The selected financial data set forth below should be read together with, and are qualified by reference to, the "Management's Discussion and Analysis of Financial condition and Results of Operations" section of this report and our audited consolidated financial statements and accompanying notes included elsewhere in this report.
- ---------- (a) The common stock equivalents for the year ended December 31, 2000 were 1,304,000. (b) The common stock equivalents for the years ended December 31, 1999, 1998, 1997 and 1996 were 745,000, 214,000, 62,000 and 17,000. The common stock equivalents for these shares were not included in the calculation of diluted income (loss) per common share because the effect would be antidilutive.
Pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, readers of this report are advised that this document contains both statements of historical facts and forward looking statements. Forward looking statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from those indicated by the forward looking statements. Examples of forward looking statements include, but are not limited to (i) projections of revenues, income or loss, earnings per share, capital expenditures, dividends, capital structure and other financial items, (ii) statements of our
plans and objectives with respect to business transactions and enhancement of shareholder value, (iii) statements of future economic performance, and (iv) statements of assumptions underlying other statements and statements about our business prospects.
This report also identifies important factors which could cause actual results to differ materially from those indicated by the forward looking statements. These risks and uncertainties include the factors discussed under the heading "Certain Factors That May Affect Future Growth" beginning at page 7 of this report.
In December 1995, we acquired the operating assets of Falk Finance Company ("FFC"), a Norfolk, Virginia based specialty financial services company for $5,125,000 in cash and the assumption of liabilities and debt approximating $34,000,000. As a result, we became a specialized consumer finance company that acquired and serviced automobile receivables from automobile dealers selling new and used vehicles to non-prime customers.
During 1999, we negotiated the termination of our executive office lease in Montvale, New Jersey and relocated to temporary space in Stamford, Connecticut as part of our continuing effort to reduce operating expenses and preserve corporate capital. Our main business focus became the challenge to seek out business opportunities in furtherance of our plan to rebuild the company and create shareholder value. These efforts were inhibited by our negative net worth and remaining subordinated debt of $9.3 million. Therefore, we commenced discussions with our noteholders regarding the restructuring of this debt to enhance the possibility of consummating a transaction to return the company to operating status and create shareholder value.
Sunteck, which was formed in 1997, is a full service third party transportation logistics provider. Its services include ground transportation coast to coast, local pick up and delivery, warehousing, air freight and ocean freight. Sunteck has developed strategic alliances with less than truckload (LTL), truckload, air, rail and ocean common carriers to service its customers' needs. Sunteck's personnel have in excess of forty years
On June 27, 2000, we received the approval of our Amended Disclosure Statement and Amended Plan of Reorganization (the "Plan") by the Bankruptcy Court.
On August 1, 2000, we announced that the Plan had been confirmed by the Honorable Adlai S. Hardin, Jr., United States Bankruptcy Judge to become effective, without further action by the Court, upon the closing of AutoInfo's merger with Sunteck Transport Co., Inc.
On December 7, 2000 we announced that we had secured new financing totaling $575,000 in the form of ten year 12% Convertible Debentures (the "Debentures") and had consummated the acquisition of Sunteck Transport Co., Inc. ("Sunteck"), in exchange for 10 million shares of AutoInfo Common Stock, pursuant to the Merger Agreement dated June 22, 2000. As a result, AutoInfo's Chapter 11 Reorganization Plan became effective. The $575,000 financing was provided by certain officers, directors and other parties and will be used as working capital to support planned business expansion. The Debentures are convertible into the Common Stock of the Company at the option of the debenture holder at a conversion price of $0.25 per share and are redeemable, at the option of the holder, after three years. Harry Wachtel, president of Sunteck, became president and chief executive officer of AutoInfo and William Wunderlich became executive vice president and chief financial officer. In addition, the board of directors was reconstituted to include Harry M. Wachtel (chairman), Mark Weiss, Thomas Robertson and Peter Einselen.
As described below, during 2000, we experienced operating results from our Sunteck business which were consistent with the results from the prior year.
Direct freight consisting primarily of delivery costs totaled $2,554,000 for the year ended December 31, 2000, as compared with $2,616,000 in the prior year.
Operating expenses totaled $599,000 for the year ended December 31, 2000, as compared with $537,000 in the prior year.
Loss (gain) on investments, primarily consisting of the gain or loss on the sale of marketable securities, totaled a loss of $11,000 for the year ended December 31, 2000 as compared with a gain of $50,000 in the prior year.
Revenues consisting of freight fees and other related services revenue totaled $3,457,000 for the year ended December 31, 1999, as compared with $2,388,000 in the prior year. The increase is the result of the business expansion of Sunteck.
Operating expenses totaled $537,000 for the year ended December 31, 1999 as compared with $334,000 in the prior year. The increase is the result of the business expansion of Sunteck.
The loss from discontinued operations was $1,109,000 for the year ended December 31, 1999 as compared with $13,624,000 in the prior year. During 1998, we ceased to operate as an automobile finance company. The loss from discontinued operations for the year ended December 31, 1999 consisted primarily of interest expense on our subordinated debt.
Net loss totaled $1,033,000 for the year ended December 31, 1999 as compared with a loss of $9,937,000 in the prior year. The decrease in the loss is related directly to the loss from discontinued operations for the year ended December 31, 1998.
Revenues consisting of freight fees and other related services revenue totaled $2,388,000 for the year ended December 31, 1998 as compared with $384,000 in the prior year. The increase is the result of the business expansion of Sunteck which was formed during the fourth quarter on 1997.
Commissions totaled $366,000 for the year ended December 31, 1998 as compared with $91,000 in the prior year. The increase is the result of the business expansion of Sunteck which was formed during the fourth quarter on 1997.
facility. The two off-balance sheet assets consisted a preferred stock investment in ComputerLogic, Inc. and an equity interest in a start-up corporation pursuing a roll-up transaction of new car dealerships. Our preferred stock investment in ComputerLogic was written off in May 1995 due to the poor financial condition of ComputerLogic and its failure to make timely dividend payments.
In December 2000, as a result of our acquisition of Sunteck, we became a full service third party transportation logistics provider. Our services include ground transportation coast to coast, local pick up and delivery, warehousing, air freight and ocean freight. We have strategic alliances with less than truckload (LTL), truckload, air, rail and ocean common carriers to service our customers' needs. The transportation industry is highly competitive and highly fragmented. Our primary competitors are other non-asset based as well as asset based third party logistics companies, freight brokers, carriers offering logistics services and freight forwarders. We also compete with customers' / shippers internal traffic / transportation departments as well as carriers internal sales and marketing departments directly seeking shippers' freight. We anticipate that competition for our services will continue to increase. Many of our competitors have substantially greater capital resources, sales and marketing resources and experience. We cannot assure you that we will be able to effectively compete with our competitors in effecting our business expansion plans.
Our operations to date have not been profitable. As of December 31, 2000, we had an accumulated deficit of $17.8 million. We expect to continue operating at a loss during the current fiscal year as we implement our new business plan. These losses are primarily attributable to costs associated with scaling up Sunteck's business as well as our general and administrative expenses. Other factors that could adversely affect our operating results include:
o the success of Sunteck in expanding its business operations; and
financing on terms acceptable to us when required, our ability to expand Sunteck's operations may be materially adversely affected.
At December 31, 2000, we had outstanding $575,000 of subordinated convertible debentures. The debentures are convertible into common stock at the option of the debenture holder at a conversion price of $0.25 per share and are redeemable, at the option of the holder, after December 31, 2003.
At December 31, 2000, we had liquid assets of approximately $941,000.
The response to this item is submitted as a separate section of this report beginning on page.