1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number 0-19858
USA TRUCK, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 71-0556971
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
3200 INDUSTRIAL PARK ROAD 72956
VAN BUREN, ARKANSAS (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (501) 471-2500
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, PAR VALUE $.01 PER SHARE
(Title of class)
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
---- ----
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 the 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 the voting stock held by nonaffiliates of the
Registrant on March 8, 2000 was $34,353,298. (The characterization of officers
and directors of the Registrant as affiliates for purposes of this computation
should not be construed as an admission for any other purpose that any such
person is in fact an affiliate of the Registrant).
The number of shares outstanding of the Registrant's Common Stock, par
value $ .01, as of March 8, 2000 is 9,267,139.
DOCUMENTS INCORPORATED BY REFERENCE
Part of Form 10-K into Which the
Document Document is Incorporated
-------- ------------------------
Portions of the Proxy Statement to be Part III
sent to stockholders in connection with
2000 Annual Meeting
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USA TRUCK, INC.
TABLE OF CONTENTS
ITEM NO. CAPTION PAGE
- ------- ------- ----
PART I
1. Business................................................................................. 1
2. Properties............................................................................... 6
3. Legal Proceedings........................................................................ 7
4. Submission of Matters to a Vote of Security Holders...................................... 7
PART II
5. Market for Registrant's Common Equity and Related Stockholder Matters.................... 8
6. Selected Financial Data.................................................................. 9
7. Management's Discussion and Analysis of Financial Condition and Results of
Operations........................................................................... 10
7A. Quantitative and Qualitative Disclosure about Market Risk................................ 15
8. Financial Statements and Supplementary Data.............................................. 16
9. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure........................................................................... 32
PART III
10. Directors and Executive Officers of the Registrant....................................... 32
11. Executive Compensation................................................................... 32
12. Security Ownership of Certain Beneficial Owners and Management........................... 32
13. Certain Relationships and Related Transactions........................................... 32
PART IV
14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.......................... 33
Signatures............................................................................... 39
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PART I
ITEM 1. BUSINESS
GENERAL
USA Truck, Inc. (the "Company" or "USA Truck") is engaged in the
transportation of general commodity freight in interstate and foreign commerce.
Operations are conducted primarily east of the Rocky Mountains, but the Company
holds authority to transport and does transport freight between all points in
the continental United States, other than intrastate, and between all points in
the U.S., on the one hand, and the Canadian provinces of Ontario and Quebec, on
the other. The Company also provides the U.S. and Canadian portions of shipments
between points in the U.S. and Canadian provinces of Ontario and Quebec, on the
one hand, and points in Mexico, on the other. The Company transfers freight to,
or receives freight from, Mexican carriers at the U.S.-Mexico border in Laredo,
Texas. Revenue from foreign countries represents less than 5% of total revenues
of the Company for each of the past three years. The principal types of freight
transported include automotive parts and materials, tires, paper and paper
products, glass, retail store merchandise, chemicals, aluminum and manufacturing
materials and supplies. USA Truck does not transport Class A or Class B
explosives, garbage, radioactive materials or hazardous wastes. The Company does
not operate any flatbed, tanker, or other specialized trailers.
USA Truck transports freight in truckload quantities from individual
shippers to single or multiple destinations on an as-needed basis. Its business
consists primarily of medium haul shipments, more than 700 but less than 1,000
miles. For 1997, 1998, and 1999, the average length of haul for Company tractors
was 920 miles, 916 miles, and 908 miles, respectively.
The Company was incorporated in 1983 as a wholly-owned subsidiary of
Arkansas Best Corporation. In December 1988, the stock of the Company was sold
to management, and the Company completed its initial public offering of Common
Stock in late March 1992.
The Company's principal offices are located at 3200 Industrial Park Road,
Van Buren, Arkansas 72956, and its telephone number is (501) 471-2500.
BUSINESS STRATEGY
USA Truck's principal competitive strength is its ability and commitment to
consistently provide superior service to shippers. Although price is a primary
concern to all shippers, many of the Company's customers are high-volume
shippers that require a flexible and dependable source of motor carrier service
tailored to specific needs, including pickup or delivery within narrow time
windows. The Company's strategy is to provide a premium service to meet these
needs and to charge compensating rates for such service. This approach has found
increasing acceptance. See "Business -- Competition".
The Company is committed to prompt freight pickup, consistent on-time
delivery, and twenty-four hours a day, seven days a week dispatching. It has
taken a number of steps to meet these commitments. In particular, the Company
(i) adheres to strict maintenance and cleaning schedules to avoid breakdowns and
delays; (ii) provides detailed routing instructions for, and maintains satellite
communications with, drivers to expedite delivery; (iii) maintains trailer pools
at strategic locations to minimize the time between customer order and pickup;
and (iv) provides extra trailers to high volume shippers for loading and
unloading at their convenience.
USA Truck utilizes cost-efficient communications throughout its operations.
The Company provides EDI (electronic data interchange) arrangements with several
of its largest customers, providing them with access through their computer
systems to current information on the status of their shipments. Beginning in
the third quarter of 1997, the Company began installing two-way, satellite based
mobile messaging and position-locating equipment in all of its tractors. This
equipment is designed to fulfill customers' heightened need for real time
transit information as well as provide the Company with an enhanced and
cost-effective method of communications between its drivers and its operations
personnel. The system permits fleet managers to contact drivers virtually
anywhere in the
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Company's market area. These capabilities are intended to shorten response time
to customers, as well as to allow drivers uninterrupted rest time while awaiting
assignment. The installation of the equipment was completed in the fourth
quarter of 1997.
The Company has designed its own management information software systems,
which it operates on a mainframe computer that the Company acquired in 1997.
This system became operational during the second quarter of 1997, when the
Company's software was migrated to the new computer. Prior to that, the Company
used a mainframe computer through a contractual agreement with a third party.
These data processing capabilities enhance operating efficiency by providing
immediate access to detailed information concerning equipment, cargo, customer
locations, credit history, billing arrangements and specific customer
requirements. They also permit the Company to respond quickly and accurately to
customers' requests and assist in balancing equipment availability throughout
the market area. Management believes these information software systems and
computer hardware will be sufficient to support the Company's expansion plans at
least through 2001 without substantial additional expenditures in the data
processing area.
RECENT EVENTS
On November 1, 1999, pursuant to an Asset Purchase Agreement (the "Asset
Purchase Agreement") dated October 31, 1999, the Company acquired substantially
all the assets of CARCO Carrier Corporation, an Arkansas corporation, which
operated under the name CCC Express, Inc. ("CCC"), for a purchase price of $35.3
million. The purchase price, which was subject to certain post-closing
adjustments, consisted of (i) a cash payment of approximately $3.0 million; (ii)
the assumption of approximately $6.5 million of liabilities including equipment
notes held by Bank Boston, Mellon U.S. Leasing and Banc of America Leasing &
Capital LLC and (iii) the refinancing with Banc One Leasing Corporation and
Deposit Guaranty National Bank of approximately $25.8 million in other debt
secured by equipment. The cash portion of the purchase price was paid with
available cash and proceeds of borrowings under the Company's credit facilities
with Deposit Guaranty National Bank. The purchase price was equal to the net
book value of CCC on the closing date, as adjusted in accordance with the Asset
Purchase Agreement, plus $2.0 million. In connection with the acquisition, the
Company's borrowing limit under its General Line of Credit with Deposit Guaranty
National Bank was increased from $20.0 million to $35.0 million effective
October 28, 1999.
The acquired operations include a fleet of 498 tractors and 1,103 dry van
trailers, which the Company will use in its truckload motor carrier business.
The acquisition represents an increase of 43% in the tractor fleet of the
Company, which operated 1,149 tractors and 2,266 dry van trailers before the
transaction. As part of the transaction, the Company also assumed three leases
for dedicated shop and fuel facilities.
MARKETING AND SALES
The Company focuses its marketing efforts on customers with demanding
requirements and heavy shipping needs within the regions where the Company
operates. This permits the Company to concentrate available equipment in its
primary service area, enabling it to be more responsive to customer needs. USA
Truck's Marketing and Operations Departments have primary responsibility for
developing and implementing the Company's marketing strategy and retaining
customer accounts.
The Marketing Department solicits and responds to customer orders and
maintains close customer contact regarding service requirements and rates. A
high percentage of the Company's business is from repeat customers. For the year
ended December 31, 1999, at least 93% of USA Truck's operating revenues were
derived from customers that were customers of the Company prior to 1999.
USA Truck establishes rates through individual negotiations with customers
and through contracts tailored to the specific needs of shippers.
For the year ended December 31, 1999, the Company's ten largest customers
accounted for 38% of revenues and its three largest customers accounted for 19%
of revenues, with more than 1,600 other customers accounting for the balance. No
customer accounted for more than 10% of revenues.
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Customers are generally required to have credit approval before dispatch.
The Company bills customers at or shortly after pickup, and, for the last three
years, receivables collection has averaged approximately 31 days from the
billing date.
OPERATIONS
The Operations Department consists of two primary divisions: the Load
Coordinator Group and the Fleet Manager Group.
Load coordinators are responsible for efficiently matching available
equipment with customer needs, and they serve as the contact with customers'
receiving and shipping personnel. Load coordinators also have primary
responsibility for minimizing empty miles, and they work closely with the
Marketing Department to increase equipment utilization.
The average distance between loads as a percentage of total miles (empty
mile factor) is a standard measurement in the truckload industry. The empty mile
factor generally decreases as average length of haul and density of trucks in an
area increase. The Company's commitment to on-time pickup often requires a
tractor to travel farther to complete a pickup than it would have to travel if
the Company delayed the pickup until a tractor became available in the area. USA
Truck's empty mile factor was 9.26% for the year ended December 31, 1999.
Fleet managers supervise fleets of approximately 55 drivers each and serve
as the drivers' primary contact with the Company. Fleet managers monitor the
location of equipment and direct its movement in the most efficient and safe
manner practicable.
DRIVERS AND OTHER PERSONNEL
Driver recruitment and retention continue to be a challenge for the
Company. Recruiting drivers is difficult because Company standards are high and
because of declining enrollment in driving schools. Retention is difficult
because of wage and job fulfillment considerations. Driver turnover, especially
in the early months of employment, is a significant problem, and the competition
for qualified drivers is intense. Although USA Truck has experienced difficulty
with driver turnover, it has been able to attract and retain a sufficient number
of qualified drivers to support its operations. To attract and retain drivers,
the Company must continue to provide safe, attractive and comfortable equipment,
direct access to management, and competitive wages, benefits and financial
incentives designed to encourage longer-term employment.
Drivers' pay is calculated on the basis of miles driven and increases with
tenure. In 1999, drivers averaged 481 miles per workday. On October 18, 1998,
the Company implemented a pay increase for drivers that resulted in an average
increase in total base compensation of approximately 6% per driver. Drivers are
also paid bonuses based on productivity. For 1999, the Company's drivers earned
bonuses totaling approximately $643,000. During 1999, the Company's drivers
earned wages and bonuses averaging $.31 per mile.
As of December 31, 1999, USA Truck employed 2,069 persons, of which 1,600
were drivers, none of whom was represented by a collective bargaining unit. In
the opinion of management, the Company's relationship with its employees is
satisfactory.
SAFETY
USA Truck's safety program is designed to meet the Company's goal of an
accident-free working environment and to enforce governmental safety
regulations. The Company controls the maximum speed of its tractors with
electronic governing equipment, and all its tractors are equipped with anti-lock
braking systems.
Safety records are one of several hiring criteria used by USA Truck, and
safe equipment handling techniques are an important part of new driver training.
The Company also conducts pre-employment, random and post-accident drug testing
in accordance with Department of Transportation ("DOT") regulations.
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REVENUE EQUIPMENT AND MAINTENANCE
The Company's current policy is to replace most tractors within 42 months
from the date of purchase, which permits the Company to maintain substantial
warranty coverage throughout the period of ownership. USA Truck replaces its
tractors and trailers based on various factors, including the used equipment
market, prevailing interest rates, technological improvements, fuel efficiency
and durability. The following table shows the number and age of revenue
equipment operated by the Company at December 31, 1999:
TRACTORS TRAILERS
------------------------- -----------------------
AVERAGE AVERAGE
MODEL MONTHS MONTHS
YEAR NUMBER IN SERVICE NUMBER IN SERVICE
- ---- ------ ---------- ------ ----------
2000 353 4 350 3
1999 324 14 286 9
1998 569 26 797 24
1997 329 37 302 37
1996 138 48 332 49
1995 -- -- 624 59
1994 -- -- 372 70
1993 -- -- 191 82
1992 and prior -- -- 270 126
----- -- ----- ---
Total 1,713 23 3,524 46
===== == ===== ===
At December 31, 1999, USA Truck operated 1,713 conventional sleeper
tractors and 3,524 van trailers. To simplify driver and mechanic training,
control the cost of spare parts and tire inventory and provide for a more
efficient vehicle maintenance program, the Company buys tractors and trailers
manufactured to its specifications. In deciding which equipment to buy, it
considers a number of factors, including safety, economy, resale value and
driver comfort. Most of the Company's tractors are equipped with Detroit Diesel
Series 60 12.7-liter engines, air-ride suspension, and anti-lock brakes. The
Company's equipment is maintained through a strict preventive maintenance
program designed to minimize equipment downtime and to enhance trade-in value.
Beginning with the November 1995 trailer purchases, the Company began
converting its trailer fleet from 48-foot long and 102 inches wide trailers to
53-foot long and 102 inches wide trailers. Because of this conversion process
and additional trailers required to serve Mexico, the Company's trailer to
tractor ratio was 2.1-to-1 at December 31, 1999. Management believes that a
2.1-to-1 ratio is ideal for the Company's operations, in that it promotes
efficiency and provides the flexibility needed to serve customer needs. As of
December 31, 1999, 2,475 of the 3,524 trailers in the Company's trailer fleet
were 53-foot models. All future purchases of trailers will be 53-foot models.
The Company is undertaking this conversion in order to meet its customers'
requirements and to continue to provide an efficient balance between trailer
capacity and weight and length limitations in the various states and Canada.
During 1999, the Company financed revenue equipment through its
collateralized, $40 million revolving credit agreement (the "General Line of
Credit" or "Line of Credit"), through conventional financing and lease-purchase
arrangements. See "Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Capital Resources". All of
its revenue equipment is pledged to secure its obligations under such financing
arrangements.
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REVENUE EQUIPMENT ACQUISITION PROGRAM
During 2000 and 2001, the Company plans to acquire 641 and 695 new tractors
and 650 and 825 new trailers, respectively. This will result in net increases of
66 and 267 tractors and 111 and 546 trailers, respectively. As of February 4,
2000, contracts had been executed for the acquisition of all 641 tractors and
650 trailers to be acquired in 2000. Although these contracts fix the price at
which the Company may acquire this equipment, the Company has the right in its
discretion to decrease or increase the number of tractors or trailers to be
purchased during the year at agreed prices. See "Item 7. Management's Discussion
and Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources."
During 1999, the Company acquired 381 new tractors (a net increase of 83)
and 600 new trailers (a net increase of 417). The Company purchased 68 fewer new
tractors in 1999 than anticipated in response to the shortage of qualified
drivers in the truckload industry. The process of converting to 53-foot
trailers, growth in dedicated service and freight into Mexico, which
traditionally requires more trailers that regular dry-van service, necessitated
increasing the trailer fleet by 114 units above the amount anticipated. The CCC
Express acquisition added an additional 498 tractors and 1,103 trailers to the
fleet.
INSURANCE
The primary risk areas in the motor carrier industry are cargo loss and
damage, personal injury, property damage and workers' compensation claims.
Management believes that its insurance coverages are sufficient in each of these
areas. The Company is qualified as a workers' compensation self-insurer in the
States of Arkansas and Louisiana. The workers' compensation self-insurance is
secured by $300,000 in certificates of deposit. In June 1993, the Company
received authority to self-insure for cargo loss and damage claims and up to
$1.0 million per occurrence for bodily injury and property damage ("BIPD")
claims. These self-insurance arrangements are secured by $1.01 million in
letters of credit with the Federal Highway Administration. During 1999, the
self-insurance retention levels were $1.0 million for BIPD and $500,000 for
workers' compensation claims per occurrence. The Company has insurance coverage
for cargo loss and damage claims exceeding $100,000 per occurrence and coverage
for physical damage to its tractors and trailers with a self-insurance level of
$10,000 per occurrence. The Company has excess general liability coverage in
amounts substantially exceeding minimum legal requirements and believed to be
sufficient to protect the Company against material loss.
FUEL AVAILABILITY AND COST
The motor carrier industry is dependent upon the availability of diesel
fuel, and fuel shortages or increases in fuel taxes or fuel costs have adversely
affected and may in the future adversely affect the profitability of USA Truck.
Fuel prices have fluctuated widely and fuel taxes have generally increased in
recent years. The Company has not experienced difficulty in maintaining
necessary fuel supplies, and in the past the Company generally has been able to
recover all but the most significant increases in fuel costs and fuel taxes from
customers through increased freight rates. Diesel prices increased during 1999,
and there can be no assurance that diesel prices will decrease to price levels
experienced in recent periods. There also can be no assurance that the Company
will be able to recover any future increases in fuel costs and fuel taxes
through increased rates.
COMPETITION
The trucking industry is highly competitive. It is characterized by ease of
entry and by many small carriers having revenues of less than $1 million per
year, with relatively few carriers being able to achieve revenues exceeding $100
million per year. The principal means of competition in the truckload segment of
the industry are service and price, with rate discounting being particularly
intense during economic downturns. Although the Company competes primarily on
the basis of service rather than rates, rate discounting continues to be a
factor in obtaining and retaining business. Although the number of firms
competing in the truckload segment has increased dramatically since industry
deregulation in 1980, the industry appears to be undergoing a consolidation
phase. Furthermore, a depressed economy tends to increase both price and service
competition from alternative modes such as less-than-truckload carriers and
railroads. Management believes that further growth in the truckload segment of
the industry is likely to be achieved by acquiring greater market share rather
than through an increase in the size of the market.
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USA Truck competes primarily with other truckload carriers and
shipper-owned fleets and, to a lesser extent, with railroads and
less-than-truckload carriers. A number of truckload carriers have much greater
financial resources, own more revenue equipment and carry a larger volume of
freight than does the Company.
The Company also competes with truckload and less-than-truckload carriers
for qualified drivers. See "Business -- Drivers and Other Personnel".
TRADEMARK
The Company's name and logo are registered with the United States Patent
and Trademark Office, the Canadian Trade Marks Office, and the Mexican
Industrial Property Institute. The Company believes its trademark has
significant value and is important to its marketing efforts. The trademark
registration in each country is renewable indefinitely at the option of the
Company.
REGULATION
USA Truck is a motor carrier regulated by the DOT and other federal and
state agencies. The Company's business activities in the United States are
subject to broad federal, state and local laws and regulations beyond those
applicable to most business activities. These regulated business activities
include, among other things, service area, routes traveled, equipment
specifications, commodities transported, rates and charges, accounting systems,
financial reporting and insurance coverages. The Company's Canadian business
activities are subject to similar requirements imposed by the laws and
regulations of the Dominion of Canada and provincial laws and regulations.
Motor carrier operations are subject to safety requirements prescribed by
the DOT, governing interstate operation, and by Canadian provincial authorities.
Matters such as weight and equipment dimensions are also subject to federal,
state, and provincial regulations.
The Company is subject to federal, state, provincial, and local
environmental laws and regulations. Management believes that the Company is in
substantial compliance with such laws and regulations and that costs of such
compliance will not have a material adverse effect on its competitive position,
operations or financial condition or require a material increase in currently
anticipated capital expenditures.
ITEM 2. PROPERTIES
The Company owns its headquarters in Van Buren, Arkansas, located on 63
acres. This site has approximately 84,000-square feet of office, training, and
driver housing space within two structures, a 12,000-square foot maintenance
facility and a 2,500-square foot dock. In the second quarter of 1997, the
Company completed construction of a new 57,000-square foot corporate
headquarters next to its existing headquarters facility in Van Buren, Arkansas.
The previously existing 27,000-square foot facility will be refurbished over the
next several years to house additional training, maintenance and support
services. This facility also contains aboveground fuel tanks with a capacity of
40,000 gallons.
The Company operates a maintenance and driver facility in West Memphis,
Arkansas, situated on roughly 32 acres with 13 acres of paved tractor and
trailer parking behind fence, a 17,200-square foot shop, an eight-lane drive
through fueling station containing above ground fuel tanks with a capacity of
37,000 gallons and drivers' sleeping quarters that can house 36 drivers. During
1998, the Company expanded the shop by 7,200 square feet and added four
additional lanes to its drive through fueling station. The drivers' quarters
also include a recruiting office and driver training center for new drivers. The
Company owns 29 of the 32 acres and leases the remainder under a long-term lease
agreement with an initial term ending in November 2044. Located at the
intersection of I-40 and I-55, this facility is an ideal location for these
activities.
In August 1995, the Company completed construction of and began operating
its maintenance and driver facility in Shreveport, Louisiana, with 15 acres of
paved tractor and trailer parking behind fence, a 12,000-square foot shop, a
two-lane drive through fueling station containing above ground fuel tanks with a
capacity of 37,000 gallons and a drivers' sleeping quarters that can house 32
drivers. The drivers' quarters also include a recruiting office and driver
training center for new drivers. The facility is located on 20 acres of land
owned by the Company near I-20 on US Hwy. 80 and is strategically located near
several major customers in the area.
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In June 1996, the Company began operating its maintenance and driver
facility in Vandalia, Ohio, with approximately five acres of paved tractor and
trailer parking behind fence, a 2,400-square foot shop, a one-lane drive through
fueling station containing a below ground fuel tank with a capacity of 10,000
gallons and a drivers' sleeping quarters that can house 22 drivers. During 1999
the company acquired approximately 3 acres of adjoining land and plans to use
this space for truck and trailer parking as soon as it can be prepared. The
drivers' quarters also include a sales and recruiting office. The Company owned
facility is located near I-75 & I-70 and is strategically located for these
activities.
The Company leases, on a month-to-month basis, parking and office
facilities in East Peoria and Blue Island, Illinois, New Paris, Indiana and
Fayetteville, North Carolina.
Management believes that its facilities will be sufficient for its
operations at least through 2000.
See "Item 1. Business -- Revenue Equipment and Maintenance" and "Item 1.
Business -- Revenue Equipment Acquisition Program" for information regarding the
Company's revenue equipment.
ITEM 3. LEGAL PROCEEDINGS
The Company is a party to routine litigation incidental to its business,
primarily involving claims for personal injury and property damage incurred in
the transportation of freight. It maintains insurance covering liabilities
resulting from personal injury and property damage claims. Management believes
that adverse results in one or more of these cases would not have a material
adverse effect on the financial position of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company did not submit any matter to a vote of security holders during
the fourth quarter of the fiscal year covered by this Annual Report.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's Common Stock trades on The Nasdaq Stock Market under the
symbol: USAK. The following table sets forth the high and low closing sales
prices for the Company's Common Stock as reported by The Nasdaq Stock Market for
1999 and 1998.
1999 HIGH LOW
- ---- ---- ----
First Quarter.............................................. $ 10.44 $ 10.19
Second Quarter............................................. $ 9.38 $ 9.16
Third Quarter.............................................. $ 9.25 $ 8.88
Fourth Quarter............................................. $ 8.13 $ 7.75
1998 HIGH LOW
- ---- ---- ----
First Quarter ............................................. $ 16.13 $ 10.88
Second Quarter............................................. $ 16.94 $ 14.25
Third Quarter.............................................. $ 17.00 $ 10.25
Fourth Quarter............................................. $ 12.38 $ 9.50
As of March 8, 2000, there were 264 holders of record (including brokerage
firms and other nominees) of the Company's Common Stock. The Company estimates
that there were approximately 1,888 beneficial owners of the Common Stock as of
that date.
The Company has never paid a cash dividend on its Common Stock. It is the
current intention of the Company's Board of Directors to continue to retain
earnings to finance the growth of the Company rather than to pay cash dividends.
Any future payments of cash dividends will depend upon the financial condition,
results of operations and capital commitments of the Company as well as other
factors deemed relevant by the Board of Directors. Covenants contained in the
Company's General Line of Credit may limit the Company's ability to pay
dividends.
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ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth, for the periods and at the dates indicated,
selected financial data of the Company. The data should be read in conjunction
with the financial statements and related notes contained in Item 8 of this
Annual Report and "Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations".
YEAR ENDED DECEMBER 31
-------------------------------------------------------------------------
1999 1998 1997 1996 1995
--------- --------- --------- --------- ---------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
STATEMENT OF OPERATIONS DATA:
Operating revenues .......................... $ 166,363 $ 145,216 $ 129,507 $ 108,313 $ 102,400
Operating expenses and costs:
Salaries, wages and employee benefits .... 70,198 61,297 53,122 45,122 42,860
Operations and maintenance ............... 42,480 33,401 34,189 31,064 26,909
Operating taxes and licenses ............. 3,005 2,547 2,160 1,964 1,822
Insurance and claims ..................... 7,987 7,250 6,773 6,422 5,146
Communications and utilities ............. 2,000 1,469 1,828 1,612 1,285
Depreciation and amortization ............ 18,592 16,179 13,608 11,839 11,145
Other .................................... 6,265 4,113 3,659 4,038 2,794
--------- --------- --------- --------- ---------
150,527 126,256 115,339 102,061 91,961
--------- --------- --------- --------- ---------
Operating income ............................ 15,836 18,960 14,168 6,252 10,439
Other (income) expenses:
Interest expense ......................... 1,655 1,715 1,380 730 799
Gain on disposal of assets ............... (9) (37) (2) (9) (1)
Other, net ............................... (23) 102 (191) (4) (152)
--------- --------- --------- --------- ---------
1,623 1,780 1,187 717 646
--------- --------- --------- --------- ---------
Income before income taxes .................. 14,213 17,180 12,981 5,535 9,793
Income taxes ................................ 5,571 6,683 5,078 2,153 3,756
--------- --------- --------- --------- ---------
Net Income .................................. 8,642 $ 10,497 $ 7,903 $ 3,382 $ 6,037
========= ========= ========= ========= =========
Basic:
Net income per share ..................... $ .93 $ 1.12 $ 0.84 $ 0.36 $ 0.62
========= ========= ========= ========= =========
Average shares outstanding ............... 9,324 9,400 9,356 9,463 9,684
========= ========= ========= ========= =========
Diluted:
Net income per share ..................... $ .92 $ 1.11 $ 0.83 $ 0.35 $ 0.60
========= ========= ========= ========= =========
Average shares outstanding ............... 9,354 9,466 9,485 9,620 10,028
========= ========= ========= ========= =========
Cash dividends per share .................... -- -- -- -- --
BALANCE SHEET DATA (AT END OF YEAR):
Current assets .............................. $ 39,449 $ 20,459 $ 20,292 $ 16,825 $ 16,008
Current liabilities ......................... 28,277 21,151 20,762 15,193 13,295
Total assets ................................ 182,040 119,611 113,518 86,330 78,980
Long-term debt, less current maturities ..... 64,453 19,058 27,057 15,867 13,361
Stockholders' equity ........................ 70,108 62,734 52,373 44,424 43,157
9
12
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following table sets forth the percentage relationship of certain items to
operating revenues for the years indicated:
YEAR ENDED DECEMBER 31,
-----------------------------
1999 1998 1997
----- ----- -----
Operating revenues .......................... 100.0% 100.0% 100.0%
Operating expenses and costs:
Salaries, wages and employee benefits ... 42.2 42.2 41.0
Operations and maintenance .............. 25.5 23.0 26.4
Operating taxes and licenses ............ 1.8 1.8 1.7
Insurance and claims .................... 4.8 5.0 5.2
Communications and utilities ............ 1.2 1.0 1.4
Depreciation and amortization ........... 11.2 11.1 10.5
Other ................................... 3.8 2.8 2.9
----- ----- -----
90.5 86.9 89.1
----- ----- -----
Operating income ............................ 9.5 13.1 10.9
Other (income) expenses:
Interest expense ........................ 1.0 1.2 1.1
Gain on disposal of assets .............. -- -- --
Other, net .............................. -- 0.1 (0.2)
----- ----- -----
1.0 1.3 0.9
----- ----- -----
Income before income taxes .................. 8.5 11.8 10.0
Income taxes ................................ 3.3 4.6 3.9
----- ----- -----
Net income .................................. 5.2% 7.2% 6.1%
===== ===== =====
RESULTS OF OPERATIONS
Year Ended December 31, 1999 Compared to Year Ended December 31, 1998
Operating revenues increased 14.6% to $166.4 million in 1999 from $145.2
million in 1998, resulting from increased business with existing customers,
additional business from new customers and the acquisition of CCC Express on
November 1, 1999. Average revenue per mile increased to $1.13 in 1999 from $1.12
in 1998. The empty mile factor decreased to 9.26% of paid miles in 1999 from
9.78% of paid miles in 1998. There was a 15.1% increase in the number of
shipments to 147,484 in 1999 from 128,179 in 1998. This volume improvement was
made possible by an increase of 15.6% in the average number of tractors operated
from 1,058 in 1998 to 1,223 in 1999. The net effect of the volume improvement
and the Company's continuing fleet expansion was a decrease of 1.5% in miles per
tractor per week from 2,441 in 1998 to 2,404 in 1999.
Operating expenses and costs as a percentage of revenues rose to 90.5% in
1999 from 86.9% in 1998. This change resulted primarily from an increase, on a
percent of revenue basis, in operations and maintenance cost, communications and
utilities, and other expenses. These increases were partially offset by a
decrease, on a percent of revenue basis, in insurance and claims. The percentage
increase, relative to revenues, in operations and maintenance cost was primarily
the result of a an increase of 10 cents per gallon in the average cost of fuel
in 1999 compared to 1998, offset by an increase in fuel efficiency to 6.46
average miles per gallon in 1999 from 6.41 in 1998. The increase in
communications and utilities expense, as a percentage of revenue and in actual
dollars, reflects the usage credits issued with the purchase of Qualcomm units
in 1997 being used to reduce rates in 1998. The increase in other expenses, as a
percentage of revenue, resulted primarily from higher recruiting costs brought
about by a higher driver turnover rate and increased competition for drivers.
The percentage decrease, relative to revenues, in insurance and claims expense
was due to a decrease in the number and severity of accidents in 1999 compared
to 1998.
As a result of the foregoing factors, operating income decreased 16.5% to
$15.8 million, or 9.5% of revenue, in 1999 from $19.0 million or, 13.1% of
revenues, in 1998.
10
13
Interest expense decreased 3.5% to $1.65 million from $1.72 million in
1998, resulting primarily from reduction in borrowings for most of the year
offset by a substantial increase in borrowings following the acquisition of CCC
Express on November 1, 1999.
The Company had other income, net of $23,000 during 1999 compared to other
expense, net of $102,000 in 1998. This increase in other income, net was due to
a variety of factors, no single one of which accounted for more than half of the
increase.
As a result of the above factors, income before taxes decreased 17.3% to
$14.2 million, or 8.5% of revenues, in 1999 from $17.2 million, or 11.8% of
revenues, in 1998.
The Company's effective tax rate increased to 39.2% in 1999 from 38.9% in
1998. The effective rates varied from the statutory Federal tax rate of 34%
primarily due to state income taxes and certain non-deductible expenses.
As a result of the aforementioned factors, net income decreased 17.7% to
$8.6 million, or 5.2% of revenues, in 1999 from $10.5 million, or 7.2% of
revenues in 1998, representing a decrease of 17.1% in diluted net income per
share to $.92 from $1.11. The number of shares used in the calculation of
diluted net income per share for 1999 and 1998 were 9,354,441 and 9,465,971.
Year Ended December 31, 1998 Compared to Year Ended December 31, 1997
Operating revenues increased 12.1% to $145.2 million in 1998 from $129.5
million in 1997, resulting from increased business with existing customers and
additional business from new customers. Average revenue per mile increased to
$1.12 in 1998 from $1.11 in 1997. The empty mile factor decreased to 9.78% in
1998 from 10.05% of paid miles in 1997. There was a 12.4% increase in the number
of shipments to 128,179 in 1998 from 114,022 in 1997. This volume improvement
was made possible by an increase of 13.2% in the average number of tractors
operated from 935 in 1997 to 1,058 in 1998. The net effect of the volume
improvement and the Company's continuing fleet expansion was a decrease of 1.4%
in miles per tractor per week from 2,475 in 1997 to 2,441 in 1998.
Operating expenses and costs as a percentage of revenues improved to 86.9%
in 1998 from 89.1% in 1997. This change resulted primarily from a decrease, on a
percentage of revenue basis, in operations and maintenance costs, in insurance
and claims expense and in communications and utilities expense. These decreases
were partially offset by increases, on a percentage of revenue basis, in
salaries, wages, and employee benefits and in depreciation and amortization
expense. The percentage decrease, relative to revenues, in operations and
maintenance costs was primarily the result of a decrease of 16 cents per gallon
in the average cost of fuel in 1998 compared to 1997, and by an increase in fuel
efficiency to 6.41 average miles per gallon in 1998 from 6.29 in 1997. The
percentage decrease, relative to revenues, in insurance and claims expense was
due to a decrease in the number and severity of accidents in 1998 as compared to
1997. The decrease in communications and utilities expense, as a percentage of
revenue and in actual dollars, reflects the installation in December 1997 of the
Company's two-way, satellite-based mobile messaging and position-locating
equipment in all of its tractors. This equipment has greatly reduced the
Company's telephone expenses and increased the efficiency of communications with
drivers. In addition, these devices have enabled the Company to eliminate the
cost associated with the global paging system the Company was previously
utilizing in its operations. The increase in salaries, wages, and employee
benefits was due to an increase in aggregate driver pay, an increase in driver
total base compensation of approximately 6% per driver in October 1998, along
with an increase in incentives earned by employees due to improved operating and
financial performance of the Company in 1998 compared to 1997. The increase in
depreciation and amortization expense reflects the effects of timing differences
between trade-in cycles and purchasing schedules along with an increase in the
cost of tractors and trailers when compared to those being retired.
As a result of the foregoing factors, operating income increased 33.8% to
$19.0 million, or 13.1% of revenues, in 1998 from $14.2 million, or 10.9% of
revenues, in 1997.
11
14
Interest expense increased 24.3% to $1.7 million in 1998 from $1.4 million
in 1997, resulting primarily from an increase in borrowings to facilitate
equipment purchases, partially offset by a decrease in interest rates, in the
aggregate, on both short-term and long-term debt.
The Company had other income, net, of $191,000 in 1997, compared to other
expense, net, of $102,000 in 1998. This increase in other expense, net was due
to a variety of factors, no single one of which accounted for more than half of
the increase.
As a result of the above, income before income taxes increased 32.3% to
$17.2 million, or 11.8% of revenues, in 1998 from $13.0 million, or 10.0% of
revenues, in 1997.
The Company's effective tax rate decreased to 38.9% in 1998 from 39.1% in
1997. The effective rates varied from the statutory Federal tax rate of 34%
primarily due to state income taxes and certain non-deductible expenses.
As a result of the aforementioned factors, net income increased 32.8% to
$10.5 million, or 7.2% of revenues, in 1998 from $7.9 million, or 6.1% of
revenues, in 1997, an increase of 33.8% in diluted net income per share to $1.11
from $.83. The number of shares used in the calculation of diluted net income
per share for 1998 and 1997 were 9,465,971 and 9,484,570, respectively.
INFLATION
The effect of inflation on operating costs has been minimal in recent
years. Most of the Company's operating expenses are inflation sensitive, with
increases in inflation generally resulting in increased operating costs and
expenses. The effect of inflation-driven cost increases on the Company's overall
operating costs would not be expected to be greater for the Company than for its
competitors.
SEASONALITY
In the trucking industry generally, revenues decrease as customers reduce
shipments during the winter holiday season and as inclement weather impedes
operations. At the same time, operating expenses increase, due primarily to
decreased fuel efficiency and increased maintenance costs. Future revenues could
be impacted if customers reduce shipments due to temporary plant closings, which
historically have occurred during July and December.
FUEL AVAILABILITY AND COST
The motor carrier industry is dependent upon the availability of diesel
fuel, and fuel shortages or increases in fuel taxes or fuel costs have adversely
affected, and may in the future adversely affect the profitability of USA Truck.
Fuel prices have fluctuated widely and fuel taxes have generally increased in
recent years. The Company has not experienced difficulty in maintaining
necessary fuel supplies, and in the past the Company generally has been able to
recover all but the most significant increases in fuel costs and fuel taxes from
customers through increased freight rates. Diesel prices increased during 1999
and there can be no assurance when diesel prices will decrease to price levels
experienced in recent periods. There also can be no assurance that the Company
will be able to recover any future increases in fuel costs and fuel taxes
through increased rates.
OPERATIONAL DATA
The following table sets forth certain operational information for the last
three fiscal years:
YEAR ENDED DECEMBER 31,
---------------------------------------------
1999 1998 1997
----------- ----------- -----------
Total loads moved during the year .......................... 147,484 128,179 114,022
Average number of tractors operated during the year ........ 1,223 1,058 935
Number of tractors operated at year end .................... 1,713 1,132 1,007
Number of trailers operated at year end .................... 3,524 2,004 1,928
Total tractor miles during the year ........................ 169,587,327 148,590,937 133,941,037
12
15
LIQUIDITY AND CAPITAL RESOURCES
The continued growth of the Company's business has required significant
investments in new revenue equipment. USA Truck has financed revenue equipment
purchases with cash flows from operations and through borrowings, including
borrowings under the General Line of Credit and capitalized lease obligations.
Working capital needs have generally been met with cash flows from operations
and occasionally through borrowings under the General Line of Credit. Although
the Company historically has not relied significantly on the General Line of
Credit to meet working capital requirements, it does experience cyclical cash
flow needs common to the industry. The Company uses the General Line of Credit
to minimize these fluctuations and to provide flexibility in financing revenue
equipment. Cash flows from operations were $13.6 million for 1999 and $28.5
million for 1998.
The Company's General Line of Credit provides for available borrowings of
up to $40.0 million, including letters of credit not exceeding $5.0 million. The
Company increased the maximum borrowing limit from $20.0 million to the current
level based upon its evaluation of the Company's borrowing requirements. As of
December 31, 1999, approximately $1.0 million was available under the General
Line of Credit. The General Line of Credit matures on April 30, 2001, prior to
which time, subject to certain conditions, the amount outstanding can be
converted at any time, at the Company's option, to a four-year term loan
requiring 48 equal monthly principal payments plus interest. The interest rate
on the General Line of Credit fluctuates between the lender's prime rate, or
prime plus 1/2% or LIBOR plus a certain percentage which is determined based on
the Company's attainment of certain financial ratios. The effective interest
rate on the Company's borrowings under the General Line of Credit for the year
ending December 31, 1999 was 6.48%. The principal maturity can be accelerated if
the borrowing base does not support the principal balance outstanding. The
General Line of Credit is collateralized by accounts receivable and all
otherwise unencumbered equipment. The Company has the option under certain
conditions and at certain rates to fix the rate and term on portions of the
outstanding balance of the General Line of Credit. See Note 4 to the Financial
Statements.
The Company is a party to a lease commitment agreement (the "Equipment TRAC
Lease Commitment"), dated November 19, 1997, to facilitate the leasing of
tractors. The Equipment TRAC Lease Commitment was amended on October 12, 1999 to
provide for available borrowings of up to $6,000,000 available during the
remainder of 1999 and until October 12, 2000. Each capital lease under this
lease commitment has a repayment period of either 36 or 42 months. As of
December 31, 1999, capital leases in the aggregate principal amount of $21.7
million were outstanding under the Equipment TRAC Lease Commitment with an
average interest rate of 5.66% per annum.
As of December 31, 1999, capital leases in the aggregate principal amount
of $9.3 million were outstanding under a prior lease commitment with an average
interest rate of 5.25% per annum.
The Company's long-term debt, excluding current debt, increased by 238.2%
to $64.4 million at December 31, 1999 from $19.1 million at December 31, 1998.
This increase resulted from increased borrowings under the Equipment TRAC Lease
Commitment for revenue equipment purchases and the acquisition of CCC Express,
Inc., partially offset by the retirement of $14.8 million in debt. The retired
debt had an average interest rate of approximately 6.6% and was repaid with cash
flow from operations.
During the years 2000 and 2001, the Company plans to make approximately
$134 million in capital expenditures. At December 31, 1999, USA Truck was
committed to spend $63.7 million of this amount for revenue equipment in 2000,
and $64.2 million of this amount is currently budgeted for revenue equipment in
2001. The commitments to purchase revenue equipment are cancelable by the
Company if certain conditions are met. The balance of the expected capital
expenditures will be used for maintenance and office equipment and facility
improvements.
The General Line of Credit, the Equipment TRAC Lease Commitment, equipment
leases and cash flows from operations should be adequate to fund the Company's
operations and expansion plans through the end of 2000. There can be no
assurance, however, that such sources will be sufficient to fund Company
operations and all expansion plans through such date, or that any necessary
additional financing will be available, if at all, in
13
16
amounts required or on terms satisfactory to the Company. The Company expects to
continue to fund its operations with cash flows from operations, equipment
leases, the General Line of Credit, and the Equipment TRAC Lease Commitment for
the foreseeable future.
On July 9, 1998, the Company's Board of Directors authorized the Company to
purchase up to 500,000 shares of its outstanding common stock over a three-year
period dependent upon market conditions. Common stock purchases under the
authorization may be made from time to time on the open market or in privately
negotiated transactions at prices determined by the Chairman of the Board or
President of the Company. This new authorization became effective in September
1998 upon the expiration of the Company's existing stock repurchase program. As
of December 31, 1999, the Company had purchased 231,600 shares pursuant to this
new authorization at an aggregate purchase price of $2,125,000. On May 5, 1999,
the Board of Directors authorized the retirement of 100,000 shares of treasury
stock that had been purchased at an aggregate cost of $.9 million. In addition,
as of December 31, 1999, 9,589 of the remaining 131,600 repurchased shares had
been resold under the Company's Employee Stock Purchase Plan. The Company may
continue to purchase shares in the future if, in the view of management, the
common stock is undervalued relative to the Company's performance and prospects
for continued growth. Any such purchases would be funded with cash flows from
operations or the General Line of Credit.
YEAR 2000 ISSUES
The Year 2000 issue is the result of computer programs being written using
two digits rather than four to define the applicable year. Potentially, the Year
2000 issue could have resulted, at the Company and at its vendors and customers,
in system failures or miscalculations causing disruptions of operations,
including, among other things, a temporary inability to process transactions or
to engage in other normal business activities. Beginning in 1997, the Company
undertook various initiatives intended to ensure that its computer equipment and
software would function properly in the Year 2000 and thereafter.
As of February 24, 2000, the Company has not experienced any material
adverse effects related to the Year 2000 issue, and none of its key vendors have
reported to the Company any material adverse effects related to the issue. At
this time, the Company does not expect to encounter any Year 2000 issues that
would have a material effect on its results of operations, liquidity and
financial condition. Furthermore, the Company does not anticipate any
significant expenditure in the future related to year 2000 compliance. However,
latent Year 2000 problems may surface at key dates or events in the future.
NEW ACCOUNTING PRONOUNCEMENTS
In 1998, the American Institute of Certified Public Accountants issued
Statement of Position 98-1, Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use. This statement provides guidance on the
capitalization of certain costs incurred in developing or acquiring internal-use
computer software. This statement was adopted in 1998 and did not have a
significant impact on the Company's financial statements.
FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements and information that are
based on management's belief as well as assumptions made by, and information
currently available to management. Although the Company believes that the
expectations reflected in such forward-looking statements are reasonable, it can
give no assurance that such expectations will be realized. Should one or more of
the risks or uncertainties underlying such expectations materialize, or should
underlying assumptions prove incorrect, actual results may vary materially from
those expected. Among the key factors that are not within the Company's control
and that may have a direct bearing on operating results are increases in diesel
prices, adverse weather conditions or driver turnover and the impact of
increased rate competition or competition for qualified drivers. The Company's
results may also be significantly affected by fluctuations in general economic
conditions, as the Company's utilization rates are directly related to business
levels of shippers in a variety of industries. Results for any specific period
could also be affected by various unforeseen events, such as unusual levels of
equipment failure or accident claims.
14
17
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
The Company's General Line of Credit agreement provides for borrowings
which bear interest at variable rates based on either a prime rate or the LIBOR.
At December 31, 1999, the Company had $39.0 million outstanding pursuant to the
General Line of Credit. The Company believes that the effect, if any, of
reasonably possible near-term changes in interest rates on the Company's
financial position, results of operations, and cash flows should not be
material.
All customers are required to pay for Company services in U.S. dollars.
Although the Canadian Government makes certain payments, such as tax refunds, to
the Company in Canadian dollars, any foreign currency exchange risk associated
with such payments is insignificant.
The Company does not engage in hedging transactions relating to diesel fuel
or any other commodity.
15
18
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
USA TRUCK, INC.
ANNUAL REPORT ON FORM 10-K
YEAR ENDED DECEMBER 31, 1999
INDEX TO FINANCIAL STATEMENTS
Page
Report of Independent Auditors ......................................................................... 17
Balance Sheets as of December 31, 1999 and 1998......................................................... 18
Statements of Income for the years ended December 31, 1999, 1998 and 1997............................... 19
Statements of Stockholders' Equity for the years ended December 31, 1999, 1998 and 1997................. 20
Statements of Cash Flows for the years ended December 31, 1999, 1998 and 1997........................... 21
Notes to Financial Statements........................................................................... 22
16
19
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
The Board of Directors and Stockholders
USA Truck, Inc.
We have audited the accompanying balance sheets of USA Truck, Inc. as of
December 31, 1999 and 1998, and the related statements of income, stockholders'
equity, and cash flows for each of the three years in the period ended December
31, 1999. Our audits also included the financial statement schedule listed in
the Index at Item 14(a). These financial statements and schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and schedule based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. 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 USA Truck, Inc. at December 31,
1999 and 1998, and the results of its operations and its cash flows for each of
the three years in the period ended December 31, 1999, in conformity with
accounting principles generally accepted in the United States. Also, in our
opinion, the related financial statement schedule, when considered in relation
to the basic financial statements taken as a whole, present fairly in all
material respects the information set forth therein.
ERNST & YOUNG LLP
Little Rock, Arkansas
January 18, 2000
17
20
USA TRUCK, INC.
BALANCE SHEETS
December 31,
---------------------------------
1999 1998
------------- -------------
ASSETS
Current assets:
Cash and cash equivalents ............................................. $ 2,145,707 $ 1,779,643
Receivables (Note 5):
Trade, less allowance for doubtful accounts of
$269,150 in 1999 and $140,670 in 1998 ............................. 26,649,235 13,928,848
Other ............................................................... 5,509,866 299,914
Inventories ........................................................... 301,907 236,338
Deferred income taxes (Note 7) ........................................ 1,208,413 1,573,365
Prepaid expenses and other current assets (Note 3) .................... 3,634,056 2,640,561
------------- -------------
Total current assets ...................................................... 39,449,184 20,458,669
Property and equipment (Notes 5 and 6):
Land and structures ................................................... 16,798,699 14,637,631
Revenue equipment ..................................................... 155,546,718 107,323,786
Service, office and other equipment ................................... 13,665,713 10,947,496
------------- -------------
186,011,130 132,908,913
Accumulated depreciation and amortization ............................. (43,873,074) (36,769,320)
------------- -------------
142,138,056 96,139,593
Security deposits ......................................................... -- 1,745,478
Other assets .............................................................. 452,448 1,267,479
------------- -------------
Total assets .............................................................. $ 182,039,688 $ 119,611,219
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Bank drafts payable ................................................... $ 1,116,485 $ 425,485
Trade accounts payable ................................................ 5,139,164 3,397,593
Accrued expenses (Note 4) ............................................. 11,065,604 11,139,369
Current maturities of long-term debt (Note 5) ......................... 10,956,533 6,188,241
------------- -------------
Total current liabilities ................................................. 28,277,285 21,150,688
Long-term debt, less current maturities (Notes 5 and 6) ................... 64,452,648 19,057,816
Deferred income taxes (Note 7) ............................................ 17,008,364 14,576,038
Insurance and claims accruals ............................................. 2,192,714 2,092,614
Commitments and contingencies (Notes 6 and 12)
Stockholders' equity (Notes 5 and 9):
Preferred Stock, $.01 par value; 1,000,000 shares -- --
authorized; none issued .............................................
Common Stock, $.01 par value; 16,000,000 shares
authorized; issued 9,387,041 shares in 1999
and 9,437,097 shares in 1998 ........................................ 93,870 94,371
Additional paid-in capital ............................................ 12,271,685 12,921,342
Retained earnings ..................................................... 58,840,827 50,199,325
Less treasury stock, at cost (122,011 shares in 1999 and 46,789
shares in 1998) ..................................................... (1,098,206) (480,975)
------------- -------------
Total stockholders' equity ................................................ 70,108,176 62,734,063
------------- -------------
Total liabilities and stockholders' equity ................................ $ 182,039,688 $ 119,611,219
============= =============
See accompanying notes.
18
21
USA TRUCK, INC.
STATEMENTS OF INCOME
Year Ended December 31,
------------------------------------------------------
1999 1998 1997
--------------- --------------- ----------------
Operating revenues .................................... $ 166,363,356 $ 145,216,121 $ 129,507,242
Operating expenses and costs:
Salaries, wages and employee benefits (Note 8) .... 70,197,581 61,296,860 53,122,136
Operations and maintenance ........................ 42,480,525 33,400,982 34,188,558
Operating taxes and licenses ...................... 3,005,166 2,547,449 2,160,408
Insurance and claims .............................. 7,987,208 7,249,853 6,773,001
Communications and utilities ...................... 1,999,548 1,468,485 1,827,608
Depreciation and amortization ..................... 18,591,780 16,179,143 13,607,835
Other ............................................. 6,264,876 4,113,158 3,658,992
------------- ------------- -------------
150,526,684 126,255,930 115,338,538
------------- ------------- -------------
Operating income ...................................... 15,836,672 18,960,191 14,168,704
Other (income) expenses:
Interest expense .................................. 1,655,558 1,714,662 1,379,481
Gain on disposal of assets ........................ (9,297) (37,088) (1,731)
Other, net ........................................ (22,588) 102,340 (190,641)
------------- ------------- -------------
1,623,673 1,779,914 1,187,109
------------- ------------- -------------
Income before income taxes ............................ 14,212,999 17,180,277 12,981,595
Income taxes (Note 7):
Current ........................................... 2,774,219 3,366,164 4,027,787
Deferred .......................................... 2,797,278 3,316,964 1,050,336
------------- ------------- -------------
5,571,497 6,683,128 5,078,123
------------- ------------- -------------
Net income ............................................ $ 8,641,502 $ 10,497,149 $ 7,903,472
============= ============= =============
Net income per share (Notes 9 and 10):
Basic earnings per share .......................... $ 0.93 $ 1.12 $ .84
============= ============= =============
Diluted earnings per share ........................ $ 0.92 $ 1.11 $ .83
============= ============= =============
See accompanying notes.
19
22
USA TRUCK, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
COMMON STOCK ADDITIONAL RETAINED TREASURY TOTAL
PAID-IN EARNINGS STOCK
CAPITAL
------------ ------------ ------------ ------------ ------------
Balance at January 1, 1997 ............. $ 94,996 $ 13,837,785 $ 31,798,704 $ (1,307,490) $ 44,423,995
Exercise of stock options, net
(Note 10) ........................ 608 374,439 -- -- 375,047
Purchases of 40,500 shares of
common stock into treasury ....... -- -- -- (329,253) (329,253)
Retirement of 185,500 shares
of treasury stock ................ (1,855) (1,634,888) -- 1,636,743 --
Net income for 1997 ................ -- -- 7,903,472 -- 7,903,472
------------ ------------ ------------ ------------ ------------
Balance at December 31, 1997 ........... 93,749 12,577,336 39,702,176 -- 52,373,261
Exercise of stock options, net
(Note 10) ........................ 622 290,941 -- -- 291,563
Tax benefit of stock options
(Note 7) ......................... -- 53,065 -- -- 53,065
Purchases of 54,750 shares of
common stock into treasury ....... -- -- -- (585,962) (585,962)
Sale of 7,961 shares of treasury
stock to employee stock
purchase plan .................... -- -- -- 104,987 104,987
Net income for 1998 ................ -- -- 10,497,149 -- 10,497,149
------------ ------------ ------------ ------------ ------------
Balance at December 31, 1998 ........... 94,371 12,921,342 50,199,325 (480,975) 62,734,063
Exercise of stock options, net
(Note 10) ........................ 499 278,219 -- -- 278,718
Purchase of 186,600 shares of
common stock into treasury ....... -- -- -- (1,662,883) (1,662,883)
Sale of 11,379 shares of
treasury stock to employee
stock purchase plan .............. -- -- -- 116,776 116,776
Retirement of 100,000 shares
out of treasury stock ........... (1,000) (927,876) -- 928,876 --
Net income for 1999 ................ -- -- 8,641,502 -- 8,641,502
------------ ------------ ------------ ------------ ------------
Balance at December 31, 1999 ........... $ 93,870 $ 12,271,685 $ 58,840,827 $ (1,098,206) $ 70,108,176
============ ============ ============ ============ ============
See accompanying notes.
20
23
USA TRUCK, INC.
STATEMENTS OF CASH FLOWS
Year Ended December 31,
--------------------------------------------------
1999 1998 1997
------------ ------------ ------------
OPERATING ACTIVITIES
Net income ................................................. $ 8,641,502 $ 10,497,149 $ 7,903,472
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization ........................ 18,591,780 16,179,143 13,607,835
Provision for doubtful accounts ...................... 121,900 30,000 30,000
Deferred income taxes ................................ 2,797,278 3,316,964 1,050,336
Gain on disposal of assets ........................... (9,297) (37,088) (1,731)
Changes in operating assets and liabilities:
Receivables ....................................... (17,186,596) (1,363,041) (186,827)
Inventories, prepaid expenses and other
current assets .................................. (609,527) (1,103,891) (106,694)
Bank drafts payable, trade accounts payable and
accrued expenses ................................ 1,103,205 539,981 5,568,536
Insurance and claims accruals - long-term ......... 100,100 408,000 408,000
------------ ------------ ------------
Net cash provided by operating activities .................. 13,550,345 28,467,217 28,272,927
INVESTING ACTIVITIES
Purchases of property and equipment ........................ (29,492,589) (21,731,600) (32,777,855)
Purchase of CCC Express, Inc. .............................. (22,891,055) -- --
Proceeds from sale of equipment ............................ 9,651,337 6,395,382 8,174,217
Proceeds from sale of investments .......................... 968,196 -- --
(Increase) decrease in other assets ........................ (153,165) 31,150 (307,728)
------------ ------------ ------------
Net cash used by investing activities ...................... (41,917,276) (15,305,068) (24,911,366)
FINANCING ACTIVITIES
Borrowings under long-term debt ............................ 55,685,310 14,325,000 29,553,208
Proceeds from the exercise of stock options ................ 278,718 291,563 375,047
Proceeds from sale of treasury stock ....................... 116,776 104,987 --
Refund of security deposits ................................ 1,745,478 -- --
Payments to repurchase common stock ........................ (1,662,883) (585,962) (597,379)
Principal payments on long-term debt ....................... (19,595,310) (22,800,000) (23,828,208)
Principal payments on capitalized lease obligations ........ (7,835,094) (6,385,405) (6,683,864)
------------ ------------ ------------
Net cash provided by (used by) financing activities ........ 28,732,995 (15,049,817) (1,181,196)
------------ ------------ ------------
Increase (decrease) in cash and cash equivalents ........... 366,064 (1,887,668) 2,180,365
Cash and cash equivalents:
Beginning of year ...................................... 1,779,643 3,667,311 1,486,946
------------ ------------ ------------
End of year ............................................ $ 2,145,707 $ 1,779,643 $ 3,667,311
============ ============ ============
See accompanying notes
21
24
USA TRUCK, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
DESCRIPTION OF BUSINESS
USA Truck, Inc. (the "Company"), operates as a truckload motor carrier with
operating authority to provide service throughout the continental United States
and parts of Canada and Mexico.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
CASH EQUIVALENTS
The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents. The carrying amount
reported in the balance sheet for cash and cash equivalents approximates its
fair value.
CONCENTRATION OF CREDIT RISK
The Company performs ongoing credit evaluations and generally does not require
collateral. The Company maintains reserves for potential credit losses. Such
losses have been within management's expectations.
One customer represented approximately 7% and 11% of net trade receivables as of
December 31, 1999 and 1998, respectively. A different customer represented
approximately 9% and 11% of revenues for the years ended December 31, 1999 and
1998, respectively.
INVENTORIES
Inventories consist primarily of tires, fuel and supplies and are stated at the
lower of cost (first-in, first-out basis) or market.
PROPERTY AND EQUIPMENT
Property and equipment is recorded at cost. For financial reporting purposes,
the cost of such property is depreciated principally by the straight-line method
using the following estimated useful lives: structures - 5 to 39.5 years;
revenue equipment - 3 to 7 years; and service, office and other equipment - 3 to
20 years. Gains and losses on asset sales are reflected in the year of disposal.
Trade-in allowances in excess of book value of revenue equipment are accounted
for by adjusting the cost of assets acquired. Tires purchased with revenue
equipment are capitalized as a part of the cost of such equipment, with
replacement tires being inventoried and expensed when placed in service.
22
25
USA TRUCK, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CLAIMS LIABILITIES
The Company is self-insured up to certain limits for bodily injury, property
damage, workers' compensation, and cargo loss and damage claims. Provisions are
made for both the estimated liabilities for known claims as incurred and
estimates for those incurred but not reported. In 1999 the Company was
self-insured up to $1,000,000 per occurrence for bodily injury and property
damage, up to $500,000 for workers' compensation claims, and up to $100,000 per
occurrence for cargo loss and damage claims. These self-insurance arrangements
are secured by $1,010,000 in letters of credit.
The workers' compensation self-insurance is secured by $300,000 in certificates
of deposit maturing during 2000. The certificates of deposit are included in
other assets on the balance sheet as of December 31, 1999 and 1998.
REVENUE RECOGNITION
Revenues are recognized based on a method whereby revenue is allocated between
reporting periods based on relative transit time in each period and direct
expenses are allocated on the same basis.
INCOME TAXES
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax liabilities and assets include temporary differences
relating to depreciation, capitalized leases and certain revenues and expenses.
EARNINGS PER SHARE
Earnings per share amounts are computed based on Financial Accounting Standards
Board Statement No. 128, Earnings per Share. Basic earnings per share is
computed based on the weighted average number of shares of common stock
outstanding during the year excluding any dilutive effects of options. Diluted
earnings per share is computed by adjusting the weighted average shares
outstanding by common stock equivalents attributable to dilutive options.
COMPENSATION TO EMPLOYEES
Stock based compensation to employees is accounted for based on the intrinsic
value method under Accounting Principles Board Opinion No. 25, Accounting for
Stock Issued to Employees (APB 25). Under APB 25 because the exercise price of
employee stock options equaled the market price of the underlying stock on the
grant date, no compensation expense is recorded. The Company has adopted the
disclosure - only provisions of Statement of Financial Accounting Standards No.
123, Accounting for Stock-Based Compensation (SFAS 123).
23
26
USA TRUCK, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
NEW ACCOUNTING PRONOUNCEMENTS
In 1997, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 130, Reporting Comprehensive Income. This statement was
adopted in 1998 and had no impact on the Company's financial statements.
In 1997, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 131, Disclosures about Segments of an Enterprise and
Related Information. The Company's operations are comprised entirely of one
segment. This statement was adopted in 1998 and had no impact on the disclosures
in the Company's financial statements.
In 1998, the American Institute of Certified Public Accountants issued Statement
of Position 98-1, Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use. This statement provides guidance on the
capitalization of certain costs incurred in developing or acquiring internal-use
computer software. This statement was adopted in 1998 and did not have a
significant impact on the Company's financial statements.
2. ACQUISITION
On November 1, 1999, pursuant to an Asset Purchase Agreement (the "Asset
Purchase Agreement") dated October 31, 1999, the Company acquired substantially
all the assets of CARCO Carrier Corporation, an Arkansas corporation, which
operated under the name CCC Express, Inc. ("CCC"), for a purchase price of $35.3
million. The purchase price consisted of (i) a cash payment of approximately
$3.0 million; (ii) the assumption of approximately $6.5 million of liabilities
including equipment notes and (iii) the refinancing of approximately $25.8
million in other debt secured by equipment. Additionally, $5.9 million of the
$25.8 million consisted of a non-cash transaction. The cash portion of the
purchase price was paid from available cash and proceeds of borrowings under the
Company's credit facilities. The purchase price was equal to the net book value
of CCC on the closing date, as adjusted in accordance with the Asset Purchase
Agreement, plus $2 million. In connection with the acquisition, the Company's
borrowing under its General Line of Credit was increased from $20 million to $35
million effective October 28, 1999.
The acquisition has been accounted for under the purchase method. Accordingly,
the acquired assets and liabilities have been recorded at their estimated fair
values at the date of acquisition. Operating results of the acquired business
are included in the statements of income from the acquisition date.
24
27
USA TRUCK, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. ACQUISITION (CONTINUED)
The following pro forma summary of results of operations has been prepared as
though CCC had been acquired on January 1, 1998. These pro forma results have
been prepared for comparative purposes only and do not purport to be indicative
of what would have occurred had the acquisition been made on January 1, 1998, or
of results which may occur in the future.
December 31,
------------------------------------
1999 1998
--------------- ---------------
Operating revenues ............ $ 222,089,793 $ 211,937,321
Net Income .................... 6,127,054 9,074,624
Basic earnings per share ...... $ .66 $ .97
Diluted earnings per share .... $ .65 $ .96
3. PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets consist of the following:
December 31,
------------------------------------
1999 1998
--------------- ---------------
Prepaid licenses and taxes .... $ 1,381,345 $ 938,881
Prepaid insurance ............. 2,039,749 1,624,315
Other ......................... 212,962 77,365
--------------- ---------------
$ 3,634,056 $ 2,640,561
=============== ===============
4. ACCRUED EXPENSES
Accrued expenses consist of the following:
December 31,
------------------------------------
1999 1998
--------------- ---------------
Salaries, wages, bonuses and
employee benefits ........................... $ 4,352,233 $ 4,825,956
Insurance and claims accruals ................ 3,585,366 4,071,832
Other ........................................ 3,128,005 2,241,581
--------------- ---------------
$ 11,065,604 $ 11,139,369
=============== ===============
25
28
USA TRUCK, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. LONG-TERM DEBT
Long-term debt consists of the following:
December 31,
---------------------------------
1999 1998
---------------- --------------
Revolving credit agreement(1) ........... $ 38,990,000 $ 2,900,000
Capitalized lease obligations(2) ........ 36,419,181 22,346,057
------------ ------------
75,409,181 25,246,057
Less current maturities ................. (10,956,533) (6,188,241)
------------ ------------
$ 64,452,648 $ 19,057,816
============ ============
(1) The Company's revolving credit agreement (the "Line of Credit"), effective
December 15, 1999, provides for available borrowings of $40,000,000,
including letters of credit not exceeding $5,000,000. The Line of Credit
matures on April 30, 2002, prior to which time, subject to certain
conditions, the remaining balance may be converted at any time at the
Company's option to a term loan requiring forty-eight equal monthly
principal payments plus interest. The credit facility bears variable
interest based on the lenders prime rate, or prime plus 1/2% or LIBOR plus
a certain percentage which is determined based on the Company's attainment
of certain financial ratios. The effective interest rate on the Company's
borrowings under the credit facility for the year ending December 31, 1999
was 6.09%. A quarterly commitment fee of 1/4% per annum is payable on the
unused credit line. The Line of Credit is collateralized by accounts
receivable and all otherwise unencumbered equipment. The Company has
outstanding letters of credit of approximately $1,010,000 at December 31,
1999.
The Line of Credit requires the Company to meet certain financial covenants
and to maintain a minimum tangible net worth of approximately $40,300,000
at December 31, 1999. The Company was in compliance with these covenants at
December 31, 1999. The covenants would prohibit the payment of dividends by
the Company if such payment would cause the Company to be in violation of
any of the covenants. The carrying amount reported in the balance sheet for
borrowings under the Line of Credit approximates its fair value since the
interest rate is variable.
(2) The leases extend through June 2003 and contain renewal or fixed price
purchase options. The effective interest rates on the leases range from
1.89% to 10.15% at December 31, 1999. The lease agreements require the
Company to pay property taxes, maintenance and operating expenses.
The Company made interest payments of approximately $1,490,000, $1,699,000 and
$1,454,000 during 1999, 1998 and 1997, respectively. The Company capitalized
$6,800 in interest as a result of construction during 1998.
26
29
USA TRUCK, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
6. LEASES AND COMMITMENTS
Capital lease obligations of $21,908,219, $6,763,522 and $12,416,151 were
incurred during the years ended December 31, 1999, 1998 and 1997, respectively.
At December 31, 1999, the future minimum payments under capitalized leases with
initial terms of one year or more were $12,731,609 for 2000, $11,203,043 for
2001, $10,012,512 for 2002 and $6,085,516 for 2003. The present value of net
minimum lease payments was $36,419,151 which includes the current portion of the
capital leases of $10,956,533 and excludes amounts representing interest of
$3,613,529.
At December 31, 1999, property and equipment included capitalized leases which
had capitalized costs of $45,526,083, accumulated amortization of $7,944,872 and
a net book value of $37,581,211. At December 31, 1998 property and equipment
included capitalized leases which had capitalized costs of $28,666,354,
accumulated amortization of $6,957,207 and a net book value of $21,709,147.
Amortization of leased assets is included in depreciation and amortization
expense.
Commitments to purchase revenue equipment, which are cancelable by the Company
if certain conditions are met, aggregated approximately $63,700,000 at December
31, 1999.
7. FEDERAL AND STATE INCOME TAXES
Significant components of the Company's deferred tax liabilities and assets as
of December 31, 1999 and 1998 are as follows:
December 31,
-------------------------------
1999 1998
------------ ------------
Noncurrent deferred tax liabilities:
Tax over book depreciation ................... $ 16,904,280 $ 14,512,768
Capitalized leases ........................... 104,084 63,270
------------ ------------
Total noncurrent deferred tax liabilities ........ $ 17,008,364 $ 14,576,038
============ ============
Current deferred tax assets:
Revenue recognition .......................... $ (89,392) $ (116,286)
Accrued expenses not deductible until paid ... (2,389,894) (2,420,906)
Allowance for doubtful accounts .............. (99,166) (53,033)
------------ ------------
Total current deferred tax assets ................ (2,578,452) (2,590,225)
Current deferred tax liabilities:
Prepaid expenses deductible when paid ........ 1,370,039 1,016,860
------------ ------------
Net current deferred tax assets .................. $ (1,208,413) $ (1,573,365)
============ ============
27
30
USA TRUCK, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
7. FEDERAL AND STATE INCOME TAXES (CONTINUED)
Significant components of the provision for income taxes are as follows:
Year Ended December 31,
--------------------------------------------------
1999 1998 1997
--------------- -------------- ---------------
Current
Federal............................................. $ 2,406,997 $ 2,812,318 $ 3,491,181
State............................................... 367,222 553,846 536,606
--------------- -------------- ---------------
Total current....................................... 2,774,219 3,366,164 4,027,787
Deferred
Federal............................................. 2,350,248 2,883,617 862,092
State............................................... 447,030 433,347 188,244
--------------- -------------- ---------------
Total deferred...................................... 2,797,278 3,316,964 1,050,336
--------------- -------------- ---------------
Total income tax expense............................ $ 5,571,497 $ 6,683,128 $ 5,078,123
=============== ============== ===============
During 1998, 1998 and 1997, the Company made income tax payments of
approximately $3,105,300, $3,484,000, and $3,644,000, respectively.
During 1998, the Company recognized a tax benefit of $53,065 related to stock
options. This amount was added to additional paid-in capital.
A reconciliation between the effective income tax rate and the statutory federal
income tax rate is as follows:
Year Ended December 31,
--------------------------------------------------
1999 1998 1997
--------------- -------------- ---------------
Income tax at 34% statutory federal rate............ $ 4,832,420 $ 5,841,294 $ 4,413,742
Federal income tax effects of:
State income taxes.............................. (276,846) (336,172) (246,449)
Nondeductible expenses.......................... 58,846 98,131 (3,582)
Other........................................... 142,825 92,682 189,562
--------------- -------------- ---------------
Federal income taxes............................ 4,757,245 5,695,935 4,353,273
State income taxes.................................. 814,252 987,193 724,850
--------------- -------------- ---------------
Total income tax expense............................ $ 5,571,497 $ 6,683,128 $ 5,078,123
=============== ============== ===============
Effective tax rate.................................. 39.2% 38.9% 39.1%
=============== ============== ===============
28
31
USA TRUCK, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
8. EMPLOYEE BENEFIT PLANS
The Company sponsors the USA Truck, Inc. Employees' Investment Plan, a tax
deferred savings plan under section 401(k) of the Internal Revenue Code, that
covers substantially all employees. Employees can contribute up to 15% of their
compensation, with the Company matching 50% of the first 4% of compensation
contributed by each employee. Company matching contributions were approximately
$634,000, $652,000 and $558,000 for 1999, 1998 and 1997, respectively.
9. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per
share:
Year Ended December 31,
-------------------------------------------------
1999 1998 1997
-------------- ---------------- --------------
Numerator:
Net Income....................................... $ 8,641,502 $ 10,497,149 $ 7,903,472
Denominator:
Denominator for basic earnings per
share - weighted average shares................ 9,324,037 9,399,727 9,355,671
Effect of dilutive securities:
Employee stock options......................... 30,404 66,244 128,899
-------------- ---------------- -------------
Denominator for diluted earnings per
share - adjusted weighted average
shares and assumed conversions................. 9,354,441 9,465,971 9,484,570
============== ================ =============
Basic earnings per share............................ $.93 $1.12 $.84
============== ================ =============
Diluted earnings per share.......................... $.92 $1.11 $.83
============== ================ =============
Anti-dilutive employee stock options................ 94,600 -- 3,000
============== ================ =============
10. COMMON STOCK TRANSACTIONS
The Company has a stock option plan which provides for the granting of incentive
or nonqualified options to purchase up to 800,000 shares of common stock to
officers and other key employees. No options may be granted under this plan for
less than the fair market value of the common stock at the date of the grant.
Although the exercise period is determined when options are actually granted, no
option will be exercised later than 10 years after it is granted.
The Company also has a nonqualified stock option plan for directors who are not
officers or employees of the Company, which provides for the granting of options
to purchase up to 25,000 shares of common stock. No options may be granted under
this plan with exercise prices of less than the fair market value of the common
stock at the date of grant. Although the exercise period is determined when
options are actually granted, options will vest no less than six months or more
than three years after the grant date and may not be exercised later than five
years after the grant date.
29
32
USA TRUCK, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
10. COMMON STOCK TRANSACTIONS (CONTINUED)
A summary of the Company's stock option activity, and related information for
the years ended December 31, follows:
1999 1998 1997
------------------------ ------------------------ -----------------------
WEIGHTED- Weighted- Weighted-
AVERAGE Average Average
OPTIONS EXERCISE PRICE Options Exercise Price Options Exercise Price
-------- -------------- -------- -------------- -------- --------------
Outstanding-beginning
of year 323,200 $ 7.72 356,400 $ 6.90 425,320 $ 6.87
Granted -- -- 46,000 11.59 9,600 9.73
Exercised (65,000) $ 6.25 (79,200) 6.30 (63,320) 6.25
Canceled -- -- -- -- (15,200) 10.50
-------- ------ -------- ------ -------- ------
Outstanding-end of year 258,200 $ 8.09 323,200 $ 7.72 356,400 $ 6.90
======== ====== ======== ====== ======== ======
Exercisable at end of
year 95,600 $ 7.85 103,000 $ 6.46 142,200 $ 6.25
Exercise prices for options outstanding as of December 31, 1999 ranged from
$6.25 to $13.00. The weighted-average fair value of options granted during 1998
was $4.30 and $4.46. No options were granted during 1999. The weighted-average
remaining contractual life of these options is 2.14 years.
In 1999, 1998 and 1997, 44,595, 45,240 and 60,007 options, respectively, were
exercised for cash. In 1999, 1998 and 1997 additional options of 20,405, 33,960
and 3,313 respectively, were exercised by the exchange of 15,056, 16,971 and
2,588 shares of stock respectively, (with a market value equal to the exercise
price of the options). The exchanged shares were then canceled.
Since the Company has adopted the disclosure-only provisions of SFAS 123, no
compensation cost has been recognized for the stock option plans. Had
compensation cost for the Company's two stock option plans been determined based
on the fair value at the grant date for awards in 1999, 1998 and 1997 consistent
with the provisions of SFAS 123, the Company's pro forma net income would have
been $8,603,394, $10,431,143 and $7,852,172, pro forma basic earnings per share
would have been $.92, $1.11 and $.84, and pro forma diluted earnings per share
would have been $.92, $1.10 and $.83, respectively.
The fair value of each option grant is estimated on the date of grant using the
Black-Scholes option-pricing model. The following weighted-average assumptions
were used for grants in 1999: dividend yield of 0%; expected volatility of
0.292%; risk-free interest rates range from 4.29% to 5.44% and expected lives
range from 3 to 5 years. The following weighted-average assumptions were used
for grants in 1998: dividend yield of 0%; expected volatility of 0.457%;
risk-free interest rates range from 4.29% to 5.44% and expected lives range from
3 to 5 years. The following weighted-average assumptions were used for grants in
1996: dividend yield of 0%; expected volatility of 0.535%; risk-free interest
rates range from 5.45% to 6.17% and expected lives range from 3 to 5 years.
30
33
USA TRUCK, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
11. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The tables below present quarterly financial information for 1999 and 1998:
1999
THREE MONTHS ENDED
-----------------------------------------------------------
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31,
----------- ----------- ------------- ------------
Operating revenues ...................... $36,199,447 $38,117,504 $40,416,850 $51,629,555
Operating expenses and costs ............ 32,063,006 33,830,877 37,330,310 47,302,491
----------- ----------- ----------- -----------
Operating income ........................ 4,136,441 4,286,627 3,086,540 4,327,064
Other expenses, net ..................... 313,880 282,016 308,597 719,180
----------- ----------- ----------- -----------
Income before income taxes .............. 3,822,561 4,004,611 2,777,943 3,607,884
Income taxes ............................ 1,498,444 1,569,808 1,088,954 1,414,291
----------- ----------- ----------- -----------
Net income .............................. $ 2,324,117 $ 2,434,803 $ 1,688,989 $ 2,193,593
=========== =========== =========== ===========
Average shares outstanding (basic) ...... 9,392,817 9,373,109 9,298,377 9,257,361
=========== =========== =========== ===========
Basic earnings per share ................ $ .25 $ .26 $ .18 $ .24
=========== =========== =========== ===========
Average shares outstanding (diluted) .... 9,452,481 9,410,750 9,335,972 9,287,601
=========== =========== =========== ===========
Diluted earnings per share .............. $ .25 $ .26 $ .18 $ .24
=========== =========== =========== ===========
1998
Three Months Ended
------------------------------------------------------------
March 31, June 30, September 30, December 31,
----------- ----------- ------------- ------------
Operating revenues ...................... $35,223,203 $37,387,246 $36,266,931 $36,338,741
Operating expenses and costs ............ 30,993,887 32,208,832 31,213,221 31,839,990
----------- ----------- ----------- -----------
Operating income ........................ 4,229,316 5,178,414 5,053,710 4,498,751
Other expenses, net ..................... 403,265 598,909 435,041 342,699
----------- ----------- ----------- -----------
Income before income taxes .............. 3,826,051 4,579,505 4,618,669 4,156,052
Income taxes ............................ 1,488,334 1,781,428 1,796,662 1,616,704
----------- ----------- ----------- -----------
Net income .............................. $ 2,337,717 $ 2,798,077 $ 2,822,007 $ 2,539,348
=========== =========== =========== ===========
Average shares outstanding (basic) ...... 9,378,054 9,418,826 9,417,520 9,375,927
=========== =========== =========== ===========
Basic earnings per share ................ $ .25 $ .30 $ .30 $ .27
=========== =========== =========== ===========
Average shares outstanding (diluted) .... 9,478,162 9,531,054 9,512,954 9,442,155
=========== =========== =========== ===========
Diluted earnings per share .............. $ .25 $ .29 $ .30 $ .27
=========== =========== =========== ===========
12. LITIGATION
The Company is not a party to any pending legal proceedings which management
believes to be material to the financial condition of the Company. The Company
maintains liability insurance against risks arising out of the normal course of
its business.
31
34
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There were no changes in or disagreements with accountants on accounting
and financial disclosure matters during any period covered by the financial
statements filed herein or any period subsequent thereto.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The sections entitled "Election of Directors", "Executive Officers" and
"Section 16(a) Compliance" in the Company's proxy statement for the annual
meeting of stockholders to be held on May 3, 2000, set forth certain information
with respect to the directors, nominees for election as directors and executive
officers of the Company and are incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
The section entitled "Executive Compensation" in the Company's proxy
statement for the annual meeting of stockholders to be held on May 3, 2000, sets
forth certain information with respect to the compensation of management of the
Company and is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The sections entitled "Outstanding Stock and Voting Rights" and "Election
of Directors" in the Company's proxy statement for the annual meeting of
stockholders to be held on May 3, 2000, set forth certain information with
respect to the ownership of the Company's voting securities and are incorporated
herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The section entitled "Certain Transactions" in the Company's proxy
statement for the annual meeting of stockholders to be held on May 3, 2000, sets
forth certain information with respect to relations of and transactions by
management of the Company and is incorporated herein by reference.
32
35
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) THE FOLLOWING DOCUMENTS ARE FILED AS A PART OF THIS REPORT:
1. Financial statements.
The following financial statements of the Company are included in Part II,
Item 8 of this report:
PAGE
----
Balance Sheets as of December 31, 1999 and 1998 ........................................ 18
Statements of Income for the years ended December 31, 1999, 1998 and 1997 .............. 19
Statements of Stockholders' Equity for years ended December 31, 1999, 1998 and 1997 .... 20
Statements of Cash Flows for the years ended December 31, 1999, 1998 and 1997 .......... 21
Notes to Financial Statements .......................................................... 22
2. The following financial statement schedule of the Company is included in
Item 14(d):
Schedule II - Valuation and Qualifying Accounts........................................ 38
Schedules other than the schedule listed above have been omitted since the
required information is not present or not present in amounts sufficient to
require submission of the schedule, or because the information required is
included in the financial statements or the notes thereto.
3. Listing of exhibits.
Exhibit No. Exhibit
2.1 Asset Purchase Agreement dated as of October 31, 1999
between the Company, as buyer, and CARCO Carrier
Corporation doing business as CCC Express, Inc., as
seller, and CARCO Capital Corporation (incorporated by
reference to Exhibit 2.1 to the Company's Report on Form
8-K filed on November 15, 1999).
3.1 Restated and Amended Certificate of Incorporation of the
Company (incorporated by reference to Exhibit 3.1 to the
Company's Registration Statement on Form S-1,
Registration No. 33-45682, filed with the Securities and
Exchange Commission on February 13, 1992 [the "Form
S-1"]).
3.2 Bylaws of the Company as currently in effect
(incorporated by reference to Exhibit 3.2 to Amendment
No. 1 to the Form S-1 filed with the Securities and
Exchange Commission on March 19, 1992 ["Amendment No.
1"]).
3.3 Certificate of Amendment to Certificate of Incorporation
of the Company filed March 17, 1992 (incorporated by
reference to Exhibit 3.3 to Amendment No. 1).
4.1 Specimen certificate evidencing shares of the Common
Stock, $.01 par value, of the Company (incorporated by
reference to Exhibit 4.1 to the Form S-1).
4.2 Fourth Amended and Restated Revolving Credit Agreement
dated December 30, 1992, between the Company and Deposit
Guaranty National Bank, as Lender (incorporated by
reference to Exhibit 4.2 to the Company's annual report
on Form 10-K for the year ended December 31, 1992).
33
36
4.3 Fourth Amended and Restated Revolving Note of the Company
dated December 30, 1992, in the maximum principal amount
of $12,000,000 payable to Deposit Guaranty National Bank,
executed in connection with the credit facility filed as
Exhibit 4.2 (incorporated by reference to Exhibit 4.3 to
the Company's annual report on Form 10-K for the year
ended December 31, 1992).
4.4 Fifth Amendment to Fourth Amended and Restated Revolving
Credit Agreement dated December 30, 1996, between the
Company and Deposit Guaranty National Bank, as Lender
(incorporated by reference to Exhibit 4.5 to the
Company's annual report on Form 10-K for the year ended
December 31, 1996).
4.5 Sixth Amendment to Fourth Amended and Restated Revolving
Credit Agreement dated December 30, 1997, between the
Company and Deposit Guaranty National Bank, as Lender
(incorporated by reference to Exhibit 4.5 to the
Company's annual report on Form 10-K for the year ended
December 31, 1997).
4.6 Sixth Amendment to Fourth Amended and Restated Revolving
Note of the Company dated December 30, 1997, in the
maximum principal amount of $28,500,000 payable to
Deposit Guaranty National Bank, executed in connection
with the credit facility filed as Exhibit 4.5
(incorporated by reference to Exhibit 4.6 to the
Company's annual report on Form 10-K for the year ended
December 31, 1997).
4.7 Seventh Amendment to Fourth Amended and Restated
Revolving Credit Agreement dated October 30, 1998,
between the Company and Deposit Guaranty National Bank,
as Lender (incorporated by reference to Exhibit 4.7 to
the Company's annual report on Form 10-K for the year
ended December 31, 1998).
4.8 Seventh Amendment to Fourth Amended and Restated
Revolving Note of the Company dated October 30, 1998, in
the maximum principal amount of $20,000,000 payable to
Deposit Guaranty National Bank, executed in connection
with the credit facility filed as Exhibit 4.7
(incorporated by reference to Exhibit 4.8 to the
Company's annual report on Form 10-K for the year ended
December 31, 1998).
4.9* Eighth Amendment to Fourth Amended and Restated
Revolving Credit Agreement dated October 28, 1999,
between the Company and Deposit Guaranty National Bank,
as Lender.
4.10* Eighth Amended and Restated Revolving Note of the
Company dated October 28, 1999, in the maximum principal
amount of $35,000,000 payable to Deposit Guaranty
National Bank, executed in connection with the credit
facility filed as Exhibit 4.9.
4.11* Ninth Amendment to Fourth Amended and Restated
Revolving Credit Agreement dated December 15, 1999,
between the Company and Deposit Guaranty National Bank,
as Lender.
4.12* Ninth Amended and Restated Revolving Note of the
Company dated December 15, 1999, in the maximum principal
amount of $40,000,000 payable to Deposit Guaranty
National Bank,
34
37
executed in connection with the credit facility filed as
Exhibit 4.11.
4.13 TRAC Lease Commitment Agreement dated January 24, 1996,
between the Company and Fleet Credit Corporation, as
Lender. (incorporated by reference to Exhibit 4.9 to the
Company's annual report on Form 10-K for the year ended
December 31, 1995).
4.14 First Amendment to TRAC Lease Commitment Agreement dated
November 13, 1996, between the Company and Fleet Credit
Corporation, as Lender (incorporated by reference to
Exhibit 4.8 to the Company's annual report on Form 10-K
for the year ended December 31, 1997).
4.15 Equipment TRAC Lease Commitment Agreement dated November
12, 1997 and accepted November 19, 1997, between the
Company and Banc One Leasing Corporation, as Lender
(incorporated by reference to Exhibit 4.9 to the
Company's annual report on Form 10-K for the year ended
December 31, 1997).
4.16 First Amendment dated December 30, 1998, to the Equipment
TRAC Lease Commitment Agreement dated November 12, 1997
and accepted November 19, 1997, between the Company and
Banc One Leasing Corporation, as Lender, as amended by
letter dated March 12, 1999 (incorporated by reference to
Exhibit 4.12 to the Company's annual report on Form 10-K
for the year ended December 31, 1998).
4.17* Second Amendment dated December 30, 1998, to the
Equipment TRAC Lease Commitment Agreement dated October
25, 1999 between the Company and Banc One Leasing
Corporation, as Lender.
4.18 Instruments with respect to long-term debt not exceeding
10% of the total assets of the Company have not been
filed. The Company agrees to furnish a copy of such
instruments to the Securities and Exchange Commission
upon request.
10.1 Employee Stock Option Plan of the Company (incorporated
by reference to Exhibit 10.6 to the Form S-1).
10.2 Nonqualified Stock Option Plan for Nonemployee Directors
of the Company (incorporated by reference to Exhibit 10.7
to the Form S-1) terminated in January 1997, except with
respect to outstanding options.
10.3 Description of Incentive Compensation Plan for executive
officers of the Company (incorporated by reference to
Exhibit 10.8 to the Form S-1).
10.4 1997 Nonqualified Stock Option Plan for Nonemployee
Directors of the Company (incorporated by reference to
Exhibit 99.1 to the Company's Registration Statement on
Form S-8, Registration No. 333-20721, filed with the
Securities and Exchange Commission on January 30, 1997).
21 The Company has no subsidiaries.
35
38
23* Consent of Ernst & Young LLP, Independent Auditors.
27.1* 1999 Financial Data Schedule
- -----------------
* Filed herewith.
Management Compensatory Plans:
-Employee Stock Option Plan (Exhibit 10.1)
-Nonqualified Stock Option Plan for Nonemployee Directors (Exhibit 10.2)
-Incentive Compensation Plan (Exhibit 10.3)
-1997 Nonqualified Stock Option Plan for Nonemployee Directors (Exhibit 10.4)
(b) REPORTS ON FORM 8-K:
Current report on Form 8-K as filed on November 15, 1999.
36
39
USA TRUCK, INC.
ANNUAL REPORT ON FORM 10-K
YEAR ENDED DECEMBER 31, 1999
ITEM 14 (d)
FINANCIAL STATEMENT SCHEDULE
37
40
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
USA TRUCK, INC.
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
-------- -------- -------- -------- --------
(1)
BALANCE AT CHARGED BALANCE
BEGINNING TO COST DEDUCTIONS END
DESCRIPTION OF PERIOD AND EXPENSES -OTHER OF PERIOD
--------- ------------ ---------- ---------
Year ended December 31, 1999:
Deducted from asset accounts:
Allowance for doubtful accounts ...................... $140,670 $121,900 $ 6,580 (a) $ 269,150
-------- -------- -------- ---------
Year ended December 31, 1998: Deducted from asset accounts:
Allowance for doubtful accounts ...................... $170,250 $ 30,000 $(59,580)(a) $ 140,670
-------- -------- -------- ---------
Year ended December 31, 1997: Deducted from asset accounts:
Allowance for doubtful accounts ...................... $113,000 $ 30,000 $ 27,250 (a) $ 170,250
-------- -------- -------- ---------
(a) Uncollectible accounts written off, net recoveries.
38
41
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) 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.
USA TRUCK, INC.
(Registrant)
By: /s/ ROBERT M. POWELL By: /s/ JERRY D. ORLER
------------------------------- ---------------------------------
Robert M. Powell Jerry D. Orler
President and Chief Executive Vice President - Finance, Chief
Officer Financial Officer and Secretary
Date: March 30, 2000 Date: March 30, 2000
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/ ROBERT M. POWELL President, Chief Executive Officer March 30, 2000
-------------------------------- and Director
Robert M. Powell
/s/ JERRY D. ORLER Vice President - Finance, March 30, 2000
------------------------------- Chief Financial Officer, Secretary
Jerry D. Orler and Director
/s/ J.B. SPEED Director March 30, 2000
-------------------------------
James B. Speed
/s/ GEORGE R. JACOBS Director March 30, 2000
-------------------------------
George R. Jacobs
/s/ JIM L. HANNA Director March 30, 2000
-------------------------------
Jim L. Hanna
/s/ ROLAND S. BOREHAM Director March 30, 2000
-------------------------------
Roland S. Boreham, Jr.
39
42
INDEX TO EXHIBITS
EXHIBIT SEQUENTIALLY
NUMBER EXHIBIT NUMBERED PAGE
------ ------- -------------
2.1 Asset Purchase Agreement dated as of October 31, 1999
between the Company, as buyer, and CARCO Carrier
Corporation doing business as CCC Express, Inc., as
seller, and CARCO Capital Corporation (incorporated by
reference to Exhibit 2.1 to the Company's Report on Form
8-K filed on November 15, 1999).
3.1 Restated and Amended Certificate of Incorporation of the
Company (incorporated by reference to Exhibit 3.1 to the
Company's Registration Statement on Form S-1,
Registration No. 33-45682, filed with the Securities and
Exchange Commission on February 13, 1992 [the "Form
S-1"]).
3.2 Bylaws of the Company as currently in effect
(incorporated by reference to Exhibit 3.2 to Amendment
No. 1 to the Form S-1 filed with the Securities and
Exchange Commission on March 19, 1992 ["Amendment No.
1"]).
3.3 Certificate of Amendment to Certificate of Incorporation
of the Company filed March 17, 1992 (incorporated by
reference to Exhibit 3.3 to Amendment No. 1).
4.1 Specimen certificate evidencing shares of the Common
Stock, $.01 par value, of the Company (incorporated by
reference to Exhibit 4.1 to the Form S-1).
4.2 Fourth Amended and Restated Revolving Credit Agreement
dated December 30, 1992, between the Company and Deposit
Guaranty National Bank, as Lender (incorporated by
reference to Exhibit 4.2 to the Company's annual report
on Form 10-K for the year ended December 31, 1992).
4.3 Fourth Amended and Restated Revolving Note of the Company
dated December 30, 1992, in the maximum principal amount
of $12,000,000 payable to Deposit Guaranty National Bank,
executed in connection with the credit facility filed as
Exhibit 4.2 (incorporated by reference to Exhibit 4.3 to
the Company's annual report on Form 10-K for the year
ended December 31, 1992).
4.4 Fifth Amendment to Fourth Amended and Restated Revolving
Credit Agreement dated December 30, 1996, between the
Company and Deposit Guaranty National Bank, as Lender
(incorporated by reference to Exhibit 4.5 to the
Company's annual report on Form 10-K for the year ended
December 31, 1996).
4.5 Sixth Amendment to Fourth Amended and Restated Revolving
Credit Agreement dated December 30, 1997, between the
Company and Deposit Guaranty National Bank, as Lender
(incorporated by reference to Exhibit 4.5 to the
Company's annual report on Form 10-K for the year ended
December 31, 1997).
43
EXHIBIT SEQUENTIALLY
NUMBER EXHIBIT NUMBERED PAGE
------ ------- -------------
4.6 Sixth Amendment to Fourth Amended and Restated Revolving
Note of the Company dated December 30, 1997, in the
maximum principal amount of $28,500,000 payable to
Deposit Guaranty National Bank, executed in connection
with the credit facility filed as Exhibit 4.5
(incorporated by reference to Exhibit 4.6 to the
Company's annual report on Form 10-K for the year ended
December 31, 1997).
4.7 Seventh Amendment to Fourth Amended and Restated
Revolving Credit Agreement dated October 30, 1998,
between the Company and Deposit Guaranty National Bank,
as Lender (incorporated by reference to Exhibit 4.7 to
the Company's annual report on Form 10-K for the year
ended December 31, 1998).
4.8 Seventh Amendment to Fourth Amended and Restated
Revolving Note of the Company dated October 30, 1998, in
the maximum principal amount of $20,000,000 payable to
Deposit Guaranty National Bank, executed in connection
with the credit facility filed as Exhibit 4.7
(incorporated by reference to Exhibit 4.8 to the
Company's annual report on Form 10-K for the year ended
December 31, 1998).
4.9* Eighth Amendment to Fourth Amended and Restated Revolving 44
Credit Agreement dated October 28, 1999, between the
Company and Deposit Guaranty National Bank, as Lender.
4.10* Eighth Amended and Restated Revolving Note of the Company 46
dated October 28, 1999, in the maximum principal amount
of $35,000,000 payable to Deposit Guaranty National Bank,
executed in connection with the credit facility filed as
Exhibit 4.9.
4.11* Ninth Amendment to Fourth Amended and Restated Revolving 47
Credit Agreement dated December 15, 1999, between the
Company and Deposit Guaranty National Bank, as Lender.
4.12* Ninth Amended and Restated Revolving Note of the Company 49
dated December 15, 1999, in the maximum principal amount
of $40,000,000 payable to Deposit Guaranty National Bank,
executed in connection with the credit facility filed as
Exhibit 4.11.
4.13 TRAC Lease Commitment Agreement dated January 24, 1996,
between the Company and Fleet Credit Corporation, as
Lender. (incorporated by reference to Exhibit 4.9 to the
Company's annual report on Form 10-K for the year ended
December 31, 1995).
4.14 First Amendment to TRAC Lease Commitment Agreement dated
November 13, 1996, between the Company and Fleet Credit
Corporation, as Lender (incorporated by reference to
Exhibit 4.8 to the Company's annual report on Form 10-K
for the year ended December 31, 1997).
44
EXHIBIT SEQUENTIALLY
NUMBER EXHIBIT NUMBERED PAGE
------ ------- -------------
4.15 Equipment TRAC Lease Commitment Agreement dated November
12, 1997 and accepted November 19, 1997, between the
Company and Banc One Leasing Corporation, as Lender
(incorporated by reference to Exhibit 4.9 to the
Company's annual report on Form 10-K for the year ended
December 31, 1997).
4.16 First Amendment dated December 30, 1998, to the Equipment
TRAC Lease Commitment Agreement dated November 12, 1997
and accepted November 19, 1997, between the Company and
Banc One Leasing Corporation, as Lender, as amended by
letter dated March 12, 1999 (incorporated by reference to
Exhibit 4.12 to the Company's annual report on Form 10-K
for the year ended December 31, 1998).
4.17* Second Amendment dated December 30, 1998, to the
Equipment TRAC Lease Commitment Agreement dated October
25, 1999 between the Company and Banc One Leasing
Corporation, as Lender.
4.18 Instruments with respect to long-term debt not exceeding
10% of the total assets of the Company have not been
filed. The Company agrees to furnish a copy of such
instruments to the Securities and Exchange Commission
upon request.
10.1 Employee Stock Option Plan of the Company (incorporated
by reference to Exhibit 10.6 to the Form S-1).
10.2 Nonqualified Stock Option Plan for Nonemployee Directors
of the Company (incorporated by reference to Exhibit 10.7
to the Form S-1) terminated in January 1997, except with
respect to outstanding options.
10.3 Description of Incentive Compensation Plan for executive
officers of the Company (incorporated by reference to
Exhibit 10.8 to the Form S-1).
10.4 1997 Nonqualified Stock Option Plan for Nonemployee
Directors of the Company (incorporated by reference to
Exhibit 99.1 to the Company's Registration Statement on
Form S-8, Registration No. 333-20721, filed with the
Securities and Exchange Commission on January 30, 1997).
21 The Company has no subsidiaries.
23* Consent of Ernst & Young LLP, Independent Auditors. 52
27.1* 1999 Financial Data Schedule 53
- ----------------------
* Filed herewith.