UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
Annual Report Pursuant To Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the year ended December 31, 2000 Commission file number 1-19773
OTR EXPRESS, INC.
(Exact name of registrant as specified in its charter)
Kansas 48-0993128
(State or other jurisdiction of (IRS Employer
incorporation of organization) Identification No.)
804 N. Meadowbrook Drive, Olathe, Kansas 66062
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (913) 829-1616
Securities Registered Pursuant to Section 12(g) of the Act:
Title of each class
Common Stock, $.01 par value
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 the 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.
(1) Yes X No (2) Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained to
the best of Registrant's knowledge in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. ( )
The aggregate market value of voting stock held by non-affiliates of the
Registrant was $267,005 as of February 28, 2001.
1,782,022
(Number of shares of common stock outstanding as of February 28, 2001)
Part II incorporates certain information by reference from the
Registrant's Annual Report to Stockholders for fiscal year ended December 31,
2000. Part III incorporates certain information by reference from the
Registrant's definitive Proxy Statement dated April 10, 2001
OTR EXPRESS, INC.
2000 Annual Report on Form 10-K
Table of Contents
Page
Part I
Item 1. Business 3
Item 2. Properties 9
Item 3. Legal Proceedings 9
Item 4. Submission of Matters to a Vote of Security Holders 10
Part II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters 10
Item 6. Selected Financial Data 10
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
Item 8. Financial Statements and Supplementary Data 10
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 10
Part III
Item 10. Directors and Executive Officers of the Registrant 10
Item 11. Executive Compensation 11
Item 12. Security Ownership of Certain Beneficial Owners and
Management 11
Item 13. Certain Relationships and Related Transactions 11
Part IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K 11
PART I
Item 1. Business
Overview
The discussion set forth below as well as other documents
incorporated by reference herein and oral statements made by
officers of the Company relating thereto, may contain forward
looking statements. Such comments are based upon information
currently available to management and management's perception
thereof as of the date of this Form 10-K. Actual results of the
Company's operations could materially differ from those forward
looking statements. Such differences could be caused by a number
of factors including, but not limited to, potential adverse
affects of regulation; changes in freight demand and markets and
the effects of such changes; increased competition; changes in
fuel prices; changes in used tractor and trailer values; changes
in economic, political or regulatory environments; litigation
involving the Company; changes in the availability of a stable
labor force; ability of the Company to hire drivers meeting
Company standards; changes in driver compensation rates; changes
in management strategies; environmental or tax matters; increases
in interest rates and availability of affordable financing; available
cash liquidity to finance working capital and risks described from time
to time in reports filed by the Company with the Securities and Exchange
Commission. Readers should take these factors into account in evaluating
any such forward looking statements.
The Company
OTR Express, Inc., a Kansas corporation, was organized in 1985
(the "Company" or "OTR") and operates primarily as a dry van,
truckload carrier and logistics company. The Company transports
a diversified mix of general commodities for a large base of
customers (currently over 600) primarily east of the Rocky
Mountains and in the Los Angeles area. OTR is headquartered in
Olathe, Kansas, a suburb of Kansas City, Missouri. The Company
also provides non-asset based third party logistics services to
its customers, including rail, truckload, and less-than-truckload
services.
Operating Strategy
OTR's business philosophy is to provide high quality
transportation services at a low cost. The Company has
historically achieved this by (1) focusing on technology; (2)
operating premium, late model equipment; (3) hiring experienced
drivers; and (4) maintaining an efficient cost structure. From
its founding in 1985 until 1995, the Company's operating strategy
differed from that of most truckload carriers in that OTR
serviced a large base of customers with no long-term contracts or
commitments. This strategy allowed the Company to obtain the
most profitable loads available on a spot basis. To identify the
most profitable loads, the Company utilized its internally
developed, proprietary Freight Optimization System - a next-move
probability based freight system. The Freight Optimization
System enabled the Company to analyze historical data to
prioritize customers most likely to have freight that will
produce the most profitable combination of rates and
destinations. The Freight Optimization System was designed to
maximize freight opportunities, maximize revenue per mile and
minimize empty miles, but had become dependent to some extent on
freight brokers offering opportunities in the spot market. In
mid-1995, using the system, the Company received as much as 55%
of its freight opportunities from freight brokers who typically
pay 10% to 15% less per mile than direct shippers.
In 1996, due to changing market conditions, the Company
determined that it was necessary to change its operating strategy
to market to larger national accounts and away from the lower
priced spot freight market and its reliance on freight brokers.
The objective of OTR's new operating strategy was to improve
revenue per mile, equipment utilization, stability of the
customer base and reduce reliance on freight brokers. These
larger shippers are capable of offering increased load counts at
higher revenue rates. The larger shippers require additional
services, including guaranteed equipment availability, drop
trailers and fifty-three foot trailers. Additionally, in 1996,
the Company began offering Qualcomm satellite communications on
every truck and electronic data interchange (EDI) for load status
information to serve the Company's larger national accounts. The
Company is working to integrate these larger shippers into the
Company's existing operating strategy effectively, providing a
higher mix of more profitable shipper freight. In this operating
strategy, the Company now emphasizes a balance of inbound and out
bound shipper freight in twenty eight target cities, minimizing
out of target area freight and focusing on lane density and
utilization of equipment for the lane.
OTR has reduced regional short-haul operations to focus on the
Kansas City operation which has proven to be more profitable than
other cities.
The Company has sustained significant losses during 1999 and
2000 due to slowing freight demand, higher fuel prices, higher
insurance costs, depressed used tractor and trailer values,
increased driver pay and other factors. There can be no
assurance that the Company will be able to successfully address
this current situation without substantial waivers and/or
modifications to its current debt agreements.
Subsequent to year-end the company decided to reduce the size of
its fleet as more fully described in Management's Discussion and
Analysis of Financial Condition and Results of Operations and footnotes
to the audited financial statements.
Customers and Marketing
OTR has a large customer base that is diversified in terms of
geographic location and types of commodities shipped. The
Company markets its services based on dependable, time definite
delivery and service.
The Company obtains freight in three different manners:
directly from shippers ("OTR Shippers"), through Company agents
("Agent Shippers") and from freight brokers. OTR Shippers are
marketed directly by OTR sales representatives. Agent Shippers
are marketed by the Company's outside sales agents. The
Company's customer database includes approximately 250 OTR
Shippers, 160 Agent Shippers and 220 freight brokers. In 2000,
OTR Shippers accounted for 69% of OTR's revenue miles, Agent
Shippers accounted for 10% and freight brokers accounted for 21%.
The freight obtained from OTR Shippers and Agent Shippers is
generally more profitable than freight obtained from brokers,
having freight rates which average 10% to 15% more than brokered
freight. From the Company's inception through 1995, sales
representatives operated primarily through direct telemarketing
efforts.
During 1998, the Company divided its operations and sales
departments into seven regional teams to better serve customers
in those regions. The Company has since reduced the number of
operations and sales regions to five. In order to capitalize on
this structure, the Company currently has regional sales managers
in the Kansas City, Columbus and Boston metropolitan areas. The
focus of these regional sales managers is to enhance freight
opportunities with current customers and to add new customers.
The Company's brokered freight is obtained through a network
of freight brokers who contract for freight directly from
shippers and re-contract with the Company to transport the
freight. A freight broker helps carriers obtain loads in areas
where the carrier does not typically have a large number of
customers, thereby minimizing the empty miles of the carrier.
Freight brokers typically earn a margin based on a percentage of
the carrier's freight fee. The Company has developed a network
of approximately 220 freight brokers. The Company hopes to
reduce the percentage of revenue miles from freight brokers in
the future.
For the year ended December 31, 2000, the Company's 20, 10 and
five largest customers accounted for 35.7%, 22.9% and 13.7%,
respectively, of the Company's operating revenue. The largest
customer accounted for 4.4% of the Company's operating revenue
for that period.
Logistics Division
To better serve its customers, OTR has developed a logistics
division which brokers loads to other carriers. The Company
contracts with other trucking companies to haul freight on their
equipment for OTR's customers. The Company is able to increase
its profitability while satisfying its customers' shipping needs
without utilizing Company owned equipment.
In 1998, OTR formed a rail logistics department within its OTR
Logistics division. The intermodal logistics department
contracts with rail carriers to move freight on rail equipment
for customers and was based in Salt Lake City, Utah. In January,
2001, the Company consolidated its rail division into the
logistics division at its home office in Olathe, Kansas. OTR
expects to utilize its information technology to improve the
operating efficiency and capacity for the intermodal logistics
department. OTR's internal computer programmers have developed a
proprietary load order system specifically for intermodal
logistics services which is integrated with the Company's current
system and substantially reduces the amount of time it takes to
coordinate the movement of a load. The intermodal logistics
division operates as a non-asset based transportation service
provider and the Company expects that it will not require the
purchase of transportation equipment.
Logistics division revenue increased to $10.2 million in 2000
from $9.7 million in 1999. OTR expects total revenues from the
rail logistics division to decrease from current levels as a
result of the consolidation of its rail division into its
logistics division at its home office in Olathe, Kansas.
Drivers, Other Employees and Owner-Operator Drivers
Recruiting and retaining professional, experienced drivers is
critical to the Company's success, and all of the Company's
drivers must meet specific guidelines relating primarily to
safety record, driving experience and personal evaluation,
including drug and alcohol testing. OTR's drivers have an
average age of 47.5 years and average 13.6 years of driving
experience. Within the Company, drivers are considered
"managers" and are given a high level of responsibility to manage
the profitability of their equipment.
The Company's Driver Incentive Management System allows
experienced drivers to earn higher compensation than prevailing
industry wages. The Company provides incentive programs for its
drivers based on number of miles driven, fuel efficiency, safety
record and profitability. OTR considers each tractor and its
driver to be a separate profit center, with profit center
reports, including the actual revenue and expense of the
equipment and fixed expense components for administration, taxes
and depreciation, generated monthly. Under the Company's "profit
center" program, on a quarterly basis, a distribution approved by
management may be distributed to the drivers based on the
profitability of their respective profit centers and
profitability of the Company. The program is designed to give
OTR's drivers the incentive to improve their individual
productivity, minimize costs and thereby increase overall Company
profitability.
Driver recruitment and retention is essential to the
maintenance of high equipment utilization. OTR's drivers are given
recruiting bonuses for the referral of new drivers to the
Company. In order to attract and retain highly qualified drivers
and to promote safe operations, the Company purchases premium
quality tractors and equips the tractors with optimal comfort and
safety features, such as on-board satellite communications, high
quality interiors, power steering, automatic braking systems,
engine brakes and oversized sleepers. The Company's driver
turnover rate was 87% in 2000, which management believes to be
consistent with other companies in the industry.
At December 31, 2000, the Company's ratio of tractors to non-
driving employees was 4.48 to one, which management believes is
above industry standards. At February 28, 2001, the Company had
317 employees, of whom 219 were drivers and 98 were management
and administrative personnel. At February 28, 2001, the Company
also had contracts with independent contractors (owner-operators)
for the services of 59 tractors that provide both a tractor and a
qualified driver. The Company's employees are not represented by
a collective bargaining unit. Employees may participate in OTR's
401(k) program and in Company-sponsored health, life and dental
plans. The Company does not have any employees who are receiving
post retirement benefits and does not anticipate offering any
post retirement benefits in the future. Management considers
relations with its employees to be good, considering the
difficult operating circumstances.
In 1997, the Company began contracting with owner-operators to
haul freight for the Company's customers. The Company recognizes
that carefully selected owner-operators complement its company
drivers. Owner-operators supply their own tractor and driver,
and are responsible for their operating expenses. Because owner-
operators provide their own tractors, less capital is required
from the company for growth and they provide the Company with
another source of drivers to support its growth. While the
Company is currently engaged in a significant downsizing, it
expects to continue to recruit owner-operators, as well as
company drivers, to maintain whatever staffing levels it needs.
Revenue Equipment
The Company believes that a key to the successful retention of
drivers is the use of standardized, fuel efficient, late-model
tractors and trailers. The Company purchases all new tractors,
primarily with driver comfort, fuel efficiency, safety and
overall economy in mind. To recruit and retain high-quality
drivers, all of the tractors owned by the Company have deluxe
interiors and oversized sleepers. The average age of OTR's
tractors and trailers at December 31, 2000 was 2.1 years and 3.6
years, respectively.
At December 31, 2000 the Company owned 203 Navistar tractors
and 227 Peterbilt tractors. The tractors include engines which
are fully electronic and manufactured by Detroit Diesel and
Caterpillar. Trailers in the fleet at year-end were manufactured
by Pines, Utility, Great Dane, Stoughton and Trailmobile. All
of the Company's trailers have a 110 inch inside height and are
102 inches wide, the maximum width generally allowed by law. The
trailer fleet at December 31, 2000 included 796 fifty-three foot
trailers and 122 forty-eight foot trailers. The Company owns
only dry van trailers.
The following table shows the age of Company-owned equipment
in service at December 31, 2000.
Acquisition Year Tractors Trailers
2000 19 -
1999 258 20
1998 76 279
1997 77 292
1996 - 205
1995 - 110
1994 - 12
Total 430 918
In 2000 and 2001, the market for used tractors and trailers
has seen a dramatic increase in supply and thus a significant
decrease in value for used equipment the Company wishes to sell.
The Company's preventive maintenance program focuses on early
diagnosis of problems and contracting maintenance out to third-party
providers. In addition to annual Department of Transportation
("DOT") inspections, tractors are inspected when they pass through
the Company's diagnostic facilities at its headquarters. Almost all
tractors are still under warranty and are generally traded in before
their engine warranties expire. The exclusive use of third-party
maintenance providers, coupled with the effective utilization of
manufacturers' warranties and the Company's trade-in policy, allows
the Company to minimize its maintenance costs. Owner-operator
tractors are inspected prior to acceptance by the Company for
compliance with operational and safety requirements of the Company
and the Department of Transportation. These tractors are then
periodically inspected, similar to company-owned tractors, to
monitor continued compliance. Subsequent to year-end, the Company
decided to reduce the size of its fleet as more fully described in
Management's Discussion and Analysis of Financial Condition and
Results of Operations and footnotes to the audited financial
statements.
Fuel Availability and Cost
The Company actively manages a portion of its fuel costs
through a five component fuel management system which
incorporates: wholesale purchasing for the Company's unmanned
fuel facilities, mileage pay rates based upon fuel economy, the
"profit center" incentive driver compensation program, fuel
hedging, and equipment specifications. See "-Drivers and Other
Employees." While the system does reduce some of the effects of
a volatile fuel market, it is limited in nature and the Company
is adversely affected by rising fuel costs.
The Company owns four automated fuel facilities, one located
at the Company's headquarters in Kansas and one each located on
major traffic lanes in Arizona, Ohio and Texas. Each of the
three remote unmanned fuel facilities consists of an above-ground
fuel tank, pump and a computer modem linking it directly to the
Company's computers. In 2000, the Company purchased 15.7% of its
fuel in bulk for distribution through its automated fuel
facilities. These facilities allow the Company to purchase fuel
at wholesale prices.
As a way to protect the Company against a portion of major
fuel price increases, since October 1994 the Company has engaged
in a fuel hedging strategy. Pursuant to this program, the Company
buys four-or-six month call options within ten cents of current
market prices, to buy futures contracts for #2 heating oil, in
amounts equal to less than 50% of the Company's anticipated fuel
purchases for such period.
All of the Company's tractors have fully electronic engines,
which typically deliver enhanced fuel economy compared to
tractors with mechanically governed engines.
Environmental Matters
The Company's operations are subject to federal, state and
local laws and regulations concerning the environment. There is
the possibility of environmental liability as a result of the
Company's use of fuels, from the fuel storage tanks installed at
its fuel facilities and also from the cargo it may transport.
The Company's only underground storage tanks are two fiberglass
tanks installed at its headquarters facility. One tank was
installed in 1988 and the other in 1995. The tanks have overfill
protection hardware, spill containment manhole covers and leak
detection equipment. The Company believes that the use of above-
ground storage tanks at its remote fuel facilities minimizes both
potential liability and the cost of compliance with environmental
regulations. The Company occasionally transports environmentally
hazardous substances in accordance with hazardous material
guidelines. To date, the Company has experienced no material
claims for hazardous substance shipments. The Company believes
that its environmental practices comply with applicable federal,
state and local environmental laws and regulations. In the event
the Company should fail to comply with applicable regulations,
the Company could be subject to substantial fines or penalties
and to civil or criminal liability.
Competition
The truckload industry is extremely competitive and highly
fragmented, with numerous regional, inter-regional and national
truckload carriers, none of which dominates the market. The
Company competes primarily with other long-haul truckload
carriers, rail-truck intermodal transportation, railroads and, to
a lesser degree, with less-than-truckload ("LTL") carriers. Most
of OTR's larger truckload competitors utilize "core carrier" or
"lane density" marketing concepts, which emphasize greater
individualized service to a smaller number of shippers. Many
long haul truck load carriers utilize driver teams which allow
them to provide expedited service while complying with DOT
regulations concerning driver's duty hours. OTR's drivers
consist principally of single drivers. Intermodal transportation
and railroads typically have created downward pressure on the
truckload industry's pricing structure. The Company competes for
freight based primarily on freight rates, service and
reliability. Many of the Company's competitors are better
capitalized and have greater financial resources that enable them
to better manage through difficult market conditions such as the
Company experienced in 2000.
Seasonality
Seasonality causes variations in the operations of the
Company as well as industry-wide operations. Demand for the
Company's service is generally the highest during the summer and
fall months. Historically, expenses are greater during the
winter months when fuel costs are generally higher and fuel
efficiency is lower.
Governmental Regulation
The Company is a contract and common motor carrier subject to
the authority of federal and state agencies. These regulatory
authorities have broad powers, but the rates and charges of the
Company are not directly regulated by these authorities. OTR, as
primarily a contract carrier, negotiates competitive rates
directly with its customers as opposed to adhering to scheduled
tariffs.
The trucking industry is subject to regulatory and
legislative changes such as increasingly stringent environmental
regulations and limits on weight and size that can affect the
economics of the industry by requiring changes in operating
practices or influencing the demand for, and the costs of
providing, services to shippers.
In August 1994, the Federal Aviation Administration
Authorization Act of 1994 (the "1994 FAA Act") became law.
Effective January 1, 1995, the 1994 FAA Act preempted certain
state and local laws regulating the prices, routes or services of
motor carriers (other than household carriers). State agencies
may continue to impose tax, license, bonding and insurance
requirements. The 1994 FAA Act does not limit the authority of a
state or other political subdivision to impose safety regulations
or highway route limitations or controls based on the size or
weight of the motor vehicle, the hazardous nature of cargo being
transported by motor vehicles or minimum financial responsibility
requirements relating to insurance and self-insurance
authorization.
The Negotiated Rates Act of 1993 ("NRA"), in tandem with the
Trucking Industry Regulatory Reform Act of 1994 ("TIRRA"),
further redefined the regulatory structure applicable to
interstate transportation of goods. The NRA provided further
regulation governing interstate transportation, including
prohibitions on off-bill discounting, certain re-regulation of
contract shipping arrangements, and, with respect to common
carriers, regulation regarding the collection of undercharge
claims, and applicable defenses and exceptions to such claims.
The TIRRA further deregulated the trucking industry by partially
repealing the "filed-rate" doctrine previously applicable to
common carriers. Under the TIRRA, while collectively-made bureau
rates must still be published in tariffs, individually negotiated
rates are not.
The Company's drivers must be licensed as "commercial
drivers" pursuant to requirements established by the Federal
Highway Administration ("FHA") of the DOT. In addition to the
knowledge and driving skills tests required to obtain a
commercial driver's license (a "CDL"), there are various
disqualifying offenses set forth in the FHA rules, which, if
committed, could result in suspension or termination of the
operator's CDL, as well as potential civil or criminal
liabilities. Also, DOT regulations impose mandatory drug testing
of drivers and the Company has its own ongoing drug-testing
program. DOT alcohol testing rules require certain tests for
alcohol levels in drivers and other safety personnel.
Motor carrier operations are also subject to safety,
equipment and operators' hours of service requirements prescribed
by the DOT. The Company currently has a satisfactory rating from
the DOT based upon the DOT's most recent audit of the Company.
Safety
The Company maintains a program for training and supervising
personnel to keep safety awareness at its highest level. The
emphasis on safety begins in the hiring and training process. A
minimum of 2.0 years of over-the-road driving experience is
required for new company drivers. OTR also verifies the driving
records of all new drivers before they begin employment.
Prospective employees are given physical examinations and drug
tests, and newly hired drivers are trained in the Company's
safety procedures. In general, any driver who violates the
Company's safety standards will receive a warning letter, and any
driver who has more than two such violations within certain
periods of time is subject to termination. The Company
continuously monitors driver performance and has final authority
regarding employment and retention of drivers. OTR currently has
a "satisfactory" safety and fitness rating from the DOT. See "_
Governmental Regulation."
Item 2. Properties.
The Company owns real estate in Olathe, Kansas, where the
Company is headquartered. The property includes a 22,000 square
foot office facility and a 9,400 square foot diagnostic and
inspection facility. The property also includes approximately
258,000 square feet of parking space and the Kansas fuel
facility. Additionally, as of December 31, 2000, the Company
owns tracts, each approximately one acre in size, in Arizona,
Ohio, Texas and Wyoming, on which its remote fuel facilities are
located. Subsequent to year end, the Company sold its Wyoming
fuel facility and is under contract to sell its Ohio fuel
facility, although there can be no assurance that the sale of the
Ohio fuel facility will close. See "Item 1-Fuel Availability
and Cost."
Item 3. Legal Proceedings.
The Company is routinely a party to litigation incidental to
its business, primarily involving claims for personal injuries
and property damage incurred in the transportation of freight.
The Company believes that all litigation in which the Company is
currently involved is covered by the Company's liability
insurance (personal injury, physical damage and cargo) or
workers' compensation insurance. The Company believes the
ultimate outcome of current litigation will not have a material
adverse effect on its financial position or results of
operations.
The Company maintains liability insurance (including
umbrella coverage) in the amount of $10 million per occurrence
for personal injury, property damage and cargo. Under the terms
of the policy, the Company retains the first $50,000 of losses
paid and loss adjusting expense. The Company is self-insured for
workers' compensation insurance. The Company is responsible for
claims up to $250,000 per occurrence and $900,000 aggregate per
year. The Company carries excess insurance to cover losses over
$250,000, subject to a maximum coverage of $5 million per
occurrence.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters.
The information required by this Item is incorporated by
reference from the Company's Annual Report to Stockholders for
the fiscal year ended December 31, 2000, under the caption "Price
Range of Stock."
Item 6. Selected Financial Data.
The information required by this Item is incorporated by
reference from the Company's Annual Report to Stockholders for
the fiscal year ended December 31, 2000, under the caption
"Financial Highlights."
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
The information required by this Item is incorporated by
reference from the Company's Annual Report to Stockholders for
the fiscal year ended December 31, 2000 under the caption
"Management's Discussion and Analysis of Financial Condition and
Results of Operations."
Item 8. Financial Statements and Supplementary Data.
Index to Financial Statements
The information required by this Item is incorporated by
reference from the Company's Annual Report to Stockholders for
the fiscal year ended December 31, 2000 under the caption
"Financial Statements" and "Quarterly Financial Data."
Annual Report Page
Report of Independent Public Accountants 13
Balance Sheets 14
Statements of Operations 15
Statements of Stockholders' Equity 16
Statements of Cash Flows 17
Notes to Financial Statements 18
Supplemental Financial Information 28
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
None.
PART III
Item 10. Directors and Executive Officers of the Registrant.
The information required by this Item is incorporated by
reference from the Company's definitive Proxy Statement dated
April 10, 2001 under the headings "Proposal One: Election of Class
C Directors- Nominees," "The Board of Directors-Continuing
Directors," "Executive Officers-Information About Other Executive
Officers" and "Miscellaneous-Section 16 Reporting" to be filed
with the Commission not later than 120 days after the end of the
fiscal year covered by this Form 10-K.
Item 11. Executive Compensation.
The information required by this Item is incorporated by
reference from the Company's definitive Proxy Statement under the
heading "Executive Compensation and Other Information" to be
filed with the Commission not later than 120 days after the end
of the fiscal year covered by this Form 10-K.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
The information required by this Item is incorporated by
reference from the Company's definitive Proxy Statement dated
April 10, 2001 under the heading "Stock Ownership of Certain
Beneficial Owners and Management" to be filed with the Commission
not later than 120 days after the end of the fiscal year covered
by this Form 10-K.
Item 13. Certain Relationships and Related Transactions.
The information required by this Item is incorporated by reference
from the Company's definitive Proxy Statement dated April 10, 2001
under the heading "Certain Relationships and Other Transactions"
to be filed with the Commission not later than 120 days after the
end of the fiscal year covered by this Form 10-K.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K.
(a) List of documents filed as part of this Report on Form 10-K.
(1) Financial Statements
All financial statements of the Registrant as set forth
under Item 8 of this Report on Form 10-K.
(2) Financial Statement Schedules
Page of
Schedule Number Description 2000 10-K
II Valuation and Qualifying Accounts 17
The report of the Registrant's independent public accountants
with respect to the above listed financial statements and
financial statement schedules appears on page 13 of this Annual
Report on Form 10-K.
All other financial statement schedules not listed above have
been omitted since the required information is included in the
financial statements or the notes thereto, or is not applicable
or required.
(b) Reports on Form 8-K
In the fourth quarter of 2000, the Company filed a Form 8-K on
December 13, 2000.
Exhibits
Exhibit Page Number or Incorporation
Number Description By Reference To
3(a)(1) Articles of Incorporation, as amended Exhibit 3(a) to Annual Report
prior to July 10, 1988 for the year ended Dec 31,
1994 on Form 10-K (SEC File
No. 1-19773)
3(a)(2) Amendment to Articles of Incorporation, Exhibit 3(a)(2) to Annual
filed July 13, 1998 Report for the year ended
Dec 31, 1998 on Form 10-K
(SEC File No. 1-19773)
3(b) Restated By-Laws Exhibit 3(b) to Annual Report
for the year ended Dec 31,
1995 on Form 10-K (SEC File
No. 1-19773)
4 The Registrant, by signing this Report,
agrees to furnish the Securities and
Exchange Commission, upon its request,
a copy of any instrument which defines
the rights of holders of long-term debt
of the Registrant.
4(a) Specimen Common Stock Certificate Exhibit 4(a) to Amendment
No. 1 to Registration
Statement on Form S-18(SEC
File No. 33-44422FW)
10(a) 1991 Incentive Stock Option Plan of Exhibit 10(a) to Registration
OTR Express, Inc. Statement on Form S-18 (SEC
File No. 33-44422FW)
10(b) Mortgage note dated January 10, 1995 Exhibit 10(xx) To Annual
between Registrant and Toni J. Report for the year ended Dec 31,
Waggoner and Robert E. Waggoner, 1994 on Form 10-K (SEC File
as Trustees 1-19773)
10(c) OTR Express, Inc. 1996 Stock Option Exhibit 10(bbb) to Annual
Plan Report for the year ended Dec
31, 1995 on Form 10-K (SEC
File No. 1-19773)
10(d) OTR Express, Inc. 1996 Directors' Exhibit 10(ccc) to Annual
Stock Option Plan Report for the year ended Dec
31, 1995 on Form 10-K (SEC
File No. 1-19773)
10(e) Loan and Security Agreement dated Exhibit 10(ddd) to Quarterly
June 11, 1997 between Registrant Report for the period ended
and HSBC June 30, 1997 on Form 10-Q
(SEC File No. 1-19773)
10(f) Guaranty Agreement dated February 27, Exhibit 10(q) to Quarterly
1998 between Registrant and HSBC Report for the period ended
Business Loans, Inc.-Steven W. March 31, 1998 on Form 10-Q
Ruben (SEC File No. 1-19773)
10(g) Stock Purchase Assistance Agreement Exhibit 10(s) to Quarterly
dated February 27, 1998 between the Report for the period ended
Registrant and Steven W. Ruben March 31, 1998 on Form 10-Q
(SEC File No. 1-19773)
10(h) Amended Loan and Security Agreement Exhibit 10(m) to Annual Report
Agreement dated February 24, 2000 for the year ended December
between Registrant and HSBC 31, 2000 on Form 10-K (SEC
File No. 1-19773)
10(i) Form of Carrier/Shipper Transportation Page 18 of sequentially
Contract* numbered pages
10(j) Amended Loan and Security Agreement Page 21 of sequentially
dated February 22, 2001 between numbered pages
Registrant and HSBC*
10(k) Agreement dated March 15, 2001 between Page 25 of sequentially
the Registrant and Hillcrest Bank* numbered pages
10(l) First Amended Stock Loan Agreement Page 27 of sequentially
dated January 31, 2000 between the numbered pages
Registrant and Steven W. Ruben*
10(m) Second Amended Stock Loan Agreement Page 28 of sequentially
dated June 1, 2000 between the numbered pages
Registrant and Steven W. Ruben*
10(n) Third Amended Stock Loan Agreement Page 30 of sequentially
dated October 1, 2000 between the numbered pages
Registrant and Steven W. Ruben*
10(o) Stock Loan Agreement dated February Page 31 of sequentially
2, 2001 between the Registrant and numbered pages
Steven W. Ruben*
10(p) Debt Restructure Agreement dated Page 35 of sequentially
December 20, 2000 between the numbered pages
Registrant and Navistar Financial
Corporation*
10(q) Modification Agreement dated October 3, Page 40 of sequentially
2000 between the Registrant and numbered pages
Associates Commercial Corporation*
10(r) Credit Restructure Agreement dated Page 41 of sequentially
October 1, 2000 between the numbered pages
Registrant and Paccar Financial
Corporation*
10(s) Extension Agreement dated February 27, Page 60 of sequentially
2001 between the Registrant and numbered pages
Navistar Financial Corporation*
10(t) Agreement Regarding Private Sale and Page 61 of sequentially
Deficiency Balance dated February 26, numbered pages
2001 between the Registrant and
Navistar Financial Corporation*
10(u) Environmental Indemnity Agreement Page 64 of sequentially
dated March 2, 2001 between the numbered pages
Registrant and Associates
Commercial Corporation*
10(v) Mortgage, Assignment of Rents and Page 77 of sequentially
Leases and Security Agreement dated numbered pages
March 2, 2001 between the Registrant
and Associates Commercial Corporation*
10(w) First Amended Stock Loan Agreement Page 115 of sequentially
dated January 31, 2000 between the numbered pages
Registrant and Jeff Brown*
10(x) Second Amended Stock Loan Agreement Page 116 of sequentially
dated June 1, 2000 between the numbered pages
Registrant and Jeff Brown*
10(y) Financing Statement dated February Page 118 of sequentially
21, 2001 between the Registrant and numbered pages
Associates Commercial Corporation*
11 Statement re: Computation of Earnings Page 121 of sequentially
per Share* numbered pages
13(a) Annual Report to Stockholders Exhibit 13(b) to Annual
for the year ended December 31, 1999 Report for the year ended
December 31, 1999 on Form
10-K/A (SEC File No. 1-19773)
13(b) Annual Report to Stockholders Page 122 of sequentially
for the year ended December 31, 2000 numbered pages
23 Consent of Arthur Andersen LLP* Page 156 of sequentially
numbered pages
* Filed herewith.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registration has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
OTR EXPRESS, INC.
Date: March 29, 2001 /s/ WILLIAM P. WARD
Chairman of the Board
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the registrant and in the capacities and on the
dates indicated.
Signature Title Date
/s/WILLIAM P. WARD President, Principal Executive March 29, 2001
William P. Ward Officer and Chairman of the Board
/s/JANICE K. WARD Vice President and Director March 29, 2001
Janice K. Ward
/s/STEVEN W. RUBEN Vice President Finance March 29, 2001
Steven W. Ruben Principal Financial Officer and
Principal Accounting Officer
/s/CHRISTINE D. SCHOWENGERDT Treasurer and Secretary March 29, 2001
Christine D. Schowengerdt
/s/JAMES P. ANTHONY Director March 29, 2001
James P. Anthony
/s/DEAN W. GRAVES Director March 29, 2001
Dean W. Graves
/s/RALPH E. MACNAUGHTON Director March 29, 2001
Ralph E. MacNaughton
/s/TERRY G. CHRISTENBERRY Director March 29, 2001
Terry G. Christenberry
/s/CHARLES M. FOUDREE Director March 29, 2001
Charles M. Foudree
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON SCHEDULES
To the Board of Directors and Stockholders of OTR Express, Inc.:
We have audited in accordance with auditing standards generally
accepted in the United States, the financial statements included
in OTR Express, Inc.'s annual report to stockholders incorporated
by reference in this Form 10-K, and have issued our report
thereon dated February 9, 2001. Our audits were made for the
purpose of forming an opinion on those statements taken as a
whole. Schedule II-Valuation and Qualifying Accounts is the
responsibility of the company's management and is presented for
purposes of complying with the Securities and Exchange
Commission's rules and is not a part of the basic financial
statements. This schedule has been subjected to the auditing
procedures applied in our audit of the basic financial
statements, and, in our opinion, fairly states in all material
respects, the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.
/s/Arthur Andersen LLP
Arthur Andersen LLP
Kansas City, Missouri
February 9, 2001
Schedule II
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Balance at Additions Balance at
Beginning Charged to End
Of Year Expense Deductions of Year
Allowance for
doubtful accounts
1998 101,123 47,648 71,368 77,403
1999 77,403 141,485 32,668 186,220
2000 186,220 92,383 129,290 149,313
Valuation allowance
on deferred tax asset
2000 - 1,367,805 - 1,367,805
CORPORATE INFORMATION
Corporate Offices Common Stock Listing
OTR Express, Inc. OTR Express, Inc.'s common
804 N. Meadowbrook Drive stock trades on The American
Olathe, Kansas 66062 Stock Exchange under the
(913) 829-1616 symbol OTR
Mailing address:
PO Box 2819
Olathe, Kansas 66063-0819