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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): May 9, 2001
OTR EXPRESS, INC.
(Exact name of registrant as specified in charter)
KANSAS 1-19773 48-0993128
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(State of Incorporation) (Commission File Number) (I.R.S. Employer
Identification Number)
804 N. MEADOWBROOK DRIVE, OLATHE, KS 64111
(Address of Principal Executive Offices) (Zip Code)
(913) 829-1616
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
OTR Express, Inc. (Amex: OTR), a nationwide transportation company, today
announced that it will cease operations within 60 days because of adverse
business conditions, including a difficult freight market, high fuel costs, high
insurance costs and declining used truck and trailer values. These factors would
preclude the Company from achieving operational profitability in the foreseeable
future. Additionally, the Company lacks adequate capital to execute its business
plan. OTR Express will continue pickup and delivery of loads for customers until
further notice and shut down operations and liquidate in an orderly manner.
According to William P. Ward, Chairman, President and CEO: "Reluctantly, our
Board of Directors decided today that we must take this very difficult action.
Our immediate goal is to meet our commitments to customers and conclude our
business in a way that treats everyone as fairly and ethically as possible. We
deeply appreciate the willingness of our customers, employees, lenders and
vendors to work with OTR Express during this difficult time."
Mr. Ward added: "In recent months, we have explored many different alternatives
to help OTR Express recover, but we continue to face weakening freight demand,
high fuel prices, higher insurance costs and deterioration in asset values
because of the depressed truck and trailer market. In spite of some positive
impact from restructured loan payments and our recent fleet and staff
downsizing, we can no longer foresee a successful outcome in this environment.
We have lost money the past seven quarters. The Company has not been able to
return to compliance with certain covenants on our working capital line of
credit, and we have not been able to comply with our current agreement with
equipment lenders. The Board, after management consultation with secured
lenders, felt the best decision at this time was to wind the operations down and
apply the Company's remaining resources to cover existing liabilities."
Mr. Ward noted that OTR's line of credit lender has a security interest in the
Company's accounts receivable, and that OTR's equipment lenders are secured by
the revenue equipment (trucks and trailers) purchased, but that the value of
such equipment did not fully collateralize the equipment lenders, especially due
to the unprecedented decrease in value of used truck equipment. The Company
anticipates that it may lack sufficient funds to fully pay unsecured creditors,
and that stockholders should not expect any distributions in the liquidation.
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The Company expects to complete its shutdown of truckload operations in the next
several weeks and wind up its business within 60 days. The Company will
communicate details directly with its employees, stockholders, customers and
vendors as necessary. The Company still plans to hold its previously scheduled
annual meeting of stockholders on May 14, 2001.
OTR Express, Inc. is a nationwide dry van truckload carrier and logistics
company serving customers throughout the 48 states. The common stock is traded
on the American Stock Exchange under the symbol OTR. For further information,
please contact Steve Ruben, chief financial officer, OTR Express, at (913)
829-1616, extension 3102, or visit www.otrx.com.
Various statements in this press release regarding the company's business which
are not historical facts are forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Such statements are based on current expectations and are
subject to risks and uncertainties. Actual results could differ materially from
current expectations due to a number of factors, including general economic and
market conditions, regulatory issues, fuel price volatility, pricing pressures,
the availability and compensation of qualified drivers and owner operators,
availability of cost-effective financing, interest rate fluctuations, the
ability of the Company to realize the benefits of its shut down plan, tractor
and trailer resale values and other factors. Readers should review and consider
the various disclosures made by the company in this press release, in its
reports to stockholders, and periodic reports on Form 10-K, 10-Q and 8-K filed
with the Securities and Exchange Commission (SEC). The Company undertakes no
obligation to update publicly or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
OTR EXPRESS, INC.
Date: May 9, 2001 By: /s/ William P. Ward
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William P. Ward
President and Chief Executive Officer