-----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, AS0/hpYFMW6gDSUSJkpDxSu/Wq58UJV751jSk29dK3OTfghCwJYB4cM6d/Piz5qx 6H3sg7PrTFBXhrrAvkE2zQ== 0000950144-97-002935.txt : 19970327 0000950144-97-002935.hdr.sgml : 19970327 ACCESSION NUMBER: 0000950144-97-002935 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970326 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BOYD BROS TRANSPORTATION INC CENTRAL INDEX KEY: 0000920907 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 636006515 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-23948 FILM NUMBER: 97563686 BUSINESS ADDRESS: STREET 1: 3275 HIGHWAY 30 CITY: CLAYTON STATE: AL ZIP: 36016 BUSINESS PHONE: 3347753261 MAIL ADDRESS: STREET 1: 3275 HWY 30 CITY: CLAYTON STATE: AL ZIP: 36016 10-K 1 BOYD BROTHERS FORM 10-K 1 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------------- FORM 10-K (Mark One) [X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996] For the fiscal year ended December 31, 1996 OR [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Act of 1934 [No Fee Required] For the transition period from _______ to _______ COMMISSION FILE NO. 0-23948 BOYD BROS. TRANSPORTATION INC. (Exact name of Registrant as specified in its charter) DELAWARE 63-6006515 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 3275 HIGHWAY 30 36016 CLAYTON, ALABAMA (Zip Code) (Address of principal executive offices) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (334) 775-1400 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange on Title of each class which registered ------------------- ------------------------ None None Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $.001 per share (Title of class) ---------------- 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 [ ] Aggregate market value of the voting stock held by non-affiliates of the Registrant: $7,015,554 as of March 12, 1997 Indicate the number of shares outstanding of each of the Registrant's classes of common stock, as of the latest practicable date. 3,700,888 shares of Common Stock, par value $.001 per share, outstanding as of March 12, 1997. Documents incorporated by reference in this Annual Report on Form 10-K: Portions of the definitive proxy statement relating to the 1997 Annual Meeting of Stockholders in Part III, Items 10 (as related to Directors), 11, 12 and 13. Portions of the Annual Report to Stockholders for the year ended December 31, 1996 in Parts II and IV. Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] ================================================================================ 2 TABLE OF CONTENTS
PAGE ---- PART I ITEM 1. BUSINESS............................................................... 1 ITEM 2. PROPERTIES............................................................. 6 ITEM 3. LEGAL PROCEEDINGS...................................................... 6 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.................... 6 PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS............................................ 7 ITEM 6. SELECTED FINANCIAL DATA................................................ 7 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.............................................. 7 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA............................ 7 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE............................................... 7 PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT..................... 7 ITEM 11. EXECUTIVE COMPENSATION................................................. 7 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT......... 7 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS......................... 7 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K................................................ 8
3 PART I ITEM 1. Business THE COMPANY Boyd Bros. Transportation Inc. (the "Company") is a truckload carrier that operates exclusively in the flatbed segment of the industry and hauls primarily steel products and building materials. Since its founding in 1956, the Company has grown into what management believes is one of the largest exclusively flatbed carriers in the United States operating only Company-owned tractors. The Company owns and operates over 575 late model tractors and over 916 flatbed trailers. All of the Company's tractors are equipped with a two-way satellite communication system produced by QUALCOMM, Inc. ("QUALCOMM") as well as on-board computers that monitor engine and driver performance. The Company's strategy is to offer high-quality flatbed transportation services to high-volume, time-sensitive shippers. Because much of the freight hauled by the Company consists of steel products and building materials, time-definite delivery is required. A late delivery can mean a shutdown of a production line at a plant or a delay in a construction project. The Company focuses its marketing efforts on the types of shippers that require time-definite delivery because the Company believes that service, rather than price, generally will be the primary factor that will dictate their choice of carrier. Management believes that its ability to recruit and retain drivers has been critical to its success, and the Company has sought to attract and retain drivers by using only high-quality, late-model tractors, installing its two-way satellite communication equipment and offering financial and other incentives to drivers. Management recognizes that getting drivers home frequently is critical to driver retention. Accordingly, the Company makes load assignments to drivers to enable each driver to attain his or her goals in terms of miles driven as well as time at home. STRATEGY The Company's business strategy is to offer high quality flatbed transportation services in the truckload carrier market primarily to high-volume, time-sensitive customers. The key components of the Company's strategy are as follows: Company-Owned Equipment. The Company owns all of its revenue equipment and all drivers are employees of the Company. Management believes that using Company-owned equipment and Company-employed drivers offers the Company an advantage over its competitors that depend solely on owner-operators. Management believes that controlling the dispatch of drivers is necessary for the Company to meet the needs of time-sensitive customers. The Company is considering the use of a small number of owner/operators in 1997. Time-Sensitive Shippers. The Company focuses its marketing efforts on high-volume, time-sensitive shippers that are involved primarily in the steel and building materials businesses and require time-definite delivery. Management believes that many large volume shippers in this segment of the industry have reduced the number of carriers they use so as to use only those "core carriers" that offer consistently superior service. The Company intends to continue its focus on developing relationships as a core-carrier for high-volume, time-sensitive shippers. Technology. The Company's strategy has been to utilize technology to provide better service to its customers and to improve operating efficiency. The Company became the first major flatbed carrier in the country to install a satellite tracking system, manufactured by QUALCOMM, in 100% of its tractors. The tracking system enables the Company to monitor equipment locations and schedules more effectively and to communicate with both drivers and customers. The Company has also installed computers on board each of its tractors to monitor fuel efficiency and other operational data. The Company will continue to monitor and implement technological developments that will enable the Company to improve customer service and operating efficiency. Premium Quality Tractors. The Company continuously upgrades its fleet of tractors. Maintaining a young, high quality fleet of tractors facilitates the Company's ability to recruit and retain drivers, achieve maximum on-time reliability, maximize fuel economy and convey an image of quality to existing and potential customers. CUSTOMERS AND MARKETING The Company markets itself on the basis of quality service and employees, its satellite communication system, the capabilities of its information system to interface with the information systems of its customers, its record of on-time deliveries, and its efficient and well-maintained tractors and trailers. The Company's marketing efforts 4 concentrate on attracting customers that require time-definite delivery and ship multiple loads to and from locations that complement the Company's existing traffic flows. The Company has written contracts with most of its customers. The contracts generally require the customer to use the Company for a specified minimum amount of shipments each year and may be terminated by either party upon 30 to 60 days' written notice. The largest 25, 10 and 5 customers accounted for approximately 69%, 52% and 36%, respectively, of the Company's revenues during 1996. Many of those customers are large, publicly-held companies. During 1996, the only customer that accounted for more than 10% of the Company's revenues was USG Interiors, Inc. ("USG"), which together with certain affiliates accounted for approximately 12.8% of the Company's revenues. The Company's contract with USG specifies that USG will permit the Company to transport at least 100 tons of USG's goods each year, has no minimum term, and is terminable by either party upon sixty days written notice. The loss of any of the Company's major customers could adversely affect the Company's profitability. OPERATIONS The Company's operations are designed to maximize efficiency and provide quality service to customers. All of the Company's fleet operations, routing and scheduling are centrally coordinated through a satellite tracking system from its corporate headquarters in Clayton, Alabama. Through the use of the Company's satellite-based communication system, which is complemented by its fully-integrated mainframe computer system, dispatchers monitor the location and delivery schedules of all shipments and equipment to coordinate routes and maximize utilization of the Company's drivers and equipment. See "-- Transportation Technology." The Company conducts its operations through a network of 12 regional and satellite service centers in strategic locations in the eastern two-thirds of the United States. See "Item 2 - Properties." The Company operates regional service centers in Clayton and Birmingham, Alabama; Atlanta, Georgia; and Greenville, Mississippi. The regional service centers are supported by smaller satellite service centers, each having between one and three employees, located in Calvert City, Kentucky; Danville, Virginia; Lisbon Falls, Maine; Pittsburgh, Pennsylvania; Baltimore, Maryland; and Walworth, Wisconsin. These service centers allow the Company to re-dispatch equipment terminating in a given area, enhance driver recruiting and return drivers to their homes more regularly. The Company also has arrangements to deposit trailers near various major customers or shipping locations to facilitate pre-loading of shipments and thereby increase efficiency. DRIVERS AND EMPLOYEES Recruiting and retaining professional, well-trained drivers is critical to the Company's success, and all of the Company's drivers must meet specific guidelines relating primarily to safety record, driving experience and personal evaluation, including drug testing. To maintain high equipment utilization, particularly during periods of growth, the Company strongly emphasizes continuous driver recruiting and training. Drivers are recruited at all regional terminal locations and at the corporate headquarters. Competition for qualified drivers is intense. In order to attract and retain highly qualified drivers and to promote safe operations, the Company purchases premium quality tractors and equips them with optimal comfort and safety features, such as air conditioning, high quality interiors, power steering, engine brakes and sleeper cabs. Drivers are trained in Company policies and operations, safety techniques and fuel efficient operation of equipment, and must pass a rigorous road test prior to assignment to a vehicle. The Company's training programs range from two to eight weeks of concentrated schooling, depending on a driver's level of prior experience. In addition, all drivers are required to participate in annual safety training and defensive driving courses for recertification by the Company. Recognizing the importance of driver contact while drivers are on the road for extended periods, the Company maintains toll-free telephone lines and publishes a newsletter containing Company information, in addition to maintaining daily contact between dispatchers and drivers. The short- to medium-haul truckload segment of the trucking industry, including the Company, experiences significant driver turnover, and the Company anticipates that the intense competition for qualified drivers in the trucking industry will continue. The Company experienced driver shortages that resulted in up to 60 idled tractors during 1996, and currently has approximately 20 idled tractors due to driver shortages. Management is actively implementing new driver recruitment and retention programs to better attract and retain drivers, but expects to continue to experience idled tractors in the near future until those programs are fully implemented. Additionally, the Company is considering the use of a small number of owner/operators commencing in 1997. 2 5 At December 31, 1996, the Company employed 807 persons, of whom approximately 647 were drivers and trainees and the balance of whom were mechanics, other equipment maintenance personnel and support personnel, including management and administration. None of the Company's employees is subject to a collective bargaining agreement, and the Company has never experienced a work stoppage. The Company believes that its relations with its employees are excellent. REVENUE EQUIPMENT The Company's philosophy is to purchase premium quality tractors to help attract and retain drivers and to promote safe operations, and the Company believes the higher initial cost of such equipment is recovered through better resale marketability. Each of the Company's tractors is equipped with a sleeper cab to permit all drivers to comply conveniently and cost-effectively with the United States Department of Transportation ("DOT") hours of service guidelines and to facilitate team operations when necessary. At December 31, 1996, the Company owned 575 tractors and 916 flatbed trailers. The tractors are manufactured by Freightliner, Kenworth and Navistar, and the trailers are manufactured by Utility, Dorsey, Fruehauf and Great Dane. The Company owns all of the tractors and trailers used by it in order to enhance continued dependability of services, increase equipment utilization and decrease its costs per mile. TRANSPORTATION TECHNOLOGY Management believes that the application of technology is an ongoing part of providing high quality service at competitive prices, and further believes that the Company has enhanced its strong reputation for customer satisfaction through the early, fleet-wide implementation of two computer systems. The Company was the first major flatbed carrier to be fully equipped with the two-way satellite communication system produced by QUALCOMM. The satellite-based OMNITRACS(C) system ("Omnitracs") was installed and operational in the entire Company fleet by the end of 1990. Omnitracs has improved the quality and efficiency of the Company's operations by allowing drivers and dispatchers to have instant, on-the-road communication ability and by enabling the Company to provide its customers with accurate information on the status and estimated delivery time of cargo shipments. As there are further technological developments or enhancements in such systems the Company intends to remain committed to investing in and utilizing advanced technology to better serve its customers. Omnitracs permits more efficient transmission of load assignments to drivers, as well as an enhanced capability to monitor loads in transit and rapidly bill customers for completed deliveries. Once a load is assigned by a load planner, the assignment is transmitted to the Company's operations department where it is reviewed by a dispatcher who then relays the assignment to the appropriate driver through the Omnitracs display unit in each of the Company's vehicles. The driver can respond to the dispatcher through Omnitracs in a matter of seconds, thereby eliminating waiting time and inefficient dependence on truck stop telephones or other methods of communication between drivers and dispatchers. Through Omnitracs, the Company can electronically record a load assignment, report the load to the billing department and generate customer invoices. In addition, the Company uses Omnitracs to automatically transmit location and equipment information and other data to the dispatcher, thereby reducing the need for drivers to stop to communicate with dispatchers in the event of a problem. The system continually tracks every cargo load with accuracy within one-tenth of a mile. This information, along with information concerning available loads, is constantly updated on the Company's on-line computer. Load planners use this information to match available equipment with available loads, meet delivery schedules and respond more quickly to customer inquiries. The Company has also equipped its entire fleet of tractors with the SENSORTRACS(C) on-board computer system ("Sensortracs"), which is also produced by QUALCOMM and which monitors fuel efficiency and other operational data. Information from Sensortracs is periodically processed by one of the Company's computers, which generates reports on vehicle efficiency and driver performance. Reports generated by this system enhance the Company's ability to counsel its drivers on strengths and deficiencies in their driving habits and fuel efficiency and to monitor the effectiveness of driver training programs. The Company has a centralized, fully-integrated management information system that utilizes an IBM mainframe computer located at the corporate headquarters and is on-line at all the Company's regional service centers. The Company believes that its commitment to investing in and utilizing advanced technology has given it electronic data interchange ("EDI") capabilities that provide a competitive advantage. The system's Company-wide 3 6 database allows the Company to respond quickly to customer information requests without having to combine data files from several sources. The EDI capability allows the Company to exchange billing information with customers and is capable of providing immediate delivery status updates from all regional service centers for reporting to customers and for better control and tracking of shipments. This ability to exchange data directly with customers regarding their shipments significantly enhances quality control and customer service. SAFETY AND INSURANCE The Company's safety department is responsible for training and supervising personnel to keep safety awareness at its highest level, the Company has implemented an active safety and loss prevention program at its corporate headquarters and each of its regional service centers. The emphasis on safety begins in the hiring and training process, where prospective employees are given physical examinations and drug tests, and newly hired drivers, regardless of experience level, must participate in an intensive training program. See "-- Drivers and Employees." If drivers maintain certain standards in five areas, including safety, they are paid additional compensation per mile. The Company's Director of Safety continuously monitors driver performance and has final authority regarding employment and retention of drivers. The Company is committed to securing appropriate insurance coverage at cost-effective rates. The primary claims that arise in the trucking industry consist of cargo loss and damage, personal injury, property damage and workers' compensation. The Company currently retains liability up to $100,000 for each claim for personal injury and property damage, $300,000 for each claim for workers' compensation, $90,000 for each claim for employee medical and hospitalization, and $10,000 for each claim for cargo damage. The Company currently purchases excess primary and umbrella insurance coverage in amounts that management believes are adequate to supplement its retained liabilities. FUEL Motor carrier service is dependent upon the availability of diesel fuel. The Company's fuel expense comprised 16.5% and 14.9% of revenues in 1996 and 1995, respectively. Through the on-board computers, the Company continually monitors fuel usage, miles per gallon, cost per mile and cost per gallon. The Company has not experienced any difficulty in maintaining fuel supplies sufficient to support its operations. Shortages of fuel, increases in fuel prices or fuel tax rates or rationing of petroleum products could have a material adverse effect on the operations and profitability of the Company. COMPETITION The trucking industry is highly competitive and fragmented. The Company competes primarily with other short- to medium-haul, flatbed truckload carriers, internal shipping conducted by existing and potential customers and, to a lesser extent, railroads. Deregulation of the trucking industry during the 1980s created an influx of new truckload carriers which, along with certain other factors, continues to create substantial downward pressure on the industry's rate structure. Competition for the freight transported by the Company is based primarily on service and efficiency and, to a lesser degree, on freight rates. While management believes that the Company is one of the largest exclusively flatbed carriers in the United States operating only Company-owned tractors, there are other trucking companies, including truckload carriers that have flatbed divisions, which have substantially greater financial resources, operate more equipment or carry a larger volume of freight than the Company. The Company also competes with other motor carriers in hiring qualified drivers. REGULATION The trucking industry is subject to regulatory oversight and legislative changes which can affect the economics of the industry by requiring certain operating practices or influencing the demand for, and the costs of providing, services to shippers. The Intermodal Surface Transportation Board, as well as various state agencies that have jurisdiction over the Company, have broad powers, generally governing such matters as authority to engage in motor carrier operations, rates and charges, accounting systems, certain mergers, consolidations and acquisitions, and periodic financial reporting. The federal Motor Carrier Act of 1980 commenced a program to increase competition among motor carriers and to diminish the level of regulation in the industry. Following this deregulation, applicants have more easily been able to obtain operating authority, and interstate motor carriers such as the Company have been able to implement certain rate changes without federal approval. The Motor Carrier Act also removed many route and commodity restrictions on transportation of freight. In 1995, the Interstate Commerce Commission (the "ICC") was eliminated 4 7 and the Intermodal Surface Transportation Board (the "ISTB") was established within the Department of Transportation (the "DOT"). The ISTB performs all functions previously performed by the ICC. Since 1981, the Company has held authority to carry general commodities throughout the 48 contiguous states, as both a common and contract carrier. Interstate motor carrier operations are subject to safety requirements prescribed by the DOT. Such matters as weight and dimensions of equipment are also subject to federal and state regulation. All of the Company's drivers were required to obtain national commercial driver's licenses by April 1, 1992 pursuant to the regulations promulgated by the DOT. Also, effective in 1989, DOT regulations imposed mandatory drug testing of drivers. In addition, the Company has completed the implementation of its own ongoing drug-testing program. The DOT's national commercial driver's license and drug testing requirements have not to date adversely affected the availability to the Company of qualified drivers. DOT alcohol testing rules require certain tests, random and otherwise, for alcohol levels in drivers and other safety personnel. See " -- Safety and Insurance." ENVIRONMENTAL MATTERS The Company's operations are subject to federal, state and local laws and regulations concerning the environment. Certain of the Company's facilities are located in historically industrial areas and, therefore, there is the possibility of environmental liability as a result of operations by prior owners as well as the Company's use of fuels and underground storage tanks at its regional service centers. During 1994, the Company retained an environmental consulting firm to conduct an audit of its compliance with applicable federal, state and local laws and regulations concerning the environment. The environmental consulting firm detected the presence of soil contamination and potential groundwater contamination related primarily to the use of underground storage tanks, including tanks used by a prior owner of the property, at the Company's terminal in Birmingham, Alabama. The Company notified the Alabama Department of Environmental Management of this contamination and subsequently removed and replaced all currently known underground storage tanks at the Birmingham terminal. The Company also replaced all underground storage tanks at the Clayton, Alabama terminal. Based upon cost estimates provided by its environmental consulting firm and contractors in 1994, the Company recorded an $800,000 charge to establish a reserve for the removal and replacement of underground storage tanks at the Company's service centers. Based on subsequent reviews of this project by management and its independent consultants, the Company reduced this reserve during 1995 to $293,652, reflecting a decline in the current estimated costs of remediating the sites. The environmental remediation liability in the accompanying balance sheet at December 31, 1996 is $145,122. There can be no assurance that material liabilities or expenditures will not arise from these or additional environmental matters that may be discovered, or from future requirements of law. The Company does not believe these expenditures will have a material adverse effect on the Company's financial condition. FORWARD LOOKING STATEMENTS Certain statements incorporated by reference from the information under the caption "Management's Discussion and Analysis of Financial Conditions and Results of Operations" in the Company's Annual Report to Stockholders for the year ended December 31, 1996 contained herein constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such factors include, among other things, business conditions and growth in the economy, including the transportation and construction sectors in particular, competitive factors, including price pressures and the ability to recruit and retain qualified drivers, the ability to control internal costs as well as fuel costs, that are not passed on to the Company's customers, and other factors referenced elsewhere herein. 5 8 ITEM 2. Properties The Company's corporate headquarters and principal service center are located on a 17.9 acre tract in Clayton, Alabama, which the Company purchased during 1993. Such facilities consist of approximately 22,000 square feet of office space, 12,000 square feet of equipment repair facilities and approximately 3 acres of parking space. The following table sets forth information regarding each of the Company's service center and shuttle locations: Clayton, AL ................................ Owned Atlanta, GA ................................ Owned Birmingham, AL ............................. Owned Greenville, MS ............................. Owned Gary, IN ................................... Leased Calvert City, KY ........................... Leased Danville, VA ............................... Leased Lisbon Falls, ME ........................... Leased Pittsburgh, PA ............................. Leased Baltimore, MD .............................. Leased Walworth, WI ............................... Leased
ITEM 3. Legal Proceedings The Company is routinely a party to litigation incidental to its business, primarily involving claims for personal injury and property damage incurred in the transportation of freight. The Company maintains insurance that it believes is adequate to cover its liability risks. See "Item 1 Business -- Safety and Insurance." ITEM 4. Submission of Matters to a Vote of Security Holders No matters were submitted to a vote of security holders during the fourth quarter of the year ended December 31, 1996, either through the solicitation of proxies or otherwise. Executive Officers of the Registrant Set forth below is information concerning the Executive Officers of the Company as of March 15, 1997. Dempsey Boyd, age 70, founded the Company in 1956, and has been Chairman of the Board since April 1980. Mr. Boyd served as President of the Company from December 1962 until April 1980. Mr. Boyd is the father of Gail B. Cooper and Ginger B. Tibbs. Donald G. Johnston, age 60, has served as President and Chief Executive Officer of the Company since April 1980, and as a Director since December 1979. Prior to that time, he served as Vice President and General Manager since joining the Company in 1979. Mr. Johnston has a background in industrial management and sales, and is active in, and has previously served as chairman of, the Alabama Trucking Association and the University of Georgia Trucking Profitability Strategies Conference. Mr. Johnston received a B.S. in industrial management from Auburn University. Richard C. Bailey, age 46, has served as Chief Financial Officer since joining the Company in August 1992, and has served as a Director since February 1995. He served as president and director of Eastern Inter-Trans Services, Inc., a dry van truckload carrier based in Columbus, Georgia, from December 1989 to August 1992. Mr. Bailey is a certified public accountant with a B.S. in accounting from Georgia State University. He was previously employed in various financial positions by Ernst & Young, Intermet Corporation and Snapper Products (a division of The Actava Group Inc.). Mr. Bailey has served on the Advisory Board of the University of Georgia Trucking Profitability Strategies Conference. Gail B. Cooper, age 46, has been the Secretary of the Company since December 1969, and served as a Director of the Company from December 1969 until March 1994. Ms. Cooper received a B.S. in business administration from Troy State University. She has served the Company in numerous administrative and accounting positions since joining the Company full-time in June 1972. Ms. Cooper is the daughter of Mr. Boyd and the sister of Ms. Tibbs. 6 9 Ginger B. Tibbs, age 43, has been the Treasurer of the Company since December 1979, and served as a Director from December 1978 until March 1994. Ms. Tibbs is primarily responsible for collection of the Company's accounts receivable and has served as Credit Manager since September 1980. Ms. Tibbs received a degree in elementary education from Auburn University. She is the daughter of Mr. Boyd and the sister of Ms. Cooper. PART II ITEM 5. Market for Registrant's Common Equity and Related Stockholder Matters The Common Stock of the Company is listed on the Nasdaq National Market under the symbol "BOYD." As of March 15, 1997, the Common Stock was held by approximately 80 holders of record. The table below sets forth the reported high and low sales price per share for the Common Stock as reported by the Nasdaq National Market for each fiscal quarter during 1996.
Price Range --------------------------- 1996 High Low ---- --------------------------- First Quarter ................................. $ 8 1/2 $7 Second Quarter ................................ 9 7 Third Quarter ................................. 9 1/2 7 1/2 Fourth Quarter ................................ 9 1/4 7
Price Range --------------------------- 1995 High Low ---- --------------------------- First Quarter ................................. $12 1/4 $9 1/2 Second Quarter (since May 10, 1994) ........... 12 1/4 8 1/2(1/8) Third Quarter ................................. 10 8 Fourth Quarter ................................ 9 1/2 6
The Company currently anticipates that all of its earnings will be retained for development of the Company's business, and does not anticipate paying any cash dividends in the foreseeable future. Furthermore, certain of the Company's financing arrangements contain covenants that may restrict the payment of cash dividends for the foreseeable future. Future cash dividends, if any, will be at the discretion of the Company's Board of Directors and will depend upon, among other things, the Company's future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions, and other factors as the Board of Directors may deem relevant. ITEM 6. Selected Financial Data The information required by this item is incorporated by reference from the information under the caption "Selected Financial Data" in the Company's Annual Report to Stockholders for the year ended December 31, 1996. ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The information required by this item is incorporated by reference from the information under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report to Stockholders for the year ended December 31, 1996. ITEM 8. Financial Statements and Supplementary Data The information required by this item is incorporated by reference from the Financial Statements contained in the Company's Annual Report to Stockholders for the year ended December 31, 1996. ITEM 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure None. PART III With the exception of information relating to the executive officers of the Company, which is provided in Part I hereof, all information required by Part III (Items 10, 11, 12 and 13) is incorporated by reference to the Company's definitive Proxy Statement relating to the 1997 Annual Meeting of Stockholders, which is scheduled to be filed on or before April 30, 1997. 7 10 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) Exhibits, Financial Statements and Schedules. 1. Financial Statements. The following financial statements for the Company and Independent Auditors' Report are incorporated by reference from the Company's Annual Report to Stockholders for the year ended December 31, 1996: Independent Auditors' Report Balance Sheets at December 31, 1996 and 1995 Statements of Operations for the years ended December 31, 1996, 1995 and 1994 Statements of Stockholders' Equity for the years ended December 31, 1996, 1995 and 1994 Statements of Cash Flows for the years ended December 31, 1996, 1995 and 1994 Notes to Financial Statements 2. Financial Statement Schedules. None. Financial Statement Schedules are omitted because of the absence of conditions under which they are required or because the information is included in the financial statements or notes thereto. 3. Exhibits required by Item 601 of Regulation S-K. The following exhibits are included in this Form 10-K: EXHIBIT NO. DESCRIPTION 13 Those portions of the Company's Annual Report to Stockholders for the year ended December 31, 1996 that are specifically incorporated herein by reference. 23 Consent of Deloitte & Touche LLP 27 Financial Data Schedule 8 11 The following exhibits are incorporated by reference to the Company's Registration Statement on Form S-1 (File No. 33-76756), declared effective on May 9, 1994: EXHIBIT NO. DESCRIPTION 3.1 Certificate of Incorporation of the Company 3.2 By-laws of the Company 10.1* Boyd Bros. Transportation Inc. 1994 Stock Option Plan 10.2* Form of the Company's Nonstatutory Stock Option Agreement 10.3* Form of the Company's Nonstatutory Stock Option Agreement for Nonemployee Directors 10.4* Description of Senior Management Bonus Plan 10.5* Description of Key Employee Bonus Program 10.11 Master Note for Business and Commercial Loans dated July 22, 1992 providing for a $1,500,000 line of credit from AmSouth Bank N.A. to the Company 10.12 Note for Business and Commercial Loans dated November 1, 1992 by the Company in favor of AmSouth Bank N.A. in the principal amount of $5,317,120.95 10.13 Note for Business and Commercial Loans dated August 2, 1993 by the Company in favor of AmSouth Bank N.A. in the principal amount of $5,122,702.70 10.14 Security Agreement for Tangible Personal Property dated February 15, 1994 by the Company in favor of AmSouth Bank N.A. 10.15 Note for Business and Commercial Loans dated February 15, 1994 for a $5,000,000 non-revolving draw note by the Company in favor of AmSouth Bank N.A. 10.22 Modification of the Continuation of Credit and Security Agreement and Loan Modification Agreement dated March 4, 1994 by and between the Company and Compass Bank 10.26 Credit and Security Agreement dated February 1, 1994 by and between the Company and Compass Bank 10.27 Security Agreement dated February 1994 by the Company in favor of Compass Bank 10.31 OMNITRACS Contract dated February 1, 1990 by and between the Company and QUALCOMM, Inc. 10.33 Stock Option Exercise and Cancellation Agreement dated as of March 22, 1994 by and between the Company and Donald G. Johnston 10.34 Indemnification Agreement dated as of March 22, 1994 by and between the Company and Donald G. Johnston 10.35 Form of Tax Indemnification Agreement by and between the Company and certain stockholders of the Company 10.37 Credit Agreement dated April 1, 1994 by and between the Company and AmSouth Bank N.A. 10.38 Trucking Contract dated May 2, 1988 by and between the Company and USG Interiors, Inc. - ---------------------- * Identifies each exhibit that is a "management contract or compensatory plan or arrangement" required to be filed as an exhibit to this Annual Report on Form 10-K pursuant to Item 14(c) of Form 10-K. 9 12 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. BOYD BROS. TRANSPORTATION INC. By: /s/ DONALD G. JOHNSTON ------------------------------------- Donald G. Johnston President and Chief Executive Officer Date: March 20, 1997 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:
SIGNATURES TITLE DATE ---------- ----- ---- /s/ DONALD G. JOHNSTON President, Chief Executive March 20, 1997 - ------------------------------ Officer and Director (Principal Donald G. Johnston Executive Officer) /s/ RICHARD C. BAILEY Chief Financial Officer and March 20, 1997 - ------------------------------ Director (Principal Financial Richard C. Bailey and Accounting Officer) /s/ DEMPSEY BOYD Chairman and Director March 20, 1997 - ------------------------------ Dempsey Boyd /s/ GLYN E. NEWTON Director March 24, 1997 - ------------------------------ Glyn E. Newton /s/ W. WYATT SHORTER Director March 24, 1997 - ------------------------------ W. Wyatt Shorter /s/ PAUL G. TAYLOR Director March 20, 1997 - ------------------------------ Paul G. Taylor /s/ BOYD WHIGHAM Director March 20, 1997 - ------------------------------ Boyd Whigham
13 Exhibit Index
Exhibit Sequential No. Description Page No. - ------- ----------- ---------- 13 Those portions of the Company's Annual Report to Stockholders for the year ended December 31, 1996 that are specifically incorporated herein by reference . . . . . . . . . . . . . . . . . . . . . . 23 Consent of Deloitte & Touche LLP . . . . . . . . . . 27 Financial Data Schedule (for SEC use only) . . . . .
EX-13 2 ANNUAL REPORT TO SHARE HOLDERS 1 EXHIBIT 13 SELECTED FINANCIAL DATA The following tables set forth selected financial data and selected pro forma financial data of the Company. The selected financial data presented below for the five year period ended December 31, 1996, are derived from the Company's audited financial statements. The data presented below should be read in conjunction with "Management's Discussion and Analysis," the Financial Statements and Notes thereto.
Year Ended December 31, ---------------------------------------------------- (in thousands, except per share data) 1996 1995 1994 1993 1992 - ------------------------------------------------------------------------------------------------------- STATEMENT OF OPERATIONS DATA: OPERATING REVENUES $ 65,523 $ 61,866 $ 59,132 $ 50,340 $ 42,403 Operating expenses: Salaries, wages and employee benefits 28,420 27,573 24,800 20,610 17,152 Non-cash compensation expense(1) 947 806 Operating supplies 19,550 17,156 15,042 13,180 11,551 Taxes and licenses 2,222 1,823 1,922 1,934 1,664 Insurance and claims 3,379 3,210 3,669 3,065 2,396 Communications and utilities 1,186 1,022 927 776 706 Depreciation and amortization 8,261 7,296 6,451 5,516 4,792 Rent 202 154 136 136 94 Gain on disposition of property and equipment, net (805) (648) (410) (272) (347) Environmental remediation(2) 19 (294) 800 -- -- Other 439 474 523 544 485 -------- -------- -------- -------- -------- Total operating expenses 62,873 57,765 53,860 46,436 39,299 -------- -------- -------- -------- -------- Operating income 2,650 4,101 5,272 3,904 3,104 Interest income 164 82 54 106 135 Interest expense (1,408) (781) (806) (901) (871) Other -- -- 70 -- (223) -------- -------- -------- -------- -------- Income before income taxes 1,406 3,402 4,590 3,109 2,145 Income taxes 579 1,227 6,544 47 31 -------- -------- -------- -------- -------- Income (loss) before cumulative effect of accounting change 828 2,125 (1,954) 3,062 2,114 Cumulative effect of accounting change -- -- -- 157 -- -------- -------- -------- -------- -------- Net income (loss) $ 828 $ 2,125 $ (1,954) $ 3,219 $ 2,114 ======== ======== ======== ======== ======== Net income (loss) per share $ .22 $ .56 $ (.55) $ 1.07 $ .70 ======== ======== ======== ======== ======== Dividends paid(3) $ -- $ -- $ 2,525 $ 1,253 $ 502 ======== ======== ======== ======== ======== PRO FORMA INCOME DATA (Unaudited)(4): Income before income taxes $ 4,590 $ 3,109 $ 2,145 Pro forma income taxes 1,762 1,313 965 -------- -------- -------- Pro forma net income $ 2,828 $ 1,796 $ 1,180 ======== ======== ======== Pro forma net income per share $ .80 $ .60 $ .39 ======== ======== ========
2 SELECTED FINANCIAL DATA (1) Reflects non-cash compensation expense attributable to stock options previously granted to the Chairman of the Board and the President of the Company. (2) Reflects an operating expense (credit) accrued for environmental remediation during 1995. See Note 6 to Financial Statements. (3) Distributions primarily to fund tax liabilities resulting from the Company's S Corporation status were made to the Company's stockholders in each year between 1990 and 1994, prior to the termination of the Company's S Corporation status on March 30, 1994. See Note 8 to Financial Statements. (4) Between January 1, 1987 and March 30, 1994, the Company was treated as an S Corporation for federal and certain state income tax purposes. As a result, the Company's taxable earnings for 1989 through 1993, and the first quarter of 1994, were taxed for federal and certain state income tax purposes directly to the Company's then-existing stockholders. On March 30, 1994, the Company terminated its S Corporation status and became subject to federal and certain additional state income taxes. For informational purposes, unaudited pro forma net income data is provided to reflect an adjustment for a provision for federal and state income taxes as if the Company had not been treated as an S Corporation during those periods. The pro forma net income data do not give effect to the non-cash charge of approximately $5.5 million in recognition of deferred income taxes that resulted from the termination of the Company's S Corporation status. See Note 8 to Financial Statements.
December 31, --------------------------------------------- (in thousands) 1996 1995 1994 1993 1992 - ------------------------------------------------------------------------------------------ BALANCE SHEET DATA: Working capital (deficit) $ 2,495 $ 2,676 $ 768 $ (107) $(2,557) Net property and equipment 44,593 37,188 33,184 30,452 26,308 Total assets 57,262 48,892 41,480 38,888 32,365 Long-term debt, less current maturities 15,198 9,228 6,143 11,875 9,639 Total liabilities 33,374 24,903 19,616 20,403 16,872 Stockholders' equity 23,888 23,989 21,864 18,405 15,493
SELECTED OPERATING DATA: The following table sets forth certain operating data regarding the Company.
December 31, ------------------------------------------ 1996 1995 1994 1993 1992 - ------------------------------------------------------------------------------------------ Operating ratio 95.95% 93.37% 91.08% 92.24% 92.68% Average length of haul in miles 677 694 687 671 681 Average number of truckloads per week 1,607 1,470 1,457 1,252 1,055 Average revenues per total mile $ 1.14 $ 1.14 $ 1,15 $ 1.13 $ 1.11 Equipment at period end: Tractors 575 522 480 415 370 Trailers 916 875 830 723 540
3 MANAGEMENT'S DISCUSSION AND ANALYSIS The following is a discussion of the financial condition and results of operations of the Company for each of the years in the three year period ended December 31, 1996. This discussion should be read in conjunction with the Financial Statements and Notes thereto included elsewhere herein. GENERAL The Company was founded in 1956 by Dempsey Boyd and his brothers as a small regional flatbed trucking operation with three tractors. Since that time, the Company has grown to one that operates over 575 tractors and 916 trailers in the eastern two-thirds of the United States. The Company's historical strategy has been to own all of its revenue equipment and to operate through employee drivers. The Company's expansion, therefore, has required significant capital expenditures which have been funded through secured borrowings. The Company operated as an S Corporation from January 1, 1987 through March 30, 1994. As a result, the net taxable income of the Company during such period was taxed directly to the Company's stockholders rather than to the Company. The termination of the Company's S Corporation status on March 30, 1994, resulted in a one-time non-cash charge of approximately $5.5 million in recognition of deferred income taxes and a corresponding reduction in stockholders' equity. The pro forma income data of the Company has been prepared to reflect the termination of S Corporation status. See Note 8 to Financial Statements. RESULTS OF OPERATIONS The following table sets forth the percentage relationship of the expense items to operating revenues for the periods indicated.
PERCENTAGE OF OPERATING REVENUES YEARS ENDED DECEMBER 31, ------------------------------------ 1996 1995 1994 - ----------------------------------------------------------------------------------------------------- Operating revenues 100.00% 100.00% 100.00% ------ ------ ------ Operating expenses Salaries, wages, and employee benefits 43.37 44.58 41.94 Operating supplies 29.84 27.73 25.44 Taxes and licenses 3.39 2.95 3.25 Insurance and claims 5.16 5.19 6.20 Depreciation and amortization 12.61 11.79 10.91 Gain on disposition of property and equipment, net (1.23) (1.05) (.69) Other 2.81 2.18 4.03 ------ ------ ------ Total operating expenses 95.95 93.37 91.08 Operating income 4.04 6.63 8.92 Interest expense, net (1.90) (1.13) (1.27) Other -- -- .12 ------ ------ ------ Income before income taxes 2.14 5.50 7.76 Income taxes* .88 2.06 2.98 ------ ------ ------ Net income* 1.26% 3.43% 4.78% ------ ------ ------
* Amounts for 1994 are pro forma. 4 MANAGEMENT'S DISCUSSION AND ANALYSIS COMPARISON OF YEAR ENDED DECEMBER 31, 1996 TO YEAR ENDED DECEMBER 31, 1995 Operating revenues for 1996 increased $3.7 million or 5.91% to $65.5 million as compared to $61.9 million for 1995. The increase resulted primarily from additional tractors in use. The Company's operating ratio increased from 93.37% in 1995 to 95.95% in 1996. The increased operating ratio was due primarily to increases in fuel costs, maintenance and lower utilization of equipment. Operating supplies expense for 1996 increased $2.4 million or 14.0% due primarily to higher fuel costs. Additionally, maintenance and related costs were higher. Salaries, wages and employee benefit expenses for 1996 increased by $847,268 or 3.1%, to $28.4 million as compared to $27.6 million for 1995. The increase was less than the percentage increase in revenue due to a reduction in non-driver personnel costs and headcount. Insurance and claims expense for 1996 increased $169,115 or 5.3% to $3.4 million as compared to $3.2 million in 1995. The increase was less than the percentage increase in revenue due primarily to a reduction in insurance premiums. Taxes and licenses increased $398,429 or 21.9% due to having a newer fleet of tractors. Depreciation and amortization expense increased $965,582 or 13.2% due primarily to lower utilization and the increase in tractor prices. Environmental remediation expense was $19,408 in 1996 compared with a credit of $293,652 in 1995. The initial estimate of remediation expense in 1994 was substantially reduced in 1995. Gain on sale of equipment increased $157,739 or 24.3% in 1996 over 1995 due to the sale of more equipment in 1996 as opposed to 1995. Interest expense, net increased $545,290 or 78.0% in 1996 over 1995. Long-term debt increased substantially due to the purchase and trade-in of an increased number of tractors. Net income for 1996 was $827,617 compared with $2,124,658 for 1995. COMPARISON OF YEAR ENDED DECEMBER 31, 1995 TO YEAR ENDED DECEMBER 31, 1994 Operating revenues for 1995 increased $2.73 million or 4.62% to $61.9 million as compared to $59.1 million for 1994. The increase resulted primarily from additional tractors in use. The Company's operating ratio increased from 91.08% in 1994 to 93.37% in 1995. The increased operating ratio was due primarily to increases in driver wages, fuel costs, and maintenance expenses, which were partially offset by a $294,000 credit against environmental expenses previously accrued. Salaries, wages and employee benefit expenses for 1995 increased by $2.8 million or 11.2%, to $27.6 million as compared to $24.8 million for 1994, and also increased as a percentage of operating revenues. The increase in salaries, wages, and employee benefit expenses as a percentage of operating revenues is due primarily to increases in the number of employees and increases in overall compensation for drivers in order to enhance driver recruitment and retention. Operating supplies expense for 1995 increased $2.1 million or 14.1% to $17.2 million as compared to $15.0 million for 1994, and also increased as a percentage of revenues due to increased maintenance and fuel costs. Insurance and claims expenses for 1995 decreased by $459,047 or 12.5% to $3.2 million as compared to $3.7 million for 1994. The decrease was due to reduced reserves for pending claims and a reduction in liability premiums. Depreciation and amortization expense for 1995 increased $844,000 or 13.1%, to $7.3 million as compared to $6.5 million for 1994. This increase was a result of the net increase in fleet size, lower utilization and the purchase of higher priced new tractors. Management believes that the additional cost of owning better equipped tractors can be offset by lower driver turnover and maintenance expenses. Environmental remediation expenses produced a credit of $294,000 in 1995 compared to an expense of $800,000 in 1994. The initial estimate of remediation expense in 1994 was substantially reduced in 1995 due to a reduced estimate of anticipated remediation expenses. 5 MANAGEMENT'S DISCUSSION AND ANALYSIS Gain on sale of equipment increased $238,404 or 58.2%, to $648,061 in 1995 compared to $409,657 in 1994. The gain on sale of equipment was due to the sale of more equipment in 1995 compared to 1994. Net income for 1995 was $2.1 million compared with pro forma net income of $2.8 million for 1994. LIQUIDITY AND CAPITAL RESOURCES The growth of the Company's business and maintenance of its modern fleet have required significant investments in new tractors and trailers, and has been financed largely through long-term debt. Capital expenditures, net of proceeds from disposals of property and equipment, were approximately $14.9 million in 1996, compared to $10.7 million in 1995. At December 31, 1996, the Company had long-term debt (including current portions) of $19.8 million, primarily incurred to purchase revenue equipment. Management anticipates increasing the Company's fleet by approximately 50 tractors in 1997, net of replacements, at an anticipated cost of approximately $10.1 million. Management expects to finance such equipment purchases through equipment financing arrangements with various lenders. Historically, the Company has relied on cash generated from operations to fund its working capital requirements. However, the Company has a bank line of credit permitting short term borrowings of up to $1.5 million. The revolving line of credit is collateralized by accounts receivable and inventory. Interest on the borrowings is at the prime rate less .125%. In May 1994 the Company completed an initial public offering of 823,000 shares of Common Stock. Net proceeds from the offering totaled $7,937,332, all of which were used to repay indebtedness incurred by the Company to purchase revenue equipment. In addition, in May 1994 the Company received approximately $600,000 upon repayment of a note from the Company's principal stockholder, all of which proceeds were also applied to repayment of outstanding indebtedness. In January 1996, the Company implemented a stock repurchase program based on management's belief that, at then current market prices, the common stock represented a sound investment for the Company's corporate funds. Pursuant to the repurchase program, the Company purchased 122,300 shares of the common stock in open market and negotiated transactions, for an aggregate purchase price of $928,500. The Company funded such purchases using working capital and borrowings under its line of credit. The Company currently has outstanding letters of credit, totaling $1,607,000 at December 31, 1996, to cover liability insurance claims and self-insured workers' compensation programs. Annual commitment fees relating to those letters of credit do not exceed 1.5% of the face amounts thereof. In connection with the termination of its S Corporation status and the initial public offering of Common Stock, the Company distributed approximately $2,525,000 to its stockholders of record on March 30, 1994. The distributions represented the previously undistributed taxable earnings of the Company included in the taxable income of such stockholders as a result of the Company's S Corporation status. Management believes that cash flow from future operations and borrowings available under its line of credit will be sufficient to meet its needs for working capital for the foreseeable future. Over the long term, the Company will continue to have significant capital requirements which may require the Company to seek additional borrowings or equity capital. The availability of debt financing or equity capital will depend upon prevailing market conditions, the market price of the Common Stock and other factors over which the Company has no control, as well as the Company's financial condition and results of operations. SEASONALITY In the trucking industry, results of operations show a seasonal pattern because customers generally reduce shipments during the winter season, and the Company does experience some seasonality due to the open, flatbed nature of its trailers. The Company has at times experienced delays in meeting its shipping schedules as a result of severe weather conditions, particularly during the winter months. In addition, the Company's operating expenses have historically been higher in the winter months due to decreased fuel efficiency and increased maintenance costs in colder weather. 6 BALANCE SHEETS
DECEMBER 31, ------------------------- 1996 1995 - ---------------------------------------------------------------------------------------- ASSETS CURRENTS ASSETS: Cash and cash equivalents (Note 1) $ 3,593,206 $ 1,481,910 Short-term investments 100,000 100,000 Accounts receivable (less allowance for doubtful accounts of $125,000 in 1996 and 1995): Trade and interline 5,541,471 5,779,409 Other 274,876 842,508 Refundable income taxes 579,573 1,161,311 Inventories (Note 1) 230,920 397,062 Prepaid tire expense (Note 1) 711,208 558,750 Other prepaid expenses 761,324 737,690 Deferred income taxes (Note 8) 530,623 328,678 ----------- ----------- Total current assets 12,323,201 11,387,318 ----------- ----------- PROPERTY AND EQUIPMENT (Notes 1 and 5): Land and land improvements 1,082,510 1,055,606 Buildings 3,240,496 3,174,363 Revenue equipment 51,513,665 46,139,369 Other equipment 8,111,012 7,481,290 Leasehold improvements 406,577 373,561 ----------- ----------- Total 64,354,260 58,224,189 Less accumulated depreciation and amortization 19,761,532 21,035,800 ----------- ----------- Property and equipment, net 44,592,728 37,188,389 ----------- ----------- DEPOSITS AND OTHER ASSETS 346,050 316,012 ----------- ----------- TOTAL $57,261,979 $48,891,719 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities of long-term debt (Note 5) $ 4,625,204 $ 4,090,561 Accounts payable - trade and interline 2,122,561 932,524 Accrued liabilities: Self-insurance claims (Note 6) 2,203,999 1,664,465 Salaries and wages 465,665 1,297,116 Other 411,206 726,416 ----------- ----------- Total current liabilities 9,828,635 8,711,082 LONG-TERM DEBT (Note 5) 15,197,840 9,227,851 DEFERRED INCOME TAXES (Note 8) 8,347,757 6,964,156 ----------- ----------- Total liabilities 33,374,232 24,903,089 ----------- ----------- COMMITMENTS AND CONTINGENCIES (Note 6) STOCKHOLDERS' EQUITY (Notes 5 and 7): Preferred stock, $.001 par value - 1,000,000 shares authorized; no shares issued and outstanding Common stock, $.001 par value - 10,000,000 shares authorized; 3,700,688 and 3,823,000 shares issued and outstanding in 1996 and 1995, respectively 3,701 3,823 Additional paid-in capital 13,780,616 14,708,994 Retained earnings 10,103,430 9,275,813 ----------- ----------- Total stockholders' equity 23,887,747 23,988,630 ----------- ----------- TOTAL $57,261,979 $48,891,719 =========== ===========
See notes to financial statements. 7 STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, -------------------------------------------- 1996 1995 1994 - ---------------------------------------------------------------------------------------------------- OPERATING REVENUES (Note 9) $ 65,523,412 $ 61,865,851 $ 59,132,066 ------------ ------------ ------------ OPERATING EXPENSES: Salaries, wages and employee benefits (Note 3) 28,419,881 27,572,613 24,799,963 Operating supplies 19,549,827 17,155,929 15,042,198 Taxes and licenses 2,221,710 1,823,281 1,922,172 Insurance and claims 3,378,815 3,209,700 3,668,747 Communications and utilities 1,186,131 1,021,927 926,816 Depreciation and amortization 8,261,253 7,295,671 6,451,402 Rent (Note 4) 202,489 153,944 135,771 Gain on disposition of property and equipment, net (805,800) (648,061) (409,657) Environmental remediation (Note 6) 19,408 (293,652) 800,000 Other 439,213 473,723 522,226 ------------ ------------ ------------ Total operating expenses 62,872,927 57,765,075 53,859,638 ------------ ------------ ------------ OPERATING INCOME 2,650,485 4,100,776 5,272,428 ------------ ------------ ------------ OTHER INCOME (EXPENSES): Interest income 164,363 82,018 53,613 Interest expense (1,408,489) (780,854) (805,580) Other -- -- 70,066 ------------ ------------ ------------ Other expenses, net (1,244,126) (698,836) (681,901) ------------ ------------ ------------ INCOME BEFORE PROVISION FOR INCOME TAXES 1,406,359 3,401,940 4,590,527 ------------ ------------ ------------ PROVISION (BENEFIT) FOR INCOME TAXES (Note 8): Current (602,915) 145,529 1,300,612 Deferred 1,181,657 1,131,753 5,243,687 ------------ ------------ ------------ Total provision for income taxes 578,742 1,277,282 6,544,299 ------------ ------------ ------------ NET INCOME (LOSS) $ 827,617 $ 2,124,658 $ (1,953,772) ============ ============ ============ NET INCOME (LOSS) PER SHARE $ 0.22 $ 0.56 $ (0.55) ============ ============ ============ WEIGHTED AVERAGE SHARES OUTSTANDING 3,726,496 3,823,000 3,523,677 ============ ============ ============ PRO FORMA INCOME DATA (UNAUDITED), (Note 2): HISTORICAL INCOME BEFORE INCOME TAXES $ 4,590,527 ============ PRO FORMA INCOME TAXES (Note 8) 1,762,600 ------------ PRO FORMA NET INCOME $ 2,827,927 ============ PRO FORMA NET INCOME PER SHARE $ 0.80 ============ WEIGHTED AVERAGE SHARES OUTSTANDING 3,523,677 ============
SEE NOTES TO FINANCIAL STATEMENTS. 8 STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994 -------------------------------------------------------------- ADDITIONAL COMMON PAID-IN RETAINED STOCK CAPITAL EARNINGS TOTAL - ------------------------------------------------------------------------------------------------------------ BALANCE, JANUARY 1, 1994 $ 3,000 $ 6,772,485 $ 11,629,927 $ 18,405,412 Proceeds from public offering of common stock, net of offering costs 823 7,936,509 -- 7,937,332 Dividends paid (Note 7) (2,525,000) (2,525,000) Net loss -- -- (1,953,772) (1,953,772) ----------- ------------ ------------ ------------ BALANCE, DECEMBER 31, 1994 3,823 14,708,994 7,151,155 21,863,972 Net income -- -- 2,124,658 2,124,658 ----------- ------------ ------------ ------------ BALANCE, DECEMBER 31, 1995 3,823 14,708,994 9,275,813 23,988,630 Purchase and retirement of common stock (122) (928,378) -- (928,500) Net income -- -- 827,617 827,617 ----------- ------------ ------------ ------------ BALANCE, DECEMBER 31, 1996 $ 3,701 $ 13,780,616 $ 10,103,430 $ 23,887,747 =========== ============ ============ ============
SEE NOTES TO FINANCIAL STATEMENTS. 9 STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, ------------------------------------------------------ 1996 1995 1994 - -------------------------------------------------------------------------------------------------------------------------- OPERATING ACTIVITIES: Net income (loss) $ 827,617 $ 2,124,658 $ (1,953,772) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 8,261,253 7,295,671 6,451,402 Provision for bad debts -- (28,000) -- Gain on disposal of property and equipment, net (805,800) (648,061) (409,657) Provision for deferred income taxes 1,181,657 1,131,753 5,243,687 Changes in assets and liabilities provided (used) cash: Accounts receivable 805,570 (2,184,454) (212,331) Refundable income taxes 581,738 (860,543) -- Other current assets (9,950) (156,920) (175,130) Deposits and other assets (30,038) (54,012) -- Accounts payable - trade and interline 1,190,036 165,309 64,614 Accrued liabilities (607,128) (643,341) 1,532,666 ------------ ------------ ------------ Net cash provided by operating activities 11,394,955 6,142,060 10,541,479 ------------ ------------ ------------ INVESTING ACTIVITIES: Capital expenditures: Revenue equipment (20,981,024) (11,452,497) (8,084,406) Other property and equipment (838,881) (1,882,879) (2,434,448) Proceeds from disposals of property and equipment 6,959,399 2,663,850 1,745,300 Collections on note receivable from stockholder -- -- 1,000,000 ------------ ------------ ------------ Net cash used in investing activities (14,860,506) (10,671,526) (7,773,554) ------------ ------------ ------------ FINANCING ACTIVITIES: Purchase of common stock (928,500) Net proceeds from initial public offering of common stock 7,937,332 Net payments under line of credit (400,000) Proceeds from long-term debt 18,411,485 10,457,052 6,730,712 Principal payments on long-term debt (11,906,138) (5,731,221) (14,740,629) Dividends paid -- -- (2,525,000) ------------ ------------ ------------ Net cash provided by (used in) financing activities 5,576,847 4,725,831 (2,997,585) ------------ ------------ ------------ NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 2,111,296 196,365 (229,660) CASH AND CASH EQUIVALENTS: BEGINNING OF YEAR 1,481,910 1,285,545 1,515,205 ------------ ------------ ------------ END OF YEAR $ 3,593,206 $ 1,481,910 $ 1,285,545 ============ ============ ============ SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid (received) during the year for: Interest $ 1,350,568 $ 775,495 $ 825,580 ============ ============ ============ Income taxes, net of refunds $ (943,351) $ 1,043,207 $ 1,664,976 ============ ============ ============
SEE NOTES TO FINANCIAL STATEMENTS. 10 NOTES TO FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF OPERATIONS - Boyd Bros. Transportation Inc. (the "Company") is a flatbed carrier,transporting a variety of products, primarily steel and building materials. The Company has authority to operate in the continental United States; however, its market generally encompasses the eastern two-thirds of the United States. The Company is headquartered in Clayton, Alabama, and operates regional and satellite terminals in locations near interstate highways or customer facilities. ACCOUNTING ESTIMATES - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. CASH AND CASH EQUIVALENTS - Cash and cash equivalents include cash on hand, cash on deposit and highly liquid investments with a maturity of three months or less at purchase date. SHORT-TERM INVESTMENTS - Short-term investments, which consist of certificates of deposit with maturities of three to twelve months, are stated at cost, which approximates market. TIRES IN SERVICE - Tires placed in service on newly purchased revenue equipment are carried at cost and depreciated over their useful lives, estimated to be eighteen months. The undepreciated cost of tires is included in prepaid tire expense. INVENTORIES - Parts and supplies are stated at the lower of cost or market. PROPERTY AND EQUIPMENT - Property and equipment is stated at cost. Depreciation is computed using the straight-line method at rates intended to distribute the cost of the assets over their estimated service lives as follows: Land improvements 15 years Buildings 5-25 years Revenue equipment 5-7 years Other equipment 3-10 years Leasehold improvements 5-20 years Expenditures which significantly increase values or extend useful lives of property and equipment are capitalized, whereas those for normal maintenance and repairs are expensed. Gains and losses on disposal of property and equipment are reflected in operations in the year of disposal. CLAIMS - The Company accrues estimates for the uninsured portion of claims relating to the Company's insurance programs (see Note 6). REVENUE RECOGNITION - Operating revenue and related costs are recognized on the date shipments are delivered by the Company. NET INCOME (LOSS) PER SHARE - Net income (loss) per share is based on the weighted average number of shares of common stock outstanding during the year, adjusted to reflect the reincorporation described in Note 7. RECLASSIFICATIONS - Certain reclassifications have been made to the 1995 and 1994 financial statements to conform to the 1996 presentation. 11 NOTES TO FINANCIAL STATEMENTS 2. PRO FORMA INFORMATION (UNAUDITED) PRO FORMA INCOME TAXES - As described in Note 8, through March 30, 1994, the Company was treated as an S Corporation pursuant to the Internal Revenue Code. As such, for all periods prior to March 30, 1994, the Company was not subject to federal income taxes and certain state income taxes. For informational purposes, the statements of operations include an unaudited pro forma adjustment for income taxes which would have been recorded if the Company had not been an S Corporation, computed in accordance with Statement of Financial Accounting Standards ("SFAS") No. 109. PRO FORMA NET INCOME PER SHARE - Pro forma net income per share is based on the weighted average number of shares of common stock outstanding during the year, adjusted to reflect the reincorporation described in Note 7. 3. EMPLOYEE BENEFIT PLAN The Company has a contributory 401(k) retirement plan, which covers employees who elect to participate and meet certain eligibility requirements. The amounts charged to operations related to this plan for the years ended December 31, 1996, 1995, and 1994 were $233,444, $218,496, and $226,501, respectively. There are no significant post-retirement benefits provided for retired employees of the Company. 4. LEASES The Company leases certain terminal buildings, land and equipment under various agreements, which expire at various dates through 1999. The lease agreements generally include renewal options and the Company is required to pay taxes, insurance and normal maintenance for the facilities. Future minimum lease payments under all operating leases with an initial or remaining noncancellable lease term of more than one year are as follows:
YEAR ------------------------------------------------------------------ 1997 $27,048 1998 27,048 1999 6,762 ------- Total $60,858 =======
Total rental expense for all operating leases totaled $98,648, $96,300, and $97,686 for the years ended December 31, 1996, 1995 and 1994, respectively. 5. LONG-TERM DEBT Long-term debt at December 31, 1996 and 1995 is summarized as follows:
1996 1995 - ---------------------------------------------------------------------------------------- Revenue equipment obligations repaid in 1996 $ -- $ 3,650,715 Revenue equipment obligations at LIBOR plus 1.25% (6.81% - 1996 and 7.31% - 1995) payable in monthly installments through August 2001 19,823,044 9,667,697 ----------- ----------- Total 19,823,044 13,318,412 Less current maturities 4,625,204 4,090,561 ----------- ----------- Long-term debt, exclusive of current maturities $15,197,840 $ 9,227,851 =========== ===========
12 NOTES TO FINANCIAL STATEMENTS Revenue equipment obligations are collateralized by revenue equipment. Long-term debt is scheduled to mature as follows:
Year ------------------------------------------------------------------------ 1997 $ 4,625,204 1998 4,625,204 1999 4,625,204 2000 4,330,309 2001 1,617,123 ----------- Total $19,823,044 ===========
The Company has a $1,500,000 line of credit agreement with a bank which was not utilized at December31, 1996 and December 31, 1995. The interest rate available on borrowings under the line of credit is prime less .125%. The covenants of loan agreements require the Company, among other things, to maintain a tangible net worth of $14,800,000, as defined, and to maintain certain financial ratios. The Company was in compliance with these financial covenants at December 31, 1996. The fair value of long-term debt was estimated using a discounted cash flow analysis, based on the borrowing rate currently available to the Company for bank loans with similar terms and average maturities and approximates its carrying value. 6. COMMITMENTS AND CONTINGENCIES The Company is currently self-insured as follows:
RETENTION AMOUNT PER OCCURRENCE ----------------------------------------------------------------------------- Workers' compensation $300,000 Liability - bodily injury and property damage 100,000 Employee medical and hospitalization 90,000 Cargo loss and damage 10,000 Collision and environmental losses No limit
The Company has excess primary coverage on a per claim and aggregate basis beyond the deductible levels and also maintains umbrella policies to supplement the primary liability coverage. The liabilities for self-insurance are accrued based on claims incurred, with liabilities for unsettled claims and claims incurred but not yet reported being estimated based on management's evaluation of the nature and severity of individual claims and the Company's past claims experience. The Company has outstanding letters of credit at December 31, 1996, totaling $1,607,000 to cover liability insurance claims and self-insured workers' compensation programs, and to purchase revenue equipment. There are sundry claims and suits pending against the Company in the ordinary course of business. In the opinion of the Company's management, any ultimate liability in these matters will have no material adverse effect on the operations or financial position of the Company. During 1994, the Company retained an environmental consulting firm to conduct an audit of its compliance with applicable federal, state and local laws and regulations concerning the environment. The environmental consulting firm detected the presence of soil contamination and potential groundwater contamination related primarily to the use of underground storage tanks, including tanks used by a prior owner of the property, at the Company's terminal in Birmingham, Alabama. The Company notified the Alabama Department of Environmental Management of this contamination. The Company completed the 13 NOTES TO FINANCIAL STATEMENTS process of removing and replacing all currently known underground storage tanks at the Birmingham terminal. The Company also replaced all underground storage tanks at the Clayton, Alabama, terminal. Based upon cost estimates provided by its environmental consulting firm and contractors in 1994, the Company recorded an $800,000 charge to establish a reserve for the removal and replacement of underground storage tanks at the Company's terminals. Based on subsequent reviews of this project by management and its independent consultants, the Company reduced this reserve during 1995 by $293,652 and again during 1996 by $54,878, reflecting a decline in the current estimated costs of remediating the sites. The environmental remediation liability included in the accompanying balance sheet at December31, 1996 is $145,122. There can be no assurance that material liabilities or expenditures will not arise from these or additional environmental matters that may be discovered, or from future requirements of law. The Company does not believe that these expenditures will have a material adverse effect on the Company's financial condition. 7. STOCKHOLDERS' EQUITY REINCORPORATION - Originally incorporated in Alabama in 1956 under the name of Boyd Brothers Transportation Company, Incorporated, the Company reincorporated as a Delaware corporation on March 23, 1994, and changed its name to Boyd Bros. Transportation Inc. As a result of the merger that effected the reincorporation, each share of common stock outstanding in the Alabama corporation was converted into 12,000 shares of common stock, resulting in a total of 3,000,000 shares of common stock outstanding prior to the offering. All common shares and per share amounts in the accompanying financial statements have been adjusted retroactively to give effect to the reincorporation. PREFERRED STOCK - The Board of Directors is authorized to issue, at its discretion, up to 1,000,000 shares of preferred stock at par value of $.001. The terms and conditions of the preferred stock are to be determined by the Board of Directors. STOCK OPTION PLAN - The Company has a stock option plan ("the Plan") that provides for the granting of stock options to key employees, executive officers and directors. The options are exercisable in increments over a five-year period beginning on the first anniversary of the grant and will expire ten years after the date of the grant. No options were exercised in 1994, 1995, or 1996. Information regarding the Plan is summarized below:
Option Shares Price ---------------------------------------------------------------------------------- Shares under option: Options granted in 1994 260,000 $ 11.00 Options terminated (16,100) ------- Outstanding at December 31, 1994 243,900 Options granted in 1995 73,000 $ 11.00 Options terminated (25,950) ------- Outstanding at December 31, 1995 290,950 Options granted in 1996 64,500 $7.75-11.00 Options terminated (97,050) ------- Outstanding at December 31, 1996 258,400 =======
Stock options exercisable and shares available for future grants at December 31, 1996, were 77,960 and 75,650, respectively, under the Plan. SFAS No. 123, Accounting for Stock-Based Compensation, encourages, but does not require companies to record compensation cost for stock-based employee compensation plans at fair value. The Company has chosen to continue to account for stock-based compensation using the intrinsic value method prescribed in Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and related Interpretations. Accordingly, compensation cost for stock options is measured as the excess, if any, of the quoted market price of the Company's stock at the date of the grant over the amount an employee must pay to acquire the stock. The option price of all the Company's stock options is equal to the fair value of the stock at the grant date. As such, no compensation expense is recorded in the accompanying financial statements. 14 NOTES TO FINANCIAL STATEMENTS Had compensation cost for the Company's stock option plans been determined based upon the fair value at the grant date for options awarded in 1996 and 1995 under these plans consistent with the methodology prescribed under SFAS No. 123, the Company's pro forma net income and net income per share would have differed from the amounts reported as follows:
As Reported Pro Forma ----------------------- ---------------------- 1996 1995 1996 1995 - ------------------------------------------------------- ---------------------- Net income $827,617 $2,124,658 $696,085 $2,079,365 Net income per share $ 0.22 $ 0.56 $ 0.19 $ 0.54
The weighted average fair value of the options granted during 1996 and 1995 is estimated as $6.24 and $8.63, respectively, on the date of grant using the Black-Scholes option-pricing model with the following assumptions: dividend yield 0%, volatility of 82.6%, risk-free interest rate of 6.5% and an expected life of 7 years. PUBLIC OFFERING - The Company completed the initial public offering of its common stock in May 1994, under which 823,000 shares of stock were sold. Net proceeds from the offering totaled $7,937,332. DISTRIBUTIONS TO S CORPORATION STOCKHOLDERS - In connection with the termination of its S Corporation status and its initial public offering of common stock, the Company distributed $2,525,000 to the S Corporation stockholders. The distributions represented the previously undistributed taxable earnings of the Company included in the taxable income of the S Corporation stockholders as a result of the Company's S Corporation status. 8. INCOME TAXES The Company terminated its S Corporation status on March 30, 1994, and became subject to corporate income taxes on that date. Upon termination of the S Corporation election, deferred income taxes became a liability of the Company and were recorded in the balance sheet with a corresponding charge to the income statement. The liability as of March 30, 1994, computed under the provisions of SFAS No. 109, was approximately $5,478,000 and is included in the 1994 provision for deferred income taxes. The provision (credit) for income taxes for the years ended December 31, 1996, 1995 and 1994 consisted of the following (in thousands):
1996 1995 1994 ----------------------------------------------------------------------------- Current: Federal $ (545) $ 125 $ 1,029 State (58) 20 272 ------- ------ ------- Total current (603) 145 1,301 ------- ------ ------- Deferred: Federal 1,019 979 5,322 State 163 153 (79) ------- ------ ------- Total deferred 1,182 1,132 5,243 ------- ------ ------- Total provision for income taxes $ 579 $1,277 $ 6,544 ======= ====== =======
Income tax expense for the years ended December 31, 1996, 1995 and 1994 differs from the amounts computed by applying the federal statutory rate of 34% to income before income taxes as follows (in thousands):
1996 1995 1994 ------------------------------------------------------------------------------- Tax expense at the statutory rate $ 478 $1,157 $ 1,561 Deferred taxes recorded upon termination of S Corporation status -- -- 5,478 Tax benefit of pro-rata allocation of items between C Corporation and S Corporation -- -- (737) State income taxes, net of federal benefit 69 94 184 Other 32 26 58 ------ ------ ------- $ 579 $1,277 $ 6,544 ====== ====== =======
15 NOTES TO FINANCIAL STATEMENTS The Company has approximately $2,400,000 of state net operating loss carryforwards for tax purposes available to offset future state taxable income through 2011. The Company also has approximately $244,000 of alternative minimum tax credit carryforwards available to offset future federal income tax. PRO FORMA INCOME TAXES - The following unaudited pro forma information reflects income tax expense that the Company would have incurred if it had been subject to federal and state income taxes for all of 1994, computed in accordance with SFAS No. 109 (in thousands).
1994 --------------------------------------------------------------------------- Pro forma income tax expense: Current: Federal $1,424 State 296 Deferred federal and state 43 ------ $1,763 ======
The unaudited pro forma income tax expense differs from the amounts computed by applying the federal statutory rate of 34% to income before income taxes as follows (in thousands):
1994 ----------------------------------------------------------------- Tax expense at the statutory rate $1,561 State income taxes, net of federal benefit 184 Meals and entertainment 7 Other 11 ------ $1,763 ======
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax liabilities and assets as of December 31, 1996 and 1995 are as follows (in thousands):
1996 1995 --------------------------------------------------------------------------- Deferred tax liabilities: Tax over book depreciation $8,746 $6,907 Prepaid expenses deductible when paid 247 273 Capitalized tires 265 206 Cash basis to accrual basis adjustment -- 84 Other 31 58 ------ ------ Total deferred tax liabilities 9,289 7,528 ------ ------ Deferred tax assets: Environmental remediation reserve 55 74 Accrued self insurance claims 865 639 Other accrued expenses not deductible until paid 87 86 Allowance for doubtful accounts 47 46 State NOL carryforward 118 -- Alternative minimum tax credit carryforward 234 -- Other 66 48 ------ ------ Total deferred tax assets 1,472 893 ------ ------ Net deferred tax liabilities $7,817 $6,635 ====== ======
16 NOTES TO FINANCIAL STATEMENTS The above amounts are reflected in the accompanying balance sheets as:
1996 1995 --------------------------------------------------------------------------- Current assets $ 531 $ 329 Noncurrent liabilities 8,348 6,964 ------ ------ $7,817 $6,635 ====== ======
9. MAJOR CUSTOMERS The Company does not believe that it is dependent upon any single customer. Sales to the Company's largest customer amounted to 13%, 14% and 14% of operating revenues during 1996, 1995 and 1994, respectively. 10. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) The following is a summary of the quarterly results of operations for the years ended December 31, 1996 and 1995:
1996 ----------------------------------------------- (In Thousands, except per share data) March 31 June 30 September 30 December 31 --------------------------------------------------------------------------------------- Operating revenues $ 14,929 $16,350 $17,529 $16,715 Operating income (loss) (101) 890 1,243 618 Net income (loss) (234) 307 507 248 Net income (loss) per share (.06) .08 .14 .07
1995 ----------------------------------------------- (In Thousands, except per share data) March 31 June 30 September 30 December 31 --------------------------------------------------------------------------------------- Operating revenues $ 14,638 $15,987 $15,827 $15,414 Operating income 1,429 1,241 761 670 Net income 778 680 312 355 Net income per share .20 .18 .08 .09
EX-23 3 CONSENT OF DELOITTE & TOUCHE LLP 1 EXHIBIT 23 INDEPENDENT AUDITORS' REPORT To the Board of Directors and Stockholders of Boyd Bros. Transportation Inc.: We have audited the accompanying balance sheets of Boyd Bros. Transportation Inc. as of December 31, 1996 and 1995, and the related statements of operations, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 1996. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the financial position of the Company at December 31, 1996 and 1995, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1996 in conformity with generally accepted accounting principles. As discussed in Note 8 to the financial statements, the Company terminated its S Corporation status on March 30, 1994 and became subject to corporate income taxes on that date. /s/ Deloitte & Touche LLP Birmingham, Alabama February 13, 1997 EX-27 4 FINANCIAL DATA SCHEDULE
5 1 YEAR DEC-31-1996 JAN-01-1996 DEC-31-1996 3,593,206 100,000 5,541,471 0 230,920 12,323,201 64,354,260 19,671,532 57,261,979 9,828,635 0 0 0 3,701 23,884,046 57,261,979 0 65,523,412 0 62,872,927 0 0 1,244,126 1,406,359 578,742 827,617 0 0 0 827,617 .22 .22
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