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): SEPTEMBER 30, 1997
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RYDER SYSTEM, INC.
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(Exact name of registrant as specified in its charter)
FLORIDA 1-4364 59-0739250
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(State or other jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
3600 N. W. 82ND AVENUE, MIAMI, FLORIDA 33166
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(Address of Principal Executive Offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (305) 500-3726
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Item 2. Acquisition or Disposition of Assets.
On September 30, 1997, Ryder System, Inc. (the "Company") completed the
sale of its automotive carrier services segment to Allied Holdings, Inc.
("Allied"). The preliminary purchase price of $111.3 million was based
on a stated premium over the net book value of the businesses sold as of
August 31, 1997 and will be adjusted to an amount equal to the final
audited net book value of those businesses as of September 30, 1997,
plus the premium. The preliminary purchase price was determined by
negotiations between the Company and Allied and was paid in cash at the
closing. The Company will record an after-tax gain on the sale of $3.2
million, or $0.04 per share, in the third quarter of 1997.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements and Pro Forma Financial Information
(1) Ryder System, Inc. and Subsidiaries Introduction to
Unaudited Pro Forma Consolidated Condensed Financial
Information.
(2) Ryder System, Inc. and Subsidiaries Unaudited Pro Forma
Consolidated Condensed Statement of Earnings for the Six
Months Ended June 30, 1997.
(3) Ryder System, Inc. and Subsidiaries Unaudited Pro Forma
Consolidated Condensed Statement of Earnings for the Year
Ended December 31, 1996.
(4) Ryder System, Inc. and Subsidiaries Unaudited Pro Forma
Consolidated Condensed Balance Sheet at June 30, 1997.
(5) Notes to Ryder System, Inc. and Subsidiaries Unaudited
Pro Forma Consolidated Condensed Financial Information.
(b) Exhibits
99.1 Press Release issued by the Company on September 30,
1997.
99.2 Acquisition Agreement among Allied Holdings, Inc., A H
Acquisition Corp., Canadian Acquisition Corp., and Axis
National Incorporated and Ryder System, Inc., dated as of
August 20, 1997.
RYDER SYSTEM, INC. AND SUBSIDIARIES
INTRODUCTION TO UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL
INFORMATION
The unaudited pro forma consolidated condensed financial information presents
the historical and pro forma financial position and results of operations of
Ryder System, Inc. and subsidiaries, assuming that the consumer truck rental
business unit (which was sold on October 17, 1996) and the automotive carrier
services segment had both been sold on January 1, 1996 (the beginning of the
period) for statements of earnings data. The automotive carrier services segment
was assumed to be sold on June 30, 1997 for balance sheet purposes. The
historical financial information for the year ended December 31, 1996 has been
derived from the audited consolidated financial statements of the Company. The
historical financial information as of June 30, 1997 and for the six months then
ended is unaudited but, in the opinion of management, includes all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of such information.
The unaudited pro forma consolidated condensed financial information should be
read in conjunction with the historical financial information (financial
statements, related notes and Management's Discussion and Analysis of Financial
Condition and Results of Operations) included in the most recent annual report
and Form 10-Q filed with the Commission, copies of which are available from the
Company. The pro forma adjustments are based on available information and
assumptions management believes to be reasonable. The pro forma information does
not purport to represent what the Company's results would have been if the sales
had occurred at the dates indicated, nor does it purport to project the results
of the Company or its financial position for any future period.
RYDER SYSTEM, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF EARNINGS (UNAUDITED)
Six Months Ended June 30, 1997
(In thousands, except per share amounts)
(NOTE 2)
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
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REVENUE $ 2,729,004 (301,016) (a) 2,427,988
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Operating expense 2,188,972 (270,510) (a) 1,918,462
Depreciation expense, net of gains 310,216 (19,068) (a) 291,148
Interest expense 95,771 893 (a) 96,664
Miscellaneous income, net (7,246) 738 (a) (6,508)
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2,587,713 (287,947) 2,299,766
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Earnings before income taxes 141,291 (13,069) 128,222
Provision for income taxes 57,590 (5,147) (a) 52,443
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Net earnings from continuing operations $ 83,701 (7,922) 75,779
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Earnings per common share from
continuing operations $ 1.07 1.01
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Average common and common
equivalent shares 78,460 (3,122) (d) 75,338
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See accompanying notes to the unaudited pro forma consolidated condensed
financial information.
RYDER SYSTEM, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF EARNINGS (UNAUDITED)
Year Ended December 31, 1996
(In thousands, except per share amounts)
(NOTE 2) (NOTE 3)
PRO FORMA PRO FORMA
HISTORICAL ADJUSTMENTS ADJUSTMENTS PRO FORMA
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REVENUE $ 5,519,415 (569,224) (a) (380,813) (h) 4,569,378
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Operating expense 4,641,528 (546,244) (a) (266,009) (h) 3,829,275
Depreciation expense, net of gains 713,344 (37,071) (a) (76,757) (h) 599,516
Interest expense 206,607 29 (a) (9,700) (i) 196,936
Miscellaneous income, net (24,441) 2,470 (a) 25,652 (h)
(8,300) (j) (4,619)
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5,537,038 (580,816) (335,114) 4,621,108
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Loss before income taxes, extraordinary loss,
and cumulative effect of change in accounting (17,623) 11,592 (45,699) (51,730)
Provision for income taxes 13,664 (271) (a) (17,139) (h)
(1,000) (k) (4,746)
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Loss from continuing operations before
extraordinary loss and cumulative effect of
change in accounting $ (31,287) 11,863 (27,560) (46,984)
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Loss per common share from continuing
operations before extraordinary loss and
cumulative effect of change in accounting $ (0.39) (0.65)
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Average common and common
equivalent shares 81,263 (3,122) (d) (5,713) (l) 72,428
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See accompanying notes to the unaudited pro forma consolidated condensed
financial information.
RYDER SYSTEM, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET (UNAUDITED)
June 30, 1997
(In thousands)
(NOTE 2)
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
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ASSETS
Current assets:
Cash and cash equivalents $ 117,798 (1,217) (b)
118,000 (c)
(112,200) (d) 122,381
Receivables 593,033 (47,046) (b) 545,987
Inventories 62,356 (1,982) (b) 60,374
Tires in service 166,461 (3,655) (b) 162,806
Deferred income taxes 36,994 (11,185) (b) 25,809
Prepaid expenses and other current assets 127,263 (4,055) (b)
2,694 (e) 125,902
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Total current assets 1,103,905 (60,646) 1,043,259
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Revenue earning equipment 3,262,555 (134,493) (b) 3,128,062
Operating property and equipment 604,130 (24,629) (b) 579,501
Direct financing leases and other assets 373,857 (6,166) (b) 367,691
Intangible assets and deferred charges 298,735 (42,550) (b) 256,185
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$ 5,643,182 (268,484) 5,374,698
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 368,010 (548) (b) 367,462
Accounts payable 319,558 (21,956) (b) 297,602
Accrued expenses 537,600 (68,190) (b)
5,696 (e) 475,106
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Total current liabilities 1,225,168 (84,998) 1,140,170
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Long-term debt 2,130,614 (805) (b) 2,129,809
Other non-current liabilities 453,378 (62,354) (b)
(3,173) (e) 387,851
Deferred income taxes 697,413 (10,260) (b) 687,153
Shareholders' equity:
Common stock of $0.50 par value per share
(shares outstanding at June 30,
1997 - historical, 77,312,272; 471,498 (112,200) (d) 359,298
pro forma, 74,190,272)
Retained earnings 674,506 3,200 (f) 677,706
Translation adjustment (9,395) 2,106 (g) (7,289)
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Total shareholders' equity 1,136,609 (106,894) 1,029,715
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$ 5,643,182 (268,484) 5,374,698
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See accompanying notes to unaudited pro forma consolidated condensed financial
information.
RYDER SYSTEM, INC. AND SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED
CONDENSED FINANCIAL INFORMATION
Note 1 -
On September 30, 1997, the Company completed the sale of its automotive carrier
services segment to Allied Holdings, Inc. The sales price was based upon a
stated premium over net book value of the segment. The accompanying unaudited
pro forma consolidated condensed balance sheet assumes the transaction occurred
as of June 30, 1997 at a purchase price of $118.0 million, in cash, based on the
net book value of the segment at that date.
The Company has announced its intention to use the proceeds from the sale to
repurchase shares of its common stock. As such, the accompanying unaudited pro
forma consolidated condensed statements of earnings for the six months ended
June 30, 1997 and the year ended December 31, 1996 reflect the repurchase of
approximately 3.1 million shares of common stock as of January 1, 1996. In
addition, the unaudited pro forma consolidated condensed balance sheet as of
June 30, 1997 reflects the use of the assumed cash proceeds from the sale of
$112.2 million, net of direct transaction costs, to repurchase approximately 3.1
million shares of common stock at June 30, 1997. In both instances, the assumed
repurchase of common stock was based on the September 30, 1997 closing common
stock price of $35.94.
On October 17, 1996, the Company sold substantially all the assets and certain
liabilities of its consumer truck rental business unit for $574.0 million in
cash, resulting in a pretax gain of $25 million ($15.1 million after-tax). The
accompanying unaudited pro forma consolidated condensed statement of earnings
for the year ended December 31, 1996 assumes the use of cash proceeds from the
sale to repurchase common stock, reduce debt and reduce the level of receivables
sold, assuming the transaction had occurred as of January 1, 1996.
Note 2 -
The pro forma adjustments to the accompanying unaudited pro forma consolidated
condensed financial information related to the sale of the automotive carrier
services segment are described below:
(a) To remove the results of operations of the automotive carrier services
segment, net of certain intercompany eliminations.
(b) To remove the assets and liabilities of the automotive carrier services
segment.
(c) To reflect the cash proceeds from the sale of $118.0 million (assuming the
sale took place at June 30, 1997, based on net book values at that date).
(d) To reflect the use of cash proceeds of $112.2 million, net of direct
transaction costs, to repurchase 3.1 million shares of the Company's common
stock.
(e) To reflect the accrual of direct transaction and employee severance costs,
curtailment and settlement of certain employee benefit plan liabilities and
tax benefits realized as a result of the sale.
(f) To reflect the estimated after-tax gain on the sale of $3.2 million
(including a realized tax benefit of $8.5 million).
(g) To recognize the cumulative foreign currency translation adjustment related
to the sold segment.
RYDER SYSTEM, INC. AND SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED
CONDENSED FINANCIAL INFORMATION - CONTINUED
Note 3 -
The pro forma adjustments to the accompanying unaudited pro forma consolidated
condensed statement of earnings for the year ended December 31, 1996 related to
the sale of the Company's consumer truck rental business unit are described
below:
(h) To remove the results of operations of the consumer truck rental business
unit, net of certain intercompany eliminations.
(i) To reduce interest expense due to the reduction of debt from cash flows
generated from the sale.
(j) To increase miscellaneous income as a result of a reduction in the level of
receivables sold (at a discount) due to cash being available from the sale
(and assumed to be used in lieu of selling receivables).
(k) To reflect the income tax benefit associated with the pro forma adjustments
to the statement of earnings.
(l) To reflect the use of proceeds from the sale of the consumer truck rental
business unit to repurchase up to 6 million shares of common stock. The pro
forma amount is net of actual shares repurchased during the period.
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.
Dated: October 15, 1997
RYDER SYSTEM, INC.
By: /s/ EDWARD R. HENDERSON
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Name: Edward R. Henderson
Title: Assistant General Counsel
and Assistant Secretary
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
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99.1 Press Release issued by the Company on September 30, 1997.
99.2 Acquisition Agreement among Allied Holdings, Inc., A H
Acquisition Corp., Canadian Acquisition Corp., and Axis National
Incorporated and Ryder System, Inc., dated as of August 20, 1997.