SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 12b-25
Commission File
Number 0-23210
NOTIFICATION OF LATE FILING
(Check One): [_] Form 10-K [_] Form 11-K [_] Form 20-F
[X] Form 10-Q [_] Form N-SAR
For Period Ended: September 30, 2001
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[_] Transition Report on Form 10-K
[_] Transition Report on Form 10-Q
[_] Transition Report on Form 20-F
[_] Transition Report on Form N-SAR
[_] Transition Report on Form 11-K
For the Transition Period Ended:
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Read attached instruction sheet before preparing form.
Please print or type.
Nothing in this form shall be construed to imply that the
Commission has verified any information contained herein.
If the notification relates to a portion of the filing
checked above, identify the Item(s) to which the notification
relates:
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PART I. REGISTRANT INFORMATION
Full name of registrant TRISM, Inc.
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Former name if applicable
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Address of principal executive office (STREET AND NUMBER)
4174 Jiles Road
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City, State and Zip Kennesaw, Georgia 30144
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PART II. RULE 12b-25(b) AND (c)
If the subject report could not be filed without
unreasonable effort or expense and the registrant seeks
relief pursuant to Rule 12b-25(b), the following should be
completed. (Check box if appropriate.)
(a) The reasons described in reasonable detail in
Part III of this form could not be eliminated
without unreasonable effort or expense;
[X] (b) The subject annual report, semi-annual report,
transition report on Form 10-K, 20-F, 11-K or
Form -SAR, or portion thereof will be filed on
or before the 15th calendar day following the
prescribed due date; or the subject quarterly
report or transition report on Form 10-Q, or
portion thereof will be filed on or before
the fifth calendar day following the prescribed
due date; and
(c) The accountant's statement or other exhibit
required by Rule 12b-25(c) has been attached
if applicable.
See Exhibit A
FORM 12b-25
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PART III. NARRATIVE
State below in reasonable detail the reasons why Form 10-K, 11-K,
20-F, 10-Q, N-SAR or the transition report portion thereof could
not be filed within the prescribed time period. (Attach extra
sheets if needed.)
For the quarter ended June 30, 2001 Form 10-Q could not be filed
within the prescribed time limit because of the substantial time
and attention of management required to collect data requested by
our bank group in order to obtain waivers of our debt covenants.
Futhermore, the Company's ability to timely file its Form 10-Q
has been adversely affected by continued changes in management
resulting from the resignations of the former Chief Executive
Officer and Chief Financial Officer in late October 2000 and the
resignation of the Corporate Controller in April 2001.
PART IV. OTHER INFORMATION
(1) Name and telephone number of person to contact in regard to
this notification
Thomas P. Krasner 770 795-4600
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(Name) (Area code) (Telephone number)
(2) Have all other periodic reports required under Section 13
or 15(d) of the Securities Exchange Act of 1934 or Section 30 of
the Investment Company Act of 1940 during the preceding 12 months
or for such shorter period that the registrant was required to
file such report(s) been filed? If the answer is no, identify
report(s).
[X] Yes [_] No
(3) Is it anticipated that any significant change in results of
operations from the corresponding period for the last fiscal year
will be reflected by the earnings statements to be included in
the subject report or portion thereof?
[X] Yes [_] No
If so: attach an explanation of the anticipated change, both
in narrative and quantitatively, and, if appropriate, state the
reasons why a reasonable estimate of the results cannot be made.
The Form 10-Q will be filed promptly following this Form 12b-25
for the reasons described above.
TRISM, Inc.
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(Name of registrant as specified in charter)
Has caused this notification to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: November 15, 2001 By /s/ Thomas P. Krasner
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Thomas P. Krasner,
Chairman and President
Instruction: The form may be signed by an executive officer
of the registrant or by any other duly authorized representative.
The name and title of the person signing the form shall be typed
or printed beneath the signature. If the statement is signed on
behalf of the registrant by an authorized representative (other
than an executive officer,) evidence of the representative's
authority to sign on behalf of the registrant shall be filed with
the form.
ATTENTION
Intentional misstatements or omissions of fact constitute
Federal criminal violations (see 18 U.S.C. 1001).
FORM 12b-25
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Exhibit A
Financial Results and Liquidity
The Company is presently in default of certain covenants related
to its Senior Subordinated Notes Due 2005 (the "New Notes") and
has not made interest payments relating to such notes which were
due March 15, 2001 and September 15, 2001. Under the terms of
the New Notes, the thirty-day grace period with respect to such
interest payments has passed and this constituted Events of
Default under the terms of the indenture pursuant to which the
New Notes were issued, which gives the noteholders the right to
accelerate the New Notes. The total arrearage as of November 14,
2001 is $4.7 million, including interest at 13% on the past due
amount. In addition, beginning in October 2000 the Company has
been in default of certain covenants relating to its revolving
credit facility (the "Revolver"). Since that time, the Company
has negotiated several forbearance agreements with the lender for
the Revolver, the terms of which have included payment of fees
totaling $1.1 million, in exchange for such forbearance, as well
as an increase in interest rates under the Revolver and a
reduction in borrowing capacity. The most recent forbearance
expires on November 30, 2001. The Company is presently
negotiating with its lender for a continued extension of the
forbearance agreements, however, such extension is not assured at
this time. The Company is also in technical default on certain
of its equipment debt and is several months behind in making
certain of its equipment debt payments. As a result, in July
2001, one lender repossessed thirteen of the two-hundred-forty
tractors which they financed. Partial payments have been made to
the lender and repossessions have been discontinued.
On March 9, 2001, the Company announced the Board of Directors
has engaged the Carreden Group, Inc., investment bankers located
in New York City, as financial advisor to explore strategic
alternatives. With the assistance of Carreden Group, the Company
is currently exploring alternative financing to replace the
Revolver and is also engaged in preliminary discussions with
potential purchasers of substantially all of the Company's assets
who have indicated their interests in pursuing such a
transaction. There can be no assurances that the Company will be
successful in accomplishing either of these objectives.
Moreover, the consummation of either of these alternatives may
require a restructuring of the Company's existing indebtedness.
In order to effect any such sale or restructuring of its
indebtedness, it may be necessary for the Company to file for
protection under Chapter 11 of the Bankruptcy Code.
On April 18, 2001, the Board of Directors authorized the
retention of Transport Management, a trucking management firm, to
assist in the management of the Company.
As a result of the continued decline in the profitability of the
general freight services, the Company has downsized the Heavy
Haul segment. To facilitate the downsizing, the Company
announced the closure of Trism Specialized Carriers ("TSC") on
August 22, 2001. TSC completed delivery of all shipments in
transit to their destination points. The Company will continue
some over-dimensional services in the Heavy Haul segment through
Tri-State Motor Transit Co. ("TSMT"), which also operates in the
Company's Secured Materials segment.
The Company is in the process of returning 892 tractors to
equipment lenders and selling 2,737 trailers with a carrying
value of $38.6 million and $20.9 million respectively as of
September 30, 2001. The majority of this equipment had been
operated by TSC. However, management has identified excess
equipment in the Secured Materials segment that has been included
in the above amounts. Trailers are being sold through an
equipment broker the Company has engaged and the proceeds will be
applied to the Revolver. Management estimates based on the
current market for used trailers, that the proceeds from such
sales will not be sufficient to recover the carrying value of the
trailers. As a result the Company has recorded an impairment loss
of approximately $1.2 million for trailers during the nine months
ended September 30, 2001. Tractors are being returned to the
equipment lenders for disposal and proceeds will be applied to
equipment debt. Management estimates based on the current market
for used tractors, that the proceeds from such sales will not be
sufficient to recover the carrying value of the tractors. As a
result, the Company recorded an impairment loss of approximately
$12.0 million for tractors during the nine months ended September
30, 2001. Based on the balance of equipment debt and the
application of the anticipated proceeds from the sale of such
tractors, the Company expects the remaining balance of the
equipment debt will be approximately $10.7 million. Proceeds
from these sales to date are $2.0 million.
FORM 12b-25
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Exhibit A, continued
Financial Results and Liquidity continued
In addition to the reduction in the fleet, the Company has also
reduced the number of driver and non-driver employees and is
closing fifteen leased terminal facilities. No payments or other
benefits were provided to severed employees except for accrued
vacation. With respect to the closed terminal facilities, the
Company has been able to exit lease agreements and management
does not anticipate any material liability.
In August 2001, the Company reached agreements in principle to
separately sell the two divisions of the Logistics segment, Trism
Logistics, Inc. ("TLI"), and Trism Intermodal Services, to former
officers of the Company. Declining revenues and shrinking
customer lists prompted these sales.
The sale of Trism Intermodal Services, which was completed on
August 20, 2001, resulted in the Company receiving $60,000 in
cash in exchange for the net assets, excluding accounts
receivable and accounts payable, of this business as of the
closing date, and recognizing a gain on the disposal of $3,000.
The operations of Trism Intermodal Services are included in
income from discontinued operations of Logistics segment for all
periods presented.
The sale of TLI, which was completed on August 31, 2001, resulted
in the Company receiving total consideration of $245,000 ($26,000
in cash and a release from $219,000 in severance payments from a
former officer) in exchange for the net assets, excluding
accounts receivable and accounts payable, of this business as of
the closing date, and recognizing a gain on the disposal of
$313,000. The operations of TLI are included in income from
discontinued operations of Logistics segment for all periods
presented.
The Board of Directors of the Company has determined that the
sale of these entities is fair to the Company and is on terms at
least as favorable to the Company as might reasonably have been
obtained at the present time from an unaffiliated party. No
member of the Board of Directors has a personal interest in the
sale.
The Company's headquarters in Kennesaw, Georgia has been listed
for sale. The property has been listed for sale at $5.9 million
as compared to a carrying value of $5.2 million. The Company has
also listed for sale other land and terminal facilities
throughout the country. These properties have been listed for
sale at $8.3 million as compared to a carrying value of $5.6
million. This property collateralizes the Revolver and the sale
proceeds will be used to reduce the Revolver.
The Company sold 160 acres of unimproved land in Joplin that was
listed for sale. The related sale price of $1.1 million and
carrying value of $0.5 million are not included in the above
amounts.
The following events occurred after September 30, 2001:
On October 4, 2001 and October 5, 2001, two of the Company's
tractors were involved in single motor vehicle incidents while
transporting materials for the Department of Defense. As a
consequence, the Department of Defense disqualified the Company
from picking up munitions effective 6:00 p.m. October 25, 2001.
The Department of Defense suspended this disqualification
effective 6:00 a.m. November 5, 2001.
On October 16, 2001, the Company accepted early payment a
$200,000 note receivable. The 10 year note for the sale of
property in Claremore, Oklahoma was settled in full for $185,000.
In November 2001, the Company advised The CIT Group/Business
Credit, Inc. and Fleet Capital Corporation, ("revolving credit
lenders") that the Collateral Borrowing Base Certificates that
are prepared and sent daily to the revolving credit lenders have
overstated collateral assets by an estimated $4.4 million. On
discovery of the misstatement, the Company took immediate action
to terminate the employment of the Treasurer, and to increase the
amount of borrowing base collateral by pledging additional
unencumbered real property assets to its revolving credit lenders
to bring the collateral borrowing base in line with its current
loan balance. The erroneous borrowing base certificate had no
effect on the Company's financial statements.
FORM 12b-25
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Exhibit A, continued
Financial Results and Liquidity continued
In November 2000, the Company purchased a premium-based insurance
policy against bodily injury and property damage with a $500,000
deductible per occurrence. As a result of this policy, insurance
costs have increased 48.3% from $2.9 million for the third
quarter 2000 to $4.3 million for the third quarter 2001. The
Company issued standby letters of credit in the amount of $9.3
million and collateralized an additional $5.4 million in the form
of restricted cash deposits at September 30, 2001 in respect of
their policies. Of the $9.3 million letters of credit, only $2.1
million remain outstanding as of September 30, 2001, $6.2
million was presented for payment, and $1.0 million was
cancelled. During the quarter ended September 30, 2001, the
Company's insurer for personal injury presented for payment a
$6.0 million letter of credit, which was collateral for the
Company's liability for the deductible portion of outstanding
claims, with which the insurance carrier has taken responsibility
for related outstanding claims. The Company believes there will
be no liability associated with outstanding claims. Insurance
liability for claims was reduced by the amount of associated
claims. On October 31, 2001, the Company obtained financing for
insurance coverage for the Company's operations for a twelve
month period beginning November 1, 2001 through October 31, 2002.
Existing credit facilities are not expected to be sufficient to
cover liquidity requirements for the next twelve months and the
Company is facing the prospect of not having adequate funds to
operate its business. Due to a number of uncertainties, many of
which are outside the control of the Company, there can be no
assurance that additional credit facilities can be arranged or
that any long term restructuring can be successfully initiated or
implemented, in which case the Company may be compelled to file
for protection under Chapter 11 or to liquidate under Chapter 7
of the Bankruptcy Code. Moreover, it may be necessary for the
Company to file under Chapter 11 to implement any consensually
negotiated restructuring of its indebtedness or a sale of the
Company as discussed above.
These matters raise substantial doubt about the Company's ability
to continue as a going concern. The Company's continued existence
is dependent on several factors, including the Company's ability
to overcome the operational and liquidity issues discussed above.
The Company's consolidated financial statements for the three and
nine months ended September 30, 2001 and for the year ended
December 31, 2000 do not include any adjustments that might
result from the outcome of this uncertainty.
As previously discussed, management is exploring alternative
financing structures and has also engaged in preliminary
discussions with potential purchasers of some or all of the
Company's assets. In order to effect a refinancing or sale,
management has begun to implement a business plan that can
significantly improve operating results. To date, management
has, among other things, significantly reduced the size of its
Heavy Haul segment by shedding unprofitable volume and focusing
its efforts in this segment on a regionalized, as opposed to a
national, basis, attempted to concentrate on the Secured
Materials segment, a niche market which management believes is a
core capability of the Company, and has sold the logistics
segment. With this downsizing, the Company has (1) eliminated
unnecessary personnel, (2) focused on other cost containment
initiatives, (3) started to dispose of excess fleet and other
property, the proceeds from which have been utilized to reduce
debt and (4) closed certain unneeded terminal facilities. The
continued support of the Company's vendors, customers, lenders,
stockholders and employees will continue to be key to the
Company's future success.