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Filed by Motor Cargo Industries, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Motor Cargo Industries, Inc.
Commission File No. 000-23341
On October 22, 2001, Motor Cargo Industries, Inc. issued the following press
release:
FOR IMMEDIATE RELEASE
MOTOR CARGO INDUSTRIES, INC. REPORTS THIRD QUARTER EARNINGS
SALT LAKE CITY, UTAH, October 22, 2001--Motor Cargo Industries, Inc. (NASDAQ
NMS:CRGO) announced today results of operations for the third quarter ended
September 30, 2001. Operating revenues for the three months ended September 30,
2001 increased 5.7% to $36,041,000, compared to $34,098,000 for the
corresponding quarter of 2000. Net earnings increased 16.8% to $2,003,000 ($0.31
per diluted share) for the three months ended September 30, 2001, compared to
net earnings of $1,715,000 ($0.26 per diluted share) for the same period in
2000. Net earnings reported for the third quarter of 2001 reflect a charge to
earnings of $78,000 related to variable stock option accounting requirements.
MC Distribution Services, Inc. ("MCDS"), the Company's third-party logistics and
distribution management services company, contributed revenues of $1,527,000
during the third quarter of 2001, compared to revenues of $1,168,000 for the
same period in 2000, a growth rate of 30.7%.
Hal Tate, the Company's Chairman and Chief Executive Officer, stated: "While our
growth in revenue for the quarter was moderate, we are excited about the
improvement in our operating ratio. We have reduced our operating ratio compared
to the third quarter of last year, while many carriers have experienced
significant increases in their operating ratios. We also continue to provide
excellent service, with a current on-time delivery rate of 98%."
On October 15, 2001, the Company announced it had entered into an agreement and
plan of merger with Union Pacific Corporation. Pursuant to the terms of the
agreement, Union Pacific will offer to exchange for each share of common stock,
no par value, of the Company, at the election of the holder, either 0.26 of a
share of common stock, par value $2.50 per share, of Union Pacific or $12.10 in
cash. Shareholders of the Company who do not elect to tender their shares in the
exchange offer will receive $12.10 per share upon consummation of the merger.
Motor Cargo Industries, Inc. is a less-than-truckload carrier that provides
transportation and logistics services to shippers primarily within the western
region of the United States. The Company transports general commodities,
including consumer goods, packaged foodstuffs, electronics, computer equipment,
apparel, hardware, industrial goods and auto parts for a diversified customer
base. Through MCDS, the Company also provides customized logistics, warehousing
and distribution management services. The Company's executive offices are
located at 845 West Center Street, North Salt Lake, Utah 84054.
This news release is being filed pursuant to Rule 425 under the Securities Act
of 1933. This document does not constitute an offer of sale of securities.
Shareholders of the Company and other investors are urged to read the following
documents, when available, in connection with the pending transaction between
the Company and Union Pacific Corporation: the prospectus, exchange offer
materials, registration statement on Form S-4 and Schedule TO, containing or
incorporating by reference such documents and other information, to be filed by
Union Pacific and the solicitation/recommendation statement on Schedule 14D-9,
to be filed by the Company. Such documents will contain important information
about the Company, Union Pacific, the transaction, and significant shareholders
and their interests in the transaction, and related matters.
This press release and statements by the Company in reports to its shareholders
and public filings, as well as oral public statements by Company representatives
may contain certain forward-looking information that is subject to certain risks
and uncertainties that could cause actual results to differ materially from
those projected. Without limitation, these risks and uncertainties include
economic recessions or downturns in customers' business cycles, decreased demand
for transportation services offered by the Company, increases in interest rates,
and the availability and compensation of qualified drivers. Readers should
review and consider the various disclosures made by the Company in this press
release and in its period reports on forms 10-K and 10-Q.
(Selected Financial Data Follows)
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MOTOR CARGO INDUSTRIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands, except per share data and operating ratio)
<Table>
<Caption>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------------ ------------------------------
2001 2000 2001 2000
----------- ----------- ----------- -----------
(unaudited) (unaudited)
Operating Revenues $ 36,041 $ 34,098 $ 103,745 $ 96,254
Operating expenses
Salaries, wages and benefits 18,058 16,922 53,312 47,894
Operating supplies and expenses 5,606 5,657 16,569 15,748
Purchased transportation 3,171 3,000 8,732 8,849
Operating taxes and licenses 1,364 1,326 3,887 3,743
Insurance and claims 1,065 857 2,951 2,608
Depreciation and amortization 2,243 2,144 6,633 6,641
Communications and utilities 496 583 1,582 1,601
Building rents 761 881 2,314 2,607
Loss (gain) sale of equipment, net (43) (62) 5 (152)
Other non-recurring expense -- -- -- 102
----------- ----------- ----------- -----------
Total operating expenses 32,721 31,308 95,985 89,641
----------- ----------- ----------- -----------
Operating ratio 90.8% 91.8% 92.5% 93.1%
Operating income 3,320 2,790 7,760 6,613
Other income (expense)
Interest expense (28) (33) (91) (121)
Other, net 33 46 114 97
----------- ----------- ----------- -----------
5 13 23 (24)
----------- ----------- ----------- -----------
Earnings before income taxes 3,325 2,803 7,783 6,589
Income taxes 1,322 1,088 3,138 2,567
----------- ----------- ----------- -----------
NET EARNINGS 2,003 1,715 4,645 4,022
=========== =========== =========== ===========
Earnings per share:
Basic .31 .26 .72 .59
Diluted .31 .26 .71 .59
Weighted-average shares outstanding
Basic 6,473,140 6,720,693 6,473,177 6,796,755
Diluted 6,530,224 6,724,973 6,517,402 6,799,258
</Table>
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MOTOR CARGO INDUSTRIES INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED BALANCE SHEETS
(in thousands)
<Table>
<Caption>
September 30, 2001 December 31, 2000
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(unaudited)
Cash $ 5,783 $ 7,034
Receivables 18,260 18,125
Other current assets 4,061 4,483
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Current assets $28,104 $29,642
Property and equipment 57,521 54,335
Other assets 596 1,388
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Total assets $86,221 $85,365
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Current liabilities $15,462 $12,327
Long term obligations 1,065 8,015
Deferred income taxes 7,522 7,522
Stockholders' equity
Common Stock 9,315 9,289
Retained earnings 52,857 48,212
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Total liabilities and stockholders' equity $86,221 $85,365
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</Table>
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MOTOR CARGO INDUSTRIES INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED CASH FLOW DATA
(in thousands)
<Table>
<Caption>
NINE MONTHS ENDED
SEPTEMBER 30
--------------------------
2001 2000
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(unaudited)
Cash flows from operating activities $ 14,491 $ 11,359
Cash flows used in investing activities (8,792) (7,164)
Cash flows used in financing activities (6,949) (5,233)
Net (decrease) in cash and cash equivalents (1,250) (1,038)
Cash and cash equivalents at beginning of period 7,033 5,509
Cash and cash equivalents at end of period 5,783 4,471
</Table>
MOTOR CARGO SUBSIDIARY ONLY
SUMMARY OPERATING STATISTICS
<Table>
<Caption>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
---------------------- ----------------------
2001 2000 2001 2000
-------- -------- -------- --------
(unaudited) (unaudited)
Revenues (thousands) $ 34,663 $ 33,036 $ 99,981 $ 93,184
Operating ratio 91.4 92.2 92.9 93.4
Shipments 249,430 249,200 731,799 724,868
Weight (tons) 151,480 144,747 438,386 408,087
Miles (thousands) 11,001 10,090 31,669 28,657
Average length haul (miles) 581 592 589 596
Number of terminals and agencies 54 53 54 53
Revenue/shipment 139.43 132.57 136.78 128.55
Revenue/CWT 11.48 11.41 11.42 11.42
Revenue/mile 3.16 3.27 3.16 3.25
</Table>
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* * *
Additional Information Regarding the
Union Pacific Transaction and Where to Find It
In addition to the prospectus, exchange offer materials, registration statement,
Schedule TO, and Schedule 14D-9, Union Pacific and Motor Cargo file annual,
quarterly and special reports, proxy statements and other information with the
SEC. You may read and copy any reports, statements or other information filed by
Motor Cargo or Union Pacific at the SEC Public Reference Rooms at 450 Fifth
Street, N.W., Washington, D.C. 20549 or in the SEC's public reference room in
Chicago. Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. Union Pacific's and Motor Cargo's filings with the SEC
are also available to the public from commercial document-retrieval services and
at the web site maintained by the SEC at http://www.sec.gov. Free copies of the
tender offer materials, when available, and these other documents may also be
obtained from Union Pacific by directing a request by mail to Union Pacific
Corporation, 1416 Dodge Street, Omaha, Nebraska 68179, Attention: Investor
Relations, Telephone: 402-271-4227. Free copies of the Schedule 14D-9, when
available, may also be obtained from Motor Cargo by directing a request by mail
to Motor Cargo Industries, Inc., 845 West Center Street, North Salt Lake City,
Utah 84054, Attention: Investor Relations, Telephone: 801-299-5294.