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, 1997 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 $12,851,685 as of February 28, 1998.
1,835,955
(Number of shares of common stock outstanding as of February 28, 1998)
Part III incorporates certain information by reference from the Registrant's
Annual Report to Stockholders for fiscal year ended December 31, 1997 and Part
III incorporates certain information by reference from the Registrant's
definitive proxy statement dated April 4, 1998.
OTR EXPRESS, INC.
1997 Annual Report on Form 10-K
Table of Contents
Page
Part I
Item 1. Business 3
Item 2. Properties 9
Item 3. Legal Proceedings 10
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 11
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 11
Part III
Item 10. Directors and Executive Officers of the Registrant 11
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 12
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 competition
and the effects of such changes; increased competition; changes in fuel
prices; 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
management strategies; environmental or tax matters; issues arising from
addressing Year 2000 Issues; 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 organized in 1985 (the "Company" or
"OTR") operates as a long-haul, dry van, truckload carrier. The Company
transports a diversified mix of general commodities, including paper products,
food products, furniture, wire and retail goods for a large base of customers
(currently over 1,000) throughout the continental United States. OTR is
headquartered in Olathe, Kansas, a suburb of Kansas City, Missouri.
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 enables 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 new operating
strategy, the Company will be able to utilize its Freight Optimization System
which will work in conjunction with the Company's new national accounts
program to identify opportunities on non-national account freight and backhaul
opportunities on national account freight.
In 1997, the Company added a customer service department in order to
further enhance the Company's service capabilities and to expand business
opportunities with direct shipper customers.
OTR began regional short-haul operations in Kansas City and Chicago in 1997
to meet customer demand. Based on management's analysis of the market size,
cost of entry and potential long-term profitability, the Company expects to
make further investments in the short-haul division.
This flexible operating strategy has contributed to the Company's rapid
growth during the five year period ending December 31, 1997, with revenue
increasing to $63.8 million in 1997 from $22.0 million in 1992 (a compound
annual growth rate of 23.7%), and a corresponding increase in its fleet to 526
company-owned tractors from 228 during such period.
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 internal OTR sales
representatives. Agent Shippers are marketed by the Company's outside sales
agents. The Company's customer database includes approximately 500 OTR
Shippers, 320 Agent Shippers and 230 freight brokers. In 1997, OTR Shippers
accounted for 57% of OTR's revenue miles, Agent Shippers accounted for 20% and
freight brokers accounted for 23%. In 1996, OTR Shippers accounted for 46% of
OTR's revenue miles, Agent Shippers accounted for 14% and freight brokers
accounted for 40%.
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. To maximize this more
profitable revenue base by generating new OTR Shippers, OTR increased the
number of its sales representatives and customer service representatives to
eighteen at February 28, 1998 from three at December 31, 1994. Historically,
sales representatives operated primarily through direct telemarketing efforts.
In 1996, the Company began making face to face sales calls to its current
customers and prospective customers in conjunction with its national account
program. The Company plans to continue expansion of its sales force and
customer service representatives.
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 230 freight brokers. The
Company expects to continue to reduce the percentage of revenue miles from
freight brokers in the future.
For the year ended December 31, 1997, the Company's 20, 10 and five largest
customers accounted for 29.9%, 20.5% and 12.9%, respectively, of the Company's
operating revenue. The largest customer accounted for 3.0% of the Company's
operating revenue for that period.
Freight Brokerage Division
To better service its customers, OTR has developed a freight brokerage
division which brokers loads to other carriers. By brokering loads, the
Company is able to increase its profitability while satisfying its customers'
shipping needs without utilizing Company owned equipment. Freight brokerage
division revenue increased to $3.7 million in 1997 from $3.3 million in 1996.
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 46.4 years and average 14.2 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, 7.5% of the
Company's after tax net income is distributed to the drivers based on the
profitability of their respective profit centers. 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, particularly during periods of rapid fleet growth.
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.
In 1997, the Company established the Driver Support department to help
retain drivers and to share information and concerns and seek mutually
satisfactory solutions. The Driver Support department is currently staffed
with three full-time employees. As a result of management's attention to
driver retention, the Company's driver turnover rate was 63% in 1997, which
management believes to be below the industry average.
At December 31, 1997, the Company's ratio of tractors to non-driving
employees was 4.50 to one, which management believes is well above industry
standards. At February 28, 1998, the Company had 655 employees, of whom 537
were drivers and 118 were management and administrative personnel. At
February 28, 1998, the company also had contracts with independent contractors
(owner-operators) for the services of 21 tractors that provide both a tractor
and a qualified driver. The Company's employees are not represented by a
collective bargaining unit. Employees 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 very good.
In 1997, the Company began contracting with owner-operator drivers to haul
freight for the Company's customers. The Company recognizes that carefully
selected owner-operator drivers complement its company drivers.
Owner-operator drivers supply their own tractor and driver, and are
responsible for their operating expenses. Because owner-operator drivers
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. The Company expects to continue to recruit owner-operator
drivers, as well as company drivers.
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 the tractors owned by the Company have deluxe interiors
and oversized sleepers. The average age of OTR's tractors and trailers at
December 31, 1997 was 2.0 years and 1.5 years, respectively. The Company
plans its trade cycle based on engine warranties and routinely replaces its
tractors after forty months of use (approximately 400,000 miles).
At December 31, 1997 the Company owned 279 Navistar tractors, 114 Peterbilt
tractors and 133 Freightliner tractors. The tractors include engines which
are fully electronic, manufactured by Detroit Diesel, Caterpillar or Cummins.
Trailers in the fleet at year end were manufactured by Pines, Utility,
Stoughton and Trailmobile. All of the Company's trailers have a 110 inch
inside and are 102 inches wide, the maximum width generally allowed by law.
The trailer fleet at December 31, 1997 included 500 fifty-three foot trailers
and 265 forty-eight foot trailers.
The following table shows the age of Company equipment in service at
December 31, 1997.
Acquisition Year Tractors Trailers
1997 150 295
1996 67 205
1995 247 130
1994 62 120
1993 - 15
Total 526 765
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. All tractors are 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.
Fuel Availability and Cost
The Company actively manages 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."
The Company owns five automated fuel facilities, one located at the
Company's headquarters in Kansas and one each located on major traffic lanes
in Arizona, Ohio, Texas and Wyoming. Each of the four 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 1997, the Company
purchased 27.0% 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 major fuel price increases, since
October 1994 the Company has engaged in a fuel hedging strategy. Pursuant to
this program, the Company buys six month call options within $.05 of current
market prices, to buy futures contracts for #2 heating oil, in amounts equal
to one-half 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.
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 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
last underwent a DOT audit of its driver logs and received a satisfactory
rating. 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 1.5 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, the Company owns tracts, each approximately one
acre in size, in Arizona, Ohio, Texas and Wyoming, on which its remote fuel
facilities are located. 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. 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
$100,000 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. The Company carries excess insurance to
cover losses over $250,000, subject to a maximum coverage of $10 million per
occurrence and per year.
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,
1997, 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,
1997, 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,
1997 under the caption "Financial Review."
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,
1997 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 26
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 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 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.
None.
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 1997 10-K
II Valuation and Qualifying Accounts 16
The report of the Registrant's independent public accountants with respect
to the above listed financial statements and financial statement schedules
appears on page 15 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
No reports on Form 8-K were filed for the year ended December 31, 1997.
Exhibits
Exhibit Page Number or Incorporated
Number Description By Reference To
3(a) Articles of Incorporation, as amended Exhibit 3(a) to Annual Report
for the year ended Dec 31, 1994
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 Exhibit 10(a) to Registration
of OTR Express, Inc. Statement on Form S-18
(SEC File No. 33-44422FW)
10(c) Mortgage note dated January 10, Exhibit 10(xx) to Annual Report
1995 between Registrant and Toni J. for the year ended Dec 31, 1994
Waggoner and Robert E. Waggoner, on Form 10-K (SEC File
as Trustees No. 1-19773)
10(f) OTR Express, Inc. 1996 Stock Exhibit 10(bbb) to Annual
Option Plan Report for the year ended
Dec 31, 1995 on Form 10-K
(SEC File No. 1-19773)
10(g) 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(l) 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(m) Form of Carrier/Shipper Page 17 of sequentially
Transportation Contract numbered pages
10(n) Contract to Purchase Tractors in Page 19 of sequentially
1998 between Registrant and numbered pages
Kansas City Peterbilt
10(o) Contract to Purchase Trailers in Page 20 of sequentially
1998 between Registrant and numbered pages
Pines Trailer Corp.
11 Statement re: Computation of Page 21 of sequentially
Earnings per Share numbered pages
13(a) Annual Report to Stockholders Exhibit 13(a) to Annual Report
for the year ended December 31, for the year ended December
1996 31, 1996 on Form 10-K/A
(SEC File No. 1-19773)
13(b) Annual Report to Stockholders for Page 22 of sequentially
the year ended December 31, 1997 numbered pages
23 Consent of Arthur Andersen LLP Page 54 of sequentially
(filed herewith) numbered pages
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the regisrtation has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
OTR EXPRESS, INC.
/s/ WILLIAM P. WARD
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 Chairman of the Board March 17, 1998
William P. Ward
/s/ GARY J. KLUSMAN President, Principal Executive March 17, 1998
Gary J. Klusman Officer and Director
/s/ JANICE K. WARD Vice President and Director March 17, 1998
Janice K. Ward
/s/ STEVEN W. RUBEN Vice President Finance March 17, 1998
Steven W. Ruben Principal Financial Officer and
Principal Accounting Officer
/s/ CHRISTINE D. SCHOWENGERDT Treasurer March 17, 1998
Christine D. Schowengerdt
/s/ JAMES P. ANTHONY Director March 17, 1998
James P. Anthony
/s/ DEAN W. GRAVES Director March 17, 1998
Dean W. Graves
/s/ RALPH E. MACNAUGHTON Director March 17, 1998
Ralph E. MacNaughton
/s/ TERRY G. CHRISTENBERRY Director March 17, 1998
Terry G. Christenberry
/s/ CHARLES M. FOUDREE Director March 17, 1998
Charles M. Foudree
/s/ FRANK J. BECKER Director March 17, 1998
Frank J. Becker
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON SCHEDULES
To the Board of Directors and Stockholders of OTR Express, Inc.:
We have audited in accordance with generally accepted auditing standards,
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 5, 1998. Our audits were made for the purpose
of forming an opinion on those statements taken as a whole. Schedule II 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
required part of the basic financial statements. This schedule has been
subjected to the auditing procedures applied in our audits 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 5, 1998
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
1995 39,996 21,840 4,904 56,932
1996 56,932 38,070 37,986 57,016
1997 57,016 115,522 71,415 101,123
CORPORATE INFORMATION
Corporate Offices Common Stock Listing
OTR Express, Inc. OTR Express, Inc. common stock
804 N. Meadowbrook Drive is traded on NASDAQ National
Olathe, Kansas 66062 Market System under the symbol:
(913) 829-1616 OTRX
Mailing address:
PO Box 2819
Olathe, Kansas 66063-0819