FORM 10-Q
________________________________________________
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2009.
Commission File No. 1-8129.
US 1 INDUSTRIES, INC.
______________________________________________________
(Exact name of registrant as specified in its charter)
Indiana 95-3585609
_______________________ ___________________________________
(State of Incorporation) (I.R.S. Employer Identification No.)
336 W. US 30,Valparaiso, Indiana 46385
________________________________________ ___________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (219)476-1300
________________
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes _X_ No __
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer,
or a smaller reporting company. See definition of "accelerated
filer, large accelerated filer", and "smaller reporting company"
in Rule 12b-2 of the Exchange Act.
Large accelerated filer ____Accelerated filer ____Non-accelerated
filer _X__
Smaller reporting company ____ (Do not check if a smaller
reporting company)
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). Yes __ No _X__
As of November 5, 2009 there were 14,243,409 shares of
registrant's common stock outstanding.
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2009 (UNAUDITED) AND DECEMBER 31, 2008
Part I FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS.
ASSETS
September 30, 2009 December 31, 2008
(Unaudited)
Accounts receivable-trade, less
allowances for doubtful accounts of
$1,240,000 and $1,360,000, respectively $ 26,594,056 $ 30,054,657
Other receivables, including receivables
due from affiliated entities of $250,000 and
$964,000, respectively 4,719,699 4,676,388
Prepaid expenses and other current assets 2,064,610 2,214,218
Current deferred income tax asset 2,165,913 1,444,670
_____________ ____________
Total current assets 35,544,278 38,389,933
FIXED ASSETS:
Land 195,347 195,347
Equipment 2,405,867 2,286,465
Leasehold Improvements 347,781 302,773
Less accumulated depreciation and amortization (1,279,155) (833,771)
_____________ ____________
Net property and equipment 1,669,840 1,950,814
_____________ ____________
Non-current deferred income tax asset - 721,243
Notes receivable - long term 748,266 1,314,395
Intangible assets, net 3,043,504 3,736,000
Goodwill 4,780,639 4,756,943
Other assets - 135,162
_____________ ____________
Total Assets $ 45,786,527 $ 51,004,490
============= ============
<FN>
The accompanying notes are an integral part of the consolidated financial statements.
</FN>
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2009 (UNAUDITED) AND DECEMBER 31, 2008
LIABILITIES AND SHAREHOLDERS' EQUITY
September 30, 2009 December 31, 2008
(Unaudited)
<s> <c> <c>
CURRENT LIABILITIES:
Revolving line of credit $ 8,834,237 $ 11,312,690
Bank overdraft 1,873,152 3,090,613
Current portion of capital
lease obligation 33,847 107,196
Current portion of long-term debt 915,161 1,372,546
Accounts payable 11,706,953 9,987,291
Insurance and claims 1,494,235 1,836,391
Other accrued expenses 1,201,916 1,871,800
___________ ____________
Total current liabilities 26,059,501 29,578,527
LONG-TERM DEBT, less current portion 454,898 817,277
CAPITAL LEASE, less current portion 59,162 44,108
SHAREHOLDERS' EQUITY:
Common stock, authorized 20,000,000
shares: no par value; 14,838,657 shares
issued at September 30, 2009 and
December 31, 2008, respectively 46,975,931 46,920,288
Treasury stock, 595,248 shares at both
September 30, 2009 and December 31, 2008,
respectively (952,513) (952,513)
Accumulated US 1 Industries, Inc. deficit (26,745,893) (26,249,640)
___________ ___________
Total US 1 Industries, Inc.
shareholder's equity 19,277,525 19,718,135
Noncontrolling Interests (64,559) 846,443
___________ ___________
Total equity 19,212,966 20,564,578
___________ ___________
Total liabilities and shareholders'
equity $45,786,527 $51,004,490
=========== ===========
<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
</FN>
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(UNAUDITED)
Three Months Ended Nine Months ended
September 30, September 30,
2009 2008 2009 2008
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<s> <c> <c>
OPERATING REVENUES $44,725,926 $46,060,907 $132,423,418 $132,748,074
OPERATING EXPENSES:
Purchased transportation 30,582,663 32,642,587 91,615,476 94,220,842
Commissions 6,612,716 6,192,030 18,938,513 17,227,768
Insurance and claims 1,186,977 1,482,117 3,911,391 4,304,678
Salaries, wages and other 3,224,944 2,369,704 9,900,745 7,767,114
Other operating expenses 2,679,477 1,889,574 8,245,813 5,499,194
Total operating expenses 44,286,777 44,576,012 132,611,938 129,019,596
OPERATING (LOSS) INCOME 439,149 1,484,895 (188,520) 3,728,478
NON-OPERATING INCOME (EXPENSE)
Interest income 3,534 (2,201) 49,089 20,891
Interest expense (127,727) (48,856) (559,049) (108,682)
Other income (expense) 44,349 48,188 160,131 129,464
Total non operating
(expense) income (79,844) (2,869) (349,829) 41,673
NET (LOSS) INCOME BEFORE
INCOME TAXES $ 359,305 $ 1,482,026 $ (538,349) $ 3,770,150
Income tax expense 54,616 119,596 198,546 261,045
NET (LOSS) INCOME BEFORE
NONCONTROLLING INTEREST $ 304,689 $ 1,362,430 $ (736,895) $ 3,509,105
(Income) Expense attributable
to noncontrolling interest 73,155 389,907 (240,643) 1,033,394
NET (LOSS) INCOME AVAILABLE TO
COMMON SHARES $ 231,534 $ 972,523 $ (496,252) $ 2,475,711
Basic and Diluted Net (Loss)
Income per Common Share $ 0.02 $ 0.07 $ (0.03) $ 0.17
Weighted Average Shares
Outstanding
Basic and Diluted 14,243,409 14,243,409 14,243,409 14,243,409
<FN>
The accompanying notes are an integral part of the consolidated
financial statements.
</FN>
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009
Total
US1 Industries, Inc.
Common Stock Treasury Accumulated Stockholders' Noncontrolling
Shares Amount Shares Amount Deficit Equity Interests
___________________________________________________________________________________________________________________
<s> <c> <c> <c> <c> <c> <c> <c>
Balance at January 1, 2009 14,838,657 $46,920,288 (595,248) $(952,513) $(26,249,640) $19,718,135 $ 846,443
Net (loss) income for the
nine months ended
September 30, 2009 - - - - (496,252) (496,252) 240,643
Stock Compensation Expense - 55,643 - - - 55,643 -
Distribution to noncontrolling
interests - - - - - - (670,359)
__________ ____________ ___________ __________ _____________ ____________ __________
Balance at September 30, 2009 14,838,657 $46,975,931 (595,248) $(952,513) $(26,745,892) $19,277,526 $ 416,727
========== ============ =========== ========== ============= ============ ==========
<FN>
The accompanying notes are in integral part of the consolidated
financial statements.
</FN>
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
SEPTEMBER 30, 2009 AND SEPTEMBER 30, 2008 (UNAUDITED)
Nine Months Ended September 30,
2009 2008
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
<s> <c> <c>
Net (Loss) Income (496,252) 2,475,711
Adjustments to reconcile net (loss)
income to net cash provided by
operating activities
Depreciation and amortization 1,164,631 123,596
Loss (Gain) on disposal of assets 32,132 (16,308)
Stock compensation expense 55,643 -
Provision for bad debts 992,614 648,401
Noncontrolling interest (240,643) 1,033,394
Changes in operating assets and
liabilities:
Accounts receivable - trade 2,467,984 (4,809,109)
Other receivables (43,311) (552,561)
Notes receivable 566,129 (660,657)
Prepaid expenses and other current assets 284,769 (493,088)
Accounts payable 1,789,664 885,623
Insurance and claims (342,156) 324,457
Other accrued expenses (669,884) (452,754)
Net cash provided by (used in) operating __________ ___________
activities 5,561,320 (1,493,295)
__________ ___________
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to equipment (231,443) (150,845)
Goodwill purchase accounting adjustment (40,192) -
Proceeds from sales of fixed assets 8,150 21,922
__________ ___________
Net cash used in investing activities (263,485) (128,923)
__________ ___________
CASH FLOWS FROM FINANCING ACTIVITIES:
Net repayments under the line of credit (2,478,453) 2,187,703
Increase (Decrease) in cash overdraft (1,217,461) 262,812
Capital lease payments (71,062) -
Principal payments of long term debts (860,500) -
Distributions to noncontrolling interests (670,359) (828,297)
Net cash (used in) provided by financing ___________ ___________
activities (5,297,835) 1,622,218
___________ ___________
Net Change in Cash - -
CASH, BEGINNING OF PERIOD - -
___________ ___________
CASH, END OF PERIOD - -
=========== ===========
Cash paid for interest $ 536,448 $ 165,880
Cash paid for income taxes $ 503,923 $ 470,123
<FN>
The accompanying notes are an integral part of the consolidated
financial statements.
</FN>
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
1. BASIS OF PRESENTATION
The accompanying consolidated balance sheet as of September
30, 2009 and the consolidated statements of income and cash flows
for the three and nine month periods ended September 30, 2009 and
2008, and the statement of shareholders' equity for the nine
months ended September 30, 2009 are unaudited, but, in the
opinion of management, include all adjustments (consisting of
normal, recurring accruals) necessary for a fair presentation of
the financial position and the results of operations at such date
and for such periods. The year-end balance sheet data was
derived from audited financial statements. These statements
should be read in conjunction with US 1 Industries, Inc. and
Subsidiaries ("the Company") audited consolidated financial
statements for the year ended December 31, 2008, and the notes
thereto included in the Company's Annual Report on Form 10-K.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been omitted, as permitted by
the requirements of the Securities and Exchange Commission,
although the Company believes that the disclosures included in
these financial statements are adequate to make the information
not misleading. The results of operations for the three and nine
months ended September 30, 2009 and 2008 are not necessarily
indicative of the results for a full year.
The Company has evaluated events through November 13, 2009,
the filing date of this Form 10-Q, and has determined that there
were no subsequent events to recognize or disclose in these
financial statements.
2. ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS
In December 2007, the Financial Accounting Standards Board
("FASB") issued Statement of Financial Accounting Standards
("SFAS") No. 141R, a revision of SFAS No. 141, "Accounting for
Business Combinations," which was primarily codified into
Accounting Standards Codification ("ASC") Topic 805 -
"Business Combinations." The standard establishes
requirements for the recognition and measurement of acquired
assets, liabilities, goodwill, and non-controlling interests. It
also provides disclosure requirements related to business
combinations. This guidance is effective for fiscal years
beginning after December 15, 2008. Should they occur, the
Company will apply this guidance prospectively to business
combinations with an acquisition date on or after the effective
date.
In April 2008, the FASB issued FASB Staff Position ("FSP")
No. 142-3, Determination of the Useful life of Intangible Assets
("FSP 142-3"), which was primarily codified into ASC Topic 350.
This standard amends the factors that should be considered in
developing assumptions about renewal or extension used in
estimating the useful life of a recognized intangible asset under
SFAS 142, and expands the disclosure requirements of SFAS 142.
The provisions of this guidance are effective for the Company as
of January 1, 2009. The provisions of this guidance for
determining the useful life of a recognized intangible asset
shall be applied prospectively to intangible assets recognized as
of, and subsequent to, the effective date. The adoption of this
staff position did not have a material impact on the Company's
consolidated financial statements.
In September 2006, the FASB issued SFAS No. 157, Fair Value
Measurements ("SFAS 157"). SFAS 157 defines fair value,
establishes a framework for measuring fair value, and expands
disclosures about fair value measurements. SFAS 157 is effective
for financial statements issued for fiscal years beginning after
November 15, 2007. In February 2008, the FASB issued FSP No.
157-2, which was primarily codified into ASC Topic 820. This
standard delays the effective date of SFAS 157 for non-financial
assets and liabilities which are not measured at fair value on a
recurring basis (at least annually) until fiscal years beginning
after November 15, 2008. The Company has adopted this guidance
as of January 1, 2008, with the exception of the application of
the statement to non-recurring nonfinancial assets and
nonfinancial liabilities. The implementation of this guidance did
not have any material impact on its consolidated financial
condition or results of operations.
Effective January 1, 2009, the Company adopted FASB Staff
Position No. 157-2, "Effective Date of FASB Statement No. 157"
("FSP 157-2"), which was primarily codified into ASC Topic 820,
which delayed the effective date of SFAS No. 157 "Fair Value
Measurements" for all non-financial assets and non-financial
liabilities, except for items that are recognized or disclosed at
fair value on a recurring basis such as reporting units measured
at fair value for goodwill impairment, indefinite-lived
intangible assets measured at fair value for impairment
assessment, nonfinancial assets and liabilities initially
measured at fair value in a business combination, or nonfinancial
long-lived assets measured at fair value for impairment
assessment. This standard did not have a material impact on the
Company's results of operations or financial condition.
Effective January 1, 2009, the Company adopted Statement of
Financial Accounting Standards ("SFAS") No. 160, "Noncontrolling
Interests in Consolidated Financial Statements," which was
primarily codified into ASC Topic 810 - "Consolidation". ASC 810
establishes accounting and reporting standards for the
noncontrolling interest in a subsidiary and for the accounting
for future ownership changes with respect to those subsidiaries.
This standard defines a noncontrolling interest, previously
called a minority interest, as the portion of equity in a
subsidiary not attributable, directly or indirectly, to a parent.
SFAS No. 160 requires, among other items, that a noncontrolling
interest be included in the consolidated balance sheet within
equity separate from the parent's equity; consolidated net income
to be reported at amounts inclusive of both the parent's and
noncontrolling interest's shares and, separately, the amounts of
consolidated net income attributable to the parent and
noncontrolling interest all on the consolidated statements of
income; and if a subsidiary is deconsolidated, any retained
noncontrolling equity investment in the former subsidiary be
measured at fair value and a gain or loss be recognized in net
income based on such fair value. The Company applied the
provisions of SFAS No. 160 retrospectively. As a result,
noncontrolling interests of $846,443 were reclassified from the
liability section to equity in the December 31, 2008 balance
sheet. Certain reclassifications have been made to prior period
amounts to conform to the presentation of the current period
under SFAS No. 160.
In May 2009, the FASB issued SFAS No. 165, "Subsequent
Events," which was primarily codified into ASC Topic 855 -
"Subsequent Events." It establishes general standards of
accounting and disclosure for events that occur after the balance
sheet date but before the financial statements are issued. This
new standard was effective for interim or annual periods
beginning after June 15, 2009. The adoption did not have a
material impact on the Company's consolidated financial position,
results of operations or cash flows.
In June 2009, the Financial Accounting Standards Board
("FASB") issued FAS No. 168, "The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted
Accounting," which was Primarily Codified into ASC Topic 105
"Generally Accepted Accounting Standards." This standard
represents the last numbered standard issued by the FASB under
the old (pre-Codification) numbering system, and amends the GAAP
hierarchy. On July 1, 2009, FASB launched FASB's new Codification
(i.e. the Accounting Standards Codification "ASC"). The
Codification supersedes existing GAAP for nongovernmental
entities. The Company has revised its financial statement
disclosure in compliance with the new codification system
effective with its third quarter ended September 30, 2009.
3. RECLASSIFICATIONS
Certain reclassifications have been made to the previously
reported 2008 financial statements to conform with the 2009
presentation.
4. ACQUISITIONS
On December 18, 2008, the Company completed the acquisition
of a 60% membership interest in ARL for $1.59 million. In
addition, the prior shareholder of ARL can receive up to an
additional $2.9 million in cash if ARL achieves certain revenue
and earnings goals through 2012. The acquisition was recorded
using the purchase method of accounting, and on the date of the
acquisition, the Company recorded the fair value of the acquired
assets and assumed liabilities and allocated purchase price
accordingly. For purposes of the allocation, it has allocated
$3.6 million of the ARL purchase price to agent relationships
which is an identifiable intangible asset with a finite life,
currently estimated at 7 years. At the date of the acquisition of
ARL, the book value attributable to the minority interest
shareholder was a deficit, which the shareholder was not required
to fund. As a result, the minority interest at the date of the
acquisition was valued at zero and the amount allocated to
goodwill was increased by the deficit attributable to the
minority interest. The resulting goodwill recorded on the date
of the acquisition was approximately $4.8 million.
The Company's goodwill is subject to an annual fourth
quarter impairment assessment of its carrying value. Goodwill
impairment is deemed to exist if the net book value of a
reporting unit exceeds its estimated fair value. Fair values of
the reporting units are estimated using an earnings model and a
discounted cash flow valuation model. The discounted cash flow
model incorporates the Company's estimates of future cash flows,
future growth rates and management's judgment regarding the
applicable discount rates used to discount those estimated cash
flows. If the Company's estimates and assumptions used in the
discounted cash flow valuation model should prove inaccurate at
some future date, the result of operations for the period could
be materially affected by an impairment of goodwill. The
Company's fiscal 2009 year to date operating results have
declined, which may have an adverse effect on the valuation of
goodwill in the future.
While the results of ARL have been included in the
consolidated financial statements of the Company for the period
subsequent to the acquisition, the following unaudited pro forma
financial information for the three and nine months ended
September 30, 2008 presents the consolidated operations of the
Company as if the acquisition of ARL had been made on January 1,
2008. Certain adjustments have been included in this pro forma
information for the three and nine months ended September 30,
2008 to present the effects of the acquisition as of the
acquisition date. The Company made adjustments primarily for the
amortization of intangible assets and non-controlling interest
expense. The unaudited pro forma financial information is
provided for informational purposes only and does not project the
Company's results of operations for any future period:
As Reported Pro Forma As Reported Pro Forma
Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended
September 30, 2009 September 30, 2008 2009 2008
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenue 44,725,926 63,826,722 132,423,418 183,626,874
Net Income (Loss) 231,534 822,313 (496,252) 2,101,339
Basic & Diluted Earnings
Per Share 0.02 0.06 (0.03) 0.15
5. EARNINGS PER SHARE
The Company calculates earnings per share ("EPS") in
accordance with SFAS No. 128. Following is the reconciliation of
the numerators and denominators of basic and diluted EPS.
Three Months Ended Nine Months Ended
2009 2008 2009 2008
Numerator
Net income (loss) available
to common shareholders for
basic and diluted EPS $231,534 $972,523 $(496,252) $2,475,711
Denominator
Weighted average common shares
outstanding for basic and
diluted EPS
14,243,409 14,243,409 14,243,409 14,243,409
The outstanding stock options granted to two employees as
part of the acquisition of ARL Transport, LLC ("ARL"), in
December 2008, have been excluded from the calculation of
earnings per share because the effect would be anti-dilutive.
The Company has no other options or warrants to purchase
common stock outstanding.
6. REVENUE RECOGNITION
Revenue for freight is recognized upon delivery. The
Company accounts for its revenue in accordance with Emerging
Issues Task Force ("EITF") 99-19, "Reporting Revenue Gross as a
Principal Versus Net as an Agent," which was primarily codified
into ASC topic 605. Amounts payable for purchased transportation,
commissions and insurance are accrued when incurred. The Company
follows guidance of this standard and records revenues at the
gross amount billed to customers because the Company (1)
determined it operates as the primary obligor, (2) typically is
responsible for damages to goods and (3) bears the credit risk.
7. BANK LINE OF CREDIT
The Company and its subsidiaries have a $17.5 million line
of credit that was amended on July 24, 2009. The amendment
included a reduction of the Revolving Line of Credit from $22.0
million to $17.5 million, an unused fee, a restriction on
distributions to minority interest holders, temporary replacement
of certain financial covenants, and the addition of a covenant on
current maturities of long term debt other than debt to the
Company's lender. This line of credit matures on October 1,
2010. Advances under this revolving line of credit are limited
to 75% of eligible accounts receivable. Unused availability
under the amended line of credit was $8.7 million at September
30, 2009. Under the amended line of credit agreement, the
Company's interest rate is based upon certain financial covenants
and may range from "One Month LIBOR" plus 3.35% to "One Month
LIBOR" plus 4.35%. As of September 30, 2009, the interest rate
on this line of credit was 4.60%. The Company's accounts
receivable, property, and other assets are collateral under the
agreement. Borrowings up to $3.0 million are guaranteed by the
Chief Executive Officer and Chief Financial Officer of the
Company. At September 30, 2009, the outstanding borrowings on
this line of credit were $8.8 million. The significant increase
relates to funding the retirement of $10.0 million of debt
assumed in the ARL acquisition.
This line of credit is subject to termination upon various
events of default, including failure to remit timely payments of
interest, fees and principal, any adverse change in the business
of the Company or failure to meet certain financial covenants.
At September 30, 2009, the Company is subject to one financial
covenant of Minimum Quarterly EBITDA. Temporarily suspended
covenants include: prohibition of additional indebtedness without
prior authorization (suspended until December 31, 2009), minimum
net worth requirements and maximum total debt service coverage
ratio (suspended until March 31, 2010). At September 30, 2009,
the Company was in compliance with its financial covenant.
The Company has classified the balance outstanding under
this line of credit agreement as a current liability at September
30, 2009 and December 31, 2008 because the line of credit
contains both a subjective acceleration clause and a lockbox
arrangement.
On January 15, 2009, the Company and its subsidiaries
entered into a no cost Interest Rate Swap Agreement with U.S.
Bank effective February 2, 2009 through February 1, 2012. This
agreement is in the notional amount of $10.0 million from
February 2, 2009 through January 31, 2010, then $7.0 million from
February 1, 2010 through January 31, 2011, then $4.0 million from
February 1, 2011 to February 1, 2012. The agreement provides for
the Company to pay interest at an annual rate of 1.64% times the
notional amount of the swap agreement, and receive interest at
the LIBOR rate times the notional amount of the swap. The
Company did not enter into this agreement for speculative
purposes. The fair value of the interest rate swap was minimal
at September 30, 2009.
8. EQUITY TRANSACTIONS
In December 2008, as part of the acquisition of ARL, the
Company granted two employees a total of 200,000 options to
purchase shares of common stock at an exercise price of $0.80 per
share. These options vest over 4 years. The fair value of these
options of $0.1 million was calculated using a Black Scholes
Model. During 2009, the Company recorded stock compensation
expense of $0.06 million. These options have been excluded from
the calculation of earnings per share because the effect would be
anti-dilutive. The Company has no other options or warrants to
purchase common stock outstanding as of September 30, 2009.
9. LEGAL PROCEEDINGS
The Company and its subsidiaries are involved in certain
litigation matters in the normal course of its business.
Management intends to vigorously defend these cases. In the
opinion of management, any negative outcome from litigation now
pending will not have a material adverse affect on the
consolidated financial statements of the Company.
10. INCOME TAXES
The Company files a consolidated U.S income tax return and
tax returns in various states and local jurisdictions. Income tax
expense of $0.20 million for nine months ended September 30, 2009
and $0.26 million for the nine months ended September 30, 2008 is
for estimated tax payments to various state and local
jurisdictions. Each subsidiary of the Company is required to file
stand-alone state tax returns and pay taxes based on certain
apportionment factors. As such, each subsidiary is not able to
obtain state tax benefits for the losses generated by the
consolidated entity, and is required to pay quarterly state
taxes. As a result, the effective tax rate will vary from the
statutory rate.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION.
Results of Operations
You should read the following discussion regarding the
Company and its subsidiaries along with the Company's
consolidated financial statements and related notes included in
this quarterly report. The following discussion contains
forward-looking statements that are subject to risks,
uncertainties and assumptions. The Company's actual results,
performance and achievements in 2009 and beyond may differ
materially from those expressed in, or implied by, these forward-
looking statements.
The financial statements and related notes contained
elsewhere in this Form 10-Q as of and for the three months and
nine months ended September 30, 2009 and 2008 and in the
Company's Form 10-K for its fiscal year ended December 31, 2008,
are essential to an understanding of the comparisons and are
incorporated by reference into the discussion that follows.
Historically salaries, wages, fringe benefits, and other
operating expenses had been principally non-variable expenses and
remained relatively fixed with slight changes in relationship to
revenue. However, since the Company has added certain
operations, which utilize employees rather than independent
agents, these non-variable expenses have increased and may not be
directly comparable between the three and nine months ended
September 30, 2009 and September 30, 2008.
Nine months ended September 30, 2009 compared to the nine months
ended September 30, 2008 (continued)
The following table sets forth the percentage relationships of
expense items to revenue for the nine months ended September 30,
2009 and September 30, 2008:
2009 2008
_______ _______
Revenue 100.00% 100.00%
Operating expenses:
Purchased transportation 69.18% 70.98%
Commissions 14.30% 12.98%
Insurance and claims 2.95% 3.24%
Salaries, wages and other 7.48% 5.85%
Other operating expenses 6.23% 4.14%
_______ _______
Total operating expenses 100.14% 97.19%
_______ _______
Operating (loss) income -0.14% 2.81%
The Company's operating revenues decreased slightly by $0.3
million to $132.4 million for the nine months ended September 30,
2009 from $132.7 million for the same period in 2008. This is an
decrease of 0.2%. This decline is largely attributable to a
decrease in load volume from various larger customers of the
Company, which we believe is attributable to the general slowing
economy. This decrease in volume was offset by an increase in
revenue as a result of the ARL acquisition.
Purchased transportation and commission expense generally
increase or decrease in proportion to the revenue generated
through independent contractors. Many agents negotiate a
combined percentage payable for purchased transportation and
commission. Purchased transportation and commission together
decreased 0.5% from 84.0% as a percentage of revenue for the nine
months ended September 30, 2008 to 83.5% as a percentage of
revenue for the same period of time in 2009. Purchased
transportation expense decreased 2.0% as a percentage of
operating revenue from 71.0% for the nine months ended September
30, 2008 to 69.0% for the nine months ended September 30, 2009.
A factor contributing to the decrease in purchased transportation
was the decrease in percentage paid to independent owner
operators at one of the Company's operations. The mix between the
amounts of purchased transportation paid versus commissions paid
may vary slightly based on agent negotiations with independent
owner operators. In addition, pay on certain types of revenue
may be higher than for other types of revenue. Thus a change in
the mix of revenue can cause some variation in the percent paid
out for purchased transportation and commission. However, in
total, commissions and purchased transportation would typically
Nine months ended September 30, 2009 compared to the nine months
ended September 30, 2008 (continued)
be expected to remain relatively consistent as a percentage of
revenue. This decrease in purchased transportation was somewhat
offset by an increase in commission expense of 1.3% of operating
revenues for the nine months ended September 30, 2009 compared to
the nine months ended September 30, 2008. There are operations
that contract agents rather than utilize employees. In such
instances this will lead to lower commission expense and higher
salaries expense. This is one additional factor that contributes
to a decrease in the combined commission and purchased
transportation expense as a percentage of revenue and an increase
in salaries expense.
Salaries expense is not directly variable with revenue and
has increased $2.1 million for the nine months ended September
30, 2009 compared to the same period of time in 2008. This
increase in salaries expense is primarily attributable to the
failure to reduce salaries in proportion to the decrease in sales
during the first quarter of 2009. Salaries expense increased
1.6% as a percentage of operating revenue from 5.9% for the nine
months ended September 30, 2008 to 7.5% for the nine months ended
September 30, 2009. Some of the increase in salaries expense as
a percentage of revenue included severance pay during the first
quarter of 2009 as well as additional expense associated with the
acquisition of ARL.
Insurance and claims decreased slightly to 3.0% of operating
revenue for the nine months ended September 30, 2009 from 3.2%
for the same period of time in 2008. This was a decrease of 0.2%
of operating revenue for the nine months ended September 30, 2009
compared to the same period of time in 2008. A majority of the
insurance and claims expense is based on a percentage of revenue
and, as a result, will increase or decrease on a consolidated
basis with the Company's revenue. Potential liability associated
with accidents in the trucking industry is severe and occurrences
are unpredictable. A material increase in the frequency or
severity of accidents or the unfavorable development of existing
claims could adversely affect the Company's operating income.
Other operating expenses increased to 6.2% of revenue for
the nine months ended September 30, 2009 from 4.1% of revenue for
the nine months ended September 30, 2008. The actual dollar
amount increased by approximately $2.7 million from $5.5 million
for the nine months ended September 30, 2008 to $8.2 million for
the nine months ended September 30, 2009. This increase is
attributable to several factors. The Company experienced a
defalcation related to accounts receivable which resulted in an
increase in the Company's bad debt expense of approximately $0.5
million during the first quarter and $.15 million in the third
quarter of 2009. In addition, the Company experienced increases
in rent expense, depreciation expense, and amortization expense.
Many of these increases are associated with the ARL subsidiary
acquired in December 2008.
Interest expense increased $0.5 million from $0.1 million
for the nine months ended September 30, 2008 to $0.6 million for
the nine months ended September 30, 2009. This increase is
primarily attributable to increased borrowings as part of the
Nine months ended September 30, 2009 compared to the nine months
ended September 30, 2008 (continued)
acquisition of ARL. Under the amended line of credit agreement,
the interest rate is based upon certain financial covenants and
may range from "One Month LIBOR" plus 3.35% to "One Month LIBOR"
plus 4.35%. As of September 30, 2009 the interest rate on this
line of credit was 4.60%.
Other income includes income from rental property, storage
and equipment usage fees and other administrative fee income.
Other income increased $0.03 million from $0.13 million for the
nine months ended September 30, 2008 to $0.16 million for the
nine months ended September 30, 2009.
Income tax expense decreased from $0.3 million for the nine
months ended September 30, 2008 to $0.2 million for the nine
months ended September 30, 2009. Income tax expense is primarily
related to state and local taxes, as each subsidiary is required
to file stand-alone state tax returns, and is not able to obtain
the benefit of losses generated by the consolidated entity.
The Company also recognized noncontrolling interest income
of $0.2 million for the nine months ended September 30, 2009
compared to $1.0 million expense for the nine months ended
September 30, 2008 relating to the minority shareholders' portion
of loss or income generated by our majority owned subsidiaries,
ARL Transport, LLC, Carolina National Transportation, LLC and
US1 Logistics, LLC.
As a result of the factors outlined above, the Company
experienced a net loss in the amount of $0.5 million for the nine
months ended September 30, 2009 compared to net income of $2.5
million for the nine months ended September 30, 2008.
Three months ended September 30, 2009 compared to the three
months ended September 30, 2008
The following table sets forth the percentage relationships of
expense items to revenue for the three months ended September 30,
2009 and September 30, 2008:
2009 2008
______ ______
Revenue 100.00% 100.00%
Operating expenses:
Purchased transportation 68.38% 70.87%
Commissions 14.78% 13.44%
Insurance and claims 2.65% 3.22%
Salaries, wages and other 7.21% 5.14%
Other operating expenses 5.99% 4.10%
_______ _______
Total operating expenses 99.02% 96.77%
_______ _______
Operating (loss) income 0.98% 3.23%
Three months ended September 30, 2009 compared to the three
months ended September 30, 2008 (continued)
The Company's operating revenues decreased by $1.4 million
to $44.7 million for the three months ended September 30, 2009
from $46.1 million for the same period in 2008. This is a
decrease of 2.9%. This decline is largely attributable to a
decrease in load volume from various larger customers of the
Company, which we believe is attributable to the general slowing
economy. The decrease in volume was offset by an increase in
revenue as a result of the ARL acquisition.
Purchased transportation and commission expense generally
increase or decrease in proportion to the revenue generated
through independent contractors. Many agents negotiate a
combined percentage payable for purchased transportation and
commission. Purchased transportation and commission together
decreased 1.2% as a percentage of revenue for the three months
ended September 30, 2009 from the same period of time in 2008.
Purchased transportation expense decreased 2.5% as a percentage
of operating revenue from 70.9% for the three months ended
September 30, 2008 to 68.4% for the three months ended September
30, 2009. A factor contributing to the decrease in purchased
transportation was the decrease in percentage paid to independent
owner operators at one of the Company's operations. The mix between
the amounts of purchased transportation paid versus commissions
paid may vary slightly based on agent negotiations with independent
owner operators. In addition, pay on certain types of revenue may
be higher than for other types of revenue. Thus a change in the
mix of revenue can cause some variation in the percent paid out
for purchased transportation and commission. However, in total,
commissions and purchased transportation would typically be
expected to remain relatively consistent as a percentage of
revenue. This decrease in purchased transportation was somewhat
offset by an increase in commission expense of 1.3% of operating
revenues for the three months ended September 30, 2009 compared to
the three months ended September 30, 2008.
Salaries expense is not directly variable with revenue and
increased approximately $0.9 million for the three months ended
September 30, 2009 compared to the same period of time in 2008.
Salaries expense increased 2.1% as a percentage of operating
revenue from 5.1% for the three months ended September 30, 2008
to 7.2% for the three months ended September 30, 2009. This is
primarily attributable to salaries and expenses associated with
employees added with the acquisition of ARL.
Insurance and claims decreased by 0.5% of operating revenue
for the three months ended September 30, 2009. Insurance and
claims were 3.2% of operating revenue for the three months ended
September 30, 2008 versus 2.7% of operating revenue for the same
period of time in 2009. A majority of the insurance and claims
expense is based on a percentage of revenue and, as a result,
will increase or decrease on a consolidated basis with the
Company's revenue. Potential liability associated with accidents
in the trucking industry is severe and occurrences are
unpredictable. A material increase in the frequency or severity
of accidents or the unfavorable development of existing claims
could adversely affect the Company's operating income.
Three months ended September 30, 2009 compared to the three
months ended September 30, 2008 (continued)
Other operating expenses increased to 6.0% of revenue for the
three months ended September 30, 2009 from 4.1% of revenue for
the three months ended September 30, 2008. The actual dollar
amount increased by approximately $0.8 million to approximately
$2.7 million for the three months ended September 30, 2009
compared to approximately $1.9 million for the three months ended
September 30, 2008. This increase is attributable to several
factors including increases in rent expense, depreciation
expense, and amortization expense. Many of these increases are
associated with the ARL subsidiary acquired in December 2008.
Interest expense increased $0.08 million from $0.05 million
for the three months ended September 30, 2008 to $0.13 million
for the three months ended September 30, 2009. This increase is
primarily attributable to increased borrowings as part of the
acquisition of ARL. Under the amended line of credit agreement,
the interest rate is based upon certain financial covenants and
may range from "One Month LIBOR" plus 3.35% to "One Month LIBOR"
plus 4.35%. As of September 30, 2009 the interest rate on this
line of credit was 4.60%.
Other income includes income from rental property, storage
and equipment usage fees and other administrative fee income.
Other income remained consistent for the three month's ended
September 30, 2009.
Income tax expense decreased to $0.06 million for the three
months ended September 30, 2009 compared to $0.12 million for the
three months ended September 30, 2008. Income tax expense is
primarily related to state and local taxes, as each subsidiary is
required to file stand-alone state tax returns, and is not able
to obtain the benefit of losses generated by the consolidated
entity.
The Company also recognized noncontrolling interest expense
of $0.07 million for the three months ended September 30, 2009
compared to $0.4 million expense for the three months ended
September 30, 2008 relating to the minority shareholders' portion
of (loss) or income generated by our majority owned subsidiaries,
ARL Transport, LLC, Carolina National Transportation, LLC and
US1 Logistics, LLC.
As a result of the factors outlined above, the Company
experienced net income in the amount of $0.2 million for the
three months ended September 30, 2009 compared to net income of
$1.0 million for the three months ended September 30, 2008.
The Company's goodwill is subject to an annual fourth
quarter impairment assessment of its carrying value. Goodwill
impairment is deemed to exist if the net book value of a
reporting unit exceeds its estimated fair value. Fair values of
the reporting units are estimated using an earnings model and a
discounted cash flow valuation model. The discounted cash flow
model incorporates the Company's estimates of future cash flows,
future growth rates and management's judgment regarding the
applicable discount rates used to discount those estimated cash
flows. If the Company's estimates and assumptions used in the
Three months ended September 30, 2009 compared to the three
months ended September 30, 2008 (continued)
discounted cash flow valuation model should prove inaccurate as
some future date, the result of operations for the period could
be materially affected by an impairment of goodwill. The
Company's fiscal 2009 year to date operating results have
declined, which may have an adverse effect on the valuation of
goodwill.
Liquidity and Capital Resources
During the nine months ended September 30, 2009, the
Company's financial position deteriorated. The Company had
shareholders' equity of $19.3 million at September 30, 2009
compared with $19.7 million at December 31, 2008.
Net cash provided by operating activities increased $7.1
million from using cash of $1.5 million for the nine months ended
September 30, 2008 to providing $5.6 million for the nine months
ended September 30, 2009. Working capital needs provided cash of
$4.1 million during the nine months ended September 30, 2009.
For the nine months ended September 30, 2008, working capital
needs used cash of $5.8 million.
The Company experienced a decrease in accounts receivable
for the nine months ended September 30, 2009 due to an overall
reduction of volume of business when considering the impact of
the ARL acquisition.
Other receivables used cash for the nine months ended
September 30, 2009 in the amount of $0.04 million compared to
$0.6 million cash used for the same period in 2008. The largest
contributor to this change is a decrease in owner operator
advances associated with the daily operations of the Company.
Notes receivable provided cash for the nine months ended
September 30, 2009 in the amount of $0.6 million compared to
using cash of $0.7 million in the same period in 2008. The
increase in cash provided was primarily a result of payments from
agents with notes.
Accounts Payable provided $1.8 million in cash for the nine
months ended September 30, 2009 compared to $0.9 million for the
same period in 2008. This increase in cash provided from accounts
payable during the nine months ended September 30, 2009 is
attributable to timing of payments made to owner operators.
Net cash used in investing activities was $0.3 million for
the nine months ended September 30, 2009 compared to $0.1 million
for the same period in 2008. The net cash used in investing
activities is primarily due to the purchase of fixed assets.
Net cash used in financing activities was $5.3 million for
the nine months ended September 30, 2009 compared to net cash
provided by financing activities of $1.6 million for the nine
months ended September 30, 2008. This is a decrease of $6.9
million. For the nine months ended September 30, 2009, net
repayments under the line of credit were $2.5 million compared to
borrowings of $2.2 million for the nine months ended September
30, 2008. For the nine months ended September 30, 2009, the
Company distributed $0.7 million to minority shareholders of the
Company's majority owned subsidiaries. Net cash used in
repayments of debt was $0.9 million for the nine months ended
September 30, 2009. Cash overdraft decreased by $1.2 million
during the nine months ended September 30, 2009 compare to a $0.3
million increase during the nine months ended September 30, 2008.
The Company and its subsidiaries have a $17.5 million line
of credit that was amended on July 24, 2009. The amendment
included a reduction of the Revolving Line of Credit from $22.0
million to $17.5 million, the imposition of an unused fee, a
restriction on distributions to minority interest holders,
temporary replacement of certain financial covenants and the
addition of a covenant on current maturities of long term debt
other than debt to the Company's lender. This line of credit
matures on October 1, 2010. Advances under this revolving line
of credit are limited to 75% of eligible accounts receivable.
Unused availability under the amended line of credit was $8.7
million at September 30, 2009. Under the amended line of credit
agreement, the Company's interest rate is based upon certain
financial covenants and may range from "One Month LIBOR" plus
3.35% to "One Month LIBOR" plus 4.35%. As of September 30, 2009,
the interest rate on this line of credit was 4.60%. The
Company's accounts receivable, property, and other assets are
collateral under the agreement. Borrowings up to $3.0 million
are guaranteed by the Chief Executive Officer and Chief Financial
Officer of the Company. At September 30, 2009, the outstanding
borrowings on this line of credit were $8.8 million.
This line of credit is subject to termination upon various
events of default, including failure to remit timely payments of
interest, fees and principal, any adverse change in the business
of the Company or failure to meet certain financial covenants.
At September 30, 2009, the Company is subject to one financial
covenant of Minimum Quarterly EBITDA. Temporarily suspended
covenants include: prohibition of additional indebtedness without
prior authorization (suspended until December 31, 2009), minimum
net worth requirements and maximum total debt service coverage
ratio (suspended until March 31, 2010). At September 30, 2009,
the Company was in compliance with its financial covenant.
The Company has classified the balance outstanding under
this line of credit agreement as a current liability at September
30, 2009 and December 31, 2008 because the line of credit
contains both a subjective acceleration clause and a lockbox
arrangement.
On January 15, 2009, the Company and its subsidiaries
entered into a no cost Interest Rate Swap Agreement with U.S.
Bank effective February 2, 2009 through February 1, 2012. This
agreement is in the notional amount of $10.0 million from
February 2, 2009 through January 31, 2010, then $7.0 million from
February 1, 2010 through January 31, 2011, then $4.0 million from
February 1, 2011 to February 1, 2012. The agreement provides for
the Company to pay interest at an annual rate of 1.64% times the
notional amount of the swap agreement, and receive interest at
the LIBOR rate times the notional amount of the swap. The
Company did not enter into this agreement for speculative
purposes. The fair value of the interest rate swap was minimal
at September 30, 2009.
The Company's primary sources of liquidity consist of cash
on hand generated through operations and availability under the
line of credit agreement. The Company believes these sources are
sufficient to operate its business and meet its obligations.
Certain Relationships and Related Transactions.
One of the Company's subsidiaries provides safety,
management, and accounting services to companies controlled by
the Chief Executive Officer and Chief Financial Officer of the
Company. These services are priced to cover the cost of the
employees providing the services and the overhead.
The Company has approximately $0.6 million of other accounts
receivable due from entities that could be deemed to be under
common control as of September 30, 2009.
One of the Company's insurance providers, American Inter-
Fidelity Exchange (AIFE), is managed by a director of the
Company, and the Company has an investment of $126,461 in the
provider. AIFE provides auto liability and cargo insurance to
several subsidiaries of the Company as well as other entities
related to the Company by common ownership. For the years ended
December 31, 2008, 2007 and 2006, cash paid to AIFE for insurance
premiums and deductibles was approximately $4.9 million, $6.0
million, and $5.4 million, respectively.
The Company's investment in AIFE is accounted for under the
cost method as the Company has not exercised control over AIFE.
Under the cost method, the investment in AIFE is reflected at its
original amount and income is recognized only to the extent of
dividends paid by the investee. There were no dividends declared
by AIFE payable to US1 Industries, Inc. or its subsidiaries for
the three months ended September 30, 2009 and 2008. In the
future, the Company's control over AIFE or the structure of AIFE
could change, which might require the Company to consolidate
AIFE. The Company has not determined what, if any impact a
change in its control over AIFE or AIFE's structure and a
resulting consolidation of AIFE would have with respect to the
market value of the Company, but as of December 31, 2008 AIFE had
a recorded surplus of approximately $11.1 million.
If AIFE incurs a net loss, the loss may be allocated to the
various policyholders based on each policyholder's premium as a
percentage of the total premiums of AIFE for the related period.
There has been no such loss assessment for any of the three years
in the period ended December 31, 2008 or the nine months ended
September 30, 2009.
Mr. Kibler, the Chief Executive Officer and a director of
the Company, Mr. Antonson, the Chief Financial Officer and a
director of the Company, as well as Mr. Venditti, a director of
the Company, are the sole shareholders of American Inter-Fidelity
Corporation ("AIFC"), which serves as the attorney in fact of
AIFE. AIFC is entitled to receive a management fee from AIFE.
AIFE incurred management fees of approximately $0.5 million, $0.5
million, and $0.6 million for the years ended December 31, 2008,
2007, and 2006, respectively. These management fees are
available to be paid as dividends to these officers and directors
of the Company.
At September 30, 2009 and 2008,the Company paid consulting
fees to Robert Scissors, one of its directors, relating to
insurance services.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
Interest Rate Risk
The Company has a revolving line of credit with U.S. Bank
which currently bears interest at the "One Month LIBOR" plus 3.35%
(at September 30, 2009 the interest rate was 4.60%). The interest
rate was based on certain financial covenants. A one percentage
point change in the LIBOR rate would result in approximately $0.09
million in additional expense annually.
On January 15, 2009, the Company and its subsidiaries
entered into a no cost Interest Rate Swap Agreement with U.S.
Bank effective February 2, 2009 through February 1, 2012. This
agreement is in the notional amount of $10.0 million from
February 2, 2009 through January 31, 2010, then $7.0 million from
February 1, 2010 through January 31, 2011, then $4.0 million from
February 2011 to February 1, 2012. of the swap. The Company did
not enter into this agreement for speculative purposes. The fair
value of the interest rate swap was minimal at September 30,
2009.
The agreement provided for the Company to pay interest at an
annual rate of 1.64% times the notional amount of the swap
agreement and U.S. Bank pays interest at the LIBOR rate times the
notional amount the Company's primary sources of liquidity
consist of cash on hand generated through operations and
availability under the line of credit agreement. The Company
believes these sources are sufficient to operate its business and
meet its obligations.
Item 4. CONTROLS AND PROCEDURES
The Company maintains disclosure controls and procedures, as
such term is defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934 (the "Exchange Act") that are
designed to ensure that information required to be disclosed in
the Company's Exchange Act reports is recorded, processed,
summarized and reported within the time periods specified in the
SEC's rules and forms, and that such information is accumulated
and communicated to the Company's management, including its Chief
Executive Officer and Chief Financial Officer, as appropriate, to
allow timely decisions regarding required disclosure. In
designing and evaluating the disclosure controls and procedures,
management recognized that any controls and procedures, no matter
how well designed and operated, can provide only reasonable
assurance of achieving the desired control objectives, and
management is required to apply its judgment in evaluating the
cost-benefit relationship of possible controls and procedures.
As required by SEC Rule 13a-15(b), the Company carried out
an evaluation, under the supervision and with the participation
of the Company's management, including the Company's Chief
Executive Officer and the Company's Chief Financial Officer, of
the effectiveness of the design and operation of the Company's
disclosure controls and procedures as of the end of the period
covered by this report. Based on the foregoing, the Company's
Chief Executive Officer and Chief Financial Officer concluded
that the Company's disclosure controls and procedures were
effective at the reasonable assurance level.
Item 4T. CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in the Company's internal control over
financial reports (as such term is defined in Rule 13a-15(f)
under the Exchange Act) that occurred during the quarterly period
ended September 30, 2009 that have materially affected, or are
reasonably likely to materially affect, the Company's internal
control over financial reporting.
Part II OTHER INFORMATION
Item 6. EXHIBITS
The following exhibits, numbered in accordance with Item 601
of Regulation S-K, are filed as part of this report:
Exhibit 31.1 Certification 302 of Chief Executive Officer
Exhibit 31.2 Certification 302 of Chief Financial Officer
Exhibit 32.1 Certification 906 of Chief Executive Officer
Exhibit 32.2 Certification 906 of Chief Financial Officer
(b)(1) Reports on Form 8-K
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
US 1 Industries, Inc.
Michael E. Kibler
Chief Executive Officer
Harold E. Antonson
Chief Financial Officer
November 13, 2009