U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period ended to
Commission File Number: 33-30123-A
GENERAL PARCEL SERVICE, INC.
(Exact name of small business issuer in its charter)
State of Florida 59-2576629
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8923 Western Way, Suite 22,
Jacksonville, FL 32256
(Address of principal executive offices)
(904) 363-0089
(Issuer's telephone number)
Check whether issuer (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities and 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
There were 3,758,671 shares of the Company's common stock
outstanding as of August 9, 1996.
GENERAL PARCEL SERVICE, INC. AND SUBSIDIARY
FORM 10-QSB
INDEX
PART I. FINANCIAL INFORMATION Page Number
Item 1
- ------
Consolidated Balance Sheets as of
June 30, 1996 and December 31, 1995 . . . . 2
Consolidated Statements of Earnings
for the three months ended June 30, 1996
and 1995 and for the six months ended
June 30, 1996 and 1995 . . . . . . . . . . 3
Consolidated Statements of Cash Flows
for the three months ended June 30,
1996 and 1995 . . . . . . . . . . . . . . . 4
Notes to Consolidated Financial
Statements . . . . . . . . . . . . . . . . 5
Item 2
- ------
Management's Discussion and Analysis
of Financial Condition and Results
of Operations . . . . . . . . . . . . . . . 6
PART II. OTHER INFORMATION. . . . . . . . .12
Item 4
- ------
Submission of Matters to a
Vote of Security Holders
Item 6
- ------
Exhibits and Reports on Form 8-K
(A) Reports on Form 8-K
(B) Exhibits:
Exhibit 10, Material Contracts
Exhibit 27, Financial Data Schedule
GENERAL PARCEL SERVICE, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
1996 1995
-------------- --------------
(Unaudited)
ASSETS
Current assets:
Cash $ 8,589 $ 6,739
Accounts receivable
(net of allowance for doubtful
accounts of $7,546 and $7,846 at
June 30, 1996 and December 31,
1995 respectively) 2,077,848 2,068,975
Other current assets 406,606 380,090
------------- -------------
Total current assets 2,493,043 2,455,804
------------- -------------
Long term assets:
Equipment, at net book value 6,991,095 7,593,626
Goodwill 980,444 1,015,784
Other assets 187,251 187,251
------------- -------------
Total long term assets 8,158,790 8,796,661
------------- -------------
Total assets $ 10,651,833 $ 11,252,465
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Short term borrowings $ 1,562,689 $ 1,599,000
Current obligations under
capital leases 886,135 860,309
Current maturities of
long-term debt 333,540 518,842
Accounts payable 1,926,726 1,953,468
Accrued expenses and other
current liabilities 815,986 738,404
------------- -------------
Total current liabilities 5,525,076 5,670,023
------------- -------------
Long term liabilities:
Long-term obligations under
capital leases 1,296,853 1,605,802
Long-term debt 755,646 3,910,808
Convertible debentures 300,000 300,000
------------ ------------
Total long term liabilities 2,352,499 5,816,610
------------ ------------
Total liabilities 7,877,575 11,486,633
------------ ------------
Commitments and contingencies
Stockholders' equity (deficit):
Preferred stock, $.01 par value,
500,000 shares authorized,
280,000 issued and outstanding
at June 30, 1996, 100,000 issued
and outstanding at December 31,
1995, liquidation preference
$7,000,000. 2,800 1,000
Common stock, $.01 par value,
10,000,000 shares authorized,
3,758,671 shares issued and
outstanding at June 30, 1996
and December 31, 1995. 37,586 37,586
Additional paid-in capital 17,887,855 13,389,655
Deficit (15,153,983) (13,662,409)
------------- -------------
Total stockholders'
equity (deficit) 2,774,258 (234,168)
------------- -------------
Total liabilities and
stockholders' equity
(deficit) $ 10,651,833 $ 11,252,465
============= =============
Read accompanying notes.
GENERAL PARCEL SERVICE, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Three months ended June 30, Six months ended June 30,
1996 1995 1996 1995
------------- ------------- ------------ -------------
Revenue $ 5,600,322 $ 4,853,489 $ 11,383,993 $ 9,916,819
Operating expenses
Operations salaries
& benefits 2,990,557 2,800,797 6,048,689 5,337,489
Fuel 408,388 302,760 763,888 590,319
Equipment rental 20,359 15,800 49,449 24,499
Insurance 348,681 524,980 712,846 973,980
Tires & maintenance 221,061 182,803 421,075 356,988
Depreciation & amortization 418,833 438,065 833,112 848,698
Facilities expense 374,128 306,574 726,773 638,162
Terminal expense 51,684 79,308 105,594 135,362
Purchased transportation 95,835 66,556 193,993 120,282
Other operating costs 71,836 56,515 133,619 95,765
Selling and administrative
expense 1,306,064 940,458 2,369,594 1,652,306
----------- ----------- ----------- -----------
Total operating expense 6,307,426 5,714,616 12,358,632 10,773,850
----------- ----------- ----------- -----------
Operating income (loss) (707,104) (861,127) (974,639) (857,031)
Interest expense (135,155) (203,180) (341,935) (355,253)
----------- ----------- ----------- -----------
Net income (loss) (842,259) (1,064,307) (1,316,574) (1,212,284)
Preferred stock
dividend requirement (65,624) (43,750) (159,029) (87,500)
----------- ----------- ----------- -----------
Earnings available to
common shareholders $ (907,883) $ (1,108,057) $ (1,475,603) $ (1,299,784)
=========== =========== =========== ===========
Net Income (loss) per
common share (primary
and fully diluted) $ (0.24) $ (0.29) $ (0.39) $ (0.35)
=========== =========== =========== ===========
Weighted average
number of common
shares outstanding 3,758,671 3,758,671 3,758,671 3,758,671
=========== =========== =========== ==========
Read accompanying notes.
GENERAL PARCEL SERVICE, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash
(Unaudited)
Six Months Ended June 30,
1996 1995
------------- -------------
Cash flows (used in) provided
by operating activities:
Net loss $ (1,316,574) $ (1,212,284)
------------ ------------
Adjustments to reconcile net loss to cash
(used in) provided by operating activities:
Loss on disposal of fixed assets 1,307 2,718
Depreciation and amortization 926,434 878,695
Changes in assets and liabilities:
Increase in accounts receivable (8,873) (238,760)
Decrease (increase) in other current assets (26,516) 48,008
Increase in other assets -- (5,326)
Increase in accounts payable 347,302 280,402
Increase (decrease) in accrued expenses 77,582 (28,764)
------------ ------------
Total adjustments 1,317,236 936,973
------------ ------------
Net cash (used in) provided
by operating activities 662 (275,311)
------------ ------------
Cash flows for investing activities:
Business combination -- (151,674)
Proceeds from disposal of equipment 4,500 --
Purchase of equipment (226,337) (473,573)
------------ ------------
Net cash used in
investing activities (221,837) (625,247)
------------ ------------
Cash flows from financing activities:
Proceeds from issuance of preferred stock 4,500,000 --
Dividends paid on preferred stock (175,000) (175,000)
Repayment of long-term debt (3,340,464) (346,801)
Increase in long-term debt -- 3,000,000
Principal payments under capital
lease obligations (351,156) (525,789)
Repayment of short-term debt (2,058,689) (2,500,000)
Increase in short-term borrowings 2,022,378 1,400,000
Increase (decrease) in bank overdraft (374,044) 48,333
------------ ------------
Net cash provided by
financing activities 223,025 900,743
------------ ------------
Increase (decrease) in cash and cash
equivalents 1,850 185
Cash and cash equivalents, beginning of period 6,739 5,575
------------ ------------
Cash and cash equivalents, end of period $ 8,589 $ 5,760
============ ============
Supplemental cash flow data
Cash paid during the period for interest $ 354,699 $ 319,825
============ ============
Supplemental schedule of noncash investing and
financing activities
Capital lease and notes payable obligations
incurred for new vehicles and equipment $ 68,033 $ 461,874
============ ============
Business combination
Fair value of assets acquired $ -- $ 1,408,670
Fair value of liabilities assumed -- (1,256,996)
------------ ------------
Net cash payments $ -- $ 151,674
============ ============
Read accompanying notes
GENERAL PARCEL SERVICE, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
The information presented herein as of June 30, 1996, and for
the three months and six months ended June 30, 1996 and 1995, is
unaudited. The December 31, 1995, balance sheet data was
derived from audited financial statements, but does not include
all disclosures required by generally accepted accounting
principles.
1. Summary of Significant Accounting Policies
Management's Representation
- ---------------------------
In the opinion of management, all adjustments necessary for a
fair presentation of such consolidated financial statements are
reflected in the interim periods presented. Such adjustments
consisted of normal recurring items. Interim results are not
necessarily indicative of results for a full year.
The consolidated financial statements and notes are presented as
permitted by Form 10-QSB and do not contain certain information
included in the annual consolidated financial statements and
notes of General Parcel Service, Inc. (the "Company").
Net Loss per Common Share
- -------------------------
Net loss applicable to common share is based on the weighted
average number of shares outstanding during the periods
reported. Any assumption of conversion of common stock
equivalents, such as options and warrants, is anti-dilutive and
has not been considered in determining net loss per share or the
weighted average number of shares outstanding.
Preferred Stock
- ---------------
On February 28, 1996, the Board of Directors amended the
Articles of Incorporation to provide for 300,000 shares of Class
A, Series 2 Cumulative Preferred Stock ("Series 2 Preferred").
On March 4, 1996, 120,000 shares were sold for a total price of
$3,000,000 to an Affiliate of the Company's Chairman. Proceeds
from the sale were used to retire $3,000,000 of bank debt. On
June 25, 1996, 60,000 shares were sold at a total price of
$1,500,000 to the same Affiliate of the Company's Chairman.
Proceeds from the June 25, 1966 sale were used to retire
$500,000 of short term debt and to fund working capital
requirements. The Series 2 Preferred shares are non-voting and
generally provide for a conversion into common stock at a rate
of $2.50 per share, and provide for a cumulative dividend of
$1.75 per annum, paid quarterly. At June 30, 1996, the Company
had preferred stock dividends in arrears of $155,807.
GENERAL PARCEL SERVICE, INC. AND SUBSIDIARY
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
The following discussion should be read in conjunction with the
Consolidated Financial Statements including the footnotes and is
qualified in its entirety by the foregoing and other more
detailed financial information appearing elsewhere herein.
Historical results of operations and the percentage
relationships among any amounts included in the Consolidated
Statements of Earnings, and any trends which may appear to be
inferable therefrom, should not be taken as being necessarily
indicative of trends in operations or results of operations for
any future periods.
Liquidity and Capital Resources
- -------------------------------
Except for the year ending December 31, 1993, the Company has
experienced negative annual operating cash flows since its
inception. Expansion of operations and operating losses since
inception have been funded from six major sources: 1) private
placements of restricted shares of common and preferred stock to
its principal shareholders, 2) proceeds from its initial public
offering of common stock in November, 1989, 3) installment loans
and leases from third party lenders collateralized by equipment
acquired to support business growth, 4) a bank line of credit
collateralized by accounts receivable and stock owned by a major
shareholder and his affiliates, 5) short term borrowings from
banks and shareholders, 6) debt issued and liabilities assumed
in connection with the acquisition of the assets of Transit
Express of Charlotte, Inc. ("TE").
As of June 30, 1996, the Company had raised net equity capital
of $8,145,052 from private placements of restricted common
shares, $6,917,489 from private placements of preferred stock,
$2,715,700 from its initial public offering of November 2, 1989,
and $150,000 from the sale of unrestricted common shares. When
combined with cumulative operating losses since inception of
$14,803,984 and $350,000 of dividends paid on preferred stock,
the Company's net stockholders' equity as of June 30, 1996, was
$2,774,258. The Company issued $4,500,000 of preferred stock on
March 5, 1996, but has issued no restricted common stock in 1996.
As of June 30, 1996, the Company was contractually obligated to
repay $4,834,863 of indebtedness to equipment lessors, banks and
other secured lenders and $300,000 to holders of its convertible
debentures. In addition, the Company owed $1,926,726 to
suppliers of goods and services necessary for the conduct of
ongoing business including amounts represented by issued and
outstanding checks, and had accrued salaries and other expenses
of $815,986 which were unpaid at June 30, 1996.
Cash provided by operations during the six months ended June 30,
1996 was $662 as compared to cash used in operations for the
first six months of 1995 of $275,311. The net cash provided by
operations resulted primarily from the non-cash expense of
depreciation and amortization, and an increase in accounts
payable and accrued expenses. These were partially offset by
the net loss, an increase in accounts receivable and a decrease
in other current assets. The Company's cash balance increased
by $1,850 during the first six months of 1996.
The Company decreased its borrowings under its bank lines of
credit by $3,036,311 during the first six months of 1996. The
Company repaid its $3,000,000 bank term loan and reduced amounts
borrowed under its revolving line of credit agreement by a net
amount of $36.311.
The revolving line of credit agreement provides for interest
payable monthly for advances of $1,000,000 or greater at the
lower interest of the thirty day LIBOR rate plus .75% or the
Bank's prime interest rate less .75% and for all other advances
at the Bank's prime interest rate less .75%. The revolving
credit agreement is collateralized by the Company's accounts
receivable and certain stock certificates pledged by the
Company's Chairman. As of December 31, 1995, the Company had
borrowed $1,599,000 against the line of credit and had
$1,101,000 of credit available. As of June 30, 1996, the
Company has borrowed $1,562,689 against the $2,750,000 line of
credit.
Management's estimates of cash requirements to fund operating
losses and debt service are substantial. All of these factors
raise the question as to whether the Company will continue to
operate as a going concern. While revenues continue to increase
and expense containment measures have been instituted,
management is nonetheless pursuing several strategies for
raising additional resources through debt or equity transactions.
Management believes, but can offer no assurances, that it can
improve operating performance and cash flows through the
following measures:
* A large portion of the Company's expenses since
inception have been related to efforts to develop
its marketing, distribution and service network. The
Company has developed extensive distribution networks in
Florida, Atlanta, Georgia, and Charlotte, North
Carolina. In January, 1996. the Company opened a terminal in
Greensboro, North Carolina to service existing customers in
the Greensboro, Winston Salem, Durham and Raleigh areas.
In June, 1996, the Company began an aggressive expansion into
South Carolina and areas no previously served in North
Carolina to fill the void created when another carrier ceased
operations. This carrier had serviced in the Carolinas many
of the customers that the Company serves in Florida and Georgia.
Management believes that the revenues which will be generated
by extending the Company's service area for present customers and
those additional customers it will attract will exceed the cost
of providing such service and will contribute to the absorption
of overhead. To service these new areas the Company has opened
new terminals in the North Carolina cities of Asheville,
Fayetteville, Raleigh and Wilmington, relocated to a larger
Charlotte, North Carolina terminal and opened new
terminals in the South Carolina cities of Charleston,
Columbia, Greenville and Florence.
* Management has reassessed the operating practices at
each of its terminals and has instituted a number of changes
directed towards cost containment including elimination of
unprofitable delivery routes. Route planning computer hardware
and software has been purchased to analyze and redesign the
routing structure of each city. The equipment went
operational in July and the city by city analysis has begun.
Management expects to be able to reduce costs through eliminating
routes.
Strict accountability over all costs is being implemented at all
locations through budgetary controls and improved reporting of
actual operating results to operations managers.
*The Board of Directors has engaged KPMG BayMark Capital
LLC ("BayMark") to render certain financial advisory and
investment banking services to the Company. Under the
terms of the engagement, BayMark will familiarize itself to the
extent it deems appropriate and feasible with the business,
operations, properties, financial condition and prospects
of the Company and will advise and assist the Company in
identifying and/or evaluating various strategic or financial
alternatives that may be available to the Company to
enhance shareholder value. Among the alternatives which may be
available to the Company are an acquisition of all or a
significant portion of the assets or equity securities
of another corporation or business entity; a sale of the
Company or significant portion of its equity securities,
assets or businesses to one or more third parties;
a recapitalization or restructuring of the Company;
repurchases by the Company of its common stock
or other securities; a public or private sale of additional
equity or debt securities of the Company; or such other
form of transaction that BayMark believes may be of possible
interest to the Company.
*Should the Company not obtain additional funding through
the efforts of BayMark and not be able to provide cash for
its operations to fund operations losses or debt service,
it will rely on the commitment of one of its major shareholders
to fund losses of the Company through December 31, 1996.
Financial Condition
- -------------------
As of June 30, 1996, the Company's working capital deficit
(current liabilities less current assets) was $3,032,033, which
was a decrease of $182,186 from the $3,214,219 working capital
deficit at December 31, 1995. Total current assets of
$2,493,043 included cash of $8,589, accounts receivable of
$2,077,848, prepaid insurance premiums and deposits of $54,229,
inventories of tires, parts, uniforms and supplies of $218,405,
other prepaid expenses of $52,010 and other assets of $81,963.
Current liabilities of $5,525,075 included current obligations
under leases and other lending agreements of $2,482,364, amounts
owed to trade creditors of $1,926,726, including amounts
represented by issued and outstanding checks, and other accrued
expenses of $815,986.
Total assets as of June 30, 1996, decreased by $600,632 (or
5.3%) during the six months ended June 30, 1996 to $10,651,833.
Accounts receivable increased by $8,873 (or 0.4%) during the six
months ended June 30, 1996 to $2,077,848. The number of weeks
sales in outstanding receivables was 4.7 at June 30, 1996,
compared to 5.2 at December 31, 1995. Other current assets of
$406,606 increased by $26,516 (or 7.0%).
The net book value of equipment decreased by $602,531 (or 7.9%)
to $6,991,095 during the six months ended June 30, 1996 as a
result of depreciation of $833,112 and disposals of $5,805
exceeding additions of $236,386. The additions included $68,033
for four new delivery vans, $37,056 for life-extending
equipment repairs, $32,428 for terminal equipment and $98,869
for computers and other office equipment.
Total liabilities of $7,877,575 decreased by $3,609,058 (or
31.4%) during the six months ended June 30, 1996. This resulted
primarily from a decrease in total bank and other debt by
$3,376,775 (or 56.0%) to $2,651,875, a decrease in accounts
payable by $26,742 (or 1.4%) to $1,926,726, an increase in
accrued expenses of $77,582 (or 10.5%) to $815,986 and a
decrease in obligations under capital leases of $283,123 (or
11.5%).
Capital lease obligations of $2,189,988 decreased during the six
months ended June 30, 1996 as a result of $351,156 of scheduled
principal payments in excess of $68,033 of new additions. The
additions to capitalized leases were for four new delivery vans.
Long term debt of $1,089,186 decreased $3,340,464 (or 75.4%) as
a result of repayment of the $3,000,000 term loan and $127,172
of scheduled principal payments. Short-term borrowings
decreased by $36,311 to $1,562,689 (or 2.3%) as a result of a
repayment of $1,500,000 of short term borrowings with proceeds
from the sale of preferred stock and net increases of
$1,463,689 to fund operations, service debt and pay lease
payments.
The Company's stockholders' equity increased during six months
ended June 30, 1996 by $3,008,426 to $2,774,258 at June 30,
1996, as a result of the sale of $4,500,000 of preferred stock
and was reduced by the net loss for the period and the payment
of a $175,000 dividend on the Company's preferred stock.
Results of Operations
- ---------------------
The Company's net loss for the six months ended June 30, 1995
was $1,316,574 compared to a net loss of $1,212,284 for the same
period of 1995. For the quarter ended June 30, 1996 the loss
was $842,259 compared to a net loss of $1,064,307 for the same
period of 1995. Revenue for the six months ended June 30, 1996, was
$11,383,993 representing an increase of $1,467,174 (or 14.8%)
over revenue for the same period of 1995. Revenue for the three
months ended June 30, 1996, was $5,600,322 representing an
increase of $746,833 (or 15.4%) from revenue for the same period
of 1995.
Total operating expenses (excluding interest expense) were
$12,358,632 for the first six months of 1996 and $6,307,426 for
the second quarter of 1996. For the first six months of 1996,
total operating expenses increased $1,584,782 (or 14.7%)
compared to those expenses for the first six months of 1995. For
the second quarter of 1996, total operating expenses were
$6,307,426, an increase of $592,810 (or 10.4%) over the second
quarter of 1995. The operating ratio (total operating expenses
as a percentage of revenue), was 108.6% for the six months
ended June 30, 1996 and for the six months ended June 30, 1995,
and 112.6% for the quarter ended June 30, 1996, compared to
117.7% for the quarter ended June 30, 1995.
Operating salaries and benefits at $6,048,689 increased by
$711,200 (or 13.3%) for the first six months of 1996, and were
53.1% of revenue compared to 53.8% for the first six months of
1995. For the second quarter of 1996, operating salaries and
benefits were $2,990,557, an increase of $189,760 (or 6.8%)
over those for the second quarter of 1995. Operating salaries
and benefits were 53.4% of revenue for the second quarter of 1996
compared to 57.7% for the second quarter of 1995.
Fuel costs at $763,888 increased by $173,569 from the first six
months of 1995 level of $590,319 and were 6.7% of revenue for
the six months ended June 30, 1996, compared to 6.0% for the
first six months of 1995. For the second quarter of 1995, fuel
costs were $302,760. They increased in the quarter ended June
30, 1996, $105,628 from the second quarter 1995 level of 6.2% of
revenue to reach 7.3% of revenue. These increases resulted
primarily from increases in the price of fuel.
Insurance costs decreased by $261,134 to $712,846 (or 6.3%) of
revenue in the first six months of 1996 as compared to $973,980 (or
9.8%) of the first six months of 1995 revenue. Insurance costs
decreased by $176,299 to $348,681 or (6.3%) of revenue in the second
quarter of 1996 as compared to $524,980 (or 10.8%) of second
quarter 1995 revenue.
Tires and maintenance expense at $421,075 increased by $64,087
from the first six months 1995 level and represented 3.7% of
revenue compared to 3.6% in the first six months of 1995. Tires
and maintenance expense at $221,061 increased by $38,258 from
the second quarter 1995 level and represented 3.9% of revenue in
the second quarter of 1996, up from 3.8% for the same 1995
quarter.
The fixed components of operating cost (depreciation and
amortization, facilities and terminal expense) decreased in the
first six months of 1996 over the first six months of 1995.
Depreciation and amortization was $833,112, a decrease of
$15,586 (or 1.8%) from the first six months of 1995, and was
7.3% of revenue in the first six months of 1996 as compared to
8.6% in the same period of 1995. Depreciation and amortization
was $418,833, a decrease of $19,232 (or 4.4%) from the second
quarter of 1995, and was 7.5% of revenue in the second quarter
of 1996 as compared to 9.0% in the same period of 1995.
Facilities expense (rent plus utilities) at $726,773 increased
by $88,611 (or 13.9%) and was 6.4% of revenue in the first six
months of both 1996 and 1995. Facilities expense (rent plus
utilities) at $374,128 increased by $67,554 (or 22.0%) and was
6.7% of second quarter 1996 revenue versus 6.3% in the second
quarter of 1995. Terminal expense decreased by $28,678 and
$27,624 to $105,574 and $51,684 for the six months and quarter
ended June 30, 1995.
Purchased transportation, which includes amounts paid to
trucking companies to bring packages from customers' distribution
points outside the Company's geographical operating area to the
Company's terminals for delivery has increased to $193,993 and
$95,835 for the six months and quarter ended June 30, 1996, from
$120,282 for the six months ended June 30, 1995 and $66,556 for
the quarter ended June 30, 1995.
Selling and administrative expense at $2,369,574 was 43.4%
higher than the first six months 1995 level and increased as a
percentage of revenue from 16.7% in the 1995 first six months to
20.8% in the 1996 first six months. For the second quarter of
1996, selling and administrative expense were $1,306,064, an
increase of $385,606 (or 38.9%) over those for the second
quarter 1995 and increased as a percentage of revenue from 19.4%
in the 1995 second quarter to 23.3% in the 1996 second quarter.
The increases relate primarily to additional personnel costs,
legal expenses associated with the UPS litigation and additional
taxes and licenses.
The Company's operating loss for the six months ended June 30,
1996 was $974,639 compared to an operating loss of $857,031 for
the six months ended June 30, 1995. Its operating loss for the
quarter ended June 30, 1996 was $707,104 compared to an
operating loss of $861,127 for the quarter ended June 30, 1995.
Interest expense for the first six months of 1996 was $341,935,
which was a decrease of $13,318 from the interest expense for
the first six months of 1995. Interest expense for the second
quarter of 1996 was $135,155. This amount was $68,025 below the
interest expense for the quarter ended June 30, 1995.
GENERAL PARCEL SERVICE, INC. AND SUBSIDIARY
Part II - Other Information
Item 4. Submission of Matters to a Vote of Security Holders
At its Annual Meeting on June 6, 1996, the Company's
Shareholders:
a) ratified the appointment by the Board of Directors of
Grenadier, Collins, Mencke & Howard, LLP as independent
public accountants for the fiscal year ending
December 31, 1996, and
b) elected seven directors as follows:
T. Wayne Davis
Chairman of the Board of Directors
E. Hoke Smith
Director, President and Chief Executive Officer
J. Ray Gatlin
Director
Drue B. Linton
Director
Steven C. Koegler
Director, Legal Counsel
Terry Coleman
Director
Gayle Smith
Director, Executive Vice President and
Chief Operating Officer
Item 6. Exhibits and Reports on Form 8-K
Reports on Form 8-k:
The Company filed a Form 8-K dated June 25, 1996,
reporting that on June 25, 1996 an affiliate of the
Chairman of the Board of the Company purchased
$1,500,000 of the Class A, Series 2 Cumulative Convertible
Preferred Stock of the corporation.
Exhibits:
Exhibit 10.1 - Lease Agreement governing GPS's terminal in
Columbia, South Carolina dated May 31, 1996 between GPS and
Angor.a Columbia Enterprises. .
Exhibit 10.2 - Assignment of Lease Agreement governing GPS's
terminal in Greensboro, North Carolina dated June 13, 1996
between GPS, ABF Freight System, Inc., Bob G. Gibson and Defco Company.
Exhibit 10.3 - Lease Agreement governing GPS's terminal in
Greenville, South Carolina dated June 20, 1996 between GPS
and Real Estate Partners.
Exhibit 10.4 - Lease Agreement governing GPS's terminal in
Ashville, North Carolina dated July 8, 1996 between GPS and
J. C. Swicegood, Jr.
.
Exhibit 10.5 - Lease Agreement governing GPS's terminal in
Fayetteville, North Carolina dated July 1, 1996 between GPS
and Eugene and Jean G. Hair.
Exhibit 10.6 - Termination of Lease Agreement governing GPS's
terminal in Charlotte, North Carolina dated June 24, 1996
between GPS and Lincoln National Life Insurance Company.
Exhibit 10.7 - Lease Agreement governing GPS's terminal in
Charlotte, North Carolina dated July 30, 1996 between GPS
and Lincoln National Life Insurance Company.
Exhibit 10.8 - Lease Agreement governing GPS's terminal in
Charleston, South Carolina dated July 9, 1996 between GPS
and J. P. Gaillard, ET AL.
Exhibit 10.9 - Lease Agreement governing GPS's terminal in
Raleigh, North Carolina dated July 9, 1996 between GPS and
Parker-Raleigh Development I, Limited Partnership.
Exhibit 27 - Financial Data Schedule
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.
General Parcel Service, Inc.
Date: August 15, 1996
By (Signed)
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E. Hoke Smith, Jr.
President and Chief Executive Officer
By: (Signed)
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Wayne N. Nellums
Vice President, Chief Financial Officer