-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BQ6roPQP2TTi/7ju7abUziNhq9Jy4eBNRwzqskfA5jL0f1qtqd+oUi+eS99OvFbw ybw5i4kkpYkfaVoI9zIvAg== 0000719271-97-000026.txt : 19970807 0000719271-97-000026.hdr.sgml : 19970807 ACCESSION NUMBER: 0000719271-97-000026 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970806 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRANSFINANCIAL HOLDINGS INC CENTRAL INDEX KEY: 0000719271 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 460278762 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-12070 FILM NUMBER: 97652418 BUSINESS ADDRESS: STREET 1: 8245 NIEMAN ROAD, STE 100 STREET 2: SUITE 100 CITY: LENEXA STATE: KS ZIP: 66214 BUSINESS PHONE: (913)859-0055X262 MAIL ADDRESS: STREET 1: 8245 NIEMAN ROAD STREET 2: SUITE 100 CITY: LENEXA STATE: KS ZIP: 66214 FORMER COMPANY: FORMER CONFORMED NAME: ANUHCO INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN CARRIERS INC DATE OF NAME CHANGE: 19910812 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1997 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 0-12321 TRANSFINANCIAL HOLDINGS, INC. (Exact name of Registrant as specified in its charter) Delaware 46-0278762 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 8245 Nieman Road, Suite 100 Lenexa, Kansas 66214 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (913) 859-0055 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 the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at August 1, 1997 Common stock, $0.01 par value 6,153,110 Shares PART I. FINANCIAL INFORMATION Item 1. Financial Statements TRANSFINANCIAL HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED JUNE 30, (In thousands, except per share amounts) (Unaudited)
1997 1996 Operating Revenues.......................................................... $ 32,775 $ 28,345 Operating Expenses.......................................................... 31,710 27,919 Operating Income............................................................ 1,065 426 Nonoperating Income (Expense) Interest income.......................................................... 172 217 Other.................................................................... 43 (8) Total nonoperating income (expense).................................. 215 209 Income Before Income Taxes.................................................. 1,280 635 Income Tax Provision........................................................ 576 273 Net Income.................................................................. $ 704 $ 362 Average Common Shares Outstanding (Note 5).................................. 6,320 6,892 Net Income Per Share........................................................ $ 0.11 $ 0.05 The accompanying notes to consolidated financial statements are an integral part of these statements.
TRANSFINANCIAL HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, (In thousands, except per share amounts) (Unaudited)
1997 1996 Operating Revenues.......................................................... $ 64,164 $ 53,561 Operating Expenses.......................................................... 62,165 52,941 Operating Income............................................................ 1,999 620 Nonoperating Income (Expense) Interest income.......................................................... 390 608 Other.................................................................... 40 26 Total nonoperating income (expense).................................. 430 634 Income Before Income Taxes.................................................. 2,429 1,254 Income Tax Provision........................................................ 1,093 539 Net Income.................................................................. $ 1,336 $ 715 Average Common Shares Outstanding (Note 5).................................. 6,347 7,014 Net Income Per Share........................................................ $ 0.21 $ 0.10 The accompanying notes to consolidated financial statements are an integral part of these statements.
TRANSFINANCIAL HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands)
JUNE 30, DECEMBER 31, 1997 1996 ASSETS (Unaudited) Current Assets: Cash and temporary cash investments...................................... $ 6,097 $ 9,021 Short-term investments................................................... 6,996 9,957 Freight accounts receivable, less allowance for doubtful accounts of $441 and $419, respectively................. 11,190 9,233 Finance accounts receivable, less allowance for doubtful accounts of $464 and $769, respectively................. 16,199 14,554 Current deferred tax assets.............................................. 474 618 Other current assets..................................................... 2,549 1,965 AFS net assets (Note 6).................................................. 7,793 7,570 Total current assets................................................. 51,298 52,918 Operating Property, at Cost: Revenue equipment........................................................ 26,457 24,373 Land..................................................................... 3,585 3,489 Structures and improvements.............................................. 10,301 10,087 Other operating property................................................. 6,079 5,328 46,422 43,277 Less accumulated depreciation........................................ (21,194) (19,887) Net operating property........................................... 25,228 23,390 Intangibles, net of accumulated amortization ............................... 9,174 9,497 Other Assets................................................................ 3,289 1,007 $ 88,989 $ 86,812 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable......................................................... $ 3,006 $ 2,980 Accrued payroll and fringes.............................................. 6,810 5,533 Claims and insurance accruals............................................ 251 246 Accrued income taxes..................................................... 331 -- Other accrued expenses................................................... 1,643 2,289 Total current liabilities............................................ 12,041 11,048 Deferred Income Taxes....................................................... 1,661 1,203 Other Non-Current Liabilities............................................... 461 -- Shareholders' Equity (Note 5) Preferred stock with $0.01 par value, authorized 1,000,000 shares, none outstanding..................................................... -- -- Common stock with $0.01 par value, authorized 13,000,000 shares, issued 7,614,670 and 7,605,570 shares, respectively.................. 76 76 Paid-in capital.......................................................... 5,572 5,529 Retained earnings........................................................ 80,578 79,242 Treasury stock, 1,354,712 and 1,224,661 shares, respectively, at cost.... (11,400) (10,286) Total shareholders' equity........................................... 74,826 74,561 $ 88,989 $ 86,812 The accompanying notes to consolidated financial statements are an integral part of these statements.
TRANSFINANCIAL HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, (In thousands) (Unaudited)
1997 1996 Cash Flows From Operating Activities Net income.......................................................... $ 1,336 $ 715 Adjustments to reconcile net income to cash provided by operating activities Gain on sale of operating property, net......................... (47) (41) Depreciation and amortization................................... 2,212 1,678 Provision for credit losses..................................... 403 364 Deferred tax provision.......................................... 602 136 Net increase (decrease) from change in other working capital items affecting operating activities........... (1,793) (247) 2,713 2,605 Cash Flows From Investing Activities Purchase of finance subsidiaries (Note 2)........................... -- (11,979) Purchase of operating property...................................... (5,441) (3,998) Origination of finance accounts receivable.......................... (63,229) (53,556) Sale of finance accounts receivable................................. 41,263 20,885 Collection of owned finance accounts receivable..................... 19,978 32,444 Purchases of short-term investments................................. (6,868) (10,515) Maturities of short-term investments................................ 9,829 27,298 (4,468) 579 Cash Flows From Financing Activities Payments to acquire treasury stock.................................. (1,114) (4,385) Borrowings (repayments) on credit agreements, net................... -- 522 Other............................................................... (55) 135 (1,169) (3,728) Net Increase (Decrease) in Cash and Temporary Cash Investments........ (2,924) (544) Cash and Temporary Cash Investments at beginning of period............ 9,021 6,617 Cash and Temporary Cash Investments at end of period.................. $ 6,097 $ 6,073 Cash Paid During the Period for Interest............................................................ $ -- $ 534 Income Tax.......................................................... $ 27 $ 12 The accompanying notes to consolidated financial statements are an integral part of these statements.
TRANSFINANCIAL HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (In thousands)
Total Share Common Paid-In Retained Treasury holders' Stock Capital Earnings Stock Equity Balance at December 31, 1995.................. $ 76 $ 5,357 $ 78,390 $ (3,543) $ 80,280 Net income.................................... -- -- 852 -- 852 Issuance of shares under Incentive Stock Plan -- 172 -- (87) 85 Purchase of 797,341 shares of common stock.... -- -- -- (6,656) (6,656) Balance at December 31, 1996.................. 76 5,529 79,242 (10,286) 74,561 Net income.................................... -- -- 1,336 -- 1,336 Issuance of shares under Incentive Stock Plan. -- 43 -- -- 43 Purchase of 130,051 shares of common stock.... -- -- -- (1,114) (1,114) Balance at June 30, 1997 (unaudited).......... $ 76 $ 5,572 $ 80,578 $(11,400) $ 74,826 The accompanying notes to consolidated financial statements are an integral part of these statements.
TRANSFINANCIAL HOLDINGS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. PRINCIPLES OF CONSOLIDATION The consolidated financial statements include TransFinancial Holdings, Inc. ("TransFinancial") and all of its subsidiary companies (the "Company"). Pursuant to the approval of shareholders the Company changed its name from Anuhco, Inc. to TransFinancial Holdings, Inc. effective June 30, 1997. All significant intercompany accounts and transactions have been eliminated in consolidation. The condensed financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and have not been examined or reviewed by independent public accountants. In the opinion of management, all adjustments necessary to fairly present the results of operations have been made. Pursuant to SEC rules and regulations, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted from these statements unless significant changes have taken place since the end of the most recent fiscal year. TransFinancial believes that the disclosures contained herein, when read in conjunction with the financial statements and notes included, or incorporated by reference, in TransFinancial's Form 10-K/A-3, filed with the SEC on May 5, 1997, are adequate to make the information presented not misleading. It is suggested, therefore, that these statements be read in conjunction with the statements and notes included, or incorporated by reference, in the aforementioned report on Form 10-K/A-3. 2. ACQUISITION OF PREMIUM FINANCE SUBSIDIARIES On March 29, 1996, TransFinancial completed the acquisition of all of the issued and outstanding stock of Universal Premium Acceptance Corporation and UPAC of California, Inc. (together referred to as "UPAC"). UPAC and Agency Premium Resource, Inc. ("APR"), the Company's other finance subsidiary, offer short-term collateralized financing of commercial and personal insurance premiums through approved insurance agencies throughout the United States. At March 31, 1996, UPAC had outstanding net finance receivables of approximately $30 million. This transaction was accounted for as a purchase. TransFinancial utilized a portion of its available cash and short-term investments to consummate the purchase at a price of approximately $12 million. The terms of the acquisition and the purchase price resulted from negotiations between TransFinancial and William H. Kopman, the former sole shareholder of UPAC. In connection with the purchase of UPAC, the Company has recorded goodwill of $6.6 million, which is being amortized on the straight-line basis over 25 years. In addition to the Stock Purchase Agreement by which TransFinancial acquired all of the UPAC stock, the Company entered into a consulting agreement with Mr. Kopman. Under the consulting agreement, Anuhco is entitled to consult with Mr. Kopman on industry developments as well as UPAC operations through December 31, 1998. In addition to retaining the services of Mr. Kopman under a consulting agreement, certain executive management personnel of UPAC were retained under multiyear employment agreements. The unaudited pro forma operating results of TransFinancial for the six months ended June 30, 1996, assuming the acquisition occurred as of the beginning of the period, were operating revenues of $54,794,000, net income of $700,000, and net income per share of $0.10. The pro forma results of operations are not necessarily indicative of the actual results that would have been obtained had the acquisition been made at the beginning of the period, or of results which may occur in the future. 3. PROFIT SHARING In September 1988, the employees of Crouse Cartage Company ("Crouse"), a wholly owned subsidiary of TransFinancial, approved the establishment of a profit sharing plan ("the Plan"). The Plan is structured to allow all employees (union and non-union) to ratably share 50% of Crouse's income before income taxes (excluding extraordinary items and gains or losses on the sale of assets) in return for a 15% reduction in their wages. Plan distributions are made on a quarterly basis. The Plan was recertified in 1991 and 1994, and shall continue in effect through March 31, 1998, or until a replacement of the Collective Bargaining Agreement is reached between the parties, whichever is the later. The accompanying consolidated balance sheets as of June 30, 1997 include an accrual for profit sharing costs of $1,047,000. The accompanying consolidated statements of income include profit sharing costs of $1,047,000 and $724,000 for the second quarter of 1997 and 1996, respectively, and $1,826,000 and $1,189,000 for the first six months of 1997 and 1996, respectively. 4. FINANCING AGREEMENTS In December, 1996, TransFinancial, UPAC and APR Funding Corporation (a wholly- owned subsidiary) entered into an extendible three year securitization agreement whereby undivided interests in a designated pool of accounts receivable can be sold on an ongoing basis. The maximum allowable amount of receivables to be sold under the agreement is $50,000,000. This agreement replaced a similar securitization agreement with another financial institution that was entered into in October, 1995 and UPAC's secured credit agreement, dated July, 1994. The purchaser permits principal collections to be reinvested in new financing agreements. The Company had securitized receivables of $35.2 million at June 30, 1997. The cash flows from the sale of receivables are reported as investing activities in the accompanying consolidated statement of cash flows. The securitized receivables are reflected as sold in the accompanying balance sheet. The proceeds from the initial securitization of the receivables were used to purchase previous securitized receivables under the prior agreement and to pay off the secured note payable under UPAC's secured credit agreement. The terms of the agreement require UPAC to maintain a minimum tangible net worth of $5 million and contain restrictions on the payment of dividends by UPAC to TransFinancial without prior consent of the financial institution. The terms of the agreement also require the Company to maintain a minimum tangible net worth of $50 million. The Company was in compliance with all such provisions at June 30, 1997. The terms of the securitization agreement also require that UPAC maintain a default reserve at specified levels which serves as collateral. At June 30, 1997, approximately $4.9 million of owned finance receivables served as collateral under the default reserve provision. Effective January 1, 1997, the Company adopted the requirements of Statement of Financial Accounting Standards No. 125 ("SFAS No. 125"), "Accounting for the Transfers and Servicing of Financial Assets and Extinguishment of Liabilities," for transfers occurring after December 31, 1996. The adoption of SFAS No. 125 did not have a material impact on the net income of the Company. In September 1988, Crouse entered into a multi-year credit agreement with a commercial bank which provided for maximum borrowings equaling the lesser of $2,500,000 or the borrowing base, as defined in such agreement. In September, 1996 the term of this agreement was extended to June 30, 1998. There was no outstanding balance on this revolving line of credit at June 30, 1997. 5. SHAREHOLDERS' EQUITY Income per share is based on the average number of common shares outstanding during each period. The average number of common shares so computed was 6,319,699 and 6,891,740 for the quarters ended June 30, 1997 and 1996, respectively, and 6,347,201 and 7,013,878 for the first six months of 1997 and 1996, respectively. On June 26, 1995, the Company adopted a program to repurchase up to 10% of its outstanding shares of common stock. During the second quarter of 1996, the Company completed this initial repurchase program and expanded the number of shares authorized to be repurchased by an additional 10% of its then outstanding shares. During the second quarter and first six months of 1997, the Company repurchased an additional 105,051 shares and 130,051 shares of common stock, respectively, bringing the total shares repurchased to 1,344,492 shares, or 17.8% of outstanding shares before initiating the program, at a total cost of $11,314,000. On June 26, 1997, the shareholders of the Company approved a 1-for-100 reverse stock split followed by a 100-for-1 forward stock split. These stock splits were effected on July 1, 1997. The result of this transaction was the cancellation of approximately 107,000 shares of common stock held by holders of fewer than 100 shares at a market price of $8.89 per share. 6. AFS NET ASSETS Under the provisions of a Joint Plan of Reorganization ("the Joint Plan"), AFS is responsible for the administration of pre-July 12, 1991 creditor claims and conversion of assets owned before that date. As claims were allowed and cash was available, distributions to the creditors occurred. The Joint Plan also provided for distributions to TransFinancial as unsecured creditor distributions occurred in excess of 50% of allowed claims. TransFinancial also will receive the full benefit of any remaining assets of AFS through its ownership of AFS stock, after unsecured creditors received distributions, including interest, equivalent to 130% of their claims. AFS has made the full payment of all its resolved claims and liabilities. The remaining AFS net assets are estimated to have net realizable value of $9.8 million. The primary assets include approximately $6.6 million in cash and investments. There are no material claims outstanding as of June 30, 1997. The remaining AFS assets are recorded at their estimated net realizable value. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS Second quarter and six months ended June 30, 1997 compared to the second quarter and six months ended June 30, 1996 With the acquisition of APR on May 31, 1995, and UPAC on March 29, 1996, TransFinancial now operates in two distinct industries; transportation, through its subsidiary, Crouse; and financial services, through its subsidiaries, APR and UPAC. TRANSPORTATION Operating Revenue - The changes in transportation operating revenue are summarized in the following table (in thousands): Qtr. 2 1997 Six Months 1997 vs. vs. Qtr. 2 1996 Six Months 1996 Increase (decrease) from: Increase in LTL tonnage........................ $3,063 $7,284 Increase in LTL revenue per hundredweight...... 968 1,233 Increase in truckload revenues................. 441 811 Net increase............................... $4,472 $9,328 Less-than-truckload ("LTL") operating revenues rose by 18.5% and 20.4% for the second quarter and first six months of 1997, respectively, as compared to the same periods in 1996. Crouse achieved increases of 14.1% and 17.4% in LTL tons for the second quarter and first six months of 1997, respectively, compared to 1996. Crouse's LTL revenue yield improved approximately 3.9% and 2.5%, respectively, from the second quarter and first six months of 1996 to the same periods of 1997. These improvements were the result of a general rate increase placed in effect January 1, 1997, negotiated rate increases on certain shipping contracts and fuel surcharges to pass-through to customers the continuing high cost of diesel fuel. Truckload operating revenues were more than 9% higher in the periods of 1997, on approximately 10% more shipments, offset by slight declines in revenue per shipment. Operating Expense - A comparative summary of transportation operating expenses as a percent of transportation operating revenue follows:
Percent of Operating Revenue Second Quarter Six Months 1997 1996 1997 1996 Salaries, wages and employee benefits................... 56.8% 55.7% 56.7% 55.7% Operating supplies and expenses.......................... 12.1% 12.9% 12.6% 13.1% Operating taxes and licenses............................. 2.7% 2.7% 2.8% 2.9% Insurance and claims..................................... 1.9% 2.1% 1.9% 2.0% Depreciation............................................. 3.0% 2.6% 3.0% 2.6% Purchased transportation................................. 20.0% 21.2% 19.9% 21.3% Total operating expenses............................. 96.5% 97.2% 96.9% 97.6%
Crouse's operating expenses as a percentage of operating revenue, or operating ratio, improved for the second quarter and first six months of 1997 as compared to 1996. An increase in the proportion of LTL tons and revenues of total tons and revenues resulted in the increases in salaries, wages and employee benefits and depreciation and the decrease in purchased transportation as a percent of revenues. The improvement in the 1997 operating ratios was the result of spreading the fixed component of the Company's operating expenses over increased operating revenues. FINANCIAL SERVICES In the second quarter and first six months of 1997, APR and UPAC financed $32.4 million and $63.4 million, respectively, in insurance premiums at an average annual yield of 14.5%. These operations generated net operating income of $288,000 and $662,000, on net finance charges, fees and other income earned of $2.1 million and $4.3 million for the second quarter and first six months of 1997, respectively. These results compare to second quarter and first six months of 1996 financings of $35.9 million and $50.1 million at average annual yields of 14.6% and 14.2%, respectively, which produced operating income of $91,000 and $87,000 on net finance charges, fees and other income earned of $2.1 million and $3.0 million for the second quarter and first six months of 1996, respectively. The increases in premium financed, net finance charges, fees and other income are primarily the result of the Company's acquisition of UPAC effective March 29, 1996, operating income was positively impacted by the integration of the administrative operations of UPAC and APR. Also, contributing to the increased operating income was the impact of the Company's new securitization agreement and the increase in receivables sold through that agreement by the inclusion of UPAC receivables. See Note 4 - Financing Agreements in the Notes to Consolidated Financial Statements. OTHER Primarily as a result of its utilization of cash and short-term investments for the acquisition of UPAC and the stock repurchase program since the first quarter of 1996, TransFinancial recorded a substantial decrease in interest income for the periods ended June 30, 1997, from the corresponding period of 1996. TransFinancial's effective tax rate increased for the second quarter and first six months of 1997, to 45% from 43% for the same periods of 1996. Outlook The following statements are forward-looking statements, within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as such involve risks and uncertainties which are detailed below under the caption "Forward-Looking Statements". The Company's three-year strategic plan includes the goal of continuing the growth of each of its business segments, and making the financial services segment a more equal contributor to the Company's earnings per share. In the transportation segment, the plan calls for the Company to continue to provide and improve upon its already superior service to its customers in its primary operating territory, while extending its operations throughout the Midwest. As the Company makes the strategic investments necessary to support this expansion, the Company intends to continue to improve the efficiency and effectiveness of its existing base of operations. The financial services segment will also focus on increasing its market penetration in certain states with substantial population and industrial base. The additional volumes of premium finance contracts is expected to be handled within the Company's existing administrative operations without incurring significant additional fixed costs. In addition to the expansion of its existing operations in each of its business segments, the Company continues to consider potential acquisitions which would complement these operations. Forward-Looking Statements Certain statements contained in this Quarterly Report on Form 10-Q which are not statements of historical fact constitute forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, including, without limitation, the statements specifically identified as forward-looking statements in this Form 10-Q. In addition, certain statements in future filings by the Company with the Securities and Exchange Commission, in the Company's press releases, and in oral statements made by or with the approval of an authorized executive officer of the Company which are not statements of historical fact constitute forward-looking statements within the meaning of the Act. Examples of forward-looking statements include, but are not limited to (i) projections of revenues, income or loss, earnings or loss per share, capital expenditures, the payment or non-payment of dividends, capital structure and other financial items, (ii) statements of plans and objectives of the Company or its management or Board of Directors, including plans or objectives relating to the products or services of the Company, (iii) statements of future economic performance, and (iv) statements of assumptions underlying the statements described in (i), (ii) and (iii). These forward-looking statements involve risks and uncertainties which may cause actual results to differ materially from those anticipated in such statements. The following discussion identifies certain important factors that could affect the Company's actual results and actions and could cause such results or actions to differ materially from any forward-looking statements made by or on behalf of the Company that related to such results or actions. Other factors, which are not identified herein, could also have such an effect. Transportation Certain specific factors which may affect the Company's transportation operation include: increasing competition from other regional and national carriers for freight in the Company's primary operating territory; increasing price pressure; changes in fuel prices; labor matters; including changes in labor costs, and other labor contract issues; and, environmental matters. Financial Services Certain specific factors which may affect the Company's financial services operation include: the performance of financial markets and interest rates; the performance of the insurance industry; increasing competition from other premium finance companies and insurance carriers for finance business in the Company's key operating states; the successful acquisition and integration of additional premium finance operations or receivables portfolios; and, the inability to obtain continued financing at a competitive cost of funds. General Factors Certain general factors which could affect both the Company's transportation operation and the Company's financial services operation include: changes in general business and economic conditions; changes in governmental regulation, and; tax changes. Expansion of these businesses into new states or markets is substantially dependent on obtaining sufficient business volumes from existing and new customers in these new markets at compensatory rates. The cautionary statements made pursuant to Section 21E of the Securities Exchange Act of 1934, as amended, are made as of the date of this Report and are subject to change. The cautionary statements set forth in this Report are not intended to cover all of the factors that may affect the Company's businesses in the future. Forward-looking information disseminated publicly by the Company following the date of this Report may be subject to additional factors hereafter published by the Company. FINANCIAL CONDITION The Company's financial condition remained strong at June 30, 1997 with more than $13 million in cash and investments at the TransFinancial level, as well as approximately $6.6 million in cash and investments held in the discontinued operation. In addition, during the first six months of 1997, the Company has purchased $5.5 million of operating property and equipment, without incurring any significant long term indebtedness. A substantial portion of the capital required for UPAC's and APR's insurance premium finance operations has been provided through the sale of undivided interests in a designated pool of receivables on an ongoing basis under receivables securitization agreements. The current securitization agreement, which matures December 31, 1999, currently provides for the sale of a maximum of $50 million of eligible receivables. As of June 30, 1997, $35.2 million of such receivables had been securitized. On June 26, 1995, the Company adopted a program to repurchase up to 10% of its outstanding shares of common stock. During the second quarter of 1996 the Company completed this program and expanded the program to include an additional 10% of its then outstanding shares. During the first six months of 1997, the Company repurchased 130,051 shares of common stock bringing the total shares repurchased to 1,344,492, or 17.8% of outstanding shares before initiating the program, at a total cost of $11,314,000. This program is being funded from available cash and investments. On June 26, 1997, the shareholders of the Company approved a 1-for-100 reverse stock split followed by a 100-for-1 forward stock split. These stock splits were effected on July 1, 1997. The result of this transaction was the cancellation of about 107,000 shares of common stock held by holders of fewer than 100 shares at a market price of $8.89 per share. Effective July 31, 1997, the Company entered into a subscription agreement with a start-up venture, pursuant to which TransFinancial committed to a $2.9 million capital contribution over two years in exchange for the exclusive lease and/or sale rights to equipment produced by, and a controlling interest in, the venture. The venture owns patent and other rights relating to a particle reduction process. The venture intends to market equipment utilizing this process to companies which require sub-micron materials in their manufacturing processes. The Company does not believe this operation will have a material impact on its consolidated results of operations or financial position during 1997. PART II - OTHER INFORMATION Item 1. Legal Proceedings Reference is made to Item 3 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1996. Item 2 Changes in Securities None Item 3. Defaults Upon Senior Securities None Item 4. Submission of Matters to vote of Security Holders (a) Annual Meeting of Shareholders was held on June 26, 1997. (b) The nominees for the board of directors previously reported to the Commission in the Company's Proxy Statement were elected. (c) The matters voted upon at the Annual Meeting were as follows: (1) The amendment of Article FOURTH of the Certificate of Incorporation to effect a 1-for-100 reverse stock split followed by a 100-for-1 forward stock split was approved with 4,477,214 shares voting for, 104,538 shares voting against, 32,077 shares abstaining and 43,075 shares delivered by brokers not voted. (2) The amendment of Article FIRST of the Certificate of Incorporation changing the name of the Corporation to TransFinancial Holdings, Inc. was approved with 4,492,009 shares voting for, 141,895 shares voting against and 23,000 shares abstaining. (3) All seven nominees for director were elected as follows: Shares Voted Nominees For Withheld William D. Cox 4,586,239 70,665 Lawrence D. ("Larry") Crouse 4,587,914 68,990 J. Richard Devlin 4,586,721 70,183 Harold C. Hill, Jr. 4,587,297 69,607 Roy R. Laborde 4,617,033 39,871 Timothy P. O'Neil 4,567,771 89,133 Eleanor Brantley Schwartz 4,619,412 37,492 (4) The selection of Coopers & Lybrand L.L.P. as independent public accountants was ratified with 4,614,239 shares voting for 19,821 shares voting against, and 22,844 shares abstaining. Item 5. Other Information Effective July 31, 1997, the Company entered into a subscription agreement with a start-up venture, pursuant to which TransFinancial committed to a $2.9 million capital contribution over two years in exchange for the exclusive lease and/or sale rights to equipment produced by, and a controlling interest in, the venture. The venture owns patent and other rights relating to a particle reduction process. The venture intends to market equipment utilizing this process to companies which require sub- micron materials in their manufacturing processes. The Company does not believe this operation will have a material impact on its consolidated results of operations or financial position during 1997. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 3(a)* 1997 Amended and Restated Certificate of Incorporation of the Registrant. 4* Specimen Certificate of the Common Stock, $.01 par value, of the Registrant. 19(a)* Report to Shareholders for the Second Quarter, 1997, dated July 25, 1997. 27* Financial Data Schedule. * Filed herewith. (b) Reports on Form 8-K None (SIGNATURE) Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. TransFinancial Holdings, Inc. Registrant By: /s/Timothy P. O'Neil Timothy P. O'Neil, President & Chief Executive Officer By: /s/Mark A. Foltz Mark A. Foltz Vice President, Finance and Secretary Date: August 5, 1997 EXHIBIT INDEX Assigned Exhibit Number Description of Exhibit 3(a) 1997 Amended and Restated Certificate of Incorporation of the Registrant. 4 Specimen Certificate of the Common Stock, $.01 par value, of the Registrant. 19(a) Report to Shareholders for the Second Quarter, 1997, dated July 25, 1997. 27 Financial Data Schedule. EX-3 2 ANUHCO, INC. 1997 AMENDED AND RESTATED CERTIFICATE OF INCORPORATION ANUHCO INC., a Corporation organized and existing under and by virtue of The General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY: 1. The name under which the Corporation was originally incorporated was All-American Transport, Inc., and the date of filing its original Certificate of Incorporation was April 6, 1976. The name of the Corporation was American Freight System, Inc. from April 6, 1977 to April 27, 1978; A C T Companies Inc. from April 27, 1978 to February 10, 1981; American Carriers, Inc. from February 10, 1981 to July 11, 1991; and Anuhco, Inc. from July 11, 1991 to June 30, 1997. 2. This Amended and Restated Certificate of Incorporation restates, integrates and further amends the prior Restated Certificate of Incorporation by amending Article FOURTH to provide for a 1-for-100 reverse stock split followed by a 100-for-1 forward stock split and by amending Article FIRST to change the name of the corporation to TRANSFINANCIAL HOLDINGS, INC. 3. This amendment to and restatement of the Certificate of Incorporation has been duly adopted in accordance with the provisions of Sections 242 and 245 of the General Corporation law of the State of Delaware. 4. Pursuant to Section 103(d) of the General Corporation Law of the State of Delaware, this Amended and Restated Certificate of Incorporation shall become effective at 6:00 p.m. Eastern time on July 1, 1997. 5. The text of the Certificate of Incorporation, as restated, reads as hereinbelow set forth in full: FIRST. The name of the Corporation is TRANSFINANCIAL HOLDINGS, INC. SECOND. The address of the Corporation's registered office in the State of Delaware is 1209 Orange Street in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. THIRD. The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. FOURTH. The total number of shares of capital stock of all classifications which the Corporation shall have the authority to issue is fourteen million (14,000,000) shares, of which (a) one million (1,000,000) shares shall be Preferred Stock of one cent ($0.01) par value per share; and (b) thirteen million (13,000,000) shares shall be Common Stock of one cent ($0.01) par value per share. Any shares of capital stock issued shall have voting power and, if more than one class of capital stock is issued, an appropriate distribution of such power among such classes shall be made; including, in the case of capital stock having a preference over another class of equity securities with respect to dividends, adequate provisions for the election of directors representing such preferred class in the event of default in the payment of such dividends. The designations, powers, preferences and rights and the qualifications, limitations or restrictions of the Preferred Stock and Common Stock are as follows: PART I PREFERRED STOCK The Preferred Stock may be issued from time to time in one or more series and with such designation for each such series as shall be stated and expressed in the resolution or resolutions providing for the issue of each such series adopted by the Board of Directors. The Board of Directors in any such resolution or resolutions is expressly authorized to state and express for each such series: A. The voting powers of the holders of stock of such series; B. The rate per annum and the times at and conditions upon which the holders of stock of such series shall be entitled to receive dividends, and whether such dividends shall be cumulative or noncumulative and if cumulative terms upon which such dividends shall be cumulative; C. The price or prices and the time or times at and the number in which the stock of such series shall be redeemable; D. The rights to which the holders of the shares of such series shall be entitled upon any voluntary or involuntary liquidation, dissolution or winding-up of the Corporation; E. The terms, if any, upon which shares of stock of such series shall be convertible into, or exchangeable for, shares of stock of any other class or classes or of any other series of the same or any other class or classes, including the price or prices or the rate or rates of conversion of exchange and the terms of adjustment, if any; and F. Any other designations, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof so far as they are not inconsistent with the provisions of the Certificate of Incorporation, as amended, and to the full extent now or hereafter permitted by the laws of Delaware. G. The Preferred Stock, with respect to both dividends and distribution of assets on liquidation, dissolution or winding-up, shall rank prior to the Common Stock. All shares of the Preferred Stock of any one series shall be identical to each other in all respects, except that shares of any one series issued at different times may differ as to the dates from which dividends thereon, if cumulative, shall be cumulative. Each share of Preferred Stock shall rank on a parity with each other share of Preferred Stock irrespective of series, with respect to preferential dividends at the respective rates fixed for such series; and no dividend shall be declared and paid or set apart for payment on the Preferred Stock of any series unless at the same time a dividend in like proportion to the dividends accrued upon the Preferred Stock of each other series shall be declared and paid or set apart for payment, as the case may be, on Preferred Stock of each other series then outstanding. Unless dividends at the rate prescribed for each series shall be declared and paid or set apart for payment in full on all outstanding shares of Preferred Stock for all previous quarterly dividend periods and for the current quarterly dividend period, no dividends shall be declared or paid upon, and no assets shall be distributed to or set apart for, shares of junior stock. No shares of Preferred Stock shall be purchased or redeemed by the Corporation unless all dividends on the Preferred Stock for all past quarterly dividend periods shall have been declared and paid or a sum sufficient for the payment thereof set apart and the full dividend thereon for the current dividend period shall have been, or currently shall be, paid or declared. Accrued and unpaid dividends on the Preferred Stock shall not bear interest. The term "accrued and unpaid dividends", as used herein with respect to the Preferred Stock, shall mean dividends on all outstanding Preferred Stock at the rates fixed for the respective series thereof, from the respective dates from which such dividends shall accrue to the date as of which accrued and unpaid dividends are being determined, less the aggregate of dividends theretofore declared and paid or set apart for payment upon such outstanding Preferred Stock. PART II COMMON STOCK A. Subject to the prior and superior rights of the Preferred Stock, as set forth in the foregoing Part I, or in any directors' resolutions providing for the issue of a series of the Preferred Stock, such dividends (payable in cash, stock or otherwise), as may be determined by the Board of Directors, may be declared and paid on Common Stock from time to time to the holders of the Common Stock. B. In the event of any liquidation, dissolution or winding-up of the affairs of the Corporation, whether voluntary or involuntary, all assets remaining after the payment to the holders of the Preferred Stock at the time outstanding of the full amounts to which they shall be entitled shall be divided and distributed among the holders of the Common Stock according to their respective shares. C. Each holder of the Common Stock shall have one vote for all purposes in respect to each share of such stock held. Subject to the voting rights of the Preferred Stock that may be provided for pursuant to this Article Fourth, the holders of Common Stock shall possess the sole voting power of this Corporation. Reverse Stock Split and Forward Stock Split At 6:00 p.m. (Eastern time) on the effective date of the amendment adding these paragraphs to Article FOURTH ("Effective Date"), each share of the Corporation's Common Stock held of record as of 6:00 p.m. (Eastern time) on the Effective Date shall be and hereby is automatically reclassified and converted, without further action, into one-one hundredth (1/100) of one share of the Corporation's Common Stock. No fractions of shares shall be issued to any Odd- Lot Holder (as defined below), and from and after 6:00 p.m. on the Effective Date, each Odd-Lot Holder shall have no further interest as a stockholder in respect of such fractions of shares, and in lieu of receiving such fractions of shares shall be entitled to receive, upon surrender of the certificate or certificates representing shares of Common Stock held of record by such Odd-Lot Holder, the cash value of such fractions of shares based upon the average closing price per share of the Corporation's Common Stock on the American Stock Exchange for the 10 trading days immediately preceding the Effective Date, without interest. An "Odd-Lot Holder" is defined as a holder of record of fewer than 100 shares of Common Stock as of 6:00 p.m. (Eastern time) on the Effective Date, who would be entitled to less than one whole share of Common Stock in respect of such shares as a result of such reclassification and conversion. At 7:00 p.m. (Eastern time) on the Effective Date, each share of the Corporation's Common Stock and any fraction thereof held by a holder of record of one or more shares of Common Stock as of 7:00 p.m. (Eastern time) on the Effective Date shall be and hereby is automatically reclassified and converted, without further action, into the Corporation's Common Stock, on the basis of one hundred (100) new shares of Common Stock for each whole share of Common Stock. FIFTH. Other than as the Board of Directors in its discretion may otherwise determine, no holder of stock of the Corporation of any class heretofore authorized or which may hereafter be authorized or of any series of any such class, shall, as such holder and because of his ownership of stock, have any preemptive or other right to purchase or subscribe for any shares of stock of the Corporation of any such class or of any series of any such class, or any obligations or instruments which the Corporation has heretofore issued or sold or may hereafter issue or sell that are or shall be convertible into or exchangeable for or entitle the holders thereof to subscribe for or purchase any shares of stock of the Corporation of any such class or of any series of any such class. Any part of the stock of the Corporation and any part of the notes, debentures, bonds or other securities convertible into or carrying options or warrants to purchase stock of the Corporation which may hereafter be authorized may at any time be issued, optioned for sale, and sold or disposed of pursuant to resolutions of the Board of Directors to such persons and upon such terms and conditions as may to the Board of Directors seem proper and advisable without first offering said stock or such other securities or any part thereof to existing stockholders. SIXTH. The Board of Directors of the Corporation is expressly authorized to adopt, amend or repeal the Bylaws of the Corporation. SEVENTH. Elections of Directors need not be by written ballot, except and to the extent provided in the Bylaws of the Corporation. EIGHTH. 1. In addition to any affirmative vote required by law or this Certificate of Incorporation, and except as expressly provided in Section 2 of this Article EIGHTH, the affirmative vote of the holders of three-fourths (3/4) or more of the outstanding shares of Voting Stock (as hereinafter defined) held by stockholders other than the Interested Stockholder (as hereinafter defined) involved in the Business Combination (as hereinafter defined) shall be required for the approval or authorization of any Business Combination involving such Interested Stockholder. 2. The provisions of Section 1 of this Article EIGHTH shall not be applicable if: A. The Business Combination shall have been approved by a majority of the Continuing Directors (as hereinafter defined); or B. The Business Combination is a merger or consolidation and the cash or Fair Market Value (as hereinafter defined) as of the date of the Business Combination of the property, securities or other consideration to be received per share by the stockholders of each class of stock of the Corporation in the Business Combination, if applicable, is not less than the highest per share price paid by the Interested Stockholder, with appropriate adjustments for stock splits, stock dividends and like distributions, in the acquisition by the Interested Stockholder of any of its holdings of each class of the Corporation's capital stock. 3. For purposes of this Article EIGHTH: A. The term "Business Combination" shall mean: (i) any merger or consolidation of the Corporation or any Subsidiary (as hereinafter defined) with (a) any Interested Stockholder or (b) any other corporation (whether or not itself an Interested Stockholder) which is, or after such merger or consolidation would be, an "Affiliate" (as defined on January 6, 1984 in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the "Exchange Act") of an Interested Stockholder; (ii) any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions) to or with any Interested Stockholder or any Affiliate of any Interested Stockholder of any assets of the Corporation or any Subsidiary that have an aggregate Fair Market Value of $1,000,000 or more; (iii) the issuance or transfer by the Corporation or any Subsidiary (in one transaction or a series of transactions) of any securities of the Corporation or any Subsidiary to any Interested Stockholder or any Affiliate of any Interested Stockholder in exchange for cash, securities or other property (or a combination thereof) having an aggregate Fair Market Value of $1,000,000 or more; (iv) the adoption of any plan or proposal for the liquidation or dissolution of the Corporation proposed by or on behalf of any Interested Stockholder or any Affiliate of any Interested Stockholder; or (v) any reclassification of securities (including any reverse stock split), or recapitalization of the Corporation, or any merger or consolidation of the Corporation with any of its Subsidiaries or any other transaction (whether or not with or into or otherwise involving any Interested Stockholder) which has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of any class of equity or convertible securities of the Corporation or any Subsidiary which is directly or indirectly owned by any Interested Stockholder or any Affiliate of any Interested Stockholder. B. The term "Continuing Director" shall mean any member of the Board of Directors of the Corporation who is unaffiliated with the Interested Stockholder and was a member of the Board of Directors prior to the time that the Interested Stockholder became an Interested Stockholder, any successor of a Continuing Director if the successor is unaffiliated with the Interested Stockholder and is recommended or elected to succeed a Continuing Director by a majority of Continuing Directors. C. The term "Fair Market Value" shall mean: (i) in the case of stock, the highest closing sale price during the 30-day period immediately preceding the date in question of a share of such stock on the principal United States securities exchange registered under the Exchange Act on which such stock is listed, or if such stock is not listed on any such exchange, the highest closing sale price with respect to a share of such stock during the 30-day period preceding the date in question on the National Association of Securities Dealers, Inc. Automated Quotation System or any system then in use, or if no such quotations are available, the fair market value on the date in question of a share of such stock as determined in good faith by a majority of Continuing Directors; and (ii) in the case of property or securities other than cash or stock, the fair market value of such property or securities on the date in question as determined in good faith by a majority of Continuing Directors. D. The term "Interested Stockholder" shall mean and include any individual, corporation, partnership or other person or entity (other than the Corporation or any Subsidiary) which, together with its Affiliates and "Associates" (as defined on January 6, 1984 in Rule 12b-2 under the Exchange Act), "Beneficially Owns" (as defined on January 6, 1984 in Rule 13d-3 under the Exchange Act) in the aggregate five percent (5%) or more of the outstanding shares of Voting Stock, and any Affiliate or Associate of any such individual, corporation, partnership or other person or entity. E. The term "Voting Stock" shall mean all of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors. F. The term "Subsidiary" shall mean any corporation of which a majority of any class of equity security is owned, directly or indirectly, by the Corporation; provided, however, that for the purposes of the definition of Interested Stockholder set forth in paragraph D of this Section 3, the term "Subsidiary" shall mean only a corporation of which a majority of each class of equity security is owned, directly or indirectly, by the Corporation. G. Without limitation, any share of Voting Stock that any Interested Stockholder has the right to acquire at any time (notwithstanding the fact that Rule 13d-3 under the Exchange Act deems such shares to be Beneficially Owned only if such right may be exercised within 60 days) pursuant to any agreement, or upon exercise of conversion rights, warrants or options, or otherwise, shall be deemed to be "Beneficially Owned" by the Interested Stockholder and to be outstanding for purposes of Paragraph D of this Section 3. H. In the event of any Business Combination in which the Corporation survives, the term "other consideration to be received" as used in Paragraph B of Section 3 of this Article EIGHTH shall include without limitation any shares of capital stock of the Corporation retained by the holders of such shares. I. An Interested Stockholder shall be deemed to have acquired a share of Voting Stock at the time when such Interested Stockholder became the Beneficial Owner thereof. With respect to the shares owned by Affiliates, Associates or other persons whose ownership is attributed to an Interested Stockholder under the definition of Interested Stockholder contained in Paragraph D of this Section 3, if the price paid by such Interested Stockholder for such shares is not determined by a majority of the Continuing Directors, the price so paid shall be deemed to be the higher of: (i) the price paid upon the acquisition thereof by the Affiliate, Associate or other person, or (ii) the Fair Market Value of the shares in question at the time when the Interested Stockholder became the Beneficial Owner thereof. J. A majority of the Continuing Directors shall have the exclusive right to determine for purposes of this Article EIGHTH, on the basis of information known to them after reasonable inquiry, whether: (i) a person is an Interested Stockholder; (ii) the number of shares of Voting Stock Beneficially Owned by any person; (iii) whether a person is an Affiliate or Associate of another; and (iv) whether the assets which are the subject of any Business Combination have, or the consideration to be received for the issuance or transfer of securities by the Corporation or any Subsidiary in any Business Combination has, an aggregate Fair Market Value of $1,000,000 or more. 4. The provisions of this Article EIGHTH of the Certificate of Incorporation may be amended, altered or repealed upon the affirmative vote of a majority of the outstanding shares of the Corporation entitled to vote upon such amendment; provided, however, that if there is an Interested Stockholder, such action must also be approved by the affirmative vote of the holders of three- fourths (3/4) or more of the outstanding shares of Voting Stock held by stockholders other than the Interested Stockholder. NINTH. No director shall be personally liable to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty by such Director as a Director. Notwithstanding the foregoing sentence, a Director shall be liable to the extent provided by applicable law: (i) for breach of the Director's duty of loyalty to the Corporation or its Stockholders; (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii) pursuant to Section 174 of the Delaware General Corporation Law; or (iv) for any transaction from which the Director derived an improper personal benefit. No amendment to or repeal of this Article NINTH shall apply to or have any effect on the liability or alleged liability of any Director of the Corporation for or with respect to any acts or omissions of such Director occurring prior to such amendment or repeal. IN WITNESS WHEREOF, said ANUHCO, INC., has caused this Certificate to be signed by Timothy P. O'Neil, its President, and attested by Mark A. Foltz, its Secretary, this 26th day of June, 1997. ANUHCO, INC. /s/ Timothy P. O'Neil Timothy P. O'Neil, President ATTEST: /s/ Mark A. Foltz Mark A. Foltz, Corporate Secretary ACKNOWLEDGMENT STATE OF KANSAS ) ) ss. COUNTY OF JOHNSON ) I, DIANA L. BARBARICK, the undersigned Notary Public within and for the above County and State, do hereby certify that on this 26th day of June, 1997, personally appeared before me Timothy P. O'Neil, who, being by me first duly sworn, declared that he is the President of Anuhco, Inc., a Delaware Corporation, and that he signed the foregoing document in his official capacity on behalf of the Corporation, as the free act and deed of the Corporation, and that the statements contained therein are true. /s/ Diana L. Barbarick Notary Public My Commission Expires: 05/24/98 EX-4 3 SPECIMEN STOCK CERTIFICATE EXHIBIT 4 TRANSFINANCIAL (Company mark in two-color gray and green) Common Stock Common Stock Number Shares TF TransFinancial Holdings, Inc. Incorporated Under the Laws of the State of Delaware See reverse for certain definitions CUSIP 89365P 10 6 This Certifies that is the owner of Fully paid and Non-Assessable Shares of Common Stock, $.01 par value, of TransFinancial Holdings, Inc. transferable on the books of the Corporation in person or by duly authorized attorney upon surrender of this Certificate properly endorsed. This Certificate is not valid until countersigned by the Transfer Agent and registered by the Registrar. Witness the facsimile seal of the Company and the facsimile signatures of its duly authorized officers. Dated: /s/Mark A. Foltz /s/Timothy P. O'Neil Secretary President Countersigned and Registered: UMB Bank, N.A. Transfer Agent and Registrar BY: Authorized Signature TRANSFINANCIAL HOLDINGS, INC. Corporate Seal 1976 Delaware (Facsimile Corporate Seal) The Corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional, or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian TEN ENT - as tenants by the entireties (Cust) (Minor) JT TEN- as joint tenants with right of under Uniform Gifts to Minors survivorship and not as tenants Act in common (State) Additional abbreviations may also be used though not in the above list. For value received, hereby sell, assign and transfer unto Please Insert Social Security or Other Identifying Number of Assignee: (Please print or typewrite name and address including zip code of assignee) of the Common Stock represented by the within Certificate, and do hereby irrevocably constitute and appoint Attorney to transfer the said stock on the books of the within named Corporation with full power of substitution in the premises. Dated X X Notice: The signature to this assignment must correspond with the name as written upon the face of this Certificate in every particular, without alteration or enlargement or any change whatever. Signature(s) Guaranteed: BY The signature(s) should be guaranteed by an eligible guarantor Institution (Banks, Stock Brokers, Savings and Loan Associations And credit unions with membership in an approved Signature Guarantee Medallion program). Pursuant to S.E.C. Rule 17Ad-15. EX-19 4 TRANSFINANCIAL HOLDINGS, INC. SECOND QUARTER 1997 REPORT TO SHAREHOLDERS Our second quarter highlights included strong performances by Crouse Cartage Company ("Crouse"), TransFinancial's general commodities motor carrier, and Universal Premium Acceptance Corporation ("UPAC"), TransFinancial's insurance premium finance operation. For the second quarter of 1997, TransFinancial increased net income to $704,000, or $0.11 per share, on operating revenues of $32.8 million, compared to net income of $362,000, or $0.05 per share on operating revenues of $28.5 million for the second quarter of 1996. Crouse earned operating income of $1,071,000 on revenues of $30.7 million in second quarter 1997, compared to operating income of $737,000 on revenues of $26.2 million for second quarter 1996. This improvement was principally the result of a 14% increase in less-than-truckload ("LTL") tons handled. In addition, Crouse achieved a 3.9% increase in revenue yield on LTL freight through the combination of a general rate increase, negotiated increases in contracted rates and the implementation of fuel surcharges. UPAC reported operating income of $288,000 on net finance charges, fees and other income earned of $2.1 million, compared to operating income of $91,000 on comparable revenue for the second quarter of 1996. The primary factors contributing to the improved profitability were the new securitization agreement and the integrated administrative operations. We are encouraged by the continued progress of our operating segments. Crouse improved business volumes and profitability while simultaneously conducting the first phase of an aggressive expansion plan. UPAC continued its first quarter profitability while focusing on customer service, the foundation of the Company's expansion and business success. TransFinancial continues to maintain a strong balance sheet with cash and investments of $13.1 million, excluding an additional $6.6 million included in net assets of discontinued operations, and book value of $11.95 per share at June 30, 1997. TransFinancial acquired 130,000 shares in the first half of 1997 under its stock repurchase program. Approximately 121,000 additional shares are authorized to be repurchased under this program. As approved by you, our fellow shareholders, the Company effected a 1-for-100 reverse stock split followed by a 100-for-1 forward stock split on July 1, 1997, which resulted in the cancellation of an additional 107,000 shares held by odd- lot shareholders. You also approved the change of the Company's name to "TransFinancial Holdings, Inc." This change has been well received by shareholders, brokers and analysts, and reflects our continued commitment to each of our businesses. Look for our stock on the American Stock Exchange under its new trading symbol "TFH." We are confident in each of our businesses and believe our commitment to an aggressive growth strategy will continue to enhance our industry position and provide shareholder value. /s/ Timothy P. O'Neil /s/ William D. Cox Timothy P. O'Neil William D. Cox President Chairman July 25, 1997 "Safe Harbor" Statement under Private Securities Litigation Reform Act of 1995 The Company's 1997 outlook and all other statements in this report other than historical facts are forward-looking statements that involve risks and uncertainties and are subject to change at any time. The Company derives its forward-looking statements from forecasts which are based upon assumptions about many important factors such as the relationship of demand and capacity in the freight market, the performance of finance and insurance markets, prevailing short-term interest rates, general market conditions and competitive activities. While the Company believes that its assumptions are reasonable, it cautions that there are inherent difficulties in predicting the impact of certain factors, which could cause actual results to differ materially from anticipated results. These factors, as and when applicable, are discussed in the Company's filings with the Securities and Exchange Commission, in particular its most recent Form 10-Q. TRANSFINANCIAL HOLDINGS, INC. UNAUDITED SUMMARY FINANCIAL STATEMENTS (in thousands, except per share data) CONSOLIDATED STATEMENTS OF INCOME Second Quarter and Six Months Ended June 30, 1997 and 1996 Second Quarter Six Months 1997 1996 1997 1996 Operating Revenues.............. $ 32,775 $28,345 $64,164 $ 53,561 Operating Expenses.............. 31,710 27,919 62,165 52,941 Operating Income................ 1,065 426 1,999 620 Non-Operating Income............ 215 209 430 634 Income Before Income Taxes...... 1,280 635 2,429 1,254 Income Tax Provision............ 576 273 1,093 539 Net Income...................... $ 704 $ 362 $ 1,336 $ 715 Net Income Per Share............ $ 0.11 $ 0.05 $ 0.21 $ 0.10 Average Common Shares Outstanding 6,320 6,892 6,347 7,014 CONSOLIDATED BALANCE SHEETS 06/30/97 12/31/96 ASSETS Cash and Short-Term Investments. $ 11,190 $ 9,233 Other Current Assets............ 10,816 10,153 Total Current Assets.......... 51,298 52,918 Operating Property, net......... 25,228 23,390 Intangible and Other Assets..... 12,463 10,504 $ 88,989 $86,812 LIABILITIES AND SHAREHOLDERS' EQUITY Total Current Liabilities....... $ 12,041 $11,048 Deferred Income Taxes and Other Liabilities................... 2,122 1,203 Shareholders' Equity............ 74,826 74,561 $ 88,989 $86,812 TransFinancial Holdings, Inc., 8245 Nieman Road, Suite 100, Lenexa, Kansas 66214 (913) 859-0055 EX-27 5
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM TRANSFINANCIAL HOLDINGS, INC. CONSOLIDATED STATEMENT OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000719271 TRANFINANCIAL HOLDINGS, INC. 1,000 6-MOS DEC-31-1997 JAN-01-1997 JUN-30-1997 6,097 6,996 28,294 905 0 51,298 46,422 21,194 88,989 12,041 0 0 0 76 74,750 88,989 0 64,164 0 62,165 0 0 0 2,429 1,093 1,336 0 0 0 1,336 .21 .21
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