-----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, LrQU3vlF1QLB4HzzN43kqRU3sbg65kltWLf3bRi6lEPP68jY8NnWBP13HRSxpZiq ibdcfwHPEbp/O4N8CT/U2A== 0001014108-02-000094.txt : 20020814 0001014108-02-000094.hdr.sgml : 20020814 20020814105312 ACCESSION NUMBER: 0001014108-02-000094 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020630 FILED AS OF DATE: 20020814 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: 02732309 BUSINESS ADDRESS: STREET 1: 8245 NIEMAN ROAD, STE 100 STREET 2: SUITE 100 CITY: LENEXA STATE: KS ZIP: 66214 BUSINESS PHONE: 9138590055 MAIL ADDRESS: STREET 1: 8245 NIEMAN ROAD STREET 2: SUITE 100 CITY: LENEXA STATE: KS ZIP: 66214 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN CARRIERS INC DATE OF NAME CHANGE: 19910812 FORMER COMPANY: FORMER CONFORMED NAME: ANUHCO INC DATE OF NAME CHANGE: 19920703 10-Q 1 tf-form10q_463055.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 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, 2002 [ ] 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. 1-12070 TRANSFINANCIAL HOLDINGS, INC. (Exact name of Registrant as specified in its charter) Delaware 46-0278762 ---------------------- -------------- (State or other jurisdiction of (IRS 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 July 31, 2002 ---------------------- ---------------------------------- Common stock, $0.01 par value 3,288,291 shares Part I. FINANCIAL INFORMATION Item 1. Financial Statements - ----------------------------------------- TRANSFINANCIAL HOLDINGS, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Income For the Three Months Ended June 30, (In thousands, except per share amounts) (Unaudited) 2002 2001 ----- ---- Operating Revenues (Note 6).................. $ -- $3,881 Operating Expenses........................... 960 3,453 ------ ------ Operating Income (Loss)...................... (960) 428 ------ ------ Nonoperating Income (Expense) Other, net................................. 28 33 Interest income............................ 23 25 Interest expense........................... (11) (4) ------- ------- Total nonoperating income (expense)...... 40 54 ------- ------- Income (Loss) Before Income Taxes............ (920) 482 Income Tax Provision (Benefit)............... (177) 15 -------- ------- Income (Loss) from Continuing Operations..... (743) 467 -------- ------- Income (Loss) from Discontinued Operations (Note 2) -- -- -------- ------- Net Income (Loss)............................ $ (743) $ 467 ======== ======= Basic Earnings (Loss) Per Share From Continuing Operations...................... $(0.23) $ 0.14 Discontinued Operations (Note 2)........... -- -- ------- ------- Total................................ $(0.23) $ 0.14 ======= ======= Diluted Earnings (Loss) Per Share From Continuing Operations...................... $(0.22) $ 0.14 Discontinued Operations (Note 2)........... -- -- ------- ------- Total................................ $(0.22) $ 0.14 ======= ======= Basic Average Shares Outstanding............. 3,288 3,278 ======= ======= Diluted Average Shares Outstanding........... 3,438 3,286 ======= ======= The accompanying notes to condensed consolidated financial statements are an integral part of these statements. 2 Item 1. Financial Statements - ----------------------------------------- TRANSFINANCIAL HOLDINGS, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Income For the Six Months Ended June 30, (In thousands, except per share amounts) (Unaudited) 2002 2001 ---- ---- Operating Revenues (Note 6).................. $ 4,147 $ 7,467 Operating Expenses........................... 4,477 6,660 ------- ------- Operating Income (Loss)...................... (330) 807 ------- ------- Nonoperating Income (Expense) Other, net................................. 28 33 Interest income............................ 27 28 Interest expense........................... (51) (11) ------- ------- Total nonoperating income (expense)...... 4 50 ------- ------ Income (Loss) Before Income Taxes............ (326) 857 Income Tax Provision (Benefit)............... (171) 25 ------- ------ Income (Loss) from Continuing Operations..... (155) 832 ------- ------ Income (Loss) from Discontinued Operations (Note 2)..................................... -- (2,050) Extraordinary Income (Loss) - Goodwill Impairment (Note 5).......................... -- (6,697) Net Income (Loss)............................ $(6,852) $(1,218) ======== ======== Basic Earnings (Loss) Per Share From Continuing Operations...................... $ (0.05) $0.25 Discontinued Operations (Note 2)........... -- (0.62) Extraordinary Loss (Note 5)................ (2.03) -- --------- -------- Total.................................. $ (2.08) $(0.37) ========== ======== Diluted Earnings (Loss) Per Share From Continuing Operations...................... $ (0.05) $ 0.25 Discontinued Operations (Note 2)........... -- (0.62) Extraordinary Loss (Note 5)................ (1.95) -- --------- ------- Total.................................. $ (2.00) $ (0.37) ========= ======== Basic Average Shares Outstanding............. 3,288 3,278 ======== ======== Diluted Average Shares Outstanding........... 3,434 3,286 ======== ======== The accompanying notes to condensed consolidated financial statements are an integral part of these statements. 3 TRANSFINANCIAL HOLDINGS, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands, except share data) June 30, December 31, 2002 2001 ---------- ------------ Assets (Unaudited) ------ Current Assets: Cash and cash equivalents.................. $10,668 $ 1,343 Finance accounts receivable, less allowance for credit losses of $ -0- and $1,541.... -- 102,028 Other current assets..................... 71 344 ------- ---------- Total current assets..................... 10,739 103,715 ------- ---------- Operating Property, at Cost: Land....................................... -- 192 Structures and improvements................ -- 1,018 Other operating property................... -- 1,030 ------- ---------- -- 2,240 Less accumulated depreciation............ -- (1,085) ------- ---------- Net operating property............... -- 1,155 ------- ---------- Intangibles, net of accumulated amortization and Other Assets -- 8,454 $ 10,739 $ 113,324 ======== ========== Liabilities and Shareholders' Equity ------------------------------------ Current Liabilities: Cash overdrafts............................ $ -- $ 1,776 Accounts payable........................... 64 5,204 Revolving bank loan (Note 3)............... -- 87,616 Accrued payroll and fringes................ -- 1,002 Dividends payable (Note 6)................. 9,243 -- Other accrued expenses..................... 893 1,092 ------- ---------- Total current liabilities................ 10,200 96,690 ------- ---------- Contingencies and Commitments (Note 4)....... -- -- Shareholders' Equity 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 7,633,852...... 76 76 Paid-in capital............................ 6,262 6,262 Retained earnings.......................... 29,268 45,363 Treasury stock 4,345,561 shares, at cost... (35,067) (35,067) -------- ----------- Total shareholders' equity............... 539 16,634 -------- ----------- $10,739 $ 113,324 ======== =========== The accompanying notes to condensed consolidated balance sheets are an integral part of these statements. 4 TRANSFINANCIAL HOLDINGS, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows For the Six Months Ended June 30 (In thousands) (Unaudited) 2002 2001 ---- ---- Cash Flows From Operating Activities Net Loss................................ $ (6,852) $(1,218) Adjustments to reconcile net loss to cash used in operating activities Depreciation and amortization.......... 44 395 Debt cost amortization................. 38 64 Extraordinary Loss - Goodwill Impairment 6,697 -- Provision for credit losses............ 595 1,004 Net increase (decrease) from change in other working capital items affecting operating activities Accounts Receivable............... (15,260) (13,642) Accounts Payable.................. (337) 1,836 Other............................. (524) 810 Loss from and on discontinued operations -- 2,050 -------- ------- (15,599) (8,701) -------- ------- Cash Flows From Investing Activities Purchase of operating property, net..... (10) (52) Sale of Finance Company................. 13,282 -- ------- ------- 13,272 (52) Cash Flows From Financing Activities Revolving bank loan borrowings (repayments), net 10,381 8,900 Cash overdrafts......................... 1,271 46 Other................................... -- -- ------ ------- 11,652 8,946 ------ ------- Net Increase (Decrease) in Cash and Cash Equivalents................. 9,325 (526) Cash and Cash Equivalents at beginning of period .......................... 1,343 1,076 ------- ------- Cash and Cash Equivalents at end of period .......................... $ 10,668 $ 550 ======== ======= The accompanying notes to condensed consolidated financial statements are an integral part of these statements. 5 TRANSFINANCIAL HOLDINGS, INC. AND SUBSIDIARIES Condensed Consolidated Statement Of Shareholders' Equity (In thousands) (Unaudited)
Total Share- Common Paid-In Retained Treasury holders' Stock Capital Earnings Stock Equity Balance at December 31, 2000.... $ 76 $ 6,254 $ 46,614 $(35,067) $17,877 Issuance of Incentive Stock..... -- 8 -- -- 8 Net Loss....................... -- -- (1,251) -- (1,251) ---- ------- -------- -------- -------- Balance at December 31, 2001... 76 6,262 45,363 (35,067) 16,634 Net Loss....................... -- -- (6,852) -- (6,852) Liquidating Dividend Payable... -- -- (9,243) -- (9,243) ----- ------- -------- -------- -------- Balance at June 30, 2002...... $ 76 $6,262 $ 29,268 $(35,067) $ 539 ===== ======= ========= ========= ========
The accompanying notes to condensed consolidated financial statements are an integral part of these statements. 6 TRANSFINANCIAL HOLDINGS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Principles of Consolidation and Significant Accounting Policies The unaudited condensed consolidated financial statements include TransFinancial Holdings, Inc. ("TransFinancial") and all of its subsidiary companies (the "Company"). All significant intercompany accounts and transactions have been eliminated in consolidation. The unaudited condensed financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). The year end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles. In the opinion of management, all adjustments necessary to fairly present the results of operations have been made. See Note 6, Sale of Financial Services Operations, to the financial statements for a discussion of the sale of the financial services businesses and the dissolution of the Company. 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 in TransFinancial's Annual Report on Form 10-K, filed with the SEC on April 15, 2002, 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 in the aforementioned report on Form 10-K. 2. Discontinued Operations TransFinancial discontinued its transportation operations in 2000. The Company's subsidiary, TFH Logistics & Transportation Services, Inc. ("TFH L&T"), which is a holding company for the Company's transportation subsidiaries, had two principal subsidiaries, Crouse Cartage Company ("Crouse"), which was acquired in 1991, and Specialized Transport, Inc. ("Specialized"), formed in 1999. On September 16, 2000 and December 16, 2000, Crouse and Specialized, respectively, ceased operations; Crouse as a result of significant operating losses and cash flow deficiency and Specialized as a result of its insurance carrier revoking its coverage. These companies liquidated outside of bankruptcy, with the advice of independent advisory committees of creditors, and followed the general processes and procedures defined under the federal bankruptcy code. The Company has essentially completed the orderly liquidation of Crouse and Specialized*. The proceeds of asset liquidations have allowed full payment of secured claims and a partial distribution to priority creditors. Proceeds from asset liquidation were insufficient to satisfy in excess of $17 million of unsecured creditor claims*. All remaining assets (which approximate $3,000) are reserved for administrative costs associated with the closure of these companies. The financial statements do not include any adjustments that might result from the outcome of this uncertainty*. 3. Financing Agreements In December 1996, Universal Premium Acceptance Corporation ("UPAC") and TransFinancial entered into a securitization agreement whereby undivided interests in a designated pool of finance accounts receivable could be sold on an ongoing basis. Effective May 26, 2000, the securitization agreement was assigned to and assumed by a new financial institution. UPAC and its subsidiary, APR Funding Corporation, amended the securitization agreement with the new financial institution increasing maximum allowable amount of receivables to be sold under the agreement to $80 million, extending the term of the agreement by five years with annual liquidity renewals and amending certain convenants. On August 31, 2000, UPAC and APR Funding Corporation executed a Loan and Security Agreement with the same financial institution under essentially the same terms as the securitization agreement. UPAC and APR Funding borrow under a revolving loan arrangement with allowable maturities from 1 to 270 days. On August 17, 2001, UPAC and APR Funding amended the Loan and Security Agreement to increase the facility to $100 million under essentially the same terms as the prior agreement. The loan bears interest at commercial paper rates plus bank program fees. As 7 part of the sale of the financial services businesses (See Note 6), this facility and all related obligations were transferred with the consummation of that sale. Among other things, the terms of the agreement require UPAC to maintain a minimum tangible net worth of $10 million plus 25% of cumulative net income, contain restrictions on the payment of dividends by UPAC to TransFinancial without prior consent of the financial institution and require UPAC to report any material adverse changes in its financial condition. The terms of the loan agreement require UPAC to maintain a reserve at specific levels that served as collateral. At March 31, 2002, $11.0 million of accounts receivable served as collateral reserves for the loan agreement. UPAC and APR Funding's loan agreement was transferred in conjunction with the sale of the financial services businesses. The Company, in settlement of joint liability with its discontinued operations, entered into two short-term notes each in the amount of $1.25 million. The Company's corporate office building served as collateral for a note with Crouse's primary lending bank, with interest at the bank's prime rate. The proceeds from the sale of UPAC served as collateral for a note with UPAC's acquirer. Interest on this note was paid monthly at 10%. These notes were paid off with the proceeds from the sale of UPAC. 4. Contingencies and Commitments The Company is party to certain claims and litigation arising in the ordinary course of business. In the opinion of management, the outcome of such claims and litigation will not materially affect the Company's results of operations, cash flows or financial position.* The Company and its directors have been named as defendants in a lawsuit filed on January 12, 2000 in the Chancery Court in New Castle County, Delaware. The suit seeks declaratory, injunctive and other relief relating to a proposed management buyout of the Company. The suit alleges that the directors of the Company failed to seek bidders for the Company's subsidiary, Crouse, failed to seek bidders for its subsidiary, UPAC, failed to actively solicit offers for the Company, imposed arbitrary time constraints on those making offers and favored a management buyout group's proposal and failed to obtain approval of the Company's shareholders for the sale of certain Crouse assets. The suit seeks certification as a class action complaint. The proposed management buyout was terminated on February 18, 2000. The plaintiff filed an amended class action complaint on August 9, 2000, seeking damages in excess of $4.50 per share for the alleged breaches of fiduciary duties. A motion to dismiss a second amended complaint has been filed and the Company believes this suit will not have a material adverse effect on the financial condition, liquidity or results of operations of the Company.* The Company and its directors have been named as defendants in a lawsuit filed on December 7, 2001 in the United States District Court, District of Kansas, in Kansas City, Kansas. The suit seeks certification as a class action complaint. The suit alleges that the transfer of the assets of Crouse Cartage Company (a subsidiary of TransFinancial Holdings, Inc.) violated Section 271 of the Delaware Code insofar as the transfer constituted a sale of substantially all the assets of the Company without shareholder approval and alleges that the Company only obtained approximately one-half the fair market value of the assets for no valid business reason, when 90% could have been achieved. The Company has filed a motion to dismiss a portion of this complaint, and intends to vigorously defend. The Company believes this suit will not have a material adverse effect on the financial condition, liquidity or results of operations of the Company.* 5. Goodwill Impairment In July 2001, the FASB issued Statement No. 142, Goodwill and Other Intangible Assets. Statement 142, effective January 1, 2002, requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead be tested for impairment at least annually. The Company has deemed that $6.7 million of goodwill recorded on its books related to UPAC is impaired based upon the purchase agreement with outside investors for UPAC. The goodwill impairment is shown on the Statement of Income and Statement of Cash Flows as an extraordinary loss. 8 Pro-Forma Financial Disclosure - Goodwill and Intangible Asset Adoption of Statement 142 For the Six Months Ended June 30, 2002 2001 ---- ---- Income from Continuing Operations $ (155) $ 832 Add back: Goodwill Amortization -- 274 ------- ------ Adjusted Income from Continuing Operations (155) 1,106 Loss from Discontinued Operations -- (2,050) Extraordinary Loss - Goodwill Impairment (6,697) -- ------- ------ Adjusted Net Income (Loss) $(6,852) $ (944) ======== ======= Basic Earnings (Loss) Per Share: Continuing Operations $ (0.05) $ 0.25 Goodwill Amortization -- 0.08 Discontinued Operations -- (0.62) Extraordinary Loss (2.03) -- --------- ------- Adjusted Net Income (Loss) $ (2.08) $ (0.29) ========= ======== Diluted Earnings (Loss) Per Share: Continuing Operations $ (0.05) $ 0.25 Goodwill Amortization -- 0.08 Discontinued Operations -- (0.62) Extraordinary Loss (1.95) -- -------- ------- Adjusted Net Income (Loss) $ (2.00) $ (0.29) 6. Sale of Financial Services Operations The sale of the financial services operations, as approved by the Company's shareholders on January 22, 2002, was consummated on April 19, 2002, with an effective date of April 1, 2002. This sale of the financial services operations represents the disposition of the last operating enterprise of the Company. In accordance with the plan of liquidation as approved by the shareholders, the Company filed a certificate of dissolution with the State of Delaware on April 29, 2002, at which time the Company's stock was delisted from the American Stock Exchange. The transfer agent has closed its records to any further trades. Under the plan of liquidation, the Company will sell all of its remaining assets, and after paying off its debts and setting aside required reserves, will distribute the remaining proceeds as one or more "liquidating dividends". The Company accrued an estimate of all costs and expenses that are expected to be incurred to complete the plan of liquidation. Such expenses and accruals are reflected in the June 30, 2002 financial statement, and reduced the amounts available for distribution under the plan of liquidation. The current estimates of the total distribution under the plan range from $2.70 to $3.00 per share. 9 On June 28, 2002, after setting aside the aforementioned reserves and accruals, the Company declared a liquidating dividend of $2.70 per share, which was paid to shareholders of record as of April 29, 2002, the date on which the company's Stock Transfer Books were closed. Future distributions, if any, will be dependent upon the resolution of ongoing litigation, claims and contingent liabilities. Item 2. Management's Discussion and Analysis of Financial Condition and - ------------------------------------------------------------------------------- Results of Operations - --------------------- RESULTS OF OPERATIONS TransFinancial operated in financial services until April 1, 2002, the effective date for the sale of the financial services businesses. The company discontinued its transportation operations in 2000. Financial Services - ------------------ For the six months of 2002, UPAC reported operating income of $1,123,000 on operating revenue of $4.1 million, as compared to operating income of $1,081,000 on operating revenue of $7.5 million for the comparable period of 2001. The changes in operating revenue and operating income in 2002 were primarily the result of greater amounts financed, offset by the sale of the financial services businesses in April 2002 (see Note 6 to the Financial Statements). A hardening in the insurance premium market has resulted in significant increases in insurance premiums being financed. Other - ----- TransFinancial's effective income tax provision rate for the second quarter of 2002 was 15.96%, as compared to 3.0% for the comparable period of 2001. In the second quarter of 2002, the Company's income tax benefit provision was $177,000 on a pre-tax loss of $920,000. The effective income tax rates for each period were a lower percentage than statutory rates due to the impact of reduction in tax cushions and net operating loss carry-forwards, partially offset by non-deductible amortization of intangibles and valuation allowances provided against net deferred tax assets. Forward-Looking Statement - ------------------------- The Company believes certain statements contained in this Quarterly Report on Form 10-Q which are not statements of historical fact may 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. These statements can often be identified by the use in such statements of forward-looking terminology, such as "believes," "expects," "may," "will," "should," "could," "intends," "plans," "estimates," or "anticipates," or the negative thereof, or comparable terminology. Certain of such statements contained herein are marked by an asterisk ("*") or otherwise specifically identified herein. In addition, the Company believes 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 may 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 relate to such results or actions. Other factors, which are not identified herein, could also have such an effect. 10 Other Matters - ------------- With respect to statements in this Report which relate to the current intentions of the Company and its subsidiaries or of management of the Company and its subsidiaries, such statements are subject to change by management at any time without notice. With respect to statements in Part II - Item 1 regarding the outcome of claims and litigation, such statements are subject to a number of risks and uncertainties, including without limitation the difficulty of predicting the results of the discovery process and the final resolution of ongoing claims and litigation. General Factors - --------------- 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 On September 14, 2001, the Board of Directors unanimously approved a plan of liquidation for the Company. Under the plan of liquidation, the Company will sell all of its assets, and after paying off its debts and setting aside required reserves, will distribute the remaining proceeds as one or more "liquidating dividends". The shareholders approved the plan of liquidation at the Company's annual shareholder meeting on January 22, 2002. The sale of the financial services operations was consummated on April 19, 2002, with an effective date of April 1, 2002. This sale of the financial services operations represents the disposition of the last operating enterprise of the Company. In accordance with the plan of liquidation as approved by the shareholders, the Company filed a certificate of dissolution with the State of Delaware on April 29, 2002, at which time the Company's stock was delisted from the American Stock Exchange. The transfer agent has closed its records to any further trades. Under the plan of liquidation, the Company will sell all of its remaining assets, and after paying off its debts and setting aside required reserves, will distribute the remaining proceeds as one or more "liquidating dividends". The Company accrued an estimate of all costs and expenses that are expected to be incurred to complete the plan of liquidation. Such expenses and accruals are reflected in the June 30, 2002 financial statement, and reduced the amounts available for distribution under the plan of liquidation. The current estimates of the total distribution under the plan range from $2.70 to $3.00 per share. On June 28, 2002, after setting aside the aforementioned reserves and accruals, the Company declared a liquidating dividend of $2.70 per share, payable immediately, to shareholders of record as of April 29, 2002, the date on which the company's Stock Transfer Books were closed. Future distributions, if any, will be dependent upon the resolution of ongoing litigation, claims and contingent liabilities. PART II - OTHER INFORMATION Item 1. Legal Proceedings -- The Company and its directors have been named as defendants in a lawsuit filed on January 12, 2000 in the Chancery Court in New Castle County, Delaware. The suit seeks declaratory, injunctive and 11 other relief relating to a proposed management buyout of the Company. The suit alleges that the directors of the Company failed to seek bidders for the Company's subsidiary, Crouse, failed to seek bidders for its subsidiary, UPAC, failed to actively solicit offers for the Company, imposed arbitrary time constraints on those making offers and favored a management buyout group's proposal and failed to obtain approval of the Company's shareholders for the sale of certain Crouse assets. The suit seeks certification as a class action complaint. The proposed management buyout was terminated on February 18, 2000. The plaintiff filed an amended class action complaint on August 9, 2000, seeking damages in excess of $4.50 per share for the alleged breaches of fiduciary duties. A motion to dismiss a second amended complaint has been filed and the Company believes this suit will not have a material adverse effect on the financial condition, liquidity or results of operations of the Company.* The Company and its directors have been named as defendants in a lawsuit filed on December 7, 2001 in the United States District Court, District of Kansas, in Kansas City, Kansas. The suit seeks certification as a class action complaint. The suit alleges that the transfer of the assets of Crouse Cartage Company (a subsidiary of TransFinancial Holdings, Inc.) violated Section 271 of the Delaware Code insofar as the transfer constituted a sale of substantially all the assets of the Company without shareholder approval and alleges that the Company only obtained approximately one-half the fair market value of the assets for no valid business reason, when 90% could have been achieved. The Company has filed a motion to dismiss a portion of this complaint, and intends to vigorously defend. The Company believes this suit will not have a material adverse effect on the financial condition, liquidity or results of operations of the Company.* Item 2. Changes in Securities - None - ------------------------------ Item 3. Defaults Upon Senior Securities - None - ---------------------------------------- Item 4. Submission of Matters to Vote of Security Holders - None - ---------------------------------------------------------- Item 5. Other Information - None - -------------------------- Item 6. Exhibits and Reports on Form 8-K - ------------------------------------------ (b) Reports on Form 8-K - (1) A current report on Form 8-K, dated and filed May 3, 2002, and as amended May 7.2002 and June 18,2002, filed to report the closing of the sale of all of the outstanding shares of its subsidiaries Universal Premium Acceptance Corporation (UPAC), UPAC of California, Inc., APR Funding Corporation and American Freight System, Inc., and real estate, formerly constituting the headquarters of the Company. (99)* Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the SARBANES-OXLEY ACT OF 2002 * Filed herewith 12 (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/ William D. Cox -------------------------------- William D. Cox, President & Chief Executive Officer (Principal executive and financial officer) Date August 14, 2002 13 Exhibit 99 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of TransFinancial Holdings, Inc. (the "Company") on Form 10-Q for the period ending June 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, William D. Cox, chief executive officer and chief financial officer of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ William D. Cox ------------------------- William D. Cox Chief Executive Officer and Chief Financial Officer August 14, 2002 14 -----END PRIVACY-ENHANCED MESSAGE-----