UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 1995
Commission file Number 0-14781
M.S. CARRIERS, INC.
(Exact name of Registrant as specified in its charter.)
Tennessee 62-1014070
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3171 Director's Row, Memphis, TN 38131
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (901) 332-2500
Indicate by check mark whether the Registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES [X] NO [ ]
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practical
date:
Outstanding common shares at May 5, 1995 - 12,878,300
M.S. Carriers, Inc.
Index to Form 10-Q
Contents
Part I - Financial Information
Item I - Financial Statements (Unaudited)
Balance Sheets as of March 31, 1995 and December 31, 1994................. 1
Statement of Income for the Three Months Ended March 31, 1995
and 1994................................................................ 3
Statement of Stockholders' Equity for the Three Months Ended
March 31, 1995.......................................................... 4
Statements of Cash Flows for the Three Months Ended
March 31, 1995 and 1994................................................. 5
Notes to Financial Statements............................................. 6
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations..................................... 8
Part II - Other Information
Item 1 - Legal Proceedings... ............................................ *
Item 2 - Changes in Securities............................................ *
Item 3 - Defaults Upon Senior Securities.................................. *
Item 4 - Submission of Matters to a Vote of Security Holders.............. 10
Item 5 - Other Information................................................ *
Item 6 - Exhibits and Reports on Form 8-K................................. 11
*No Information Submitted Under This Caption.
M.S. Carriers, Inc.
Balance Sheets
March 31 December 31
1995 1994
_________________________________________
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 19,486,560 $ 30,806,731
Accounts receivable:
Trade, net 30,666,253 33,327,599
Officers and employees 431,625 457,165
____________ ____________
31,097,878 33,784,764
Recoverable income taxes 253,690
Deferred income taxes 5,304,000 4,774,000
Prepaid expenses and other 6,868,231 4,419,081
____________ ____________
Total current assets 63,010,359 73,784,576
Property, plant and equipment:
Land and land improvements 6,201,674 6,201,674
Buildings 23,393,800 23,393,800
Revenue equipment 244,628,746 232,771,820
Service equipment and other 30,315,476 28,531,425
Construction in progress 3,473,865 2,813,438
____________ ____________
308,013,561 293,712,157
Accumulated depreciation and
amortization 101,888,027 95,019,410
____________ ____________
206,125,534 198,692,747
Other assets 3,786,542 3,595,196
____________ ____________
Total assets $272,922,435 $276,072,519
____________ ____________
____________ ____________
M.S. Carriers, Inc.
Balance Sheets (continued)
March 31 December 31
1995 1994
_________________________________________
(Unaudited)
Liabilities and stockholders'
equity
Current liabilities:
Trade accounts payable $ 1,757,057 $ 6,341,525
Accrued expenses 8,149,987 8,277,724
Claims payable 13,680,090 12,325,226
Incomes taxes payable 1,256,186
Current maturities of
long-term debt 16,894,057 16,693,512
____________ ____________
Total current liabilities 40,481,191 44,894,173
Long-term debt, less current
maturities 46,875,822 51,186,613
Deferred income taxes 33,878,000 32,068,000
Stockholders' equity:
Common stock, $.01 par value,
Authorized shares - 20,000,000 128,783 128,783
Issued and outstanding shares -
12,878,300 in 1995 and 1994
Additional paid-in capital 64,137,909 64,137,909
Retained earnings 88,605,730 84,842,041
Equity adjustments from foreign
currency translation (1,185,000) (1,185,000)
____________ ____________
Total stockholders' equity 151,687,422 147,923,733
Total liabilities and stockholders'
equity $272,922,435 $276,072,519
____________ ____________
____________ ____________
See accompanying notes.
M.S. Carriers, Inc.
Statements of Income (Unaudited)
Three Months Ended
March 31
1995 1994
___________________________________________
Operating revenues $ 81,701,370 $ 60,432,420
Operating expenses:
Salaries, wages and benefits 31,391,759 24,572,513
Operations and maintenance 17,066,895 15,586,004
Taxes and licenses 2,472,076 1,957,919
Insurance and claims 3,625,582 2,910,374
Communications and utilities 1,480,057 1,189,738
Depreciation and amortization 9,345,133 7,601,631
Rent and purchased transportation 8,946,626 1,831,157
Other 645,445 469,615
____________ ____________
$ 74,973,573 $ 56,118,951
____________ ____________
Operating income 6,727,797 4,313,469
Other expense (income):
Interest expense 914,285 310,659
Other (65,177) (20,127)
____________ ____________
849,108 290,532
____________ ____________
Income before income taxes 5,878,689 4,022,937
Income taxes 2,115,000 1,602,000
____________ ____________
Net income $ 3,763,689 $ 2,420,937
____________ ____________
____________ ____________
Common shares and common stock
equivalents $ 13,102,634 $ 13,123,046
____________ ____________
____________ ____________
Earnings per share $0.29 $0.18
____________ ____________
____________ ____________
See accompaning notes.
M.S. Carriers, Inc.
Statement of Stockholders' Equity (Unaudited)
Three Months Ended March 31, 1995
Equity
Adjustment
From
Additional Foreign
Common Stock Paid-In Retained Currency
Shares Amount Capital Earnings Translation Total
__________________________________________________________________________
Balance at January
1, 1995 12,878,300 $128,783 $64,137,909 $84,842,041 $ (1,185,000) $147,923,733
Net Income 3,763,689 3,763,689
__________________________________________________________________________
Balance at March
31, 1995 12,878,300 $128,783 $64,137,909 $88,605,730 $ (1,185,000) $151,687,422
See accompanying notes.
M.S. Carriers, Inc.
Statements of Cash Flows (Unaudited)
Three Months Ended
March 31
1995 1994
___________________________________________
Operating activities
Net income $ 3,763,689 $ 2,420,937
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 9,345,133 7,601,631
Other 56,028 32,733
Provision for deferred income taxes 1,280,000 946,000
Changes in operating assets and
liabilities:
Accounts receivable 2,686,886 (1,404,410)
Current and other assets (2,969,274) (2,526,965)
Trade accounts payable (4,584,468) 982,621
Other current liabilities (29,059) 118,391
_____________ ____________
5,785,246 5,750,001
Net cash provided by operating
activities 9,548,935 8,170,938
Investing activities
Purchases of property, plant and
equipment (18,987,825) (11,540,606)
Proceeds from disposals of property
and equipment 2,228,965 15,673
_____________ ____________
Net cash used in investing
activities (16,758,860) (11,524,933)
Financing activities
Proceeds from revolving line of
credit and long-term debt 20,632,000
Proceeds from issuance of Common
Stock 19,183
Principal payments on revolving
line of credit and long-term debt (4,110,246) (17,180,000)
_____________ _____________
Net cash provided by (used in)
financing activities (4,110,246) 3,471,183
Increase (decrease) in cash and cash
equivalents (11,320,171) 117,188
Cash and cash equivalents at
beginning of period 30,806,731 110,080
_____________ _____________
Cash and cash equivalents at end
of period $ 19,486,560 $ 227,268
_____________ ______________
_____________ ______________
Interest paid $ 918,481 $ 314,856
_____________ ______________
_____________ ______________
Taxes paid $ 2,344,876 $ 178,800
See accompanying notes.
M.S. Carriers, Inc.
Notes to Financial Statements (Unaudited)
March 31, 1995
1. Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results for the three
month period ended March 31, 1995 are not necessarily indicative of the
results that may be expected for the year ended December 31, 1995. For
further information and a listing of the Company's significant accounting
policies, refer to the financial statements and footnotes thereto included
in the Company's annual report on Form 10-K for the year ended December 31,
1994.
2. Net Income Per Common Share
Three Months Ended
March 31
1995 1994
___________________________________________
Average common shares outstanding 12,878,300 12,876,343
Common stock equivalents 224,334 246,703
____________ ____________
Average common shares and common
stock equivalents 13,102,634 13,123,046
____________ ____________
____________ ____________
Net income $ 3,763,689 $ 2,420,937
_____________ _____________
_____________ _____________
Net income per common and
equivalent share $0.29 $0.18
M.S. Carriers, Inc.
Notes to Financial Statements (Unaudited)(continued)
3. Income Taxes
For the three months ended March 31, 1995, the effective income tax
rate varied from the statutory federal income tax rate of 35% primarily
due to reduced state income taxes, and tax benefits from leasing
transactions.
For the three months ended March 31, 1994, the effective income tax rate
varied from the statutory federal income tax rate of 35% primarily due
to state income taxes.
M.S. Carriers, Inc.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
March 31, 1995
Results of Operations
Operating revenues for the first three months of 1995 increased 35% over the
same period in the prior year. The Company's increased revenues reflect
additional volume from existing customers as well as new volume from the
expansion of the Company's customer base.
The operating ratio (operating expenses as a percent of operating revenues)
for the first three months of 1995 was 91.8% compared to 92.9% for the same
period in 1994. Operating expenses generally reflect increases proportionate
to the increased level of operations except as explained below.
Salaries, wages and benefits decreased from 41% of operating revenues for
the three month period ended March 31, 1994 to 38% for the same period in
1995, due primarily to the use of owner operators. Amounts paid to owner
operators are recorded as purchased transportation.
Operations and maintenance decreased from 26% of operating revenues for the
three month period ended March 31, 1994 to 21% for the three month period
ended March 31, 1995 due primarily to the use of owner operators.
Rent and purchased transportation increased from 3% of operating revenues
for the three months ended March 31, 1994 to 11% for the three months
ended March 31, 1995 due to rental expenses incurred related to the
Company's logistics operations and the use of owner operators.
The increase in interest expense is due to the increase in outstanding debt
during the fourth quarter of 1994.
The effective tax rates were 36.0% and 39.8% for the three months
ended March 31, 1995 and 1994, respectively. This decrease was due to
reduced state income taxes and tax benefits from leasing transactions.
Liquidity and Capital Resources
The growth of the Company's business has required significant investments
in new revenue equipment and office and terminal facilities, financed
largely through cash from operations, secured borrowings, unsecured credit
facilities, and capital markets. At March 31, 1995, the Company had
obligations of approximately $64,000,000 related to purchases of revenue
equipment.
The Company has a bank line of credit providing for borrowings of up to
$10,000,000, with interest at the lower of the bank's corporate prime rate or
the 30-day LIBOR rate plus .45%. At March 31, 1995 there were no amounts
outstanding under this line of credit. Management expects to maintain this
line of credit for an indefinite period.
The Company expects to finance its normal operating requirements and future
revenue equipment purchases through cash from operations and secured
borrowings.
PART II - Other Information
Item 4 - Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the first
quarter of 1995.
PART II - Other Information
Item 6 - Exhibits and Reports on Form 8-K
(1) The exhibits filed as a part of this report are listed below:
Exhibit Number Description of Exhibit
_____________________________________________________________________________
(11) Statement regarding computation of per share
earnings - see Note 2 of the notes to financial
statements included in Part I - Financial
Information.
(27) Financial Data Schedule
(b) The Company did not file any reports on Form 8-K during the three months
ended March 31, 1995.
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.
M.S. Carriers, Inc.
(Registrant)
May 12, 1995 Dwight Bassett
Date
Dwight Bassett, Controller
(Principal Financial Officer of the
Company)