SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1999
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 0-24908
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TRANSPORT CORPORATION OF AMERICA, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
MINNESOTA 41-1386925
--------------------------------- -------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1769 YANKEE DOODLE ROAD
EAGAN, MINNESOTA 55121
-----------------------------------------------------
(Address of principal executive offices and zip code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (651) 686-2500
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 such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days: YES _X_ NO ___
As of August 13, 1999, the Company had outstanding 8,269,141 shares of Common
Stock, $.01 par value.
---------------------------------
TRANSPORT CORPORATION OF AMERICA, INC.
Quarterly Report on Form 10-Q
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
Item 1. Financial Statements and Notes
Consolidated Balance Sheets as of
June 30, 1999 and December 31, 1998---------------------------Page 3
Consolidated Statements of Earnings for the three and
six months ended June 30, 1999 and 1998-----------------------Page 4
Consolidated Statements of Cash Flows for the
six months ended June 30, 1999 and 1998-----------------------Page 5
Notes to Consolidated Financial Statements----------------------Page 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations--------------------------------------Page 7
Item 3. Quantitative and Qualitative Disclosures about Market Risk------Page 15
PART II OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds-----------------------Page 16
Item 4. Submission of Matters to a Vote of Security Holders-------------Page 16
Item 6. Exhibits and Reports on Form 8-K--------------------------------Page 17
2
ITEM 1. FINANCIAL STATEMENTS
Transport Corporation of America, Inc.
Consolidated Balance Sheets
(In thousands)
June 30, December 31,
1999 1998
--------- ---------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 1,576 $ 448
Trade accounts receivable, net 33,108 27,403
Other receivable 2,082 1,593
Operating supplies - inventory 1,463 1,378
Deferred income tax benefit 5,237 5,443
Prepaid expenses and tires 4,064 2,212
--------- ---------
Total current assets 47,530 38,477
Property and equipment:
Land, buildings, and improvements 20,858 18,759
Revenue equipment 212,720 179,042
Other equipment 12,176 9,905
--------- ---------
Total property and equipment 245,754 207,706
Less accumulated depreciation (51,164) (46,946)
--------- ---------
Property and equipment, net 194,590 160,760
Other assets, net 26,352 25,315
--------- ---------
Total assets $ 268,472 $ 224,552
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 14,655 $ 13,717
Accounts payable 5,636 7,207
Checks issued in excess of cash balances 1,183 426
Due to independent contractors 3,329 2,126
Accrued expenses 15,242 11,795
--------- ---------
Total current liabilities 40,045 35,271
Long term debt, less current maturities 104,149 79,531
Deferred income taxes 32,166 27,749
1,200,000 shares of common stock with non-detachable put 20,268 20,268
Stockholders' equity:
Common stock 70 67
Additional paid-in capital 28,163 24,093
Retained earnings 43,611 37,573
--------- ---------
Total stockholders' equity 71,844 61,733
--------- ---------
Total liabilities and stockholders' equity $ 268,472 $ 224,552
========= =========
3
Transport Corporation of America, Inc.
Consolidated Statements of Earnings
(In thousands, except share and per share amounts)
(unaudited)
Three months ended Six months ended
June 30, June 30,
--------------------------- ---------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
Operating revenues $ 75,034 $ 53,075 $ 142,179 $ 102,563
Operating expenses:
Salaries, wages, and benefits 20,681 16,059 39,416 31,165
Fuel, maintenance, and other expenses 8,244 6,405 15,077 13,202
Purchased transportation 24,517 15,238 48,181 29,397
Revenue equipment leases 833 949 1,702 1,915
Depreciation and amortization 6,284 4,694 12,017 9,104
Insurance, claims and damage 1,956 1,390 3,873 2,915
Taxes and licenses 1,300 915 2,600 1,750
Communications 847 653 1,586 1,265
Other general and administrative expenses 2,156 2,139 4,486 4,072
Gain on sale of equipment (186) (47) (140) (59)
----------- ----------- ----------- -----------
Total operating expenses 66,632 48,395 128,798 94,726
----------- ----------- ----------- -----------
Operating income 8,402 4,680 13,381 7,837
Interest expense 1,917 1,075 3,498 2,190
Interest income (15) (25) (27) (116)
----------- ----------- ----------- -----------
Interest expense, net 1,902 1,050 3,471 2,074
----------- ----------- ----------- -----------
Earnings before income taxes 6,500 3,630 9,910 5,763
Provision for income taxes 2,541 1,416 3,872 2,249
----------- ----------- ----------- -----------
Net earnings $ 3,959 $ 2,214 $ 6,038 $ 3,514
=========== =========== =========== ===========
Net earnings per share:
Basic $ 0.49 $ 0.33 $ 0.75 $ 0.53
=========== =========== =========== ===========
Diluted $ 0.46 $ 0.33 $ 0.71 $ 0.52
=========== =========== =========== ===========
Average common shares outstanding:
Basic 8,114,121 6,712,526 8,005,530 6,691,223
Diluted 8,635,082 6,786,380 8,504,554 6,776,435
4
Transport Corporation of America, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(unaudited)
Six months ended
June 30,
---------------------
1999 1998
-------- --------
Operating activities:
Net earnings $ 6,038 $ 3,514
Adjustments to reconcile net earnings to net cash provided
by operating activities:
Depreciation and amortization 12,017 9,104
Gain on sale of equipment (140) (59)
Deferred income taxes 2,936 2,086
Changes in operating assets and liabilities,
net of acquisitions:
Trade receivable (2,940) (1,992)
Other receivable (428) 4,099
Operating supplies (85) 29
Prepaid expenses and tires (1,510) (1,268)
Accounts payable (2,689) 1,035
Due to independent contractors 1,165 800
Accrued expenses 1,519 2,575
-------- --------
Net cash provided by operating activities 15,883 19,923
-------- --------
Investing activities:
Purchases of revenue equipment (30,176) (20,464)
Purchases of property and other equipment (4,313) (1,409)
Payments for other assets (252) (15,800)
Acquisition of business, net of cash acquired (2,179) 0
Proceeds from sales of equipment 9,871 1,130
-------- --------
Net cash used in investing activities (27,049) (36,543)
-------- --------
Financing activities:
Proceeds from issuance of common stock,
and exercise of options and warrants 173 489
Proceeds from issuance of long-term debt 165 10,577
Principal payments on long-term debt (14,101) (9,236)
Proceeds from issuance of notes payable to bank 83,850 11,670
Principal payments on notes payable to bank (58,550) 0
Change in net checks issued in excess of cash balances 757 1,803
-------- --------
Net cash provided by financing activities 12,294 15,303
-------- --------
Net increase (decrease) in cash 1,128 (1,317)
Cash and cash equivalents, beginning of period 448 1,383
-------- --------
Cash and cash equivalents, end of period $ 1,576 $ 66
======== ========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 3,415 $ 2,183
Income taxes, net 617 71
5
TRANSPORT CORPORATION OF AMERICA, INC.
Notes to Consolidated Financial Statements
1. Interim Financial Statements (unaudited)
The unaudited interim consolidated financial statements
contained herein reflect all adjustments which, in the opinion
of management, are necessary for a fair presentation of the
interim periods. They have been prepared in accordance with
the instructions to Form 10-Q, Article 10 of Regulation S-X
and, accordingly, do not include all the information and
footnotes required by generally accepted accounting principles
for complete financial statements. These financial statements
should be read in conjunction with the audited financial
statements and footnotes included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1998. The
policies described in that report are used in preparing
interim reports. Certain balances from prior periods have been
reclassified to conform to current presentation.
The Company's business is seasonal. Operating results
for the six month period ended June 30, 1999 are not
necessarily indicative of the results that may be expected for
the year ending December 31, 1999.
2. Commitments
As of June 30, 1999, the Company had commitments to
purchase approximately $24.5 million of revenue equipment and
real estate, net of anticipated proceeds from the disposition
of used equipment.
In April of 1999, the Company entered into a five-year
operating lease for the construction of a new headquarters
facility in Eagan, Minnesota. Construction is expected to be
complete in the first quarter of 2000. The aggregate lease
payments are contingent on the final construction costs, which
are currently estimated to be $13 million.
6
3. Acquisition
Effective May 1, 1999, the Company issued 350,000 shares
of its common stock as a portion of the purchase price to
acquire Robert Hansen Trucking, Inc. The purchase price
consists of $2.2 million in cash and shares of the Company's
common stock. The number of shares will be determined based
upon post acquisition adjustments to the purchase price. The
Company is holding in escrow 105,000 shares of the total
shares issued, pending this final determination. The common
stock was issued in reliance of exemptions from registration
under the Securities Act of 1933 pursuant to Registration D.
The acquisition will be accounted for as a purchase.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Three Months Ended June 30, 1999 and 1998
Operating revenues increased 41.4% to $75.0 million for
the quarter ended June 30, 1999 from $53.1 million for the
quarter ended June 30, 1998. The increase resulted from
revenue growth from existing customers as well as additional
revenues attributable to the acquisition of Robert Hansen
Trucking, Inc ("RHT"), which became effective May 1, 1999, and
North Star Transport, Inc. ("North Star"), which became
effective July 1, 1998. Revenue per mile, excluding fuel
surcharges, increased to $1.28 in the second quarter of 1999,
compared to $1.25 for the same period of 1998. The improvement
in revenue per mile reflects an improvement in the Company's
freight mix. Equipment utilization, as measured by average
revenue per tractor per week, was $2,816 during the second
quarter of 1999, compared to $2,905 in the second quarter of
1998. The decline reflects decreased equipment utilization
resulting from the historically lower utilization of the
acquired North Star and RHT business.
7
North Star utilized the services of independent
contractors for substantially its entire driver workforce. As
a result of the acquisition, independent contractors
represented a significantly higher share of the Company's
total driver workforce than in prior periods. At June 30,
1999, there were 845 independent contractors, compared to 424
at June 30, 1998. In addition to providing their own tractors,
independent contractors are responsible for operating expenses
including repairs, fuel and other direct costs associated with
their equipment. As a result of the greater proportion of
independent contractors than in the same quarter a year ago,
several expense categories declined as a percentage of revenue
in the second quarter of 1999, offsetting an increase in
purchased transportation expense as a percentage of revenues,
when compared to the same quarter of 1998. RHT utilized the
services of employee drivers for substantially all of its
driver workforce. The acquisition of RHT had only a slight
impact on the proportion of independent contractors versus
employee drivers.
Pre-tax margin (earnings before income taxes as a
percentage of operating revenues) was 8.7% in the second
quarter of 1999, compared to 6.8% in the same period of 1998.
Efficiency, as measured by average annualized revenues per
non-driver employee, improved 7.6% to $603,700 for the second
quarter of 1999, compared to $561,200 for the same period of
1998. Salaries, wages, and benefits as a percentage of
operating revenues decreased to 27.6% in the second quarter of
1999, compared to 30.3% for the same period of 1998. The
decrease is primarily a reflection the utilization of a higher
proportion of independent contractors in the second quarter of
1999, compared to the same period of 1998. Miles driven by
independent contractors in the second quarter of 1999
increased 82.7% over the same quarter in 1998 as a result of a
higher proportion of independent contractors in the second
quarter of 1999 compared to the same period in 1998.
Accordingly, purchased transportation increased as a
percentage of operating revenues to 32.7% in the second
quarter of 1999 from 28.7% for the same quarter of 1998. The
decline of fuel, maintenance, and other expenses as a
percentage of operating revenues to 11.0% in the second
quarter of 1999, when compared to 12.1% in the second quarter
of 1998, is also a reflection of the increased ratio of
independent contractors. Revenue equipment leases decreased as
a percentage of operating revenues to 1.1% in the second
quarter of 1999 from 1.8% for the same period of 1998,
primarily as a result of a decrease in the use of leases.
Depreciation and amortization for the second quarter of 1999
was 8.4% of operating revenues, compared to 8.9% for the same
period of 1998, primarily resulting from the larger portion of
revenue equipment supplied by independent contractors during
the second quarter of 1999. Other general and administrative
expenses as a percentage of operating revenues were 2.9% in
the second quarter of 1999, compared to 4.0% for the same
period of 1998. The decrease in the percentage of other
general and administrative expenses represents the Company's
ability to quickly integrate and leverage the cost synergies
of the North Star and RHT acquisitions, as well as reduced
driver hiring expense.
Net interest expense in the second quarter of 1999 was
2.5% of operating revenues, compared to 2.0% for the same
period of 1998, resulting from increased
8
debt balances relating to the acquisition of North Star and
RHT. In addition, the Company increased its purchases of
revenue equipment to replace older, less efficient equipment
obtained in the acquisitions.
Gain on the disposition of equipment was $186,000 in the
second quarter of 1999, compared to a gain on $47,000 in the
same quarter of 1998. The effective tax rate for the second
quarters of 1999 and 1998 was 39.0%.
As a consequence of the items discussed above, net
earnings increased to $4.0 million, or 5.3% of operating
revenues for the quarter ended June 30, 1999 from $2.2
million, or 4.2% of operating revenues for the quarter ended
June 30, 1998.
Six Months Ended June 30, 1999 and 1998
Operating revenues increased 38.6% to $142.2 million for
the six months ended June 30, 1999 from $102.6 million for the
first six months of 1998. This increase resulted from revenue
growth from existing customers as well as additional revenues
attributable to the North Star and RHT acquisitions. Revenue
per mile was $1.28 in the first six months of 1999 compared to
$1.25 for the same period of 1998. The improvement in revenue
per mile reflects an improvement in the Company's freight mix.
Equipment utilization, as measured by average revenue per
tractor per week, declined to $2,742 during the first six
months of 1999 from $2,842 for the same period of 1998. The
decline reflects decreased equipment utilization resulting
from the historically lower utilization of the North Star and
RHT business.
9
Pre-tax margin (earnings before income taxes as a
percentage of operating revenues) was 6.9% in the first six
months of 1999, compared to 5.6% for the same period of 1998.
Efficiency, as measured by average annualized revenues per
non-driver employee, increased 5.2% to $583,900 for the first
six months of 1999 from $554,700 for the same period of 1998.
Salaries, wages, and benefits, as a percentage of operating
revenues, declined to 27.7% in the first six months of 1999,
compared to 30.4% for the same period of 1998, resulting
primarily from an increase in the percentage of miles driven
by independent contractors in the first six months of 1999,
compared to the same period of 1998. Correspondingly,
purchased transportation increased as a percentage of
operating revenues to 33.9% in the first six months of 1999
from 28.7% for the same period of 1998. Fuel, maintenance, and
other expenses decreased as a percentage of operating revenues
to 10.6% in the first six months of 1999 from 12.9% for the
same period of 1998, reflecting higher fuel prices in 1999,
offset by an increased percentage of independent contractors
in the Company fleet. Revenue equipment leases decreased as a
percentage of operating revenues to 1.2% in the first six
months of 1999 from 1.9% for the same period of 1998,
primarily as a result of a decrease in the use of leases.
Depreciation and amortization decreased as a percentage of
operating revenues to 8.5% in the first six months of 1999,
compared to 8.9% for the same period of 1998, primarily
resulting from the larger portion of revenue equipment
supplied by independent contractors during the first six
months of 1999. Other general and administrative expenses as a
percentage of operating revenues were 3.2% in the first six
months of 1999, compared 4.0% for the same period of 1998,
reflecting the Company's ability to absorb the operations of
RHT and North Star without significantly increasing its
non-wage related indirect costs.
In the first six months of 1999, gain on the disposition
of equipment was $140,000, compared to a gain of $59,000 in
the first six months of 1998.
Net interest expense in the first six months of 1999 was
2.5% of operating revenues, compared to 2.0% for the same
period of 1998, primarily a reflection of the higher average
outstanding debt associated with the acquisition of North Star
in July 1998 and RHT in May 1999. In addition, the Company
increased its purchases of revenue equipment to replace older,
less efficient equipment obtained in the acquisition.
The effective tax rates for the first six months of 1999
and 1998 were 39.1% and 39.0%, respectively.
As a consequence of the items discussed above, net
earnings increased to $6.0 million, or 4.2% of operating
revenues, for the six months ended June 30, 1999 from $3.5
million, or 3.4% of operating revenues, for the six months
ended June 30, 1998.
10
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $15.9
million in the first six months of 1999. Working capital as of
June 30, 1999 was $7.5 million, compared to $3.2 million as of
December 31, 1998. Accrued liabilities include normal
provisions for accident and workers' compensation claims
associated with the Company's self-insured retention insurance
program, less claim payments actually made. The Company
believes that its reserves and liquidity are adequate for
expected future claim payments.
Investing activities in the first six months of 1999
consumed net cash of $27.0 million, primarily for the purchase
of 169 new tractors, 673 new trailers, less proceeds from the
disposition of used equipment. This purchase activity is a
result of the Company's strategy to replace older, less
efficient equipment acquired in the acquisition. The Company
expects capital spending on revenue equipment to decrease in
the second half of the year. As of June 30, 1999, the Company
had commitments for the purchase of approximately $24.5
million of revenue equipment and real estate. The Company
expects to use cash provided by operating activities to
purchase the revenue equipment.
Net cash provided by financing activities was $12.3
million in the first six months of 1999, including $25.3
million representing net proceeds from the Company's credit
facility less reduction of other long term debt by $14.0
million.
In April of 1999, the Company entered into a five-year
operating lease for the construction of a new headquarters
facility in Eagan, Minnesota. Construction is expected to be
complete in the first quarter of 2000. The aggregate lease
payments are contingent on the final construction costs, which
are currently estimated to be $13 million.
The Company has a credit agreement with seven major
banks for an un-secured credit facility with maximum combined
borrowings and letters of credit of $100 million. Amounts
actually available under the credit facility are limited by
the Company's accounts receivable and unencumbered revenue
equipment. The credit facility, which expires in March 2001,
is used to meet working capital needs, purchase revenue
equipment and other assets, satisfy letter of credit
requirements associated with the Company's self-insured
retention arrangements, and for acquisitions. At June 30,
1999, there were outstanding borrowings of $78.3 million and
letters of credit outstanding totaling $3.6 million under this
credit facility. The Company expects to continue to fund its
liquidity needs and anticipated capital expenditures with cash
flows from operations and the credit facility.
11
RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, The FASB issued Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("Statement No. 133").
Statement No. 133 requires that an enterprise recognize all
derivatives as either assets or liabilities in the
consolidated balance sheet and measure those instruments at
fair value. Statement No. 133 is effective for all fiscal
quarters of all fiscal years beginning after June 15, 2000.
The Company is currently assessing the effect, if any, of
Statement No. 133 on its financial statements.
YEAR 2000
GENERAL STATE OF READINESS:
The Company has instituted a Steering Committee (the
"Committee") to assess the readiness and take remedial action
to correct the Company's systems to accommodate Year 2000
("Y2K") issues. The Committee, consisting of senior management
representing both technical and operating departments, is
charged with developing a project plan, detailed management
and remediation plans, as well as execution of these plans.
The Company is currently dependent upon systems that are
not Y2K compliant, including the Company's operations systems,
which is critical to coordinate driver movements with customer
needs and which interacts with other internal accounting and
operating systems as well as external customer information
systems. Development of a replacement operations system
commenced in 1997, and coding and testing of this system is
complete. The Company plans to fully implement the system in
the third quarter of 1999. The replacement system has been
designed to provide operational capabilities and enhancements
not present in the current systems, in addition to achieving
Y2K compliance.
Under the guidance of the Committee, an inventory and
assessment of all systems has been completed. The Company
plans that remediation for non-compliant systems will be
completed in the third quarter of 1999.
12
The Company is dependent upon system-based relationships
with outside parties, including customers, banks, payroll
processors, suppliers, communication service providers, and
other business partners. The Company has outlined its core
business processes and identified customers and vendors who
are critical to these processes. The Company has implemented a
series of phone and printed surveys which have been sent to
these business partners to assess their Y2K readiness.
Responses to these surveys have been collected and assessments
made to determine the degree of impact on Company operations,
should any of these outside parties fail to achieve Y2K
compliance. Remediation actions and alternate procedures will
be developed to overcome any significant business partner
issues discovered as a result of the surveys.
COSTS TO ADDRESS THE COMPANY'S Y2K ISSUES
The Company believes that the costs of addressing
internal Y2K issues will not have a material adverse effect
upon its results of operations or financial condition. The
major initiative, consisting of replacing the operations
system, is primarily directed at improving operational
effectiveness, with the added benefit of replacing a non-Y2K
compliant system. The Company has estimated that internal
costs associated with Y2K compliance will be $450,000, of
which approximately $300,000 has been incurred and expensed to
date. The potential financial impact on the Company resulting
from the failure of any of the Company's business partners to
be Y2K compliant cannot be estimated until the Company has
received and evaluated responses to its surveys of its
business partners.
RISKS ASSOCIATED WITH THE COMPANY'S Y2K ISSUES
The Company's failure to implement Y2K compliant systems
could disrupt daily operations, impairing, for example, the
Company's ability to receive and record customer orders,
coordinate driver movements, and invoice customers, all of
which could have a material adverse effect upon the Company's
results of operations and liquidity, if prolonged. Although
the Company believes alternate manual processes exist that
could temporarily minimize the disruption caused by a Y2K
failure, such processes would not likely be effective for an
extended period of time.
13
The Company is dependent upon third party resources
which are outside its direct control. Among the more critical
of these is the telecommunication system, upon which the
Company depends to receive customer orders and direct driver
movements. Daily activities are very dependent upon
voice-based phone systems and satellite-based communication
systems. Failure of the voice-based phone system would pose a
critical loss of capabilities, only partially offset by
satellite communication options.
Several critical relationships exist between the Company
and its customers, particularly those who electronically
initiate order transactions with the Company or interact
directly with the Company's systems. Failure of the Company's
customers to achieve Y2K compliance could jeopardize the
Company's ability to transact business electronically with
those customers. In the event of a customer's Y2K failure, the
success of manual interim processes will be largely out of the
Company's control.
CONTINGENCY PLANS
The Company has developed a comprehensive Y2K
Contingency Plan. The plan includes alternative manual and
electronic procedures.
FORWARD-LOOKING STATEMENTS
The Company has included various statements in this
Management's Discussion and Analysis and Results Of Operations
which may be considered as forward-looking statements of
expected future results of operations or events made pursuant
to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Such statements, based upon
management's interpretation of currently available
information, are subject to risks and uncertainties that could
cause future financial results or events to differ materially
from those which are presented. Such risks and factors include
general economic conditions, competition in the transportation
industry, governmental regulation, the Company's ability to
recruit, train and retain qualified drivers, the cost of
fuels, customer decisions to meet their transportation needs,
the ability of the Company to maintain a higher level of
service than its competitors, the integration of its
acquisition of RHT, adverse weather conditions, and other
factors outside the Company's control. The Company wishes to
caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date
made.
14
Item 3. Quantitative and Qualitative Disclosures about Market Risk
The Company is exposed to certain market risks with its
$100 million credit agreement, of which $78.3 million is
outstanding at June 30, 1999. The agreement bears interest at
a variable rate, which was 5.8% at June 30, 1999. In addition,
the Company also has 1.2 million shares of common stock with a
non-detachable Put option. The Put gives the shareholder the
right to sell some or all of the 1.2 million shares of the
Company's common stock back to the Company at $16.89 per
share, payable in cash, during a 60-day period commencing June
30, 2001.
15
PART II OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
Effective May 1, 1999, the Company issued 350,000 shares
of its common stock as a portion of the purchase price to
acquire Robert Hansen Trucking, Inc. The purchase price
consists of $2.2 million in cash and shares of the Company's
common stock. The number of shares will be determined based
upon post acquisition adjustments to the purchase price. The
Company is holding in escrow 105,000 shares of the total
shares issued, pending this final determination. The common
stock was issued in reliance of exemptions from registration
under the Securities Act of 1933 pursuant to Registration D.
The acquisition will be accounted for as a purchase.
Item 4. Submission of Matters to a Vote of Security Holders:
On May 20, 1999 the Company held its Annual Meeting of
Shareholders. At the meeting, the following persons were
elected to the Company's Board of Directors:
Votes For Votes Withheld
--------- --------------
James B. Aronson 6,728,952 58,373
Michael J. Paxton 6,727,532 59,793
Robert J. Meyers 6,728,332 58,993
Anton J. Christianson 6,728,932 58,393
Kenneth J. Roering 6,728,932 58,393
William D. Slattery 6,727,052 60,273
16
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits:
Exhibit
Number Description
10.1 Master Lease, dated as of April 9, 1999, between
ABN AMRO Leasing, Inc. and the Company
11.1 Statement re: Computation of Net Earnings per
Share
27 Financial Data Schedule
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the
quarter ended June 30, 1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TRANSPORT CORPORATION OF AMERICA, INC.
Date: August 13, 1999 /s/ Robert J. Meyers
--------------------------- --------------------------------------
Robert J. Meyers
President and Chief Operating Officer
/s/ Keith R. Klein
--------------------------------------
Keith R. Klein
Chief Financial Officer
17