CLIPPER EXXPRESS COMPANY
Financial Statements
June 30, 1994 and 1993
CLIPPER EXXPRESS COMPANY
Balance Sheets
June 30 December 31
1994 1993
(Unaudited) (Note)
Assets
Current assets:
Cash and cash equivalents $ 1,972,473 $ 908,065
Trade accounts receivable, less
allowance for doubtful accounts of
$453,886 in 1994 and $682,702 in 1993 14,723,838 14,274,056
Other receivables 1,083,548 872,595
Notes receivable - affiliate 300,000 300,000
Prepaid expenses 155,207 216,650
----------- -----------
Total current assets 18,235,066 16,571,366
Notes receivable - affiliate 1,434,956 1,447,565
Property and equipment, at cost:
Service and administrative equipment 1,354,383 1,353,996
Other 98,665 98,665
----------- -----------
Total property and equipment 1,453,048 1,452,661
Less accumulated depreciation (892,192) (860,343)
----------- -----------
Net property and equipment 560,856 592,318
----------- -----------
Total Assets $20,230,878 $18,611,249
=========== ===========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 9,766,869 $10,983,372
Accrued expenses and other liabilities 1,188,877 1,506,957
----------- -----------
Total current liabilities 10,955,746 12,490,329
Deferred gain on sale of buildings 1,350,077 1,430,202
----------- -----------
Total liabilities 12,305,823 13,920,531
Stockholders' equity:
Common stock, $.01 par value. Authorized
10,000 shares; issued and outstanding
5,414 shares 54 54
Additional paid-in capital 1,263,931 1,263,931
Retained earnings 6,661,070 3,426,733
----------- -----------
Total stockholders' equity 7,925,055 4,690,718
----------- -----------
Total Liabilities and
Stockholders' Equity $20,230,878 $18,611,249
=========== ===========
<FN>
<F1>
Note: The balance sheet at December 31, 1993 has been derived from audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements.
<F2>
See accompanying notes to financial statements.
</FN>
CLIPPER EXXPRESS COMPANY
Statements of Earnings and Retained Earnings (Unaudited)
Six Months Ended
June 30
1994 1993
Revenue $ 56,447,666 $ 51,606,530
Purchased transportation services 46,133,757 42,485,023
------------ ------------
Gross margin 10,313,909 9,121,507
Indirect expenses:
Salaries, wages and benefits 4,704,656 5,128,326
Occupancy and supplies 1,127,171 997,037
Selling, general and administration 712,040 917,345
Professional services 220,559 242,828
Depreciation 66,881 135,221
State income taxes 94,141 44,290
Insurance 64,220 47,719
Other 120,341 89,649
----------- -----------
7,110,009 7,602,415
----------- -----------
Operating income 3,203,900 1,519,092
Nonoperating income (expense):
Interest income 48,183 12,229
Interest expense (18,668) (3,082)
Other, net 922 (19)
----------- -----------
30,437 9,128
----------- -----------
Net income 3,234,337 1,528,220
Retained earnings at beginning of period 3,426,733 4,261,677
Dividends paid -- (2,165,600)
----------- -----------
Retained earnings at end of period $ 6,661,070 $ 3,624,297
============ ============
<FN>
See accompanying notes to financial statements.
</FN>
CLIPPER EXXPRESS COMPANY
Statements of Cash Flows (Unaudited)
Six Months Ended
June 30
1994 1993
Cash flows from operating activities:
Net income $3,234,337 $1,528,208
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation 66,881 135,221
Loss on disposal of computer equipment (3,200) --
Amortization of deferred gain on sale
of buildings (80,125) (14,357)
Increase in receivables (660,735) (1,527,806)
Decrease (increase) in prepaid
expenses 61,443 (26,318)
Increase (decrease) in accounts
payable and accrued liabilities (1,534,583) 2,247,160
---------- ----------
Net cash provided by operating
activities 1,084,018 2,342,108
Cash flows from investing activities:
Purchase of equipment (35,419) (43,497)
Notes receivable from affiliate -- (300,000)
Payment of notes receivable 12,609 --
Proceeds from sale of fixed assets 3,200 --
----------- -----------
Net cash used in investing
activities (19,610) (343,497)
Cash flows from financing activities:
Dividends paid -- (2,165,600)
Principal payments on debt -- (30,007)
----------- -----------
Net cash used in financing
activities -- (2,195,607)
----------- -----------
Net increase (decrease) in cash
and cash equivalents 1,064,408 (196,996)
Cash and cash equivalents at
beginning of period 908,065 2,141,191
---------- ----------
Cash and cash equivalents at end of period $1,972,473 $1,944,195
========== ==========
CLIPPER EXXPRESS COMPANY
Statements of Cash Flows, Continued
Six Months Ended
June 30
1994 1993
Supplemental disclosure of cash flow
information:
State income taxes paid $ 55,235 $ 57,400
========== ==========
Interest paid $ -- $ 3,082
========== ==========
<FN>
See accompanying notes to financial statements.
</FN>
CLIPPER EXXPRESS COMPANY
Notes to Financial Statements
June 30, 1994
Note A -- Nature of the Business
Clipper Exxpress Company (the Company), a Delaware corporation, is a
transcontinental general commodities freight forwarder, specializing in less-
than-trailer load (LTL) shipments, and a shipper's agent, specializing in the
arrangement of door-to-door movements of trailer load (TL) shipments of
general commodity freight throughout the United States. As a freight
forwarder, the Company arranges the movement of merchandise from its point of
origin to its destination with railroads and over the road carriers acting as
the source of transportation, which allows for direct nonstop service to
major metropolitan areas. As a shipper's agent, the Company arranges all the
components of the movement of TL freight for the customer from the point of
origin to its destination, including pickup and delivery, railroad services,
monitoring of the shipment's progress, and consolidation of billing.
Note B -- Financial Statement Presentation
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with Article 10 of Regulation S-X. Accordingly,
they do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the six months ended June 30, 1994, are not necessarily
indicative of the results that may be expected for the year ended December
31, 1994. For further information, refer to the Company's financial
statements and footnotes thereto for the year ended December 31, 1993,
included elsewhere herein.
Note C -- Subsequent Event
On September 30, 1994, the Company and two affiliated companies were
purchased by Arkansas Best Corporation pursuant to a stock purchase agreement
entered into on August 18, 1994. Under the agreement, Arkansas Best
Corporation is to pay a total consideration of approximately $60 million in
cash for the Company and its affiliates, subject to certain closing audit and
other contractual adjustments.