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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
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 000-23341
MOTOR CARGO INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Utah 87-0406479
------------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
845 West Center Street
North Salt Lake, Utah 84054
(801) 292-1111
(Address of principal executive offices and telephone number)
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
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. On July 31, 1999, there were
6,925,040 outstanding shares of the Registrant's Common Stock, no par value.
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MOTOR CARGO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
June 30, December 31,
1999 1998
----------- -----------
(unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 3,685,285 $ 7,514,654
Receivables 14,512,951 14,182,974
Prepaid expenses 2,092,224 2,630,416
Supplies inventory 394,402 459,711
Deferred income taxes 1,517,605 1,365,000
Income taxes receivable -- 622,648
----------- -----------
Total current assets 22,202,467 26,775,403
PROPERTY AND EQUIPMENT, AT COST 93,923,451 85,954,356
Less accumulated depreciation
and amortization 43,985,298 40,560,113
----------- -----------
49,938,153 45,394,243
OTHER ASSETS
Deferred charges 434,918 426,461
Unrecognized net pension obligation 63,861 63,861
----------- -----------
498,779 490,322
=========== ===========
$72,639,399 $72,659,968
=========== ===========
The accompanying notes are an integral part of these statements.
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MOTOR CARGO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - CONTINUED
LIABILITIES AND STOCKHOLDERS' EQUITY
June 30, December 31,
1999 1998
----------- -----------
(unaudited)
CURRENT LIABILITIES
Current maturities of long-term obligations $ 104,470 $ 99,990
Accounts payable 4,277,274 4,237,515
Accrued liabilities 5,787,452 5,021,286
Accrued income taxes 1,068,388 --
Accrued claims 1,698,265 1,382,085
----------- -----------
Total current liabilities 12,935,849 10,740,876
LONG-TERM OBLIGATIONS, less current
maturities 1,336,472 5,389,852
DEFERRED INCOME TAXES 7,159,884 7,255,000
COMMITMENTS AND CONTINGENCIES -- --
STOCKHOLDERS' EQUITY
Preferred stock, no par value; Authorized -
25,000,000 shares - none issued -- --
Common stock, no par value; Authorized -
100,000,000 shares - issued 6,925,040 shares as
of June 30, 1999 and 6,987,820 shares as of
December 31, 1998 11,849,600 12,135,490
Retained earnings 39,357,594 37,138,750
----------- -----------
51,207,194 49,274,240
----------- -----------
$72,639,399 $72,659,968
=========== ===========
The accompanying notes are an integral part of these statements.
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MOTOR CARGO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
Three months ended Six months ended
June 30, June 30,
-------------------------------- --------------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
(unaudited) (unaudited)
Operating revenues $ 32,353,017 $ 28,327,739 $ 61,083,847 $ 53,915,321
------------ ------------ ------------ ------------
Operating expenses
Salaries, wages and benefits 14,570,117 12,592,455 28,500,763 24,634,011
Operating supplies and expenses 5,303,965 3,709,958 9,611,014 7,413,790
Purchased transportation 4,353,263 4,558,239 8,424,731 8,338,200
Operating taxes and licenses 1,245,292 950,296 2,302,460 1,835,101
Insurance and claims 1,180,152 985,461 2,155,328 1,919,218
Depreciation and amortization 2,155,829 1,990,380 4,240,338 3,821,160
Communications and utilities 461,164 474,258 894,138 921,282
Building rents 685,503 565,175 1,364,735 1,066,359
------------ ------------ ------------ ------------
Total operating expenses 29,955,285 25,826,222 57,493,507 49,949,121
============ ============ ============ ============
Operating income 2,397,732 2,501,517 3,590,340 3,966,200
Other income (expense)
Interest expense (32,177) (31,666) (68,794) (107,020)
Other, net 99,224 132,327 133,439 180,769
------------ ------------ ------------ ------------
67,048 100,661 64,645 73,749
------------ ------------ ------------ ------------
Earnings before income taxes 2,464,780 2,602,178 3,654,985 4,039,949
Income taxes 967,142 1,013,970 1,436,142 1,563,258
------------ ------------ ------------ ------------
NET EARNINGS $ 1,497,638 $ 1,588,208 $ 2,218,843 $ 2,476,691
============ ============ ============ ============
Earnings per share: (note 2)
Basic $ 0.22 0.23 0.32 0.35
Diluted 0.22 0.23 0.32 0.35
============ ============ ============ ============
Weighted-average shares outstanding:
Basic 6,925,040 6,990,000 6,951,911 6,990,000
Diluted 6,925,040 6,998,000 6,951,911 6,908,000
============ ============ ============ ============
The accompanying notes are an integral part of these statements.
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MOTOR CARGO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended
June 30,
------------------------------
1999 1998
----------- -----------
(unaudited)
Increase (decrease) in cash and cash equivalents
Cash flows from operating activities
Net earnings $ 2,218,843 $ 2,476,691
----------- -----------
Adjustments to reconcile net earnings to net cash
provided by operating activities
Depreciation and amortization 4,240,338 3,821,160
Provision for losses on trade
and other receivables 121,100 105,000
Gain on disposition of property and equipment (59,382) (75,297)
Deferred income taxes (247,721) (355,000)
Charge associated with stock issuance to an officer 40,000 --
Changes in assets and liabilities
Receivables (451,077) 42,379
Prepaid expenses 538,192 469,027
Supplies inventory 65,309 84,770
Income taxes 1,691,036 683,033
Other assets (8,457) (42,416)
Accounts payable 39,759 (690,114)
Accrued liabilities and claims 1,064,906 951,277
----------- -----------
Total adjustments 7,034,003 4,993,819
----------- -----------
Net cash provided by operating activities 9,252,846 7,470,510
----------- -----------
Cash flows from investing activities
Purchase of property and equipment (8,809,915) (6,455,865)
Proceeds from disposition of property and equipment 85,050 303,946
Repurchase of shares (308,450) --
----------- -----------
Net cash used in
investing activities (9,033,315) (6,151,919)
----------- -----------
(Continued)
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MOTOR CARGO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
Six months ended
June 30,
------------------------------
1999 1998
----------- -----------
(unaudited) (unaudited)
Cash flows from financing activities
Principal payments on long-term
obligations (4,048,900) (5,044,795)
----------- -----------
Net cash used in financing activities (4,048,900) (5,044,795)
----------- -----------
Net decrease in
cash and cash equivalents (3,829,369) (3,726,204)
Cash and cash equivalents at beginning of period 7,514,654 8,616,702
----------- -----------
Cash and cash equivalents at end of period $ 3,685,285 $ 4,890,498
=========== ===========
Supplemental cash flow information
Cash paid during the period for
Interest $ 29,177 $ 116,000
Income taxes 16,500 1,060,000
Noncash investing and financing activities
During the first quarter of 1999, in connection with shares issued per the
restricted stock agreement, 2,180 shares valued at $17,440 were withheld by the
Company as tax withholdings.
The accompanying notes are an integral part of these statements.
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MOTOR CARGO INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
1. UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
The interim consolidated financial information included herein is
unaudited; however, the information reflects all adjustments
(consisting of normal recurring adjustments) that are, in the opinion
of management, necessary to the fair presentation of the consolidated
financial position, results of operations, and cash flows for the
interim periods. The consolidated financial statements should be read
in conjunction with the Notes to consolidated financial statements
included in the audited consolidated financial statements for Motor
Cargo Industries, Inc. (the "Company") for the year ended December 31,
1998 which are included in the Company's Annual Report on Form 10-K for
such year (the "1998 10-K"). Results of operations for interim periods
are not necessarily indicative of annual results of operations. The
consolidated balance sheet at December 31, 1998, was extracted from the
Company's audited consolidated financial statements contained in the
1998 10-K, and does not include all disclosures required by generally
accepted accounting principles for annual consolidated financial
statements.
2. EARNINGS PER SHARE
Basic earnings per common share ("EPS") are based on the weighted
average number of common shares outstanding during each such period.
Diluted earnings per common share are based on shares outstanding
(computed under basic EPS) and potentially dilutive common shares.
Potential common shares included in dilutive earnings per share
calculations include stock options granted but not exercised. A
reconciliation of weighted-average shares outstanding is presented
below:
Three months ended Six months ended
June 30, June 30,
--------------------------- ---------------------------
1999 1998 1999 1998
---------- ---------- ---------- ----------
Net earnings $1,497,638 $1,588,208 $2,218,843 $2,476,691
Weighted-average shares outstanding - basic 6,925,040 6,990,000 6,951,911 6,990,000
Effect of dilutive stock options -- 8,000 -- 8,000
Weighted-average shares outstanding - assuming
dilution 6,925,040 6,998,000 6,951,911 6,998,000
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The purpose of this section is to discuss and analyze the Company's
consolidated financial condition, liquidity and capital resources and results of
operations. This analysis should be read in conjunction with the Management's
Discussion and Analysis of Financial Condition and Results of Operations
contained in the Company's Annual Report on Form 10-K for the year ended
December 31, 1998 (the "1998 10-K").
OVERVIEW
Motor Cargo Industries, Inc. (the "Company") is a regional
less-than-truckload ("LTL") carrier which provides transportation and logistics
services to shippers within the Company's core service region. The Company's
core service region is the western United States, including Arizona, California,
Colorado, Idaho, New Mexico, Oregon, western Texas, Utah and Washington. The
Company transports general commodities, including consumer goods, packaged
foodstuffs, electronics, computer equipment, apparel, hardware, industrial goods
and auto parts for a diversified customer base. The Company offers a broad range
of services, including expedited scheduling and full temperature-controlled
service. Through its wholly-owned subsidiary, MC Distribution Services, Inc.
("MCDS"), the Company also provides customized logistics, warehousing and
distribution management services.
In 1997, the Company initiated a program to establish market and
operations presence in several major business economic areas ("BEAs") outside of
the Company's core service region. Unlike more traditional inter-regional
expansion models, the Company only solicits tonnage from these markets moving
west into its core service region. The Company primarily utilizes third-party
truckload carriers to transport freight from these markets to its core service
region. The Company initiated this strategy of selling into the region in an
effort to improve lane, route and service center densities in its core service
region without requiring the Company to incur the costs associated with building
an inter-regional terminal network. The Company commenced operations at its
first BEA expansion facility in Dallas in October 1997. In April 1998, the
Company commenced operations at its second BEA expansion facility in Chicago.
During the second quarter of 1999, the Company carefully examined its
BEA operations in Chicago and Dallas. The Company's Dallas operation continues
to show positive growth and margin yield. The Company determined that the
Chicago operation, however, was not profitable, and would not produce acceptable
levels of profitability for the near or intermediate term. As a result, in mid
July 1999, the Company discontinued freight pick-up operations and closed its
service center in Chicago. A small percentage of the freight handled by the
Chicago operation will continue to be handled by the Company at other existing
facilities. The Company currently has no immediate plans to open additional BEA
operations; however, the Company will continue to evaluate additional BEA
markets with the potential for success comparable to the Company's Dallas
operation. The Company intends to evaluate all available strategies for
obtaining tonnage from markets outside its core service region.
On August 1, 1999, the Company secured a service center in Fremont,
California. The Newark and Benicia, California service centers will be
consolidated into the larger Fremont service center. The Company believes this
consolidation will result in a reduction in line-haul expense and re-handling of
freight.
On August 1, 1999, the Company also converted its pick-up and delivery
operations in Boise and Twin Falls, Idaho from independent agencies to
Company-owned service centers. The Company expects that Company-owned service
centers in these locations will facilitate improved line-haul relay and freight
consolidation to and from the Northwest.
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RESULTS OF OPERATIONS
The following table sets forth for the periods indicated the percentage
of operating revenues represented by certain items in the Company's statements
of earnings:
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------- -------------------
1999 1998 1999 1998
----- ----- ----- -----
Operating revenues 100.0% 100.0% 100.0% 100.0%
Operating expenses
Salaries, wages and benefits 45.0 44.4 46.7 45.6
Operating supplies and expenses 16.4 13.1 15.7 13.8
Purchased transportation 13.4 16.1 13.8 15.5
Operating taxes and licenses 3.9 3.4 3.8 3.4
Insurance and claims 3.7 3.5 3.5 3.6
Depreciation and amortization 6.7 7.0 6.9 7.1
Communications and utilities 1.4 1.7 1.5 1.7
Building rents 2.1 2.0 2.2 1.9
----- ----- ----- -----
Total operating expenses 92.6 91.2 94.1 92.6
----- ----- ----- -----
Operating income 7.4 8.8 5.9 7.4
Other income (expense)
Interest expense (0.1) (0.1) (0.1) (0.2)
Other, net 0.3 0.5 0.2 0.3
----- ----- ----- -----
Earnings before income taxes 7.6 9.2 6.0 7.5
Income taxes 3.0 3.6 2.4 2.9
----- ----- ----- -----
Net earnings 4.6 5.6 3.6 4.6
===== ===== ===== =====
Three Months Ended June 30, 1999 Compared to Three Months Ended June 30, 1998
Operating revenues increased 14.2% to $32.4 million for the three
months ended June 30, 1999, compared to $28.3 million for the same period in
1998. The increase was primarily attributable to an increased volume of freight
within the Company's core service region. Approximately 3% of the 14.2% growth
was attributable to revenue obtained because a competitor discontinued business
at the end of May 1999. Freight from the Company's BEA operations also
contributed to the revenue growth. As discussed above, the Company discontinued
freight pick-up operations and closed its service center in Chicago subsequent
to the end of the second quarter. The number of shipments during the second
quarter of 1999 increased by 18.7% to 261,000 compared to 219,900 for the second
quarter of 1998.
Revenues contributed by MCDS increased to $929,000 for the second
quarter of 1999, compared to $592,000 for the second quarter of 1998. The
increase was due primarily to the expansion of a contract with one customer and
the addition of several smaller customers.
As a percentage of operating revenues, salaries, wages and benefits
increased to 45.0% for the second quarter of 1999 from 44.4% for the second
quarter of 1998. This increase was due primarily to increased staffing of full
time employees with their associated benefits. This included staffing of the
Company's new service center in Benicia, California. Also, additional line
drivers were employed by the Company in the second quarter of 1999, compared to
the second quarter of 1998. During the second quarter of 1998, the Company
utilized more purchased transportation instead of employee-drivers.
Purchased transportation decreased to 13.4% of revenues for the three
months ended June 30, 1999 as compared to 16.1% for the same period in 1998.
This was primarily caused by shifting costs from purchased transportation to
other expense categories such as payroll, operating expenses, operating taxes
and licenses and depreciation associated with having approximately 30 more
employee line drivers during the second quarter of 1999 compared to the second
quarter of 1998. The Company has increased its staff of employee drivers in
order to reduce overall costs and provide more reliable and consistent service.
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Total operating expenses increased to 92.6% of operating revenues for
the three months ended June 30, 1999 from 91.2% for the same period in 1998.
This increase was primarily due to increased salaries, wages, benefits and
investment in sales, marketing and operations. Fuel costs, as a percentage of
operating revenues, were comparable to prior periods. Fuel prices have increased
in recent months, however, particularly in the latter part of the second
quarter. As a result, beginning in August 1999, the Company will implement a
variable fuel surcharge tied to the west coast average fuel price index.
Net earnings decreased 5.7% to $1,498,000 for the three months ended
June 30, 1999, compared to $1,588,000 for the same period in 1998. Net earnings
per share decreased $0.01 to $0.22 for the second quarter of 1999, compared to
net earnings per share of $0.23 for the second quarter of 1998.
Six Months Ended June 30, 1999 Compared to Six Months Ended June 30,
1998
Operating revenues increased 13.3% to $61.1 million for the six months
ended June 30, 1999, compared to $53.9 million for the same period in 1998. The
increase was attributable to an increased volume of freight within the Company's
core service region, as well as freight from the Company's BEA operations. The
number of shipments during the six months ended June 30, 1999 increased by 18.1%
to 496,300, compared to 420,100 for the same period in 1998.
Revenues for MCDS increased to $1,779,000 for the six months ended June
30, 1999 from $1,068,000 for the same period in 1998. The increase was due
primarily to the expansion of a contract with one customer and the addition of
several smaller customers.
As a percentage of operating revenues, salaries, wages and benefits
increased to 46.7% for the six months ended June 30, 1999 from 45.6% for the
same period of 1998. This increase was due primarily to increased staffing of
full time employees with their associated benefits. This included staffing of
the Company's BEA expansion facility in Chicago and a new service center in
Benicia, California. Also, additional line drivers were employed by the Company
in the first half of 1999, compared to the first half of 1998. During the first
half of 1998, the Company utilized more purchased transportation instead of
employee-drivers.
Purchased transportation decreased to 13.8% of revenues for the six
months ended June 30, 1999 as compared to 15.5% for the same period in 1998.
This was primarily caused by shifting costs from purchased transportation to
other expense categories such as payroll, operating expenses, operating taxes
and licenses, and depreciation associated with having an average of
approximately 26 more employee line drivers during the first six months of 1999
compared to the first six months of 1998. The Company has increased its staff of
employee drivers in order to reduce overall costs and provide more reliable and
consistent service.
Total operating expenses increased to 94.1% of operating revenues for
the six months ended June 30, 1999 from 92.6% for the same period in 1998. This
increase was primarily due to increased salaries, wages and benefits. Fuel
costs, as a percentage of operating revenues, were comparable to prior periods.
Fuel prices have increased in recent months, however, particularly in the latter
part of the second quarter. As a result, beginning in August 1999, the Company
will implement a variable fuel surcharge tied to the west coast average fuel
price index.
Net earnings decreased 10.4% to $2,219,000 for the six months ended
June 30, 1999, compared to $2,477,000 for the same period in 1998. Net earnings
per share decreased $0.03 to $0.32 for the six months ended June 30, 1999
compared to net earnings per share of $0.35 for the same period in 1998.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of liquidity are funds provided by
operations and bank borrowings. Net cash provided by operating activities was
approximately $9.3 million for the first six months of 1999 compared to $7.5
million for the corresponding period in 1998. Net cash provided by operating
activities is primarily attributable to the Company's earnings before
depreciation and amortization expense.
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Capital expenditures totaled approximately $8.8 million during the
first six months of 1999 compared to $6.5 million in the comparable period of
1998. The increase in capital expenditures was primarily due to the purchase of
revenue equipment and land and construction costs at new terminal facilities.
Net cash used in financing activities was $4.0 million for the six
months ended June 30, 1999 compared to $5.0 million for the comparable period of
1998. At June 30, 1999, total borrowings under long-term obligations totaled
approximately $1.4 million.
The Company is a party to a loan agreement with Zions First National
Bank ("Zions") that provides for a revolving line of credit in an amount not
exceeding $5 million. The loan agreement provides for the issuance of letters of
credit and may be used for this purpose, as well as to fund the working capital
needs of the Company. As of March 31, 1999, there was no outstanding balance
under this revolving line of credit.
Zions has also provided a second revolving line of credit to the
Company in an amount not to exceed $20 million. The Company intends to use
amounts available under this credit facility primarily to purchase equipment
used in operations and for other strategic purposes. As of June 30, 1999, there
was no outstanding balance under this facility.
All amounts outstanding under the two loan facilities described above
accrue interest at a variable rate established from time to time by Zions. The
Company does have the option, however, to request that specific advances accrue
interest at a fixed rate quoted by Zions subject to certain prepayment
restrictions. All amounts outstanding under the two loan facilities are
collateralized by the Company's inventory, chattel paper, accounts receivable
and equipment now owned or hereafter acquired by the Company.
During the first quarter of 1999, the Company announced a share
repurchase program. The Board of Directors of the Company authorized the
repurchase of up to 700,000 shares. As of June 30, 1999, a total of 60,600
shares had been repurchased by the Company for approximately $308,000.
SEASONALITY
The Company experiences some seasonal fluctuations in freight volume.
Historically, the Company's shipments decrease during the winter months. In
addition, the Company's operating expenses historically have been higher in the
winter months due to decreased fuel efficiency and increased maintenance costs
for revenue equipment in colder weather.
THE YEAR 2000 ISSUE
The Company utilizes computer hardware and software in its operations.
Certain computer applications could fail or create erroneous results due to the
upcoming change in the century (the "Year 2000 Issue"). The Company has
performed an analysis and has implemented procedures to address the Year 2000
Issue. The Company regularly upgrades its computer hardware and believes that it
will not incur any additional expenses to modify computer hardware due to the
Year 2000 Issue. In addition, the Company has received commitments from software
vendors that will allow the Company to upgrade third-party software programs
with minimal expense to the Company. The Company anticipates, however, that it
will incur expenses of approximately $100,000 to upgrade and test certain
proprietary software developed for the Company. As of June 30, 1999,
approximately $90,000 of these expenses had been incurred. The Company has
completed the modification of its proprietary software and has completed the
majority of testing for such software.
The Company is also contacting vendors and customers to determine the
extent to which the Company may be vulnerable to third party year 2000 issues.
It is not possible at this time to quantify the amount of business that might be
lost or the costs that could be incurred by the Company as a result of the
Company's significant customers' and suppliers' failure to remediate their Year
2000 issues. The Company will establish, where needed, contingency plans based
on testing experience and responses from significant customers and suppliers.
Based upon current information, the Company believes that all hardware
and software modifications necessary to operate and effectively manage the
Company will be performed by the year 2000 and that related costs
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will not have a material impact on the results of operations, cash flow, or
financial condition of the Company. There can be no assurances, however, that
management's estimates and evaluations will prove to be accurate, and actual
results could differ materially from those anticipated. Factors which might
cause material changes include, but are not limited to, the availability of Year
2000 personnel, the readiness of third parties and the Company's ability to
respond to unforeseen Year 2000 complications.
CAUTIONARY STATEMENT FOR FORWARD-LOOKING INFORMATION
Certain information set forth in this report contains "forward-looking
statements" within the meaning of federal securities laws. Forward-looking
statements include statements concerning plans, objectives, goals, strategies,
future events, future revenues or performance, capital expenditures, financing
needs, plans or intentions relating to acquisitions by the Company and other
information that is not historical information. When used in this report, the
words "estimates," "expects," "anticipates," "forecasts," "plans," "intends,"
"believes" and variations of such words or similar expressions are intended to
identify forward-looking statements. Additional forward-looking statements may
be made by the Company from time to time. All such subsequent forward-looking
statements, whether written or oral and whether made by or on behalf of the
Company, are also expressly qualified by these cautionary statements.
The Company's forward-looking statements are based upon the Company's
current expectations and various assumptions. The Company's expectations,
beliefs and projections are expressed in good faith and are believed by the
Company to have a reasonable basis, including without limitation, management's
examination of historical operating trends, data contained in the Company's
records and other data available from third parties, but there can be no
assurance that management's expectations, beliefs and projections will result or
be achieved or accomplished. The Company's forward-looking statements apply only
as of the date made. The Company undertakes no obligation to publicly update or
revise forward-looking statements which may be made to reflect events or
circumstances after the date made or to reflect the occurrence of unanticipated
events.
There are a number of risks and uncertainties that could cause actual
results to differ materially from those set forth in, contemplated by or
underlying the forward-looking statements contained in this report. These risks
include, but are not limited to, economic factors and fuel price fluctuations,
the availability of employee drivers and independent contractors, risks
associated with geographic expansion, capital requirements, claims exposure and
insurance costs, competition and environmental hazards. Each of these risks and
certain other uncertainties are discussed in more detail in the 1998 10-K. There
may also be other factors, including those discussed elsewhere in this report,
that may cause the Company's actual results to differ from the forward-looking
statements. Any forward-looking statements made by or on behalf of the Company
should be considered in light of these factors.
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PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of Shareholders of the Company was held on June 21,
1999. At the meeting:
1. The following persons were elected as Directors of the Company
to serve until the next Annual Meeting or until their
successors are elected and qualified.
Name Votes For Votes Withheld
---- --------- --------------
Harold R. Tate 5,835,094 4,653
Marshall L. Tate 5,834,494 5,253
Marvin L. Friedland 5,836,344 3,403
Robert Anderson 5,835,744 4,003
James Clayburn LaForce, Jr 5,836,344 3,403
2. The selection of Grant Thornton LLP as independent auditors to
audit the Consolidated Financial Statements of the Company and
its subsidiaries for the year ending December 31, 1999 was
ratified by the shareholders as follows:
Votes For: 5,837,547
Votes Against: 700
Abstentions: 1,500
Broker Non-Votes: 0
3. The Company's 1999 Stock Option Plan for Nonemployee Directors
was approved by the Shareholders as follows:
Votes For: 5,387,447
Votes Against: 443,250
Abstentions: 9,050
Broker Non-Votes: 0
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are filed with this report.
10.1 1999 Stock Option Plan for Non-Employee Directors
27 Financial Data Schedule
(b) No report on Form 8-K was filed during the quarter for which
this report is filed.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MOTOR CARGO INDUSTRIES, INC.
/s/ Lynn H. Wheeler
--------------------------------
LYNN H. WHEELER
Vice President of Finance and
Chief Financial Officer
(Authorized Signatory and
Principal Financial and
Accounting Officer)
Date: August 11, 1999
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INDEX TO EXHIBITS
Exhibits
10.1 1999 Stock Option Plan for Non-Employee Directors
27 Financial Data Schedule.
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