AGILE FREIGHT SYSTEM, INC.
Financial Statements
December 31, 1993 and 1992
(With Independent Auditors' Report Thereon)
Independent Auditors' Report
The Stockholders and Board of Directors
Agile Freight System, Inc.:
We have audited the accompanying balance sheets of Agile Freight System, Inc.
as of December 31, 1993 and 1992, and the related statements of operations
and retained earnings (deficit) and cash flows for the years then ended.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Agile Freight System, Inc.
as of December 31, 1993 and 1992, and the results of its operations and its
cash flows for the years then ended in conformity with generally accepted
accounting principles.
KPMG Peat Marwick, LLP
April 15, 1994
AGILE FREIGHT SYSTEM, INC.
Balance Sheets
December 31, 1993 and 1992
1993 1992
Assets
Current assets:
Cash and cash equivalents $ 92,972 $ 102,287
Trade accounts receivable, less
allowance for doubtful accounts
of $4,000 in 1993 and $2,500 in 1992 557,772 436,882
Other receivables 89,785 241,705
Prepaid expenses 242,975 182,696
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Total current assets 983,504 963,570
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Property and equipment, at cost:
Administrative equipment 2,686 2,686
Less accumulated depreciation (809) (478)
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Net property and equipment 1,877 2,208
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Total Assets $ 985,381 $ 965,778
========== ==========
Liabilities and Stockholders' Equity
(Deficit)
Current liabilities:
Notes payable to stockholders $ 75,000 $ 375,000
Note payable - affiliate 300,000 --
Accounts payable 553,530 413,756
Accrued liabilities 82,917 67,868
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Total current liabilities 1,011,447 856,624
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Stockholders' equity (deficit):
Common stock, $1 par value. Authorized
10,000 shares; issued and outstanding
1,000 shares 1,000 1,000
Retained earnings (deficit) (27,066) 108,154
---------- ----------
Total stockholders' equity (deficit) (26,066) 109,154
---------- ----------
Total Liabilities and
Stockholders' Equity $ 985,381 $ 965,778
========== ==========
<FN>
See accompanying notes to financial statements.
AGILE FREIGHT SYSTEM, INC.
Statements of Operations and Retained Earnings (Deficit)
Years Ended December 31, 1993 and 1992
1993 1992
Revenue $6,540,226 $6,817,065
Transportation expenses:
Purchased services 5,055,810 4,861,738
Salaries, wages and benefits 595,111 860,656
Other 633,813 671,214
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6,284,734 6,393,608
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Gross margin 255,492 423,457
Indirect expenses:
Salaries, wages and benefits 179,771 200,438
Selling, general and administration 97,226 85,183
Occupancy and supplies 70,673 55,022
Professional services 14,900 12,100
State income taxes 800 6,007
Other 12,712 7,231
---------- ----------
376,082 365,981
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Operating income (loss) (120,590) 57,476
Nonoperating income (expense):
Interest income 606 772
Interest expense (15,236) (16,873)
---------- ----------
(14,630) (16,101)
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Net income (loss) (135,220) 41,375
Retained earnings at beginning of year 108,154 66,779
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Retained earnings (deficit) at end of year $ (27,066) $ 108,154
========== ==========
<FN>
See accompanying notes to financial statements.
AGILE FREIGHT SYSTEM, INC.
Statements of Cash Flows
Years Ended December 31, 1993 and 1992
1993 1992
Cash flows from operating activities:
Net income (loss) $ (135,220) $ 41,375
Adjustments to reconcile net income
(loss) to net cash used in operating
activities:
Depreciation 331 334
Increase (decrease) in receivables 31,030 (316,677)
Increase in prepaid expenses (60,279) (8,599)
Increase in accounts payable
and accrued liabilities 154,823 271,840
---------- ----------
Net cash used in operating activities (9,315) (11,727)
---------- ----------
Cash used in investing activities -
purchase of equipment -- (194)
---------- ----------
Net decrease in cash and cash
equivalents (9,315) (11,921)
Cash and cash equivalents at beginning
of year 102,287 114,208
---------- ----------
Cash and cash equivalents at end of year $ 92,972 $ 102,287
========== ==========
Supplemental disclosures of cash
flow information:
State income taxes paid $ 800 $ 6,500
========= =========
Interest paid $ 15,236 $ 16,873
========== =========
<FN>
See accompanying notes to financial statements.
AGILE FREIGHT SYSTEM, INC.
Notes to Financial Statements
Years Ended December 31, 1993 and 1992
(1) Summary of Significant Accounting Policies
Nature and Organization of Business
In February of 1990, Agile Freight System, Inc. (the Company), a
Delaware corporation, commenced operations as an irregular route,
general commodities motor carrier specializing in transcontinental truck
load transportation of merchandise from origin to destination.
The Company subleases certain revenue equipment it uses in its
operations from an affiliated company and obtains a portion of its power
equipment from independent contractors.
Property and Equipment
Depreciation is provided for using straight-line and accelerated methods
over the estimated useful lives of the respective assets, generally five
to ten years for equipment.
Loss and Damage Claims
Estimated loss and damage claims against the Company are accrued for
when incurred.
Revenue Recognition
The Company records revenue and corresponding expenses on all freight
movements on the date the shipment moves.
Income Taxes
Federal income taxes are not reflected in the accompanying financial
statements because the revenue and expenses of the Company are
reportable in the individual Federal income tax returns of its
stockholders, who have made an S corporation election.
State income taxes are provided for and included in operating expenses
in the financial statements for those states in which the Company is
subject to state income taxes.
AGILE FREIGHT SYSTEM, INC.
Notes to Financial Statements, Continued
Statement of Cash Flows
For the purposes of reporting cash flows, cash and cash equivalents
include cash on hand, amounts due from banks, and short-term
certificates of deposit with original maturities of three months or
less, which are recorded at cost.
(2) Related Party Transactions
Various administrative and management services are performed for the
Company by Clipper Exxpress Company (Clipper), an affiliate. The
Company paid Clipper approximately $71,000 for these services in 1993
and 1992. The Company received approximately $4,787,000 and $4,762,000
in revenue in 1993 and 1992, respectively, from Clipper for long-haul
and local road transportation.
The Company leases tractor equipment under an operating sublease entered
into with Clipper. The remaining lease obligation due under the
agreement is approximately $196,000 in 1994, $196,000 in 1995, and
$82,000 in 1996.
Notes payable to stockholders and affiliate are due on demand and bear
interest at a variable rate (3.79% at December 31, 1993).