pipeline and operation of hotels. | Core business not related to automobile insurance | |||||
| MAJESTIC CAPITAL LTD | MAJC | Majestic Capital Ltd is engaged in underwriting primary workers' compensation policies, underwriting workers' compensation reinsurance and excess insurance policies, and providing fee-based management and other services to self-insured entities. | Core business not related to automobile insurance |
| ISSUE 28-4 |
| PREPARED FOR US 1 INDUSTRIES, INC. |
| VALUATION OF AMERICAN INTER-FIDELITY EXCHANGE |
| GUIDELINE COMPANIES METHOD - SELECTED COMPANY DESCRIPTIONS |
| Company | Ticker | Headquarters | Description | Exclusions | ||||
| MARKEL CORP | MKL | Markel Corporation markets and underwrites specialty insurance products and programs to a number of niche markets. It operates in three markets: excess and surplus lines, specialty admitted, and the London markets. | Core business not related to automobile insurance | |||||
| MBIA | MBI | MBIA Incorporated operates the financial guarantee insurance business in the industry and is a provider of asset management advisory services. | Core business not related to automobile insurance | |||||
| MEADOWBROOK INSURANCE GRP | MIG | Meadowbrook Insurance Group, Inc. offers a full range of insurance products and services, focused on niche and specialty program business, which we believe is under served by the standard insurance market. | Core business not related to automobile insurance | |||||
| MERCER INSURANCE GROUP | MIGP | N/A | Core business not related to automobile insurance | |||||
| MGIC INVESTMENT | MTG | MGIC Investment Corporation is a holding company, which through its wholly owned subsidiary Mortgage Guaranty Insurance Corporation is a provider of private mortgage insurance in the United States. | Core business not related to automobile insurance | |||||
| MONTPELIER RE HOLDINGS | MRH | Montpelier Re Holdings, Ltd. through its subsidiaries provides customized and innovative insurance and reinsurance solutions to the global market. | Core business not related to automobile insurance | |||||
| NATIONAL INTERSTATE | NATL | National Interstate Corporation and its subsidiaries operate as an insurance holding company group which underwrites and sells traditional and alternative risk transfer property and casualty insurance products. | Core business not related to automobile insurance | |||||
| NATIONAL SECURITY GROUP | NSEC | National Security Group, Inc. through its subsidiaries, provides property and casualty, and life insurance products and services in the United States. | Core business not related to automobile insurance | |||||
| NAVIGATORS GROUP | NAVG | Navigators Group is an international insurance holding company focusing on specialty products within the overall property/casualty insurance market. | Core business not related to automobile insurance | |||||
| OLD REPUBLIC INTERNAT | ORI | Old Republic International is an insurance holding company, which is engaged in the single business of insurance underwriting. It conducts its business through regulated insurance company subsidiaries organized into three segments. | Core business not related to automobile insurance | |||||
| ONEBEACON INSURANCE GROUP | OB | OneBeacon Insurance Group is a specialty lines insurer with roots dating back to 1831.Through its subsidiaries, OneBeacon offers a range of specialty insurance products sold through independent agents,brokers, and wholesalers throughout the United States. | Core business not related to automobile insurance | |||||
| PENN MILLERS HLD | PMIC | Penn Millers Holding Corporation through its subsidiaries, provides various property and casualty insurance products for agricultural and small commercial business customers. | Core business not related to automobile insurance | |||||
| PMI GROUP | PMI | PMI Group, Inc. provides residential mortgage insurance products designed to promote homeownership and strengthen communities. | Core business not related to automobile insurance | |||||
| PROASSURANCE | PRA | Proassurance Corporation is an insurance holding company for wholly-owned specialty property and casualty insurance companies that provide professional liability insurance for providers of health care services. | Core business not related to automobile insurance | |||||
| RADIAN GROUP | RDN | Radian Group, Inc. through its subsidiaries and affiliates, provides credit-related insurance coverage and financial services to mortgage lenders and other financial institutions. | Core business not related to automobile insurance | |||||
| RENAISSANCERE HOLDINGS | RNR | Renaissance Re Holdings, Ltd is the provider of reinsurance and insurance coverages and related services. Its business consists of two segments, Reinsurance and Individual Risk. | Core business not related to automobile insurance | |||||
| RLI CORP | RLI | RLI Corporation underwrites selected property and casualty insurance through its subsidiaries, collectively known as RLI Insurance Group. | Core business not related to automobile insurance |
| ISSUE 28-4 |
| PREPARED FOR US 1 INDUSTRIES, INC. |
| VALUATION OF AMERICAN INTER-FIDELITY EXCHANGE |
| GUIDELINE COMPANIES METHOD - SELECTED COMPANY DESCRIPTIONS |
| Company | Ticker | Headquarters | Description | Exclusions | ||||
| SEABRIGHT HOLDINGS INC | SBX | SeaBright Holdings Inc. is a specialty provider of multi-jurisdictional workers' compensation insurance and, on a limited basis, general liability insurance. | Core business not related to automobile insurance | |||||
| SELECTIVE INSURANCE | SIGI | Selective Insurance Group is a holding company for seven insurance subsidiaries that offers property and casualty insurance products and services in the East and Midwest of the United States. | Core business not related to automobile insurance | |||||
| STATE AUTO FINANCIAL CP | STFC | State Auto Financial is a property and casualty insurance holding company, which is engaged in writing both personal and business lines of insurance. | Core business not related to automobile insurance | |||||
| THE TRAVELERS COMPANIES | TRV | The Travelers Companies, Inc. is a holding company, which through its subsidiaries is engaged in providing commercial and personal property and casualty insurance products and services to businesses, government units, associations and individuals. | Core business not related to automobile insurance | |||||
| TOWER GROUP | TWGP | Tower Group, Inc. through its subsidiaries offers property and casualty insurance products and insurance services and products. | Core business not related to automobile insurance | |||||
| TRANSATLANTIC HLDGS | TRH | Transatlantic Holdings Inc. through its operating subsidiaries offers reinsurance capacity for a full range of property and casualty products to insurers and reinsures on a treaty and facultative basis. | Core business not related to automobile insurance | |||||
| TRIAD GUARANTY | TGIC | Triad Guaranty Inc. is a holding company which, through its wholly-owned subsidiary, Triad Guaranty Insurance Corporation (TGIC), provides mortgage insurance coverage in the United States. | Core business not related to automobile insurance | |||||
| UNICO AMERICAN | UNAM | Unico American Corporation underwrites property and casualty insurance through its insurance company subsidiary; provides property, casualty, and health insurance through its agency subsidiaries; and provides insurance financing services. | Core business not related to automobile insurance | |||||
| UNITED FIRE & CASUALTY | UFCS | United Fire & Casualty CO. is engaged in the business of writing property and casualty insurance and life insurance. | Core business not related to automobile insurance | |||||
| UNITED INSURANCE HOLDINGS | UIHC | The Company together its subsidiaries is engaged in the property and casualty insurance business in Florida. | Core business not related to automobile insurance | |||||
| UNITRIN INC | UTR | Unitrin, Inc. serves the basic financial needs of individuals, families and small businesses by providing property and casualty insurance, life and health insurance, and automobile finance services. | Core business not related to automobile insurance | |||||
| UNIVERSAL INSURANCE | UVE | Universal Insurance Holdings, Inc. is a vertically integrated insurance holding company, which through its various subsidiaries, covers substantially all aspects of insurance underwriting, distribution, claims processing and exposure management. | Core business not related to automobile insurance | |||||
| W.R. BERKLEY | WRB | W.R. Berkley Corporation is an insurance holding company in the United States which operates in five business segments: specialty insurance, regional property casualty insurance, alternative markets, reinsurance and international. | Core business not related to automobile insurance | |||||
| WHITE MOUNTAINS INSURANCE | WTM | White Mountains Insurance Group Ltd. is a Bermuda limited liability company whose main businesses are conducted through its property and casualty insurance and reinsurance subsidiaries and affiliates. | Core business not related to automobile insurance | |||||
| XL GROUP | XL | XL Group plc, through its subsidiaries, is a provider of global insurance and reinsurance coverages to industrial, commercial and professional service firms, insurance companies and other enterprises. | Core business not related to automobile insurance |
Exhibit (b)(3)
US 1 Industries, Inc.
Projections for September 2010
| December 31, 2009 | January 31, 2010 | February 28, 2010 | March 31, 2010 | April 30, 2010 | May 31, 2010 | June 30, 2010 | July 31, 2010 | August 31, 2010 | ||||||||||||||||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||||||||||||||||
| ASSETS: | ||||||||||||||||||||||||||||||||||||
| CASH | (1,628,383 | ) | (1,983,565 | ) | (1,824,945 | ) | (2,104,088 | ) | (2,410,798 | ) | (2,035,980 | ) | (2,035,440 | ) | (2,531,142 | ) | (187,363 | ) | ||||||||||||||||||
| RESTRICTED STOCK | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
| ACCOUNTS RECEIVABLE-TRADE: | ||||||||||||||||||||||||||||||||||||
| GROSS RECEIVABLES | 27,762,001 | 27,672,108 | 29,498,161 | 30,899,861 | 30,414,270 | 32,118,288 | 32,000,767 | 32,545,305 | 33,154,979 | |||||||||||||||||||||||||||
| ALLOWANCE FOR DOUBTFUL ACCTS | (1,147,031 | ) | (1,107,414 | ) | (1,240,676 | ) | (1,227,498 | ) | (1,274,346 | ) | (1,243,892 | ) | (1,114,877 | ) | (1,104,921 | ) | (1,144,522 | ) | ||||||||||||||||||
| A/R-TRADE, NET | 26,614,970 | 26,564,694 | 28,257,485 | 29,672,363 | 29,139,924 | 30,874,396 | 30,885,890 | 31,440,384 | 32,010,457 | |||||||||||||||||||||||||||
| INTER COMPANY | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
| OTHER RECEIVABLES | 4,433,582 | 5,035,335 | 5,089,906 | 5,359,931 | 5,193,606 | 5,364,872 | 5,369,007 | 5,008,458 | 5,316,582 | |||||||||||||||||||||||||||
| DIVIDEND RECEIVABLE | (6,555 | ) | (6,555 | ) | (6,555 | ) | 65,445 | 65,445 | 65,445 | 65,445 | 65,445 | 65,445 | ||||||||||||||||||||||||
| CURRENT DEFERRED TAX ASSET | 975,178 | 975,178 | 975,178 | 975,178 | 975,178 | 975,178 | 975,178 | 975,178 | 975,178 | |||||||||||||||||||||||||||
| PREPAID ASSETS | 576,346 | 623,089 | 591,913 | 656,021 | 697,820 | 848,257 | 767,317 | 769,036 | 829,632 | |||||||||||||||||||||||||||
| DEPOSITS | 1,047,462 | 1,040,888 | 1,040,848 | 1,040,888 | 1,032,026 | 1,028,728 | 1,025,736 | 1,036,288 | 994,595 | |||||||||||||||||||||||||||
| TOTAL CURRENT ASSETS | 32,012,600 | 32,249,064 | 34,123,830 | 35,665,738 | 34,693,201 | 37,120,896 | 37,053,133 | 36,763,647 | 40,004,526 | |||||||||||||||||||||||||||
| FIXED ASSETS: | ||||||||||||||||||||||||||||||||||||
| EQUIPMENT | 2,331,649 | 1,462,064 | 1,440,165 | 1,427,290 | 1,415,172 | 1,306,104 | 1,311,266 | 1,295,097 | 1,298,816 | |||||||||||||||||||||||||||
| LEASEHOLD IMPROVEMENTS | 347,886 | 347,781 | 347,781 | 347,781 | 347,781 | 347,781 | 347,781 | 347,781 | 347,781 | |||||||||||||||||||||||||||
| TOTAL | 2,679,535 | 1,809,845 | 1,787,946 | 1,775,071 | 1,762,953 | 1,653,885 | 1,659,047 | 1,642,878 | 1,646,597 | |||||||||||||||||||||||||||
| ACCUMULATED DEPRECIATION | (1,353,102 | ) | (956,992 | ) | (959,183 | ) | (964,965 | ) | (971,285 | ) | (880,412 | ) | (895,489 | ) | (899,758 | ) | (914,654 | ) | ||||||||||||||||||
| NET FIXED ASSETS | 1,326,433 | 852,853 | 828,763 | 810,106 | 791,668 | 773,473 | 763,558 | 743,120 | 731,943 | |||||||||||||||||||||||||||
| ASSETS HELD FOR SALE: | ||||||||||||||||||||||||||||||||||||
| LAND | 195,347 | 195,347 | 195,347 | 195,347 | 195,347 | 195,347 | 195,347 | 195,347 | 195,347 | |||||||||||||||||||||||||||
| WORK IN PROGRESS | 68,735 | 144,929 | 144,929 | 144,929 | 187,137 | 150,000 | 150,000 | 150,000 | 150,000 | |||||||||||||||||||||||||||
| NON-CURRENT DEPOSITS | - | 0 | 0 | 0 | 0 | 0 | 0 | 0 | - | |||||||||||||||||||||||||||
| TOTAL | 264,082 | 340,276 | 340,276 | 340,276 | 382,484 | 345,347 | 345,347 | 345,347 | 345,347 | |||||||||||||||||||||||||||
| ACCUMULATED DEPRECIATION | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
| VALUATION ALLOWANCE | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
| NET ASSETS HELD FOR SALE | 264,082 | 340,276 | 340,276 | 340,276 | 382,484 | 345,347 | 345,347 | 345,347 | 345,347 | |||||||||||||||||||||||||||
| NON CURRENT DEFERRED TAX ASSET | 1,107,575 | 1,107,575 | 1,107,575 | 1,107,575 | 1,107,575 | 1,107,575 | 1,107,575 | 1,107,575 | 1,107,575 | |||||||||||||||||||||||||||
| OTHER ASSETS | 126,461 | 126,461 | 126,461 | 126,461 | 126,461 | 126,461 | 126,461 | 126,461 | 126,461 | |||||||||||||||||||||||||||
| NOTE RECEIVABLE | 833,651 | 817,835 | 762,168 | 732,288 | 716,939 | 679,824 | 838,324 | 800,780 | 734,061 | |||||||||||||||||||||||||||
| ACQUISITION-RELATED INTANGIBLES | 2,812,672 | 2,748,785 | 2,684,899 | 2,621,012 | 2,557,125 | 2,493,238 | 2,429,351 | 2,365,464 | 2,301,578 | |||||||||||||||||||||||||||
| GOODWILL | 1,780,639 | 1,391,741 | 1,391,741 | 1,391,741 | 1,391,741 | 1,391,741 | 1,391,741 | 1,391,741 | 1,391,741 | |||||||||||||||||||||||||||
| TOTAL ASSETS | 40,264,113 | 39,634,590 | 41,365,713 | 42,795,197 | 41,767,194 | 44,038,555 | 44,055,490 | 43,644,135 | 46,743,232 | |||||||||||||||||||||||||||
| LIABILITIES AND EQUITY: | ||||||||||||||||||||||||||||||||||||
| LINE OF CREDIT | 9,592,474 | 7,788,123 | 7,760,362 | 9,376,261 | 9,813,481 | 10,146,107 | 9,352,089 | 8,903,491 | 9,857,443 | |||||||||||||||||||||||||||
| CAPITAL LEASES (CURRENT) | 30,246 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | - | |||||||||||||||||||||||||||
| NOTES PAYABLE (CURRENT) | 642,413 | 280,695 | 279,121 | 27,760 | 24,990 | 24,532 | 22,828 | 20,032 | 20,084 | |||||||||||||||||||||||||||
| OFFICERS' NOTES PAYABLE | - | 0 | 0 | 0 | 0 | 0 | 0 | 0 | - | |||||||||||||||||||||||||||
| ACCRUED INTEREST | 47,057 | 39,549 | 39,374 | 45,378 | 47,858 | 34,626 | 38,328 | 33,999 | 32,699 | |||||||||||||||||||||||||||
| ACCRUED EXPENSES | 617,985 | 596,264 | 745,639 | 850,638 | 800,586 | 757,242 | 840,582 | 784,735 | 884,884 | |||||||||||||||||||||||||||
| ACCOUNTS PAYABLE - TRADE | 8,668,903 | 9,397,286 | 10,195,002 | 10,414,358 | 10,507,313 | 10,451,009 | 10,858,655 | 10,701,636 | 12,545,199 | |||||||||||||||||||||||||||
| ACCOUNTS PAYABLE - COMDATA | 870,008 | 1,559,418 | 1,615,191 | 1,495,231 | 1,063,236 | 1,813,140 | 1,667,962 | 1,291,833 | 943,688 | |||||||||||||||||||||||||||
| INSURANCE AND CLAIMS | 1,435,924 | 1,410,509 | 1,426,154 | 1,681,347 | 1,616,730 | 1,597,125 | 1,613,836 | 1,662,614 | 1,587,670 | |||||||||||||||||||||||||||
| OTHER ACCRUED COMPENSATION | 23,359 | 28,765 | 28,765 | 52,294 | 66,991 | 73,239 | 84,341 | 32,537 | 46,553 | |||||||||||||||||||||||||||
| FUEL & OTHER TAXES | 721,697 | 778,941 | 775,323 | 856,828 | 871,183 | 885,976 | 1,158,642 | 1,172,986 | 1,173,147 | |||||||||||||||||||||||||||
| TOTAL CURRENT LIABILITIES | 22,650,066 | 21,879,550 | 22,864,931 | 24,800,095 | 24,812,368 | 25,782,996 | 25,637,263 | 24,603,863 | 27,091,367 | |||||||||||||||||||||||||||
| NOTES PAYABLE - LONG TERM | 146,878 | 52,706 | 51,023 | 49,330 | 47,637 | 45,990 | 44,236 | 42,529 | 40,817 | |||||||||||||||||||||||||||
| CAPITAL LEASES - LONG TERM | 56,241 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | - | |||||||||||||||||||||||||||
| NONCONTROLLING INTEREST | 221,037 | 385,149 | 475,937 | 547,062 | 108,774 | 294,166 | 468,100 | 711,083 | 957,333 | |||||||||||||||||||||||||||
| SHAREHOLDERS' EQUITY: | ||||||||||||||||||||||||||||||||||||
| PREFERRED STOCK | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | - | |||||||||||||||||||||||||||
| COMMON STOCK | 46,546,638 | 46,545,638 | 46,545,638 | 46,546,638 | 46,546,638 | 46,546,638 | 46,546,638 | 46,546,638 | 46,546,638 | |||||||||||||||||||||||||||
| TREASURY STOCK | (952,513 | ) | (951,513 | ) | (951,513 | ) | (952,513 | ) | (952,513 | ) | (952,513 | ) | (952,513 | ) | (952,513 | ) | (952,513 | ) | ||||||||||||||||||
| RETAINED EARNINGS: | ||||||||||||||||||||||||||||||||||||
| BAL FWD 12/2008 | (26,249,635 | ) | (28,835,948 | ) | (28,835,947 | ) | (28,735,024 | ) | (28,735,024 | ) | (28,735,024 | ) | (28,735,024 | ) | (28,735,024 | ) | (28,735,024 | ) | ||||||||||||||||||
| EQUITY ADJUSTMENT | 0 | 0 | 0 | 0 | 0 | 0 | - | |||||||||||||||||||||||||||||
| ADDITIONAL PAID IN CAPITAL | 431,711 | 432,518 | 433,324 | 434,130 | 434,937 | 435,743 | 436,550 | 437,356 | 438,163 | |||||||||||||||||||||||||||
| DIVIDENDS DECLARED | 0 | 0 | 0 | 0 | (800,000 | ) | 0 | 0 | 0 | - | ||||||||||||||||||||||||||
| CURRENT YEAR INCOME/(LOSS) | (2,586,310 | ) | 126,486 | (30,740 | ) | 105,479 | 304,376 | 620,560 | 610,240 | 990,202 | 1,356,451 | |||||||||||||||||||||||||
| TOTAL EQUITY | 17,189,891 | 17,317,181 | 17,160,762 | 17,398,710 | 16,798,414 | 17,915,404 | 17,905,891 | 18,286,659 | 18,653,715 | |||||||||||||||||||||||||||
| TOTAL LIABILITIES & EQUITY | 40,264,113 | 39,634,586 | 40,552,653 | 42,795,197 | 41,767,193 | 44,038,556 | 44,055,490 | 43,644,134 | 46,743,232 | |||||||||||||||||||||||||||
| STATEMENT OF OPERATIONS | 1/30/2006 | 2/27/2006 | 3/30/2006 | 4/29/2006 | 5/30/2006 | 6/29/2006 | 7/29/2006 | 8/30/2006 | ||||||||||||||||||||||||
| OPERATING REVENUES: | 14,636,585 | 14,823,510 | 18,104,003 | 17,332,821 | 16,925,328 | 18,403,835 | 17,865,316 | 19,246,360 | ||||||||||||||||||||||||
| SUBSIDIARIES | (22,702 | ) | (23,325 | ) | (30,301 | ) | (27,070 | ) | (27,113 | ) | (30,487 | ) | (28,042 | ) | (30,157 | ) | ||||||||||||||||
| OTHER | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
| Total Revenue | 14,613,883 | 14,800,185 | 18,073,702 | 17,305,751 | 16,898,215 | 18,373,348 | 17,837,274 | 19,216,203 | ||||||||||||||||||||||||
| OPERATING EXPENSES | ||||||||||||||||||||||||||||||||
| PURCHASED TRANSPORTATION | 9,901,725 | 10,310,397 | 12,647,798 | 11,987,666 | 11,718,814 | 12,678,339 | 12,015,286 | 13,254,291 | ||||||||||||||||||||||||
| INSURANCE & CLAIMS | 479,884 | 552,236 | 456,866 | 554,193 | 438,007 | 530,683 | 617,387 | 418,353 | ||||||||||||||||||||||||
| SALARIES OPERATIONS | 638,005 | 446,761 | 461,907 | 478,810 | 543,054 | 525,445 | 492,934 | 464,198 | ||||||||||||||||||||||||
| SALARIES ADMINISTRATIVE | 380,848 | 495,069 | 537,648 | 535,290 | 491,099 | 521,108 | 655,465 | 583,961 | ||||||||||||||||||||||||
| COMMISSIONS | 2,357,662 | 2,115,602 | 2,525,171 | 2,460,672 | 2,439,620 | 3,019,973 | 2,700,189 | 2,873,663 | ||||||||||||||||||||||||
| OPERATING SUPPLIES & EXPENSES | 349,504 | 451,389 | 402,668 | 473,648 | 431,276 | 443,637 | 313,225 | 362,840 | ||||||||||||||||||||||||
| OPERATING TAXES & LICENSES | 4,398 | 4,728 | 14,170 | 10,156 | 15,221 | (462 | ) | 12,933 | 6,167 | |||||||||||||||||||||||
| COMMUNICATIONS & UTILITIES | 47,455 | 53,193 | 70,301 | 67,675 | 56,631 | 53,777 | 57,693 | 56,621 | ||||||||||||||||||||||||
| RENTS | 123,005 | 141,544 | 110,237 | 116,788 | 109,771 | 111,101 | 118,891 | 119,124 | ||||||||||||||||||||||||
| DEPRECIATION & AMORTIZATION | 15,513 | 15,330 | 15,184 | 15,049 | 9,050 | 20,919 | 14,807 | 14,896 | ||||||||||||||||||||||||
| AMORTIZATION OF INTANGIBLE ASSET | 63,887 | 63,887 | 63,886 | 63,887 | 69,730 | 58,044 | 63,887 | 63,886 | ||||||||||||||||||||||||
| BAD DEBT EXPENSE | 21,157 | 140,112 | 67,567 | 50,273 | (4,978 | ) | (45,452 | ) | 34,632 | 259,752 | ||||||||||||||||||||||
| SAFETY EXPENSE/TESTING | 39,040 | 44,851 | 55,931 | 41,699 | 46,001 | 56,417 | 70,358 | 77,702 | ||||||||||||||||||||||||
| TOTAL OPERATING EXPENSES | 14,422,083 | 14,835,099 | 17,429,334 | 16,855,806 | 16,363,296 | 17,973,529 | 17,167,687 | 18,555,454 | ||||||||||||||||||||||||
| OPERATING INCOME (LOSS) | 191,800 | (34,914 | ) | 644,368 | 449,945 | 534,919 | 399,819 | 669,587 | 660,749 | |||||||||||||||||||||||
| OTHER INCOME <EXPENSE>: | ||||||||||||||||||||||||||||||||
| INTEREST INCOME | 4,441 | 8,759 | 9,440 | 5,632 | 6,829 | 9,930 | 3,950 | 2,363 | ||||||||||||||||||||||||
| INTEREST (EXPENSE) | (43,073 | ) | (45,316 | ) | (121,685 | ) | (51,234 | ) | (31,545 | ) | (38,924 | ) | (35,476 | ) | (33,488 | ) | ||||||||||||||||
| INTERCOMPANY INTEREST EXPENSE | - | - | - | - | - | - | - | 371 | ||||||||||||||||||||||||
| SALE OF FIXED ASSETS | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
| PUBLIC COSTS | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
| INCOME TAX BENEFIT | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
| OTHER | 146,994 | 8,519 | (156,727 | ) | 180 | 4,867 | 77,193 | (448 | ) | 400 | ||||||||||||||||||||||
| TOTAL OTHER INCOME (EXPENSE) | 108,362 | (28,038 | ) | (268,972 | ) | (45,422 | ) | (19,849 | ) | 48,199 | (31,974 | ) | (30,354 | ) | ||||||||||||||||||
| NET INCOME BEFORE MINORITY INTEREST EXPENSE | 300,162 | (62,952 | ) | 375,396 | 404,523 | 515,070 | 448,018 | 637,613 | 630,395 | |||||||||||||||||||||||
| MINORITY INTEREST EXPENSE | 164,112 | 90,788 | 63,597 | 193,712 | 185,392 | 173,934 | 242,983 | 246,250 | ||||||||||||||||||||||||
| NET BEFORE TAX PROVISION | 136,050 | (153,740 | ) | 311,799 | 210,811 | 329,678 | 274,084 | 394,630 | 384,145 | |||||||||||||||||||||||
| TAX PROVISION: | ||||||||||||||||||||||||||||||||
| INTERCOMPANY FEDERAL INCOME TAX | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
| FEDERAL INCOME TAXES | - | - | (117,767 | ) | - | - | (222,707 | ) | - | - | ||||||||||||||||||||||
| STATE INCOME TAXES | (9,565 | ) | (3,484 | ) | (57,813 | ) | (11,915 | ) | (13,494 | ) | (61,697 | ) | (14,668 | ) | (17,897 | ) | ||||||||||||||||
| NET INCOME (LOSS) AFTER TAX PROVISION | 126,485 | (157,224 | ) | 136,219 | 198,896 | 316,184 | (10,320 | ) | 379,962 | 366,248 | ||||||||||||||||||||||
| Working Capital | December 31, 2009 | January 31, 2010 | February 28, 2010 | March 31, 2010 | April 30, 2010 | May 31, 2010 | June 30, 2010 | July 31, 2010 | August 31, 2010 | |||||||||||||||||||||||||||
| Total Current Assets | 32,012,600 | 32,249,064 | 34,123,830 | 35,665,738 | 34,693,201 | 37,120,896 | 37,053,133 | 36,763,647 | 40,004,526 | |||||||||||||||||||||||||||
| Less: Total Current Liabilities | (22,650,066 | ) | (21,879,550 | ) | (22,864,931 | ) | (24,800,095 | ) | (24,812,368 | ) | (25,782,996 | ) | (25,637,263 | ) | (24,603,863 | ) | (27,091,367 | ) | ||||||||||||||||||
| Add back Line of credit | 9,592,474 | 7,788,123 | 7,760,362 | 9,376,261 | 9,813,481 | 10,146,107 | 9,352,089 | 8,903,491 | 9,857,443 | |||||||||||||||||||||||||||
| 18,955,008 | 18,157,637 | 19,019,261 | 20,241,904 | 19,694,314 | 21,484,007 | 20,767,959 | 21,063,275 | 22,770,602 | ||||||||||||||||||||||||||||
| CASH FLOW | December 31, 2009 | January 31, 2010 | February 28, 2010 | March 31, 2010 | April 30, 2010 | May 31, 2010 | June 30, 2010 | July 31, 2010 | August 31, 2010 | |||||||||||||||||||||||||||
| Net (loss) Income | 105,479 | 610,240 | 990,202 | |||||||||||||||||||||||||||||||||
| Depreciation and amortization | 237,687 | 474,368 | 553,060 | |||||||||||||||||||||||||||||||||
| Loss (Gain) on disposal of assets | 1,027 | (4,020 | ) | (3,494 | ) | |||||||||||||||||||||||||||||||
| Stock Compensation expense | 2,419 | 4,839 | 5,645 | |||||||||||||||||||||||||||||||||
| Compensation expense restricted stock grant to officers | - | - | - | |||||||||||||||||||||||||||||||||
| Provision for bad debts | 228,836 | 228,679 | 263,311 | |||||||||||||||||||||||||||||||||
| Amortization of discount on covertible note | - | - | - | |||||||||||||||||||||||||||||||||
| Deferred Tax Benefit | - | - | - | |||||||||||||||||||||||||||||||||
| Noncontrolling interest expense | 318,497 | 871,535 | 1,114,518 | |||||||||||||||||||||||||||||||||
| Accounts receivable | (3,312,192 | ) | (4,525,562 | ) | (5,114,688 | ) | ||||||||||||||||||||||||||||||
| Other receivables | (763,749 | ) | (772,825 | ) | (412,276 | ) | ||||||||||||||||||||||||||||||
| Notes Receivable | 101,363 | (4,673 | ) | 32,871 | ||||||||||||||||||||||||||||||||
| Dividend Receivable | - | - | - | |||||||||||||||||||||||||||||||||
| Prepaid expenses | (174,101 | ) | (270,245 | ) | (282,516 | ) | ||||||||||||||||||||||||||||||
| Deposits & other assets | - | - | - | |||||||||||||||||||||||||||||||||
| Accounts payable | 2,759,233 | 3,376,260 | 2,843,114 | |||||||||||||||||||||||||||||||||
| Accrued expenses | 232,653 | 222,597 | 166,750 | |||||||||||||||||||||||||||||||||
| Accrued interest | (1,679 | ) | (8,729 | ) | (13,058 | ) | ||||||||||||||||||||||||||||||
| Insurance and claims | 245,423 | 177,912 | 226,690 | |||||||||||||||||||||||||||||||||
| Other Accrued Expenses | 28,935 | 60,982 | 9,178 | |||||||||||||||||||||||||||||||||
| Other Taxes Payable | 135,131 | 436,945 | 451,289 | |||||||||||||||||||||||||||||||||
| NET CASH (USED IN) PROVIDED BY OPERATING ACT. | 144,962 | 878,302 | 830,596 | |||||||||||||||||||||||||||||||||
| Additions to fixed assets | (86,206 | ) | (101,701 | ) | (103,095 | ) | ||||||||||||||||||||||||||||||
| Other | - | - | - | |||||||||||||||||||||||||||||||||
| Proceeds from sales of fixed assets | 14,000 | 31,000 | 37,500 | |||||||||||||||||||||||||||||||||
| CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | (72,206 | ) | (70,701 | ) | (65,595 | ) | ||||||||||||||||||||||||||||||
| Net (Repayments) borrowings under line of credit | (216,213 | ) | (240,385 | ) | (688,983 | ) | ||||||||||||||||||||||||||||||
| Proceeds (Principal payments) of from long term debt | - | - | - | |||||||||||||||||||||||||||||||||
| Change in bank overdraft | 451,014 | 382,366 | 878,068 | |||||||||||||||||||||||||||||||||
| Capital Lease Payments | - | - | - | |||||||||||||||||||||||||||||||||
| Net Repayments of) proceeds from shareholder debts | - | - | - | |||||||||||||||||||||||||||||||||
| Repurchase of treasury stock | - | - | - | |||||||||||||||||||||||||||||||||
| Dividends declared | - | - | - | |||||||||||||||||||||||||||||||||
| Distribution to minority interest | (48,000 | ) | (680,000 | ) | (680,000 | ) | ||||||||||||||||||||||||||||||
| CASH PROVIDED BY (USED IN)FINANCING ACTIVITIES | 186,800 | (538,020 | ) | (490,916 | ) | |||||||||||||||||||||||||||||||
| Net change in cash | 259,557 | - | - | |||||||||||||||||||||||||||||||||
| - | - | - | ||||||||||||||||||||||||||||||||||
| 259,557 | - | - | ||||||||||||||||||||||||||||||||||
| 0 | ||||||||||||||||||||||||||||||||||||
| 0 | ||||||||||||||||||||||||||||||||||||
| 0 | ||||||||||||||||||||||||||||||||||||