Cannon express closes its doors

Arkansas Business, May 17, 2004

Dean Cannon, former president and CEO of Cannon Express Inc., said the Springdale-based trucking firm dosed its doors for good on April 30. "They lost their financing source," Cannon said, referring to Arizona Diversified Equity of Phoenix, which acquired 62 percent interest in Cannon Express in May 2003 and was still primary owner. Cannon Express filed for Chapter 11 bankruptcy protection on Dec. 9, listing $33.6 million in secured debts and less than $50,000 in assets.

International Truck and Engine Corp. "confiscated" its truck tractors from the Cannon F2cpress headquarters over the weekend of May 1-2, Cannon said. The bankruptcy filing indicates Cannon Express had 219 tractors financed by International. Cannon Express had a total of 244 trucks at the time of its bankruptcy filing.

In 2002, Cannon Express hired CFOex Inc., a transportation management company in Knoxville, Tenn., as an adviser to try to turn the troubled trucking company around.

"That was the biggest mistake I ever made," Cannon said.

Cannon resigned from the company upon CFOex's recommendation.

Dean Cannon still owns the land and buildings, appraise for $1.3 million, where the company was headquartered on U.S. Highway 412. The tenant, Cannon Express, quickly vacated the buildings on April 30.

Cannon Express started losing money after Wal-Mart Stores Inc. decided in 1997 to bid out its $1.5 billion annual outside trucking business. In 1997, transporting goods for Wal-Mart accounted for =51 percent of Cannon Express' $106 million in annual revenue.

Since then, Cannon Express had a net loss of $487,000 in 1999, net income of $520,000 in 2000, a net loss of $7.3 million in 2001 and a loss of $12.2 million in 2002.

--Northwest Arkansas Business Journal