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SECURITIES AND EXCHANGE
COMMISSION FORM 10-QQUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d)
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| Delaware | 13-3467669 | |
| (State of other
jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) |
| 211 College Road East, Princeton, New Jersey | 08540 | |||
| (Address of principal executive office) | (Zip Code) |
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(609) 452-8900
As of September 17, 2002, 27,361,252 shares of common stock, $.001 par value were outstanding. Indicate by check |X| 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 for the past 90 days
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INTERPOOL, INC. AND SUBSIDIARIESINDEX |
| Page No. | |
| Part I — Financial Information: | |
| Introduction to Financial Statements | 3 |
| Condensed Consolidated Balance Sheets | |
| June 30, 2002 and December 31, 2001 | 4 |
| Condensed Consolidated Statements of Income | |
| For the Three Months and Six Months ended June 30, 2002 and 2001 | 5 |
| Condensed Consolidated Statements of Cash Flows | |
| For the Six Months ended June 30, 2002 and 2001 | 6 |
| Condensed Consolidated Statements of Changes in Stockholders’ Equity | |
| For the Year Ended December 31, 2001 and the Six Months ended June 30, 2002 | 7 |
| Notes to Condensed Consolidated Financial Statements | 8 - 22 |
| Management’s Discussion and Analysis of | |
| Financial Condition and Results of Operations | 23 - 31 |
| Part II — Other Information: | |
| Item 4: Submission of Matters to a Vote of Security Holders | 32 |
| Item 6: Exhibits and Reports on Form 8-K | 32 |
| Signatures | 33 |
| Certifications | 34-35 |
| Exhibits | 36 |
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PART I — FINANCIAL INFORMATIONINTERPOOL, INC. AND SUBSIDIARIESFINANCIAL STATEMENTSThe condensed consolidated financial statements of Interpool, Inc. and Subsidiaries (the “Company”) included herein have been prepared by the registrant, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Registrant believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and the notes thereto included in the Company’s latest Annual Report on Form 10-K. These condensed consolidated financial statements reflect, in the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the results for the interim periods. The results of operations for such interim periods are not necessarily indicative of the results for the full year. 3 |
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INTERPOOL, INC. AND SUBSIDIARIES |
| ASSETS |
June 30, 2002 |
December
31, 2001 |
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| (Unaudited) | ||||||
| CASH AND SHORT-TERM INVESTMENTS | $ | 147,909 | $ | 102,189 | ||
| MARKETABLE SECURITIES, at fair value | 1,958 | 638 | ||||
| ACCOUNTS AND NOTES RECEIVABLE, less allowance of $9,101 and | ||||||
| $5,862 respectively | 59,312 | 45,156 | ||||
| NET INVESTMENT IN DIRECT FINANCING LEASES | 232,687 | 229,239 | ||||
| OTHER RECEIVABLES, net | 43,546 | 63,169 | ||||
| LEASING EQUIPMENT, net of accumulated depreciation and amortization of | ||||||
| $446,188 and $322,702, respectively | 1,588,536 | 1,372,326 | ||||
| OTHER INVESTMENT SECURITIES, at fair value | 11,510 | 15,970 | ||||
| OTHER ASSETS | 81,046 | 79,078 | ||||
| ASSETS RELATED TO DISCONTINUED OPERATIONS | 5,030 | 10,020 | ||||
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| TOTAL ASSETS | $ | 2,171,534 | $ | 1,917,785 | ||
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| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
| ACCOUNTS PAYABLE AND ACCRUED EXPENSES | $ | 128,599 | $ | 80,683 | ||
| INCOME TAXES: | ||||||
| Current | 100 | 353 | ||||
| Deferred | 35,966 | 29,890 | ||||
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| 36,066 | 30,243 | |||||
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| DEFERRED INCOME | 1,262 | 766 | ||||
| DEBT AND CAPITAL LEASE OBLIGATIONS | ||||||
| Due within one year | 174,619 | 179,664 | ||||
| Due after one year | 1,345,681 | 1,155,646 | ||||
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| 1,520,300 | 1,335,310 | |||||
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| LIABILITIES RELATED TO DISCONTINUED OPERATIONS | 1,877 | 6,072 | ||||
| COMPANY-OBLIGATED MANDATORILY REDEEMABLE PREFERRED | ||||||
| SECURITIES IN SUBSIDIARY GRANTOR TRUSTS (holding solely junior | ||||||
| Subordinated Deferrable interest debentures of the Company) (75,000 shares | ||||||
| 9-7/8% Capital Securities outstanding, liquidation preference $75,000) | 75,000 | 75,000 | ||||
| MINORITY INTEREST IN EQUITY OF SUBSIDIARIES | 34,872 | 27,247 | ||||
| STOCKHOLDERS’ EQUITY: | ||||||
| Common stock, par value $.001 per share; 100,000,000 shares authorized, | ||||||
| 27,579,952 issued at June 30, 2002 and December 31, 2001 | 28 | 28 | ||||
| Additional paid-in capital | 124,184 | 124,184 | ||||
| Treasury
stock, at cost, 218,700 at June 30, 2002 and 216,600 at December 31, 2001 |
(2,139 | ) | (2,099 | ) | ||
| Retained earnings | 269,022 | 255,154 | ||||
| Accumulated other comprehensive loss, net of taxes | (17,537 | ) | (14,803 | ) | ||
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| Total stockholders’ equity | 373,558 | 362,464 | ||||
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| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 2,171,534 | $ | 1,917,785 | ||
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The accompanying notes to consolidated financial statements are an integral part of these balance sheets. 4 |
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INTERPOOL, INC. AND
SUBSIDIARIES |
| Three
Months Ended June 30, |
Six
Months Ended June 30, |
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| 2002 | 2001 | 2002 | 2001 | |||||||||
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| REVENUES | $ | 74,426 | $ | 77,653 | $ | 147,317 | $ | 154,121 | ||||
| COST AND EXPENSES: | ||||||||||||
| Lease operating and administrative expenses | 20,848 | 23,185 | 40,379 | 45,090 | ||||||||
| Provision for doubtful accounts | 826 | 642 | 1,647 | 1,355 | ||||||||
| Market value adjustment for derivative instruments | 2,702 | (35 | ) | 2,052 | 835 | |||||||
| Depreciation and amortization of leasing equipment | 17,456 | 17,963 | 37,767 | 36,732 | ||||||||
| Loss for investments accounted for under the equity method | 3,088 | 69 | 3,736 | 164 | ||||||||
| Other (income)/expense, net | (3,658 | ) | 315 | (5,235 | ) | (1,394 | ) | |||||
| Interest expense | 28,412 | 23,729 | 51,758 | 48,318 | ||||||||
| Interest income | (1,464 | ) | (2,573 | ) | (3,536 | ) | (5,252 | ) | ||||
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| 68,210 | 63,295 | 128,568 | 125,848 | |||||||||
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| Income from continuing operations before provision for income | ||||||||||||
| taxes, results from discontinued operations, cumulative | ||||||||||||
| effect of change in accounting principle and extraordinary | ||||||||||||
| gain | 6,216 | 14,358 | 18,749 | 28,273 | ||||||||
| PROVISION FOR INCOME TAXES | 47 | 2,150 | 1,177 | 5,030 | ||||||||
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| Income from continuing operations before results from | ||||||||||||
| discontinued operations, cumulative effect of change in | ||||||||||||
| accounting principle and extraordinary gain | 6,169 | 12,208 | 17,572 | 23,243 | ||||||||
| Loss from discontinued operations, net of applicable | ||||||||||||
| taxes of $525, $472 and $505 | — | (785 | ) | (710 | ) | (818 | ) | |||||
| Cumulative effect of change in accounting principle, net of | ||||||||||||
| applicable taxes of $44 | — | — | — | 833 | ||||||||
| Extraordinary gain on debt retirements, net of applicable taxes | ||||||||||||
| of $13 and $ 172 | 19 | 257 | 19 | 257 | ||||||||
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| NET INCOME | $ | 6,188 | $ | 11,680 | $ | 16,881 | $ | 23,515 | ||||
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| INCOME PER SHARE FROM CONTINUING OPERATIONS | ||||||||||||
| BEFORE RESULTS FROM DISCONTINUED OPERATIONS, | ||||||||||||
| CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING | ||||||||||||
| PRINCIPLE AND EXTRAORDINARY GAIN: | ||||||||||||
| Basic | $ | 0.23 | $ | 0.45 | $ | 0.64 | $ | 0.85 | ||||
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| Diluted | $ | 0.21 | $ | 0.42 | $ | 0.60 | $ | 0.80 | ||||
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| LOSS FROM DISCONTINUED OPERATIONS: | ||||||||||||
| Basic | $ | 0.00 | ($ 0.03 | ) | ($ 0.03 | ) | ($ 0.03 | ) | ||||
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| Diluted | $ | 0.00 | ($ 0.03 | ) | ($ 0.02 | ) | ($ 0.03 | ) | ||||
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| CUMULATIVE
EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE: |
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| Basic | N/A | N/A | N/A | $ | 0.03 | |||||||
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| Diluted | N/A | N/A | N/A | $ | 0.03 | |||||||
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| EXTRAORDINARY GAIN: | ||||||||||||
| Basic | $ | 0.00 | $ | 0.01 | $ | 0.00 | $ | 0.01 | ||||
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| Diluted | $ | 0.00 | $ | 0.01 | $ | 0.00 | $ | 0.01 | ||||
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| NET INCOME PER SHARE: | ||||||||||||
| Basic | $ | 0.23 | $ | 0.43 | $ | 0.62 | $ | 0.86 | ||||
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| Diluted | $ | 0.21 | $ | 0.41 | $ | 0.57 | $ | 0.82 | ||||
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| WEIGHTED
AVERAGE SHARES OUTSTANDING (in thousands): |
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| Basic | 27,361 | 27,421 | 27,361 | 27,421 | ||||||||
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| Diluted | 29,639 | 28,750 | 29,443 | 28,936 | ||||||||
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The accompanying notes to consolidated financial statements are an integral part of these statements. 5 |
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INTERPOOL, INC. AND
SUBSIDIARIES |
| Six
Months Ended June 30, |
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| 2002 | 2001 | |||||
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| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
| Net income | $ | 16,881 | $ | 23,515 | ||
| Adjustments
to reconcile net income to net cash provided by operating activities — |
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