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FORM 10-K
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the fiscal year ended December 31, 2001.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission File No. 1-8129.
US 1 INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Indiana
(State of Incorporation)
(I.R.S. Employer Identification No.) 95-3585609
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1000 Colfax, Gary, Indiana 46406
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(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code: (219) 944-6116
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Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
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Common Stock, no par value None
Securities registered pursuant to Section 12(g) of the Act: None
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 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. [X]
On March 13, 2002, there were 10,618,224 shares of registrant's common
stock outstanding, and the aggregate market value of the voting stock held
by non-affiliates of the registrant was approximately $3,500,000. For
purposes of the forgoing statement, directors and officers of the
registrant have been assumed to be affiliates.
PART 1
Item 1. Business.
The registrant, US 1 Industries, Inc. (hereinafter referred to, together
with its subsidiaries, as "US 1" or the "Company"), through its subsidiaries is
an interstate trucking company operating in 48 states. The Company's business
consists principally of a truckload operation for which the Company obtains a
significant percentage of its business through independent sales agents who
then arrange with independent truckers to haul the freight to the desired
destination.
US 1 was incorporated in California under the name Transcon Incorporated
on March 3, 1981. In March 1994, the Company changed its name to US 1
Industries, Inc. In February 1995, the Company was merged with an Indiana
corporation for purposes of re-incorporation under the laws of the state of
Indiana. The Company's subsidiaries consist of Blue and Grey Transport, Inc.,
an Indiana corporation,("BGT"), Blue and Grey Brokerage, Inc., an Indiana
corporation, ("BGB"), Carolina National Logistics, Inc. an Indiana
corporation,("CNL"), Carolina National Transportation, Inc., an Indiana
corporation ("CNT"), Accu Scan Drug Testing, Inc., an Indiana corporation
("ACCU"), Keystone Logistics, Inc. an Indiana corporation, ("KYL"), Unity
Logistics Inc., an Indiana Corporation, ("UNL"), Gulf Line Brokerage, Inc., an
Indiana corporation ("GLB"), Gulf Line Transportation, Inc., an Indiana
corporation ("GLT"), Keystone Lines,Inc. a California corporation ("Keystone"),
Cam Transport, Inc., an Indiana corporation,("CAM"), ERX, Inc. an Indiana
Corporation ("ERX"), Transport Leasing, Inc, an Arkansas Corporation ("TLI"),
and TC Services, Inc., a California corporation ("TCS"). BGT, BGB, CAM, CNL,
CNT, GLB, GLT,ACCU, KYL,UNL,TLI and Keystone operate under authority granted by
the United States Department of Transportation (the "DOT") and various state
agencies.
The Company has entered into an agreement with certain key employees of
Carolina National Transportation, Inc. ("Carolina"), a wholly owned subsidiary
of the Company, in which these employees will receive up to 40% ownership in
Carolina. These key employees will earn the 40% ownership interest in Carolina
over a three year period beginning in the year following which Carolina
achieves positive retained earnings, contingent upon certain restrictions
(including continued employment at Carolina) pursuant to the agreement. In
2001, Carolina achieved positive retained earnings. As a result, the Company
will incur total compensation expense of $400,000 over the three-year vesting
period. Beginning in 2002, a minority interest will be disclosed on the
Company's financial statements. Net income for Carolina was $486,000, $563,814
and $262,131 for the years ended 2001, 2000 and 1999, respectively.
Operations
The Company carries virtually all forms of freight transported by truck,
except bulk goods, including specialized trucking services such as
containerized, refrigerated, and flatbed transportation. In addition, this year
the Company started a division that hauls over-size and over-weight loads.
The Company is a non-asset based business, contracting with independent
truckers who generally own the truck they drive and sales agents. The Company
pays the independent truckers and agents a percentage of the revenue received
from customers for the transportation of goods. The expenses related to the
operation of the trucks are the responsibility of the independent contractors.
Consequently, short-term fluctuations in operating activity have less of an
impact on the Company's net income than they have on the net income of truck
transportation companies that bear substantially all of the fixed cost
associated with the ownership of the trucks. Like other truck transportation
companies, however, US 1's revenues are affected by competition and the state
of the economy.
The Company's principal focus during 2001 was business growth. This growth
was achieved through the continued growth of existing operations such as CNT
and Keystone. New divisions were added to these subsidiaries, such as a new
Keystone division that specialized in over-sized freight. The Company also
started up new operations such as ERX. In addition, 2001 was the first full
year of operations for CAM, an operation started in November 2000.
Marketing and Customers
The Company conducts most of its business through a network of independent
sales agents who are in regular contact with shippers at the local level. The
sales agents have facilities and personnel to monitor and coordinate shipments
and respond to shippers' needs in a timely manner.
These agents are typically paid a commission of 6% to 10% of the Company's
revenues from its trucking operations.
During 2001, the Company utilized the services of approximately 70 sales
agents. One agent accounted for 8%, 13%, and 18% of the Company's revenue for
the years ended December 31, 2001, 2000, and 1999 respectively. The Company
shipped freight for approximately 1,000 customers in 2001, none of which
accounted for more than of 10% of the Company's total revenues.
Independent Contractors
The independent contractors used by the Company must enter into standard
equipment operating agreements. The agreements provide that independent
contractors must bear many of the costs of operations, including drivers'
compensation, maintenance costs, fuel costs, collision insurance, taxes related
to the ownership and operation of the vehicle, licenses, and permits for which
they are paid 76% to 78% of the charges billed to the customer. The Company
requires independent contractors to maintain their equipment to standards
established by the DOT, and the drivers are subject to qualification and
training procedures established by the DOT. The Company is also required to
have random drug testing, enforce hours of service requirements, and monitor
maintenance of vehicles. The resale value of used trucks has severely declined
during the past year. This may affect the viability and success for the
independent contractors and in turn, the Company.
Employees
At December 31, 2001, the Company had approximately ninety-five full-time
employees. The Company's employees are not covered by a collective bargaining
agreement.
Competition
The trucking industry is highly competitive. The Company competes for
customers primarily with other nationwide carriers, some of which have
company-owned equipment and company drivers, and many, have greater volume and
financial resources. The Company also competes with private carriage conducted
by existing and potential customers. In addition, the Company competes with
other modes of transportation including rail.
The Company also faces competition for the services of independent
trucking contractors and sales agents. Sales agents routinely do business with
a number of carriers on an ongoing basis. The Company has attempted to develop
a strong sales agent network by maintaining a policy of prompt payment for
services rendered and providing advanced computer systems.
Competition is based on several factors; principally cost, timely
availability of equipment and quality of service.
Insurance
The Company insures the trucks with liability insurance coverage of up to
$2 million per occurrence with a $5,000 deductible. The Company has cargo
insurance coverage of up to $1,000,000 per occurrence with a $10,000
deductible. The Company also maintains a commercial general liability policy
with a limit of $1,000,000 per occurrence and no deductible. The current
insurance market is difficult with significant rate increases expected that
could adversely affect the cost and the available coverage.
Independent Contractor Status
From time to time, various legislative or regulatory proposals are
introduced at the federal or state levels to change the status of independent
contractors' classification to employees for either employment tax purposes
(withholding, social security, Medicare and unemployment taxes) or other
benefits available to employees. Currently, most individuals are classified as
employees or independent contractors for employment tax purposes based on 20
"common-law" factors rather than any definition found in the Internal Revenue
Code or Internal Revenue Service regulations. In addition, under Section 530 of
the Revenue Act of 1978, taxpayers that meet certain criteria may treat
similarly situated workers as employees, if they have received a ruling from
the Internal Revenue Service or a court decision affirming their treatment, or
if they are following a long-standing recognized practice.
Although management is unaware of any proposals currently pending to
change the employee/independent contractor classification, the costs associated
with potential changes, if any, in the employee/independent contractor
classification could adversely affect the Company's results of operations if
the Company were unable to reflect them in its fee arrangements with the
independent contractors and agent or in the prices charged to its customer.
Regulation
The Company is a common and contract motor carrier regulated by the DOT
and various state agencies. Historically, the Interstate Commerce Commission
(the "ICC") and various state agencies regulated motor carriers' operating
rights, accounting systems, mergers and acquisitions, periodic financial
reporting, and other matters. In 1995 federal legislation preempted state
regulation of prices, routes, and services of motor carriers and eliminated the
ICC. Several ICC functions were transferred to the DOT. Management does not
believe that regulation by the DOT or by the states in their remaining areas of
authority will have a material effect on the Company's operations. The
Company's independent contractor drivers also must comply with the safety and
fitness regulations promulgated by the DOT, including those relating to drug
and alcohol testing and hours of service.
The Company's operations are subject to various federal, state, and local
environmental laws and regulations, implemented principally by the EPA and
similar state regulatory agencies, governing the management of hazardous
wastes, other discharge of pollutants into the air and surface and underground
waters, and the disposal of certain substances. Management believes that its
operations are in compliance with current laws and regulations and does not
know of any existing condition that would cause compliance with applicable
environmental regulations to have a material effect on the Company's earnings
or competitive position.
Environmental Regulation
The Company owns property in Phoenix, Arizona that was formerly leased to
Transcon Lines ("Lines") as a terminal facility, where soil contamination
problems existed or are known to exist currently. State environmental
authorities notified the Company of potential soil contamination from
underground storage tanks, and management has been working with the regulatory
authorities to implement the required remediation. The underground storage
tanks were removed from the Phoenix facility in February 1994. Currently the
State environmental authorities are requiring further testing of the property.
The Company believes it is in substantial compliance with state and federal
environmental regulations relative to the trucking business. However, the
Company is working with regulatory officials to eliminate any sources of
contamination and determine extent of existing problems. Estimates of the costs
to complete the future remediation of approximately $141,000 are considered in
the land valuation allowance in the Company's consolidated financial statements
at December 31, 2001 and 2000.
Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995
The statements contained in Item 1 (Description of Business) and Item 6
(Management Discussion and Analysis of Financial Condition and Results of
Operation); particularly the statements under "Future Prospects" contain
forward-looking statements that are subject to a variety of risks and
uncertainties. The Company cautions readers that these risks and uncertainties
could cause the Company's actual results in 2002 and beyond to differ
materially from those suggested by any forward-looking statements. These risks
and uncertainties include, without limitation, a lack of historic information
for new operations on which expectations regarding their future performance can
be based, general economic and business conditions affecting the trucking
industry, competition from, among others, national and regional trucking
companies that have greater financial and marketing resources than the Company,
the availability of sufficient capital, and the Company's ability to
successfully attract and retain qualified owner operators and agents.
Item 2. Properties
The Company's administrative offices are at 1000 Colfax, Gary, Indiana.
The Company leases its administrative offices on a month to month basis for
$3,000 per month from Mr. Michael E. Kibler, President, Chief Executive Officer
and a director of the Company, and Mr. Harold Antonson, Treasurer, Chief
Financial Officer and a director of the Company.
In addition, the Company's subsidiaries lease office space and land in
several locations throughout the United States, as summarized below:
Approximate Lease
Subsidiary City, State Square Feet Monthly Rent Expiration
CNT Mt. Pleasant, SC 3,900 $ 5,800 June 30, 2004
KYL South bend, IN 1,591 1,125 Oct. 31, 2002
CAM Gulfport, MS 3,000 2,250 Nov. 1, 2003
ACCU Fort Worth, TX 700 700 Feb. 29, 2004
KEY Irving, TX 8 acres 7,500 June 30, 2003
KEY Houston, TX 33,000 2,000 Jan. 1, 2003
KEY Fort Smith, AK 1,500 4,567 April 30, 2002
KEY Laredo, TX 1,200 3,500 month to month
TLI Sebastian County,AK 2,500 1,000 March 7, 2003
KEY Irving, TX 1,440 870 Nov. 25, 2003
Management believes that the company's leased properties are adequate for
its current needs and can be retained or replaced at acceptable cost.
Item 3. Legal Proceedings
CAM Regional Transport and Laurel Mountain Leasing, Inc. two unaffiliated
entities, filed a complaint against the Company in 1994 which alleges breach of
contract, claiming that Trailblazer Transportation, Inc., a subsidiary of the
Company which filed bankruptcy, failed to abide by a purchase agreement entered
into with CAM Regional Transport, Inc. and Laurel Mountain Leasing, Inc. The
complaint seeks damages of $284,000 plus interest from November 1992.
The Company is currently involved in three other lawsuits; one of which is
a class action lawsuit, as a result of an August 1999 incident in which a
Carolina National Transportation, Inc. truck overturned leaking chemicals. It
is the Company's position that it is not at fault. The Company contends that
the materials inside the container were improperly packaged by a third party,
that the chemicals which leaked were not harmful in nature, and that those
persons alleging injuries were not harmed. The Company is also involved in two
other lawsuits as a result of a chemical leak that occurred in a container
hauled by a Carolina National Transportation, Inc truck. It is the Company's
position that they are not at fault for this incident because they are merely
the shipper and a third party had the responsibility to package the load for
safe transportation. Should there be an unfavorable outcome in either of these
cases, the company's insurance carrier would provide coverage for any potential
loss in excess of $200,000 up to a limit of $1,000,000.
At this time, the Company and its legal counsel are unable to assess the
outcome of these complaints. The Company intends to vigorously defend itself in
these matters.
The Company is involved in other litigation in the normal course of its
business. Management intends to vigorously defend these cases. In the opinion
of management, the litigation now pending will not have a material adverse
effect on the consolidated financial position of the company.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of the Company's shareholders during
the fourth quarter of 2001.
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
Shares of Common Stock of the Company are listed and traded on the NASD
Electronic "bulletin board market" under the symbol USOO.
The following table sets forth for the period indicated the high and low
sales prices per share of the Common Stock as reported from NASDAQ quotations
provided by North American Quotations and reflect inter-dealer prices, without
retail mark-up, mark-down or commission and may not represent actual
transactions.
Calendar Year High Low
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2001
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First Quarter .2500 .0900
Second Quarter .3300 .1300
Third Quarter .3330 .1300
Fourth Quarter 1.0500 .1900
2000
First Quarter .3750 .0500
Second Quarter .2500 .0620
Third Quarter .3120 .0620
Fourth Quarter .1800 .0625
As of January 31, 2002, there were 3,216 holders of record of Common Stock.
The Company has not paid any cash dividends on its Common Stock.
Management does not anticipate paying any dividends on the Common Stock in the
foreseeable future, and the Company's current credit agreement prohibits the
payment of dividends.
Item 6. Selected Financial Data
The selected consolidated financial data presented below have been derived
from the Company's consolidated financial statements. The consolidated
financial statements for the years ended December 31, 2001, 2000 and 1999 have
been audited by the Company's independent certified public accountants, whose
report on such consolidated financial statements is included herein under Item
8. The information set forth below should be read in conjunction with the
consolidated financial statements and notes thereto under Item 8 and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
(in thousands, except per share data)
Fiscal Year Ended December 31,
2001 2000 1999 1998 1997
---- ---- ---- ---- ----
STATEMENT OF OPERATIONS DATA:
Operating revenues $72,110 $48,284 $32,334 $30,177 $25,422
Purchased transportation 55,609 37,627 24,846 23,417 19,676
Commissions 6,597 4,344 3,052 3,178 2,361
Other operating costs and expenses 8,122 4,988 3,481 3,408 3,806
Operating income (loss) 1,782 1,325 954 174 (421)
Interest expense 712 623 661 744 435
Income(loss) before income taxes 1,168 802 412 173 (803)
Income tax benefit 400 800 0 0 0
Net income (loss) 1,568 1,602 412 173 (192)
Income (loss) per common share
Net Income before extraordinary items:
Basic $0.14 $0.14 $0.03 $0.01 ($0.08)
Diluted $0.14 $0.14 $0.03 $0.01 ($0.08)
Extraordinary item
Basic $0.00 $0.00 $0.00 $0.00 $0.06
Diluted $0.00 $0.00 $0.00 $0.00 $0.06
Net Income
Basic $0.14 $0.14 $0.03 $0.01 ($0.02)
Diluted $0.14 $0.14 $0.03 $0.01 ($0.02)
Weighted average shares outstanding:
Basic 10,618,224 10,618,224 10,618,224 10,618,224 10,616,397
Diluted 10,618,224 10,618,224 10,618,224 10,618,224 10,616,397
BALANCE SHEET DATA:
Total assets 17,161 11,891 5,352 4,499 6,261
Long-term debt, including
current portion 4,660 4,259 2,547 2,967 2,571
Working capital 2,039 1,720 (712) (861) (1,451)
Shareholders' deficiency (995) (2,459) (3,968) (4,298) (4,399)
OTHER DATA:
Cash (used in) provided by
operating activities (841) (2,833) (370) 490 (3,630)
Cash (used in) provided by
investing activities (1,210) ( 84) 74 58 (269)
Cash provided by (used in)
financing activities 2,374 2,916 296 (848) 3,971
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operation.
Overview
Purchased transportation represents the amount an independent contractor
is paid to haul freight and is primarily based on a contractually agreed-upon
percentage of revenue generated by the haul for truck capacity provided by
independent contractors. Purchased transportation is the largest component of
operating expenses and increases or decreases in proportion to the revenue
generated through independent contractors. Commissions to agents and brokers
are primarily based on contractually agreed-upon percentages of revenue.
A majority of the insurance and claims expense is based on a percentage of
revenue and, as a result, will increase or decrease, on a consolidated basis
with the Company's revenue. Potential liability associated with accidents in
the trucking industry is severe and occurrences are unpredictable. A material
increase in the frequency or severity of accidents or the unfavorable
development of existing claims could adversely affect the Company's operating
income.
Salaries, wages, fringe benefits, and other operating expenses are
principally non-variable expenses and therefore will not typically vary
directly as a percentage of the Company's revenue.
The following table set forth the percentage relationships of expense
items to revenue for the periods indicated:
Fiscal Years
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2001 2000 1999
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Revenue 100.0% 100.0% 100.0%
Operating expenses:
Purchased transportation 77.1 77.9 76.8
Commissions 9.1 9.0 9.4
Insurance and claims 3.3 3.2 3.3
Salaries, wages and fringe benefits 3.5 3.6 3.9
Other operating expenses 4.5 3.6 3.6
------- ------ ------
Total operating expenses 97.5 97.3 97.0
------ ------ ------
Operating income 2.5 2.7 3.0
General
The Company has entered into an agreement with certain key employees of
Carolina National Transportation, Inc. ("Carolina"), a wholly owned subsidiary
of the Company, in which these employees will receive up to 40% ownership in
Carolina. These key employees will earn the 40% ownership interest in Carolina
over a three year period beginning in the year following which Carolina
achieves positive retained earnings, contingent upon certain restrictions
(including continued employment at Carolina) pursuant to the agreement. In
2001, Carolina achieved positive retained earnings. As a result, the Company
will incur total compensation expense of $400,000 over the three-year vesting
period. Beginning in 2002, a minority interest will be disclosed on the
Company's financial statements. Net income for Carolina was $486,000, $563,814
and $262,131 for the years ended 2001, 2000 and 1999, respectively.
Critical Accounting Policies and Estimates
Our financial statements reflect the selection and application of
accounting policies which require management to make significant estimates and
assumptions. We believe that the following are some of the more critical
judgment areas in the application of our accounting policies that currently
affect our financial condition and results of operations.
Preparation of the consolidated financial statements in accordance with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions affecting the reported amounts of
assets, liabilities, revenues, and expenses and related contingent liabilities.
On an on-going basis, the Company evaluates its estimates, including those
related to revenues, bad debts, income taxes and contingencies and litigation.
The Company bases its estimates on historical experience and on various other
assumptions that are believed to be reasonable under the circumstances. Actual
results may differ from these estimates under different assumptions or
conditions.
Revenue for freight in transit is recognized upon delivery. Amounts
payable for purchased transportation, commissions and insurance expense are
accrued when the related revenue is recognized.
Deferred income taxes are recognized for the tax consequences of
"temporary differences" by applying enacted statutory tax rates applicable to
future years to differences between the financial statement carrying amounts
and the tax basis of existing assets and liabilities. At December 31, 2001, the
Company's deferred tax asset consists principally of net operating loss
carryforwards. The Company's deferred tax asset has been reduced by a valuation
allowance to the extent such benefits are not expected to be fully utilized.
2001 Compared to 2000
Revenue for the 2001 fiscal year was $72.1 million, an increase of $23.8
million, or 49.3%, over revenue for the 2000 fiscal year. The increase was
attributable to continued growth at Carolina National Transportation, the
opening of a new operation that specializes in over-size loads at Keystone
Lines, the addition of new inter modal operations at Keystone Lines, the new
operations of Transport Leasing, Inc. and ERX Transportation.
Purchased transportation was 77.1% of revenue in 2001 compared with 77.9%
in 2000. Purchased transportation has decreased .8% as a percentage of revenue
for the year ended December 31, 2001, compared to the year ended December
31,2000. In 2000, the Company imposed a fuel surcharge on their customers. This
surcharge was payable 100% to the owner operators. Due to the slight decrease
in fuel costs in 2001, this component of revenue has reduced relative to total
revenue. The corresponding purchased transportation has also decreased. Thus
purchased transportation as a percentage of revenue has decreased. In addition,
in 2001, the Company started a new operation that hauls over-dimensional
freight using Company owned trailers at a lower over all cost of purchased
transportation.
Commissions to agents were 9.1% of revenue in 2001 compared with 9.0% in
2000. The increase in commissions is offset partially by the decrease in
purchased transportation.
Insurance and claims increased slightly in 2001 compared to 2000 at 3.3%
of revenue for 2001 verses 3.2% of revenue for 2000.
Salaries, wages and fringe benefits were 3.5% of revenue in 2001 and 3.6%
in 2000. The slight decrease in salaries, wages and fringe benefit expenses as
a percentage of revenue was due to increased productivity and economies of
scale.
Other operating expenses were 4.5% of revenue in 2001 and 3.6% in 2000.
One factor that substantially increased other operating expenses in 2001
compared to 2000 was an increase in depreciation expense. Depreciation expense
increased by 0.3% of revenue in 2001 compared to 2000. During 2001, the Company
had capital expenditures of $1.2 million, relating primarily to the purchase of
trailers for new operations. This increase in depreciation partially offsets
the decrease of purchased transportation in 2001 as a percentage of revenue.
Another factor contributing to the increase in operating expenses was an
increase in bad debt expense. The company's bad debt expense increased 0.3%
from 0.4% of revenue to 0.7% of revenue due to the adverse affect of customers
filing bankruptcy. Collections are an ongoing challenge with today's soft
economy and the company continually focuses on this area.
Based on the changes in revenue and expenses discussed above, operating
income increased by $456,631 from $1,325,409 in 2000 to $1,782,040 in 2001.
Interest expense increased to $0.71 million in 2001 from $0.62 million in
2000. Although the Company's line of credit interest rate is lower, the loan
balance is higher due to additional borrowings needed to fund the Company's
growth. The net effect was an increase in interest expense.
As a result of the factors outlined above, income before income tax
benefit was $1,167,517 in 2001 compared to $801,671 in 2000.
The Company has net operating loss carry-forwards of approximately $55
million at December 31, 2001. These carry-forwards are available to offset
taxable income in future years and substantially all of these carry-forwards
will expire in the years 2003 through 2010. The Company recognized an income
tax benefit of $400,000 in 2001 compared to $800,000 in 2000. Based on
profitability in recent years, the Company initially reduced its valuation
allowance for its deferred tax assets by $800,000 in 2000. A continuing upward
trend in profitability resulted in an additional $400,000 decrease in the
valuation allowance during 2001. At December 31, 2001, the Company has realized
a net deferred tax asset of $1,200,000. The Company believes it is more likely
than not that this amount will be realized as a result of anticipated future
taxable income to be generated. Due to the uncertainty of the remaining tax
asset, a valuation allowance has been maintained for the remaining deferred tax
asset at December 31, 2001.
Net income in 2001 was $1,567,517 compared with $1,601,671 in 2000. Income
available to common shareholders was $1,464,661, or $0.14 per common share, in
2001 compared with $1,509,099 or $0.14 per common share, in the prior year.
2000 Compared to 1999
Revenue for the 2000 fiscal year was $48.2 million, an increase of $15.9
million, or 49.3%, over revenue for the 1999 fiscal year. The increase was
attributable to continued growth at Carolina National Transportation, the
operations of a new agent who specialized in over-size loads at Keystone Lines,
expansion of Keystone Logistics, Inc. and the startup of two new Companies, CAM
Transport, Inc. and Unity Logistics, Inc.
Purchased transportation was 77.9% of revenue in 2000 compared with 76.8%
in 1999. Purchased transportation has increased 1.1% as a percentage of revenue
for the year ended December 31, 2000, compared to the year ended December
31,1999. Due to the increase in diesel fuel prices, the Company has begun to
bill their customers a fuel surcharge that is reimbursable to the owner
operator at 100%. Because this portion of the revenue is reimbursed at 100% to
the owner operator, the purchased transportation as a percentage of revenue
will increase.
Commissions to agents were 9.0% of revenue in 2000 compared with 9.4% in
1999 primarily due to contracts with newer agents being negotiated at a lower
percentage rate.
Insurance and claims were 3.2% of revenue in 2000 compared with 3.3% in
1999 primarily due to a decrease in claims relative to revenue and a slight
decrease in liability insurance rates.
Salaries, wages and fringe benefits were 3.6% of revenue in 2000 and 3.9%
in 1999. The slight decrease in salaries, wages and fringe benefit expenses as
a percentage of revenue was due to the Company's continued efforts to control
overhead costs coupled with the increase in revenue. Other operating expenses
were 3.6% of revenue in 2000 and 3.6% in 1999.
Based on the changes in revenue and expenses discussed above, operating
income increased by $371,550 from $953,859 in 1999 to $1,325,409 in 2000.
Interest expense decreased slightly to $0.62 million in 2000 from $0.66
million in 1999. Although the Company's new lender is charging lower interest
rates, the loan balance is higher due to continued Company growth. The net
effect was a small decrease in interest expense.
Non-operating income (expense), exclusive of interest expense, decreased
from $118,547 in 1999 to $99,252 in 2000. In 1999, other income (expense) is
comprised of a write-off of net payables from fiscal years 1996 and 1997
relating to revisions of estimates of amounts due from or payable to drivers
and agents. In 2000, the amount is primarily attributable to a refund from the
state of Alabama for permits paid in prior years that was reversed by the
courts and refunded to the Company.
The Company has net operating loss carry-forwards of approximately $57
million at December 31, 2000. These carry-forwards are available to offset
taxable income in future years and substantially all of these carry-forwards
will expire in the years 2003 through 2010. Based on the company's
profitability in recent years, at December 31, 2000, the Company has realized a
net deferred tax asset of $800,000. The Company believes it is more likely than
not that this amount will be realized as a result of anticipated future taxable
income to be generated. Due to the uncertainty of the remaining tax asset, a
valuation allowance has been maintained for the remaining deferred tax asset at
December 31, 2000.
Net income in 2000 was $1,601,671 compared with $411,897 in 1999. Income
before Income Tax Benefit was $ 801,671 in 2000 compared with 411,897 in 1999 a
95% increase. Income available to common shareholders was $1,509,099, or $0.14
per common share, in 2000 compared with $329,611, or $0.03 per common share, in
the prior year.
Liquidity and Capital Resources
During fiscal 2001, the Company's financial position continued to improve.
The Company had a net deficiency in shareholders' equity of $1.0 million at
December 31, 2001 compared with $2.5 million at December 31, 2000. Working
capital at December 31, 2001 was $2.0 million compared to $1.7 million at the
end of 2000. This increase in working capital is due to continuing
profitability.
Net cash used in operating activities decreased $2.0 million from $2.8
million for the year ended December 31, 2000 to $0.8 million for the year ended
December 31, 2001. In 2001, accounts receivable increased $2.6 million compared
to $5.1 million during 2000, resulting in a $2.5 million decrease in net cash
used in operating activities. While revenues grew significantly for 2001 as the
Company continued to add new agents and expand operations, growth in the fourth
quarter of 2001 slowed in comparison to the fourth quarter of 2000 due to a
soft economy. Other accounts receivable increased $1.0 million in 2001 compared
to $0.3 million in 2000 resulting in a $0.7 million increase in net cash used
by operating activities. The increase in other receivables is attributable to
increased driver advances resulting from the growth of operations, an increase
in loans provided to agents and a $0.2 receivable due from Enterprise Trucking,
an entity affiliated through common ownership.
Net cash used in investing activities was $1.2 million for the year ended
December 31, 2001 compared to net cash used in investing activities of $0.1
million for the year ended December 31, 2000. Net cash used in investing
activities during 2001 related to the Company's investment in additional
equipment, consisting primarily of trailers.
Net cash provided by financing activities decreased $0.5 million from $2.9
million for the year ended December 31, 2000 to $2.4 million for the year ended
December 31, 2001. The cash provided by financing activities is primarily due
to a net increase in the Company's line of credit of $2.5 million, an increase
in the equipment line of credit of $0.8 million, an increase in other long term
debt of $0.2 million, offset by a decrease in the bank overdraft of $0.5
million, and a decrease in shareholder loans of $0.3 million. The overall
increase in debt is due to financing required to fund the Company's growth
which resulted in an increase in the accounts receivable balance as well as the
purchase of additional equipment.
The Company had a $5.5 million line of credit that matured on September
28, 2001. This revolving line of credit was amended effective October 15, 2001,
increasing the line to $7.0 million and extending the maturity date until
October 1, 2003. Advances under this revolving line of credit are limited to
70% of eligible accounts receivable and bear interest at the prime rate plus
0.25% (5.0% at December 31, 2001). The interest rate is based upon certain
financial covenants and may range from prime to prime plus .5%. The Company's
accounts receivable, property, and other assets collateralize advances under
the agreement. Borrowings up to $1 million are guaranteed by the Chief
Executive Officer and Chief Financial Officer of the Company. At December 31,
2001, the outstanding borrowings on this line of credit were $6.8 million.
The Company also has 2 additional equipment loans to fund equipment
purchases. At December 31, 2001, the Company has $137,000 of additional
borrowing availability under these equipment loans which may be used to fund
additional equipment purchases. The outstanding balance on these loans bear
interest at the prime rate in effect plus 1% per annum. The principal balance
of these equipment lines are payable based on a five year amortization of the
outstanding balance with any remaining unpaid balance due in October 2003. The
outstanding balance under these equipment loans totaled $827,401 at December
31, 2001 and are collateralized by the related equipment funded by these
borrowings.
These lines of credit are subject to termination upon various events of
default, including failure to remit timely payments of interest, fees and
principal, any adverse change in the business of the Company or failure to meet
certain financial covenants. Financial covenants include: minimum net worth
requirements, total debt service coverage ratio, capital expenditure
limitations, and prohibition of additional indebtedness without prior
authorization.
Environmental Liabilities
The Company is not a party to any Super-fund litigation and otherwise does
not have any known environmental claims against it. However, the Company does
have one property where soil contamination problems existed or are known to
exist currently. The Company has preliminarily evaluated its potential
liability as this site and believes that it has reserved appropriately for its
remediation or that the fair market value of the property exceeds its net book
value by an amount in excess of any remediation cost. There can be no
assurance, however, that the cost of remediation would not exceed the expected
amounts. The Company continues to monitor soil contamination and may be
required to remediate the property in the near future.
Inflation
Changes in freight rates charged by the Company to its customers are
generally reflected in the cost of purchased transportation and commissions
paid by the Company to independent contractors and agents, respectively.
Therefore, management believes that future operating results of the Company
will be affected primarily by changes in volume of business. However, due to
the highly competitive nature of the truckload motor carrier industry, it is
possible that future freight rates and cost of purchased transportation may
fluctuate, affecting the Company's profitability.
Recently Issued Accounting Standards
In July 2001, the Financial Accounting and Standards Board(FASB) issued
Statements of Financial Accounting Standards No. 141("SFAS 141"), "Business
Combinations" and No. 142("SFAS 142"), "Goodwill and Other Intangible Assets".
SFAS 141 requires that all business combinations initiated after June 30, 2001
be accounted for under a single method-the purchase method. Use of the
pooling-of-interest method is no longer permitted. SFAS 142 requires that
goodwill no longer be amortized to earnings, but instead be reviewed for
impairment upon initial adoption of the Statement and on an annual basis going
forward. The amortization of goodwill will cease upon adoption of SFAS 142. The
provisions of SFAS 142 will be effective for fiscal years beginning after
December 15, 2001. The Company is required to adopt SFAS 142 in the first
quarter of fiscal year 2002. The Company believes that the adoption of thse
standards will have no material impact on its financial statements or results
of operations.
In October 2001, the Financial Accounting and Standards Board("FASB")
issued Statement of Financial Accounting Standards No. 144("SFAS 144"),
"Accounting for the Impairment or Disposal of Long-Lived Assets", which is
effective for fiscal years beginning on or after December 15, 2001 and interim
periods within those fiscal periods. SFAS 144 supercedes FASB 121 and APB
Opinion No. 30. However, it retains the requirement of Opinion No. 30 to report
discontinued operations separately from continuing operations and extends that
reporting to a component of an entity that either has been disposed of (by
sales, by abandonment, or in a distribution to owners) or is classified as held
for sale. SFAS 144 addresses financial accounting and reporting for the
impairment of certain long-lived assets to be disposed of. Management does not
expect the adoption of SFAS 144 to have a material impact on the Company's
financial position or results of operations.
Item 7a. Quantitative and Qualitative Disclosures about Market Risk
The Company has a revolving line of credit with a bank, which bears
interest at the prime rate plus .25% (5.00% at December 31, 2001). The interest
rate is based on certain financial covenants and may range from prime to prime
plus .5%. In addition, the company has certain equipment lines-of-credit which
bear interest at the prime rate plus 1%. The Company also has subordinated debt
with related parties which bears interest at rates ranging from prime + .75% to
prime plus 1%.
Item 8. Financial Statements and Supplementary Data.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors of
US 1 Industries, Inc.
Gary, Indiana
We have audited the accompanying consolidated balance sheets of US 1
Industries, Inc. and Subsidiaries as of December 31, 2001 and 2000 and the
related consolidated statements of income, shareholders' deficiency, and cash
flows for each of the three years in the period ended December 31, 2001. We
have also audited the schedule listed in the accompanying index. 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 audits to obtain reasonable assurance about whether the financial
statements and the schedule are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements and schedule. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the financial
statements and schedule. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of US 1
Industries, Inc. and Subsidiaries at December 31, 2001 and 2000, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 2001 in conformity with accounting principles
generally accepted in the United States.
Also in our opinion, the schedule presents fairly, in all material
respects, the information set forth therein.
BDO Seidman, LLP
Chicago, Illinois
March 11, 2002
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2001 AND 2000
ASSETS
2001 2000
---- ----
CURRENT ASSETS:
Cash $ 322,060 $ 0
Accounts receivable-trade, less allowance for
doubtful accounts of $524,000 and $209,000
respectively 11,946,382 9,911,436
Other receivables, including receivables due
from affiliated entities of $359,000 and
$62,000 in 2001 and 2000, respectively 1,374,835 382,057
Deposits 44,200 40,450
Prepaid expenses 544,143 309,897
Current Deferred tax asset 600,000 400,000
------------ ----------
Total current assets 14,831,620 11,043,840
FIXED ASSETS:
Equipment 1,542,945 335,402
Less accumulated depreciation and amortization (250,954) (68,797)
------------ ----------
Net fixed assets 1,291,991 266,605
------------ ----------
ASSETS HELD FOR SALE:
Land 195,347 195,347
Valuation allowance (141,347) (141,347)
------------- -----------
Net assets held for sale 54,000 54,000
Non-current Deferred tax asset 600,000 400,000
Other Assets 383,786 126,461
------------- -----------
TOTAL ASSETS $17,161,397 $11,890,906
============= ===========
The accompanying notes are an integral part of the consolidated financial
statements.
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2001 AND 2000
LIABILITIES AND SHAREHOLDERS' DEFICIENCY
2001 2000
---- ----
CURRENT LIABILITIES:
Revolving line of credit $6,765,999 $4,271,104
Current portion of long-term debt 399,190 232,792
Accounts payable 3,609,666 2,621,107
Bank overdraft 0 522,201
Accrued expenses 251,859 244,446
Insurance and claims 629,796 418,450
Accrued compensation 79,545 33,891
Accrued interest 974,039 836,019
Fuel and other taxes payable 82,228 143,796
----------- -----------
Total current liabilities 12,792,322 9,323,806
----------- -----------
LONG-TERM DEBT TO RELATED PARTIES 4,260,668 4,026,210
COMMITMENTS AND CONTINGENCIES
REDEEMABLE PREFERRED STOCK:
Authorized 5,000,000 shares; no par value,
Series A shares issued and outstanding:
2001 and 2000 - 1,094,224 Capitalized
dividend $0.094
Preference as to Liquidation $0.094 per share 1,102,968 1,000,112
SHAREHOLDERS' DEFICIENCY:
Common stock, authorized 20,000,000 shares;
no par value; shares issued and
outstanding:
2001 and 2000 - 10,618,224 40,844,296 40,844,296
Accumulated deficit (41,838,857) (43,303,518)
----------- -----------
Total shareholders' deficiency (994,561) (2,459,222)
----------- ------------
TOTAL LIABILITIES AND SHAREHOLDERS'
DEFICIENCY $17,161,397 $11,890,906
=========== =============
The accompanying notes are an integral part of the consolidated financial
statements.
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
YEARS ENDED DECEMBER 31, 2001, 2000, AND 1999
2001 2000 1999
OPERATING REVENUES $72,109,813 $48,284,013 $32,333,528
OPERATING EXPENSES:Purchased transportation 55,609,408 37,626,623 24,846,421
Commissions 6,596,625 4,343,529 3,052,406
Insurance and claims 2,350,254 1,553,892 1,070,564
Salaries, wages, and other 2,502,848 1,719,291 1,248,089
Other Operating expenses 3,268,638 1,715,269 1,162,189
--------- --------- -----------
Total operating expenses 70,327,773 46,958,604 31,379,669
---------- ---------- ----------
OPERATING INCOME 1,782,040 1,325,409 953,859
NON OPERATING INCOME (EXPENSE):
Interest income 6,058 19,003 9,840
Interest expense (712,381) (622,990) (660,509)
Other income, net 91,800 80,249 108,707
------ -------- ----------
Total non operating (expense) (614,523) (523,738) (541,962)
NET INCOME BEFORE INCOME TAXES 1,167,517 801,671 411,897
Income tax benefit 400,000 800,000 0
-------- ------- ----------
NET INCOME 1,567,517 1,601,671 411,897
DIVIDENDS ON PREFERRED SHARES 102,856 92,572 82,286
-------- --------- ----------
NET INCOME AVAILABLE TO COMMON SHARES $ 1,464,661 $ 1,509,099 $ 329,611
========= ========= ==========
Basic and Diluted Net Income
Per Common Share $0.14 $0.14 $0.03
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
- BASIC AND DILUTED 10,618,224 10,618,224 10,618,224
The accompanying notes are an integral part of the consolidated financial
statements.
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIENCY
YEARS ENDED DECEMBER 31, 2001, 2000, and 1999
Common Stock Accumulated
Shares Amount Deficit Total
January 1, 1999 10,618,224 40,844,296 (45,142,228) (4,297,932)
Dividends on Preferred Stock (82,286) (82,286)
Net Income 411,897 411,897
Balance at __________ ___________ ___________ __________
December 31, 1999 10,618,224 40,844.296 (44,812,617) (3,968,321)
Dividends on Preferred Stock (92,572) (92,572)
Net Income 1,601,671 1,601,671
---------- ----------- ----------- ----------
Balance at 10,618,224 $40,844,296 (43,303,518) (2,459,222)
December 31, 2000
Dividends on Preferred Stock (102,856) (102,856)
Net Income 1,567,517 1,567,517
---------- ----------- ---------- ----------
Balance at 10,618,224 $40,844,296 $(41,838,857) $ (994,561)
December 31, 2001 ========== =========== =========== ==========
The accompanying notes are an integral part of the consolidated financial
statements.
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
2001 2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,567,517 $ 1,601,671 $ 411,897
Adjustments to reconcile net income to net
cash used in operating activities:
Depreciation and amortization 184,608 26,818 30,795
Provision for bad debt 519,949 186,233 49,027
Deferred Income Tax benefit (400,000) (800,000) 0
Loss on disposal of equipment 0 3,609 30,177
Changes in operating assets and liabilities:
Accounts receivable-trade (2,554,895) (5,124,833) (979,907)
Other receivables (992,778) (276,287) (46,116)
Prepaid expenses (234,246) (147,724) 18,553
Deposits & other assets (261,075) (157,666) (29,744)
Accounts payable 988,559 1,279,973 (104,755)
Accrued expenses 7,413 28,941 32,105
Insurance and claims 211,346 213,858 23,068
Accrued interest 138,020 222,452 220,684
Accrued compensation 45,654 16,577 (277)
Fuel and other taxes payable (61,568) 93,848 (25,747)
--------- ----------- ---------
Net cash used in operating
activities (841,496) (2,832,520) (370,240)
--------- ----------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to fixed assets (1,209,994) (92,500) (5,183)
Proceeds from sale of fixed assets 0 8,885 79,358
-------- ------- --------
Net cash (used in) provided by investing
activities (1,209,994) (83,615) 74,175
----------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under line of credit 2,494,895 1,193,498 630,745
Proceeds from Long term debt 1,049,094 158,052 0
Principal payments of long-term debt (331,672) (121,808) (64,277)
Net(repayments of)proceeds from shareholder loans (316,566) 1,509,911 (355,718)
(Decrease) Increase in bank overdraft (522,201) 176,482 85,315
--------- ------- --------
Net cash used in financing
activities 2,373,550 2,916,135 296,065
-------- -------- --------
NET INCREASE IN CASH 322,060 0 0
CASH, BEGINNING OF YEAR _ _
-------- ------- ---------
CASH, END OF YEAR $322,060 $ 0 $ 0
-------- -------- ---------
- --------------------------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION--
Cash paid during year for interest $574,361 $400,538 $439,825
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND
FINANCING ACTIVITIES
Note payable incurred for purchase of equipment $ 0 $165,435 $ 0
The Company recorded $102,856, $92,572, and $82,286 in 2001,2000, and
1999 respectively, for dividends on preferred stock.
The accompanying notes are an integral part of the consolidated financial
statements.
US1 INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, AND 2000
1. OPERATIONS
The Company is primarily an interstate truckload carrier of general
commodities, which uses independent agents and owner-operators to contract for
and haul freight for its customers in 48 states with a concentration in the
Southeastern United States. One agent accounted for 8%, 13%, and 18% of the
Company's revenue in 2001, 2000, and 1999, respectively. No other agent
represented more than 10% of sales for the years ended December 31, 2001, 2000,
and 1999.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation--The consolidated financial statements include
the accounts of US 1 Industries, Inc. and its subsidiaries. All significant
intercompany accounts and transactions have been eliminated.
Revenue Recognition--Revenue for freight in transit is recognized upon
delivery. Amounts payable for purchased transportation, commissions and
insurance expense are accrued when the related revenue is recognized.
Fixed Assets--Fixed assets are stated at cost and depreciated using the
straight-line method over the estimated useful lives of the related assets,
which range from three to eight years.
Assets Held for Sale--Such assets comprise real estate, not required for
the Company's operations, which is carried at the lower of historical cost or
estimated net realizable value. See Note 12.
Long-Lived Assets - The Company assesses the realizability of its
long-lived assets in accordance with statement of Financial Accounting
Standards No. 121 "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be disposed of."
Accounting Estimates--The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the dates of
financial statements and the reported amounts of revenues and expenses during
the reporting periods. Actual results could differ from those estimates.
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
YEARS ENDED DECEMBER 31, 2000, AND 1999
Income Taxes--Deferred income taxes are recognized for the tax
consequences of "temporary differences" by applying enacted statutory tax rates
applicable to future years to differences between the financial statement
carrying amounts and the tax bases of existing assets and liabilities. In
addition, the amount of any future tax benefits are reduced by a valuation
allowance to the extent such benefits are not expected to be fully utilized.
Reclassifications - Certain amounts in the 2000 and 1999 financial
statements have been restated to conform with 2001 presentation.
Earnings Per Common Share--The Company computes earnings per share under
Statement of Financial Accounting Standards No. 128 "Earnings Per Share." The
statement required presentation of two amounts, basic and diluted earnings per
share. Basic earnings per share are computed by dividing loss available to
common stock holders by the weighted average common shares outstanding.
Dilutive earnings per share would include all common stock equivalents. There
are no common stock equiviliants at December 31, 2001, 2000, or 1999.
Business Segments - Statement of Financial Accounting Standards No. 131,
"Disclosures about Segments of an Enterprise and Related Information" requires
public enterprises to report certain information about reporting segments in
financial statements. The Company presents its operations in one business
segment.
Recently Issued Accounting Standards - In July 2001, the Financial
Accounting and Standards Board(FASB) issued Statements of Financial Accounting
Standards No. 141("SFAS 141"), "Business Combinations" and No. 142("SFAS 142"),
"Goodwill and Other Intangible Assets". SFAS 141 requires that all business
combinations initiated after June 30, 2001 be accounted for under a single
method-the purchase method. Use of the pooling-of-interest method is no longer
permitted. SFAS 142 requires that goodwill no longer be amortized to earnings,
but instead be reviewed for impairment upon initial adoption of the Statement
and on an annual basis going forward. The amortization of goodwill will cease
upon adoption of SFAS 142. The provisions of SFAS 142 will be effective for
fiscal years beginning after December 15, 2001. The Company is required to
adopt SFAS 142 in the first quarter of fiscal year 2002. The Company believes
that the adoption of these standards will have no material impact on its
financial position or results of operations.
In October 2001, the Financial Accounting and Standards Board("FASB")
issued Statement of Financial Accounting Standards No. 144("SFAS 144"),
"Accounting for the Impairment or Disposal of Long-Lived Assets", which is
effective for fiscal years beginning on or after December 15, 2001 and interim
periods within those fiscal periods. SFAS 144 supercedes FASB 121 and APB
Opinion No. 30. However, it retains the requirement of Opinion No. 30 to report
discontinued operations separately from continuing operations and extends that
reporting to a component of an entity that either has been disposed of (by
sales, by abandonment, or in a distribution to owners) or is classified as held
for sale. SFAS 144 addresses financial accounting and reporting for the
impairment of certain long-lived assets to be disposed of. Management does not
expect the adoption of SFAS 144 to have a material impact on the Company's
financial position or results of operations.
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
YEARS ENDED DECEMBER 31, 2000, AND 1999
3. REDEEMABLE PREFERRED STOCK
The Series A preferred shares are non-voting, and earn dividends at the
rate of $0.094 per share per annum (increasing by $0.0094 January 1 thereafter
until redeemed) payable quarterly on the first day of February, May, August,
and November.
The Series A preferred stock is redeemable at the option of the Company or
the holders at any time.
As of December 31, 2001, Series A cumulative preferred stock dividends are
in arrears by $555,855. The Company's current line of credit prohibits the
payment of dividends.
On February 19, 2002, the Company's board of directors approved the
conversion of all of the outstanding Series A redeemable preferred stock
(1,094,224 shares) plus all accrued dividends, into 1,000,000 shares of the
Company's common stock. The following shows proforma earnings per common share
assuming the preferred stock had been converted as of the earliest date
presented:
2001 2000 1999
---- ----- -----
Basic and Diluted Net Income per common share $0.13 $0.14 $0.03
4. RELATED PARTY TRANSACTIONS
One of the Company's subsidiaries provides safety, management, and
accounting services to companies controlled by the Chief Executive Officer and
Chief Financial Officer of the Company. These services are priced to cover the
cost of the employees providing the services. Revenues related to those
services was approximately $68,000, $124,000 and $78,000 in 2001, 2000, and
1999, respectively. $359,000 and $62,000 due from entities affiliated through
common ownership is included in other receivables at December 31, 2001 and
2000, respectively.
The Company has an investment of $126,461 in American Inter-Fidelity
Exchange ("AIFE"), an entity which provides the Company with truck liability
insurance. The Company exercised no control over the operations of AIFE. As a
result, the Company has recorded its investment in AIFE under the cost method
of accounting for these periods.
Under the cost method, the investment in AIFE is reflected at its original
amount and income is recognized only to the extent of dividends paid by the
investee. There were no dividends declared by AIFE for the years ended December
31, 2001, 2000 and 1999.
A director of the company also manages an affiliated insurance carrier,
Indiana Truckers Exchange (ITE). For the years ended December 31, 2001, 2000,
and 1999, cash paid for related party insurance premiums and deductibles
amounted to $1,313,522, $729,434, and $532,586, respectively. The Company also
has long term notes payable to AIFE and ITE as described in Note 8.
The Company has notes payable due to its Chief Executive Officer, Chief
Financial Officer, and August Investment Partnership, an entity affiliated
through common ownership, as described in Note 7.
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
5. LEASES
The Company's administrative offices are at 1000 Colfax, Gary, Indiana.
The Company leases its administrative offices on a month to month basis for
$3,000 per month from Mr. Michael E. Kibler, President, Chief Executive Officer
and a director of the Company, and Mr. Harold Antonson, Treasurer, Chief
Financial Officer and a director of the Company.
In addition, the Company's subsidiaries lease office space and land in
Mississippi, Texas, Indiana, and Arkansas under operating leases ranging from
one to three years.
Rent expense under these operating leases was $227,000, $111,000 and
$69,000 for the years ended 2001,2000, and 1999 respectively.
Future commitments under these operating leases are as follows:
2002 $271,000
2003 156,000
2004 36,200
$463,000
6. BANK LINE OF CREDIT
The Company had a $5.5 million line of credit that matured on September 28,
2001. This revolving line of credit was amended effective October 15, 2001,
increasing the line to $7.0 million and extending the maturity date until
October 1, 2003. Advances under this revolving line of credit are limited to
70% of eligible accounts receivable. The interest rate is based upon certain
financial covenants and may range from prime to prime plus .5%. At December
31, 2001, the interest rate charged on this line of credit was prime plus .25%
(5.0%). The Company's accounts receivable, property, and other assets
collateralize advances under the agreement. Borrowings up to $1 million are
guaranteed by the Chief Executive Officer and Chief Financial Officer of the
Company. At December 31, 2001, the outstanding borrowings on this line of
credit were $6.8 million.
This line of credit is subject to termination upon various events of
default, including failure to remit timely payments of interest, fees and
principal, any adverse change in the business of the Company or failure to meet
certain financial covenants. Financial covenants include: minimum net worth
requirements, total debt service coverage ratio, capital expenditure
limitations, and prohibition of additional indebtedness without prior
authorization.
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
7. LONG-TERM DEBT
Long-term debt at December 31, 2001 and 2000 comprises:
2001 2000
Note payable to the Chief Executive Officer
And Chief Financial Officer, interest at prime
+ .75%, interest only payments required,
principal balance due October, 2003 $2,725,509 $3,042,075
Mortgage note payable to the Chief Executive
Officer and Chief Financial Officer collateralized
by land, interest at prime + .75%, interest only
payments required, principal balance due
July 2004 500,000 500,000
Note payable to August Investment Partnership,
interest at prime + .75%, interest only payments
required, principal balance due October 2003 250,000 250,000
Mortgage note payable to August Investment
Partnership, interest at prime + .75%, interest
only payments required, principal balance due
October 2003 100,000 100,000
Mortgage note payable to ITE,
Monthly payments of $2,850 including
Interest at 9% through March 2002 7,249 39,217
Mortgage note payable to AIFE,
monthly payments of $2,150 including
interest at 9% through March 2002 5,536 29,646
- ------------------------------------------------------------------------------
Subtotal - related party debt $3,588,294 $3,960,938
Equipment loan, collateralized by equipment,
monthly payments of $12,537 including interest
at prime plus 1% (5.75% at December 31, 2001)
through September, 2003 with a balloon payment
of $401,000 due in October 2003. 664,489 82,860
Note payable, IPF Cargo Insurance
monthly payments of $24,561.94 including
interest at 4.70% through August 2002 192,227 0
Note payable, cargo insurance premium financing,
monthly payments of $18,376 including
interest at 11% through September 2001 0 141,124
Equipment line (total availability under this line
is $300,000 until April 2002), collateralized by
equipment, interest rate at prime + 1%, principal
payment of $2,715(based on five year amortization of
principal balance)beginning in April 2002 through
September 2003 with a balloon payment of $114,000
due in October 2003. 162,912 0
Note payable, collateralized by equipment,
monthly payments of $2,077 including
interest at 9.55% through April 2004 51,936 70,899
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Other 0 3,181
--------- ---------
Total debt 4,659,858 4,259,002
Less current portion 399,190 232,792
--------- ---------
Total long-term debt $ 4,260,668 $ 4,026,210
========== =========
Interest expense on related party notes was approximately $280,000, $342,500,
and $261,000 for the years ended December 31, 2001, 2000, and 1999,
respectively.
Scheduled maturities of the long-term debt at December 31, 2000 are due as
follows:
2002 $ 399,190
2003 3,752,525
2004 508,143
$4,659,858
==========
8. INCOME TAXES
The composition of taxes on income (benefit) is as follows:
Current 2001 2000 1999
- --------- ----- ---- ----
Federal $397,000 $273,000 $140,000
State 70,000 48,000 25,000
Utilization of net operating loss (467,000) (321,000) (165,000)
carry-forward
Adjustment of valuation allowance (400,000) (800,000) 0
-----------------------------------------------------------------------------
Income tax expense (benefit) $(400,000) $(800,000) $ 0
-----------------------------------------------------------------------------
The Company and its subsidiaries file a consolidated federal income tax
return. Deferred income taxes consist of the following:
December 31, 2001 2000 1999
-----------------------------------------------------------------------------
Total deferred tax assets, relating
principally to net operating
loss carry-forwards $22,261,000 $22,728,000 $23,049,000
-----------------------------------------------------------------------------
22,216,000 22,728,000 23,049,000
Less valuation allowance (21,061,000) (21,928,000) (23,049,000)
-----------------------------------------------------------------------------
Total net deferred tax asset $ 1,200,000 $ 800,000 $ 0
-----------------------------------------------------------------------------
At December 31, 2001 and 2000, the Company has realized a net deferred tax
asset of $1,200,000 and $800,000, respectively as it is more likely than not
that this amount will be realized as a result of anticipated future taxable
income to be generated by the Company. Due to the uncertainty of realization, a
valuation allowance has been maintained for the remaining deferred tax asset at
December 31, 2001.
The Company has net operating loss carry-forwards of approximately $55
million at December 31, 2001. These carry-forwards are available to offset
taxable income in future years and substantially all of these carry-forwards
will expire in the years 2003 through 2010.
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
9. COMMITMENTS AND CONTINGENCIES
CAM Regional Transport and Laurel Mountain Leasing, Inc. two
unaffiliated entities, filed a complaint against the Company in 1994
which alleges breach of contract, claiming that Trailblazer
Transportation, Inc., a subsidiary of the Company which filed bankruptcy,
failed to abide by a purchase agreement entered into with CAM Regional
Transport, Inc. and Laurel Mountain Leasing, Inc. The complaint seeks
damages of $284,000 plus interest from November 1992.
The Company is currently involved in three additional lawsuits; one
of which is a class action lawsuit, as a result of an August 1999
incident in which a Carolina National Transportation, Inc. truck
overturned leaking chemicals. It is the Company's position that it is not
at fault. The Company contends that the materials inside the container
were improperly packaged by a third party, that the chemicals which
leaked were not harmful in nature, and that those persons alleging
injuries were not harmed. The Company is also involved in two other
lawsuits as a result of a chemical leak that occurred in a container
hauled by a Carolina National Transportation, Inc truck. It is the
Company's position that they are not at fault for this incident because
they are merely the shipper and a third party had the responsibility to
package the load for safe transportation. Should there be an unfavorable
outcome in either of these cases, the company's insurance carrier would
provide coverage for any potential loss in excess of $200,000 up to a
limit of $1,000,000.
At this time, the Company and its legal counsel are unable to assess
the outcome of these complaints. The Company intends to vigorously defend
itself in these matters.
The Company is involved in other litigation in the normal course of
its business. Management intends to vigorously defend these cases. In the
opinion of management, the litigation now pending will not have a
material adverse effect on the consolidated financial position of the
Company.
The Company has entered into an agreement with certain key employees
of Carolina National Transportation, Inc. ("Carolina"), a wholly owned
subsidiary of the Company, in which these employees will receive up to
40% ownership in Carolina. These key employees will earn the 40%
ownership interest in Carolina over a three year period beginning in the
year following which Carolina achieves positive retained earnings,
contingent upon certain restrictions (including continued employment at
Carolina) pursuant to the agreement. In 2001, Carolina achieved positive
retained earnings. As a result, the Company will incur total compensation
expense of $400,000 over the three-year vesting period. Beginning in
2002, a minority interest will be disclosed on the Company's financial
statements. Net income for Carolina was $486,000, $563,814 and $262,131
for the years ended 2001, 2000 and 1999, respectively.
The Company carries insurance for public liability and property
damage, and cargo loss and damage through various programs. The Company's
insurance liabilities are based upon the best information currently
available and are subject to revision in future periods as additional
information becomes available. Management believes it has adequately
provided for insurance claims.
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
10. ENVIRONMENTAL MATTERS
The Company owns a piece of property in Phoenix where soil
contamination problems exist. The Company has been working with
regulatory officials to eliminate new contamination sources and determine
the extent of existing problems. Estimates of the cost to complete the
future remediation of approximately $141,000 are considered in the land
valuation allowance at December 31, 2001 and 2000.
11. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
(In thousands, except per share data) Net
Net Income
Operating Operating Income (loss)
Revenue Income (loss) per share
(basic and diluted)
----------------------------------------------------------------------
2001
$72,110 $1,782 $1,568 $0.14
----------------------------------------------------------------------
Quarters:
Fourth 20,695 716 847 0.07
Third 18,427 429 318 0.03
Second 17,537 305 211 0.02
First 15,451 332 192 0.02
----------------------------------------------------------------------
2000
$49,055 $1,325 $1,602 $0.14
----------------------------------------------------------------------
Quarters:
Fourth 15,671 482 1,161 0.10
Third 12,761 324 189 0.02
Second 11,593 282 170 0.01
First 9,030 237 82 0.01
----------------------------------------------------------------------
1999
$32,334 $ 954 $412 $0.03
-------------------------------------------------------------------------
Quarters:
Fourth 8,666 261 185 0.02
Third 8,078 233 78 0.00
Second 8,198 279 106 0.01
First 7,392 181 43 0.00
-------------------------------------------------------------------------
In the fourth quarter of 2001, the company reduced its deferred tax
asset valuation allowance by $400,000.
US 1 INDUSTRIES, INC.
VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 1, 1998,1999 AND 2000
Schedule II
Balance At Charged to Write-Offs,
Beginning of Costs and Retirements & Balance At
Year Expenses Collection End of Year
____________ __________ _____________ ___________
Description
Year Ended December 31, 1999
Allowance for Doubtful Accounts
Receivable $ 95,000 $ 49,027 $ 77,027 $ 67,000
Year Ended December 31, 2000
Allowance for Doubtful Accounts
Receivable $ 67,000 $186,233 $ 44,233 $209,000
Year Ended December 31, 2001
Allowance for Doubtful Accounts
Receivable $209,000 $519,949 $204,949 $524,000
Item 9. Changes in and Disagreements with Accountants' on Accounting and
Financial Disclosure.
None.
PART III
Item 10. Directors and Executive Officers of the Registrant.
DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of the company as of March 15, 2001 were as follows
NAME AGE POSITION
- ---- --- --------
Michael E. Kibler 61 President, Chief Executive Officer,
and Director
Harold E. Antonson 62 Chief Financial Officer, treasurer,
and Director
Lex Venditti 49 Director
Robert I. Scissors 68 Director
Gage Blue 31 Director
Brad James 46 Director
Name Office and Experience
_____ _____________________
Michael E. Kibler Mr. Kibler is President and Chief Executive
Officer of the Company and has held these
positions since September 13, 1993. He also has
been President of Enterprise Truck Lines, Inc.,
an interstate trucking company engaging in
operations similar to the Company's, since 1972.
Harold E. Antonson Mr. Antonson is Chief Financial Officer of the
Company, a position he has held since March
1998. Mr. Antonson is a certified public
accountant. Prior to joining the Company, he
was Secretary/Treasurer of American
Inter-fidelity Exchange. Mr Antonson is also a
partner in August Investment Partnership. Mr.
Antonson was elected a director and Treasurer of
the Company in November 1999.
Lex Venditti Mr. Venditti has served as a Director of the
Company since 1993. Mr. Venditti has been the
General Manager of American Interfidelity, an
insurance reciprocal located in Indiana that is
the subject of an order of rehabilitation by the
Indiana Department of Insurance, since 1995.
Robert Scissors Mr. Scissors has been a Director of the Company
since 1993. Mr. Scissors began his career in
the Insurance Industry in 1957. Later, in
1982, Mr. Scissors joined a brokerage firm
called Alexander/Alexander where he worked until
retiring in 1992. Mr. Scissors currently serves
as an insurance consultant and broker.
Directors and Executive Officers of the Registrant (continued)
Gage Blue Mr. Blue was elected Director in 1999. Mr. Blue
is Vice President of Operations for Carolina
National, a subsidiary of US1 Industries, which
began operations in 1996. Mr. Blue has held the
position of Vice President of Operations since
December 1996.
Brad James Mr. James is the President of Seagate
Transportation Services, Inc. Mr. James
graduated from Bowling Green University with a
Bachelors Degree in Science in Business
Administration. He has been in the trucking
industry since 1977.
Mr. James was elected Director of the Company in
1999.
Item 11. Executive Compensation
The following Summary Compensation Table sets forth compensation paid by the
Company during the years ended December 31, 2001, 2000 and 1999 to its Chief
Executive Officer. No other officer earned in excess of $ 100,000.
Summary Compensation Table
Annual Compensation
Name and Position Year Salary Bonus Other
- ----------------- ---- ------ ----- -----
Michael Kibler 2001 33,048 0 0
President 2000 33,048 0 0
1999 33,048 0 0
Item 12. Security Ownership of Certain Beneficial Owners and Management.
Security Ownership of Management
The following table sets forth the number and percentage of shares of Common
Stock that as of March 15, 2001 are deemed to be beneficially owned by each
director of the company and director nominee, by each executive officer of the
Company and by all directors and executive officers of the company as a group
Number of Shares of
Common Stock
Name and position Beneficially Owned Percentage of Class
- ----------------- ------------------ -------------------
Michael E Kibler 3,489,507 (1,2) 32.9%
Director, President and
Chief Executive Officer
Robert I. Scissors, 36,770 0
Director
Lex L. Venditti 20,000 0
Director
Harold E. Antonson 3,489,507 (1,2,3 32.9%
Chief Financial Officer,
Treasurer and Director
All Directors and Executive
Officers 3,735,919 35.2%
(1) As partners of August Investment Partnership (AIP), Messrs. Kibler and
Antonson, may be deemed to be beneficial owners of 3,067,840 shares of
common stock owned by AIP
(2) As Director of Eastern Refrigerated Express Inc, )an entity under
common control) Messrs. Kibler, Antonson may be deemed to be beneficial
owner of 366,667 Shares of Common Stock owned by Eastern.
(3) Mr. Antonson disclaims beneficial ownership of 197,500 shares of Common
Stock owned by American Inter-Fidelity Exchange, of which Mr Antonson is
Secretary and Treasurer
Security Ownership of Certain Beneficial Owners
The following table sets forth the number and percentage of shares of
Common Stock beneficially owned as of March 15, 2001 by any person who is
known to the Company to be the beneficial owner of more than five percent
of the outstanding shares of Common Stock:
Number of Shares of
Name and Address of Common Stock Percentage
Beneficial Owner Beneficially Owned of Class
- ---------------- ------------------ --------
Harold E. Antonson 3,489,507 (1,2,3) 32.9%
8400 Louisiana Street
Merrillville, IN 46410
August Investment Partnership 3,067,840 28.9%
8400 Louisiana Street
Merrillville, IN 46410
Security Ownership of Certain Beneficial Owners and Management (continued)
Michael Kibler 3,489,507 (1,3) 33.0%
8400 Louisiana Street
Merrillville, IN 46410
John K. Lavery 3,438,507 (1,3) 32.4%
8400 Louisiana Street
Merrillville, IN 46410
(1) As partners of AIP, Messrs. Kibler, and Antonson, and Lavery may be deemed
to be beneficial owners of the shares of Common Stock owned by AIP.
(2) Mr. Antonson disclaims beneficial ownership of 197,500 shares of Common
Stock owned by American Inter-Fidelity Exchange, of which Mr. Antonson is
Secretary and Treasurer.
(3) As directors of Eastern Refrigerated Express, Inc. Messrs. Antonson,
Kibler and Lavery may be deemed to be beneficial owners of 366,667 shares
of Common Stock owned by Eastern.
Item 13. Certain Relationships and Related Transactions.
The company leases office space for its headquarters in Gary, Indiana,
for $3,000 per month from Michael E. Kibler, the president and Chief Executive
Officer and a director of the Company, and Harold E. Antonson, the Chief
Financial Officer, treasurer and a director of the Company. Messrs. Kibler and
Antonson own the property as joint tenants.
One of the Company's subsidiaries provides safety, management, and
accounting services to companies controlled by the President and Chief
Financial Officer of the Company. These services are priced to cover the cost
of the employees providing the services. Revenues related to those services
was approximately $67,000, $124,000 and $78,000 in 2001, 2000, and 1999,
respectively. $359,000 and $62,000 due from entities affiliated under common
ownership is included in other receivables in the Company's consolidated
financial statements at December 31, 2001 and 2000, respectively.
One of the Company's insurance providers, American Inter-Fidelity
Exchange (AIFE) is managed by a Director of the Company and the Company has an
investment in the Provider. In addition, the Director also manages an
affiliated insurance carrier, Indiana Truckers Exchange (ITE). For the years
ended December 31, 2001, 2000, and 1999 cash paid for related party insurance
premiums and deductibles amounted to $1,313,522, $729,434, and $532,586,
respectively. The Company also has long term notes payable to AIFE and ITE as
described in Note 8 to the consolidated financial statements.
The Company has notes payable due to its Chief Executive Officer, Chief
Financial Officer, and August Investment Partnership, an entity affiliated
through common ownership, as described in Note 7 to the consolidated financial
statements.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a)(1) Financial Statements:
Reports of Independent Certified Public Accountants 14
Consolidated Balance Sheets as of December 31, 2001
and 2000 15 and 16
Consolidated Statements of Income for the years ended 17
December 31, 2001, 2000, and 1999
Consolidated Statements of Shareholders' Deficiency 18
for the years ended December 31, 2001, 2000,and 1999
Consolidated Statements of Cash Flows 19
for the years ended December 31, 2001, 2000, and 1999
Notes to Consolidated Financial Statements 20 - 27
(a)(2) Financial Statement Schedules:
Schedule of Valuation and Qualifying Accounts 28
Other schedules are not included because of the absence of the conditions
under which they are required or because the required information is included
in the consolidated financial statements or notes thereto.
(a)(3) List of Exhibits
The following exhibits, numbered in accordance with Item 601 of
Regulation S-K, are filed as part of this report:
Exhibit 3.1 Articles of Incorporation of the Company. (incorporated herein
by reference to the Company's Proxy Statement of November 9, 1993).
Exhibit 3.2 By-Laws of the Company. (incorporated herein by reference to the
Company's Annual Report on Form 10-K for the year ended December 31,
1994).
Exhibit 10.1 Loan and Security Agreement with FIRSTAR and Carolina National
Transportation Inc., Keystone Lines, Inc., Gulfline Transport Inc.,
and US1 Industries, Inc.(by reference to the Company's Form 10-Q for
the quarterly period ended March 31, 2000 filed on May 22, 2000).
Exhibit 10.2 Loan agreements with August Investment Partnership and US 1
Industries.
Exhibit 10.3 Loan agreements with Michael Kibler/Harold Antonson and US 1
Industries.
Exhibit 10.4 First Amendment of Loan and Security Agreement with FIRSTAR and
Carolina National Transportation Inc., Keystone Lines, Gulfline
Transport Inc., and US1 Industries, Inc. (by reference to the
Company's Form 10-Q for the quarterly period ended June 30, 2000
filed on August 14, 2000)Loan agreements with AIFE/ITE and US 1
Industries.
Exhibit 10.5 Second Amendment of Loan and Security Agreement with FIRSTAR
and Carolina National Transportation Inc., Keystone Lines, Gulfline
Transport Inc., Five Star Transport, Inc., Cam Transport, Inc., and
US1 Industries, Inc. (by reference to the Company's Annual report on
Form 10-K for the year ended December 31, 2000).
Exhibit 10.6 Third Amendment of Loan and Security Agreement with FIRSTAR and
Carolina National Transportation Inc., Keystone Lines, Gulfline
Transport Inc., Five Star Transport, Inc., Cam Transport, Inc., and
US1 Industries, Inc. (by reference to the Company's Form 10-Q for
the quarterly period ended March 31, 2001 filed on May 15, 2001).
(a)(3) List of Exhibits (continued)
Exhibit 10.7 Third Amendment of Loan and Security Agreement with FIRSTAR and
Carolina National Transportation Inc., Keystone Lines, Gulfline
Transport Inc., Five Star Transport, Inc., Cam Transport, Inc., and
US1 Industries, Inc. (by reference to the Company's Form 10-Q for
the quarterly period ended September 30, 2001 filed on November 9,
2001).
b) Reports on Form 8-K
NONE
SIGNATURES
Pursuant to the requirements of Sections 13 and 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 there unto duly authorized.
US 1 INDUSTRIES, INC.
Date:_________________ By: _________________________
Michael E. Kibler
President & Chief Executive Officer
(Principal Executive Officer)
Date:_________________ By: _________________________
Harold Antonson
Chief Financial Officer & Treasurer
(Principal Financial &
Accounting Officer)
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.
Date:_________________ _________________________
Michael E. Kibler, Director
Date:_________________ _________________________
Robert I. Scissors, Director
Date:_________________ _________________________
Lex L. Venditti, Director
Date:_________________ _________________________
Gage Blue, Director
Date:_________________ _________________________
Brad James, Director
Date:_________________ _________________________
Harold Antonson, Director