10-K

UNITED STATES 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
	For the fiscal year ended December 31, 2002
	OR
[  ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 0-23948

BOYD BROS. TRANSPORTATION INC.

(Exact name of registrant as specified in its charter)

Delaware	63-6006515
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
3275 Highway 30, Clayton, Alabama	36016
(Address of principal executive offices)	(Zip Code)

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, $.001 par value

     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

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter was $2,179,325.

     Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock, $.001 par value, as of March 28, 2003: 2,709,956 shares

     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. [  ]

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2) Yes      No X

DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by reference and the part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) any annual report to security holders; (2) any proxy or information statement; and (3) any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933. The listed documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1980).

     Portions of the Definitive Proxy Statement related to the 2003 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, 2002 in Parts II and IV.

TABLE OF CONTENTS

PART I
	Item 1. Business
	Item 2. Properties
	Item 3. Legal Proceedings
	Item 4. Submission of Matters to a Vote of Security Holders
PART II
	Item 5. Market For Registrant’s Common Stock and Related Stockholder Matters
	Item 6. Selected Financial Data
	Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 7A. Quantitative and Qualitative Disclosures About Market Risk Interest Rate Risk
	Item 8. Financial Statements and Supplementary Data
	Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure
PART III
	Item 10. Directors and Executive Officers of the Registrant
	Item 11. Executive Compensation
	Item 12. Security Ownership of Certain Beneficial Owners and Management
	Item 13. Certain Relationships and Related Transactions
	Item 14. Controls and Procedures
PART IV
	Item 15. Exhibits, Financial Statements, Financial Statement Schedules and Current Reports on Form 8-K
SIGNATURES
COMMERCIAL VARIABLE RATE PROMISSIONARY NOTE
COMMERCIAL SECURITY AGREEMENT
COMMERCIAL VARIABLE RATE PROMISIONARY NOTE
COMERCIAL SECURITY AGREEMENT DATED NOV 8 2002
WAIVER AND CONSENT DATED FEB 3 2003
WAIVER AND CONSENT DATED FEB 10 2003
PORTIONS OF THE COMPANIES ANNUAL REPORT
SUBSIDIARIES OF BOYD BROS.
CONSENT OF BDO SEIDMAN, LLP
INDEPENDENT AUDITORS REPORT OF D AND T
CONSENT AND REPORT ON SCHEDULES OF D&T
CEO PURSUANT TO SECTION 906 OF SARBANES OXLEY ACT
CEO PURSUANT TO 906 OF THE SARBANES OXLEY ACT

TABLE OF CONTENTS

ITEM		PAGE
NUMBER		NUMBER
	PART I
Item 1.	Business	2
Item 2.	Properties	9
Item 3.	Legal Proceedings	9
Item 4.	Submission of Matters to a Vote of Security Holders	9
	PART II
Item 5.	Market for the Registrant’s Common Stock and Related Stockholder Matters	10
Item 6.	Selected Financial Data	12
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 7A	Quantitative and Qualitative Disclosures About Market Risk	12
Item 8.	Financial Statements and Supplementary Data	12
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	12
	PART III
Item 10.	Directors and Executive Officers of the Registrant	13
Item 11.	Executive Compensation	13
Item 12.	Security Ownership of Certain Beneficial Owners and Management	13
Item 13.	Certain Relationships and Related Transactions	13
Item 14.	Controls and Procedures	13
	PART IV
Item 15.	Exhibits, Financial Statement Schedules, and Reports on Form 8-K	14
	Signatures	19

1

PART I

Item 1. Business

The Company

Boyd Bros. Transportation Inc. (“Boyd” or 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, Boyd has grown into what management believes is one of the largest exclusively flatbed carriers in the United States.

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 result in a shutdown of a production line at a plant or a delay in a construction project. Management focuses its marketing efforts on those shippers who require time-definite delivery because it 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 Boyd has sought to attract and retain drivers by using only high quality, late-model tractors equipped with 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, Boyd makes load assignments to drivers that enable each driver to attain his or her goals with respect to both miles driven as well as time at home.

In June 1997, Boyd began contracting with independent owner-operators to provide service to its customers. Boyd has also implemented a lease-purchase program, providing Boyd’s drivers with both career opportunities at Boyd and the opportunity to own their own tractor. Under the program, the driver leases the tractor from Boyd, along with an option to purchase the tractor. In 1998, Boyd added another option under the owner-operator program. Owner-operators are able to lease a new tractor for three and one-half years. Boyd will retain ownership of the tractor at the end of the lease, but this will enable the owner-operator to operate a new tractor and maintain his or her status as an independent contractor.

Boyd also operates Boyd Logistics, a department that provides logistical support to the Company. Boyd Logistics requires minimal overhead and capital resources. Boyd Logistics out-sources freight to third party carriers in situations where the Company does not have available tractors.

Boyd operates primarily in the southeastern United States, with an average length of haul of 734 miles. Management tracks Boyd’s ability to retain quality drivers, by ensuring drivers receive home time at their scheduled intervals. Boyd operated approximately 736 tractors and 1,056 flatbed trailers as of December 31, 2002. Owner-operators own 213 of the 736 tractors utilized by Boyd. Boyd compensates the owner-operators of these units on a per mile basis. Boyd utilizes agents in some areas to solicit and book freight.

On December 8, 1997, Boyd acquired WTI Transport, Inc., (“WTI”), (f/k/a Welborn Transport, Inc.) located in Tuscaloosa, Alabama. The acquisition was accounted for using the purchase method of accounting and, accordingly, the purchase price was allocated to the assets acquired and liabilities assumed, based upon their estimated fair market values at the acquisition date. WTI is operated by Boyd as a stand-alone subsidiary. References to the “Company” contained herein refer to the combined operations of Boyd and WTI. References hereinafter to “Boyd” or “WTI” describe the distinct operations of the parent and subsidiary, respectively.

WTI provides transportation services over shorter routes than those traditionally provided by Boyd. WTI operates primarily in the southeastern United States, with an average length of haul of 401 miles. Management believes this enhances WTI’s ability to retain quality drivers, as drivers’ time away from home is minimized. WTI operated approximately 219 tractors and 298 flatbed trailers as of December 31, 2002. Owner-operators own 182 of the 219 tractors utilized by WTI. The owner-operators of these units are compensated by WTI based upon a percentage of revenue. WTI utilizes agents in some areas to solicit and book freight. During 2000, the Company closed its WTI Logistics unit (this unit was reorganized and later reopened at the Boyd division) and WTI closed its specialized over-dimensional transport unit due to a slowdown in freight and a reduction in overall profitability.

2

Strategy

As discussed above, 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:

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 to 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. Boyd’s strategy has been to utilize technology to provide better service to its customers and to improve operating efficiency. Boyd utilizes satellite-tracking systems that enable Boyd to monitor equipment locations and schedules more effectively and to communicate with both drivers and customers. Customers are also able to track their loads by utilizing Boyd’s technology. Boyd has also installed computers on board each of its tractors to monitor fuel efficiency and other operational data. Boyd will continue to monitor and implement technological developments that will enable it to improve customer service and operating efficiency.

Premium Quality Tractors. Boyd continuously upgrades its fleet of tractors. Boyd’s management believes that maintaining a young, high-quality fleet of tractors facilitates Boyd’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. While WTI maintains a fleet of high-quality tractors, the shorter routes over which its vehicles are dispatched enables these units to be serviced more frequently. Accordingly, it has not been necessary for WTI to replace its fleet as frequently as Boyd.

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 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.

Boyd has written contracts with most of its customers. The contracts include, among other things, the pricing arrangements, the products that will be shipped and the specific destination points applicable to the contract. The contracts generally require the customer to use Boyd for a specified minimum amount of shipments each year and may be terminated by either party upon 30 to 60 days written notice.

The Company’s largest 25, 10 and 5 customers, predominately within the Boyd division, accounted for approximately 40%, 23% and 15% respectively, of the Company’s revenues during the year ended December 31, 2002. Many of the Company’s largest 25 customers are publicly held companies. The Company does not believe that it is dependent upon any single customer. Customers in the steel industry accounted for 39%, 42% and 42% of the Company’s operating revenues for the years ended December 31, 2002, 2001 and 2000, respectively.

Operations

The Company’s operations are designed to maximize efficiency and provide quality service to customers. All of Boyd’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 Boyd’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 Boyd’s drivers and equipment. See “Transportation Technology.”

Boyd conducts its operations through a network of 10 regional and satellite service centers in strategic locations in the eastern two-thirds of the United States. See “Item 2 — Properties.” Boyd operates regional service centers in Clayton and Birmingham, Alabama; Springfield, Ohio; and Greenville, Mississippi. These regional service centers are supported by smaller satellite service centers, each having between one to three employees, located in Calvert

3

City, Kentucky; Danville, Virginia; Lisbon Falls, Maine; Conley, Georgia; Walworth, Wisconsin and Cofield, North Carolina. These service centers allow Boyd to re-dispatch equipment terminating in a given area, enhance driver recruitment and return drivers to their homes more regularly. Boyd also has arrangements to deposit trailers near various major customers or shipping locations to facilitate pre-loading of shipments and thereby increasing efficiency.

WTI’s corporate offices are located in Tuscaloosa, Alabama. Both Boyd and WTI utilize independent agents to book freight. These agents are located in Texas, Tennessee, West Virginia, Florida, Alabama, Mississippi, and Ohio.

As previously mentioned, the Company also runs a Logistics department, Boyd Logistics. Boyd Logistics solicits freight for both Company trucks and carriers wanting Boyd Logistics to locate freight.

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 records, driving experiences and personal evaluations, including drug testing.

To maintain high equipment utilization, particularly during periods of growth, the Company strongly emphasizes continuous driver and owner-operator recruitment and training. Drivers are recruited at all of the Company’s regional terminal locations and primarily at the Company’s corporate headquarters. Boyd drivers attend orientation at the Birmingham terminal while WTI drivers attend orientation at the Tuscaloosa office.

The Company recognizes that its professional drivers are one of its most valuable assets. Drivers are trained in Company policies and operations, safety techniques and fuel-efficient operation of equipment. In addition, each driver must pass a rigorous road test prior to his or her assignment to a vehicle. The Company believes that experienced drivers have better safety records than new driver-school graduates, and management believes that their skills will help Boyd improve overall fleet efficiency as a result of higher utilization and historically lower maintenance costs on tractors operated by experienced drivers. As a result, beginning in February 2001, Boyd began hiring only experienced drivers and has discontinued hiring drivers directly from drivers’ schools. All drivers are required to participate in annual safety training and defensive driving courses for re-certification 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 Company also recognizes that carefully selected owner-operators complement its Company-employed drivers. Owner-operators are independent contractors who supply their own tractor and driver and are responsible for their operating expenses. Because owner-operators either provide their own tractors or lease-purchase tractors from the Company for which they make payments to the Company, less financial capital is required from the Company for growth. Also, owner-operators provide the Company with another source of drivers to support its growth. The Company intends to continue its emphasis on recruiting owner-operators, as well as Company drivers. However, it has been more difficult for the Company, and the industry as a whole, to recruit and retain owner-operators over the past year due to several factors including, but not limited to, higher fuel and insurance costs.

Competition for qualified drivers is intense. The short- to medium-haul truckload segment of the trucking industry, including the Company, experiences significant driver and owner-operator turnover, and the Company anticipates that the intense competition for qualified drivers in the trucking industry will continue.

At December 31, 2002, the Company had 947 employees; of these, approximately 600 were Company drivers, and the balance were mechanics, other equipment maintenance personnel and support personnel, including management and administration. In addition, owner-operators accounted for the operation of approximately 395 tractors. None of the Company’s employees is subject to a collective bargaining agreement, and the Company has never experienced a work stoppage. Management believes that its relationship with its employees is good.

4

Revenue Equipment

The Company’s philosophy is to purchase premium quality tractors to help attract and retain drivers and to promote safe operations, and management believes the higher initial cost of such equipment is recovered through better resale marketability. Each of the Company’s tractors are 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.

The Company adheres to a comprehensive maintenance program for both tractors and trailers. Owner-operator tractors are inspected prior to acceptance by the Company for compliance with operational and safety requirements of the Company and the DOT. These tractors are then periodically inspected, similar to Company tractors, to monitor continued compliance.

At December 31, 2002, the Company directly owned or leased through independent contractors (owner-operators) 955 tractors and 1,354 flatbed trailers. Freightliner and International manufacture the tractors, and Utility, Dorsey, Fontaine, Wabash and Great Dane manufacture the trailers.

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 Boyd has enhanced its strong reputation for customer satisfaction through the early and fleet-wide implementation of its satellite systems as well as its tracking and load tendering ability.

Boyd’s satellite system permits more efficient transmission of load assignments to drivers, and enhances the Company’s ability to monitor loads in transit and rapidly bill customers for completed deliveries. Once a load planner assigns a load, the assignment is transmitted to Boyd’s operations department where it is reviewed by a dispatcher who then relays the assignment to the appropriate driver through the display unit in each of Boyd’s vehicles. The driver can respond to the dispatcher 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. Boyd can electronically record a load assignment, report the load to the billing department and generate customer invoices.

In addition, Boyd uses the satellite system 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 Boyd’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. Customers are able to access and track their loads through Boyd’s internet web site.

Boyd has also equipped its entire fleet of tractors with the SENSORTRACS(C) on-board computer system (“Sensortracs”). This system monitors fuel efficiency and other operational data. Information from Sensortracs is periodically processed by one of Boyd’s computers, which generates reports on vehicle efficiency and driver performance. Reports generated by this system enhance Boyd’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.

Boyd has developed load tendering and tracking capabilities. Customers are able to track the progress of their loads during transport using their own personal computer. Additionally, customers are able to book loads over the internet. Customers submit potential loads to the appropriate regional load planner, and the load planner will then contact the customer via the internet e-mail system to acknowledge acceptance of the load. This technological advancement enables customers to book loads routinely without having to duplicate the same paperwork again. Additionally, Boyd utilizes a software program by The LOGISTICS.COM Group that enables Boyd to review each shipping lane to determine overall profitability and also to determine which customers are the most profitable within the lane.

5

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. The emphasis on safety begins in the hiring and training process, where prospective employees and owner-operators are given physical examinations and drug tests, and newly hired drivers and owner-operators, regardless of experience level, must participate in an intensive orientation program. See “Drivers and Employees.”

The directors of safety for the Company continuously monitor driver performance and have 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’s future insurance and claims expenses could exceed historical levels, which could have a material adverse effect on earnings. The Company currently self-insures for a portion of the claims exposure resulting from cargo loss, personal injury, and property damage, combined up to $750,000 per occurrence, effective July 1, 2002. In addition, the Company shares costs above the $750,000 self-insured amount, at a rate of fifty percent up to the Company’s coverage amount of $2 million. Costs and claims in excess of the Company’s coverage amount of $2 million will be borne solely by the Company. Also, effective July 1, 2002, the workers’ compensation self-insurance level increased to a maximum of $500,000, and the health insurance self-insurance level is $175,000 per person per year. If the number or dollar amount of claims for which the Company is self-insured increases, operating results could be adversely affected.

Company drivers were involved in two accidents in the first quarter and two accidents in the third quarter of 2002 that resulted in third party fatalities. Additionally, a Company driver was involved in one accident that involved a fatality in the first quarter of 2003. The Company would expect to absorb up to its self-insured level of $500,000 per occurrence for cargo loss, personal injury, and property damage if found liable for the two accidents occurring during the first quarter of 2002. The Company would expect to absorb up to its self-insured level of $750,000 per occurrence for the two accidents in the third quarter of 2002 and the accident in the first quarter of 2003. To date, four lawsuits have been filed against the Company with respect to these accidents. If the Company is ultimately found to have some liability for one or more of these accidents, the Company believes that its operating cash flows and, if needed, additional bank financing would be sufficient to cover any amounts payable. Each of these accidents, taken separately, has the potential to cause the Company to reach its total per occurrence retention amount for insurance purposes. Also, the Company maintains insurance coverage of up to $2 million with licensed insurance companies above the amounts for which the Company is self-insured. As discussed above, effective July 1, 2002, the Company shares fifty percent of claims amounts within its two million dollars of insurance coverage. The terrorist attacks in the United States on September 11, 2001, and subsequent events, have resulted in additional increases in the Company’s insurance expenses. If these expenses continue to increase, and the Company is unable to offset the increase with higher freight rates, the Company’s earnings could be materially affected.

Fuel

Motor carrier service is dependent upon the availability of diesel fuel. The Company’s fuel expense as a percent of operating revenue was 11.9%, 14.3% and 14.5% in 2002, 2001 and 2000, respectively. Through 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 rationing of petroleum products can have a materially adverse effect on the operations and profitability of the Company. Beginning in the second half of 1999 and continuing throughout 2000 and parts of 2001, the Company experienced significant increases in the cost of diesel fuel. Diesel fuel prices decreased in the fourth quarter of 2001, but the Company has experienced significant increases during 2002 and into the first quarter of 2003. The Company’s customer fuel surcharge reimbursement programs have historically enabled the Company to recover most of the higher fuel prices from its customers compared to normalized average fuel prices. These fuel surcharges, which automatically adjust from week to week depending on the cost of fuel, enable the Company to rapidly recoup the higher cost of fuel when prices increase. Conversely, when fuel prices decrease, fuel surcharges decrease. The Company cannot predict whether fuel prices will decrease or increase in the future or the extent to which fuel surcharges will be collected to offset potential increases. As a flatbed carrier, a significant portion of our business relates to steel, which has been in a virtual recession for more than two years, and building products, which has remained mixed due to the downturn in commercial construction and the ongoing resiliency of residential housing. Consequently, given these market conditions, we have had limited success in passing through our fuel cost increases. As of December 31, 2002, the Company had no derivative financial instruments to reduce its exposure to fuel price fluctuations.

6

The Company maintains aboveground and underground fuel storage tanks at most of its terminals. Leakage or damage to these facilities could expose the Company to environmental clean-up costs. The tanks are routinely inspected to help prevent and detect such problems.

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. There are other trucking companies, including truckload carriers that have flatbed divisions that have greater financial resources, operate more equipment or carry a larger volume of freight than the Company. The existence of these other motor carriers has also resulted in increased competition for hiring and retaining qualified drivers.

Due primarily to a weakening U.S. economy, trucking company failures in the last three years are continuing at a pace much higher than the previous fifteen years. Some truckload carriers are having extreme difficulty obtaining adequate trucking insurance coverage at a reasonable price and equipment lenders have tightened their credit policies for truck financing.

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 and the type commodity that is being shipped. 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.

Regulation

The trucking industry is subject to regulatory oversight and legislative changes that 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 (the “ISTB”), as well as various state agencies that have jurisdiction over the Company, has 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 been able more easily 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, and the ISTB was established within 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 and also legal number of hours of driver operation are subject to federal and state regulation. All of the Company’s drivers are required to obtain national commercial driver’s licenses, pursuant to the regulations promulgated by the DOT. DOT regulations require mandatory drug testing of drivers, and 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 of qualified drivers to the Company. DOT alcohol testing rules require certain tests, random and otherwise, for alcohol levels in drivers and other safety personnel. See “Safety and Insurance.”

7

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. Leakage or damage to these facilities could expose the Company to environmental clean-up costs. The tanks are routinely inspected to help prevent and detect such problems.

Currently, management does not know of any environmental remediation issues or liabilities. However, 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.

Forward Looking Statements

With the exception of historical information, the matters discussed and statements made in this report constitute forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Specifically, this report contains forward-looking statements regarding the Company’s marketing efforts and initiative to broaden its customer base; the Company’s emphasis on safety and efforts to reduce insurance claims and costs; the Company’s belief that the availability of credit under its line of credit, together with internally generated cash, will be adequate to finance its operations through fiscal year 2003 and will also be adequate to cover any liability with respect to the accidents that occurred during 2002 and the first quarter of 2003; expectations regarding the freight business and the economy; and results in future quarters and for the year. Whenever possible, the Company has identified these forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934) by words such as “anticipates,” “may,” “believes,” “estimates,” “projects,” “expects,” “intends,” and words of similar import. Forward-looking statements contained in this report involve certain assumptions, risks and uncertainties that could cause actual results to differ materially from those included in or contemplated by the statements. In particular, there can be no assurance that the Company’s marketing efforts and initiatives to broaden its customer base will be successful; that the Company’s emphasis on safety and efforts to reduce insurance claims and costs will be successful; that business conditions and the economy will improve, including the transportation and construction sectors in particular; that costs associated with increased insurance and claims costs, and liability claims for which the Company is self-insured will not have a material adverse affect on the Company; that the Company will be able to recruit and retain qualified drivers; that the Company will be able to control internal costs, particularly rising fuel costs that may or may not be passed on to the Company’s customers; that departures and defaults by owner-operators will not have a material adverse affect on the Company; or that the cost of complying with governmental regulations that are applicable to the Company will not have a material adverse affect on the Company. These assumptions, risks and uncertainties include, but are not limited to, those discussed or indicated in all documents filed by the Company with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2002. The Company expressly disclaims any obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

8

Item 2. Properties

The Company’s corporate headquarters and principal service center are located on a 17.9-acre tract in Clayton, Alabama. These 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 the location and ownership of each of Boyd’s service centers and shuttle facilities:

Clayton, AL	Owned, 34,000 sq. ft.
Springfield, OH	Owned, 21,520 sq. ft.
Birmingham, AL	Owned, 45,200 sq. ft.
Birmingham, AL	Owned, 80,000 sq. ft
Greenville, MS	Owned, 1,440 sq. ft.
Cofield, NC	Owned, 440 sq. ft.
Calvert City, KY	Leased month- to-month
Danville, VA	Leased month- to-month
Lisbon Falls, ME	Leased month- to-month
Conley, GA	Leased month- to-month
Walworth, WI	Leased month -to-month

WTI leases its corporate offices in Tuscaloosa, Alabama and also uses the Birmingham Terminal. Additionally, WTI also leases a service center located in Atlanta, Georgia. The WTI leases are on a month-to month basis.

The Birmingham terminal secures a loan to a bank with a principal balance of approximately $3.4 million at December 31, 2002. The loan bears interest of LIBOR plus 1.50% and monthly principal payments of $15,503 are due through February 2006, with a balloon payment of approximately $2.8 million due at that time.

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.” Company drivers were involved in two accidents in the first quarter and two accidents in the third quarter of 2002 that resulted in third party fatalities. Additionally, a Company driver was involved in one accident that involved a fatality in the first quarter of 2003. The Company would expect to absorb up to its self-insured level of $500,000 per occurrence for cargo loss, personal injury, and property damage, if found liable for the accidents which occurred during the first quarter of 2002. The Company would expect to absorb up to its self-insured level of $750,000 per occurrence for the two accidents in the third quarter of 2002 and the accident in the first quarter of 2003. To date, four lawsuits have been filed against the Company with respect to these four accidents. If the Company is ultimately found to have some liability for one or more of these accidents, the Company believes that its operating cash flows and, if needed, additional bank financing would be sufficient to cover any amounts payable. Also, the Company maintains insurance coverage of up to two million dollars with licensed insurance companies above the amounts for which the Company is self-insured. As discussed above, effective July 1, 2002, the Company shares fifty percent of claims amounts within its two million dollars of insurance coverage.

Item 4. Submission of Matters to a Vote of Security Holders

During the fourth quarter of 2002, no matters were submitted to a vote of security holders.

9

PART II

Item 5. Market For Registrant’s Common Stock and Related Stockholder Matters

The Common Stock of the Company is listed on The Nasdaq SmallCap Market under the symbol “BOYD”. In May 2000, Nasdaq notified the Company that its Common Stock no longer met certain requirements necessary for continued listing on the Nasdaq National Market. In response to this development, the Company elected to voluntarily transfer its Common Stock from the Nasdaq National Market to the Nasdaq SmallCap Market. This transfer became effective, and the Company’s Common Stock began trading on the Nasdaq SmallCap Market, on August 30, 2000. As of March 28, 2003, approximately 525 beneficial owners including 108 holders of record held the Common Stock. The table below sets forth the reported high and low sales price per share for the Common Stock as reported by the Nasdaq SmallCap Market for each fiscal quarter during 2002 and 2001.

	Price Range
	High		Low
2002
First Quarter	$	3.52	$	2.65
Second Quarter		3.40		2.60
Third Quarter		5.25		2.54
Fourth Quarter		4.74		2.90

	Price Range
	High		Low
2001
First Quarter	$	3.06	$	2.03
Second Quarter		2.68		1.88
Third Quarter		3.05		2.12
Fourth Quarter		3.94		2.15

The above quotes reflect inter-dealer prices, without retail mark-up, mark-down, or commission, and may not necessarily represent actual transactions. Management 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. 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.

Pursuant to the Company’s stock repurchase program, the Company purchased 6,500 and 244,463 shares of the Common Stock in open market or negotiated transactions during 2002 and 2001, for aggregate purchase prices of $42,250 and $1,521,056. The Company purchased in negotiated transactions 164,304 shares of Common Stock from the former vice-chairman of the Company during 2001 in negotiated transactions at a price per share of $6.50. The Company funded these purchases using working capital.

10

Securities Authorized for Issuance Under Equity Compensation Plans

The following table provides information as of December 31, 2002 regarding compensation plans (including individual compensation arrangements) under which Common Stock of the Company is authorized for issuance.

EQUITY COMPENSATION PLAN INFORMATION

					Number of securities
					remaining available
	Number of				for future issuance
	Securities to be				under equity
	issued upon		Weighted-average		compensation plans
	exercise of		exercise price of		(excluding
	outstanding		outstanding		securities
	options, warrants		options, warrants		reflected in
	and rights		and rights		column(a))
Plan Category	(a)		(b)		(c)
Equity Compensation Plans Approved by Security Holders		475,650	$	3.67		24,350
Equity Compensation Plans not Approved by Security Holders		—		—		—
Total		475,650	$	3.67		24,350

See Note 5 to the Consolidated Financial Statements for information regarding the material features of the above plans. Each of the above plans provides that the number of shares with respect to which options may be granted, and the number of shares of Company Common Stock subject to an outstanding option, shall be proportionately adjusted in the event of a subdivision or consolidation of shares or the payment of a stock dividend on Company Common Stock, and the purchase price per share of outstanding options shall be proportionately revised.

11

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, 2002.

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, 2002.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk Interest Rate Risk

Interest Rate Risk

The Company is exposed to interest rate risk due to its long-term debt, which at December 31, 2002, bore interest at rates ranging from 1.25% to 2.50% above the applicable bank’s LIBOR rate. Under the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 107, Disclosures about Fair Value of Financial Instruments, the Company has estimated the fair value of its long-term debt approximates its carrying value, using a discounted cash flow analysis based on borrowing rates available to the Company. The effect of a hypothetical one percent increase in interest rates would decrease pre-tax income by approximately $168,000. Management believes that current working capital funds are sufficient to offset any adverse effects caused by changes in these interest rates.

Commodity Price Risk

The price and availability of diesel fuel are subject to fluctuations due to changes in the level of global oil production, seasonality, weather, and other market factors. The geopolitical situation in the Middle East has caused oil prices to rise dramatically in the first quarter of 2003. Historically, the Company has been able to recover a majority of fuel price increases from customers in the form of fuel surcharges. The Company cannot predict the extent to which high fuel price levels will continue in the future or the extent to which fuel surcharges could be collected to offset such increases. As of December 31, 2002, the Company had no derivative financial instruments to reduce its exposure to fuel price fluctuations. The Company will consider possible opportunities to hedge fuel costs in the future.

Item 8. Financial Statements and Supplementary Data

The information required by this item is incorporated by reference from the Consolidated Financial Statements contained in the Company’s Annual Report to Stockholders for the year ended December 31, 2002.

Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure

The Company filed a Current Report on Form 8-K dated September 21, 2001, reporting, under “Item 4. Changes in Registrant’s Certifying Accountant” thereunder, the engagement of BDO Seidman, LLP as the Company’s independent accountant in substitution for Deloitte & Touche LLP.

12

PART III

Item 10. Directors and Executive Officers of the Registrant

Set forth below is information concerning the Executive Officers of the Company as of March 28, 2003. Additional information required by Part III, Item 10 is incorporated herein by reference to the Company’s definitive Proxy Statement relating to the 2003 Annual Meeting of Stockholders.

Gail B. Cooper, age 52, has served as President and Chief Executive Officer and as a Director of the Company since February 17, 2000. Ms. Cooper served as Secretary of Boyd from December 1969 until February 2000. Ms. Cooper received a B.S. in business administration from Troy State University. She has served Boyd in numerous administrative and accounting positions since joining Boyd full-time in June 1972. Ms. Cooper is the sister of Ms. Tibbs.

Richard C. Bailey, age 52, has served as Chief Operating Officer and Chief Financial Officer of the Company since joining Boyd 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.

Ginger B. Tibbs, age 49, has been the Secretary/Treasurer of Boyd since February 2000, and served as a Director from December 1978 until March 1994. Ms. Tibbs is primarily responsible for collection of Boyd’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 sister of Ms. Cooper.

Item 11. Executive Compensation

All information required by Item 11 is incorporated by reference to the Company’s definitive Proxy Statement relating to the 2003 Annual Meeting of Stockholders.

Item 12. Security Ownership of Certain Beneficial Owners and Management

All information required by Item 12 is incorporated by reference to the Company’s definitive Proxy Statement relating to the 2003 Annual Meeting of Stockholders.

Item 13. Certain Relationships and Related Transactions

All information required by Item 13 is incorporated by reference to the Company’s definitive Proxy Statement relating to the 2003 Annual Meeting of Stockholders.

Item 14. Controls and Procedures

Within the 90 days prior to the date of this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures, as defined in Exchange Act Rule 15d-14(c). Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective in enabling the Company to record, process, summarize, and report information required to be included in the Company’s periodic SEC filings within the required time period. There have been no significant changes in the Company’s internal controls or in other factors that could significantly affect internal controls subsequent to the date the Company carried out its evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

13

PART IV

Item 15. Exhibits, Financial Statements, Financial Statement Schedules and Current 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, 2002:
		Report of Independent Certified Public Accountants
		Consolidated Balance Sheets at December 31, 2002 and 2001
		Consolidated Statements of Operations for the years ended December 31, 2002, 2001 and 2000
		Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2002, 2001 and 2000
		Consolidated Statements of Cash Flows for the years ended December 31, 2002, 2001 and 2000
		Notes to Consolidated Financial Statements
	2.	Financial Statement Schedules.
		The schedule listed below is included herein immediately after the signature pages hereto. Schedules not listed below have been 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.

Schedule
Number	Description
II	Valuation and Qualifying Accounts and Reserves for the Three Fiscal Years Ended December 31, 2002

3.	Exhibits required by Item 601 of Regulation S-K.
	The following exhibits are included in this Form 10-K:

14

Exhibit
Number	Description
10.1	Commercial Variable Rate Promissory Note by and between the Company and Compass Bank dated November 08, 2002 in the amount of $1,273,830.
10.2	Commercial Security Agreement by and between the Company and Compass Bank dated November 8, 2002.
10.3	Commercial Variable Rate Promissory Note by and between the Company and Compass Bank dated November 8, 2002 for $630,250.
10.4	Commercial Security Agreement by and between the Company and Compass Bank dated November 8, 2002.
10.5	Waiver and consent by and between the Company and AmSouth Bank dated February 3, 2003.
10.6	Waiver and consent by and between the Company and Compass Bank dated February 10, 2003.
13	Portions of the Company’s Annual Report to Stockholders for the year ended December 31, 2002 are specifically incorporated herein by reference.
21	Subsidiaries of the Registrant.
23.1	Consent of BDO Seidman, LLP
23.2	Independent Auditors’ Report of Deloitte & Touche LLP
23.3	Consent and Report on Schedules of Deloitte & Touche LLP
99.1	Chief Executive Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.2	Chief Financial Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

The following exhibits are incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2002:

Exhibit
Number	Description
10.1	Commercial loan and security agreement dated July 1, 2002 by and between the Company and Navistar Financial Corporation

The following exhibits are incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2002:

Exhibit
Number	Description
10.1	Master Security Agreement dated May 31, 2002 by and between the Company and General Electric Capital Corporation.

15

10.2	Promissory Note dated May 31, 2002 by and between the Company and General Electric Capital Corporation.
10.3	Consulting Agreement dated January 1, 2002 by and between the Company and Dempsey Boyd.

The following exhibits are incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2002:

Exhibit
Number	Description
10.1	Commercial Loan and Security Agreement dated January 3, 2002 by and between the Company and Navistar Financial Corporation.
10.2	Commercial Loan and Security Agreement dated March 27, 2002 by and between the Company and Navistar Financial Corporation.
10.3	Commercial Loan and Security Agreement dated January 17, 2002 by and between the Company and Navistar Financial Corporation.
10.4	Commercial Loan and Security Agreement dated January 17, 2002 by and between the Company and Navistar Financial Corporation.

The following exhibits are incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2000:

Exhibit
Number	Description
10.1	Credit and Security Agreement dated April 11, 2000 between the Company and Compass Bank in the amount of $3,267,160 for truck equipment
10.2	Security Agreement dated April 11, 2000 between the Company and Compass Bank in the amount of $3,267,160 for truck equipment
*10.3	First Amendment to Acquisition Agreement, Employment Agreement and Covenant Not To Compete dated March 17, 2000 between the Company, Miller Welborn and Steven Rumsey
10.4	Second Amendment to Acquisition Agreement dated May 30, 2000 between the Company, Miller Welborn and Steven Rumsey
*10.5	Second Amendment to Employment Agreement dated May 22, 2000 between the Company and Steven Rumsey
10.7	Debt Covenant Waiver dated March 27, 2001 from Compass Bank relating to Credit and Security Agreement dated April 11, 2000.
10.8	Waiver and Consent Agreement dated March 28, 2001 by and between the Company and AmSouth Bank N.A. relating to Credit Agreement dated April 1, 1994.

* 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 15(c) of Form 10-K.

16

The following exhibits are incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 1999:

Exhibit
Number	Description
10.1	Credit and Security Agreement dated March 16, 1999 between the Company and Compass Bank in the amount of $10,000,000 for truck equipment
10.2	Security Agreement dated March 16, 1999 between the Company and Compass Bank in the amount of $10,000,000 for truck equipment

The following exhibits are incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 1998:

Exhibit
Number	Description
10.2	Credit and Security Agreement dated May 29, 1998 between the Company and Compass Bank in the amount of $4,500,000 for truck equipment

The following exhibits are incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 1997:

Exhibit
Number	Description
*10.1	First Amendment to Boyd Bros. Transportation Inc. 1994 Stock Option Plan
*10.3	Employment Agreement between the Company and Steven Rumsey dated December 8, 1997

* 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 15(c) of Form 10-K.

The following exhibit is incorporated by reference to the Company’s Registration Statement on Form S-8, declared effective on May 20, 1999:

Exhibit
Number	Description
4	Boyd Bros. Transportation Inc. 1999 Employee Stock Purchase Plan

17

The following exhibits are incorporated by reference to the Company’s Registration Statement on Form S-1, declared effective on May 9, 1994:

Exhibit
Number	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

* 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 15 (c) of Form 10-K.

The following exhibit is incorporated by reference to the Company’s Amendment to Report on Form 10-Q filed on August 5, 1997:

Exhibit
Number	Description
10.33	OMNITRACS contract dated February 5, 1997, between the Company and QUALCOMM, Inc.

The following exhibit is incorporated by reference to the Company’s Report on Form 8-K filed on December 19, 1997:

Exhibit
Number	Description
2.1	Acquisition Agreement dated December 8, 1997, by and among the Company, W-T Acquisition Company, WTI, Miller Welborn and Steven Rumsey
	(b)	Reports on Form 8-K
		None.

18

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/ Gail B. Cooper Gail B. Cooper President and Chief Executive Officer

Date: March 28, 2003

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:

Signature	Title	Date
/s/ Gail B. Cooper Gail B. Cooper	Chief Executive Officer, President and Director (Principal Executive Officer)	March 28, 2003
/s/ Richard C. Bailey Richard C. Bailey	Chief Operating Officer, Chief Financial Officer and Director (Principal Financial and Accounting Officer)	March 28, 2003
/s/Boyd Whigham Boyd Whigham	Chairman and Director	March 28, 2003
/s/ J. Mark Dunning J. Mark Dunning	Director	March 28, 2003
/s/ Stephen J. Silverman Stephen J. Silverman	Director	March 28, 2003
/s/ J. Larry Baxter J. Larry Baxter	Director	March 28, 2003

19

CERTIFICATIONS

I, Gail B. Cooper, certify that:

     1.  I have reviewed this annual report on Form 10-K of Boyd Bros. Transportation Inc.;

     2.  Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

     3.  Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operation and cash flows of the registrant as of, and for, the periods presented in this annual report;

     4.  The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a)  Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

     b)  Evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and

     c)  Presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

     5.  The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant ‘s board of directors (or persons performing the equivalent functions):

     a)  All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

     b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

     6.  The registrant’s other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: March 28, 2003

/s/ Gail B. Cooper

Gail B. Cooper
President and Chief Executive Officer

CERTIFICATIONS

I, Richard C. Bailey, certify that:

     1.  I have reviewed this annual report on Form 10-K of Boyd Bros. Transportation Inc.;

     2.  Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

     3.  Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operation and cash flows of the registrant as of, and for, the periods presented in this annual report;

     4.  The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a.  Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

     b.  Evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and

     c.  Presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

     5.  The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant ‘s board of directors (or persons performing the equivalent functions):

     a.  All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

     b.  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

     6.  The registrant’s other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: March 28, 2003

/s/ Richard C. Bailey

Richard C. Bailey
Chief Financial Officer

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE

To the Board of Directors and Stockholders
     of Boyd Bros. Transportation Inc.:

     The audits referred to in our report dated January 31, 2003 (except for Note 3, which is as of February 10, 2003), relating to the consolidated financial statements of Boyd Bros. Transportation Inc. and subsidiary, which is incorporated in Item 8 of the Form 10-K by reference to the annual report to stockholders for the year ended December 31, 2002 included the audits of the financial statement schedule for the years ended December 31, 2002 and 2001, listed in Item 15 of the Form 10-K. This consolidated financial schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion based on our audits.

     In our opinion such consolidated financial statement schedule for the years ended December 31, 2002 and 2001, presents fairly, in all material respects, the information set forth therein.

/s/ BDO Seidman, LLP

Atlanta, Georgia
January 31, 2003

SCHEDULE II
BOYD BROS. TRANSPORTATION INC.
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
For the Three Fiscal Years Ended December 31, 2002
(in Thousands)

			Additions		Additions
	Balance		Charged to		Charged to
	Beginning		Costs and		Other				Balance at
Description	Of Year		Expenses		Accounts		Deduction(a)		End of Year
Allowance for doubtful accounts- deducted from trade receivables in the balance sheet
Year ended December 31, 2002	$	319	$	79	$	—	$	57	$	341
Year ended December 31, 2001	$	276	$	625	$	—	$	582	$	319
Year ended December 31, 2000	$	347	$	84	$	—	$	155	$	276

(a) Uncollectible accounts written off.

			Additions
	Balance at		Charged to
	Beginning		Costs and				Balance at
Description	Of Year		Expenses		Deductions		End of Year
Allowance for uncollectible receivables related to sales-type leases-deducted from investment in sales-type leases in the balance sheet
Year ended December 31, 2002	$	1,590	$	6,788	$	6,237	$	2,141
Year ended December 31, 2001	$	678	$	2,738	$	1,826	$	1,590
Year ended December 31, 2000	$	910	$	651	$	883	$	678

EX-10.1 3 g81077exv10w1.txt COMMERCIAL VARIABLE RATE PROMISSIONARY NOTE Exhibit 10.1 COMMERCIAL VARIABLE RATE PROMISSORY NOTE BORROWER BOYD BROTHERS TRANSPORTATION CO., INC. COMPASS BANK COPY 3480 EASTERN BLVD. MONTGOMERY, AL 36116 ADDRESS (334) 409-7304 "LENDER" 3275 HIGHWAY 30 CLAYTON, AL 36016-3003 TELEPHONE NO. IDENTIFICATION NO. (334) 775-1209 636006515

OFFICER INTEREST PRINCIPAL FUNDING MATURITY CUSTOMER LOAN IDENTIFICATION RATE AMOUNT DATE DATE NUMBER NUMBER S.M. VARIABLE $1,273,830.00 11/08/02 11/01/08 PURPOSE: TO PURCHASE TRAILERS

PROMISE TO PAY: For value received, Borrower promises to pay to the order of Lender the principal amount of One Million Two Hundred Seventy-Three Thousand Eight Hundred Thirty and no/100 Dollars ($1,273,830.00) plus interest on the unpaid principal balance at the rate and in the manner described below, until all amounts owing under this Note are paid in full. All amounts received by Lender shall be applied first to accrued, unpaid interest, then to unpaid principal, and then to any late charges or expenses, or in any other order as determined by Lender, in Lender's sole discretion, as permitted by law. INTEREST RATE: This Note has a variable interest rate feature. The interest rate on this Note may change from time to time if the Index Rate identified below changes. Interest shall be computed on the basis of the actual number of days over 360 days per year. Interest on this Note shall be calculated and payable at a variable rate equal to 1.750% per annum over the Index Rate. The initial interest rate on this Note shall be 3.130% per annum. Any change in the interest rate resulting from a change in the Index Rate will be effective on: the first day of the next succeeding Interest Period. INDEX RATE: The Index Rate for this Note shall be: SEE ANNEX "A", LIBOR RATE for rate definitions and additional terms. If the Index Rate is redefined or becomes unavailable, then Lender may select another index which is substantially similar. RATE LIMITATIONS: Subject to applicable law, the minimum interest rate on this Note shall be 3.500% per annum. The maximum interest rate on this Note shall not exceed 18.00% per annum, or if less, or if a maximum rate is not indicated, the maximum interest rate Lender is permitted to charge by law. The maximum rate increase at any one time will be n/a %. The maximum rate decrease at any one time will be n/a %. DEFAULT RATE: If there is an Event of Default under this Note, the Lender may, in its discretion, increase the interest rate on this Note to: eighteen percent (18.000%) per annum or the maximum interest rate Lender is permitted to charge by law, whichever is less. PAYMENT SCHEDULE: Borrower shall pay the principal and interest according to the following schedule: 71 payments of $19,441.81 beginning December 01, 2002 and continuing at monthly time intervals thereafter. A final payment of the unpaid principal balance plus accrued interest is due and payable on November 01, 2008. If the interest rate changes, the payment amounts may change in an amount sufficient to repay the unpaid principal balance over the scheduled amortization term. New payments begin with the first payment after the rate change. INTEREST SURCHARGE: Borrower agrees to pay an interest surcharge of $ n/a. The interest surcharge is earned by Lender when paid and is not subject to refund; however, if this Note is prepaid in full within 90 days after the date of this Note, Borrower will receive a credit of a pro rata portion of the interest surcharge, subject to Lender's right to retain a minimum surcharge of $25.00. PREPAYMENT: This Note may be prepaid in part or in full on or before its maturity date. If this Note contains more than one installment, any partial prepayment will not affect the due date or the amount of any subsequent installment, unless agreed to, in writing, by Borrower and Lender. If this Note is prepaid in full, there will be: [x] No prepayment penalty. [ ] A prepayment penalty of: LATE CHARGE: If a payment is in default 10 days or more, Borrower will be charged a late charge of :[x] 5.00% of the unpaid payment ; [ ] $___________ or _____________% of the unpaid payment, whichever is [ ] greater, but not to exceed $_____________________; [ ]less. SECURITY: To secure the payment and performance of obligations incurred under this Note, Borrower grants Lender a security interest in all of Borrower's right, title, and interest in all monies, instruments, savings, checking and other accounts of Borrower (excluding IRA, Keogh, trust accounts and other accounts subject to tax penalties if so assigned) that are now or in the future in Lender's custody or control. [x] If checked, the obligations under this Note are also secured by the collateral described in any security instrument(s) executed in connection with this Note, and any collateral described in any other security instrument(s) securing this Note or all of Borrower's obligations. RENEWAL: [ ] If checked, this Note is renewal, but not a satisfaction, of Loan Number ____________________________________. - -------------------------------------------------------------------------------- THE PERSONS SIGNING BELOW ACKNOWLEDGE THAT THEY HAVE READ, UNDERSTAND, AND AGREE TO THE TERMS AND CONDITIONS OF THIS NOTE, INCLUDING THE PROVISIONS ON THE REVERSE SIDE, AND FURTHER ACKNOWLEDGE RECEIPT OF AN EXACT COPY OF THIS NOTE. Dated November 08, 2002 CAUTION - IT IS IMPORTANT THAT YOU THOROUGHLY READ THE CONTRACT BEFORE YOU SIGN IT. BORROWER: BOYD BROTHERS TRANSPORTATION BORROWER: CO., INC. By: /s/ Richard Bailey - --------------------------------------- ----------------------------------- RICHARD BAILEY CFO BORROWER: BORROWER: - --------------------------------------- ----------------------------------- BORROWER: BORROWER: - --------------------------------------- ----------------------------------- BORROWER: BORROWER: - --------------------------------------- ----------------------------------- TERMS AND CONDITIONS 1. EVENTS OF DEFAULT. An Event of Default will occur under this Note in the event that Borrower, any guarantor or any other third party pledging collateral to secure this Note: (a) fails to make any payment on this Note or any other indebtedness to Lender when due; (b) fails to perform any obligation or breaches any warranty or covenant to Lender contained in this Note, any security instrument, or any other present or future written agreement regarding this or any other indebtedness of Borrower to Lender; (c) provides or causes any false or misleading signature or representation to be provided to Lender; (d) sells, conveys, or transfers rights in any collateral securing this Note without the written approval of Lender; or destroys, loses or damages such collateral in any material respect; or subjects such collateral to seizure, confiscation or condemnation; (e) has a garnishment, judgment, tax levy, attachment or lien entered or served against Borrower, any guarantor, or any third party pledging collateral to secure this Note or any of their property; (f) dies, becomes legally incompetent, is dissolved or terminated, ceases to operate its business, becomes insolvent, makes an assignment for the benefit of creditors, fails to pay debts as they become due, or becomes the subject of any bankruptcy, insolvency or debtor rehabilitation proceeding; (g) fails to provide Lender evidence of satisfactory financial condition; (h) has a majority of its outstanding voting securities sold, transferred or conveyed to any person or entity other than any person or entity that has the majority ownership as of the date of the execution of this Note; or (i) causes Lender to deem itself insecure due to a significant decline in the value of any real or personal property securing payment of this Note, or Lender in good faith, believes the prospect of payment or performance is impaired. 2. RIGHTS OF LENDER ON DEFAULT. If there is an Event of Default under this Note, Lender will be entitled to exercise one or more of the following remedies without notice or demand (except as required by law): (a) to declare the principal amount plus accrued interest under this Note and all other present and future obligations of Borrower immediately due and payable in full, such acceleration to be automatic and immediate if the Event of Default is a filing under the Bankruptcy Code; (b) to collect the outstanding obligations of Borrower with or without resorting to judicial process; (c) to cease making advances under this Note or any other agreement between Borrower and Lender; (d) to take possession of any collateral in any manner permitted by law; (e) to require Borrower to deliver and make available to Lender any collateral at a place reasonably convenient to Borrower and Lender; (f) to sell, lease or otherwise dispose of any collateral and collect any deficiency balance with or without resorting to legal process; (g) to set-off Borrower's obligations against any amounts due to Borrower including, but not limited to, monies, instruments, and deposit accounts maintained with Lender; and (h) to exercise all other rights available to Lender under any other written agreement or applicable law. Lender's rights are cumulative and may be exercised together, separately, and in any order. Lender's remedies under this paragraph are in addition to those available at common law, including, but not limited to, the right of set-off. 3. DEMAND FEATURE. [ ] If checked, this Note contains a demand feature. Lender's right to demand payment, at any time, and from time to time, shall be in Lender's sole and absolute discretion, whether or not any default has occurred. 4. FINANCIAL INFORMATION. Borrower will at all times keep proper books of record and account in which full, true and correct entries shall be made in accordance with generally accepted accounting principles and will deliver to Lender, within ninety (90) days after the end of each fiscal year of Borrower, a copy of the annual financial statements of Borrower relating to such fiscal year, such statements to include (i) the balance sheet of Borrower as at the end of such fiscal year and (ii) the related income statement, statement of retained earnings and statement of cash flow of Borrower for such fiscal year, prepared by such certified public accountants as may be reasonably satisfactory to Lender. Borrower also agrees to deliver to Lender within fifteen (15) days after filing same, a copy of Borrower's income tax returns and also, from time to time, such other financial information with respect to Borrower as Lender may request. 5. MODIFICATION AND WAIVER. The modification or waiver of any of Borrower's obligations or Lender's rights under this Note must be contained in a writing signed by Lender. Lender may perform any of Borrower's obligations or delay or fail to exercise any of its rights without causing a waiver of those obligations or rights. A waiver on one occasion will not constitute a waiver on any other occasion. Borrower's obligations under this Note shall not be affected if Lender amends, compromises, exchanges, fails to exercise, impairs or releases any of the obligations belonging to any co-borrower or guarantor or any of its rights against any co-borrower, guarantor, the collateral or any other property securing the obligations. 6. SEVERABILITY. If any provision of this Note is invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 7. ASSIGNMENT. Borrower agrees not to assign any of Borrower's rights, remedies or obligations described in this Note without the prior written consent of Lender, which consent may be withheld by Lender in its sole discretion. Borrower agrees that Lender is entitled to assign some or all of its rights and remedies described in this Note without notice to or the prior consent of Borrower. 8. NOTICE. Any notice or other communication to be provided to Borrower or Lender under this Note shall be in writing and sent to the parties at the addresses described in this Note or such other address as the parties may designate in writing from time to time. 9. APPLICABLE LAW. This Note shall be governed by the laws of the state indicated in Lender's address. Unless applicable law provides otherwise, Borrower consents to the jurisdiction of any court located in such state selected by Lender, in its discretion, in the event of any legal proceeding under this Note. 10. COLLECTION COSTS. To the extent permitted by law, Borrower agrees to pay Lender's reasonable fees and costs of attorneys and other agents (including without limitation paralegals, clerks and consultants), whether or not such attorney or agent is an employee of Lender, which are incurred by Lender in collecting any amount due or enforcing any right or remedy under this Note, whether or not suit is brought, and including, but not limited to, all fees and costs incurred on appeal, in bankruptcy, and for post-judgment collection actions. 11. MISCELLANEOUS. This Note is being executed primarily for commercial, agricultural, or business purposes. Borrower and Lender agree that time is of the essence. Borrower agrees to make all payments to Lender at any address designated by Lender and in lawful United States currency. Borrower and any person who endorses this Note waives presentment, demand for payment, notice of dishonor and protest and further waives any right to require Lender to proceed against anyone else before proceeding against Borrower or said person. All references to Borrower in this Note shall include all of the parties signing this Note, and this Note shall be binding upon the heirs, successors and assigns of Borrower and Lender. If there is more than one Borrower their obligations under this Note shall be joint and several. This Note represents the complete and integrated understanding between Borrower and Lender regarding the terms hereof. 12. JURY TRIAL WAIVER. BORROWER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY CIVIL ACTION ARISING OUT OF, OR BASED UPON, THIS NOTE OR THE COLLATERAL SECURING THIS NOTE. 13. ADDITIONAL TERMS: SEE ADDENDUM TO PROMISSORY NOTE ANNEX A LIBOR RATE (a) Unless otherwise defined in this Annex, all capitalized terms used herein shall have the meanings given such terms in the Note to which this Annex is attached and made a part of (the Note). (b) The following terms are additionally defined for purposes of this Annex and, as with all other provisions herein, shall be deemed to be incorporated into the Note for all purposes. This Annex shall control in the event any of the following terms are otherwise defined in the Note. APPLICABLE LIBOR RATE shall mean the LIBOR Rate then in effect plus 1.75%. BUSINESS DAY shall mean each day on which the Lender is open to carry on its normal commercial lending business. INTEREST PERIOD shall mean a period commencing on the date of the Note, and which shall expire on the day immediately prior to the date that is one, two or three months thereafter as corresponds to the applicable Libor Reference Period (hereafter defined). If the Libor Reference Period is 30 days, the Interest Period shall be one month. If the Libor Reference Period is 60 days, the Interest Period shall be two months. If the Libor Reference Period is 90 days, the Interest Period shall be three months. Succeeding Interest Periods shall commence on the day immediately following the expiration date of the preceding Interest Period. LIBOR RATE refers to the London Interbank Offered Rate for the applicable Libor Reference Period as quoted on the Telerate Information System, page 3750, on the first day of each Interest Period (or in the event no such quotation is available on such date, as quoted on the day most immediately preceding the date of determination on which such a quotation was available). LIBOR REFERENCE PERIOD shall be a period of [ ] 30 days, or [ ] 30, 60 or 90 days, at Borrower's option. If Borrower has the option to select among 30, 60 or 90 day Libor Reference Periods, then at least three (3) Business Days before the end of the then effective Interest Period (hereafter defined), the Borrower may select a new Libor Reference Period of 30, 60 or 90 days, to become effective on the first day of the next succeeding Interest Period. If Borrower shall at the expiration of any Interest Period fail to elect a new Libor Reference Period as provided herein, then the duration of the next Libor Reference Period shall be the same as the previous Libor Reference Period. The initial Libor Reference Period shall be 30 days. The Libor Reference Periods, as used herein, are reference rates only, and the actual Interest Periods under this Note may be for periods of more than, or less than, 30, 60 or 90 days, as applicable. ADDENDUM The provisions of this Addendum shall supplement and be in addition to the terms and provisions of the promissory note to which this Addendum is attached (the "Note"). The following provision is added to the Note: INTEREST RATE: Notwithstanding anything to the contrary contained in the Note, the interest rate will never be lower than the minimum interest rate shown in the Note, even if the initial interest rate, as defined in the Note, is lower than the minimum interest rate. In such cases, the minimum interest rate will be the initial interest rate. Except as expressly modified by this Addendum, all terms of the Agreement remain in full force and effect. Dated: 11/8 , 2002 -------------------- BORROWER(S): (1) Richard Bailey ----------------------------- Print or Type Name /s/ Richard Bailey - --------------------------------- Signature (2) ----------------------------- Print or Type Name - --------------------------------- Signature (3) ----------------------------- Print or Type Name - --------------------------------- Signature (4) ------------------------------ Print or Type Name - --------------------------------- Signature EX-10.2 4 g81077exv10w2.txt COMMERCIAL SECURITY AGREEMENT EXHIBIT 10.2 COMMERCIAL COMPASS BANK SECURITY 3480 EASTERN BLVD. AGREEMENT MONTGOMERY, AL 36116 (334) 409-7304 "LENDER" BORROWER OWNER -------- ----- BOYD BROTHERS TRANSPORTATION BOYD BROTHERS TRANSPORTATION CO., INC. CO., INC. ADDRESS ADDRESS ------- ------- 3275 HIGHWAY 30 3275 HIGHWAY 30 CLAYTON, AL 36016-3003 CLAYTON, AL 36016-3003 TELEPHONE NO. IDENTIFICATION NO. TELEPHONE NO. IDENTIFICATION NO. - ------------- ----------------- ------------- ------------------ (334) 775-1209 636006515 (334) 775-1209 636006515 1. SECURITY INTEREST. For good and valuable consideration, Owner grants to Lender identified above a continuing security interest in the Collateral described below to secure the Obligations described in this Agreement. 2. OBLIGATIONS. The collateral shall secure the payment and performance of all of Borrower's and Owner's present and future, joint and/or several, direct and indirect, absolute and contingent, express and implied indebtedness to Lender under any promissory note or agreement described below, including all future advances made by Lender to Borrower or Owner and expenditures incurred by Lender upon the occurrence of an Event of Default (collectively "Obligations"): a. this Agreement and/or the following promissory notes and agreements:

INTEREST PRINCIPAL AMOUNT/ FUNDING/ MATURITY CUSTOMER LOAN RATE CREDIT LIMIT AGREEMENT DATE DATE NUMBER NUMBER - -------- ------------ -------------- -------- -------- ------ VARIABLE $1,273,830.00 11/08/02 11/01/08

b. [X] all other presently existing or future, evidences of indebtedness, obligations, agreements, instruments, guaranties or otherwise of Borrower or Owner to Lender (WHETHER INCURRED FOR THE SAME OR DIFFERENT PURPOSES THAN THE FOREGOING); and c. all renewals, extensions, amendments, modifications, replacements or substitutions to any of the foregoing. 3. COLLATERAL. All of Owner's right, title and interest in the following described property, as defined by the Uniform Commercial Code presently or as hereafter amended or replaced, whether now or hereafter existing or now owned or hereafter acquired by Owner and wherever located shall constitute the "Collateral": [ ] All accounts including, but not limited to, any accounts described on Schedule A attached hereto and incorporated herein by this reference; [ ] All chattel paper including, but not limited to, any chattel paper described on Schedule A attached hereto and incorporated herein by this reference; [ ] All deposit accounts including, but not limited to, any deposit accounts described on Schedule A attached hereto and incorporated herein by this reference; [ ] All documents including, but not limited to, any documents described on Schedule A attached hereto and incorporated herein by this reference; [ ] All equipment, including, but not limited to, any equipment described on Schedule A attached hereto and incorporated herein by this reference; [ ] All fixtures, including, but not limited to, any fixtures described on Schedule A and located or to be located on the real property described on Schedule B attached hereto and incorporated herein by this reference; [ ] All general intangibles including, but not limited to, any general intangibles described on Schedule A attached hereto and incorporated herein by this reference; [ ] All instruments including, but not limited to, any instruments described on Schedule A attached hereto and incorporated herein by this reference; [ ] All inventory including, but not limited to, any inventory described on Schedule A attached hereto and incorporated herein by this reference; [ ] All investment property including, but not limited to, any investment property described on Schedule A attached hereto and incorporated herein by this reference; [ ] All letter-of-credit rights including, but not limited to, any letter-of-credit rights described on Schedule A attached hereto and incorporated herein by this reference; [ ] All as-extracted collateral including, but not limited to, all minerals or the like and accounts resulting from sales at the well or minehead located on or related to the real property described on Schedule B attached hereto and incorporated herein by this reference; [ ] All standing timber which is to be cut and removed under a conveyance or contract for sale located on the real property described on Schedule B attached hereto and incorporated herein by this reference; [ ] Other: The property described on Schedule A; All monies, instruments, and savings, checking or other accounts of Owner (excluding IRA, Keogh, trust accounts, and other accounts subject to tax penalties if so assigned) that are now or in the future in Lender's custody or control; All monies or instruments pertaining to the Collateral described above; All accessions, accessories, additions, amendments, attachments, modifications, replacements and substitutions to any of the above; All proceeds and products of any of the above; and All supporting obligations of any of the above. Page 1 of 5 _________ 4. OWNER'S TAX PAYER IDENTIFICATION. Owner's social security number or federal taxpayer identification number is: 636006515. ---------- 5. OWNER'S LOCATION. [ ] Owner is an individual and maintains his or her principal residence to the state of: ________________. [X] Owner is a Corporation duly incorporated, registered, formed or organized, validly existing and in good standing under the laws of the state of: Alabama. [ ] Owner is a ______________________________ and maintains its principal place of business or, if it has more than one place of business, its chief executive office in the state of _____________________________. 6. REPRESENTATIONS, WARRANTIES AND COVENANTS. Owner represents, warrants and covenants to Lender that: (a) Owner is and shall remain the sole owner of the Collateral; (b) Neither Owner, nor, to the best of Owner's knowledge, has any other party used, generated, released, discharged, stored, or disposed of any hazardous waste, toxic substance, or related material (collectively "Hazardous Materials") or transported any Hazardous Materials across the property except as allowed by and in accordance with applicable federal, state and local law and regulation. Owner shall not commit or permit such actions to be taken in the future. The term "Hazardous Materials" shall mean any substance, material, or waste which is or becomes regulated by any governmental authority including, but not limited to, (i) petroleum; (ii) asbestos; (iii) polychlorinated biphenyls; (iv) those substances, materials or wastes designated as a "hazardous substance" pursuant to Section 311 of the Clean Water Act or listed pursuant to Section 307 of the Clean Water Act or any amendments or replacements to these statutes; (v) those substances, materials or wastes defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act or any amendments or replacements to that statute; or (vi) those substances, materials or wastes defined as a "hazardous substance" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act, or any amendments or replacements to that statute. Owner is in compliance in all respects with all applicable federal, state and local laws and regulations, including, without limitation, those relating to "Hazardous Materials", as defined herein, and other environmental matters (the "Environmental Laws") and neither the federal government nor any other governmental or quasi governmental entity has filed a lien on the Collateral, nor are there any pending or threatened governmental, judicial or administrative actions with respect to environmental matters, which involve the Collateral; (c) Owner's location (Owner's place of organization, principal place of business, or if more than one place of business, chief executive office or principal residence) is in the state indicated in paragraph 5. Owner shall not change its state of location without first notifying Lender in writing; (d) The Collateral is located and has been located during the four (4) month period prior to the date hereof, at Owner's address described above or any address described on Schedule C attached hereto and incorporated herein by this reference. Owner shall immediately advise Lender in writing of any change in or addition to the foregoing addresses; (e) Owner shall not become a party to any restructuring of its form of business or participate in any consolidation, merger, liquidation or dissolution without Lender's prior written consent; (f) Owner's exact legal name is as set forth on the first page of this Agreement. Owner shall not change such name or use any trade name without Lender's prior written consent, and shall notify Lender of the nature of any intended change of Owner's name, or the use of any trade name, and the proposed effective date of such change; (g) The Collateral is and shall at all times remain free of all tax and other liens, security interests, encumbrances and claims of any kind except for those belonging to Lender and those described on Schedule D attached hereto and incorporated herein by this reference. Without waiving the Event of Default as a result thereof, Owner shall take any action and execute any document needed to discharge any liens, security interests, encumbrances and claims not described on Schedule D; (h) Owner shall defend the Collateral against all claims and demands of all persons at any time claiming any interest therein; (i) Owner will cooperate with Lender in obtaining and maintaining control with respect to all deposit accounts, investment property, letter-of-credit rights and electronic chattel paper constituting the Collateral; (j) Owner shall provide Lender with possession, as appropriate, of all chattel paper, documents, instruments and investment property constituting the Collateral, and Owner shall promptly mark all chattel paper, instruments, investment property and documents constituting the Collateral to show that the same are subject to Lender's security interest; (k) All of Owner's accounts; chattel paper; deposit accounts; documents; general intangibles; instruments; investment property; letter-of-credit rights; and federal, state, county, and municipal government and other permits and licenses; trusts, liens, contracts, leases, and agreements constituting the Collateral are and shall be valid, genuine and legally enforceable obligations and rights belonging to Owner against one or more third parties and not subject to any claim, defense, set-off or counterclaim of any kind; (1) Owner shall not amend, modify, replace, or substitute any account; chattel paper; deposit account; document; general intangible; instrument; investment property; or letter-of-credit right constituting the Collateral without the prior written consent of Lender. Owner shall not create any chattel paper constituting the Collateral without placing a legend on the chattel paper acceptable to Lender indicating that Lender has a security interest to the chattel paper; (m) No person shall file an amendment that is a termination statement for a financing statement concerning any of the Collateral without the prior written consent of Lender, except to the extent permitted by the Uniform Commercial Code presently or as hereafter amended or replaced; (n) Owner has the right and is duly authorized to enter into and perform its obligations under this Agreement. Owner's execution and performance of these obligations do not and shall not conflict with the provisions of any statute, regulation, ordinance, rule of law, contract or other agreement which may now or hereafter be binding on Owner; (o) No action or proceeding is pending against Owner which might result in any material or adverse change in its business operations or financial condition or materially affect the Collateral; (p) Owner has not violated and shall not violate any applicable federal, state, county or municipal statute, regulation or ordinance (including but not limited to those governing Hazardous Materials) which may materially and adversely affect its business operations or financial condition or the Collateral; (q) Owner shall, upon Lender's request, deposit all proceeds of the Collateral into an account or accounts maintained by Owner or Lender at Lender's institution; (r) Owner will, upon receipt, deliver to Lender as additional Collateral all securities distributed on account of the Collateral such as stock dividends and securities resulting from stock splits, reorganizations and recapitalizations; (s) Owner agrees to the terms of the Obligations and to the terms of any renewals, extensions, amendments, modifications, replacements or substitutions of the Obligations; Lender may enter into agreements in the future with Borrower which, if this Agreement so provides, will become Obligations secured by the Collateral described in this Agreement; property other than the Collateral may also secure the Obligations, that Lender shall have no obligation to exercise its rights against such property prior to exercising its rights against the Collateral, that Lender may accept substitutions or exchanges for any such property, and that Lender may release its security interest in such property at any time; parties other than Borrower may be or may become obligated under the Obligations; and (t) This Agreement and the obligations described in this Agreement are executed and incurred for business and not consumer purposes. 7. SALE OF COLLATERAL. Owner shall not assign, convey, lease, sell, license, exchange or transfer any of the Collateral to any third party without the prior written consent of Lender except for sales of inventory to buyers in the ordinary course of business. 8. FINANCING STATEMENTS AND OTHER DOCUMENTS. Owner shall at any time and from time to time take all actions and execute all documents required by Lender to attach, perfect and maintain Lender's security interest in the Collateral and establish and maintain Lender's right to receive the payment of the proceeds of the Collateral including, but not limited to, executing any financing statements, fixture filings, continuation statements, notices of security interest and other documents required by the Uniform Commercial Code, presently or as hereafter amended or replaced, and other applicable law. Owner shall pay the costs of filing such documents in all offices wherever filing or recording is deemed by Lender to be necessary or desirable. Lender shall be entitled to perfect its security interest in the Collateral by filing carbon, photographic or other reproductions of this Agreement and/or the aforementioned documents with any authority required by the Uniform Commercial Code, presently or as hereafter amended or replaced, or other applicable law. Owner authorizes Lender to execute and file any financing statements, as well as extensions, renewals and amendments of financing statements in such form as Lender may require to perfect and maintain perfection of any security interest granted in this Agreement. 9. INQUIRIES AND NOTIFICATION TO THIRD PARTIES. Owner hereby authorizes Lender to contact any third party and make any inquiry pertaining to Owner's financial condition or the Collateral. In addition, Lender is authorized to provide oral or written notice of its security interest in the Collateral to any third party. 10. LOCKBOX, COLLATERAL ACCOUNT. If Lender so requests at any time (whether or not Owner is in default of this Agreement), Owner will direct each of its account debtors to make payments due under the relevant account or chattel paper directly to a special lock box to be under the control of Lender. Owner hereby authorizes and directs Lender to deposit into a special collateral account to be established and maintained with Lender all checks, drafts and cash payments received in the lock box. All deposits in the collateral account shall constitute proceeds of Collateral and shall not constitute payment of any Obligation. At its option, Lender may, at any time, apply finally collected funds on deposit in the collateral account to the payment of the Obligations in such order of application as Lender may determine, or permit Owner to withdraw all or any part of the balance on deposit in the collateral account. If a collateral account is so established, Owner agrees that Owner will promptly deliver to Lender, for deposit into the collateral account, all payments on accounts and chattel paper received by Owner. All such payments shall be delivered to Lender in the form received (except for Owner's endorsement if necessary). Until so deposited, all payments on accounts and chattel paper received by Owner shall be held in trust by Owner for and as the property of Lender and shall not be commingled with any funds or property of Owner. 11. COLLECTION OF INDEBTEDNESS FROM THIRD PARTIES. Lender shall be entitled to notify, and upon the request of Lender, Owner shall notify any account debtor or other third party (including, but not limited to, insurance companies) to pay any indebtedness or obligation owing to Owner and constituting the Collateral (collectively "Indebtedness") to Lender whether or not a default exists under this Agreement. Owner shall diligently collect the Indebtedness owing to Owner from its account debtors and other third parties until the giving of such notification. In the event that Owner possesses or receives possession of any instruments or other remittances with respect to the Page 2 of 5_____________ Indebtedness following the giving of such notification or if the instruments or other remittances constitute the prepayment of any Indebtedness or the payment of any insurance proceeds, Owner shall hold such instruments and other remittances in trust for Lender apart from its other property, endorse the instruments and other remittances to Lender, and immediately provide Lender with possession of the instruments and other remittances. Lender shall be entitled, but not required, to collect (by legal proceedings or otherwise), extend the time for payment, compromise, exchange or release any obligor or collateral, or otherwise settle any of the Indebtedness whether or not an event of default exists under this Agreement. Lender shall not be liable to Owner for any action, error, mistake, omission or delay pertaining to the actions described in this paragraph or any damages resulting therefrom. 12. POWER OF ATTORNEY. Owner hereby appoints Lender as its attorney-in-fact to endorse Owner's name on all instruments and other remittances payable to Owner with respect to the Indebtedness, including any items received by Lender in any lockbox account, or other documents pertaining to Lender's actions in connection with the Indebtedness. In addition, Lender shall be entitled, but not required, to perform any action or execute any document required to be taken or executed by Owner under this Agreement. Lender's performance of such action or execution of such documents shall not relieve Owner from any obligation or cure any default under this Agreement. The powers of attorney described in this paragraph are coupled with an interest and are irrevocable. 13. USE AND MAINTENANCE OF COLLATERAL. Owner shall use the Collateral solely in the ordinary course of its business, for the usual purposes intended by the manufacturer (if applicable), with due care, and in compliance with the laws, ordinances, regulations, requirements and rules of all federal, state, county and municipal authorities including environmental laws and regulations and insurance policies. Owner shall not make any alterations, additions or improvements to the Collateral without the prior written consent of Lender. Owner shall ensure that Collateral which is not now a fixture does not become a fixture. Without limiting the foregoing, all alterations, additions and improvements made to the Collateral shall be subject to the security interest belonging to Lender, shall not be removed without the prior written consent of Lender, and shall be made at Owner's sole expense. Owner shall take all actions and make any repairs or replacements needed to maintain the Collateral in good condition and working order. 14. LOSS OR DAMAGE. Owner shall bear the entire risk of any loss, theft, destruction or damage (collectively "Loss or Damage") to all or any part of the Collateral. In the event of any Loss or Damage, Owner will restore the Collateral to its previous condition, replace the Collateral with similar property acceptable to Lender in its sole discretion, or pay or cause to be paid to Lender the decrease in the fair market value of the affected Collateral. Lender has no duty to collect any income accruing on the Collateral or to preserve any rights relating to the Collateral. 15. INSURANCE. If the original amount of the Obligations is $300 or more, exclusive of the charges for insurance, and the value of the Collateral to be insured is $300 or more ($500 or more if the collateral is a motor vehicle), the Collateral will be kept insured for its full value against all loss or damage caused by fire, collision, theft or other casualty. If the Collateral consists of a motor vehicle having a retail value of at least $500, Owner will obtain comprehensive and collision coverage in amounts at least equal to the actual cash value of the vehicle with deductibles not to exceed $ n/a. OWNER HAS THE RIGHT TO PROVIDE SUCH INSURANCE THROUGH AN EXISTING POLICY OR A POLICY INDEPENDENTLY OBTAINED AND PAID FOR BY OWNER, subject to the right of Lender to decline the insurance offered by Owner for reasonable cause before credit is extended. Owner shall assign to Lender all rights to receive proceeds of insurance not exceeding the amount owed under the obligations described above, and direct the insurer to pay all proceeds directly to Lender. The insurance policies shall require the insurance company to provide Lender with at least n/a days written notice before such policies are altered or cancelled in any manner. The insurance policies shall name Lender as a loss payee and provide that no act or omission of Owner or any other person shall affect the right of Lender to be paid the insurance proceeds pertaining to the loss or damage of the Collateral. In the event Owner fails to acquire or maintain insurance, Lender (after providing notice as may be required by law) may in its discretion procure appropriate insurance coverage upon the Collateral and charge the insurance cost as an advance of principal under the promissory note. Owner shall furnish Lender with evidence of insurance indicating the required coverage. Lender may act as attorney-in-fact for Owner in making and settling claims under insurance policies, cancelling any policy or endorsing Owner's name on any draft or negotiable instrument drawn by any insurer 16. INDEMNIFICATION. Lender shall not assume or be responsible for the performance of any of Owner's obligations with respect to the Collateral under any circumstances. Owner shall immediately provide Lender with written notice of and hereby indemnifies and holds Lender and its shareholders, directors, officers, employees and agents harmless from all claims, damages, liabilities (including attorneys' fees and legal expenses), causes of action, actions, suits and other legal proceedings (collectively "Claims") pertaining to its business operations or the Collateral including, but not limited to, those arising from Lender's performance of Owner's obligations with respect to the Collateral or claims involving Hazardous Materials. Owner, upon the request of Lender, shall hire legal counsel to defend Lender from such Claims, and pay the attorneys' fees, legal expenses and other costs to the extent permitted by applicable law, incurred in connection therewith. In the alternative, Lender shall be entitled to employ its own legal counsel to defend such Claims at Owner's cost. 17. TAXES AND ASSESSMENTS. Owner shall execute and file all tax returns and pay all taxes, licenses, fees and assessments relating to its business operations and the Collateral (including, but not limited to, income taxes, personal property taxes, withholding taxes, sales taxes, use taxes, excise taxes and workers' compensation premiums) in a timely manner. 18. INSPECTION OF COLLATERAL AND BOOKS AND RECORDS. Owner shall allow Lender or its agents to examine, inspect and make abstracts and copies of the Collateral and Owner's books and records pertaining to Owner's business operations and financial condition or the Collateral during normal business hours. Owner shall provide any assistance required by Lender for these purposes. All of the signatures and information pertaining to the Collateral or contained in the books and records shall be genuine, true, accurate and complete in all respects. Owner shall note the existence of Lender's security interest in its books and records pertaining to the Collateral. 19. EVENTS OF DEFAULT. An Event of Default will occur under this Agreement in the event that Owner, Borrower, any guarantor or any other third parry pledging Collateral to secure this Agreement: (a) fails to make any payment under this Agreement, any other document or instrument relating to the foregoing or executed in favor of Lender, or under any other indebtedness to Lender when due; (b) fails to perform any obligation or breaches any warranty or covenant to Lender contained in this Agreement or any other present or future written agreement regarding this or any other indebtedness to Lender; (c) provides or causes any false or misleading signature or representation to Lender; (d) sells, conveys, or transfers rights in any Collateral without the prior written approval of Lender; (e) seeks to revoke, terminate or otherwise limit its liability under any continuing guaranty; (f)has a garnishment, judgment, tax levy, attachment or lien entered or served against any of them or any of their property; (g) dies, becomes legally incompetent, is dissolved or terminated, ceases to operate its business, becomes insolvent, makes an assignment for the benefit of creditors, or becomes the subject of any bankruptcy, insolvency or debtor rehabilitation proceeding; (h) fails to provide Lender evidence of satisfactory financial condition; or (i) has a majority of its outstanding voting securities or other ownership interest sold, transferred or conveyed to any person or entity other than any person or entity that has the majority ownership as of the date of the execution of this Agreement. In addition, an Event of Default will occur under this Agreement in the event that: (a) the Collateral is used by anyone to transport or store goods, the possession, transportation, or use of which, is illegal; (b) Lender reasonably deems itself insecure or reasonably believes the prospect of payment or performance is impaired due to a significant decline in the value of any of the Collateral or a material adverse change in Owner's, Borrower's or any guarantor's business or financial condition; or (c) any Collateral is destroyed, damaged or lost in any material respect or is subjected to seizure, confiscation, or condemnation. 20. RIGHTS OF LENDER ON EVENT OF DEFAULT. Upon the occurrence of an Event of Default under this Agreement, Lender shall be entitled to exercise one or more of the following remedies without notice or demand (except as required by law): (a) to declare the Obligations immediately due and payable in full, such acceleration shall be automatic and immediate if the Event of Default is a filing under the Bankruptcy Code; (b) to collect the outstanding Obligations with or without resorting to judicial process; (c) to change Owner's mailing address, open Owner's mail, and retain any instruments or other remittances constituting the Collateral contained therein; (d) to take possession of any Collateral in any manner permitted by law; (e) to apply for and obtain, without notice and upon ex parte application, the appointment of a receiver for the Collateral without regard to Owner's financial condition or solvency, the adequacy of the Collateral to secure the payment or performance of the obligations, or the existence of any waste to the Collateral; (f) to require Owner to deliver and make available to Lender any Collateral at a place reasonably convenient to Owner and Lender; (g) to sell, lease or otherwise dispose of any Collateral and collect any deficiency balance with or without resorting to legal process; (h) to set-off Owner's obligations against any amounts due to Owner including, but not limited to, monies, instruments, and deposit accounts maintained with Lender; and (i) to exercise all other rights available to Lender under any other written agreement or applicable law. Lender's rights are cumulative and may be exercised together, separately, and in any order. Unless the Collateral is perishable, threatens to decline speedily in value or is of a type customarily sold on a recognized market, Lender will provide reasonable notification of the time and place of any sale or intended disposition as required under the Uniform Commercial Code, presently or as hereafter amended or replaced. Lender has no obligation to clean up or otherwise prepare the Collateral for sale. Lender may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral and compliance will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral. If the Collateral consists of securities, Lender shall be entitled to transfer the securities into the name of Lender or its designee and to vote the securities. Lender shall be authorized to notify the issuer of the securities to remit any related dividends, interest and securities resulting from stock splits, reorganizations and capitalizations directly to Lender or its designee. In the event that Lender institutes an action to recover any Collateral or seeks recovery of any Collateral by way of a prejudgment remedy in an action against Owner, Owner waives the posting of any bond which might otherwise be required. Upon default, Owner shall segregate all proceeds of Collateral and hold such proceeds in trust for Lender. Lender's remedies under this paragraph are in addition to those available at common law, such as offset. Page 3 of 5 _________________ 21. APPLICATION OF PAYMENTS. Whether or not a default has occurred under this Agreement, all payments made by or on behalf of Owner and all credits due to Owner from the disposition of the Collateral or otherwise may be applied against the amounts paid by Lender (including attorneys' fees and legal expenses) in connection with the exercise of its rights or remedies described in this Agreement and any interest thereon and then to the payment of the remaining Obligations in whatever order Lender chooses. 22. REIMBURSEMENT OF AMOUNTS EXPENDED BY LENDER. Owner shall reimburse Lender for all amounts (including attorneys' fees and legal expenses) expended by Lender in the performance of any action required to be taken by Owner or the exercise of any right or remedy belonging to Lender under this Agreement, together with interest thereon at the lower of the highest rate described in any promissory note or credit agreement executed by Borrower or Owner or the highest rate allowed by law from the date of payment until the date of reimbursement. These sums shall be included in the definition of Obligations, shall be secured by the Collateral identified in this Agreement and shall be payable upon demand. Lender has no duty to take any action to protect the value of the Collateral or to exercise any rights of the Owner with respect to the Collateral. 23. ASSIGNMENT. Owner shall not be entitled to assign any of its rights, remedies or obligations described in this Agreement without the prior written consent of Lender. Consent may be withheld by Lender in its sole discretion. Lender shall be entitled to assign some or all of its rights and remedies described in this Agreement without notice to or the prior consent of Owner in any manner. 24. MODIFICATION AND WAIVER. The modification or waiver of any of Owner's Obligations or Lender's rights under this Agreement must be contained in a writing signed by Lender. Lender may perform any of Owner's Obligations or delay or fail to exercise any of its rights without causing a waiver of those Obligations or rights. A waiver on one occasion shall not constitute a waiver on any other occasion. Owner's Obligations under this Agreement shall not be affected if Lender amends, compromises, exchanges, fails to exercise, impairs or releases any of the obligations belonging to any Owner or third party or any of its rights against any Owner, third party, Collateral or any other property securing the Obligations. Owner waives any right it may have to require Lender to pursue any third person for any of the Obligations. 25. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to the benefit of Owner and Lender and their respective successors, assigns, trustees, receivers, administrators, personal representatives, legatees, and devisees. 26. NOTICES. Any notice or other communication to be provided under this Agreement shall be in writing and sent to the parties at the addresses described in this Agreement or such other address as the parties may designate in writing from time to time. 27. SEVERABILITY. If any provision of this Agreement violates the law or is unenforceable, the rest of the Agreement shall remain valid. 28. APPLICABLE LAW. This Agreement shall be governed by the laws of the state indicated in Lender's address, except to the extent that the Uniform Commercial Code, presently or as hereafter amended or replaced, provides for the application of the law of the state of Owner's location, as indicated in paragraph 5. Unless applicable law provides otherwise, Owner consents to the jurisdiction and venue of any court located in such state selected by Lender in the event of any legal proceeding under this Agreement. 29. COLLECTION COSTS. To the extent permitted by law, Owner agrees to pay Lender's reasonable fees and costs of attorneys and other agents (including without limitation paralegals, clerks and consultants), whether or not such attorney or agent is an employee of Lender, which are incurred by Lender in collecting any amount due or enforcing any right or remedy under this Agreement, whether or not suit is brought, and including, but not limited to, all fees and costs incurred on appeal, in bankruptcy, and for post-judgment collection actions. 30. MISCELLANEOUS. This Agreement is executed for commercial purposes. Owner shall supply information regarding Owner's business operations and financial condition or the Collateral in the form and manner as requested by Lender from time to time. All information furnished by Owner to Lender shall be true, accurate and complete in all respects. Owner and Lender agree that time is of the essence. Owner waives presentment, demand for payment, notice of dishonor and protest except as required by law. All references to Owner in this Agreement shall include all parties signing below except Lender. This Agreement shall be binding upon the heirs, successors and assigns of Owner and Lender. If there is more than one Owner, their obligations under this Agreement shall be joint and several. This Agreement shall remain in full force and effect until Lender provides Owner with written notice of termination. This Agreement represents the complete and integrated understanding between Owner and Lender regarding the terms hereof. 31. WAIVER OF JURY TRIAL. LENDER AND OWNER HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY CIVIL ACTION ARISING OUT OF, OR BASED UPON, THIS SECURITY AGREEMENT. 32. ADDITIONAL TERMS: - ------------------------------------------------------------------------------- OWNER ACKNOWLEDGES THAT OWNER HAS READ, UNDERSTANDS, AND AGREES TO THE TERMS AND CONDITIONS OF THIS AGREEMENT. OWNER ACKNOWLEDGES RECEIPT OF AN EXACT COPY OF THIS AGREEMENT. Dated: November 08, 2002 LENDER: COMPASS BANK BY: /s/ Steven McCarroll ------------------------ STEVE MCCARROLL CITY PRESIDENT OWNER: BOYD BROTHERS TRANSPORTATION OWNER: CO., INC. By: /s/ RICHARD BAILEY - -------------------------------------- ----------------------------------- RICHARD BAILEY CFO OWNER: OWNER: - -------------------------------------- ----------------------------------- OWNER: OWNER: - -------------------------------------- ----------------------------------- OWNER: OWNER: - -------------------------------------- ----------------------------------- Page 4 of 5 ___________________ SCHEDULE A NINETY (90) NEW TRANSCRAFT EAGLE W2 FLATBED TRAILERS WITH NEW TIRES AS PER EXHIBIT "A" ATTACHED HERETO AND FORMING A PART HEREOF. SCHEDULE B Record Owner Name: SCHEDULE C SCHEDULE D Page 5 of 5 ___________________ EXHIBIT "A" Boyd Brothers Transportation Co., Inc. Loan i/a/o $1,273,580 Ninety (90) New 2003 Transcraft Eagle W2 Flatbed Trailers Serial Numbers: 1TTF4820732010161 1TTF4820932010162 1TTF4820032010163 1TTF4820232010164 1TTF4820432010165 1TTF4820632010166 1TTF4820832010167 1TTF4820X32010168 1TTF4820132010169 1TTF4820832010170 1TTF4820732010175 1TTF4820932010176 1TTF4820032010177 1TTF4820232010178 1TTF4820432010179 1TTF4820632010183 1TTF4820832010184 1TTF4820X32010185 1TTF4820132010186 1TTF4820332010187 1TTF4820332010190 1TTF4820532010191 1TTF4820732010192 1TTF4820932010193 1TTF4820032010194 1TTF4820632010197 1TTF4820832010198 1TTF4820X32010199 1TTF4820232010200 1TTF48204320101201 1TTF4820832010203 1TTF4820X32010204 1TTF4820132010205 1TTF4820332010206 1TTF4820532010207 1TTF4820932010209 1TTF4820532010210 1TTF4820732010211 1TTF4820932010212 1TTF4820032010213 1TTF4820832010217 1TTF4820X32010218 1TTF4820132010219 1TTF4820832010220 1TTF4820X32010221 1TTF4820732010225 1TTF4820932010226 1TTF4820032010227 1TTF4820232010228 1TTF4820432010229 1TTF4820632010233 1TTF4820832010234 1TTF4820X32010235 1TTF4820132010236 1TTF4820332010237 1TTF4820332010240 1TTF4820532010241 1TTF4820732010242 1TTF4820932010243 1TTF4820032010244 1TTF4820432010246 1TTF4820632010247 1TTF4820832010248 1TTF4820X32010249 1TTF4820632010250 1TTF4820332010254 1TTF4820532010255 1TTF4820732010256 1TTF4820932010257 1TTF4820032010258 1TTF4820032010261 1TTF4820232010262 1TTF4820432010263 1TTF4820632010264 1TTF4820832010265 1TTF4820332010268 1TTF4820532010269 1TTF4820132010270 1TTF4820332010271 1TTF4820532010272 1TTF4820032010275 1TTF4820232010276 1TTF4820432010277 1TTF4820632010278 1TTF4820832010279 1TTF4820832010282 1TTF4820X32010283 1TTF4820132010284 1TTF4820332010285 1TTF4820532010286 EX-10.3 5 g81077exv10w3.txt COMMERCIAL VARIABLE RATE PROMISIONARY NOTE EXHIBIT 10.3 BORROWER BOYD BROTHERS TRANSPORTATION, COMMERCIAL CO., INC. VARIABLE RATE PROMISSORY COMPASS BANK NOTE 3480 EASTERN BLVD. MONTGOMERY, AL 36116 (334) 409-7304 "LENDER" ADDRESS 3275 HIGHWAY 30 CLAYTON, AL 36016-3003 TELEPHONE. NO. IDENTIFICATION NO. (334) 775-1209 636006515

OFFICER INTEREST PRINCIPAL FUNDING MATURITY CUSTOMER LOAN IDENTIFICATION RATE AMOUNT DATE DATE NUMBER NUMBER - -------------- -------- ----------- -------- ---------- -------- ------ S.M. VARIABLE $630,250.00 11/08/02 11/01/08 PURPOSE: TO PURCHASE TRAILERS

PROMISE TO PAY; For value received, Borrower promises to pay to the order of Lender the principal amount of Six Hundred Thirty Thousand Two Hundred Fifty and no/100 Dollars ($630,250.00) plus interest on the unpaid principal balance at the rate and in the manner described below, until all amounts owing under this Note are paid in full. All amounts received by Lender shall be applied first to accrued, unpaid interest, then to unpaid principal, and then to any late charges or expenses, or in any other order as determined by Lender, in Lender's sole discretion, as permitted by law. INTEREST RATE: This Note has a variable interest rate feature. The interest rate on this Note may change from time to time if the Index Rate identified below changes. Interest shall be computed on the basis of the actual number of days over 360 days per year. Interest on this Note shall be calculated and payable at a variable rate equal to 1.750% per annum over the Index Rate. The initial interest rate on this Note shall be 3.130% per annum. Any change in the interest rate resulting from a change in the Index Rate will be effective on: the first day of the next succeeding Interest Period. INDEX RATE: The Index Rate for this Note shall be: SEE ANNEX "A", LIBOR RATE for rate definitions and additional terms. If the Index Rate is redefined or becomes unavailable, then Lender may select another index which is substantially similar. RATE LIMITATIONS: Subject to applicable law, the minimum interest rate on this Note shall be 3.500% per annum. The maximum interest rate on this Note shall not exceed 18.000% per annum, or if less, or if a maximum rate is not indicated, the maximum interest rate Lender is permitted to charge by law. The maximum rate increase at any one time will be n/a%. The maximum rate decrease at any one time will be n/a%. DEFAULT RATE: If there is an Event of Default under this Note, the Lender may, in its discretion, increase the interest rate on this Note to: eighteen percent (18.000%) per annum or the maximum interest rate Lender is permitted to charge by law, whichever is less. PAYMENT SCHEDULE: Borrower shall pay the principal and interest according to the following schedule: 71 payments of $9,619.18 beginning December 01, 2002 and continuing at monthly time intervals thereafter. A final payment of the unpaid principal balance plus accrued interest is due and payable on November 01, 2008. If the interest rate changes, the payment amounts may change in an amount sufficient to repay the unpaid principal balance over the scheduled amortization term. New payments begin with the first payment after the rate change. INTEREST SURCHARGE: Borrower agrees to pay an interest surcharge of $n/a . The interest surcharge is earned by Lender when paid and is not subject to refund; however, if this Note is prepaid in full within 90 days after the date of this Note, Borrower will receive a credit of a pro rata portion of the interest surcharge, subject to Lender's right to retain a minimum surcharge of $25.00. PREPAYMENT: This Note may be prepaid in part or in full on or before its maturity date. If this Note contains more than one installment, any partial prepayment will not affect the due date or the amount of any subsequent installment, unless agreed to, in writing, by Borrower and Lender. If this Note is prepaid in full, there will be: [X] No prepayment penalty. [ ] A prepayment penalty of: LATE CHARGE: If a payment is in default 10 days or more, Borrower will be charged a late charge of: [X] 5.00% of the unpaid payment; [ ] $_________________ or _________________ % of the unpaid payment, whichever is [ ] greater, but not to exceed $______________; [ ] less. SECURITY: To secure the payment and performance of obligations incurred under this Note, Borrower grants Lender a security interest in all of Borrower's right, title, and interest in all monies, instruments, savings, checking and other accounts of Borrower (excluding IRA, Keogh, trust accounts and other accounts subject to tax penalties if so assigned) that are now or in the future in Lender's custody or control. [X] If checked, the obligations under this Note are also secured by the collateral described in any security instrument(s) executed in connection with this Note, and any collateral described in any other security instrument(s) securing this Note or all of Borrower's obligations. RENEWAL: [ ] If checked, this Note is a renewal, but not a satisfaction, of Loan Number _______________. - -------------------------------------------------------------------------------- THE PERSONS SIGNING BELOW ACKNOWLEDGE THAT THEY HAVE READ, UNDERSTAND, AND AGREE TO THE TERMS AND CONDITIONS OF THIS NOTE, INCLUDING THE PROVISIONS ON THE REVERSE SIDE, AND FURTHER ACKNOWLEDGE RECEIPT OF AN EXACT COPY OF THIS NOTE. Dated: November 08, 2002 CAUTION - IT IS IMPORTANT THAT YOU THOROUGHLY READ THE CONTRACT BEFORE YOU SIGN IT. BORROWER: BOYD BROTHERS TRANSPORTATION, BORROWER: CO., INC. By: /S/ Richard Bailey - ---------------------------------------- ---------------------------------- RICHARD BAILEY CFO BORROWER: BORROWER: - ---------------------------------------- ---------------------------------- BORROWER: BORROWER: - ---------------------------------------- ---------------------------------- BORROWER: BORROWER: - ---------------------------------------- ---------------------------------- TERMS AND CONDITIONS 1. EVENTS OF DEFAULT. An Event of Default will occur under this Note in the event that Borrower, any guarantor or any other third party pledging collateral to secure this Note: (a) fails to make any payment on this Note or any other indebtedness to Lender when due; (b) fails to perform any obligation or breaches any warranty or covenant to Lender contained in this Note, any security instrument, or any other present or future written agreement regarding this or any other indebtedness of Borrower to Lender; (c) provides or causes any false or misleading signature or representation to be provided to Lender; (d) sells, conveys, or transfers rights in any collateral securing this Note without the written approval of Lender; or destroys, loses or damages such collateral in any material respect; or subjects such collateral to seizure, confiscation or condemnation; (e) has a garnishment, judgment, tax levy, attachment or lien entered or served against Borrower, any guarantor, or any third party pledging collateral to secure this Note or any of their property; (f) dies, becomes legally incompetent, is dissolved or terminated, ceases to operate its business, becomes insolvent, makes an assignment for the benefit of creditors, fails to pay debts as they become due, or becomes the subject of any bankruptcy, insolvency or debtor rehabilitation proceeding; (g) fails to provide Lender evidence of satisfactory financial condition; (h) has a majority of its outstanding voting securities sold, transferred or conveyed to any person or entity other than any person or entity that has the majority ownership as of the date of the execution of this Note; or (i) causes Lender to deem itself insecure due to a significant decline in the value of any real or personal property securing payment of this Note, or Lender in good faith, believes the prospect of payment or performance is impaired. 2. RIGHTS OF LENDER ON DEFAULT. If there is an Event of Default under this Note, Lender will be entitled to exercise one or more of the following remedies without notice or demand (except as required by law): (a) to declare the principal amount plus accrued interest under this Note and all other present and future obligations of Borrower immediately due and payable in full, such acceleration to be automatic and immediate if the Event of Default is a filing under the Bankruptcy Code; (b) to collect the outstanding obligations of Borrower with or without resorting to judicial process; (c) to cease making advances under this Note or any other agreement between Borrower and Lender; (d) to take possession of any collateral in any manner permitted by law; (e) to require Borrower to deliver and make available to Lender any collateral at a place reasonably convenient to Borrower and Lender; (f) to sell, lease or otherwise dispose of any collateral and collect any deficiency balance with or without resorting to legal process; (g) to set-off Borrower's obligations against any amounts due to Borrower including, but not limited to, monies, instruments, and deposit accounts maintained with Lender; and (h) to exercise all other rights available to Lender under any other written agreement or applicable law. Lender's rights are cumulative and may be exercised together, separately, and in any order. Lender's remedies under this paragraph are in addition to those available at common law, including, but not limited to, the right of set-off. 3. DEMAND FEATURE. [ ] If checked, this Note contains a demand feature. Lender's right to demand payment, at any time, and from time to time, shall be in Lender's sole and absolute discretion, whether or not any default has occurred. 4. FINANCIAL INFORMATION. Borrower will at all times keep proper books of record and account in which full, true and correct entries shall be made in accordance with generally accepted accounting principles and will deliver to Lender, within ninety (90) days after the end of each fiscal year of Borrower, a copy of the annual financial statements of Borrower relating to such fiscal year, such statements to include (i) the balance sheet of Borrower as at the end of such fiscal year and (ii) the related income statement, statement of retained earnings and statement of cash flow of Borrower for such fiscal year, prepared by such certified public accountants as may be reasonably satisfactory to Lender. Borrower also agrees to deliver to Lender within fifteen (15) days after filing same, a copy of Borrower's income tax returns and also, from time to time, such other financial information with respect to Borrower as Lender may request. 5. MODIFICATION AND WAIVER. The modification or waiver of any of Borrower's obligations or Lender's rights under this Note must be contained in a writing signed by Lender. Lender may perform any of Borrower's obligations or delay or fail to exercise any of its rights without causing a waiver of those obligations or rights. A waiver on one occasion will not constitute a waiver on any other occasion. Borrower's obligations under this Note shall not be affected if Lender amends, compromises, exchanges, fails to exercise, impairs or releases any of the obligations belonging to any co-borrower or guarantor or any of its rights against any co-borrower, guarantor, the collateral or any other property securing the obligations. 6. SEVERABILITY. If any provision of this Note is invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 7. ASSIGNMENT. Borrower agrees not to assign any of Borrower's rights, remedies or obligations described in this Note without the prior written consent of Lender, which consent may be withheld by Lender in its sole discretion. Borrower agrees that Lender is entitled to assign some or all of its rights and remedies described in this Note without notice to or the prior consent of Borrower. 8. NOTICE. Any notice or other communication to be provided to Borrower or Lender under this Note shall be in writing and sent to the parties at the addresses described in this Note or such other address as the parties may designate in writing from time to time. 9. APPLICABLE LAW. This Note shall be governed by the laws of the state indicated in Lender's address. Unless applicable law provides otherwise, Borrower consents to the jurisdiction of any court located in such state selected by Lender, in its discretion, in the event of any legal proceeding under this Note. 10. COLLECTION COSTS: To the extent permitted by law, Borrower agrees to pay Lender's reasonable fees and costs of attorneys and other agents (including without limitation paralegals, clerks and consultants), whether or not such attorney or agent is an employee of Lender, which are incurred by Lender in collecting any amount due or enforcing any right or remedy under this Note, whether or not suit is brought, and including, but not limited to, all fees and costs incurred on appeal, in bankruptcy, and for post-judgment collection actions. 11. MISCELLANEOUS. This Note is being executed primarily for commercial, agricultural, or business purposes. Borrower and Lender agree that time is of the essence. Borrower agrees to make all payments to Lender at any address designated by Lender and in lawful United States currency. Borrower and any person who endorses this Note waives presentment, demand for payment, notice of dishonor and protest and further waives any right to require Lender to proceed against anyone else before proceeding against Borrower or said person. All references to Borrower in this Note shall include all of the parties signing this Note, and this Note shall be binding upon the heirs, successors and assigns of Borrower and Lender. If there is more than one Borrower their obligations under this Note shall be joint and several. This Note represents the complete and integrated understanding between Borrower and Lender regarding the terms hereof. 12. JURY TRIAL WAIVER. BORROWER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY CIVIL ACTION ARISING OUT OF, OR BASED UPON, THIS NOTE OR THE COLLATERAL SECURING THIS NOTE. 13. ADDITIONAL TERMS: SEE ADDENDUM TO PROMISSORY NOTE. EX-10.4 6 g81077exv10w4.txt COMERCIAL SECURITY AGREEMENT DATED NOV 8 2002 EXHIBIT 10.4 COMPASS BANK COMMERCIAL 3480 EASTERN BLVD. SECURITY MONTGOMERY, AL 36116 AGREEMENT (334) 409-7304 "LENDER"

BORROWER BORROWER -------- -------- BOYD BROTHERS TRANSPORTATION, BOYD BROTHERS TRANSPORTATION, CO., INC. CO., INC.

ADDRESS ADDRESS ------- ------- 3275 HIGHWAY 30 3275 HIGHWAY 30 CLAYTON, AL 36016-3003 CLAYTON, AL 36016-3003

TELEPHONE NO. IDENTIFICATION NO. TELEPHONE NO. IDENTIFICATION NO. - ------------- ------------------ ------------- ------------------ (334) 775-1209 636006515 (334) 775-1209 636006515

1. SECURITY INTEREST. For good and valuable consideration, Owner grants to Lender identified above a continuing security interest in the Collateral described below to secure the Obligations described in this Agreement. 2. OBLIGATIONS. The collateral shall secure the payment and performance of all of Borrower's and Owner's present and future, joint and/or several, direct and indirect, absolute and contingent, express and implied indebtedness to Lender under any promissory note or agreement described below, including all future advances made by Lender to Borrower or Owner and expenditures incurred by Lender upon the occurrence of an Event of Default (collectively "Obligations"): a. this Agreement and/or the following promissory notes and agreements:

INTEREST PRINCIPAL AMOUNT/ FUNDING MATURITY CUSTOMER LOAN RATE CREDIT LIMIT AGREEMENT DATE DATE NUMBER NUMBER - -------- ---------------- -------------- -------- -------- ------ VARIABLE $630,250.00 11/08/02 11/01/14

b. [X] all other presently existing or future, evidences of indebtedness, obligations, agreements, instruments, guaranties or otherwise of Borrower or Owner to Lender (whether incurred for the same or different purposes than the foregoing); and c. all renewals, extensions, amendments, modifications, replacements or substitutions to any of the foregoing. 3. COLLATERAL. All of Owner's right, title and interest in the following described property, as defined by the Uniform Commercial Code presently or as hereafter amended or replaced, whether now or hereafter existing or now owned or hereafter acquired by Owner and wherever located shall constitute the "Collateral": [ ] All accounts including, but not limited to, any accounts described on Schedule A attached hereto and incorporated herein by this reference; [ ] All chattel paper including, but not limited to, any chattel paper described on Schedule A attached hereto and incorporated herein by this reference; [ ] All deposit accounts including, but not limited to, any deposit accounts described on Schedule A attached hereto and incorporated herein by this reference; [ ] All documents including, but not limited to, any documents described on Schedule A attached hereto and incorporated herein by this reference; [ ] All equipment, including, but not limited to, any equipment described on Schedule A attached hereto and incorporated herein by this reference; [ ] All fixtures, including, but not limited to, any fixtures described on Schedule A and located or to be located on the real property described on Schedule B attached hereto and incorporated herein by this reference; [ ] All general intangibles including, but not limited to, any general intangibles described on Schedule A attached hereto and incorporated herein by this reference; [ ] All instruments including, but not limited to, any instruments described on Schedule A attached hereto and incorporated herein by this reference; [ ] All inventory including, but not limited to, any inventory described on Schedule A attached hereto and incorporated herein by this reference; [ ] All investment property including, but not limited to, any investment property described on Schedule A attached hereto and incorporated herein by this reference; [ ] All letter-of-credit rights including, but not limited to, any letter-of-credit rights described on Schedule A attached hereto and incorporated herein by this reference; [ ] All as-extracted collateral including, but not limited to, all minerals or the like and accounts resulting from sales at the well or minehead located on or related to the real property described on Schedule B attached hereto and incorporated herein by this reference; [ ] All standing timber which is to be cut and removed under a conveyance or contract for sale located on the real property described on Schedule B attached hereto and incorporated herein by this reference; [ ] Other: The property described on Schedule A; All monies, instruments, and savings, checking or other accounts of Owner (excluding IRA, Keogh, trust accounts, and other accounts subject to tax penalties if so assigned) that are now or in the future in Lender's custody or control; All monies or instruments pertaining to the Collateral described above; All accessions, accessories, additions, amendments, attachments, modifications, replacements and substitutions to any of the above; All proceeds and products of any of the above; and All supporting obligations of any of the above. Page 1 of 5 ___________________ 4. OWNER'S TAXPAYER IDENTIFICATION. Owner's social security number or federal taxpayer identification number is: 636006515 5. OWNER'S LOCATION. [ ] Owner is an individual and maintains his or her principal residence in the state of: __________________________. [X] Owner is a Corporation duly incorporated, registered, formed or organized, validly existing and in good standing under the laws of the state of: Alabama. [ ] Owner is a ___________ and maintains its principal place of business or, if it has more than one place of business, its chief executive office in the state of _____________ 6. REPRESENTATIONS, WARRANTIES, AND COVENANTS. Owner represents, warrants and covenants to Lender that: (a) Owner is and shall remain the sole owner of the Collateral; (b) Neither Owner, nor, to the best of Owner's knowledge, has any other party used, generated, released, discharged, stored, or disposed of any hazardous waste, toxic substance, or related material (collectively "Hazardous Materials") or transported any Hazardous Materials across the property except as allowed by and in accordance with applicable federal, state and local law and regulation. Owner shall not commit or permit such actions to be taken in the future. The term "Hazardous Materials" shall mean any substance, material, or waste which is or becomes regulated by any governmental authority including, but not limited to, (i) petroleum; (ii) asbestos; (iii) polychlorinated biphenyls; (iv) those substances, materials or wastes designated as a "hazardous substance" pursuant to Section 311 of the Clean Water Act or listed pursuant to Section 307 of the Clean Water Act or any amendments or replacements to these statutes; (v) those substances, materials or wastes defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act or any amendments or replacements to that statute; or (vi) those substances, materials or wastes defined as a "hazardous substance" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act, or any amendments or replacements to that statute. Owner is in compliance in all respects with all applicable federal, state and local laws and regulations, including, without limitation, those relating to "Hazardous Materials", as defined herein, and other environmental matters (the "Environmental Laws") and neither the federal government nor any other governmental or quasi governmental entity has filed a lien on the Collateral, nor are there any pending or threatened governmental, judicial or administrative actions with respect to environmental matters, which involve the Collateral; (c) Owner's location (Owner's place of organization, principal place of business, or if more than one place of business, chief executive office or principal residence) is in the state indicated in paragraph 5. Owner shall not change its state of location without first notifying Lender in writing; (d) The Collateral is located and has been located during the four (4) month period prior to the date hereof, at Owner's address described above or any address described on Schedule C attached hereto and incorporated herein by this reference. Owner shall immediately advise Lender in writing of any change in or addition to the foregoing addresses; (e) Owner shall not become a party to any restructuring of its form of business or participate in any consolidation, merger, liquidation or dissolution without Lender's prior written consent; (f) Owner's exact legal name is as set forth on the first page of this Agreement. Owner shall not change such name or use any trade name without Lender's prior written consent, and shall notify Lender of the nature of any intended change of Owner's name, or the use of any trade name, and the proposed effective date of such change; (g) The Collateral is and shall at all times remain free of all tax and other liens, security interests, encumbrances and claims of any kind except for those belonging to Lender and those described on Schedule D attached hereto and incorporated herein by this reference. Without waiving the Event of Default as a result thereof, Owner shall take any action and execute any document needed to discharge any liens, security interests, encumbrances and claims not described on Schedule D; (h) Owner shall defend the Collateral against all claims and demands of all persons at any time claiming any interest therein; (i) Owner will cooperate with Lender in obtaining and maintaining control with respect to all deposit accounts, investment property, letter-of-credit rights and electronic chattel paper constituting the Collateral; (j) Owner shall provide Lender with possession, as appropriate, of all chattel paper, documents, instruments and investment property constituting the Collateral, and Owner shall promptly mark all chattel paper, instruments, investment property and documents constituting the Collateral to show that the same are subject to Lender's security interest; (k) All of Owner's accounts; chattel paper; deposit accounts; documents; general intangibles; instruments; investment property; letter-of-credit rights; and federal, state, county, and municipal government and other permits and licenses; trusts, liens, contracts, leases, and agreements constituting the Collateral are and shall be valid, genuine and legally enforceable obligations and rights belonging to Owner against one or more third parties and not subject to any claim, defense, set-off or counterclaim of any kind; (1) Owner shall not amend, modify, replace, or substitute any account; chattel paper; deposit account; document; general intangible; instrument; investment property; or letter-of-credit right constituting the Collateral without the prior written consent of Lender. Owner shall not create any chattel paper constituting the Collateral without placing a legend on the chattel paper acceptable to Lender indicating that Lender has a security interest in the chattel paper; (m) No person shall file an amendment that is a termination statement for a financing statement concerning any of the Collateral without the prior written consent of Lender, except to the extent permitted by the Uniform Commercial Code presently or as hereafter amended or replaced; (n) Owner has the right and is duly authorized to enter into and perform its obligations under this Agreement. Owner's execution and performance of these obligations do not and shall not conflict with the provisions of any statute, regulation, ordinance, rule of law, contract or other agreement which may now or hereafter be binding on Owner; (o) No action or proceeding is pending against Owner which might result in any material or adverse change in its business operations or financial condition or materially affect the Collateral; (p) Owner has not violated and shall not violate any applicable federal, state, county or municipal statute, regulation or ordinance (including but not limited to those governing Hazardous Materials) which may materially and adversely affect its business operations or financial condition or the Collateral; (q) Owner shall, upon Lender's request, deposit all proceeds of the Collateral into an account or accounts maintained by Owner or Lender at Lender's institution; (r) Owner will, upon receipt, deliver to Lender as additional Collateral all securities distributed on account of the Collateral such as stock dividends and securities resulting from stock splits, reorganizations and recapitalizations; (s) Owner agrees to the terms of the Obligations and to the terms of any renewals, extensions, amendments, modifications, replacements or substitutions of the Obligations; Lender may enter into agreements in the future with Borrower which, if this Agreement so provides, will become Obligations secured by the Collateral described in this Agreement; property other than the Collateral may also secure the Obligations, that Lender shall have no obligation to exercise its rights against such property prior to exercising its rights against the Collateral, that Lender may accept substitutions or exchanges for any such property, and that Lender may release its security interest in such property at any time; parties other than Borrower may be or may become obligated under the Obligations; and (t) This Agreement and the obligations described in this Agreement are executed and incurred for business and not consumer purposes. 7. SALE OF COLLATERAL. Owner shall not assign, convey, lease, sell, license, exchange or transfer any of the Collateral to any third party without the prior written consent of Lender except for sales of inventory to buyers in the ordinary course of business. 8. FINANCING STATEMENTS AND OTHER DOCUMENTS. Owner shall at any time and from time to time take all actions and execute all documents required by Lender to attach, perfect and maintain Lender's security interest in the Collateral and establish and maintain Lender's right to receive the payment of the proceeds of the Collateral including, but not limited to, executing any financing statements, fixture filings, continuation statements, notices of security interest and other documents required by the Uniform Commercial Code, presently or as hereafter amended or replaced, and other applicable law. Owner shall pay the costs of filing such documents in all offices wherever filing or recording is deemed by Lender to be necessary or desirable. Lender shall be entitled to perfect its security interest in the Collateral by filing carbon, photographic or other reproductions of this Agreement and/or the aforementioned documents with any authority required by the Uniform Commercial Code, presently or as hereafter amended or replaced, or other applicable law. Owner authorizes Lender to execute and file any financing statements, as well as extensions, renewals and amendments of financing statements in such form as Lender may require to perfect and maintain perfection of any security interest granted in this Agreement. 9. INQUIRIES AND NOTIFICATION TO THIRD PARTIES. Owner hereby authorizes Lender to contact any third party and make any inquiry pertaining to Owner's financial condition or the Collateral. In addition, Lender is authorized to provide oral or written notice of its security interest in the Collateral to any third party. 10. LOCKBOX, COLLATERAL ACCOUNT. If Lender so requests at any time (whether or not Owner is in default of this Agreement), Owner will direct each of its account debtors to make payments due under the relevant account or chattel paper directly to a special lock box to be under the control of Lender. Owner hereby authorizes and directs Lender to deposit into a special collateral account to be established and maintained with Lender all checks, drafts and cash payments received in the lock box. All deposits in the collateral account shall constitute proceeds of Collateral and shall not constitute payment of any Obligation. At its option, Lender may, at any time, apply finally collected funds on deposit in the collateral account to the payment of the Obligations in such order of application as Lender may determine, or permit Owner to withdraw all or any part of the balance on deposit in the collateral account. If a collateral account is so established, Owner agrees that Owner will promptly deliver to Lender, for deposit into the collateral account, all payments on accounts and chattel paper received by Owner. All such payments shall be delivered to Lender in the form received (except for Owner's endorsement if necessary). Until so deposited, all payments on accounts and chattel paper received by Owner shall be held in trust by Owner for and as the property of Lender and shall not be commingled with any funds or property of Owner. 11. COLLECTION OF INDEBTEDNESS FROM THIRD PARTIES. Lender shall be entitled to notify, and upon the request of Lender, Owner shall notify any account debtor or other third party (including, but not limited to, insurance companies) to pay any indebtedness or obligation owing to Owner and constituting the Collateral (collectively "Indebtedness") to Lender whether or not a default exists under this Agreement. Owner shall diligently collect the Indebtedness owing to Owner from its account debtors and other third parties until the giving of such notification. In the event that Owner possesses or receives possession of any instruments or other remittances with respect to the Page 2 of 5 _________________ Indebtedness following the giving of such notification or if the instruments or other remittances constitute the prepayment of any Indebtedness or the payment of any insurance proceeds, Owner shall hold such instruments and other remittances in trust for Lender apart from its other property, endorse the instruments and other remittances to Lender, and immediately provide Lender with possession of the instruments and other remittances. Lender shall be entitled, but not required, to collect (by legal proceedings or otherwise), extend the time for payment, compromise, exchange or release any obligor or collateral, or otherwise settle any of the Indebtedness whether or not an event of default exists under this Agreement. Lender shall not be liable to Owner for any action, error, mistake, omission or delay pertaining to the actions described in this paragraph or any damages resulting therefrom. 12. POWER OF ATTORNEY. Owner hereby appoints Lender as its attorney-in-fact to endorse Owner's name on all instruments and other remittances payable to Owner with respect to the Indebtedness, including any items received by Lender in any lockbox account, or other documents pertaining to Lender's actions in connection with the Indebtedness. In addition, Lender shall be entitled, but not required, to perform any action or execute any document required to be taken or executed by Owner under this Agreement. Lender's performance of such action or execution of such documents shall not relieve Owner from any obligation or cure any default under this Agreement. The powers of attorney described in this paragraph are coupled with an interest and are irrevocable. 13. USE AND MAINTENANCE OF COLLATERAL. Owner shall use the Collateral solely in the ordinary course of its business, for the usual purposes intended by the manufacturer (if applicable), with due care, and in compliance with the laws, ordinances, regulations, requirements and rules of all federal, state, county and municipal authorities including environmental laws and regulations and insurance policies. Owner shall not make any alterations, additions or improvements to the Collateral without the prior written consent of Lender. Owner shall ensure that Collateral which is not now a fixture does not become a fixture. Without limiting the foregoing, all alterations, additions and improvements made to the Collateral shall be subject to the security interest belonging to Lender, shall not be removed without the prior written consent of Lender, and shall be made at Owner's sole expense. Owner shall take all actions and make any repairs or replacements needed to maintain the Collateral in good condition and working order. 14. LOSS OR DAMAGE. Owner shall bear the entire risk of any loss, theft, destruction or damage (collectively "Loss or Damage") to all or any part of the Collateral. In the event of any Loss or Damage, Owner will either restore the Collateral to its previous condition, replace the Collateral with similar property acceptable to Lender in its sole discretion, or pay or cause to be paid to Lender the decrease in the fair market value of the affected Collateral. Lender has no duty to collect any income accruing on the Collateral or to preserve any rights relating to the Collateral. 15. INSURANCE. If the original amount of the Obligations is $300 or more, exclusive of the charges for insurance, and the value of the Collateral to be insured is $300 or more ($500 or more if the collateral is a motor vehicle), the Collateral will be kept insured for its full value against all loss or damage caused by fire, collision, theft or other casualty. If the Collateral consists of a motor vehicle having a retail value of at least $500, Owner will obtain comprehensive and collision coverage in amounts at least equal to the actual cash value of the vehicle with deductibles not to exceed $ n/a. OWNER HAS THE RIGHT TO PROVIDE SUCH INSURANCE THROUGH AN EXISTING POLICY OR A POLICY INDEPENDENTLY OBTAINED AND PAID FOR BY OWNER, subject to the right of Lender to decline the insurance offered by Owner for reasonable cause before credit is extended. Owner shall assign to Lender all rights to receive proceeds of insurance not exceeding the amount owed under the obligations described above, and direct the insurer to pay all proceeds directly to Lender. The insurance policies shall require the insurance company to provide Lender with at least n/a days written notice before such policies are altered or cancelled in any manner. The insurance policies shall name Lender as a loss payee and provide that no act or omission of Owner or any other person shall affect the right of Lender to be paid the insurance proceeds pertaining to the loss or damage of the Collateral. In the event Owner fails to acquire or maintain insurance, Lender (after providing notice as may be required by law) may in its discretion procure appropriate insurance coverage upon the Collateral and charge the insurance cost as an advance of principal under the promissory note. Owner shall furnish Lender with evidence of insurance indicating the required coverage. Lender may act as attorney-in-fact for Owner in making and settling claims under insurance policies, canceling any policy or endorsing Owner's name on any draft or negotiable instrument drawn by any insurer. 16. INDEMNIFICATION. Lender shall not assume or be responsible for the performance of any of Owner's obligations with respect to the Collateral under any circumstances. Owner shall immediately provide Lender with written notice of and hereby indemnifies and holds Lender and its shareholders, directors, officers, employees and agents harmless from all claims, damages, liabilities (including attorneys' fees and legal expenses), causes of action, actions, suits and other legal proceedings (collectively "Claims") pertaining to its business operations or the Collateral including, but not limited to, those arising from Lender's performance of Owner's obligations with respect to the Collateral or claims involving Hazardous Materials. Owner, upon the request of Lender, shall hire legal counsel to defend Lender from such Claims, and pay the attorneys' fees, legal expenses and other costs to the extent permitted by applicable law, incurred in connection therewith. In the alternative, Lender shall be entitled to employ its own legal counsel to defend such Claims at Owner's cost. 17. TAXES AND ASSESSMENTS. Owner shall execute and file all tax returns and pay all taxes, licenses, fees and assessments relating to its business operations and the Collateral (including, but not limited to, income taxes, personal property taxes, withholding taxes, sales taxes, use taxes, excise taxes and workers' compensation premiums) in a timely manner. 18. INSPECTION OF COLLATERAL AND BOOKS AND RECORDS. Owner shall allow Lender or its agents to examine, inspect and make abstracts and copies of the Collateral and Owner's books and records pertaining to Owner's business operations and financial condition or the Collateral during normal business hours. Owner shall provide any assistance required by Lender for these purposes. All of the signatures and information pertaining to the Collateral or contained in the books and records shall be genuine, true, accurate and complete in all respects. Owner shall note the existence of Lender's security interest in its books and records pertaining to the Collateral. 19. EVENTS OF DEFAULT. An Event of Default will occur under this Agreement in the event that Owner, Borrower, any guarantor or any other third party pledging Collateral to secure this Agreement: (a) fails to make any payment under this Agreement, any other document or instrument relating to the foregoing or executed in favor of Lender, or under any other indebtedness to Lender when due; (b) fails to perform any obligation or breaches any warranty or covenant to Lender contained in this Agreement or any other present or future written agreement regarding this or any other indebtedness to Lender; (c) provides or causes any false or misleading signature or representation to Lender; (d) sells, conveys, or transfers rights in any Collateral without the prior written approval of Lender; (e) seeks to revoke, terminate or otherwise limit its liability under any continuing guaranty; (f) has a garnishment, judgment, tax levy, attachment or lien entered or served against any of them or any of their property; (g) dies, becomes legally incompetent, is dissolved or terminated, ceases to operate its business, becomes insolvent, makes an assignment for the benefit of creditors, or becomes the subject of any bankruptcy, insolvency or debtor rehabilitation proceeding; (h) fails to provide Lender evidence of satisfactory financial condition; or (i) has a majority of its outstanding voting securities or other ownership interest sold, transferred or conveyed to any person or entity other than any person or entity that has the majority ownership as of the date of the execution of this Agreement. In addition, an Event of Default will occur under this Agreement in the event that: (a) the Collateral is used by anyone to transport or store goods, the possession, transportation, or use of which, is illegal; (b) Lender reasonably deems itself insecure or reasonably believes the prospect of payment or performance is impaired due to a significant decline in the value of any of the Collateral or a material adverse change in Owner's, Borrower's or any guarantor's business or financial condition; or (c) any Collateral is destroyed, damaged or lost in any material respect or is subjected to seizure, confiscation, or condemnation. 20. RIGHTS OF LENDER ON EVENT OF DEFAULT. Upon the occurrence of an Event of Default under this Agreement, Lender shall be entitled to exercise one or more of the following remedies without notice or demand (except as required by law): (a) to declare the Obligations immediately due and payable in full, such acceleration shall be automatic and immediate if the Event of Default is a filing under the Bankruptcy Code; (b) to collect the outstanding Obligations with or without resorting to judicial process; (c) to change Owner's mailing address, open Owner's mail, and retain any instruments or other remittances constituting the Collateral contained therein; (d) to take possession of any Collateral in any manner permitted by law; (e) to apply for and obtain, without notice and upon ex parte application, the appointment of a receiver for the Collateral without regard to Owner's financial condition or solvency, the adequacy of the Collateral to secure the payment or performance of the obligations, or the existence of any waste to the Collateral; (f) to require Owner to deliver and make available to Lender any Collateral at a place reasonably convenient to Owner and Lender; (g) to sell, lease or otherwise dispose of any Collateral and collect any deficiency balance with or without resorting to legal process; (h) to set-off Owner's obligations against any amounts due to Owner including, but not limited to, monies, instruments, and deposit accounts maintained with Lender; and (i) to exercise all other rights available to Lender under any other written agreement or applicable law. Lender's rights are cumulative and may be exercised together, separately, and in any order. Unless the Collateral is perishable, threatens to decline speedily in value or is of a type customarily sold on a recognized market, Lender will provide reasonable notification of the time and place of any sale or intended disposition as required under the Uniform Commercial Code, presently or as hereafter amended or replaced. Lender has no obligation to clean up or otherwise prepare the Collateral for sale. Lender may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral and compliance will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral. If the Collateral consists of securities, Lender shall be entitled to transfer the securities into the name of Lender or its designee and to vote the securities. Lender shall be authorized to notify the issuer of the securities to remit any related dividends, interest and securities resulting from stock splits, reorganizations and capitalizations directly to Lender or its designee. In the event that Lender institutes an action to recover any Collateral or seeks recovery of any Collateral by way of a prejudgment remedy in an action against Owner, Owner waives the posting of any bond which might otherwise be required. Upon default, Owner shall segregate all proceeds of Collateral and hold such proceeds in trust for Lender. Lender's remedies under this paragraph are in addition to those available at common law, such as offset. Page 3 of 5 ______________ 21. APPLICATION OF PAYMENTS. Whether or not a default has occurred under this Agreement, all payments made by or on behalf of Owner and all credits due to Owner from the disposition of the Collateral or otherwise may be applied against the amounts paid by Lender (including attorneys' fees and legal expenses) in connection with the exercise of its rights or remedies described in this Agreement and any interest thereon and then to the payment of the remaining Obligations in whatever order Lender chooses. 22. REIMBURSEMENT OF AMOUNTS EXPENDED BY LENDER. Owner shall reimburse Lender for all amounts (including attorneys' fees and legal expenses) expended by Lender in the performance of any action required to be taken by Owner or the exercise of any right or remedy belonging to Lender under this Agreement, together with interest thereon at the lower of the highest rate described in any promissory note or credit agreement executed by Borrower or Owner or the highest rate allowed by law from the date of payment until the date of reimbursement. These sums shall be included in the definition of Obligations, shall be secured by the Collateral identified in this Agreement and shall be payable upon demand. Lender has no duty to take any action to protect the value of the Collateral or to exercise any rights of the Owner with respect to the Collateral. 23. ASSIGNMENT. Owner shall not be entitled to assign any of its rights, remedies or obligations described in this Agreement without the prior written consent of Lender. Consent may be withheld by Lender in its sole discretion. Lender shall be entitled to assign some or all of its rights and remedies described in this Agreement without notice to or the prior consent of Owner in any manner. 24. MODIFICATION AND WAIVER. The modification or waiver of any of Owner's Obligations or Lender's rights under this Agreement must be contained in a writing signed by Lender. Lender may perform any of Owner's Obligations or delay or fail to exercise any of its rights without causing a waiver of those Obligations or rights. A waiver on one occasion shall not constitute a waiver on any other occasion. Owner's Obligations under this Agreement shall not be affected if Lender amends, compromises, exchanges, fails to exercise, impairs or releases any of the obligations belonging to any Owner or third party or any of its rights against any Owner, third party, Collateral or any other property securing the Obligations. Owner waives any right it may have to require Lender to pursue any third person for any of the Obligations. 25. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to the benefit of Owner and Lender and their respective successors, assigns, trustees, receivers, administrators, personal representatives, legatees, and devisees. 26. NOTICES. Any notice or other communication to be provided under this Agreement shall be in writing and sent to the parties at the addresses described in this Agreement or such other address as the parties may designate in writing from time to time. 27. SEVERABILITY. If any provision of this Agreement violates the law or is unenforceable, the rest of the Agreement shall remain valid. 28. APPLICABLE LAW. This Agreement shall be governed by the laws of the state indicated in Lender's address, except to the extent that the Uniform Commercial Code, presently or as hereafter amended or replaced, provides for the application of the law of the state of Owner's location, as indicated in paragraph 5. Unless applicable law provides otherwise, Owner consents to the jurisdiction and venue of any court located in such state selected by Lender in the event of any legal proceeding under this Agreement. 29. COLLECTION COSTS. To the extent permitted by law, Owner agrees to pay Lender's reasonable fees and costs of attorneys and other agents (including without limitation paralegals, clerks and consultants), whether or not such attorney or agent is an employee of Lender, which are incurred by Lender in collecting any amount due or enforcing any right or remedy under this Agreement, whether or not suit is brought, and including, but not limited to, all fees and costs incurred on appeal, in bankruptcy, and for post-judgment collection actions. 30. MISCELLANEOUS. This Agreement is executed for commercial purposes. Owner shall supply information regarding Owner's business operations and financial condition or the Collateral in the form and manner as requested by Lender from time to time. All information furnished by Owner to Lender shall be true, accurate and complete in all respects. Owner and Lender agree that time is of the essence. Owner waives presentment, demand for payment, notice of dishonor and protest except as required by law. All references to Owner in this Agreement shall include all parties signing below except Lender. This Agreement shall be binding upon the heirs, successors and assigns of Owner and Lender. If there is more than one Owner, their obligations under this Agreement shall be joint and several. This Agreement shall remain in full force and effect until Lender provides Owner with written notice of termination. This Agreement represents the complete and integrated understanding between Owner and Lender regarding the terms hereof. 31. WAIVER OF JURY TRIAL. LENDER AND OWNER HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY CIVIL ACTION ARISING OUT OF, OR BASED UPON, THIS SECURITY AGREEMENT. 32. ADDITIONAL TERMS: - ------------------------------------------------------------------------------- OWNER ACKNOWLEDGES THAT OWNER HAS READ, UNDERSTANDS, AND AGREES TO THE TERMS AND CONDITIONS OF THIS AGREEMENT. OWNER ACKNOWLEDGES RECEIPT OF AN EXACT COPY OF THIS AGREEMENT. Dated: November 08, 2002 LENDER: COMPASS BANK By: /s/ Steven M. McCarroll ---------------------------------- STEVE MCCARROLL CITY PRESIDENT OWNER: BOYD BROTHERS TRANSPORTATION, OWNER: CO., INC. By: /s/ Richard Bailey ---------------------------------- ------------------------------------- RICHARD BAILEY CFO OWNER: OWNER: - ------------------------------------- ------------------------------------- OWNER: OWNER: - ------------------------------------- ------------------------------------- OWNER: OWNER: - ------------------------------------- ------------------------------------- Page 4 of 5 ______________ SCHEDULE A THIRTY SIX (36) 2003 FONTAINE PLATFORM TRAILERS PER LIEN DATE OF 10/18/02 AS PER EXHIBIT "A" ATTACHED HERETO AND FORMING A PART HEREOF. SCHEDULE B Record Owner Name; SCHEDULE C SCHEDULE D Page 5 of 5 ______________ EXHIBIT "A" Boyd Brothers Transportation Co., Inc. November 8, 2002 Loan i/a/o $630,000 Titles are reflecting a lien date of 10/18/02 Description of collateral: Thirty-six (36) 2003 Fontaine Platform Trailers, Serial numbers: 13N14830831516782 13N14830X31516783 13N14830131516784 13N14830331516785 13N14830531516786 13N14830731516787 13N14830931516788 13N14830031516789 13N14830731516790 13N14830931516791 13N14830031516792 13N14830231516793 13N14830431516794 13N14830631516795 13N14830831516796 13N14830X31516797 13N14830131516798 13N14830331516799 13N14830631516800 13N14830831516801 13N14830X31516802 13N14830131516803 13N14830331516804 13N14830531516805 13N14830731516806 13N14830931516807 13N14830031516808 13N14830231516809 13N14830931516810 1N314830031516811 13N14830231516812 13N14830431516813 13N14830631516814 13N14830831516815 13N14830X31516816 13N14830131516817 EX-10.5 7 g81077exv10w5.txt WAIVER AND CONSENT DATED FEB 3 2003 EXHIBIT 10.5 WAIVER AND CONSENT AGREEMENT THIS WAIVER AND CONSENT AGREEMENT ("this Agreement"), effective as of December 31, 2002, and executed on February 3, 2003, is entered into by BOYD BROTHERS TRANSPORTATION, INC., a Delaware corporation (the "Borrower"), and AMSOUTH BANK, an Alabama banking corporation (the "Lender"). RECITALS A. The Borrower and the Lender have entered into a Credit Agreement dated as of May 1, 2001, as amended (the "Credit Agreement"). B. The Borrower has requested that the Lender enter into this Agreement in order to grant certain consents and waivers with respect to the Credit Agreement as hereinafter described. AGREEMENT NOW, THEREFORE, in consideration of the foregoing recitals and of the mutual agreements of the parties hereto: 1. The parties agree that capitalized terms used in this Agreement and not otherwise defined herein have the respective meanings attributed thereto in the Credit Agreement. 2. The Lender consents to and waives the failure of the Borrower to: (a) Not make Capital Expenditures (exclusive of trucks and trailers) during any fiscal year in an amount greater than $500,000. 3. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original and all of which shall constitute the same instrument, but only one of which need be produced. 4. The Borrower hereby represents and warrants that all representations and warranties contained in the Credit Agreement are true and correct as of the date hereof (except representations and warranties that are expressly limited to an earlier date); and the Borrower certifies that except for those matters waived or consented to herein, no Event of Default nor any event that, upon notice or lapse of time or both, would constitute an Event of Default, has occurred and is continuing. 5. Nothing contained herein shall be construed as a waiver, acknowledgment or consent to any breach or Event of Default of the Credit Agreement and the Credit Documents not specifically mentioned herein, and the consents granted herein are effective only in the specific instance and for the purposes which given. 6. This Agreement shall be governed by the laws of the State of Alabama. IN WITNESS WHEREOF, each of the Borrower and the Lender has caused this Agreement to be executed by its duly authorized officer as of the day and year first above written. BOYD BROTHERS TRANSPORTATION, INC. AMSOUTH BANK By: /s/ Richard Bailey By: /s/ Paul Walker ---------------------------------- ---------------------------------- Its: CFO Its: Vice President --------------------------------- --------------------------------- EX-10.6 8 g81077exv10w6.txt WAIVER AND CONSENT DATED FEB 10 2003 EXHIBIT 10.6 [COMPASS BANK LOGO] February l0, 2003 Mr. Richard C. Bailey, COO/CFO Boyd Brothers Transportation, Inc. 3275 Highway 30 Clayton, AL 36016 Re: Security and Loan Agreement dated April 11, 2000 between Compass Bank and Boyd Brothers Transportation Co., Inc. Dear Richard: Section 6.01 in the Loan Agreement dated April 11, 2000 and subsequent amendments by and between Compass Bank and Boyd Brothers Transportation calls for a debt service coverage ratio of 1.0:1.0 at the end of December 2002. We herein waive that covenant requirement for the quarter and year ending December 31, 2002. Thank you for the good relationship we have with Boyd Brothers. I will be in touch with you regarding changes needed in the existing covenants. Sincerely, /s/ Steven M. McCarroll - ------------------------------------- Steven M. McCarroll City President EX-13 9 g81077exv13.txt PORTIONS OF THE COMPANIES ANNUAL REPORT EXHIBIT 13 SELECTED FINANCIAL DATA The following tables set forth certain selected financial data with respect to the Company's last five fiscal years. The "Statement of Operations Data" table and the "Balance Sheet Data" table relating to the five fiscal years ended December 31, 2002, are derived from the Consolidated Financial Statements incorporated by reference elsewhere in this report or in previous reports. The "Selected Operating Data" table data is not derived from the Consolidated Financial Statements. BDO Seidman, LLP, independent certified public accountants, audited the financial statements for the years ended December 31, 2002 and 2001. Deloitte & Touche LLP audited the financial statements for the three-year period ended December 31, 2000. The selected consolidated financial data should be read in conjunction with, and is qualified in its entirety by reference to, the Consolidated Financial Statements of the Company, the Notes thereto and the report thereon included elsewhere in this report.

YEAR ENDED DECEMBER 31, ------------------------------------------------------------------------- 2002 2001 2000 1999 1998 ---- ---- ---- ---- ---- (in thousands, except per share data) STATEMENT OF OPERATIONS DATA: Operating revenues (a) $ 127,792 $ 127,559 $ 131,630 $ 133,137 $ 118,123 Operating expenses: Salaries, wages and employee benefits 36,960 39,561 39,263 35,461 36,608 Cost of independent contractors 38,968 31,779 35,173 45,132 31,818 Operating supplies (a) 25,966 30,217 30,309 22,934 21,429 Taxes and licenses 2,599 2,241 2,965 2,847 2,566 Insurance and claims 6,535 6,458 7,060 6,111 5,393 Communications and utilities 1,275 1,371 1,520 1,480 1,554 Depreciation and amortization 11,605 12,290 11,611 10,720 10,320 Gain on disposition of property and equipment, net (468) (526) (1,113) (1,627) (433) Other 1,615 1,950 2,008 1,862 1,541 --------- --------- --------- --------- --------- Total operating expenses 125,054 125,340 128,796 124,920 110,796 --------- --------- --------- --------- --------- Operating income (expense) 2,738 2,219 2,834 8,217 7,327 Interest expense (1,752) (2,684) (3,904) (2,422) (1,608) Other income (expense) (51) 63 80 92 179 --------- --------- --------- --------- --------- Income (loss) before income taxes 935 (402) (990) 5,887 5,898 Income taxes (benefit) 460 5 (15) 2,430 2,326 --------- --------- --------- --------- --------- Net income (loss) $ 474 $ (407) $ (975) $ 3,457 $ 3,572 ========= ========= ========= ========= ========= Basic net income (loss) per share $ 0.18 $ (0.14) $ (0.32) $ 0.99 $ 0.87 ========= ========= ========= ========= ========= Diluted net income (loss) per share $ 0.17 $ (0.14) $ (0.32) $ 0.99 $ 0.87 ========= ========= ========= ========= =========

(a) Operating revenues and operating supplies have been increased for 2002, 2001 and 2000 by the reclassification of fuel surcharges to comply with EITF 01-14. See note 1 - Fuel Surcharges in the Notes to the Consolidated Financial Statements.

AS OF DECEMBER 31, --------------------------------------------------------------------------- 2002 2001 2000 1999 1998 ---- ---- ---- ---- ---- (in thousands) BALANCE SHEET DATA: Working capital $ (8,551) $ (2,089) $ (1,481) $ (1,049) $ 4,360 Net property and equipment 54,724 58,513 66,737 61,882 48,691 Total assets 81,582 86,084 95,052 99,456 77,047 Long-term debt, less current maturities 19,136 25,606 33,322 34,689 18,049 Total liabilities 55,857 60,795 67,870 69,062 44,186 Stockholders' equity 25,725 25,288 27,182 30,393 32,862

SELECTED OPERATING DATA: The following table sets forth certain unaudited operating data regarding the Company.

YEAR ENDED DECEMBER 31, ---------------------------------------------------------------------------- 2002 2001 2000 1999 1998 ---- ---- ---- ---- ---- Operating ratio (a) 97.9% 98.3% 97.8% 93.8% 93.8% Average length of haul in miles 683 688 661 634 576 Average number of truckloads per week 2,852 2,872 3,145 3,368 3,330 Average revenues per total mile $ 1.19 $ 1.20 $ 1.20 $ 1.18 $ 1.17 Equipment at period end: Tractors 955 972 1,017 1,112 1,032 Trailers 1,354 1,395 1,398 1,451 1,337

(a) Operating expenses stated as a percentage of operating revenues MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 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, 2002. This discussion should be read in conjunction with the Consolidated Financial Statements and Notes thereto included elsewhere herein. GENERAL The Company is headquartered in Clayton, Alabama and was founded in 1956 as a small regional flatbed trucking operation. Since that time, the Company has grown to one with 955 tractors and 1,354 trailers operating primarily in the eastern two-thirds of the United States. The Company became publicly held in 1994. Historically, the Company owned its revenue equipment and operated through employee drivers. The Company's expansion in the past, therefore, has required significant capital expenditures, which have been funded through secured borrowings. During 1997, as a strategy to expand the Company's potential for growth without the increase in capital expenditures typically related to owned equipment, the Company began adding independent contractors (owner-operators) to its fleet. The Company then accelerated the implementation of this strategy in December 1997 with the acquisition of WTI Transport, Inc., ("WTI") (f/k/a Welborn Transport), which specializes in short-haul routes using largely an owner-operated fleet. References to the "Company" contained herein refer to the combined operations of Boyd and WTI. References hereinafter to "Boyd" or "WTI" describe the distinct operations of the parent and subsidiary, respectively. Boyd provides transportation services in the contiguous United States and into some parts of Canada. During 2002, Boyd had an average length of haul of 734 miles and had 736 tractors and 1,056 trailers as of December 31, 2002. The Boyd fleet consisted of 213 owner-operators and 523 company owned tractors at December 31, 2002. Pay for owner-operators at Boyd is based on a per mile rate. Boyd utilizes agents in some areas to solicit and book freight. Boyd also operates a logistics department that provides logistical support to the Company. In addition, the logistics department brokers freight by identifying external shipping needs and matching available external carrier resources to those needs. The logistics department requires minimal overhead and capital resources and provides a service through logistically coordinating needs for carriers to available carriers and scheduling the service to be provided. All carriers brokered through the logistics department are responsible for maintaining proper insurance coverages and are required to provide proof of such coverage prior to brokerage of a load. WTI provides transportation services over shorter routes than those traditionally provided by Boyd. WTI operates primarily in the southeastern United States, with an average length of haul of 401 miles. Management believes this enhances WTI's ability to retain quality drivers, as drivers' time away from home is minimized. WTI operates 219 tractors and 298 flatbed trailers. The WTI fleet consisted of 182 owner-operators and 37 company tractors at December 31, 2002. The owner-operators are paid by WTI based upon a percentage of revenue. WTI utilizes agents in some areas to solicit and book freight. The Company continues to focus on marketing efforts and is broadening its customer base outside of the steel and building products industries, as well as stressing best-in-business service to its customers. The Company remains committed to its emphasis on safety while working to reduce insurance claims and costs. See "Factors That May Affect Future Results", below. The Company's success depends on its ability to efficiently manage its resources in the delivery of truckload transportation services to its customers. Resource requirements vary with customer demand, which may be subject to seasonal or general economic conditions. The Company's ability to adapt to changes in customer transportation requirements is a key element in efficiently deploying resources and in making capital investments in tractors, trailers, and technology. The Company may also be affected by the financial failure of its customers or loss of a customer's business from time-to-time. The Company's greatest cash requirements include qualified drivers, tractors, trailers, and related costs of operating its equipment (such as fuel, driver pay, insurance, and supplies and maintenance). The Company has historically been successful mitigating its risk to increases in fuel prices by recovering additional fuel surcharges from its customers. However, economic conditions, particularly those affecting the steel and construction industries, has negatively affected the ability of the Company to pass through to its customers fuel cost increases during the past two years. The Company's financial results are also affected by the availability of qualified drivers and the market for new and used tractors. Because the Company is self-insured for cargo, personal injury, and property damage claims on its tractors and for workers' compensation benefits for its drivers (supplemented by premium-based coverage above certain dollar amounts), financial results may also be affected by driver safety, medical costs, the weather, the legal and regulatory environment, and the costs of insurance coverage to protect against catastrophic losses. CRITICAL ACCOUNTING POLICIES The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The most significant accounting policies and estimates that affect our financial statements include the following: - - We review the selections of estimated useful lives and salvage values for purposes of depreciating tractors and trailers. Depreciable lives of tractors and trailers range from 3 to 7 years. Estimates of salvage value at the expected date of trade-in or sale are based on the expected values of equipment at the time of disposal. On average, the salvage value of equipment is 25% of cost. The accuracy of these estimates affects the amount of depreciation expense recognized in a period and, ultimately, the gains or losses on the disposal of the asset. We have recognized net gains on disposal of property and equipment of $468,321, $525,800, and $1,113,574 for the years ended December 31, 2002, 2001, and 2000, respectively. However, such amounts may differ materially in the future based on accident frequency, regulatory requirements, and other factors beyond our control. Certain revenue equipment has a guaranteed residual value from the vendor, which will be redeemable by the Company upon trade-in. - - We review the estimates of accrued liabilities for insurance and claims for liability and both physical and property damage and workers' compensation. The measurement of these costs requires the consideration of historical loss experienced and judgments about the present and expected levels of cost per claim. The insurance and claims accruals are recorded at the estimated payment amounts and are based upon individual case estimates. The specific information for each case is reviewed, detailed, and an estimate is determined based on each case separately. Similar cases, historical costs, and current trends in costs are considered when establishing estimates. Management believes the recorded obligations for these expenses are consistently measured on a conservative basis. However, changes in health costs, accident frequency and severity, and other factors can materially affect the estimates for these liabilities. - - We review the adequacy of the lease receivable allowance for doubtful accounts in the independent contractor (owner-operator) program. This allowance represents an estimate of notes receivable between the Company and owner-operators participating in the lease purchase program that will become uncollectible and which may, in turn, prevent the Company from maintaining its investment value in the tractor. Historical data, trends, current economic conditions, and profitability of owner-operators are factors considered when determining this estimate. The Company decreased the percentage of gain on lease purchases that is recognized at lease inception from 20% to 10% in October 2002. The remainder of the gain is deferred and recognized over the life of the lease. - - Because we must plan for future tractor load levels in order to make commitments for revenue equipment based on those projections, we have risks that excess capacity may exceed demand and that an impairment of our revenue equipment may occur. We review long-lived assets for impairment as described in Note 1 to our Consolidated Financial Statements. In analyzing potential impairments, we use projections of future undiscounted cash flows from the asset. These projections are based on our views of growth rates for the related business, anticipated future economic conditions, and estimates of terminal values. If the cash flows do not exceed the carrying values, the asset must be adjusted to its current fair value. In 2001, we reduced carrying values of certain WTI revenue equipment by $0.4 million due to expected reductions in trade-in values. - - We review the valuation of accounts receivable on a monthly basis. The allowance for doubtful accounts is estimated based on historical experience of write-offs and current economic conditions that might impact the collectibility of customer accounts, including such factors as bankruptcies and insolvencies. The Company performs ongoing credit evaluations of its customers. The Company continually updates the history it uses to make these estimates so as to reflect the most recent information available. Our allowance for doubtful accounts was approximately $341,000 and $319,000 at December 31, 2002 and 2001, respectively. The Company experienced losses from bad debt in the amount of $625,000 in 2001 due primarily to increased bankruptcies experienced in the steel industry. - - We have approximately $3.5 million of goodwill on our consolidated balance sheet resulting from the acquisition of WTI. New accounting standards adopted in 2002 require that we review this goodwill for impairment on an annual basis and cease all goodwill amortization. The adoption of these new rules did not result in an impairment of our goodwill. The annual evaluation for goodwill impairment requires the use of estimates about the future cash flows of WTI to determine its estimated fair value. Changes in forecasted operations and changes in discount rates can materially affect these estimates. Our review of these accounting items and the resulting accounting positions taken by the Company are based upon certain assumptions and conditions and reflect our management's best assumptions and estimates; however, estimates of these types of accounting items, particularly impairment and accrued liabilities, involve inherent uncertainties as described above, that are beyond management's control. As a result, the accounting for such items could result in different amounts if management uses different assumptions or if different conditions occur in future periods. RESULTS OF OPERATIONS COMPARISON OF YEAR ENDED DECEMBER 31, 2002 TO YEAR ENDED DECEMBER 31, 2001: The following tables set forth, by segment, the percentage relationship of expense items to operating revenues and certain other operating statistics for the periods indicated:

COMPANY BOYD WTI ------------------ -------------------- ------------------- YEARS ENDED DECEMBER 31, 2002 2001 2002 2001 2002 2001 ---- ---- ---- ---- ---- ---- Operating revenues 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Operating expenses Salaries, wages, and employee benefits 28.9 31.0 32.0 34.1 13.4 14.0 Cost of independent contractors 30.5 24.9 24.4 17.8 61.6 64.1 Operating supplies 20.3 23.7 22.4 25.9 9.6 11.1 Taxes and licenses 2.0 1.8 2.1 1.9 1.6 1.2 Insurance and claims 5.1 5.1 5.6 5.1 2.9 5.0 Communications and utilities 1.0 1.1 1.0 1.1 0.8 1.1 Depreciation and amortization 9.1 9.6 10.0 10.2 4.3 6.6 Gain on disposition of property and equipment, net (0.3) (0.4) (0.3) (0.5) (0.9) 0.0 Other 1.3 1.5 0.9 1.3 3.3 2.7 ----- ----- ----- ----- ----- ----- Total operating expenses 97.9 98.3 98.1 96.9 96.6 105.8 ----- ----- ----- ----- ----- ----- Operating income 2.1 1.7 1.9 3.1 3.4 (5.8) Interest expense, net (1.4) (2.0) (1.5) (2.2) (0.7) (1.0) Other income -- -- -- -- -- -- ----- ----- ----- ----- ----- ----- Income (loss) before income taxes 0.7 (0.3) 0.4 0.9 2.7 (6.8) Income taxes (benefit) 0.3 (0.0) 0.2 0.4 1.1 (2.1) ----- ----- ----- ----- ----- ----- Net income (loss) 0.4% (0.3)% 0.2% 0.5% 1.6% (4.7)% ===== ===== ===== ===== ===== =====

COMPANY BOYD WTI ---------------------- ---------------------- -------------------- YEARS ENDED DECEMBER 31, 2002 2001 2002 2001 2002 2001 ---- ---- ---- ---- ---- ---- Company operated tractors 560 610 523 570 37 40 Owner-operated tractors 395 362 213 190 182 172 ------- ------- ------- ------- ------- ------- Total tractors 955 972 736 760 219 212 Total trailers 1,354 1,395 1,056 1,099 298 296 Average length of haul in miles (1) 683 688 734 749 401 380 Average number of tractor loads per week (2) 2,852 2,872 2,188 2,290 664 672 Average revenues per total mile (3) $ 1.19 $ 1.20 $ 1.20 $ 1.17 $ 1.17 $ 1.17

(1) The average length of haul in miles is calculated by dividing the total line-haul miles for the year by the total number of loads for the year. (2) The average number of tractor loads per week is calculated by dividing the total number of loads for the year by the number of working weeks in the year. (3) The average revenue per total mile is calculated by dividing the total line-haul revenue for the year (excluding logistics revenue) by the total line-haul miles driven. The Company's total operating revenues increased $0.2 million or 0.2% to $127.8 million compared to $127.6 million for 2001. Boyd division revenues (83.6% of consolidated revenues) decreased $1.1 million or 1% from 2001 while WTI division revenues (16.4% of consolidated revenues) increased $1.4 million or 6.9% over 2001. Fuel surcharge revenue decreased $2.2 million or 58.5% from $3.7 million in 2001 to $1.5 million in 2002. Fuel prices decreased in the fourth quarter of 2001 and did not increase upwards until the latter part of 2002. The fuel surcharge is a function of the cost of fuel that the Company has negotiated with its vendors. These fuel surcharges, which automatically adjust from week to week depending on the cost of fuel, enable the Company to recoup the higher cost of fuel when prices increase. Conversely, when fuel prices decrease, fuel charges decrease. As a flatbed carrier, a significant portion of the Company's business relates to the steel industry, which has been in a virtual recession for more than two years, and the building products industry, which has remained flat due to the downturn in commercial construction offset by the ongoing resiliency of the residential housing market. Given these market conditions, the Company has had less success over the past two years passing through fuel cost increases. The net increase in consolidated revenues is reflective of diversification outside of the steel and building materials industries and also is reflective of an increase in revenue resulting from the Company's brokerage of freight to third-party carriers via its logistics department. Excluding revenue from Boyd's logistics department, Boyd division revenues decreased $4.4 million or 4.2% from 2001. Logistics revenue for 2002 increased $3.2 million or 84.5% over 2001. Total operating expenses decreased $0.3 million or 0.2% to $125.0 million for the year ended December 31, 2002, compared to $125.3 for the year ended December 31, 2001. The change in the Company's operating expenses reflected primarily lower expenses for salaries, wages and employee benefits, operating supplies (including fuel), depreciation and amortization, and other expenses, together with an increase in taxes and licenses. These changes were offset primarily by higher net cost of independent contractors (owner-operators) reflecting the Company's strategy to utilize a higher percentage of owner-operators as compared to Company drivers. Owner-operators are responsible for payment of the expenses they incur including fuel, operating supplies, and taxes and licenses, while the Company incurs these expenses related to Company drivers. Consequently, the amount paid per mile (shown as salaries and wages for Company drivers and within cost of independent contractors for owner-operators) for owner-operators is greater than that of Company drivers. The Company's operating ratio (operating expenses stated as a percentage of operating revenues) improved from 98.3% in 2001 to 97.9% in 2002 due to better margins provided by logistics revenue. As a percentage of consolidated revenues, the following operating expense accounts decreased from the prior year: salaries, wages and employee benefits; operating supplies; depreciation and amortization; and other expenses. Expenses related to Company drivers and the equipment they use are primarily reflected in these accounts. These expenses decreased primarily due to the shift in the utilization of the Company fleet. Of the total miles driven for 2002, 61% were driven by Company drivers, compared to 68% during 2001. Salaries, wages and employee benefits for 2002 decreased $2.6 million, or 6.6%, to $37.0 million compared to $39.6 million in 2001. This decrease is directly related to the shift in fleet utilization of Company drivers versus owner operators as mentioned above. Company drivers are paid on a per mile basis, and they accounted for 7.7 million fewer miles in 2002. The Company anticipates that the competition for qualified drivers will continue to be intense, and cannot predict whether it will experience shortages in the future. If such a shortage occurs and increases in driver pay rates become necessary to attract and retain drivers, the Company's results of operations would be negatively impacted to the extent that corresponding freight increases are not obtained. Cost of independent contractors (owner-operators) for 2002 increased $7.2 million, or 22.6%, to $39.0 million from $31.8 million in 2001. Independent contractors are owner-operators that either supply their own tractor or lease-purchase a tractor from the Company. Of the 101 million total miles driven for the year ended December 31, 2002, 39% were driven by owner-operators, compared to 32% in 2001. Owner-operators accounted for 6.2 million more miles in 2002 than in 2001, an increase of 18.8%. Owner-operators are responsible for their operating expenses including fuel, supplies and maintenance, health insurance, licenses and taxes. Thus, owner-operators are paid a higher per mile rate than Company drivers. Owner-operator compensation is included in the cost of independent contractors. Gains on sales-type leases to owner-operators, net of reserves, and interest income on the leases amounted to $1.9 million in 2002 compared to $0.5 million in 2001. The increase was due to the increased number of owner-operators in the lease program in 2002 compared to 2001. As of December 31, 2002, the Boyd division had an owner-operator fleet of 213 operators compared to 190 operators as of December 31, 2001, a 12% increase. WTI had 182 owner-operators as of December 31, 2002 compared to 172 operators in 2001, a 5.9% increase. The retention of independent contractors could remain difficult in the foreseeable future due to the uncertainty of fuel prices and continuing weaknesses in certain sectors of the U.S. economy. Historically, the Company has experienced higher driver turnover in their owner- operator lease program during periods of rising fuel prices. Operating supplies expense for 2002 decreased $4.2 million, or 14.1%, to $26.0 million compared with $30.2 million for 2001. The decrease in operating supplies, which includes fuel costs, is partly due to the increase in owner-operator utilization. Fuel costs decreased $3.1 million or 17.1% from $18.3 million in 2001 to $15.2 million in 2002, despite a 30% increase in cost, from less than $1.20 per gallon at the beginning of 2002 to $1.50 per gallon by the end of 2002. The decrease in operating supplies is also attributable to younger tractors in the Company-owned fleet, which require fewer repairs and replacements of auxiliary equipment (e.g. tarps, chains, etc.). Shortages of fuel, increases in fuel prices, or rationing of petroleum products could have materially adverse effects on the operations and profitability of the Company. The trend in higher fuel costs does not appear to abating and the Company faces the prospect of record level fuel prices in 2003. As of December 31, 2002, the Company had no derivative financial instruments to reduce its exposure to fuel price fluctuations. Taxes and licenses expense for 2002 increased $0.4 million, or 16.0%, to $2.6 million compared to $2.2 million in 2001. The amounts due for taxes and licensing are based on the value of the associated property. The higher values of newer equipment resulted in higher taxes, permits, and licenses. Insurance and claims expense for 2002 increased $0.1 million, or 1.2%, to $6.5 million compared to $6.4 million in 2001. The slight increase was primarily due to an increase in accident claims and self-insurance claims, offset by lower insurance premiums resulting from increased retention levels. The Company's insurance costs were also lower in 2002 due to the higher percentage of owner-operators incurring these costs. Communications and utilities expense for 2002 decreased $0.1 million, or 7.0%, to $1.3 million from $1.4 million in 2001. The decrease was primarily due to an increase in the overall owner-operator fleet, which has resulted in an increase in the fees the Company charges for the use of the Company's satellite units. The Company also continually monitors monthly usage and costs, making changes accordingly. Depreciation and amortization expense for 2002 decreased $0.7 million, or 5.6%, to $11.6 million from $12.3 million in 2001. The decrease in depreciation and amortization was primarily associated with the Boyd division, which during the past year has converted certain depreciable Company tractors to non-depreciable, owner-operated tractors subject to lease-purchase arrangements, thereby contributing to the increase in cost of independent contractors. Effective January 1, 2002, the Company discontinued amortization of goodwill at its WTI division in accordance with SFAS No. 142. Goodwill amortization expense was $223,800 in 2001 and, primarily because of this change, the WTI division recognized approximately $377,000 less expense during 2002 as compared to 2001. Gain on disposition of property and equipment decreased $0.1 million or 10.9%, to $0.4 million from $0.5 million. The trade values of tractors were depressed during 2002. An increased supply of used tractors caused in part by trucking company business failures and slower fleet growth by many carriers have all contributed to a decline in the market value of used tractors. See "Factors that May Affect Future Results - Revenue Equipment" and "Recently Issued Accounting Standards - SFAS No. 144". Other expenses for 2002 decreased approximately $0.3 million, or 17.2%, to $1.6 million in 2002 from $1.9 million in 2001. Other expenses include, but are not limited to, consulting fees, legal fees, advertising costs, bank charges, rent and bad debts. During 2001, the Boyd division recognized an additional charge of approximately $0.4 million in bad debts due to certain of its customers filing for bankruptcy. Such events were not prevalent during 2002. Interest expense (net of interest income) decreased $0.8 million, or 31.2%, to $1.8 million from $2.6 million in 2001. Interest expense decreased due to a decrease in the LIBOR rate, which is the interest rate charged on a large majority of the Company's debt. The Company also reduced debt levels by $5.6 million, which contributed to the reduction in interest expense. The effective tax rates for 2002 and 2001 are different from the U.S. federal statutory rate due to the permanent non-deductibility of certain expenses for tax purposes, including goodwill amortization in 2001. See Note 6 to the consolidated financial statements for further discussion of income tax items. As a result of the foregoing, the Company's net income in 2002 increased approximately $0.9 million, to $0.5 million compared to a $0.4 million net loss in 2001. COMPARISON OF YEAR ENDED DECEMBER 31, 2001 TO YEAR ENDED DECEMBER 31, 2000: The following tables set forth, by segment, the percentage relationship of expense items to operating revenues and certain other operating statistics for the periods indicated:

COMPANY BOYD WTI -------------------- --------------------- ------------------- YEARS ENDED DECEMBER 31, 2001 2000 2001 2000 2001 2000 ---- ---- ---- ---- ---- ---- Operating revenues 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Operating expenses Salaries, wages, and employee benefits 31.0 29.8 34.1 34.2 14.0 11.3 Cost of independent contractors 24.9 26.7 17.8 16.8 64.1 68.3 Operating supplies 23.7 23.0 25.9 26.6 11.1 7.8 Taxes and licenses 1.8 2.2 1.9 2.2 1.2 2.3 Insurance and claims 5.1 5.4 5.1 5.1 5.0 6.2 Communications and utilities 1.1 1.2 1.1 1.1 1.1 1.2 Depreciation and amortization 9.6 8.8 10.2 9.9 6.6 4.4 Gain on disposition of property and equipment, net (0.4) (0.8) (0.5) (0.8) 0.0 (1.0) Other 1.5 1.5 1.3 1.0 2.7 3.9 ------- ----- ----- ----- ----- ----- Total operating expenses 98.3 97.8 96.9 96.1 105.8 104.4 ------- ----- ----- ----- ----- ----- Operating income 1.7 2.2 3.1 3.9 (5.8) (4.4) Interest expense, net (2.0) (3.0) (2.2) (3.5) (1.0) (1.2) Other income -- -- -- -- -- -- ------- ----- ----- ----- ----- ----- Income (loss) before income taxes (0.3) (0.8) 0.9 0.4 (6.8) (5.6) Income taxes (benefit) (0.0) (0.0) 0.4 0.3 (2.1) (1.4) ------- ----- ----- ----- ----- ----- Net income (loss) (0.3)% (0.8)% 0.5% 0.1% (4.7)% (4.2)% ======= ===== ===== ===== ===== =====

COMPANY BOYD WTI -------------------- --------------------- -------------------- YEARS ENDED DECEMBER 31, 2001 2000 2001 2000 2001 2000 ---- ---- ---- ---- ---- ---- Company operated tractors 610 686 570 656 40 30 Owner-operated tractors 362 331 190 111 172 220 ------- ------- ------- ------- ------- ------- Total tractors 972 1,017 760 767 212 250 Total trailers 1,395 1,398 1,099 1,104 296 294 Average length of haul in miles (1) 688 661 749 737 380 347 Average number of tractor loads per week (2) 2,872 3,145 2,290 2,294 672 851 Average revenues per total mile (3) $ 1.20 $ 1.20 $ 1.17 $ 1.18 $ 1.17 $ 1.23

(1) The average length of haul in miles is calculated by dividing the total line-haul miles, for the year by the total number of loads for the year. (2) The average number of tractor loads per week is calculated by dividing the total number of loads for the year by the number of work weeks in the year. (3) The average revenue per total mile is calculated by dividing the total line-haul revenue for the year by the total line-haul miles driven. Operating revenues for 2001 decreased $4.0 million, or 3.0%, to $127.6 million compared to $131.6 million for 2000. The average loads shipped per week for 2001 decreased 273 loads, or 9.0%, to 2,872 compared to 3,145 in 2000. Freight demand during 2001, primarily in the first six months, was soft due to a weaker U.S. economy as compared to 2000. Steel comprised 42% of the Company's freight that was shipped in both 2001 and 2000, during which time the U.S. steel industry was severely impacted by the sluggish economy. Salaries, wages and employee benefits for 2001 increased $0.3 million, or 0.8%, to $39.6 million compared to $39.3 million in 2000. Salaries increased at Boyd due to an increase in the number of non-driver associates, primarily in the logistics and health claims department. Workers' compensation and health insurance expense increased due to rising medical costs and to the Company's change to becoming self-insured for workers' compensation as of July 1, 2001. The market for attracting experienced drivers improved during 2001; however, the Company anticipates the competition for qualified drivers will continue to be intense, and cannot predict whether it will experience shortages in the future. If such a shortage was to occur and increases in driver pay rates become necessary to attract and retain drivers, the Company's results of operations would be negatively impacted to the extent that the corresponding freight increases are not obtained. Cost of independent contractors (owner-operators) for 2001 decreased $3.4 million, or 9.6%, to $31.8 million from $35.2 million in 2000. Independent contractors are owner-operators that either supply their own tractor or lease-purchase one from the Company. Owner-operators are responsible for their operating expenses including fuel, supplies and maintenance, and fuel taxes. As of December 31, 2001, Boyd had an owner-operator fleet of 190 operators compared to 111 operators as of December 31, 2000. The increase in the number of owner-operators at Boyd occurred during the last five months of the year. WTI had 172 owner-operators as of December 31, 2001 compared to 220 operators in 2000. The decrease was primarily attributable to owner-operators leaving the industry altogether and, to a lesser extent, WTI closing its specialized freight business during 2000. During the fourth quarter of 2001, WTI increased reserves on its receivables associated with owner-operator leases in the amount of $0.3 million. The retention of independent contractors could remain difficult in the foreseeable future due to the uncertainty of global fuel prices and continuing weaknesses in certain sectors of the U.S. economy. Operating supplies expense for 2001 decreased $0.1 million, or 0.3%, to $30.2 million compared with $30.3 million for 2000. The slight decrease in operating supplies is partly due to a $0.8 million or 4.2% decrease in fuel costs from $19.1 million in 2000 to $18.3 million in 2001. This was offset by an increase in maintenance expense attributable to the Company's fleet aging and requiring more repairs. The average age of the Company's fleet at December 31, 2001 was 27.1 months compared to 16.3 months in 2000. Shortage of fuel, increases in fuel prices, or rationing of petroleum products can have materially adverse effects on the operations and profitability of the Company. The Company is unable to accurately predict whether fuel prices will decrease or will increase in the future or to the extent to which fuel surcharges will be collected from customers. As of December 31, 2001, the Company had no derivative financial instruments to reduce its exposure to fuel price fluctuations. Taxes and licenses expense for 2001 decreased $0.7 million, or 24.4%, to $2.2 million compared to $2.9 million in 2000. Taxes and licenses decreased due to the decrease in the overall Company fleet, as well as a net increase in the owner-operator fleet during the last quarter of the year. Taxes and licenses also decreased due to cost savings initiatives implemented by the Company during the end of 2000. Insurance and claims expense for 2001 decreased $0.6 million, or 8.5%, to $6.4 million compared to $7.0 million in 2000. The decrease was primarily due to a decrease in accident claims and insurance rates. Insurance rates were reduced as the Company increased their retention rate per accident occurrence during 2001. Communications and utilities expense for 2001 decreased $0.1 million, or 9.8%, to $1.4 million from $1.5 million in 2000. The decrease was primarily due to an increase in the overall owner-operator fleet, which has resulted in an increase in the fees the Company charges for the use of the Company's satellite units. Also, the Company changed to a lower rate long-distance service provider in 2001. The Company continually monitors monthly usage and costs and makes changes accordingly. Depreciation and amortization expense for 2001 increased $0.7 million, or 5.8%, to $12.3 million from $11.6 million in 2000. During the first quarter of 2001, Boyd placed into service the new $5.0 million Birmingham, Alabama terminal. During the fourth quarter of 2001, WTI reduced the carrying value of certain revenue equipment by $0.4 million due to expected reductions in trade-in values. Gain on disposition of property and equipment decreased $0.6 million or 52.8%, to $0.5 million from $1.1 million. The Company traded fewer units during 2001 and the trade values were depressed during the year. Record levels of tractors manufactured during 1999 and 2000, an increased supply of used tractors caused in part by trucking company business failures, and slower fleet growth by many carriers have all contributed to a decline in the market value of used tractors. Other expenses for 2001 decreased approximately $0.1 million, or 2.9%, to $1.9 million in 2001 from $2.0 million in 2000. Other expenses include, but are not limited to, consulting fees, legal fees, advertising costs, bank charges, rent and bad debts. During the second half of 2001, the Company experienced an increase in bad debt write-offs. Due to the difficult economic conditions facing the steel industry in particular, additional bad debt reserves may be required if industry conditions continue to deteriorate. Rent expense decreased due to the Company's cancellation of leases on trailers. Interest expense (net of interest income) decreased $1.2 million, or 31.5%, to $2.6 million from $3.8 million in 2000. Interest expense decreased due to an approximate 400 basis points decrease in the LIBOR rate, which is the interest rate charged on a large majority of the Company's debt. The Company also reduced debt levels, which contributed to the reduction in interest expense. The effective tax rates for 2001 and 2000 are different from the federal statutory rate due to the permanent non-deductibility for tax purposes of goodwill amortization and other expenses. As a result of the foregoing, the Company's net loss in 2001 decreased approximately $0.6 million, or 58.3%, to $(0.4) million compared to $(1.0) million in 2000. LIQUIDITY AND CAPITAL RESOURCES The Company's primary cash requirements are for capital expenditures and operating expenses, including labor costs, fuel costs and operating supplies, and the payment of current debt maturities. Historically, the Company's primary sources of cash have been continuing operations, bank borrowings and, in the last two years, dealer financings. The following table summarizes cash flows for the periods indicated:

2002 2001 2000 ---- ---- ---- Operating activities $ 12,264,939 $ 13,418,514 $ 10,108,834 Investing activities (3,913,078) 1,969,285 (6,578,204) Financing activities (10,280,802) (14,439,625) (3,264,175)

CASH FLOWS FROM OPERATING ACTIVITIES Cash flow from operations decreased by $1.2 million, or 8.6%, from 2001 to 2002, and increased by $3.3 million, or 32.7%, from 2000 to 2001. Net income (loss) adjusted for non-cash income and expense items provided cash of $7.3 million, $11.5 million and $11.5 million for 2002, 2001 and 2000, respectively. Non-cash income and expense items include depreciation and amortization, provisions for bad debt losses, gains on disposals of property and equipment, income related to owner operator sales-type leases, and deferred income taxes. Working capital items provided cash of $5.0 million and $1.9 million in 2002 and 2001, respectively, and used cash of $1.3 million in 2000. The cash flow from operations enabled the Company to repay current maturities of debt and make capital expenditures as discussed below. The decrease in net income (loss) adjusted for non-cash items from 2001 to 2002 of $4.2 million, or 36.7%, was due to increased income related to owner-operators ($1.9 million), lower deferred tax liabilities ($2.6 million) and lower bad debt provision in 2002 as compared to 2001, offset somewhat by a $0.9 million increase in net income. Income from owner-operators was higher in 2002 due to a 9.1% increase in the number of drivers compared to 2001. Deferred tax liabilities decreased due primarily to increased insurance claims which are not deductible for tax purposes until paid, and higher gains recognized on disposals of property and equipment for tax purposes compared to financial reporting purposes. Bad debt provisions decreased from $625,000 in 2001 to $79,000 in 2002 as the Company had less exposure to customer bankruptcies in 2002. The increase in cash provided by working capital items from 2001 to 2002 of $3.1 million, or 158.6%, was due to increased accident claims accruals and other accrued liabilities of $3.5 million and a decrease in accounts receivable of $1.3 million, offset by a decrease in accounts payable of $1.0 million. The increase in accident claims and other accrued liabilities was attributable to an increase in self-insurance claims and multiple accidents involving Company drivers in 2002. The Company became self-insured for workers' compensation as of July 1, 2001 and, thus, during 2001 the Company was self-insured for only six months versus the entire year for 2002. Rising medical and insurance costs have increased the amounts necessary for accrual. Included in these accruals are amounts estimated by management that are necessary to account for the Company's exposure to claims incurred in 2002. The decrease in accounts receivable is attributable to improved collection efforts as well as reduced Company exposure to customer bankruptcies in 2002 as compared to 2001. These bankruptcies were occurring primarily in the steel industry. In 2001, the increase in cash proceeds from operating activities was due to improved operating results over 2000, income tax refunds of $1.6 million and an increase of $0.8 million in trade payables. Trade payables increased due in part to required increases in maintenance supplies at the new Birmingham, Alabama terminal. The decrease in cash generated by operations in 2000 was driven by the decrease in accrued liabilities and other current liabilities and also the decrease in accounts payable. These amounts were somewhat offset by the increase in other current assets and also the increase in accounts receivable. The increase in accounts receivable was related to increases in load volume and not due to inefficiency in collecting. CASH FLOWS FROM INVESTING ACTIVITIES The growth of the Company's business and maintenance of its modern fleet has required significant investments in new tractors and trailers, which has been financed largely through long-term debt, including dealer-financed purchases of revenue equipment in the past two years. Historically, the Company financed its major capital equipment purchases consisting primarily of revenue equipment and, to a lesser extent, construction of terminals, through bank financings. In 2002, the Company invested $8.0 million in cash for revenue equipment and other property and equipment. As the Company began financing with dealers in 2001, the proceeds from disposals began decreasing as the Company began trading in more tractors to the dealers rather than selling them for cash. Dealer financed purchases in 2002 amounted to $4.5 million. Also, as the number of owner-operators increased in 2002, the payments received on sales-type leases increased. During 2002, the Company's fleet was 39% owner-operators compared to 32% in 2001. Thus, owner-operator payments to the Company increased from $2.3 million in 2001 to $3.6 million in 2002. During 2001, the Company acquired $5.5 million in revenue equipment financed through the manufacturer's financing company rather than the Company securing the financing through one of its existing lenders. There were no such dealer financings in 2000. All other equipment purchases consisting of service vehicles, computer and office equipment are purchased through cash flow from operations. The amount of revenue equipment purchased decreased in 2001 compared to 2000 due to the Company increasing the length of its trade cycle from 42 months to 45 months. CASH FLOWS FROM FINANCING ACTIVITIES During 2002, the Company paid $15.4 million towards the reduction of its long-term debt. At December 31, 2002, the Company had debt (including current maturities) of $33.6 million. New debt was incurred primarily to purchase revenue equipment. Revenue equipment was also acquired through dealer financing rather than securing additional financing through existing lenders. These financing activities supported the Company's investing activities. During 2001, the Company paid $13.1 million towards the reduction of its long-term debt. At December 31, 2001, the Company had debt (including current maturities) of $39.2 million, which was primarily incurred to purchase revenue equipment and to construct the terminal located in Birmingham, Alabama. The Company purchased in negotiated transactions 223,239 and 126,000 shares of common stock from the former vice-chairman of the Company and the CEO of WTI during 2001 and 2000, respectively, at a price per share of $6.50. The Company funded these purchases using working capital. Pursuant to the Company's stock repurchase program, the Company purchased 6,500, 244,463 and 370,463 shares of the Company's common stock in open market or negotiated transactions during 2002, 2001 and 2000, respectively, for aggregate purchase prices of $42,250, $1,521,056 and $2,248,941, respectively. From time to time, the Company has repurchased, and may continue to repurchase, shares of its common stock. The timing and amount of such purchases depends on the market and other factors. The Company's board of directors has authorized the repurchase of up to 600,000 shares, excluding 822,739 shares related to various executives. As of December 31, 2002, the Company had purchased 561,405 shares pursuant to this authorization and has 38,595 shares remaining available for repurchase. ANTICIPATED SOURCES AND USES OF FUNDS The Company's bank debt relates largely to its revenue equipment, although a portion was incurred for the construction of the terminal in Birmingham, Alabama. The construction loan was converted to a term loan in January 2001. The Company's bank debt bears interest ranging from LIBOR plus 1.25% to LIBOR plus 2.50%, all payable in monthly installments and with maturities through July 2009. The bank debt is collateralized by revenue equipment and the real property related to the Birmingham terminal. The Company has dealer-financed debt collateralized by revenue equipment with fixed rates ranging from 5.60% to 5.75%. The Company also has a line of credit totaling $2.5 million, bearing interest at the bank's prime rate (4.25% at December 31, 2002) minus 0.25%. Accounts receivable and other working capital assets collateralize the line of credit. As of December 31, 2002, the Company had letter of credit commitments of $2.5 million against this line of credit with no outstanding borrowings or availability at year-end. The Company anticipates generating sufficient cash from operations in 2003 to cover planned capital expenditures and servicing current maturities of long-term debt. The Company anticipates purchasing 92 new tractors and trading or selling 82 used tractors in 2003 at a net cost of approximately $5.7 million. Historically, the Company has relied on cash generated from operations to fund its working capital requirements. Over the long term, the Company will continue to have significant capital needs that may require it to seek additional borrowings or equity capital. The availability of debt financing or equity capital will depend on prevailing market conditions, the market price of its common stock, and other factors over which the Company has no control, as well as the Company's financial condition and results of operations. The Company's loan agreements with its major lenders require the Company, among other things, to maintain a tangible net worth, as defined in the agreements, and to maintain certain financial ratios. In February 2003, the Company received waivers executed by two of its lenders due to non-compliance with its debt service coverage ratio and for exceeding annual capital expenditure limits. The Company is currently negotiating with its lenders to adjust certain covenant requirements including its debt service coverage ratio. Management anticipates the Company will be in compliance with these covenants in 2003. While management believes that the Company's relationships with its lenders are good, there is no absolute assurance that the Company will be able to comply with its covenants in the future. If the Company is unable to comply with its covenants in the future, there can be no assurance that the Company's lenders will provide additional waivers with respect to any such noncompliance. The following tables set forth information regarding the Company's contractual obligations and commercial commitments in thousands of dollars. These disclosures are also included in the Notes to the Consolidated Financial Statements and such Notes are cross-referenced in the tables below. CONTRACTUAL OBLIGATIONS (in thousands)

YEARS FOOTNOTE ---------------------------------------------------------------------------------------- TOTAL 1 2 3 4 5 >5 REF. ------- ------ ----- ----- ----- ----- ----- ----- Long-term debt $33,625 $14,489 $7,556 $4,046 $5,868 $1,178 $ 487 3 Operating leases 154 126 28 -- -- -- -- 2 ------- ------- ------ ------ ------ ------ ------ --- Total contractual obligations $33,779 $14,615 $7,581 $4,046 $5,868 $1,178 $ 487 ======= ======= ====== ====== ====== ====== ======

The Company has decreased its operating lease commitments through increased Company-owned facilities and revenue equipment. Primarily all of the Company's operating lease commitments in effect at December 31, 2002 are on a month-to-month basis. The Company entered into a consulting agreement with its Chairman Emeritus, Dempsey Boyd, effective January 1, 2002 through December 31, 2003. Mr. Boyd will be paid $145,000 in 2003 under this consulting agreement. OTHER CONTRACTUAL OBLIGATIONS (in thousands)

YEARS FOOTNOTE ----------------------------------------------------------------------------------------- TOTAL 1 2 3 4 5 >5 REF. ------- ------ ----- ---- ----- ------ ----- ------ Unused lines of credit $ 2,500 $ 2,500 -- -- -- -- -- 3 Letters of credit 6,300 6,300 -- -- -- -- -- 4 ------- ------- ------ ------ ------ ------ ------ --- Total contractual obligations $ 8,800 $ 8,800 -- -- -- -- -- ======= ======= ====== ====== ====== ====== ======

As of December 31, 2002, the Company had letter of credit commitments of approximately $2.5 million against the line of credit and no outstanding borrowings against it. With the Company's improving financial performance, the Company expects it could obtain additional financing, if necessary, with favorable terms. The letters of credit are primarily required by insurance providers. FACTORS THAT MAY AFFECT FUTURE RESULTS The Company's future results may be affected by a number of factors over which the Company has little or no control. Fuel prices, insurance and claims costs, liability claims, interest rates, the availability of qualified drivers, fluctuations in the resale value of revenue equipment, economic and customer business cycles, and shipping demands are economic factors over which the Company has little or no control. Significant increases or rapid fluctuations in fuel prices, interest rates, insurance costs or liability claims, to the extent not offset by increases in freight rates, and the resale value of revenue equipment could result in Company losses. Weakness in the general economy, including a weakness in consumer demand for goods and services, could adversely affect customers and result in customers reducing their demand for transportation services, which, in turn, could adversely affect the Company's growth and revenues. Weakness in customer demand for the Company's services or in the general rate environment also may restrain the Company's ability to increase rates or obtain fuel surcharges. The following issues and uncertainties, among other things, should be considered in evaluating the Company's growth outlook: FUEL PRICE TREND Many of the Company's operating expenses, including fuel costs and fuel taxes, are sensitive to the effects of inflation, which could result in higher operating costs. During 2002, 2001, and 2000, the Company experienced fluctuations in fuel costs as a result of conditions in the petroleum industry. The Company also has periodically experienced some wage increases for drivers. Increases in fuel costs and driver compensation are expected to continue during 2003 and may affect operating income, unless the Company is able to pass those increased costs to customers through rate increases and fuel surcharges. The Company has initiated a program to obtain rate increases and fuel surcharges from customers in order to cover increased costs due to these increases in fuel prices, driver compensation, and other expenses and has been successful in implementing some fuel surcharges and certain rate increases. Competitive conditions in the transportation industry, including lower demand for transportation services, could limit the Company's ability to obtain rate increases or fuel surcharges in the future. As of December 31, 2002, the Company had no derivative financial instruments to reduce its exposure to fuel price fluctuations. The motor carrier industry depends upon the availability of diesel fuel. Fuel shortages or increases in fuel taxes or fuel costs have adversely affected, and may in the future adversely affect, the financial condition and results of operations of the Company. Fuel prices have fluctuated greatly, and fuel taxes have generally increased in recent years. The tensions in the Middle East, as well as reduced fuel supplies from Venezuela, have caused an increase in oil and fuel prices during the first quarter of 2003. The Company has not experienced difficulty in maintaining necessary fuel supplies and, in the past, the Company generally has been able to partially offset significant increases in fuel costs and fuel taxes through increased freight rates and through a fuel surcharge which increases incrementally as the price of fuel increases. However, there can be no assurance that the Company will be able to recover any future increases in fuel costs and fuel taxes through increased rates. If fuel prices continue to increase or are sustained at these higher levels for a continuing period of time, the higher fuel costs may have a materially adverse effect on the financial condition and business operations of the Company. Additionally, the increased fuel costs may continue to have a materially adverse effect on the Company's efforts to attract and retain owner-operators, expand its pool of available trucks, and diversify its operations. INSURANCE The Company's future insurance and claims expenses could exceed historical levels, which could have a material adverse effect on earnings. The Company currently self-insures for a portion of the claims exposure resulting from cargo loss, personal injury, and property damage, combined up to $750,000 per occurrence, effective July 1, 2002. In addition, costs above the $750,000 self-insured amount, up to the Company's coverage amount of two million dollars, will be shared by the Company at a rate of fifty percent. Costs and claims in excess of the Company's coverage amount of two million dollars will be borne solely by the Company. Also, effective July 1, 2002, the workers' compensation self-insurance level increased to a maximum of $500,000, and the health insurance self-insurance level is $175,000 per person per year. If the number or dollar amount of claims for which the Company is self-insured increases, operating results could be adversely affected. The Company was involved in two accidents in the first quarter and two accidents in the third quarter of 2002 that resulted in third party fatalities. The Company was involved in another accident resulting in a fatality during the first quarter of 2003. During the first quarter of 2002, the self-insured amount for cargo loss, personal injury, and property damage, combined was $500,000 per occurrence, which would be the amount applicable to the two accidents during the first quarter of 2002. The self-insured amount for the two accidents in the third quarter of 2002 and the accident in the first quarter of 2003 was $750,000. Each of these accidents, taken separately, has the potential to cause the Company to reach its total per occurrence retention amount for insurance purposes. To date, four lawsuits have been filed against the Company with respect to these accidents. If the Company is ultimately found to have some liability for one or more of these accidents, the Company believes that its operating cash flows and, if needed, additional bank financing would be sufficient to cover any amounts payable. Also, the Company maintains insurance coverage of up to two million dollars with licensed insurance companies above the amounts for which the Company is self-insured. As discussed above, effective July 1, 2002, the Company shares fifty percent of claims amounts within its two million dollars of insurance coverage. The terrorist attacks in the United States on September 11, 2001, and subsequent events, have resulted in additional increases in the Company's insurance expenses. If these expenses continue to increase, and the Company is unable to offset the increase with higher freight rates, the Company's earnings could be adversely affected. REVENUE EQUIPMENT The Company's growth has been made possible through the addition of new revenue equipment. Difficulty in financing or obtaining new revenue equipment (for example, delivery delays from manufacturers or the unavailability of independent contractors) could have an adverse effect on the Company's operations and financial condition. In the past the Company has acquired new tractors and trailers at favorable prices and has entered into agreements with the manufacturers to repurchase the tractors from the Company at agreed prices. Current developments in the secondary tractor and trailer resale market have resulted in a large supply of used tractors and trailers on the market. This has depressed the market value of used equipment to levels significantly below the prices at which the manufacturers have agreed to repurchase the equipment. Accordingly, some manufacturers may refuse or be financially unable to keep their commitments to repurchase equipment according to their repurchase agreement terms. BUSINESS UNCERTAINTIES The Company has experienced significant growth in revenue since the initial public offering of the Company's stock in May 1994. There can be no assurance that the Company's business will continue to grow in a similar fashion in the future or that the Company can effectively adapt its management, administrative, and operational systems to respond to any future growth. Further, there can be no assurance that the Company's operating margins will not be adversely affected by future changes in and expansion of the Company's business or by changes in economic conditions. RECENTLY ISSUED ACCOUNTING STANDARDS In June 2001, the Financial Accounting Standards Board (the "FASB") issued SFAS No. 141, "Business Combinations," and SFAS No.142, "Goodwill and Other Intangible Assets." SFAS No. 141 requires the use of the purchase method of accounting and prohibits the use of the pooling-of-interests method of accounting for business combinations initiated after June 30, 2001. This statement also requires that the Company recognize acquired intangible assets apart from goodwill if the acquired intangible assets meet certain criteria. SFAS No.142 requires, among other things, that companies no longer amortize goodwill, but instead test goodwill for impairment at least annually. The Company adopted SFAS Nos. 141 and 142 on January 1, 2002 and, accordingly, ceased amortization of goodwill at that time. Goodwill amortization expense of $223,800 was included in the consolidated financial statements for the years ended December 31, 2001 and 2000. Had goodwill amortization expense not been recognized in those years, loss per share would have decreased from $(0.14) per share to $(0.07) per share for the year ended December 31, 2001 and from $(0.32) per share to $(0.24) per share for the year ended December 31, 2000. See Note 1 to the consolidated financial statements for further discussion of SFAS No. 142. In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement Obligations." SFAS No. 143 addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and associated retirement costs. SFAS No. 143 is effective for fiscal years beginning after June 15, 2002. The Company anticipates the adoption of this statement will not have a material impact on its consolidated financial position and results of operations. In August 2001, the FASB issued Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Asset" ("SFAS No. 144"). SFAS No. 144 establishes a single accounting model for the impairment or disposal of long-lived assets and new standards for reporting discontinued operations. SFAS No. 144 superseded Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," and APB Opinion No. 30, "Reporting the Results of Operations - Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions." The provisions of SFAS No. 144 are effective in fiscal years beginning after December 15, 2001 and, in general, are to be applied prospectively. The Company adopted SFAS No. 144 effective January 1, 2002 and such adoption did not have a material impact on the Company's consolidated financial position and results of operations. In June 2002, the FASB issued Statement of Financial Accounting Standards No. 146, "Accounting for Costs Associated with Exit or Disposal Activities" ("SFAS No. 146"). SFAS No. 146 requires companies to recognize costs associated with exit or disposal activities when they are incurred rather than at the date of a commitment to an exit or disposal plan. SFAS No. 146 is to be applied prospectively to exit or disposal activities initiated after December 31, 2002. The adoption of SFAS No. 146 is not expected to have a material impact on the Company's financial position or results of operations. In December 2002, the FASB issued Statement of Financial Accounting Standards No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure" ("SFAS No. 148"). SFAS No. 148 amends Statement No. 123, Accounting for Stock-Based Compensation ("SFAS No. 123"), to provide alternative methods for voluntary transition to SFAS No. 123's fair value method of accounting for stock-based employee compensation ("the fair value method"). SFAS No. 148 also requires disclosure of the effects of an entity's accounting policy with respect to stock-based employee compensation on reported net income (loss) and earnings (loss) per share in annual and interim financials statements. The transition provisions of SFAS No. 148 are effective in fiscal years beginning after December 15, 2002. The Company is currently evaluating the transition provisions of SFAS No. 148 but expects that it will not have a material adverse impact on the Company's consolidated financial position and results of operations upon adoption since the Company has not adopted the fair value method. The Company adopted the required disclosure provisions of SFAS No. 148, see Note 1 to the Consolidated Financial Statements included in Item 8 of this report. In November 2002, the FASB issued FASB Interpretation No. 45 ("FIN 45"), "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees and Indebtedness of Others." FIN 45 elaborates on the disclosures to be made by the guarantor in its interim and annual financial statements about its obligations under certain guarantees that it has issued. It also requires that a guarantor recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. The initial recognition and measurement provisions of this interpretation are applicable on a prospective basis to guarantees issued or modified after December 31, 2002; while the provisions of the disclosure requirements are effective for financial statements of interim or annual reports ending after December 15, 2002. The Company adopted the disclosure provisions of FIN 45 during the fourth quarter of fiscal 2002 and such adoption did not have a material impact on the Company's consolidated financial statements. The Company is currently evaluating the recognition provisions of FIN 45 but expects that it will not have a material adverse impact on the Company's consolidated results of operations or financial position upon adoption. In January 2003, the FASB issued FASB Interpretation No. 46 ("FIN 46"), "Consolidation of Variable Interest Entities." In general, a variable interest entity is a corporation, partnership, trust, or any other legal structure used for business purposes that either (a) does not have equity investors with voting rights or (b) has equity investors that do not provide sufficient financial resources for the entity to support its activities. FIN 46 requires certain variable interest entities to be consolidated by the primary beneficiary of the entity if the investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The consolidation requirements of FIN 46 apply immediately to variable interest entities created after January 31, 2003. The consolidation requirements apply to older entities in the first fiscal year or interim period beginning after June 15, 2003. Certain of the disclosure requirements apply in all financial statements issued after January 31, 2003, regardless of when the variable interest entity was established. Since the Company currently has identified no variable interest entities, management expects that the adoption of the provisions of FIN 46 will not have a material impact on the Company's consolidated results of operations or financial position. There were no other recently issued accounting pronouncements with delayed effective dates that would currently have a material impact on the Company's consolidated financial position and results of operations. CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2002 2001 ---- ---- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 292,514 $ 2,221,455 Short-term investments 288,000 278,000 Accounts receivable, less allowance for doubtful accounts of $341,338 (2002) and $318,981 (2001): Trade and interline 9,083,921 10,055,894 Other 542,963 956,576 Income tax receivable -- 339,220 Current portion of net investment in sales-type leases 1,427,617 1,200,175 Parts and supplies inventory 521,201 497,637 Prepaid licenses and permits 547,460 946,054 Other prepaid expenses 965,995 1,309,670 Deferred income taxes 2,378,688 1,497,047 ------------ ------------ Total current assets 16,048,359 19,301,728 ------------ ------------ PROPERTY AND EQUIPMENT: Land and land improvements 2,948,297 2,800,523 Buildings 7,804,015 7,635,280 Revenue equipment 64,644,891 70,927,529 Other equipment 12,466,476 12,090,626 Leasehold improvements 386,384 384,884 ------------ ------------ Total 88,250,063 93,838,842 Less accumulated depreciation and amortization 33,525,571 35,325,568 ------------ ------------ Property and equipment, net 54,724,492 58,513,274 ------------ ------------ OTHER ASSETS: Net investment in sales-type leases 6,706,848 3,850,821 Goodwill, net of accumulated amortization of $912,077 3,452,446 3,452,446 Revenue equipment held for lease 310,405 500,125 Deposits and other assets 339,531 465,112 ------------ ------------ Total other assets 10,809,230 8,268,504 ------------ ------------ TOTAL $ 81,582,081 $ 86,083,506 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable - trade and interline $ 2,375,475 $ 3,339,973 Line of credit -- 210,540 Income taxes payable 1,424,791 -- Accrued liabilities: Self-insurance claims 4,537,857 2,820,773 Salaries and wages 447,911 485,599 Other 1,324,364 953,694 Current maturities of long-term debt 14,488,695 13,580,359 ------------ ------------ Total current liabilities 24,599,093 21,390,938 LONG-TERM DEBT 19,135,870 25,606,297 DEFERRED INCOME TAXES 12,122,259 13,798,144 ------------ ------------ Total liabilities 55,857,222 60,795,379 ------------ ------------ COMMITMENTS AND CONTINGENCIES (Note 4) STOCKHOLDERS' EQUITY: 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; 4,069,640 shares issued and outstanding 4,070 4,070 Additional paid-in capital 16,884,622 16,884,622 Retained earnings 18,474,441 18,008,625 Treasury stock, at cost; 1,359,684 shares (2002) and 1,355,041 shares (2001) (9,638,274) (9,609,190) ------------ ------------ Total stockholders' equity 25,724,859 25,288,127 ------------ ------------ TOTAL $ 81,582,081 $ 86,083,506 ============ ============

See accompanying notes to consolidated financial statements. CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2002 2001 2000 ---- ---- ---- OPERATING REVENUES $ 127,792,396 $ 127,559,594 $ 131,629,805 ------------- ------------- ------------- OPERATING EXPENSES Salaries, wages and employee benefits 36,960,066 39,560,825 39,262,650 Cost of independent contractors 38,967,610 31,779,119 35,172,619 Operating supplies 25,965,633 30,216,514 30,308,598 Operating taxes and licenses 2,599,431 2,241,198 2,965,480 Insurance and claims 6,534,920 6,457,919 7,060,347 Communications and utilities 1,275,475 1,370,598 1,520,342 Depreciation and amortization 11,604,696 12,289,710 11,611,081 Gain on disposal of property and equipment, net (468,321) (525,808) (1,113,574) Other 1,614,719 1,950,109 2,008,131 ------------- ------------- ------------- Total operating expenses 125,054,229 125,340,184 128,795,674 ------------- ------------- ------------- OPERATING INCOME 2,738,167 2,219,410 2,834,131 ------------- ------------- ------------- OTHER (EXPENSE) INCOME: Interest expense (1,752,390) (2,684,429) (3,904,241) Other (expense) income (51,196) 63,357 80,338 ------------- ------------- ------------- Other expense, net (1,803,586) (2,621,072) (3,823,903) ------------- ------------- ------------- INCOME (LOSS) BEFORE PROVISION (BENEFIT) FOR INCOME TAXES 934,581 (401,662) (989,772) PROVISION (BENEFIT) FOR INCOME TAXES 460,149 5,038 (15,318) ------------- ------------- ------------- NET INCOME (LOSS) $ 474,432 $ (406,700) $ (974,454) ============= ============= ============= BASIC NET INCOME (LOSS) PER SHARE $ 0.18 $ (0.14) $ (0.32) ============= ============= ============= DILUTED NET INCOME (LOSS) PER SHARE $ 0.17 $ (0.14) $ (0.32) ============= ============= ============= BASIC WEIGHTED AVERAGE SHARES OUTSTANDING 2,709,333 2,829,614 3,090,292 ============= ============= ============= DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING 2,788,234 2,829,614 3,090,292 ============= ============= =============

See accompanying notes to consolidated financial statements. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

FOR THE YEARS ENDED ADDITIONAL DECEMBER 31, COMMON PAID-IN RETAINED TREASURY 2002, 2001 AND 2000 STOCK CAPITAL EARNINGS STOCK TOTAL ----- ------- -------- ----- ----- Balance, January 1, 2000 $4,070 $16,864,622 $ 19,438,142 $(5,913,543) $ 30,393,291 Sale of common stock under employee stock purchase plan -- -- (11,999) 24,525 12,526 Purchase of treasury stock -- -- -- (2,248,941) (2,248,941) Net loss -- -- (974,454) -- (974,454) ------ ----------- ------------ ----------- ------------ Balance, December 31, 2000 4,070 16,864,622 18,451,689 (8,137,959) 27,182,422 Sale of common stock under employee stock purchase plan -- -- (36,364) 49,825 13,461 Capital contribution -- 20,000 -- -- 20,000 Purchase of treasury stock -- -- -- (1,521,056) (1,521,056) Net loss -- -- (406,700) -- (406,700) ------ ----------- ------------ ----------- ------------ Balance, December 31, 2001 4,070 16,884,622 18,008,625 (9,609,190) 25,288,127 SALE OF COMMON STOCK UNDER EMPLOYEE STOCK PURCHASE PLAN -- -- (8,616) 13,166 4,550 PURCHASE OF TREASURY STOCK -- -- -- (42,250) (42,250) NET INCOME -- -- 474,432 -- 474,432 ------ ----------- ------------ ----------- ------------ BALANCE, DECEMBER 31, 2002 $4,070 $16,884,622 $ 18,474,441 $(9,638,274) $ 25,724,859 ====== =========== ============ =========== ============

See accompanying notes to consolidated financial statements. CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2002 2001 2000 ---- ---- ---- OPERATING ACTIVITIES: Net income (loss) $ 474,432 $ (406,700) $ (974,454) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 11,604,696 12,289,710 11,611,081 Provision for bad debts 78,565 625,000 84,000 Gain on disposal of property and equipment, net (468,321) (525,808) (1,113,574) Net effect of sales-type leases on cost of independent contractors (1,857,793) (526,707) 253,990 (Benefit from) provision for deferred income taxes (2,557,526) 33,357 1,590,614 Changes in assets and liabilities that provided (used) cash: Accounts receivable 1,307,021 (40,159) 1,818,149 Other current assets 1,047,925 1,155,901 1,158,104 Deposits and other assets 125,581 (10,373) (16,367) Accounts payable - trade and interline (964,498) 764,297 (1,436,371) Accrued liabilities and other current liabilities 3,474,857 59,996 (2,866,338) ------------ ------------ ------------ Net cash provided by operating activities 12,264,939 13,418,514 10,108,834 ------------ ------------ ------------ INVESTING ACTIVITIES: Payments received on sales-type leases 3,622,436 2,288,643 3,407,859 Capital expenditures: Revenue equipment (7,366,910) (1,642,936) (14,459,770) Other property and equipment (602,969) (1,234,350) (1,617,129) Proceeds from disposals of property and equipment 434,365 2,557,928 6,090,836 ------------ ------------ ------------ Net cash (used in) provided by investing activities (3,913,078) 1,969,285 (6,578,204) ------------ ------------ ------------ FINANCING ACTIVITIES: Proceeds from sales of common stock 4,550 13,461 12,526 Proceeds from capital contribution -- 20,000 -- Purchase of treasury stock (42,250) (1,521,056) (2,248,941) (Payments) proceeds on line of credit (210,540) (839,291) 1,049,831 Proceeds from long-term debt 5,333,183 1,012,949 9,949,052 Principal payments on long-term debt (15,365,745) (13,125,688) (12,026,643) ------------ ------------ ------------ Net cash used in financing activities (10,280,802) (14,439,625) (3,264,175) ------------ ------------ ------------ Net (decrease) increase in cash and cash equivalents (1,928,941) 948,174 266,455 CASH AND CASH EQUIVALENTS: BEGINNING OF YEAR 2,221,455 1,273,281 1,006,826 ------------ ------------ ------------ END OF YEAR $ 292,514 $ 2,221,455 $ 1,273,281 ============ ============ ============ SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid (received) during the year for: Interest $ 1,752,390 $ 2,684,429 $ 3,904,593 ============ ============ ============ Income taxes, net of refunds $ 1,252,497 $ (1,508,026) $ 1,138,562 ============ ============ ============ SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES Net investment in sales-type leases $ (4,848,112) $ (1,065,389) $ (3,160,246) ============ ============ ============ Dealer financed purchases of revenue equipment $ 4,470,471 $ 5,545,820 $ -- ============ ============ ============

See accompanying notes to consolidated financial statements. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF OPERATIONS - Boyd Bros. Transportation Inc. and its subsidiary (the "Company") are flatbed carriers, transporting a variety of products, primarily steel and building materials. The Company has authority to operate throughout 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. PRINCIPLES OF CONSOLIDATION - The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, WTI Transport, Inc. ("WTI"). All significant intercompany items have been eliminated in consolidation. USE OF ACCOUNTING ESTIMATES - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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. Estimates and assumptions are used when accounting for, among other areas, depreciation, allowance for doubtful accounts, valuation of long-lived tangible and intangible assets, accident claims and commitments and contingencies. REVENUE RECOGNITION - Operating revenue and related costs, including revenue and costs related to the Company's brokerage services, are recognized upon delivery of freight to customers provided that pervasive evidence of an arrangement exists, the contract price is fixed and determinable, and collectibility of the resulting receivables is probable. Substantially all gains recognized on sales-type lease transactions are deferred and amortized into income over the life of the lease, typically 36 - 42 months. FUEL SURCHARGES - Prior to January 1, 2002, the Company recorded reimbursement by its customers for fuel surcharges as a decrease to operating supplies. The Company's results of operations for the fiscal years ended December 31, 2002, 2001 and 2000 have been reclassified for comparable purposes in accordance with Emerging Issues Task Force release 01-14, "Income Statement Characterization of Reimbursements Received for Out of Pocket Expenses Incurred". The effect of this reclassification was to increase both operating revenues and operating supplies expense by $1,538,028, $3,703,315 and $4,905,019 for fiscal years 2002, 2001 and 2000, respectively. CASH AND CASH EQUIVALENTS - Cash and cash equivalents include cash on hand, cash on deposit, and highly liquid investments with maturity of three months or less at purchase date. ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS - Accounts receivable are customer obligations due under normal trade terms. The Company sells its services primarily to manufacturers and consumers of building materials and related products. Senior management performs continuing credit evaluations of its customers' financial condition and although the Company generally does not require collateral, letters of credit may be required from its customers in certain circumstances. The Company records an allowance for doubtful accounts based on specifically identified amounts that senior management believes to be uncollectible. The Company also records additional allowance based on certain percentages of its aged receivables, which are determined based on historical experience and the assessment of the general financial conditions affecting its customer base. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. Based on the information available to management, the Company believes its allowance for doubtful accounts as of December 31, 2002 is adequate. However, actual write-offs might exceed the recorded allowance. 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. PROPERTY AND EQUIPMENT - Property and equipment are stated at the lower of fair value or 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 5-30 years Revenue equipment 4-7 years Other equipment 3-10 years Leasehold improvements 3-20 years Depreciation is computed using accelerated methods for income tax purposes. 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 period of disposal. In accordance with SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," the Company periodically evaluates the carrying value of long-lived assets to be held and used when events and circumstances warrant such a review. The carrying value of long-lived assets is considered impaired when the anticipated undiscounted cash flow from such assets is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived assets. REVENUE EQUIPMENT HELD FOR LEASE - Revenue equipment held for lease and not in use is stated at cost, less accumulated depreciation, which approximates net realizable value. Depreciation expense is suspended while the asset is in revenue equipment held for lease. GOODWILL - In June 2001, the Financial Accounting Standards Board (the "FASB") issued SFAS No. 141, "Business Combinations," and SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 requires the use of the purchase method of accounting and prohibits the use of the pooling-of-interests method of accounting for business combinations initiated after June 30, 2001. This statement also requires that the Company recognize acquired intangible assets apart from goodwill if the acquired intangible assets meet certain criteria. SFAS No. 142 requires, among other things, that companies no longer amortize goodwill, but instead test goodwill for impairment at least annually. In addition, SFAS No. 142 requires that the Company identify reporting units for purposes of assessing potential future impairments of goodwill, reassess the useful lives of other existing recognized finite-lived intangible assets, and cease amortization of intangible assets with an indefinite useful life. An intangible asset with an indefinite useful life should be tested for impairment in accordance with the guidance in SFAS No. 142. This statement is required to be applied in fiscal years beginning after December 15, 2001, to all goodwill and other intangible assets recognized at that date, regardless of when those assets were initially recognized. The Company has no intangible assets other than goodwill. SFAS No. 142 requires the Company to complete a transitional goodwill impairment test within six months from the date of adoption and reassess the useful lives of other intangible assets within the first interim quarter after adoption. The Company adopted SFAS Nos. 141 and 142 on January 1, 2002 and, accordingly, ceased amortization of goodwill at that time. Goodwill amortization expense of $223,800 was included in the consolidated financial statements for each of the years ended December 31, 2001 and 2000. Had goodwill amortization expense not been recognized in those years, loss per share would have decreased from $(0.14) per share to $(0.07) per share for the year ended December 31, 2001 and from $(0.32) per share to $(0.24) per share for the year ended December 31, 2000. The following table presents the impact of SFAS No. 142 on operating income and net loss, as if it had been in effect for the years ended December 31, 2001 and 2000.

2001 2000 ---- ---- Operating income, as reported $ 2,219,410 $ 2,834,131 Add back: Goodwill amortization 223,800 223,800 ------------ ------------ Adjusted operating income $ 2,443,210 $ 3,057,931 ============ ============ Net loss, as reported $ (406,700) $ (974,454) Add back: Goodwill amortization 223,800 223,800 Tax effect -- -- ------------ ------------ Adjusted net loss $ (182,900) $ (750,654) ============ ============

As of June 30, 2002, the Company completed the first phase of transitional testing for the potential impairment of goodwill relating to its WTI subsidiary. This goodwill impairment test will be completed annually on October 1 unless events or evidence exist that would significantly alter amounts used in the annual calculation. The Company used a multiple of EBITDA (earnings before interest, tax, depreciation and amortization expenses) in evaluating the fair value of WTI. This was consistent with the valuation method used in calculating the original purchase price of WTI in 1997. As a result of such testing, the Company determined there was no impairment of goodwill that should be included in the accompanying financial statements. At June 30, 2002, the net book value recorded for goodwill was $3,452,446. No events have occurred since this assessment to cause a significant change in the values used for computation. Thus, another impairment test was not performed. STOCK-BASED COMPENSATION PLANS - The Company adopted the disclosure provisions of Statement of Financial Accounting Standards (SFAS or Statement) No. 148, "Accounting for Stock-Based Compensation-Transition and Disclosure", which amends SFAS No. 123, "Accounting for Stock-Based Compensation." SFAS No. 148 provides alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation, which was originally provided under SFAS No. 123. The Statement also improves the timeliness of disclosures by requiring the information be included in interim, as well as annual, financial statements. The adoption of these disclosure provisions did not have a material affect on the Company's 2002 consolidated results of operations, financial position, or cash flows. SFAS No. 123 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 market value of the stock at the grant date. As such, no compensation expense is recorded in the accompanying consolidated financial statements. Had compensation cost been determined based upon the fair value at the grant date for awards under the stock option plan consistent with the methodology prescribed under SFAS No. 123, the Company's pro forma net income (loss) and net income (loss) per share would have differed from the amounts reported as follows:

FOR THE YEARS ENDED DECEMBER 31, 2002 2001 2000 ---- ---- ---- Net income (loss), as reported $ 474,432 $ (406,700) $ (974,454) Stock-based employee compensation expense determined under fair value basis, net of tax (388,892) (322,067) (532,539) ------------ ------------ ------------- Proforma net income (loss) $ 85,540 $ (728,767) $ (1,506,993) ============ ============ =============

Earnings per share: Basic - as reported $ 0.18 $ (0.14) $ (0.32) Basic - proforma $ 0.03 $ (0.26) $ (0.49) Diluted - as reported $ 0.17 $ (0.14) $ (0.32) Diluted - proforma $ 0.03 $ (0.26) $ (0.49) The weighted-average fair value per share for options granted was $2.20 and $1.98 for the years ended December 31, 2002 and 2001, respectively. No options were granted in 2000. The fair value was estimated at the date of the grant using the Black-Scholes option pricing model with the following weighted-average assumptions:

2002 2001 2000 ---- ---- ---- Risk-free interest rate 4.6% 4.6% -- Dividend yield 0.0% 0.0% -- Expected volatility 104.4% 82.4% -- Weighted average expected life (in years) 6 6 --

INCOME TAXES - The Company accounts for income taxes under the asset and liability method that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns. In estimating future tax consequences, the Company generally considers all expected future events other than possible enactments of changes in the tax laws or rates. NET INCOME (LOSS) PER SHARE - In accordance with SFAS No. 128, "Earnings per Share", the Company reports two separate net income (loss) per share numbers, basic and diluted, for all periods presented. These per share amounts have been computed using the weighted-average number of shares of common stock outstanding during each period. Diluted earnings per share amounts are presented to include the effect of potentially dilutive securities. Options that could potentially dilute basic net income (loss) per share in the future were not included in the computation of diluted net income (loss) per share for the years ended December 31, 2001 and 2000, because to do so would have been antidilutive. Antidilutive options were 85,200 and 408,300 for the years ended December 31, 2001 and 2000, respectively. FAIR VALUE OF FINANCIAL INSTRUMENTS - The carrying value of the Company's cash equivalents, short-term investments, trade receivables, short-term lease receivables, trade payables and accrued expenses approximates fair value because of the short-term nature of these instruments. The fair value of long-term sales-type lease receivables and long-term debt approximates its carrying value and are estimated using a discounted cash flow analysis. Discounted cash flows for long-term debt are based on borrowing rates currently available to the Company for bank loans with similar terms and average maturities. RECENT ACCOUNTING PRONOUNCEMENTS - In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement Obligations." SFAS No. 143 addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated retirement costs. SFAS No. 143 is effective for fiscal years beginning after June 15, 2002. The Company anticipates the adoption of this statement will not have a material impact on its consolidated financial position and results of operations. In August 2001, the FASB issued Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Asset" ("SFAS No. 144"). SFAS No. 144 establishes a single accounting model for the impairment or disposal of long-lived assets and new standards for reporting discontinued operations. SFAS No. 144 superseded Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of", and APB Opinion No. 30, "Reporting the Results of Operations--Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions". The provisions of SFAS No. 144 are effective in fiscal years beginning after December 15, 2001 and, in general, are to be applied prospectively. The Company adopted No. SFAS 144 effective December 31, 2001 and such adoption did not have a material impact on the Company's consolidated financial position and results of operations. In June 2002, the FASB issued Statement of Financial Accounting Standards No. 146, "Accounting for Costs Associated with Exit or Disposal Activities" ("SFAS No. 146"). SFAS No. 146 requires companies to recognize costs associated with exit or disposal activities when they are incurred rather than at the date of a commitment to an exit or disposal plan. SFAS No. 146 is to be applied prospectively to exit or disposal activities initiated after December 31, 2002. The adoption of SFAS No. 146 is not expected to have a material impact on the Company's financial position or results of operations. In December 2002, the FASB issued Statement of Financial Accounting Standards No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure" ("SFAS No. 148"). SFAS No. 148 amends Statement No. 123, Accounting for Stock-Based Compensation ("SFAS No. 123"), to provide alternative methods for voluntary transition to SFAS No. 123's fair value method of accounting for stock-based employee compensation ("the fair value method"). SFAS No. 148 also requires disclosure of the effects of an entity's accounting policy with respect to stock-based employee compensation on reported net income (loss) and earnings (loss) per share in annual and interim financials statements. The transition provisions of SFAS No. 148 are effective in fiscal years beginning after December 15, 2002. The Company is currently evaluating the transition provisions of SFAS No. 148 but expects that it will not have a material adverse impact on the Company's consolidated financial position and results of operations upon adoption since the Company has not adopted the fair value method. The Company adopted the disclosure provisions of SFAS No. 148, which are included in Note 1 - Stock-Based Compensation Plans herein. In November 2002, the FASB issued FASB Interpretation No. 45 ("FIN 45"), "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees and Indebtedness of Others." FIN 45 elaborates on the disclosures to be made by the guarantor in its interim and annual financial statements about its obligations under certain guarantees that it has issued. It also requires that a guarantor recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. The initial recognition and measurement provisions of this interpretation are applicable on a prospective basis to guarantees issued or modified after December 31, 2002; while the provisions of the disclosure requirements are effective for financial statements of interim or annual reports ending after December 15, 2002. The Company adopted the disclosure provisions of FIN 45 during the fourth quarter of fiscal 2002 and such adoption did not have a material impact on the Company's consolidated financial statements. The Company is currently evaluating the recognition provisions of FIN 45 but expects that it will not have a material adverse impact on the Company's consolidated results of operations or financial position upon adoption. In January 2003, the FASB issued FASB Interpretation No. 46 ("FIN 46"), "Consolidation of Variable Interest Entities." In general, a variable interest entity is a corporation, partnership, trust, or any other legal structure used for business purposes that either (a) does not have equity investors with voting rights or (b) has equity investors that do not provide sufficient financial resources for the entity to support its activities. FIN 46 requires certain variable interest entities to be consolidated by the primary beneficiary of the entity if the investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The consolidation requirements of FIN 46 apply immediately to variable interest entities created after January 31, 2003. The consolidation requirements apply to older entities in the first fiscal year or interim period beginning after June 15, 2003. Certain of the disclosure requirements apply in all financial statements issued after January 31, 2003, regardless of when the variable interest entity was established. Since the Company currently has identified no variable interest entities, management expects that the adoption of the provisions of FIN 46 will not have a material impact on the Company's consolidated results of operations or financial position. There were no other recently issued accounting pronouncements with delayed effective dates that would currently have a material impact on the Company's consolidated financial position and results of operations. RECLASSIFICATIONS - Certain previously reported amounts have been reclassified to conform to the current period presentation. 2. LEASES LESSEE OPERATING LEASES - The Company leases certain terminal buildings, land, and equipment under agreements that expire at various dates through 2004. 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 are insignificant. Total rental expense for all operating leases was $139,158, $170,741, and $356,791, for the years ended December 31, 2002, 2001 and 2000, respectively. LESSOR SALES-TYPE LEASES - The Company leases revenue equipment to certain of its owner-operators and accounts for these transactions as sales-type leases. These receivables have terms of three and one-half to four years and are collateralized by a security interest in the related revenue equipment. Certain revenue equipment under these leases have a guaranteed residual value from the vendor which will be redeemed by the Company at the end of the lease term. The components of the net investment in sales-type leases at December 31, 2002 and 2001 are as follows:

2002 2001 ---- ---- Minimum lease receivable $ 12,643,883 $ 7,929,530 Allowance for uncollectible receivables (2,141,106) (1,590,153) ------------- ------------ Net minimum lease receivable 10,502,777 6,339,377 Unearned interest income (2,368,312) (1,288,381) ------------- ------------ Net investment in sales-type leases 8,134,465 5,050,996 Less current portion (1,427,617) (1,200,175) ------------- ------------ Net amount due after one year $ 6,706,848 $ 3,850,821 ============= ============

Future minimum lease rentals for sales-type leases are as follows:

YEAR 2003 $ 4,088,035 2004 3,359,738 2005 3,036,139 2006 2,159,971 -------------- Total $ 12,643,883 ==============

Gains on disposition of revenue equipment leased to owner-operators, interest income on these leases, and provisions for bad debts related to sales-type leases are included as components of cost of independent contractors in the accompanying consolidated statements of operations. The income from these items totaled $1,857,793, $526,707, and $(253,990) for the years ended December 31, 2002, 2001, and 2000, respectively. OPERATING LEASES - The Company leases revenue equipment to certain of its owner-operators and accounts for these transactions as operating leases. These leases have terms of three to three and one-half years. The revenue equipment under these leases had a cost of $664,519 and $1,423,174, and accumulated depreciation of $295,302 and $414,076 at December 31, 2002 and 2001, respectively. Total rental income from operating leases was $384,946, $328,331, and $273,360 for the years ended December 31, 2002, 2001, and 2000, respectively, and is included as a component of cost of independent contractors in the accompanying Consolidated Statements of Operations. Future minimum lease rentals for operating leases are not significant. 3. BORROWING ARRANGEMENTS Long-term debt at December 31, 2002 and 2001 is summarized as follows:

Revenue equipment obligations: 2002 2001 ---- ---- LIBOR plus 1.25% subject to 3.625% minimum (3.625% - 2002 and 2001) Notes payable to banks in monthly installments through July 2009 $ 8,541,151 $11,478,728 LIBOR plus 2.00% (3.82% - 2002 and 3.83% - 2001) Notes payable to banks in monthly installments through November 2006 1,436,593 2,054,475 LIBOR plus 2.50% (3.63% - 2002 and 4.13% - 2001) Notes payable to banks in monthly installments through May 2004 8,519,700 16,718,438 LIBOR plus 2.38% (4.15% - 2002) Notes payable to banks in monthly installments through June 2007 2,878,004 -- Fixed rate of 5.60% Notes payable to finance company in monthly installments through January 2007 539,939 -- Fixed rate of 5.75% Notes payable to finance company in monthly installments through July 2007 8,090,630 5,058,384 Other obligations: LIBOR plus 1.50% (2.93% - 2002 and 3.38% - 2001) Notes payable to banks in monthly installments through February 2006 3,618,548 3,876,631 ----------- ----------- Total 33,624,565 39,186,656 Less current maturities 14,488,695 13,580,359 ----------- ----------- Long-term debt $19,135,870 $25,606,297 =========== ===========

Revenue equipment obligations are collateralized by revenue equipment. Other obligations are collateralized by the Birmingham, Alabama terminal building. The notes payable to banks bear interest ranging from LIBOR plus 1.25% to LIBOR plus 2.50% based on the Company's level of cash flows as defined in their loan agreements. Long-term debt is scheduled to mature as follows:

YEAR 2003 $ 14,488,695 2004 7,556,289 2005 4,046,302 2006 5,867,833 2007 1,178,050 Thereafter 487,396 -------------- Total $ 33,624,565 ==============

The Company also has a $2,500,000 line of credit under a commercial revolving note expiring May 29, 2003, bearing interest at the bank's prime rate (4.25% at December 31, 2002) minus 0.25% and collateralized by trade accounts receivable and other working capital asset items. The line had letters of credit commitments of $2,495,639 and no outstanding balance at December 31, 2002. Covenants under these loan agreements require the Company, among other things, to maintain tangible net worth, as defined, and to maintain certain financial ratios. On February 3 and February 10, 2003, the Company received waivers from certain lenders due to non-compliance with its debt service coverage ratio and for exceeding annual capital expenditure limits. The Company is currently negotiating with its lenders to adjust certain covenant requirements including its debt service coverage ratio. Management anticipates the Company will be in compliance with these covenants in 2003. 4. COMMITMENTS AND CONTINGENCIES SELF INSURANCE ACCRUALS - At December 31, 2002, the Company is self-insured as follows:

RETENTION AMOUNT PER OCCURRENCE -------------- Workers' compensation $ 500,000 Liability - body injury $ 750,000 * Liability - property damage $ 750,000 * Employee medical and hospitalization $ 175,000** Cargo loss and damage $ 750,000 * General liability $ 750,000 * Environmental losses No limit

* These coverages are all included in one retention amount per occurrence. Maximum retention is $750,000 per occurrence. ** Retention amount is per person per year. The above retention amounts represent rates that were negotiated with the Company's insurance carriers at June 30, 2002. Retention amounts under other previous insurance programs may vary from those stated above. At December 31, 2002, the Company has recorded liabilities for retention amounts related to claims under previous insurance coverage. From July 1, 2000, through June 30, 2002, the Company had a retention amount per occurrence under workers' compensation of $250,000. Prior to June 30, 2000, workers' compensation insurance was provided under fully insured policies. The Company currently self-insures for a portion of the claims exposure resulting from cargo loss, personal injury, and property damage, combined up to $750,000 per occurrence, effective July 1, 2002. In addition, costs above the $750,000 self-insured amount, up to the Company's coverage amount of two million dollars, will be shared by the Company at a rate of fifty percent. Costs and claims in excess of the Company's coverage amount of two million dollars will be borne solely by the Company. Also, effective July 1, 2002, the health insurance self-insurance level is $175,000 per person per year. 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. Company drivers were involved in two accidents in the first quarter and two accidents in the third quarter of 2002 that resulted in third party fatalities. The Company would expect to absorb up to its self-insured level of $500,000 per occurrence for cargo loss, personal injury, and property damage, if found liable for the two accidents during the first quarter. Retention of $750,000 was in effect for the two accidents in the third quarter of 2002. To date, four lawsuits have been filed against the Company with respect to these accidents. If the Company is ultimately found to have some liability for one or more of these accidents, the Company believes that its operating cash flows and, if needed, additional bank financing would be sufficient to cover any amounts payable. Also, the Company maintains insurance coverage of up to two million dollars with licensed insurance companies above the amounts for which the Company is self-insured. As discussed above, effective July 1, 2002, the Company shares fifty percent of claims amounts within its two million dollars of insurance coverage. LETTERS OF CREDIT - The Company has outstanding letters of credit at December 31, 2002 totaling approximately $6.3 million to cover liability insurance claims and claims related to its previous self-insured workers' compensation program, and to purchase revenue equipment. 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, 2002, 2001 and 2000 were $241,940, $226,731, and $165,562, respectively. LITIGATION - As discussed above, Company drivers were involved in two accidents in the first quarter and two accidents in the third quarter of 2002 that resulted in third party fatalities. Suits have been filed against the Company with respect to each of these matters. Each of these matters is in the preliminary stage; therefore, it is not possible for management to fully assess the potential liability of the Company in these matters. However, based on current information available to management, it is the view of management that, in the event the Company is ultimately found to have some liability for one or more of these accidents, operating cash flows, insurance proceeds and, if needed, additional bank financing would be sufficient to cover any amounts payable. However, the potential exists for unanticipated material adverse judgments against the Company. The Company is a party from time to time to various legal proceedings that are incidental to its business. Certain of these cases filed against the Company and other companies engaged in businesses similar to the Company often allege, among other things, personal injury and property damage. These types of suits sometimes seek the imposition of large amounts of compensatory and punitive damages and trials by juries. In the opinion of the Company's management, the ultimate liability, if any, with respect to the proceedings in which the Company is currently involved is not presently expected to have a material adverse effect on the Company. However, the potential exists for unanticipated material adverse judgments against the Company. 5. STOCKHOLDERS' EQUITY 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. EMPLOYEE STOCK PURCHASE PLAN - The Company has an Employee Stock Purchase Plan under which 175,000 shares of the Company's common stock may be issued to eligible employees at a price equal to the lesser of 90% of the market price of the stock as of the first or last day of the offering periods (as defined). Employees may elect to have a portion of their compensation withheld, subject to certain limits, to purchase the Company's common stock. The expense associated with this plan in 2002, 2001 and 2000 was insignificant. 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. An aggregate of 500,000 shares of the Company's common stock are reserved for this Plan. 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 2002, 2001 and 2000. Information regarding the Plan is summarized below:

WEIGHTED AVERAGE EXERCISE SHARES PRICE ------ ----- Outstanding at December 31, 1999 456,100 $ 9.53 Terminated (47,800) 8.58 ---------- ----------- Outstanding at December 31, 2000 408,300 9.62 Granted 20,000 2.55 Terminated (343,100) 9.54 ---------- ----------- Outstanding at December 31, 2001 85,200 8.28 Granted 390,450 2.67 ---------- ----------- Outstanding at December 31, 2002 475,650 $ 3.67 ========== =========== Options exercisable at December 31, 2000 262,380 $ 9.88 Options exercisable at December 31, 2001 65,650 $ 7.75 Options exercisable at December 31, 2002 83,600 $ 7.33

The following table summarizes information concerning stock options outstanding and options exercisable at December 31, 2002:

OPTIONS OUTSTANDING OPTIONS EXERCISABLE -------------------------------------------------- -------------------------------- WEIGHTED AVERAGE WEIGHTED WEIGHTED RANGE OF NUMBER OF REMAINING AVERAGE NUMBER OF AVERAGE EXERCISE SHARES CONTRACTUAL EXERCISE SHARES EXERCISE PRICES OUTSTANDING LIFE PRICE EXERCISABLE PRICE ------ ----------- ---- ----- ----------- ----- $2.00 - $6.00 410,450 8.6 $ 2.66 30,500 $ 2.62 $6.00 - $11.00 65,200 4.6 $ 10.04 53,100 $ 10.03 ----------- ---------- --------- ----------- ---------- 475,650 8.4 $ 3.67 83,600 $ 7.33 =========== ========== ========= =========== ==========

6. INCOME TAXES (BENEFIT) The provision (benefit) for income taxes for the years ended December 31, 2002, 2001 and 2000 consisted of the following:

2002 2001 2000 ---- ---- ---- Current: Federal $ 2,660,536 $ (24,428) $ (1,603,762) State 357,139 (3,893) (2,170) ----------- ----------- ------------ Total current provision (benefit) 3,017,675 (28,321) (1,605,932) Deferred: Federal (2,362,812) 21,990 1,625,520 State (194,714) 11,369 (34,906) ----------- ----------- ------------ Total deferred (benefit) provision (2,557,526) 33,359 1,590,614 ----------- ----------- ------------ Total provision (benefit) for income taxes $ 460,149 5,038 $ (15,318) ============ =========== =============

Total income tax provisions (benefit) for 2002, 2001 and 2000 are different from the amount that would be computed by applying the statutory federal income tax rate of 34% to income before income taxes. The reasons for this difference are as follows (in thousands):

2002 2001 2000 ---- ---- ---- Income tax provision (benefit) at expected federal income tax rate $ 317,758 $ (136,565) $ (336,522) State income taxes, net of federal tax effect 107,201 4,934 (24,470) Nondeductible operating expenses 42,692 72,381 58,254 Nondeductible goodwill amortization -- 76,592 76,592 Other (7,502) (12,304) 210,828 ----------- ---------- ------------- $ 460,149 $ 5,038 $ (15,318) =========== ========== =============

At December 31, 2002, the Company had state net operating loss carryforwards of approximately $758,000, which will expire in 2022. 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. The sources of the Company's deferred tax liabilities and assets as of December 31, 2002 and 2001 are as follows:

2002 2001 ---- ---- Deferred tax liabilities: Tax over book depreciation $ 12,179,379 $ 13,837,035 Prepaid expenses deductible when paid 476,943 755,526 ------------- ------------ Total deferred tax liabilities $ 12,656,322 $ 14,592,561 ============= ============= Deferred tax assets: Accrued self insurance claims $ 1,750,732 $ 995,612 Other accrued expenses not deductible until paid 117,519 179,247 Allowance for losses on receivables 962,681 751,296 State NOL carryforward 45,492 296,904 Other 36,327 68,405 ------------- ------------- Total deferred tax assets 2,912,751 2,291,464 ------------- ------------- Net deferred tax liabilities $ 9,743,571 $ 12,301,097 ============= =============

The above amounts are reflected in the accompanying consolidated balance sheets as: Current assets $ 2,378,688 $ 1,497,047 Noncurrent liabilities (12,122,259) (13,798,144) ------------- ------------- Net deferred tax liabilities $ 9,743,571 $ 12,301,097 ============= ============= 7. MAJOR CUSTOMERS The Company's largest 25, 10, and 5 customers, predominately within the Boyd division, accounted for approximately 40%, 23% and 15%, respectively, of the Company's consolidated revenues during the year ended December 31, 2002. Many of the Company's largest 25 customers are publicly-held companies. The Company does not believe that it is dependent upon any single customer. Sales to the Company's largest customer amounted to 10%, 10%, and 9% of consolidated operating revenues during 2002, 2001 and 2000, respectively. Customers in the steel industry accounted for 39%, 42% and 42% of the Company's consolidated operating revenues for the years ended December 31, 2002, 2001 and 2000, respectively. 8. SEGMENT INFORMATION The Company has identified two reportable segments based on the criteria of SFAS No. 131: Boyd and WTI. The Boyd segment is a flatbed carrier that hauls primarily steel and building products throughout most of the continental United States. The Boyd segment operates 736 tractors, including 523 Company drivers and 213 owner-operators as of December 31, 2002. The WTI segment is a flatbed carrier that hauls steel and roofing products over shorter routes than those typically provided by Boyd, primarily in the southeastern United States, and operates 219 tractors. WTI had 37 Company drivers and 182 owner-operators as of December 31, 2002. Management of the Company evaluates segment performance based on measures of revenues, operating ratio, depreciation, interest and capital expenditures. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. Summary information by segment follows:

INTERSEGMENT BOYD WTI ELIMINATIONS TOTAL ---- --- ------------ ----- RESULTS OF OPERATIONS YEAR ENDED DECEMBER 31, 2002 OPERATING REVENUES $ 106,847,880 $ 20,944,516 -- $ 127,792,396 OPERATING EXPENSES 104,812,519 20,241,710 -- 125,054,229 OPERATING INCOME 2,035,361 702,806 -- 2,738,167 OPERATING RATIO 98.1% 96.6% 97.9% Year Ended December 31, 2001 Operating revenues $ 108,119,522 $ 19,587,412 $ (147,340) $ 127,559,594 Operating expenses 104,762,470 20,725,054(a) (147,340) 125,340,184 Operating income 3,357,052 (1,137,642) -- 2,219,410 Operating ratio 96.9% 105.8% 98.3% Year Ended December 31, 2000 Operating revenues $ 106,318,376 $ 25,664,006 $ (352,577) $ 131,629,805 Operating expenses 102,375,826 26,772,425(a) (352,577) 128,795,674 Operating income (loss) 3,942,550 (1,108,419) -- 2,834,131 Operating ratio 96.3% 104.3% 97.8% IDENTIFIABLE ASSETS AS OF DECEMBER 31, 2002 CASH AND CASH EQUIVALENTS $ 97,157 $ 195,357 $ 292,514 PROPERTY AND EQUIPMENT 50,272,130 4,452,362 54,724,492 GOODWILL, NET -- 3,452,446 3,452,446 LONG-TERM DEBT, INCLUDING CURRENT MATURITIES 31,551,103 2,073,462 33,624,565 As of December 31, 2001 Cash and cash equivalents $ 943,574 $ 1,277,881 $ 2,221,455 Property and equipment 54,740,848 3,772,426 58,513,274 Goodwill, net -- 3,452,446 3,452,446 Long-term debt, including current maturities 37,587,257 1,599,399 39,186,656 As of December 31, 2000 Cash and cash equivalents $ (44,234) $ 1,317,515 $ 1,273,281 Property and equipment 62,137,993 4,599,375 66,737,368 Goodwill, net -- 3,676,246 3,676,246 Long-term debt, including current maturities 43,451,096 3,405,479 46,856,575

(a) Amounts for 2001 and 2000 included goodwill amortization expense of $223,800. Upon the adoption of SFAS No. 142 on January 1, 2002, the Company ceased amortization of goodwill. 9. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) The following is a summary of the quarterly results of operations for the years ended December 31, 2002 and 2001 (in thousands, except per share data). The summary of quarterly earnings per share may not agree with annual earnings per share.

2002 ------------------------------------------------------------------- March 31, June 30, September 30, December 31, --------- -------- ------------- ------------ OPERATING REVENUES (a) $ 30,633 $ 33,059 $ 33,618 $ 30,482 OPERATING INCOME (LOSS) (55) 1,530 1,342 (79) NET INCOME (LOSS) (288) 607 495 (340) BASIC NET (LOSS) INCOME PER SHARE (0.11) 0.22 0.18 (0.13) DILUTED NET (LOSS) INCOME PER SHARE (0.11) 0.22 0.18 (0.13)

2001 (b) ------------------------------------------------------------------- March 31, June 30, September 30, December 31,(c) --------- -------- ------------- --------------- Operating revenues (a) $ 31,420 $ 32,732 $ 33,404 $ 30,004 Operating income (loss) 453 1,172 980 (386) Net income (loss) (293) 283 230 (627) Basic and diluted net income (loss) per share (0.10) 0.10 0.08 (0.22)

(a) As discussed in Note 1, amounts for each period have been reclassified to reflect the inclusion of fuel surcharges in revenues rather as reductions of operating expenses. (b) Amounts for 2001 included quarterly goodwill amortization expense of $55,950. Upon the adoption of SFAS No. 142 on January 1, 2002, the Company ceased amortization of goodwill. (c) The fourth quarter of 2001 included a reduction in the carrying value of revenue equipment and charges to increase reserves for receivables associated with owner-operator leases at WTI of approximately $725,000. INDEPENDENT AUDITORS' REPORT To the Board of Directors and Stockholders of Boyd Bros. Transportation Inc. Clayton, Alabama We have audited the consolidated balance sheets of Boyd Bros. Transportation Inc. and subsidiary as of December 31, 2002 and 2001, and the related statements of operations, stockholders' equity and cash flows for the years then ended. 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. The financial statements of Boyd Bros. Transportation Inc. for the year ended December 31, 2000, were audited by other auditors whose report dated February 9, 2001 (March 28, 2001 as to the waiver letters described in Note 4), expressed an unqualified opinion on those statements. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits 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, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Boyd Bros. Transportation Inc. and subsidiary as of December 31, 2002 and 2001, and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. As discussed in Note 1 to the consolidated financial statements, the Company adopted Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" on January 1, 2002. As discussed in Note 1 to the consolidated financial statements, during the year ended December 31, 2002 the Company changed the manner in which it records fuel surcharges upon the adoption of the accounting standards in Emerging Issues Task Force Issue 01-14. /s/ BDO Seidman, LLP January 31, 2003, except for Note 3, which is as of February 10, 2003 EX-21 10 g81077exv21.txt SUBSIDIARIES OF BOYD BROS. EXHIBIT 21 Subsidiaries of Boyd Bros. Transportation, Inc. The following companies are subsidiaries of the Registrant: Subsidiary State of Incorporation - ---------- ---------------------- WTI Transport, Inc. Alabama EX-23.1 11 g81077exv23w1.txt CONSENT OF BDO SEIDMAN, LLP Exhibit 23.1 CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS Boyd Bros. Transportation Inc. Clayton, Alabama We hereby consent to the incorporation by reference in the Registration Statements Nos. 33-83768 and 33-78925 on Form S-8 of our reports dated January 31, 2003, except for Note 3, which is as of February 10, 2003, relating to the 2002 consolidated financial statements and schedule of Boyd Bros. Transportation Inc. and subsidiary appearing in and incorporated by reference in the Company's Annual Report on Form 10-K for the year ended December 31, 2002. /s/ BDO Seidman, LLP Atlanta, Georgia March 28, 2003 EX-23.2 12 g81077exv23w2.txt INDEPENDENT AUDITORS REPORT OF D AND T EXHIBIT 23.2 INDEPENDENT AUDITORS' REPORT To the Board of Directors and Stockholders of Boyd Bros. Transportation Inc.: We have audited the accompanying consolidated statements of operations, stockholders' equity, and cash flows of Boyd Bros. Transportation Inc. and subsidiary for the year ended December 31, 2000. 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 audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. 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 audit provides a reasonable basis for our opinion. In our opinion, such consolidated financial statements present fairly, in all material respects, the results of Boyd Bros. Transportation Inc. and subsidiary operations and their cash flows for the year ended December 31, 2000 in conformity with accounting principles generally accepted in the United States of America. /s/ Deloitte & Touche LLP Birmingham, Alabama February 9, 2001 (March 28, 2001 as to the waiver letters described in Note 4) EX-23.3 13 g81077exv23w3.txt CONSENT AND REPORT ON SCHEDULES OF D&T EXHIBIT 23.3 INDEPENDENT AUDITORS' CONSENT AND REPORT ON SCHEDULES To the Board of Directors and Stockholders of Boyd Bros. Transportation Inc.: We consent to the incorporation by reference in Registration Statement Nos. 33-83768 and 33-78925 of Boyd Bros. Transportation Inc. and subsidiary on Form S-8 of our report dated February 9, 2001 (March 28 as to the waiver letters described in Note 4), appearing in this Annual Report on Form 10-K of Boyd Bros. Transportation Inc. and subsidiary for the year ended December 31, 2002. Our audit of the consolidated financial statements referred to in our aforementioned report also included the financial statement schedule of Boyd Bros. Transportation Inc. and subsidiary, listed in Item 14 (a) for the year ended December 31, 2000. This financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion based on our audit. In our opinion, such financial statement schedule, when considered in relation to the basic 2000 consolidated financial statements as a whole, presents fairly in all material respects the information set forth therein. /s/ Deloitte & Touche LLP Birmingham, Alabama March 28, 2003 EX-99.1 14 g81077exv99w1.txt CEO PURSUANT TO SECTION 906 OF SARBANES OXLEY ACT EXHIBIT 99.1 CERTIFICATION PURSUANT TO 18 U.S.C. 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of Boyd Bros. Transportation Inc. (the "Company") on Form 10-K for the year ended December 31, 2002, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Gail B. Cooper, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 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 (15 U.S.C. 78m or 78o(d); and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. By: /s/ GAIL B. COOPER -------------------------------------------- Gail B. Cooper Chief Executive Officer March 28, 2003 EX-99.2 15 g81077exv99w2.txt CEO PURSUANT TO 906 OF THE SARBANES OXLEY ACT EXHIBIT 99.2 CERTIFICATION PURSUANT TO 18 U.S.C. 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of Boyd Bros. Transportation Inc. (the "Company") on Form 10-K for the year ended December 31, 2002, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Richard C. Bailey, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 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 (15 U.S.C. 78m or 78o(d); and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. By: /s/ RICHARD C. BAILEY -------------------------------------------- Richard C. Bailey Chief Financial Officer March 28, 2003 -----END PRIVACY-ENHANCED MESSAGE-----

EX-10.1

                                                                   Exhibit 10.1

                                                                    COMMERCIAL
                                                                   VARIABLE RATE
                                                                    PROMISSORY
                                                                      NOTE

                                    BORROWER
                          BOYD BROTHERS TRANSPORTATION
                          CO., INC.

COMPASS BANK                          COPY
3480 EASTERN BLVD.
MONTGOMERY, AL 36116                ADDRESS
(334) 409-7304 "LENDER"

                          3275 HIGHWAY 30
                          CLAYTON, AL 36016-3003

                      TELEPHONE NO.     IDENTIFICATION NO.
                      (334) 775-1209    636006515



   OFFICER        INTEREST          PRINCIPAL         FUNDING           MATURITY          CUSTOMER           LOAN
IDENTIFICATION      RATE             AMOUNT            DATE               DATE             NUMBER           NUMBER
                                                                                          
S.M.              VARIABLE        $1,273,830.00      11/08/02           11/01/08
PURPOSE: TO PURCHASE TRAILERS


PROMISE TO PAY: For value received, Borrower promises to pay to the order of
Lender the principal amount of One Million Two Hundred Seventy-Three Thousand
Eight Hundred Thirty and no/100 Dollars ($1,273,830.00) plus interest on the
unpaid principal balance at the rate and in the manner described below, until
all amounts owing under this Note are paid in full. All amounts received by
Lender shall be applied first to accrued, unpaid interest, then to unpaid
principal, and then to any late charges or expenses, or in any other order as
determined by Lender, in Lender's sole discretion, as permitted by law.

INTEREST RATE: This Note has a variable interest rate feature. The interest
rate on this Note may change from time to time if the Index Rate identified
below changes. Interest shall be computed on the basis of the actual number of
days over 360 days per year. Interest on this Note shall be calculated and
payable at a variable rate equal to 1.750% per annum over the Index Rate. The
initial interest rate on this Note shall be 3.130% per annum. Any change in the
interest rate resulting from a change in the Index Rate will be effective on:
         the first day of the next succeeding Interest Period.

INDEX RATE: The Index Rate for this Note shall be:
         SEE ANNEX "A", LIBOR RATE for rate definitions and additional terms.

If the Index Rate is redefined or becomes unavailable, then Lender may select
another index which is substantially similar.

RATE LIMITATIONS: Subject to applicable law, the minimum interest rate on this
Note shall be 3.500% per annum. The maximum interest rate on this Note shall
not exceed 18.00% per annum, or if less, or if a maximum rate is not indicated,
the maximum interest rate Lender is permitted to charge by law. The maximum
rate increase at any one time will be n/a %. The maximum rate decrease at any
one time will be n/a %.

DEFAULT RATE: If there is an Event of Default under this Note, the Lender may,
in its discretion, increase the interest rate on this Note to: eighteen percent
(18.000%) per annum or the maximum interest rate Lender is permitted to charge
by law, whichever is less.

PAYMENT SCHEDULE: Borrower shall pay the principal and interest according to
the following schedule:

71 payments of $19,441.81 beginning December 01, 2002 and continuing at monthly
time intervals thereafter. A final payment of the unpaid principal balance plus
accrued interest is due and payable on November 01, 2008. If the interest rate
changes, the payment amounts may change in an amount sufficient to repay the
unpaid principal balance over the scheduled amortization term. New payments
begin with the first payment after the rate change.

INTEREST SURCHARGE: Borrower agrees to pay an interest surcharge of $ n/a. The
interest surcharge is earned by Lender when paid and is not subject to refund;
however, if this Note is prepaid in full within 90 days after the date of this
Note, Borrower will receive a credit of a pro rata portion of the interest
surcharge, subject to Lender's right to retain a minimum surcharge of $25.00.
PREPAYMENT: This Note may be prepaid in part or in full on or before its
maturity date. If this Note contains more than one installment, any partial
prepayment will not affect the due date or the amount of any subsequent
installment, unless agreed to, in writing, by Borrower and Lender. If this Note
is prepaid in full, there will be: [x] No prepayment penalty. [ ] A prepayment
penalty of:

LATE CHARGE: If a payment is in default 10 days or more, Borrower will be
charged a late charge of :[x] 5.00% of the unpaid payment ; [ ] $___________ or
_____________% of the unpaid payment, whichever is [ ] greater, but not to
exceed $_____________________; [ ]less.
SECURITY: To secure the payment and performance of obligations incurred under
this Note, Borrower grants Lender a security interest in all of Borrower's
right, title, and interest in all monies, instruments, savings, checking and
other accounts of Borrower (excluding IRA, Keogh, trust accounts and other
accounts subject to tax penalties if so assigned) that are now or in the
future in Lender's custody or control. [x] If checked, the obligations under
this Note are also secured by the collateral described in any security
instrument(s) executed in connection with this Note, and any collateral
described in any other security instrument(s) securing this Note or all of
Borrower's obligations.

RENEWAL: [ ] If checked, this Note is renewal, but not a satisfaction, of Loan
Number ____________________________________.

- --------------------------------------------------------------------------------
THE PERSONS SIGNING BELOW ACKNOWLEDGE THAT THEY HAVE READ, UNDERSTAND, AND AGREE
TO THE TERMS AND CONDITIONS OF THIS NOTE, INCLUDING THE PROVISIONS ON THE
REVERSE SIDE, AND FURTHER ACKNOWLEDGE RECEIPT OF AN EXACT COPY OF THIS NOTE.

Dated November 08, 2002

         CAUTION - IT IS IMPORTANT THAT YOU THOROUGHLY READ THE CONTRACT BEFORE
YOU SIGN IT.

BORROWER: BOYD BROTHERS TRANSPORTATION       BORROWER:
          CO., INC.

By: /s/ Richard Bailey
- ---------------------------------------      -----------------------------------
RICHARD BAILEY
CFO

BORROWER:                                    BORROWER:

- ---------------------------------------      -----------------------------------

BORROWER:                                    BORROWER:

- ---------------------------------------      -----------------------------------

BORROWER:                                    BORROWER:

- ---------------------------------------      -----------------------------------




                              TERMS AND CONDITIONS

1. EVENTS OF DEFAULT. An Event of Default will occur under this Note in the
event that Borrower, any guarantor or any other third party pledging
collateral to secure this Note:

         (a) fails to make any payment on this Note or any other indebtedness
             to Lender when due;

         (b) fails to perform any obligation or breaches any warranty or
             covenant to Lender contained in this Note, any security instrument,
             or any other present or future written agreement regarding this or
             any other indebtedness of Borrower to Lender;

         (c) provides or causes any false or misleading signature or
             representation to be provided to Lender;

         (d) sells, conveys, or transfers rights in any collateral securing this
             Note without the written approval of Lender; or destroys, loses or
             damages such collateral in any material respect; or subjects such
             collateral to seizure, confiscation or condemnation;

         (e) has a garnishment, judgment, tax levy, attachment or lien entered
             or served against Borrower, any guarantor, or any third party
             pledging collateral to secure this Note or any of their property;

         (f) dies, becomes legally incompetent, is dissolved or terminated,
             ceases to operate its business, becomes insolvent, makes an
             assignment for the benefit of creditors, fails to pay debts as they
             become due, or becomes the subject of any bankruptcy, insolvency or
             debtor rehabilitation proceeding;

         (g) fails to provide Lender evidence of satisfactory financial
             condition;

         (h) has a majority of its outstanding voting securities sold,
             transferred or conveyed to any person or entity other than any
             person or entity that has the majority ownership as of the date of
             the execution of this Note; or

         (i) causes Lender to deem itself insecure due to a significant decline
             in the value of any real or personal property securing payment of
             this Note, or Lender in good faith, believes the prospect of
             payment or performance is impaired.

2. RIGHTS OF LENDER ON DEFAULT. If there is an Event of Default under this Note,
Lender will be entitled to exercise one or more of the following remedies
without notice or demand (except as required by law):

         (a) to declare the principal amount plus accrued interest under this
             Note and all other present and future obligations of Borrower
             immediately due and payable in full, such acceleration to be
             automatic and immediate if the Event of Default is a filing under
             the Bankruptcy Code;

         (b) to collect the outstanding obligations of Borrower with or without
             resorting to judicial process;

         (c) to cease making advances under this Note or any other agreement
             between Borrower and Lender;

         (d) to take possession of any collateral in any manner permitted by
             law;

         (e) to require Borrower to deliver and make available to Lender any
             collateral at a place reasonably convenient to Borrower and Lender;

         (f) to sell, lease or otherwise dispose of any collateral and collect
             any deficiency balance with or without resorting to legal process;

         (g) to set-off Borrower's obligations against any amounts due to
             Borrower including, but not limited to, monies, instruments, and
             deposit accounts maintained with Lender; and

         (h) to exercise all other rights available to Lender under any other
             written agreement or applicable law.

Lender's rights are cumulative and may be exercised together, separately, and in
any order. Lender's remedies under this paragraph are in addition to those
available at common law, including, but not limited to, the right of set-off.

3. DEMAND FEATURE. [ ] If checked, this Note contains a demand feature. Lender's
right to demand payment, at any time, and from time to time, shall be in
Lender's sole and absolute discretion, whether or not any default has occurred.

4. FINANCIAL INFORMATION. Borrower will at all times keep proper books of record
and account in which full, true and correct entries shall be made in accordance
with generally accepted accounting principles and will deliver to Lender, within
ninety (90) days after the end of each fiscal year of Borrower, a copy of the
annual financial statements of Borrower relating to such fiscal year, such
statements to include (i) the balance sheet of Borrower as at the end of such
fiscal year and (ii) the related income statement, statement of retained
earnings and statement of cash flow of Borrower for such fiscal year, prepared
by such certified public accountants as may be reasonably satisfactory to
Lender. Borrower also agrees to deliver to Lender within fifteen (15) days
after filing same, a copy of Borrower's income tax returns and also, from
time to time, such other financial information with respect to Borrower as
Lender may request.

5. MODIFICATION AND WAIVER. The modification or waiver of any of Borrower's
obligations or Lender's rights under this Note must be contained in a writing
signed by Lender. Lender may perform any of Borrower's obligations or delay or
fail to exercise any of its rights without causing a waiver of those obligations
or rights. A waiver on one occasion will not constitute a waiver on any other
occasion. Borrower's obligations under this Note shall not be affected if Lender
amends, compromises, exchanges, fails to exercise, impairs or releases any of
the obligations belonging to any co-borrower or guarantor or any of its rights
against any co-borrower, guarantor, the collateral or any other property
securing the obligations.

6. SEVERABILITY. If any provision of this Note is invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

7. ASSIGNMENT. Borrower agrees not to assign any of Borrower's rights, remedies
or obligations described in this Note without the prior written consent of
Lender, which consent may be withheld by Lender in its sole discretion. Borrower
agrees that Lender is entitled to assign some or all of its rights and remedies
described in this Note without notice to or the prior consent of Borrower.

8. NOTICE. Any notice or other communication to be provided to Borrower or
Lender under this Note shall be in writing and sent to the parties at the
addresses described in this Note or such other address as the parties may
designate in writing from time to time.

9. APPLICABLE LAW. This Note shall be governed by the laws of the state
indicated in Lender's address. Unless applicable law provides otherwise,
Borrower consents to the jurisdiction of any court located in such state
selected by Lender, in its discretion, in the event of any legal proceeding
under this Note.

10. COLLECTION COSTS. To the extent permitted by law, Borrower agrees to pay
Lender's reasonable fees and costs of attorneys and other agents (including
without limitation paralegals, clerks and consultants), whether or not such
attorney or agent is an employee of Lender, which are incurred by Lender in
collecting any amount due or enforcing any right or remedy under this Note,
whether or not suit is brought, and including, but not limited to, all fees and
costs incurred on appeal, in bankruptcy, and for post-judgment collection
actions.

11. MISCELLANEOUS. This Note is being executed primarily for commercial,
agricultural, or business purposes. Borrower and Lender agree that time is of
the essence. Borrower agrees to make all payments to Lender at any address
designated by Lender and in lawful United States currency. Borrower and any
person who endorses this Note waives presentment, demand for payment, notice of
dishonor and protest and further waives any right to require Lender to proceed
against anyone else before proceeding against Borrower or said person. All
references to Borrower in this Note shall include all of the parties signing
this Note, and this Note shall be binding upon the heirs, successors and assigns
of Borrower and Lender. If there is more than one Borrower their obligations
under this Note shall be joint and several. This Note represents the complete
and integrated understanding between Borrower and Lender regarding the terms
hereof.

12. JURY TRIAL WAIVER. BORROWER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN
ANY CIVIL ACTION ARISING OUT OF, OR BASED UPON, THIS NOTE OR THE COLLATERAL
SECURING THIS NOTE.

13. ADDITIONAL TERMS:

SEE ADDENDUM TO PROMISSORY NOTE



                                    ANNEX A

                                   LIBOR RATE

         (a)      Unless otherwise defined in this Annex, all capitalized terms
used herein shall have the meanings given such terms in the Note to which this
Annex is attached and made a part of (the Note).

         (b)      The following terms are additionally defined for purposes of
this Annex and, as with all other provisions herein, shall be deemed to be
incorporated into the Note for all purposes. This Annex shall control in the
event any of the following terms are otherwise defined in the Note.

         APPLICABLE LIBOR RATE shall mean the LIBOR Rate then in effect plus
1.75%.

         BUSINESS DAY shall mean each day on which the Lender is open to carry
on its normal commercial lending business.

         INTEREST PERIOD shall mean a period commencing on the date of the Note,
and which shall expire on the day immediately prior to the date that is one, two
or three months thereafter as corresponds to the applicable Libor Reference
Period (hereafter defined). If the Libor Reference Period is 30 days, the
Interest Period shall be one month. If the Libor Reference Period is 60 days,
the Interest Period shall be two months. If the Libor Reference Period is 90
days, the Interest Period shall be three months. Succeeding Interest Periods
shall commence on the day immediately following the expiration date of the
preceding Interest Period.

         LIBOR RATE refers to the London Interbank Offered Rate for the
applicable Libor Reference Period as quoted on the Telerate Information System,
page 3750, on the first day of each Interest Period (or in the event no such
quotation is available on such date, as quoted on the day most immediately
preceding the date of determination on which such a quotation was available).

         LIBOR REFERENCE PERIOD shall be a period of [ ] 30 days, or [ ] 30, 60
or 90 days, at Borrower's option. If Borrower has the option to select among 30,
60 or 90 day Libor Reference Periods, then at least three (3) Business Days
before the end of the then effective Interest Period (hereafter defined), the
Borrower may select a new Libor Reference Period of 30, 60 or 90 days, to become
effective on the first day of the next succeeding Interest Period. If Borrower
shall at the expiration of any Interest Period fail to elect a new Libor
Reference Period as provided herein, then the duration of the next Libor
Reference Period shall be the same as the previous Libor Reference Period. The
initial Libor Reference Period shall be 30 days.

         The Libor Reference Periods, as used herein, are reference rates only,
and the actual Interest Periods under this Note may be for periods of more than,
or less than, 30, 60 or 90 days, as applicable.



                                    ADDENDUM

The provisions of this Addendum shall supplement and be in addition to the
terms and provisions of the promissory note to which this Addendum is attached
(the "Note").

The following provision is added to the Note:

         INTEREST RATE: Notwithstanding anything to the contrary contained in
         the Note, the interest rate will never be lower than the minimum
         interest rate shown in the Note, even if the initial interest rate, as
         defined in the Note, is lower than the minimum interest rate. In such
         cases, the minimum interest rate will be the initial interest rate.

Except as expressly modified by this Addendum, all terms of the Agreement
remain in full force and effect.


Dated:        11/8         , 2002
      --------------------


BORROWER(S):

(1)  Richard Bailey
    -----------------------------
Print or Type Name


/s/ Richard Bailey
- ---------------------------------
Signature


(2)
    -----------------------------
Print or Type Name


- ---------------------------------
Signature


(3)
    -----------------------------
Print or Type Name


- ---------------------------------
Signature


(4)
   ------------------------------
Print or Type Name


- ---------------------------------
Signature

EX-10.2

                                                                    EXHIBIT 10.2

                                   COMMERCIAL
COMPASS BANK                        SECURITY
3480 EASTERN BLVD.                 AGREEMENT
MONTGOMERY, AL 36116
(334) 409-7304 "LENDER"


                  BORROWER                               OWNER
                  --------                               -----
BOYD BROTHERS TRANSPORTATION                 BOYD BROTHERS TRANSPORTATION
CO., INC.                                    CO., INC.


                  ADDRESS                               ADDRESS
                  -------                               -------
3275 HIGHWAY 30                              3275 HIGHWAY 30
CLAYTON, AL 36016-3003                       CLAYTON, AL 36016-3003

TELEPHONE NO.     IDENTIFICATION NO.         TELEPHONE NO.    IDENTIFICATION NO.
- -------------     -----------------          -------------    ------------------

(334) 775-1209      636006515                (334) 775-1209         636006515

1.       SECURITY INTEREST. For good and valuable consideration, Owner grants to
Lender identified above a continuing security interest in the Collateral
described below to secure the Obligations described in this Agreement.

2.       OBLIGATIONS. The collateral shall secure the payment and performance of
all of Borrower's and Owner's present and future, joint and/or several, direct
and indirect, absolute and contingent, express and implied indebtedness to
Lender under any promissory note or agreement described below, including all
future advances made by Lender to Borrower or Owner and expenditures incurred by
Lender upon the occurrence of an Event of Default (collectively "Obligations"):

         a.       this Agreement and/or the following promissory notes and
                  agreements:



INTEREST          PRINCIPAL AMOUNT/          FUNDING/          MATURITY          CUSTOMER          LOAN
 RATE               CREDIT LIMIT         AGREEMENT DATE          DATE             NUMBER          NUMBER
- --------            ------------         --------------        --------          --------         ------
                                                                                   
VARIABLE          $1,273,830.00            11/08/02            11/01/08


         b.       [X] all other presently existing or future, evidences of
                  indebtedness, obligations, agreements, instruments, guaranties
                  or otherwise of Borrower or Owner to Lender (WHETHER INCURRED
                  FOR THE SAME OR DIFFERENT PURPOSES THAN THE FOREGOING); and

         c.       all renewals, extensions, amendments, modifications,
                  replacements or substitutions to any of the foregoing.

3.       COLLATERAL. All of Owner's right, title and interest in the following
described property, as defined by the Uniform Commercial Code presently or as
hereafter amended or replaced, whether now or hereafter existing or now owned or
hereafter acquired by Owner and wherever located shall constitute the
"Collateral":

         [ ]      All accounts including, but not limited to, any accounts
                  described on Schedule A attached hereto and incorporated
                  herein by this reference;

         [ ]      All chattel paper including, but not limited to, any chattel
                  paper described on Schedule A attached hereto and incorporated
                  herein by this reference;

         [ ]      All deposit accounts including, but not limited to, any
                  deposit accounts described on Schedule A attached hereto and
                  incorporated herein by this reference;

         [ ]      All documents including, but not limited to, any documents
                  described on Schedule A attached hereto and incorporated
                  herein by this reference;

         [ ]      All equipment, including, but not limited to, any equipment
                  described on Schedule A attached hereto and incorporated
                  herein by this reference;

         [ ]      All fixtures, including, but not limited to, any fixtures
                  described on Schedule A and located or to be located on the
                  real property described on Schedule B attached hereto and
                  incorporated herein by this reference;

         [ ]      All general intangibles including, but not limited to, any
                  general intangibles described on Schedule A attached hereto
                  and incorporated herein by this reference;

         [ ]      All instruments including, but not limited to, any instruments
                  described on Schedule A attached hereto and incorporated
                  herein by this reference;

         [ ]      All inventory including, but not limited to, any inventory
                  described on Schedule A attached hereto and incorporated
                  herein by this reference;

         [ ]      All investment property including, but not limited to, any
                  investment property described on Schedule A attached hereto
                  and incorporated herein by this reference;

         [ ]      All letter-of-credit rights including, but not limited to, any
                  letter-of-credit rights described on Schedule A attached
                  hereto and incorporated herein by this reference;

         [ ]      All as-extracted collateral including, but not limited to, all
                  minerals or the like and accounts resulting from sales at the
                  well or minehead located on or related to the real property
                  described on Schedule B attached hereto and incorporated
                  herein by this reference;

         [ ]      All standing timber which is to be cut and removed under a
                  conveyance or contract for sale located on the real property
                  described on Schedule B attached hereto and incorporated
                  herein by this reference;

         [ ]      Other:

The property described on Schedule A;
All monies, instruments, and savings, checking or other accounts of Owner
(excluding IRA, Keogh, trust accounts, and other accounts subject to tax
penalties if so assigned) that are now or in the future in Lender's custody or
control;
All monies or instruments pertaining to the Collateral described above;
All accessions, accessories, additions, amendments, attachments, modifications,
replacements and substitutions to any of the above;
All proceeds and products of any of the above; and
All supporting obligations of any of the above.


                                                           Page 1 of 5 _________



4.       OWNER'S TAX PAYER IDENTIFICATION. Owner's social security number or
federal taxpayer identification number is: 636006515.
                                           ----------

5.       OWNER'S LOCATION. [ ] Owner is an individual and maintains his or her
principal residence to the state of: ________________.
[X] Owner is a Corporation duly incorporated, registered, formed or organized,
validly existing and in good standing under the laws of the state of: Alabama.
[ ] Owner is a ______________________________ and maintains its principal place
of business or, if it has more than one place of business, its chief executive
office in the state of _____________________________.

6.       REPRESENTATIONS, WARRANTIES AND COVENANTS. Owner represents, warrants
and covenants to Lender that:

         (a)      Owner is and shall remain the sole owner of the Collateral;

         (b)      Neither Owner, nor, to the best of Owner's knowledge, has any
                  other party used, generated, released, discharged, stored, or
                  disposed of any hazardous waste, toxic substance, or related
                  material (collectively "Hazardous Materials") or transported
                  any Hazardous Materials across the property except as allowed
                  by and in accordance with applicable federal, state and local
                  law and regulation. Owner shall not commit or permit such
                  actions to be taken in the future. The term "Hazardous
                  Materials" shall mean any substance, material, or waste which
                  is or becomes regulated by any governmental authority
                  including, but not limited to, (i) petroleum; (ii) asbestos;
                  (iii) polychlorinated biphenyls; (iv) those substances,
                  materials or wastes designated as a "hazardous substance"
                  pursuant to Section 311 of the Clean Water Act or listed
                  pursuant to Section 307 of the Clean Water Act or any
                  amendments or replacements to these statutes; (v) those
                  substances, materials or wastes defined as a "hazardous waste"
                  pursuant to Section 1004 of the Resource Conservation and
                  Recovery Act or any amendments or replacements to that
                  statute; or (vi) those substances, materials or wastes defined
                  as a "hazardous substance" pursuant to Section 101 of the
                  Comprehensive Environmental Response, Compensation and
                  Liability Act, or any amendments or replacements to that
                  statute. Owner is in compliance in all respects with all
                  applicable federal, state and local laws and regulations,
                  including, without limitation, those relating to "Hazardous
                  Materials", as defined herein, and other environmental matters
                  (the "Environmental Laws") and neither the federal government
                  nor any other governmental or quasi governmental entity has
                  filed a lien on the Collateral, nor are there any pending or
                  threatened governmental, judicial or administrative actions
                  with respect to environmental matters, which involve the
                  Collateral;

         (c)      Owner's location (Owner's place of organization, principal
                  place of business, or if more than one place of business,
                  chief executive office or principal residence) is in the state
                  indicated in paragraph 5. Owner shall not change its state of
                  location without first notifying Lender in writing;

         (d)      The Collateral is located and has been located during the four
                  (4) month period prior to the date hereof, at Owner's address
                  described above or any address described on Schedule C
                  attached hereto and incorporated herein by this reference.
                  Owner shall immediately advise Lender in writing of any change
                  in or addition to the foregoing addresses;

         (e)      Owner shall not become a party to any restructuring of its
                  form of business or participate in any consolidation, merger,
                  liquidation or dissolution without Lender's prior written
                  consent;

         (f)      Owner's exact legal name is as set forth on the first page of
                  this Agreement. Owner shall not change such name or use any
                  trade name without Lender's prior written consent, and shall
                  notify Lender of the nature of any intended change of Owner's
                  name, or the use of any trade name, and the proposed effective
                  date of such change;

         (g)      The Collateral is and shall at all times remain free of all
                  tax and other liens, security interests, encumbrances and
                  claims of any kind except for those belonging to Lender and
                  those described on Schedule D attached hereto and incorporated
                  herein by this reference. Without waiving the Event of Default
                  as a result thereof, Owner shall take any action and execute
                  any document needed to discharge any liens, security
                  interests, encumbrances and claims not described on Schedule
                  D;

         (h)      Owner shall defend the Collateral against all claims and
                  demands of all persons at any time claiming any interest
                  therein;

         (i)      Owner will cooperate with Lender in obtaining and maintaining
                  control with respect to all deposit accounts, investment
                  property, letter-of-credit rights and electronic chattel paper
                  constituting the Collateral;

         (j)      Owner shall provide Lender with possession, as appropriate, of
                  all chattel paper, documents, instruments and investment
                  property constituting the Collateral, and Owner shall
                  promptly mark all chattel paper, instruments, investment
                  property and documents constituting the Collateral to show
                  that the same are subject to Lender's security interest;

         (k)      All of Owner's accounts; chattel paper; deposit accounts;
                  documents; general intangibles; instruments; investment
                  property; letter-of-credit rights; and federal, state, county,
                  and municipal government and other permits and licenses;
                  trusts, liens, contracts, leases, and agreements constituting
                  the Collateral are and shall be valid, genuine and legally
                  enforceable obligations and rights belonging to Owner against
                  one or more third parties and not subject to any claim,
                  defense, set-off or counterclaim of any kind;

         (1)      Owner shall not amend, modify, replace, or substitute any
                  account; chattel paper; deposit account; document; general
                  intangible; instrument; investment property; or
                  letter-of-credit right constituting the Collateral without the
                  prior written consent of Lender. Owner shall not create any
                  chattel paper constituting the Collateral without placing a
                  legend on the chattel paper acceptable to Lender indicating
                  that Lender has a security interest to the chattel paper;

         (m)      No person shall file an amendment that is a termination
                  statement for a financing statement concerning any of the
                  Collateral without the prior written consent of Lender, except
                  to the extent permitted by the Uniform Commercial Code
                  presently or as hereafter amended or replaced;

         (n)      Owner has the right and is duly authorized to enter into and
                  perform its obligations under this Agreement. Owner's
                  execution and performance of these obligations do not and
                  shall not conflict with the provisions of any statute,
                  regulation, ordinance, rule of law, contract or other
                  agreement which may now or hereafter be binding on Owner;

         (o)      No action or proceeding is pending against Owner which might
                  result in any material or adverse change in its business
                  operations or financial condition or materially affect the
                  Collateral;

         (p)      Owner has not violated and shall not violate any applicable
                  federal, state, county or municipal statute, regulation or
                  ordinance (including but not limited to those governing
                  Hazardous Materials) which may materially and adversely affect
                  its business operations or financial condition or the
                  Collateral;

         (q)      Owner shall, upon Lender's request, deposit all proceeds of
                  the Collateral into an account or accounts maintained by Owner
                  or Lender at Lender's institution;

         (r)      Owner will, upon receipt, deliver to Lender as additional
                  Collateral all securities distributed on account of the
                  Collateral such as stock dividends and securities resulting
                  from stock splits, reorganizations and recapitalizations;

         (s)      Owner agrees to the terms of the Obligations and to the terms
                  of any renewals, extensions, amendments, modifications,
                  replacements or substitutions of the Obligations; Lender may
                  enter into agreements in the future with Borrower which, if
                  this Agreement so provides, will become Obligations secured by
                  the Collateral described in this Agreement; property other
                  than the Collateral may also secure the Obligations, that
                  Lender shall have no obligation to exercise its rights against
                  such property prior to exercising its rights against the
                  Collateral, that Lender may accept substitutions or exchanges
                  for any such property, and that Lender may release its
                  security interest in such property at any time; parties other
                  than Borrower may be or may become obligated under the
                  Obligations; and

         (t)      This Agreement and the obligations described in this Agreement
                  are executed and incurred for business and not consumer
                  purposes.

7.       SALE OF COLLATERAL. Owner shall not assign, convey, lease, sell,
license, exchange or transfer any of the Collateral to any third party without
the prior written consent of Lender except for sales of inventory to buyers in
the ordinary course of business.

8.       FINANCING STATEMENTS AND OTHER DOCUMENTS. Owner shall at any time and
from time to time take all actions and execute all documents required by Lender
to attach, perfect and maintain Lender's security interest in the Collateral and
establish and maintain Lender's right to receive the payment of the proceeds of
the Collateral including, but not limited to, executing any financing
statements, fixture filings, continuation statements, notices of security
interest and other documents required by the Uniform Commercial Code, presently
or as hereafter amended or replaced, and other applicable law. Owner shall pay
the costs of filing such documents in all offices wherever filing or recording
is deemed by Lender to be necessary or desirable. Lender shall be entitled to
perfect its security interest in the Collateral by filing carbon, photographic
or other reproductions of this Agreement and/or the aforementioned documents
with any authority required by the Uniform Commercial Code, presently or as
hereafter amended or replaced, or other applicable law. Owner authorizes Lender
to execute and file any financing statements, as well as extensions, renewals
and amendments of financing statements in such form as Lender may require to
perfect and maintain perfection of any security interest granted in this
Agreement.

9.       INQUIRIES AND NOTIFICATION TO THIRD PARTIES. Owner hereby authorizes
Lender to contact any third party and make any inquiry pertaining to Owner's
financial condition or the Collateral. In addition, Lender is authorized to
provide oral or written notice of its security interest in the Collateral to any
third party.

10.      LOCKBOX, COLLATERAL ACCOUNT. If Lender so requests at any time (whether
or not Owner is in default of this Agreement), Owner will direct each of its
account debtors to make payments due under the relevant account or chattel paper
directly to a special lock box to be under the control of Lender. Owner hereby
authorizes and directs Lender to deposit into a special collateral account to be
established and maintained with Lender all checks, drafts and cash payments
received in the lock box. All deposits in the collateral account shall
constitute proceeds of Collateral and shall not constitute payment of any
Obligation. At its option, Lender may, at any time, apply finally collected
funds on deposit in the collateral account to the payment of the Obligations in
such order of application as Lender may determine, or permit Owner to withdraw
all or any part of the balance on deposit in the collateral account. If a
collateral account is so established, Owner agrees that Owner will promptly
deliver to Lender, for deposit into the collateral account, all payments on
accounts and chattel paper received by Owner. All such payments shall be
delivered to Lender in the form received (except for Owner's endorsement if
necessary). Until so deposited, all payments on accounts and chattel paper
received by Owner shall be held in trust by Owner for and as the property of
Lender and shall not be commingled with any funds or property of Owner.

11.      COLLECTION OF INDEBTEDNESS FROM THIRD PARTIES. Lender shall be entitled
to notify, and upon the request of Lender, Owner shall notify any account debtor
or other third party (including, but not limited to, insurance companies) to pay
any indebtedness or obligation owing to Owner and constituting the Collateral
(collectively "Indebtedness") to Lender whether or not a default exists under
this Agreement. Owner shall diligently collect the Indebtedness owing to Owner
from its account debtors and other third parties until the giving of such
notification. In the event that Owner possesses or receives possession of any
instruments or other remittances with respect to the


                                                        Page 2 of 5_____________



Indebtedness following the giving of such notification or if the instruments or
other remittances constitute the prepayment of any Indebtedness or the payment
of any insurance proceeds, Owner shall hold such instruments and other
remittances in trust for Lender apart from its other property, endorse the
instruments and other remittances to Lender, and immediately provide Lender with
possession of the instruments and other remittances. Lender shall be entitled,
but not required, to collect (by legal proceedings or otherwise), extend the
time for payment, compromise, exchange or release any obligor or collateral, or
otherwise settle any of the Indebtedness whether or not an event of default
exists under this Agreement. Lender shall not be liable to Owner for any action,
error, mistake, omission or delay pertaining to the actions described in this
paragraph or any damages resulting therefrom.

12.      POWER OF ATTORNEY. Owner hereby appoints Lender as its attorney-in-fact
to endorse Owner's name on all instruments and other remittances payable to
Owner with respect to the Indebtedness, including any items received by Lender
in any lockbox account, or other documents pertaining to Lender's actions in
connection with the Indebtedness. In addition, Lender shall be entitled, but not
required, to perform any action or execute any document required to be taken or
executed by Owner under this Agreement. Lender's performance of such action or
execution of such documents shall not relieve Owner from any obligation or cure
any default under this Agreement. The powers of attorney described in this
paragraph are coupled with an interest and are irrevocable.

13.      USE AND MAINTENANCE OF COLLATERAL. Owner shall use the Collateral
solely in the ordinary course of its business, for the usual purposes intended
by the manufacturer (if applicable), with due care, and in compliance with the
laws, ordinances, regulations, requirements and rules of all federal, state,
county and municipal authorities including environmental laws and regulations
and insurance policies. Owner shall not make any alterations, additions or
improvements to the Collateral without the prior written consent of Lender.
Owner shall ensure that Collateral which is not now a fixture does not become a
fixture. Without limiting the foregoing, all alterations, additions and
improvements made to the Collateral shall be subject to the security interest
belonging to Lender, shall not be removed without the prior written consent of
Lender, and shall be made at Owner's sole expense. Owner shall take all actions
and make any repairs or replacements needed to maintain the Collateral in good
condition and working order.

14.      LOSS OR DAMAGE. Owner shall bear the entire risk of any loss, theft,
destruction or damage (collectively "Loss or Damage") to all or any part of the
Collateral. In the event of any Loss or Damage, Owner will restore the
Collateral to its previous condition, replace the Collateral with similar
property acceptable to Lender in its sole discretion, or pay or cause to be paid
to Lender the decrease in the fair market value of the affected Collateral.
Lender has no duty to collect any income accruing on the Collateral or to
preserve any rights relating to the Collateral.

15.      INSURANCE. If the original amount of the Obligations is $300 or more,
exclusive of the charges for insurance, and the value of the Collateral to be
insured is $300 or more ($500 or more if the collateral is a motor vehicle), the
Collateral will be kept insured for its full value against all loss or damage
caused by fire, collision, theft or other casualty. If the Collateral consists
of a motor vehicle having a retail value of at least $500, Owner will obtain
comprehensive and collision coverage in amounts at least equal to the actual
cash value of the vehicle with deductibles not to exceed $ n/a. OWNER HAS THE
RIGHT TO PROVIDE SUCH INSURANCE THROUGH AN EXISTING POLICY OR A POLICY
INDEPENDENTLY OBTAINED AND PAID FOR BY OWNER, subject to the right of Lender to
decline the insurance offered by Owner for reasonable cause before credit is
extended. Owner shall assign to Lender all rights to receive proceeds of
insurance not exceeding the amount owed under the obligations described above,
and direct the insurer to pay all proceeds directly to Lender. The insurance
policies shall require the insurance company to provide Lender with at least n/a
days written notice before such policies are altered or cancelled in any manner.
The insurance policies shall name Lender as a loss payee and provide that no act
or omission of Owner or any other person shall affect the right of Lender to be
paid the insurance proceeds pertaining to the loss or damage of the Collateral.
In the event Owner fails to acquire or maintain insurance, Lender (after
providing notice as may be required by law) may in its discretion procure
appropriate insurance coverage upon the Collateral and charge the insurance cost
as an advance of principal under the promissory note. Owner shall furnish Lender
with evidence of insurance indicating the required coverage. Lender may act as
attorney-in-fact for Owner in making and settling claims under insurance
policies, cancelling any policy or endorsing Owner's name on any draft or
negotiable instrument drawn by any insurer

16.      INDEMNIFICATION. Lender shall not assume or be responsible for the
performance of any of Owner's obligations with respect to the Collateral under
any circumstances. Owner shall immediately provide Lender with written notice of
and hereby indemnifies and holds Lender and its shareholders, directors,
officers, employees and agents harmless from all claims, damages, liabilities
(including attorneys' fees and legal expenses), causes of action, actions, suits
and other legal proceedings (collectively "Claims") pertaining to its business
operations or the Collateral including, but not limited to, those arising from
Lender's performance of Owner's obligations with respect to the Collateral or
claims involving Hazardous Materials. Owner, upon the request of Lender, shall
hire legal counsel to defend Lender from such Claims, and pay the attorneys'
fees, legal expenses and other costs to the extent permitted by applicable law,
incurred in connection therewith. In the alternative, Lender shall be entitled
to employ its own legal counsel to defend such Claims at Owner's cost.

17.      TAXES AND ASSESSMENTS. Owner shall execute and file all tax returns and
pay all taxes, licenses, fees and assessments relating to its business
operations and the Collateral (including, but not limited to, income taxes,
personal property taxes, withholding taxes, sales taxes, use taxes, excise taxes
and workers' compensation premiums) in a timely manner.

18.      INSPECTION OF COLLATERAL AND BOOKS AND RECORDS. Owner shall allow
Lender or its agents to examine, inspect and make abstracts and copies of the
Collateral and Owner's books and records pertaining to Owner's business
operations and financial condition or the Collateral during normal business
hours. Owner shall provide any assistance required by Lender for these purposes.
All of the signatures and information pertaining to the Collateral or contained
in the books and records shall be genuine, true, accurate and complete in all
respects. Owner shall note the existence of Lender's security interest in its
books and records pertaining to the Collateral.

19.      EVENTS OF DEFAULT. An Event of Default will occur under this Agreement
in the event that Owner, Borrower, any guarantor or any other third parry
pledging Collateral to secure this Agreement: (a) fails to make any payment
under this Agreement, any other document or instrument relating to the foregoing
or executed in favor of Lender, or under any other indebtedness to Lender when
due; (b) fails to perform any obligation or breaches any warranty or covenant to
Lender contained in this Agreement or any other present or future written
agreement regarding this or any other indebtedness to Lender; (c) provides or
causes any false or misleading signature or representation to Lender; (d) sells,
conveys, or transfers rights in any Collateral without the prior written
approval of Lender; (e) seeks to revoke, terminate or otherwise limit its
liability under any continuing guaranty; (f)has a garnishment, judgment, tax
levy, attachment or lien entered or served against any of them or any of their
property; (g) dies, becomes legally incompetent, is dissolved or terminated,
ceases to operate its business, becomes insolvent, makes an assignment for the
benefit of creditors, or becomes the subject of any bankruptcy, insolvency or
debtor rehabilitation proceeding; (h) fails to provide Lender evidence of
satisfactory financial condition; or (i) has a majority of its outstanding
voting securities or other ownership interest sold, transferred or conveyed to
any person or entity other than any person or entity that has the majority
ownership as of the date of the execution of this Agreement.

In addition, an Event of Default will occur under this Agreement in the event
that: (a) the Collateral is used by anyone to transport or store goods, the
possession, transportation, or use of which, is illegal; (b) Lender reasonably
deems itself insecure or reasonably believes the prospect of payment or
performance is impaired due to a significant decline in the value of any of the
Collateral or a material adverse change in Owner's, Borrower's or any
guarantor's business or financial condition; or (c) any Collateral is destroyed,
damaged or lost in any material respect or is subjected to seizure,
confiscation, or condemnation.

20.      RIGHTS OF LENDER ON EVENT OF DEFAULT. Upon the occurrence of an Event
of Default under this Agreement, Lender shall be entitled to exercise one or
more of the following remedies without notice or demand (except as required by
law): (a) to declare the Obligations immediately due and payable in full, such
acceleration shall be automatic and immediate if the Event of Default is a
filing under the Bankruptcy Code; (b) to collect the outstanding Obligations
with or without resorting to judicial process; (c) to change Owner's mailing
address, open Owner's mail, and retain any instruments or other remittances
constituting the Collateral contained therein; (d) to take possession of any
Collateral in any manner permitted by law; (e) to apply for and obtain, without
notice and upon ex parte application, the appointment of a receiver for the
Collateral without regard to Owner's financial condition or solvency, the
adequacy of the Collateral to secure the payment or performance of the
obligations, or the existence of any waste to the Collateral; (f) to require
Owner to deliver and make available to Lender any Collateral at a place
reasonably convenient to Owner and Lender; (g) to sell, lease or otherwise
dispose of any Collateral and collect any deficiency balance with or without
resorting to legal process; (h) to set-off Owner's obligations against any
amounts due to Owner including, but not limited to, monies, instruments, and
deposit accounts maintained with Lender; and (i) to exercise all other rights
available to Lender under any other written agreement or applicable law.

Lender's rights are cumulative and may be exercised together, separately, and in
any order. Unless the Collateral is perishable, threatens to decline speedily in
value or is of a type customarily sold on a recognized market, Lender will
provide reasonable notification of the time and place of any sale or intended
disposition as required under the Uniform Commercial Code, presently or as
hereafter amended or replaced. Lender has no obligation to clean up or otherwise
prepare the Collateral for sale. Lender may comply with any applicable state or
federal law requirements in connection with a disposition of the Collateral and
compliance will not be considered adversely to affect the commercial
reasonableness of any sale of the Collateral. If the Collateral consists of
securities, Lender shall be entitled to transfer the securities into the name of
Lender or its designee and to vote the securities. Lender shall be authorized to
notify the issuer of the securities to remit any related dividends, interest and
securities resulting from stock splits, reorganizations and capitalizations
directly to Lender or its designee. In the event that Lender institutes an
action to recover any Collateral or seeks recovery of any Collateral by way of a
prejudgment remedy in an action against Owner, Owner waives the posting of any
bond which might otherwise be required. Upon default, Owner shall segregate all
proceeds of Collateral and hold such proceeds in trust for Lender. Lender's
remedies under this paragraph are in addition to those available at common law,
such as offset.


                                                   Page 3 of 5 _________________


21.      APPLICATION OF PAYMENTS. Whether or not a default has occurred under
this Agreement, all payments made by or on behalf of Owner and all credits due
to Owner from the disposition of the Collateral or otherwise may be applied
against the amounts paid by Lender (including attorneys' fees and legal
expenses) in connection with the exercise of its rights or remedies described in
this Agreement and any interest thereon and then to the payment of the remaining
Obligations in whatever order Lender chooses.

22.      REIMBURSEMENT OF AMOUNTS EXPENDED BY LENDER. Owner shall reimburse
Lender for all amounts (including attorneys' fees and legal expenses) expended
by Lender in the performance of any action required to be taken by Owner or the
exercise of any right or remedy belonging to Lender under this Agreement,
together with interest thereon at the lower of the highest rate described in any
promissory note or credit agreement executed by Borrower or Owner or the highest
rate allowed by law from the date of payment until the date of reimbursement.
These sums shall be included in the definition of Obligations, shall be secured
by the Collateral identified in this Agreement and shall be payable upon demand.
Lender has no duty to take any action to protect the value of the Collateral or
to exercise any rights of the Owner with respect to the Collateral.

23.      ASSIGNMENT. Owner shall not be entitled to assign any of its rights,
remedies or obligations described in this Agreement without the prior written
consent of Lender. Consent may be withheld by Lender in its sole discretion.
Lender shall be entitled to assign some or all of its rights and remedies
described in this Agreement without notice to or the prior consent of Owner in
any manner.

24.      MODIFICATION AND WAIVER. The modification or waiver of any of Owner's
Obligations or Lender's rights under this Agreement must be contained in a
writing signed by Lender. Lender may perform any of Owner's Obligations or delay
or fail to exercise any of its rights without causing a waiver of those
Obligations or rights. A waiver on one occasion shall not constitute a waiver on
any other occasion. Owner's Obligations under this Agreement shall not be
affected if Lender amends, compromises, exchanges, fails to exercise, impairs or
releases any of the obligations belonging to any Owner or third party or any of
its rights against any Owner, third party, Collateral or any other property
securing the Obligations. Owner waives any right it may have to require Lender
to pursue any third person for any of the Obligations.

25.      SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of Owner and Lender and their respective successors, assigns,
trustees, receivers, administrators, personal representatives, legatees, and
devisees.

26.      NOTICES. Any notice or other communication to be provided under this
Agreement shall be in writing and sent to the parties at the addresses described
in this Agreement or such other address as the parties may designate in writing
from time to time.

27.      SEVERABILITY. If any provision of this Agreement violates the law or is
unenforceable, the rest of the Agreement shall remain valid.

28.      APPLICABLE LAW. This Agreement shall be governed by the laws of the
state indicated in Lender's address, except to the extent that the Uniform
Commercial Code, presently or as hereafter amended or replaced, provides for the
application of the law of the state of Owner's location, as indicated in
paragraph 5. Unless applicable law provides otherwise, Owner consents to the
jurisdiction and venue of any court located in such state selected by Lender in
the event of any legal proceeding under this Agreement.

29.      COLLECTION COSTS. To the extent permitted by law, Owner agrees to pay
Lender's reasonable fees and costs of attorneys and other agents (including
without limitation paralegals, clerks and consultants), whether or not such
attorney or agent is an employee of Lender, which are incurred by Lender in
collecting any amount due or enforcing any right or remedy under this Agreement,
whether or not suit is brought, and including, but not limited to, all fees and
costs incurred on appeal, in bankruptcy, and for post-judgment collection
actions.

30.      MISCELLANEOUS. This Agreement is executed for commercial purposes.
Owner shall supply information regarding Owner's business operations and
financial condition or the Collateral in the form and manner as requested by
Lender from time to time. All information furnished by Owner to Lender shall be
true, accurate and complete in all respects. Owner and Lender agree that time is
of the essence. Owner waives presentment, demand for payment, notice of dishonor
and protest except as required by law. All references to Owner in this Agreement
shall include all parties signing below except Lender. This Agreement shall be
binding upon the heirs, successors and assigns of Owner and Lender. If there is
more than one Owner, their obligations under this Agreement shall be joint and
several. This Agreement shall remain in full force and effect until Lender
provides Owner with written notice of termination. This Agreement represents the
complete and integrated understanding between Owner and Lender regarding the
terms hereof.

31.      WAIVER OF JURY TRIAL. LENDER AND OWNER HEREBY WAIVE ANY RIGHT TO A
TRIAL BY JURY IN ANY CIVIL ACTION ARISING OUT OF, OR BASED UPON, THIS SECURITY
AGREEMENT.

32.      ADDITIONAL TERMS:



- -------------------------------------------------------------------------------
OWNER ACKNOWLEDGES THAT OWNER HAS READ, UNDERSTANDS, AND AGREES TO THE TERMS AND
CONDITIONS OF THIS AGREEMENT. OWNER ACKNOWLEDGES RECEIPT OF AN EXACT COPY OF
THIS AGREEMENT.

Dated:    November 08,   2002

                                             LENDER: COMPASS BANK



                                             BY: /s/ Steven McCarroll
                                             ------------------------
                                             STEVE MCCARROLL
                                             CITY PRESIDENT


OWNER:    BOYD BROTHERS TRANSPORTATION       OWNER:
          CO., INC.



By: /s/ RICHARD BAILEY
- --------------------------------------       -----------------------------------
RICHARD BAILEY
CFO

OWNER:                                       OWNER:



- --------------------------------------       -----------------------------------

OWNER:                                       OWNER:



- --------------------------------------       -----------------------------------

OWNER:                                       OWNER:



- --------------------------------------       -----------------------------------


                                                 Page 4 of 5 ___________________



                                   SCHEDULE A

NINETY (90) NEW TRANSCRAFT EAGLE W2 FLATBED TRAILERS WITH NEW TIRES AS PER
EXHIBIT "A" ATTACHED HERETO AND FORMING A PART HEREOF.


                                   SCHEDULE B

Record Owner Name:

                                   SCHEDULE C


                                   SCHEDULE D


                                                 Page 5 of 5 ___________________



                                   EXHIBIT "A"

Boyd Brothers Transportation Co., Inc.
Loan i/a/o $1,273,580

Ninety (90) New 2003 Transcraft Eagle W2 Flatbed Trailers Serial Numbers:


 1TTF4820732010161                 1TTF4820932010162
 1TTF4820032010163                 1TTF4820232010164
 1TTF4820432010165                 1TTF4820632010166
 1TTF4820832010167                 1TTF4820X32010168
 1TTF4820132010169                 1TTF4820832010170
 1TTF4820732010175                 1TTF4820932010176
 1TTF4820032010177                 1TTF4820232010178
 1TTF4820432010179                 1TTF4820632010183
 1TTF4820832010184                 1TTF4820X32010185
 1TTF4820132010186                 1TTF4820332010187
 1TTF4820332010190                 1TTF4820532010191
 1TTF4820732010192                 1TTF4820932010193
 1TTF4820032010194                 1TTF4820632010197
 1TTF4820832010198                 1TTF4820X32010199
 1TTF4820232010200                 1TTF48204320101201
 1TTF4820832010203                 1TTF4820X32010204
 1TTF4820132010205                 1TTF4820332010206
 1TTF4820532010207                 1TTF4820932010209
 1TTF4820532010210                 1TTF4820732010211
 1TTF4820932010212                 1TTF4820032010213
 1TTF4820832010217                 1TTF4820X32010218
 1TTF4820132010219                 1TTF4820832010220
 1TTF4820X32010221                 1TTF4820732010225
 1TTF4820932010226                 1TTF4820032010227
 1TTF4820232010228                 1TTF4820432010229
 1TTF4820632010233                 1TTF4820832010234
 1TTF4820X32010235                 1TTF4820132010236
 1TTF4820332010237                 1TTF4820332010240
 1TTF4820532010241                 1TTF4820732010242
 1TTF4820932010243                 1TTF4820032010244
 1TTF4820432010246                 1TTF4820632010247
 1TTF4820832010248                 1TTF4820X32010249
 1TTF4820632010250                 1TTF4820332010254
 1TTF4820532010255                 1TTF4820732010256
 1TTF4820932010257                 1TTF4820032010258
 1TTF4820032010261                 1TTF4820232010262
 1TTF4820432010263                 1TTF4820632010264
 1TTF4820832010265                 1TTF4820332010268
 1TTF4820532010269                 1TTF4820132010270
 1TTF4820332010271                 1TTF4820532010272
 1TTF4820032010275                 1TTF4820232010276
 1TTF4820432010277                 1TTF4820632010278
 1TTF4820832010279                 1TTF4820832010282
 1TTF4820X32010283                 1TTF4820132010284
 1TTF4820332010285                 1TTF4820532010286

EX-10.3

                                                                    EXHIBIT 10.3

                                    BORROWER

                          BOYD BROTHERS TRANSPORTATION,             COMMERCIAL
                          CO., INC.                                VARIABLE RATE
                                                                    PROMISSORY
COMPASS BANK                                                           NOTE
3480 EASTERN BLVD.
MONTGOMERY, AL 36116
(334) 409-7304 "LENDER"

                                     ADDRESS

                          3275 HIGHWAY 30
                          CLAYTON, AL 36016-3003

                          TELEPHONE. NO.            IDENTIFICATION NO.
                          (334)   775-1209            636006515



   OFFICER        INTEREST            PRINCIPAL           FUNDING       MATURITY        CUSTOMER              LOAN
IDENTIFICATION     RATE                AMOUNT              DATE          DATE            NUMBER              NUMBER
- --------------    --------           -----------         --------     ----------        --------             ------
                                                                                           
S.M.              VARIABLE           $630,250.00         11/08/02      11/01/08

PURPOSE:   TO PURCHASE TRAILERS


PROMISE TO PAY; For value received, Borrower promises to pay to the order of
Lender the principal amount of Six Hundred Thirty Thousand Two Hundred Fifty and
no/100 Dollars ($630,250.00) plus interest on the unpaid principal balance at
the rate and in the manner described below, until all amounts owing under this
Note are paid in full. All amounts received by Lender shall be applied first to
accrued, unpaid interest, then to unpaid principal, and then to any late charges
or expenses, or in any other order as determined by Lender, in Lender's sole
discretion, as permitted by law.

INTEREST RATE: This Note has a variable interest rate feature. The interest rate
on this Note may change from time to time if the Index Rate identified below
changes. Interest shall be computed on the basis of the actual number of days
over 360 days per year. Interest on this Note shall be calculated and payable at
a variable rate equal to 1.750% per annum over the Index Rate. The initial
interest rate on this Note shall be 3.130% per annum. Any change in the interest
rate resulting from a change in the Index Rate will be effective on:

         the first day of the next succeeding Interest Period.

INDEX RATE: The Index Rate for this Note shall be:

         SEE ANNEX "A", LIBOR RATE for rate definitions and additional terms.

If the Index Rate is redefined or becomes unavailable, then Lender may select
another index which is substantially similar.

RATE LIMITATIONS: Subject to applicable law, the minimum interest rate on this
Note shall be 3.500% per annum. The maximum interest rate on this Note shall
not exceed 18.000% per annum, or if less, or if a maximum rate is not
indicated, the maximum interest rate Lender is permitted to charge by law. The
maximum rate increase at any one time will be n/a%. The maximum rate decrease
at any one time will be n/a%.

DEFAULT RATE: If there is an Event of Default under this Note, the Lender may,
in its discretion, increase the interest rate on this Note to: eighteen percent
(18.000%) per annum or the maximum interest rate Lender is permitted to charge
by law, whichever is less.

PAYMENT SCHEDULE: Borrower shall pay the principal and interest according to the
following schedule:

71 payments of $9,619.18 beginning December 01, 2002 and continuing at monthly
time intervals thereafter. A final payment of the unpaid principal balance plus
accrued interest is due and payable on November 01, 2008. If the interest rate
changes, the payment amounts may change in an amount sufficient to repay the
unpaid principal balance over the scheduled amortization term. New payments
begin with the first payment after the rate change.


INTEREST SURCHARGE: Borrower agrees to pay an interest surcharge of $n/a . The
interest surcharge is earned by Lender when paid and is not subject to refund;
however, if this Note is prepaid in full within 90 days after the date of this
Note, Borrower will receive a credit of a pro rata portion of the interest
surcharge, subject to Lender's right to retain a minimum surcharge of $25.00.

PREPAYMENT: This Note may be prepaid in part or in full on or before its
maturity date. If this Note contains more than one installment, any partial
prepayment will not affect the due date or the amount of any subsequent
installment, unless agreed to, in writing, by Borrower and Lender. If this Note
is prepaid in full, there will be: [X] No prepayment penalty. [ ] A prepayment
penalty of:


LATE CHARGE: If a payment is in default 10 days or more, Borrower will be
charged a late charge of: [X] 5.00% of the unpaid payment; [ ]
$_________________ or _________________ % of the unpaid payment, whichever is
[ ] greater, but not to exceed $______________; [ ] less.

SECURITY: To secure the payment and performance of obligations incurred under
this Note, Borrower grants Lender a security interest in all of Borrower's
right, title, and interest in all monies, instruments, savings, checking and
other accounts of Borrower (excluding IRA, Keogh, trust accounts and other
accounts subject to tax penalties if so assigned) that are now or in the future
in Lender's custody or control. [X] If checked, the obligations under this Note
are also secured by the collateral described in any security instrument(s)
executed in connection with this Note, and any collateral described in any other
security instrument(s) securing this Note or all of Borrower's obligations.

RENEWAL: [ ] If checked, this Note is a renewal, but not a satisfaction, of
Loan Number _______________.
- --------------------------------------------------------------------------------
THE PERSONS SIGNING BELOW ACKNOWLEDGE THAT THEY HAVE READ, UNDERSTAND, AND
AGREE TO THE TERMS AND CONDITIONS OF THIS NOTE, INCLUDING THE PROVISIONS ON
THE REVERSE SIDE, AND FURTHER ACKNOWLEDGE RECEIPT OF AN EXACT COPY OF THIS NOTE.


Dated:  November 08, 2002

CAUTION - IT IS IMPORTANT THAT YOU THOROUGHLY READ THE CONTRACT BEFORE YOU SIGN
          IT.

BORROWER: BOYD BROTHERS TRANSPORTATION,      BORROWER:
          CO., INC.



By: /S/ Richard Bailey
- ----------------------------------------     ----------------------------------
RICHARD BAILEY
CFO

BORROWER:                                    BORROWER:



- ----------------------------------------     ----------------------------------

BORROWER:                                    BORROWER:



- ----------------------------------------     ----------------------------------

BORROWER:                                    BORROWER:



- ----------------------------------------     ----------------------------------


                              TERMS AND CONDITIONS

1. EVENTS OF DEFAULT. An Event of Default will occur under this Note in the
event that Borrower, any guarantor or any other third party pledging collateral
to secure this Note:

         (a)      fails to make any payment on this Note or any other
                  indebtedness to Lender when due;

         (b)      fails to perform any obligation or breaches any warranty or
                  covenant to Lender contained in this Note, any security
                  instrument, or any other present or future written agreement
                  regarding this or any other indebtedness of Borrower to
                  Lender;

         (c)      provides or causes any false or misleading signature or
                  representation to be provided to Lender;

         (d)      sells, conveys, or transfers rights in any collateral securing
                  this Note without the written approval of Lender; or destroys,
                  loses or damages such collateral in any material respect; or
                  subjects such collateral to seizure, confiscation or
                  condemnation;

         (e)      has a garnishment, judgment, tax levy, attachment or lien
                  entered or served against Borrower, any guarantor, or any
                  third party pledging collateral to secure this Note or any of
                  their property;

         (f)      dies, becomes legally incompetent, is dissolved or terminated,
                  ceases to operate its business, becomes insolvent, makes an
                  assignment for the benefit of creditors, fails to pay debts as
                  they become due, or becomes the subject of any bankruptcy,
                  insolvency or debtor rehabilitation proceeding;

         (g)      fails to provide Lender evidence of satisfactory financial
                  condition;

         (h)      has a majority of its outstanding voting securities sold,
                  transferred or conveyed to any person or entity other than any
                  person or entity that has the majority ownership as of the
                  date of the execution of this Note; or

         (i)      causes Lender to deem itself insecure due to a significant
                  decline in the value of any real or personal property securing
                  payment of this Note, or Lender in good faith, believes the
                  prospect of payment or performance is impaired.

2. RIGHTS OF LENDER ON DEFAULT. If there is an Event of Default under this Note,
Lender will be entitled to exercise one or more of the following remedies
without notice or demand (except as required by law):

         (a)      to declare the principal amount plus accrued interest under
                  this Note and all other present and future obligations of
                  Borrower immediately due and payable in full, such
                  acceleration to be automatic and immediate if the Event of
                  Default is a filing under the Bankruptcy Code;

         (b)      to collect the outstanding obligations of Borrower with or
                  without resorting to judicial process;

         (c)      to cease making advances under this Note or any other
                  agreement between Borrower and Lender;

         (d)      to take possession of any collateral in any manner permitted
                  by law;

         (e)      to require Borrower to deliver and make available to Lender
                  any collateral at a place reasonably convenient to Borrower
                  and Lender;

         (f)      to sell, lease or otherwise dispose of any collateral and
                  collect any deficiency balance with or without resorting to
                  legal process;

         (g)      to set-off Borrower's obligations against any amounts due to
                  Borrower including, but not limited to, monies, instruments,
                  and deposit accounts maintained with Lender; and

         (h)      to exercise all other rights available to Lender under any
                  other written agreement or applicable law.

Lender's rights are cumulative and may be exercised together, separately, and in
any order. Lender's remedies under this paragraph are in addition to those
available at common law, including, but not limited to, the right of set-off.

3. DEMAND FEATURE. [ ] If checked, this Note contains a demand feature. Lender's
right to demand payment, at any time, and from time to time, shall be in
Lender's sole and absolute discretion, whether or not any default has occurred.

4. FINANCIAL INFORMATION. Borrower will at all times keep proper books of
record and account in which full, true and correct entries shall be made in
accordance with generally accepted accounting principles and will deliver to
Lender, within ninety (90) days after the end of each fiscal year of Borrower, a
copy of the annual financial statements of Borrower relating to such fiscal
year, such statements to include (i) the balance sheet of Borrower as at the end
of such fiscal year and (ii) the related income statement, statement of retained
earnings and statement of cash flow of Borrower for such fiscal year, prepared
by such certified public accountants as may be reasonably satisfactory to
Lender. Borrower also agrees to deliver to Lender within fifteen (15) days after
filing same, a copy of Borrower's income tax returns and also, from time to
time, such other financial information with respect to Borrower as Lender may
request.

5. MODIFICATION AND WAIVER. The modification or waiver of any of Borrower's
obligations or Lender's rights under this Note must be contained in a writing
signed by Lender. Lender may perform any of Borrower's obligations or delay or
fail to exercise any of its rights without causing a waiver of those obligations
or rights. A waiver on one occasion will not constitute a waiver on any other
occasion. Borrower's obligations under this Note shall not be affected if Lender
amends, compromises, exchanges, fails to exercise, impairs or releases any of
the obligations belonging to any co-borrower or guarantor or any of its rights
against any co-borrower, guarantor, the collateral or any other property
securing the obligations.

6. SEVERABILITY. If any provision of this Note is invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

7. ASSIGNMENT. Borrower agrees not to assign any of Borrower's rights, remedies
or obligations described in this Note without the prior written consent of
Lender, which consent may be withheld by Lender in its sole discretion. Borrower
agrees that Lender is entitled to assign some or all of its rights and remedies
described in this Note without notice to or the prior consent of Borrower.

8. NOTICE. Any notice or other communication to be provided to Borrower or
Lender under this Note shall be in writing and sent to the parties at the
addresses described in this Note or such other address as the parties may
designate in writing from time to time.

9. APPLICABLE LAW. This Note shall be governed by the laws of the state
indicated in Lender's address. Unless applicable law provides otherwise,
Borrower consents to the jurisdiction of any court located in such state
selected by Lender, in its discretion, in the event of any legal proceeding
under this Note.

10. COLLECTION COSTS: To the extent permitted by law, Borrower agrees to pay
Lender's reasonable fees and costs of attorneys and other agents (including
without limitation paralegals, clerks and consultants), whether or not such
attorney or agent is an employee of Lender, which are incurred by Lender in
collecting any amount due or enforcing any right or remedy under this Note,
whether or not suit is brought, and including, but not limited to, all fees and
costs incurred on appeal, in bankruptcy, and for post-judgment collection
actions.

11. MISCELLANEOUS. This Note is being executed primarily for commercial,
agricultural, or business purposes. Borrower and Lender agree that time is of
the essence. Borrower agrees to make all payments to Lender at any address
designated by Lender and in lawful United States currency. Borrower and any
person who endorses this Note waives presentment, demand for payment, notice of
dishonor and protest and further waives any right to require Lender to proceed
against anyone else before proceeding against Borrower or said person. All
references to Borrower in this Note shall include all of the parties signing
this Note, and this Note shall be binding upon the heirs, successors and assigns
of Borrower and Lender. If there is more than one Borrower their obligations
under this Note shall be joint and several. This Note represents the complete
and integrated understanding between Borrower and Lender regarding the terms
hereof.

12. JURY TRIAL WAIVER. BORROWER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN
ANY CIVIL ACTION ARISING OUT OF, OR BASED UPON, THIS NOTE OR THE COLLATERAL
SECURING THIS NOTE.

13. ADDITIONAL TERMS:
SEE ADDENDUM TO PROMISSORY NOTE.

EX-10.4

                                                                    EXHIBIT 10.4

COMPASS BANK                                   COMMERCIAL
3480 EASTERN BLVD.                              SECURITY
MONTGOMERY, AL 36116                            AGREEMENT
(334) 409-7304 "LENDER"



              BORROWER                          BORROWER
              --------                          --------
                                    
BOYD BROTHERS TRANSPORTATION,          BOYD BROTHERS TRANSPORTATION,
CO., INC.                              CO., INC.




       ADDRESS                                ADDRESS
       -------                                -------
                                    
3275 HIGHWAY 30                        3275 HIGHWAY 30
CLAYTON, AL 36016-3003                 CLAYTON, AL 36016-3003




TELEPHONE NO.         IDENTIFICATION NO.       TELEPHONE NO.       IDENTIFICATION NO.
- -------------         ------------------       -------------       ------------------
                                                          
(334) 775-1209        636006515                (334) 775-1209      636006515


1. SECURITY INTEREST. For good and valuable consideration, Owner grants to
Lender identified above a continuing security interest in the Collateral
described below to secure the Obligations described in this Agreement.

2. OBLIGATIONS. The collateral shall secure the payment and performance of all
of Borrower's and Owner's present and future, joint and/or several, direct and
indirect, absolute and contingent, express and implied indebtedness to Lender
under any promissory note or agreement described below, including all future
advances made by Lender to Borrower or Owner and expenditures incurred by Lender
upon the occurrence of an Event of Default (collectively "Obligations"):

         a.       this Agreement and/or the following promissory notes and
                  agreements:



INTEREST          PRINCIPAL AMOUNT/         FUNDING            MATURITY          CUSTOMER            LOAN
  RATE              CREDIT LIMIT        AGREEMENT DATE           DATE             NUMBER            NUMBER
- --------          ----------------      --------------         --------          --------           ------
                                                                                     
VARIABLE           $630,250.00             11/08/02            11/01/14


         b.       [X] all other presently existing or future, evidences of
                  indebtedness, obligations, agreements, instruments, guaranties
                  or otherwise of Borrower or Owner to Lender (whether incurred
                  for the same or different purposes than the foregoing); and

         c.       all renewals, extensions, amendments, modifications,
                  replacements or substitutions to any of the foregoing.

3. COLLATERAL. All of Owner's right, title and interest in the following
described property, as defined by the Uniform Commercial Code presently or as
hereafter amended or replaced, whether now or hereafter existing or now owned or
hereafter acquired by Owner and wherever located shall constitute the
"Collateral":

         [ ]      All accounts including, but not limited to, any accounts
                  described on Schedule A attached hereto and incorporated
                  herein by this reference;

         [ ]      All chattel paper including, but not limited to, any chattel
                  paper described on Schedule A attached hereto and incorporated
                  herein by this reference;

         [ ]      All deposit accounts including, but not limited to, any
                  deposit accounts described on Schedule A attached hereto and
                  incorporated herein by this reference;

         [ ]      All documents including, but not limited to, any documents
                  described on Schedule A attached hereto and incorporated
                  herein by this reference;

         [ ]      All equipment, including, but not limited to, any equipment
                  described on Schedule A attached hereto and incorporated
                  herein by this reference;

         [ ]      All fixtures, including, but not limited to, any fixtures
                  described on Schedule A and located or to be located on the
                  real property described on Schedule B attached hereto and
                  incorporated herein by this reference;

         [ ]      All general intangibles including, but not limited to, any
                  general intangibles described on Schedule A attached hereto
                  and incorporated herein by this reference;

         [ ]      All instruments including, but not limited to, any instruments
                  described on Schedule A attached hereto and incorporated
                  herein by this reference;

         [ ]      All inventory including, but not limited to, any inventory
                  described on Schedule A attached hereto and incorporated
                  herein by this reference;

         [ ]      All investment property including, but not limited to, any
                  investment property described on Schedule A attached hereto
                  and incorporated herein by this reference;

         [ ]      All letter-of-credit rights including, but not limited to, any
                  letter-of-credit rights described on Schedule A attached
                  hereto and incorporated herein by this reference;

         [ ]      All as-extracted collateral including, but not limited to, all
                  minerals or the like and accounts resulting from sales at the
                  well or minehead located on or related to the real property
                  described on Schedule B attached hereto and incorporated
                  herein by this reference;

         [ ]      All standing timber which is to be cut and removed under a
                  conveyance or contract for sale located on the real property
                  described on Schedule B attached hereto and incorporated
                  herein by this reference;

         [ ]      Other:

The property described on Schedule A;

All monies, instruments, and savings, checking or other accounts of Owner
(excluding IRA, Keogh, trust accounts, and other accounts subject to tax
penalties if so assigned) that are now or in the future in Lender's custody or
control;

All monies or instruments pertaining to the Collateral described above;

All accessions, accessories, additions, amendments, attachments, modifications,
replacements and substitutions to any of the above;

All proceeds and products of any of the above; and

All supporting obligations of any of the above.

                                                Page 1 of 5 ___________________


4. OWNER'S TAXPAYER IDENTIFICATION. Owner's social security number or federal
taxpayer identification number is: 636006515

5. OWNER'S LOCATION. [ ] Owner is an individual and maintains his or her
principal residence in the state of: __________________________.

[X] Owner is a Corporation duly incorporated, registered, formed or organized,
validly existing and in good standing under the laws of the state of: Alabama.
[ ] Owner is a ___________ and maintains its principal place of business or, if
it has more than one place of business, its chief executive office in the state
of _____________

6. REPRESENTATIONS, WARRANTIES, AND COVENANTS. Owner represents, warrants and
covenants to Lender that:

         (a)      Owner is and shall remain the sole owner of the Collateral;

         (b)      Neither Owner, nor, to the best of Owner's knowledge, has any
                  other party used, generated, released, discharged, stored, or
                  disposed of any hazardous waste, toxic substance, or related
                  material (collectively "Hazardous Materials") or transported
                  any Hazardous Materials across the property except as allowed
                  by and in accordance with applicable federal, state and local
                  law and regulation. Owner shall not commit or permit such
                  actions to be taken in the future. The term "Hazardous
                  Materials" shall mean any substance, material, or waste which
                  is or becomes regulated by any governmental authority
                  including, but not limited to, (i) petroleum; (ii) asbestos;
                  (iii) polychlorinated biphenyls; (iv) those substances,
                  materials or wastes designated as a "hazardous substance"
                  pursuant to Section 311 of the Clean Water Act or listed
                  pursuant to Section 307 of the Clean Water Act or any
                  amendments or replacements to these statutes; (v) those
                  substances, materials or wastes defined as a "hazardous waste"
                  pursuant to Section 1004 of the Resource Conservation and
                  Recovery Act or any amendments or replacements to that
                  statute; or (vi) those substances, materials or wastes defined
                  as a "hazardous substance" pursuant to Section 101 of the
                  Comprehensive Environmental Response, Compensation and
                  Liability Act, or any amendments or replacements to that
                  statute. Owner is in compliance in all respects with all
                  applicable federal, state and local laws and regulations,
                  including, without limitation, those relating to "Hazardous
                  Materials", as defined herein, and other environmental matters
                  (the "Environmental Laws") and neither the federal government
                  nor any other governmental or quasi governmental entity has
                  filed a lien on the Collateral, nor are there any pending or
                  threatened governmental, judicial or administrative actions
                  with respect to environmental matters, which involve the
                  Collateral;

         (c)      Owner's location (Owner's place of organization, principal
                  place of business, or if more than one place of business,
                  chief executive office or principal residence) is in the state
                  indicated in paragraph 5. Owner shall not change its state of
                  location without first notifying Lender in writing;

         (d)      The Collateral is located and has been located during the four
                  (4) month period prior to the date hereof, at Owner's address
                  described above or any address described on Schedule C
                  attached hereto and incorporated herein by this reference.
                  Owner shall immediately advise Lender in writing of any change
                  in or addition to the foregoing addresses;

         (e)      Owner shall not become a party to any restructuring of its
                  form of business or participate in any consolidation, merger,
                  liquidation or dissolution without Lender's prior written
                  consent;

         (f)      Owner's exact legal name is as set forth on the first page of
                  this Agreement. Owner shall not change such name or use any
                  trade name without Lender's prior written consent, and shall
                  notify Lender of the nature of any intended change of Owner's
                  name, or the use of any trade name, and the proposed effective
                  date of such change;

         (g)      The Collateral is and shall at all times remain free of all
                  tax and other liens, security interests, encumbrances and
                  claims of any kind except for those belonging to Lender and
                  those described on Schedule D attached hereto and incorporated
                  herein by this reference. Without waiving the Event of Default
                  as a result thereof, Owner shall take any action and execute
                  any document needed to discharge any liens, security
                  interests, encumbrances and claims not described on Schedule
                  D;

         (h)      Owner shall defend the Collateral against all claims and
                  demands of all persons at any time claiming any interest
                  therein;

         (i)      Owner will cooperate with Lender in obtaining and maintaining
                  control with respect to all deposit accounts, investment
                  property, letter-of-credit rights and electronic chattel paper
                  constituting the Collateral;

         (j)      Owner shall provide Lender with possession, as appropriate, of
                  all chattel paper, documents, instruments and investment
                  property constituting the Collateral, and Owner shall promptly
                  mark all chattel paper, instruments, investment property and
                  documents constituting the Collateral to show that the same
                  are subject to Lender's security interest;

         (k)      All of Owner's accounts; chattel paper; deposit accounts;
                  documents; general intangibles; instruments; investment
                  property; letter-of-credit rights; and federal, state, county,
                  and municipal government and other permits and licenses;
                  trusts, liens, contracts, leases, and agreements constituting
                  the Collateral are and shall be valid, genuine and legally
                  enforceable obligations and rights belonging to Owner against
                  one or more third parties and not subject to any claim,
                  defense, set-off or counterclaim of any kind;

         (1)      Owner shall not amend, modify, replace, or substitute any
                  account; chattel paper; deposit account; document; general
                  intangible; instrument; investment property; or
                  letter-of-credit right constituting the Collateral without the
                  prior written consent of Lender. Owner shall not create any
                  chattel paper constituting the Collateral without placing a
                  legend on the chattel paper acceptable to Lender indicating
                  that Lender has a security interest in the chattel paper;

         (m)      No person shall file an amendment that is a termination
                  statement for a financing statement concerning any of the
                  Collateral without the prior written consent of Lender, except
                  to the extent permitted by the Uniform Commercial Code
                  presently or as hereafter amended or replaced;

         (n)      Owner has the right and is duly authorized to enter into and
                  perform its obligations under this Agreement. Owner's
                  execution and performance of these obligations do not and
                  shall not conflict with the provisions of any statute,
                  regulation, ordinance, rule of law, contract or other
                  agreement which may now or hereafter be binding on Owner;

         (o)      No action or proceeding is pending against Owner which might
                  result in any material or adverse change in its business
                  operations or financial condition or materially affect the
                  Collateral;

         (p)      Owner has not violated and shall not violate any applicable
                  federal, state, county or municipal statute, regulation or
                  ordinance (including but not limited to those governing
                  Hazardous Materials) which may materially and adversely affect
                  its business operations or financial condition or the
                  Collateral;

         (q)      Owner shall, upon Lender's request, deposit all proceeds of
                  the Collateral into an account or accounts maintained by Owner
                  or Lender at Lender's institution;

         (r)      Owner will, upon receipt, deliver to Lender as additional
                  Collateral all securities distributed on account of the
                  Collateral such as stock dividends and securities resulting
                  from stock splits, reorganizations and recapitalizations;

         (s)      Owner agrees to the terms of the Obligations and to the terms
                  of any renewals, extensions, amendments, modifications,
                  replacements or substitutions of the Obligations; Lender may
                  enter into agreements in the future with Borrower which, if
                  this Agreement so provides, will become Obligations secured by
                  the Collateral described in this Agreement; property other
                  than the Collateral may also secure the Obligations, that
                  Lender shall have no obligation to exercise its rights against
                  such property prior to exercising its rights against the
                  Collateral, that Lender may accept substitutions or exchanges
                  for any such property, and that Lender may release its
                  security interest in such property at any time; parties other
                  than Borrower may be or may become obligated under the
                  Obligations; and

         (t)      This Agreement and the obligations described in this Agreement
                  are executed and incurred for business and not consumer
                  purposes.

7. SALE OF COLLATERAL. Owner shall not assign, convey, lease, sell, license,
exchange or transfer any of the Collateral to any third party without the prior
written consent of Lender except for sales of inventory to buyers in the
ordinary course of business.

8. FINANCING STATEMENTS AND OTHER DOCUMENTS. Owner shall at any time and from
time to time take all actions and execute all documents required by Lender to
attach, perfect and maintain Lender's security interest in the Collateral and
establish and maintain Lender's right to receive the payment of the proceeds of
the Collateral including, but not limited to, executing any financing
statements, fixture filings, continuation statements, notices of security
interest and other documents required by the Uniform Commercial Code, presently
or as hereafter amended or replaced, and other applicable law. Owner shall pay
the costs of filing such documents in all offices wherever filing or recording
is deemed by Lender to be necessary or desirable. Lender shall be entitled to
perfect its security interest in the Collateral by filing carbon, photographic
or other reproductions of this Agreement and/or the aforementioned documents
with any authority required by the Uniform Commercial Code, presently or as
hereafter amended or replaced, or other applicable law. Owner authorizes Lender
to execute and file any financing statements, as well as extensions, renewals
and amendments of financing statements in such form as Lender may require to
perfect and maintain perfection of any security interest granted in this
Agreement.

9. INQUIRIES AND NOTIFICATION TO THIRD PARTIES. Owner hereby authorizes Lender
to contact any third party and make any inquiry pertaining to Owner's financial
condition or the Collateral. In addition, Lender is authorized to provide oral
or written notice of its security interest in the Collateral to any third party.

10. LOCKBOX, COLLATERAL ACCOUNT. If Lender so requests at any time (whether or
not Owner is in default of this Agreement), Owner will direct each of its
account debtors to make payments due under the relevant account or chattel paper
directly to a special lock box to be under the control of Lender. Owner hereby
authorizes and directs Lender to deposit into a special collateral account to be
established and maintained with Lender all checks, drafts and cash payments
received in the lock box. All deposits in the collateral account shall
constitute proceeds of Collateral and shall not constitute payment of any
Obligation. At its option, Lender may, at any time, apply finally collected
funds on deposit in the collateral account to the payment of the Obligations in
such order of application as Lender may determine, or permit Owner to withdraw
all or any part of the balance on deposit in the collateral account. If a
collateral account is so established, Owner agrees that Owner will promptly
deliver to Lender, for deposit into the collateral account, all payments on
accounts and chattel paper received by Owner. All such payments shall be
delivered to Lender in the form received (except for Owner's endorsement if
necessary). Until so deposited, all payments on accounts and chattel paper
received by Owner shall be held in trust by Owner for and as the property of
Lender and shall not be commingled with any funds or property of Owner.

11. COLLECTION OF INDEBTEDNESS FROM THIRD PARTIES. Lender shall be entitled to
notify, and upon the request of Lender, Owner shall notify any account debtor or
other third party (including, but not limited to, insurance companies) to pay
any indebtedness or obligation owing to Owner and constituting the Collateral
(collectively "Indebtedness") to Lender whether or not a default exists under
this Agreement. Owner shall diligently collect the Indebtedness owing to Owner
from its account debtors and other third parties until the giving of such
notification. In the event that Owner possesses or receives possession of any
instruments or other remittances with respect to the


                                                   Page 2 of 5 _________________


Indebtedness following the giving of such notification or if the instruments or
other remittances constitute the prepayment of any Indebtedness or the payment
of any insurance proceeds, Owner shall hold such instruments and other
remittances in trust for Lender apart from its other property, endorse the
instruments and other remittances to Lender, and immediately provide Lender with
possession of the instruments and other remittances. Lender shall be entitled,
but not required, to collect (by legal proceedings or otherwise), extend the
time for payment, compromise, exchange or release any obligor or collateral, or
otherwise settle any of the Indebtedness whether or not an event of default
exists under this Agreement. Lender shall not be liable to Owner for any action,
error, mistake, omission or delay pertaining to the actions described in this
paragraph or any damages resulting therefrom.

12. POWER OF ATTORNEY. Owner hereby appoints Lender as its attorney-in-fact to
endorse Owner's name on all instruments and other remittances payable to Owner
with respect to the Indebtedness, including any items received by Lender in any
lockbox account, or other documents pertaining to Lender's actions in connection
with the Indebtedness. In addition, Lender shall be entitled, but not required,
to perform any action or execute any document required to be taken or executed
by Owner under this Agreement. Lender's performance of such action or execution
of such documents shall not relieve Owner from any obligation or cure any
default under this Agreement. The powers of attorney described in this paragraph
are coupled with an interest and are irrevocable.

13. USE AND MAINTENANCE OF COLLATERAL. Owner shall use the Collateral solely in
the ordinary course of its business, for the usual purposes intended by the
manufacturer (if applicable), with due care, and in compliance with the laws,
ordinances, regulations, requirements and rules of all federal, state, county
and municipal authorities including environmental laws and regulations and
insurance policies. Owner shall not make any alterations, additions or
improvements to the Collateral without the prior written consent of Lender.
Owner shall ensure that Collateral which is not now a fixture does not become a
fixture. Without limiting the foregoing, all alterations, additions and
improvements made to the Collateral shall be subject to the security interest
belonging to Lender, shall not be removed without the prior written consent of
Lender, and shall be made at Owner's sole expense. Owner shall take all actions
and make any repairs or replacements needed to maintain the Collateral in good
condition and working order.

14. LOSS OR DAMAGE. Owner shall bear the entire risk of any loss, theft,
destruction or damage (collectively "Loss or Damage") to all or any part of the
Collateral. In the event of any Loss or Damage, Owner will either restore the
Collateral to its previous condition, replace the Collateral with similar
property acceptable to Lender in its sole discretion, or pay or cause to be paid
to Lender the decrease in the fair market value of the affected Collateral.
Lender has no duty to collect any income accruing on the Collateral or to
preserve any rights relating to the Collateral.

15. INSURANCE. If the original amount of the Obligations is $300 or more,
exclusive of the charges for insurance, and the value of the Collateral to be
insured is $300 or more ($500 or more if the collateral is a motor vehicle), the
Collateral will be kept insured for its full value against all loss or damage
caused by fire, collision, theft or other casualty. If the Collateral consists
of a motor vehicle having a retail value of at least $500, Owner will obtain
comprehensive and collision coverage in amounts at least equal to the actual
cash value of the vehicle with deductibles not to exceed $ n/a. OWNER HAS THE
RIGHT TO PROVIDE SUCH INSURANCE THROUGH AN EXISTING POLICY OR A POLICY
INDEPENDENTLY OBTAINED AND PAID FOR BY OWNER, subject to the right of Lender to
decline the insurance offered by Owner for reasonable cause before credit is
extended. Owner shall assign to Lender all rights to receive proceeds of
insurance not exceeding the amount owed under the obligations described above,
and direct the insurer to pay all proceeds directly to Lender. The insurance
policies shall require the insurance company to provide Lender with at least n/a
days written notice before such policies are altered or cancelled in any manner.
The insurance policies shall name Lender as a loss payee and provide that no act
or omission of Owner or any other person shall affect the right of Lender to be
paid the insurance proceeds pertaining to the loss or damage of the Collateral.
In the event Owner fails to acquire or maintain insurance, Lender (after
providing notice as may be required by law) may in its discretion procure
appropriate insurance coverage upon the Collateral and charge the insurance cost
as an advance of principal under the promissory note. Owner shall furnish Lender
with evidence of insurance indicating the required coverage. Lender may act as
attorney-in-fact for Owner in making and settling claims under insurance
policies, canceling any policy or endorsing Owner's name on any draft or
negotiable instrument drawn by any insurer.

16. INDEMNIFICATION. Lender shall not assume or be responsible for the
performance of any of Owner's obligations with respect to the Collateral under
any circumstances. Owner shall immediately provide Lender with written notice of
and hereby indemnifies and holds Lender and its shareholders, directors,
officers, employees and agents harmless from all claims, damages, liabilities
(including attorneys' fees and legal expenses), causes of action, actions, suits
and other legal proceedings (collectively "Claims") pertaining to its business
operations or the Collateral including, but not limited to, those arising from
Lender's performance of Owner's obligations with respect to the Collateral or
claims involving Hazardous Materials. Owner, upon the request of Lender, shall
hire legal counsel to defend Lender from such Claims, and pay the attorneys'
fees, legal expenses and other costs to the extent permitted by applicable law,
incurred in connection therewith. In the alternative, Lender shall be entitled
to employ its own legal counsel to defend such Claims at Owner's cost.

17. TAXES AND ASSESSMENTS. Owner shall execute and file all tax returns and pay
all taxes, licenses, fees and assessments relating to its business operations
and the Collateral (including, but not limited to, income taxes, personal
property taxes, withholding taxes, sales taxes, use taxes, excise taxes and
workers' compensation premiums) in a timely manner.

18. INSPECTION OF COLLATERAL AND BOOKS AND RECORDS. Owner shall allow Lender or
its agents to examine, inspect and make abstracts and copies of the Collateral
and Owner's books and records pertaining to Owner's business operations and
financial condition or the Collateral during normal business hours. Owner shall
provide any assistance required by Lender for these purposes. All of the
signatures and information pertaining to the Collateral or contained in the
books and records shall be genuine, true, accurate and complete in all respects.
Owner shall note the existence of Lender's security interest in its books and
records pertaining to the Collateral.

19. EVENTS OF DEFAULT. An Event of Default will occur under this Agreement in
the event that Owner, Borrower, any guarantor or any other third party pledging
Collateral to secure this Agreement: (a) fails to make any payment under this
Agreement, any other document or instrument relating to the foregoing or
executed in favor of Lender, or under any other indebtedness to Lender when due;
(b) fails to perform any obligation or breaches any warranty or covenant to
Lender contained in this Agreement or any other present or future written
agreement regarding this or any other indebtedness to Lender; (c) provides or
causes any false or misleading signature or representation to Lender; (d) sells,
conveys, or transfers rights in any Collateral without the prior written
approval of Lender; (e) seeks to revoke, terminate or otherwise limit its
liability under any continuing guaranty; (f) has a garnishment, judgment, tax
levy, attachment or lien entered or served against any of them or any of their
property; (g) dies, becomes legally incompetent, is dissolved or terminated,
ceases to operate its business, becomes insolvent, makes an assignment for the
benefit of creditors, or becomes the subject of any bankruptcy, insolvency or
debtor rehabilitation proceeding; (h) fails to provide Lender evidence of
satisfactory financial condition; or (i) has a majority of its outstanding
voting securities or other ownership interest sold, transferred or conveyed to
any person or entity other than any person or entity that has the majority
ownership as of the date of the execution of this Agreement.

In addition, an Event of Default will occur under this Agreement in the event
that: (a) the Collateral is used by anyone to transport or store goods, the
possession, transportation, or use of which, is illegal; (b) Lender reasonably
deems itself insecure or reasonably believes the prospect of payment or
performance is impaired due to a significant decline in the value of any of the
Collateral or a material adverse change in Owner's, Borrower's or any
guarantor's business or financial condition; or (c) any Collateral is destroyed,
damaged or lost in any material respect or is subjected to seizure,
confiscation, or condemnation.

20. RIGHTS OF LENDER ON EVENT OF DEFAULT. Upon the occurrence of an Event of
Default under this Agreement, Lender shall be entitled to exercise one or more
of the following remedies without notice or demand (except as required by law):
(a) to declare the Obligations immediately due and payable in full, such
acceleration shall be automatic and immediate if the Event of Default is a
filing under the Bankruptcy Code; (b) to collect the outstanding Obligations
with or without resorting to judicial process; (c) to change Owner's mailing
address, open Owner's mail, and retain any instruments or other remittances
constituting the Collateral contained therein; (d) to take possession of any
Collateral in any manner permitted by law; (e) to apply for and obtain, without
notice and upon ex parte application, the appointment of a receiver for the
Collateral without regard to Owner's financial condition or solvency, the
adequacy of the Collateral to secure the payment or performance of the
obligations, or the existence of any waste to the Collateral; (f) to require
Owner to deliver and make available to Lender any Collateral at a place
reasonably convenient to Owner and Lender; (g) to sell, lease or otherwise
dispose of any Collateral and collect any deficiency balance with or without
resorting to legal process; (h) to set-off Owner's obligations against any
amounts due to Owner including, but not limited to, monies, instruments, and
deposit accounts maintained with Lender; and (i) to exercise all other rights
available to Lender under any other written agreement or applicable law.

Lender's rights are cumulative and may be exercised together, separately, and in
any order. Unless the Collateral is perishable, threatens to decline speedily in
value or is of a type customarily sold on a recognized market, Lender will
provide reasonable notification of the time and place of any sale or intended
disposition as required under the Uniform Commercial Code, presently or as
hereafter amended or replaced. Lender has no obligation to clean up or otherwise
prepare the Collateral for sale. Lender may comply with any applicable state or
federal law requirements in connection with a disposition of the Collateral and
compliance will not be considered adversely to affect the commercial
reasonableness of any sale of the Collateral. If the Collateral consists of
securities, Lender shall be entitled to transfer the securities into the name of
Lender or its designee and to vote the securities. Lender shall be authorized to
notify the issuer of the securities to remit any related dividends, interest and
securities resulting from stock splits, reorganizations and capitalizations
directly to Lender or its designee. In the event that Lender institutes an
action to recover any Collateral or seeks recovery of any Collateral by way of a
prejudgment remedy in an action against Owner, Owner waives the posting of any
bond which might otherwise be required. Upon default, Owner shall segregate all
proceeds of Collateral and hold such proceeds in trust for Lender. Lender's
remedies under this paragraph are in addition to those available at common law,
such as offset.


                                                      Page 3 of 5 ______________


21. APPLICATION OF PAYMENTS. Whether or not a default has occurred under this
Agreement, all payments made by or on behalf of Owner and all credits due to
Owner from the disposition of the Collateral or otherwise may be applied against
the amounts paid by Lender (including attorneys' fees and legal expenses) in
connection with the exercise of its rights or remedies described in this
Agreement and any interest thereon and then to the payment of the remaining
Obligations in whatever order Lender chooses.

22. REIMBURSEMENT OF AMOUNTS EXPENDED BY LENDER. Owner shall reimburse Lender
for all amounts (including attorneys' fees and legal expenses) expended by
Lender in the performance of any action required to be taken by Owner or the
exercise of any right or remedy belonging to Lender under this Agreement,
together with interest thereon at the lower of the highest rate described in any
promissory note or credit agreement executed by Borrower or Owner or the highest
rate allowed by law from the date of payment until the date of reimbursement.
These sums shall be included in the definition of Obligations, shall be secured
by the Collateral identified in this Agreement and shall be payable upon demand.
Lender has no duty to take any action to protect the value of the Collateral or
to exercise any rights of the Owner with respect to the Collateral.

23. ASSIGNMENT. Owner shall not be entitled to assign any of its rights,
remedies or obligations described in this Agreement without the prior written
consent of Lender. Consent may be withheld by Lender in its sole discretion.
Lender shall be entitled to assign some or all of its rights and remedies
described in this Agreement without notice to or the prior consent of Owner in
any manner.

24. MODIFICATION AND WAIVER. The modification or waiver of any of Owner's
Obligations or Lender's rights under this Agreement must be contained in a
writing signed by Lender. Lender may perform any of Owner's Obligations or delay
or fail to exercise any of its rights without causing a waiver of those
Obligations or rights. A waiver on one occasion shall not constitute a waiver on
any other occasion. Owner's Obligations under this Agreement shall not be
affected if Lender amends, compromises, exchanges, fails to exercise, impairs or
releases any of the obligations belonging to any Owner or third party or any of
its rights against any Owner, third party, Collateral or any other property
securing the Obligations. Owner waives any right it may have to require Lender
to pursue any third person for any of the Obligations.

25. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to
the benefit of Owner and Lender and their respective successors, assigns,
trustees, receivers, administrators, personal representatives, legatees, and
devisees.

26. NOTICES. Any notice or other communication to be provided under this
Agreement shall be in writing and sent to the parties at the addresses described
in this Agreement or such other address as the parties may designate in writing
from time to time.

27. SEVERABILITY. If any provision of this Agreement violates the law or is
unenforceable, the rest of the Agreement shall remain valid.

28. APPLICABLE LAW. This Agreement shall be governed by the laws of the state
indicated in Lender's address, except to the extent that the Uniform Commercial
Code, presently or as hereafter amended or replaced, provides for the
application of the law of the state of Owner's location, as indicated in
paragraph 5. Unless applicable law provides otherwise, Owner consents to the
jurisdiction and venue of any court located in such state selected by Lender in
the event of any legal proceeding under this Agreement.

29. COLLECTION COSTS. To the extent permitted by law, Owner agrees to pay
Lender's reasonable fees and costs of attorneys and other agents (including
without limitation paralegals, clerks and consultants), whether or not such
attorney or agent is an employee of Lender, which are incurred by Lender in
collecting any amount due or enforcing any right or remedy under this Agreement,
whether or not suit is brought, and including, but not limited to, all fees and
costs incurred on appeal, in bankruptcy, and for post-judgment collection
actions.

30. MISCELLANEOUS. This Agreement is executed for commercial purposes. Owner
shall supply information regarding Owner's business operations and financial
condition or the Collateral in the form and manner as requested by Lender from
time to time. All information furnished by Owner to Lender shall be true,
accurate and complete in all respects. Owner and Lender agree that time is of
the essence. Owner waives presentment, demand for payment, notice of dishonor
and protest except as required by law. All references to Owner in this Agreement
shall include all parties signing below except Lender. This Agreement shall be
binding upon the heirs, successors and assigns of Owner and Lender. If there is
more than one Owner, their obligations under this Agreement shall be joint and
several. This Agreement shall remain in full force and effect until Lender
provides Owner with written notice of termination. This Agreement represents the
complete and integrated understanding between Owner and Lender regarding the
terms hereof.

31. WAIVER OF JURY TRIAL. LENDER AND OWNER HEREBY WAIVE ANY RIGHT TO A TRIAL BY
JURY IN ANY CIVIL ACTION ARISING OUT OF, OR BASED UPON, THIS SECURITY AGREEMENT.

32. ADDITIONAL TERMS:



- -------------------------------------------------------------------------------

OWNER ACKNOWLEDGES THAT OWNER HAS READ, UNDERSTANDS, AND AGREES TO THE TERMS AND
CONDITIONS OF THIS AGREEMENT. OWNER ACKNOWLEDGES RECEIPT OF AN EXACT COPY OF
THIS AGREEMENT.

Dated: November 08, 2002

                                          LENDER: COMPASS BANK



                                          By: /s/ Steven M. McCarroll
                                             ----------------------------------
                                             STEVE MCCARROLL
                                             CITY PRESIDENT

OWNER: BOYD BROTHERS TRANSPORTATION,      OWNER:
       CO., INC.



By: /s/ Richard Bailey
   ----------------------------------     -------------------------------------
RICHARD BAILEY
CFO

OWNER:                                    OWNER:



- -------------------------------------     -------------------------------------

OWNER:                                    OWNER:



- -------------------------------------     -------------------------------------

OWNER:                                    OWNER:



- -------------------------------------     -------------------------------------

                                                     Page 4 of 5 ______________


                                   SCHEDULE A

THIRTY SIX (36) 2003 FONTAINE PLATFORM TRAILERS PER LIEN DATE OF 10/18/02 AS PER
EXHIBIT "A" ATTACHED HERETO AND FORMING A PART HEREOF.




                                   SCHEDULE B




Record Owner Name;

                                   SCHEDULE C




                                   SCHEDULE D



                                                     Page 5 of 5 ______________


                                   EXHIBIT "A"

Boyd Brothers Transportation Co., Inc.
November 8, 2002
Loan i/a/o $630,000
Titles are reflecting a lien date of 10/18/02 Description of collateral:
Thirty-six (36) 2003 Fontaine Platform Trailers, Serial numbers:

13N14830831516782
13N14830X31516783
13N14830131516784
13N14830331516785
13N14830531516786
13N14830731516787
13N14830931516788
13N14830031516789
13N14830731516790
13N14830931516791
13N14830031516792
13N14830231516793
13N14830431516794
13N14830631516795
13N14830831516796
13N14830X31516797
13N14830131516798
13N14830331516799
13N14830631516800
13N14830831516801
13N14830X31516802
13N14830131516803
13N14830331516804
13N14830531516805
13N14830731516806
13N14830931516807
13N14830031516808
13N14830231516809
13N14830931516810
1N314830031516811
13N14830231516812
13N14830431516813
13N14830631516814
13N14830831516815
13N14830X31516816
13N14830131516817

EX-10.5

                                                                    EXHIBIT 10.5

                          WAIVER AND CONSENT AGREEMENT

         THIS WAIVER AND CONSENT AGREEMENT ("this Agreement"), effective as of
December 31, 2002, and executed on February 3, 2003, is entered into by BOYD
BROTHERS TRANSPORTATION, INC., a Delaware corporation (the "Borrower"), and
AMSOUTH BANK, an Alabama banking corporation (the "Lender").

                                    RECITALS

         A.       The Borrower and the Lender have entered into a Credit
Agreement dated as of May 1, 2001, as amended (the "Credit Agreement").

         B.       The Borrower has requested that the Lender enter into this
Agreement in order to grant certain consents and waivers with respect to the
Credit Agreement as hereinafter described.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the foregoing recitals and of the
mutual agreements of the parties hereto:

                  1.       The parties agree that capitalized terms used in this
Agreement and not otherwise defined herein have the respective meanings
attributed thereto in the Credit Agreement.

                  2.       The Lender consents to and waives the failure of the
Borrower to:

                  (a)      Not make Capital Expenditures (exclusive of trucks
and trailers) during any fiscal year in an amount greater than $500,000.

                  3.       This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
and all of which shall constitute the same instrument, but only one of which
need be produced.




                  4.       The Borrower hereby represents and warrants that all
representations and warranties contained in the Credit Agreement are true and
correct as of the date hereof (except representations and warranties that are
expressly limited to an earlier date); and the Borrower certifies that except
for those matters waived or consented to herein, no Event of Default nor any
event that, upon notice or lapse of time or both, would constitute an Event of
Default, has occurred and is continuing.

                  5.       Nothing contained herein shall be construed as a
waiver, acknowledgment or consent to any breach or Event of Default of the
Credit Agreement and the Credit Documents not specifically mentioned herein, and
the consents granted herein are effective only in the specific instance and for
the purposes which given.

                  6.       This Agreement shall be governed by the laws of the
State of Alabama.

         IN WITNESS WHEREOF, each of the Borrower and the Lender has caused this
Agreement to be executed by its duly authorized officer as of the day and year
first above written.

BOYD BROTHERS TRANSPORTATION, INC.        AMSOUTH BANK



By: /s/ Richard Bailey                    By: /s/ Paul Walker
   ----------------------------------        ----------------------------------



Its: CFO                                  Its: Vice President
    ---------------------------------         ---------------------------------

EX-10.6

                                                                    EXHIBIT 10.6

[COMPASS BANK LOGO]


February l0, 2003


Mr. Richard C. Bailey, COO/CFO
Boyd Brothers Transportation, Inc.
3275 Highway 30
Clayton, AL 36016

Re:      Security and Loan Agreement dated April 11, 2000 between Compass Bank
         and Boyd Brothers Transportation Co., Inc.

Dear Richard:

Section 6.01 in the Loan Agreement dated April 11, 2000 and subsequent
amendments by and between Compass Bank and Boyd Brothers Transportation calls
for a debt service coverage ratio of 1.0:1.0 at the end of December 2002. We
herein waive that covenant requirement for the quarter and year ending December
31, 2002.

Thank you for the good relationship we have with Boyd Brothers. I will be in
touch with you regarding changes needed in the existing covenants.

Sincerely,



/s/ Steven M. McCarroll
- -------------------------------------
Steven M. McCarroll
City President

EX-13

                                                                      EXHIBIT 13

SELECTED FINANCIAL DATA

The following tables set forth certain selected financial data with respect to
the Company's last five fiscal years.

The "Statement of Operations Data" table and the "Balance Sheet Data" table
relating to the five fiscal years ended December 31, 2002, are derived from the
Consolidated Financial Statements incorporated by reference elsewhere in this
report or in previous reports. The "Selected Operating Data" table data is not
derived from the Consolidated Financial Statements. BDO Seidman, LLP,
independent certified public accountants, audited the financial statements for
the years ended December 31, 2002 and 2001. Deloitte & Touche LLP audited the
financial statements for the three-year period ended December 31, 2000. The
selected consolidated financial data should be read in conjunction with, and is
qualified in its entirety by reference to, the Consolidated Financial Statements
of the Company, the Notes thereto and the report thereon included elsewhere in
this report.




                                                                                    YEAR ENDED DECEMBER 31,
                                                         -------------------------------------------------------------------------
                                                            2002           2001            2000            1999             1998
                                                            ----           ----            ----            ----             ----
                                                                              (in thousands, except per share data)
                                                                                                          
STATEMENT OF OPERATIONS DATA:
Operating revenues (a)                                   $ 127,792       $ 127,559       $ 131,630       $ 133,137       $ 118,123
Operating expenses:
   Salaries, wages and employee benefits                    36,960          39,561          39,263          35,461          36,608
   Cost of independent contractors                          38,968          31,779          35,173          45,132          31,818
   Operating supplies (a)                                   25,966          30,217          30,309          22,934          21,429
   Taxes and licenses                                        2,599           2,241           2,965           2,847           2,566
   Insurance and claims                                      6,535           6,458           7,060           6,111           5,393
   Communications and utilities                              1,275           1,371           1,520           1,480           1,554
   Depreciation and amortization                            11,605          12,290          11,611          10,720          10,320
   Gain on disposition of property and equipment, net         (468)           (526)         (1,113)         (1,627)           (433)
   Other                                                     1,615           1,950           2,008           1,862           1,541
                                                         ---------       ---------       ---------       ---------       ---------
Total operating expenses                                   125,054         125,340         128,796         124,920         110,796
                                                         ---------       ---------       ---------       ---------       ---------
Operating income (expense)                                   2,738           2,219           2,834           8,217           7,327
Interest expense                                            (1,752)         (2,684)         (3,904)         (2,422)         (1,608)
Other income (expense)                                         (51)             63              80              92             179
                                                         ---------       ---------       ---------       ---------       ---------
Income (loss) before income taxes                              935            (402)           (990)          5,887           5,898
Income taxes (benefit)                                         460               5             (15)          2,430           2,326
                                                         ---------       ---------       ---------       ---------       ---------
Net income (loss)                                        $     474       $    (407)      $    (975)      $   3,457       $   3,572
                                                         =========       =========       =========       =========       =========
Basic net income (loss) per share                        $    0.18       $   (0.14)      $   (0.32)      $    0.99       $    0.87
                                                         =========       =========       =========       =========       =========
Diluted net income (loss) per share                      $    0.17       $   (0.14)      $   (0.32)      $    0.99       $    0.87
                                                         =========       =========       =========       =========       =========



(a)  Operating revenues and operating supplies have been increased for 2002,
     2001 and 2000 by the reclassification of fuel surcharges to comply with
     EITF 01-14. See note 1 - Fuel Surcharges in the Notes to the Consolidated
     Financial Statements.




                                                                                        AS OF DECEMBER 31,
                                                       ---------------------------------------------------------------------------
                                                           2002               2001          2000             1999           1998
                                                           ----               ----          ----             ----           ----
                                                                                         (in thousands)
                                                                                                          
BALANCE SHEET DATA:
   Working capital                                     $ (8,551)         $  (2,089)      $  (1,481)      $  (1,049)      $   4,360
   Net property and equipment                            54,724             58,513          66,737          61,882          48,691
   Total assets                                          81,582             86,084          95,052          99,456          77,047
   Long-term debt, less current maturities               19,136             25,606          33,322          34,689          18,049
   Total liabilities                                     55,857             60,795          67,870          69,062          44,186
   Stockholders' equity                                  25,725             25,288          27,182          30,393          32,862



SELECTED OPERATING DATA:
The following table sets forth certain unaudited operating data regarding the
Company.




                                                                                   YEAR ENDED DECEMBER 31,
                                                       ----------------------------------------------------------------------------
                                                           2002               2001            2000            1999            1998
                                                           ----               ----            ----            ----            ----
                                                                                                           

Operating ratio (a)                                        97.9%              98.3%           97.8%           93.8%           93.8%
Average length of haul in miles                             683                688             661             634             576
Average number of truckloads per week                     2,852              2,872           3,145           3,368           3,330
Average revenues per total mile                        $   1.19          $    1.20       $    1.20       $    1.18       $    1.17
Equipment at period end:
   Tractors                                                 955                972           1,017           1,112           1,032
   Trailers                                               1,354              1,395           1,398           1,451           1,337



(a)  Operating expenses stated as a percentage of operating revenues






MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

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, 2002. This discussion should be read in conjunction with the
Consolidated Financial Statements and Notes thereto included elsewhere herein.

GENERAL

The Company is headquartered in Clayton, Alabama and was founded in 1956 as a
small regional flatbed trucking operation. Since that time, the Company has
grown to one with 955 tractors and 1,354 trailers operating primarily in the
eastern two-thirds of the United States. The Company became publicly held in
1994.

Historically, the Company owned its revenue equipment and operated through
employee drivers. The Company's expansion in the past, therefore, has required
significant capital expenditures, which have been funded through secured
borrowings. During 1997, as a strategy to expand the Company's potential for
growth without the increase in capital expenditures typically related to owned
equipment, the Company began adding independent contractors (owner-operators) to
its fleet. The Company then accelerated the implementation of this strategy in
December 1997 with the acquisition of WTI Transport, Inc., ("WTI") (f/k/a
Welborn Transport), which specializes in short-haul routes using largely an
owner-operated fleet. References to the "Company" contained herein refer to the
combined operations of Boyd and WTI. References hereinafter to "Boyd" or "WTI"
describe the distinct operations of the parent and subsidiary, respectively.

Boyd provides transportation services in the contiguous United States and into
some parts of Canada. During 2002, Boyd had an average length of haul of 734
miles and had 736 tractors and 1,056 trailers as of December 31, 2002. The Boyd
fleet consisted of 213 owner-operators and 523 company owned tractors at
December 31, 2002. Pay for owner-operators at Boyd is based on a per mile rate.
Boyd utilizes agents in some areas to solicit and book freight. Boyd also
operates a logistics department that provides logistical support to the Company.
In addition, the logistics department brokers freight by identifying external
shipping needs and matching available external carrier resources to those needs.
The logistics department requires minimal overhead and capital resources and
provides a service through logistically coordinating needs for carriers to
available carriers and scheduling the service to be provided. All carriers
brokered through the logistics department are responsible for maintaining proper
insurance coverages and are required to provide proof of such coverage prior to
brokerage of a load.

WTI provides transportation services over shorter routes than those
traditionally provided by Boyd. WTI operates primarily in the southeastern
United States, with an average length of haul of 401 miles. Management believes
this enhances WTI's ability to retain quality drivers, as drivers' time away
from home is minimized. WTI operates 219 tractors and 298 flatbed trailers. The
WTI fleet consisted of 182 owner-operators and 37 company tractors at December
31, 2002. The owner-operators are paid by WTI based upon a percentage of
revenue. WTI utilizes agents in some areas to solicit and book freight.

The Company continues to focus on marketing efforts and is broadening its
customer base outside of the steel and building products industries, as well as
stressing best-in-business service to its customers. The Company remains
committed to its emphasis on safety while working to reduce insurance claims and
costs. See "Factors That May Affect Future Results", below.

The Company's success depends on its ability to efficiently manage its resources
in the delivery of truckload transportation services to its customers. Resource
requirements vary with customer demand, which may be subject to seasonal or
general economic conditions. The Company's ability to adapt to changes in
customer transportation requirements is a key element in efficiently deploying
resources and in making capital investments in tractors, trailers, and
technology. The Company may also be affected by the financial failure of its
customers or loss of a customer's business from time-to-time.

The Company's greatest cash requirements include qualified drivers, tractors,
trailers, and related costs of operating its equipment (such as fuel, driver
pay, insurance, and supplies and maintenance). The Company has historically been
successful mitigating its risk to increases in fuel prices by recovering
additional fuel surcharges from its customers. However, economic conditions,
particularly those affecting the steel and construction industries, has
negatively affected the ability of the Company to pass through to its customers
fuel cost increases during the past two years. The Company's financial results
are also affected by the availability of qualified drivers and the market for
new and used tractors. Because the Company is self-insured for cargo, personal
injury, and property damage claims on its tractors and for workers' compensation
benefits for its drivers (supplemented by premium-based coverage above certain
dollar amounts), financial results may also be affected by driver safety,
medical costs, the weather, the legal and regulatory environment, and the costs
of insurance coverage to protect against catastrophic losses.







CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. The most significant accounting policies and estimates that
affect our financial statements include the following:

- -       We review the selections of estimated useful lives and salvage values
        for purposes of depreciating tractors and trailers. Depreciable lives of
        tractors and trailers range from 3 to 7 years. Estimates of salvage
        value at the expected date of trade-in or sale are based on the expected
        values of equipment at the time of disposal. On average, the salvage
        value of equipment is 25% of cost. The accuracy of these estimates
        affects the amount of depreciation expense recognized in a period and,
        ultimately, the gains or losses on the disposal of the asset. We have
        recognized net gains on disposal of property and equipment of $468,321,
        $525,800, and $1,113,574 for the years ended December 31, 2002, 2001,
        and 2000, respectively. However, such amounts may differ materially in
        the future based on accident frequency, regulatory requirements, and
        other factors beyond our control. Certain revenue equipment has a
        guaranteed residual value from the vendor, which will be redeemable by
        the Company upon trade-in.

- -       We review the estimates of accrued liabilities for insurance and claims
        for liability and both physical and property damage and workers'
        compensation. The measurement of these costs requires the consideration
        of historical loss experienced and judgments about the present and
        expected levels of cost per claim. The insurance and claims accruals are
        recorded at the estimated payment amounts and are based upon individual
        case estimates. The specific information for each case is reviewed,
        detailed, and an estimate is determined based on each case separately.
        Similar cases, historical costs, and current trends in costs are
        considered when establishing estimates. Management believes the recorded
        obligations for these expenses are consistently measured on a
        conservative basis. However, changes in health costs, accident frequency
        and severity, and other factors can materially affect the estimates for
        these liabilities.

- -       We review the adequacy of the lease receivable allowance for doubtful
        accounts in the independent contractor (owner-operator) program. This
        allowance represents an estimate of notes receivable between the Company
        and owner-operators participating in the lease purchase program that
        will become uncollectible and which may, in turn, prevent the Company
        from maintaining its investment value in the tractor. Historical data,
        trends, current economic conditions, and profitability of
        owner-operators are factors considered when determining this estimate.
        The Company decreased the percentage of gain on lease purchases that is
        recognized at lease inception from 20% to 10% in October 2002. The
        remainder of the gain is deferred and recognized over the life of the
        lease.

- -       Because we must plan for future tractor load levels in order to make
        commitments for revenue equipment based on those projections, we have
        risks that excess capacity may exceed demand and that an impairment of
        our revenue equipment may occur. We review long-lived assets for
        impairment as described in Note 1 to our Consolidated Financial
        Statements. In analyzing potential impairments, we use projections of
        future undiscounted cash flows from the asset. These projections are
        based on our views of growth rates for the related business, anticipated
        future economic conditions, and estimates of terminal values. If the
        cash flows do not exceed the carrying values, the asset must be adjusted
        to its current fair value. In 2001, we reduced carrying values of
        certain WTI revenue equipment by $0.4 million due to expected reductions
        in trade-in values.

- -       We review the valuation of accounts receivable on a monthly basis. The
        allowance for doubtful accounts is estimated based on historical
        experience of write-offs and current economic conditions that might
        impact the collectibility of customer accounts, including such factors
        as bankruptcies and insolvencies. The Company performs ongoing credit
        evaluations of its customers. The Company continually updates the
        history it uses to make these estimates so as to reflect the most recent
        information available. Our allowance for doubtful accounts was
        approximately $341,000 and $319,000 at December 31, 2002 and 2001,
        respectively. The Company experienced losses from bad debt in the amount
        of $625,000 in 2001 due primarily to increased bankruptcies experienced
        in the steel industry.

- -       We have approximately $3.5 million of goodwill on our consolidated
        balance sheet resulting from the acquisition of WTI. New accounting
        standards adopted in 2002 require that we review this goodwill for
        impairment on an annual basis and cease all goodwill amortization. The
        adoption of these new rules did not result in an impairment of our
        goodwill. The annual evaluation for goodwill impairment requires the use
        of estimates about the future cash flows of WTI to determine its
        estimated fair value. Changes in forecasted operations and changes in
        discount rates can materially affect these estimates.




Our review of these accounting items and the resulting accounting positions
taken by the Company are based upon certain assumptions and conditions and
reflect our management's best assumptions and estimates; however, estimates of
these types of accounting items, particularly impairment and accrued
liabilities, involve inherent uncertainties as described above, that are beyond
management's control. As a result, the accounting for such items could result in
different amounts if management uses different assumptions or if different
conditions occur in future periods.

RESULTS OF OPERATIONS

COMPARISON OF YEAR ENDED DECEMBER 31, 2002 TO YEAR ENDED DECEMBER 31, 2001:

The following tables set forth, by segment, the percentage relationship of
expense items to operating revenues and certain other operating statistics for
the periods indicated:




                                                COMPANY                     BOYD                        WTI
                                           ------------------      --------------------       -------------------
                                                                   YEARS ENDED DECEMBER 31,
                                            2002         2001         2002         2001         2002         2001
                                            ----         ----         ----         ----         ----         ----
                                                                                          
Operating revenues                         100.0%       100.0%       100.0%       100.0%       100.0%       100.0%
Operating expenses
    Salaries, wages, and employee
       benefits                             28.9         31.0         32.0         34.1         13.4         14.0
    Cost of independent contractors         30.5         24.9         24.4         17.8         61.6         64.1
    Operating supplies                      20.3         23.7         22.4         25.9          9.6         11.1
    Taxes and licenses                       2.0          1.8          2.1          1.9          1.6          1.2
    Insurance and claims                     5.1          5.1          5.6          5.1          2.9          5.0
    Communications and utilities             1.0          1.1          1.0          1.1          0.8          1.1
    Depreciation and amortization            9.1          9.6         10.0         10.2          4.3          6.6
    Gain on disposition of property
       and equipment, net                   (0.3)        (0.4)        (0.3)        (0.5)        (0.9)         0.0
    Other                                    1.3          1.5          0.9          1.3          3.3          2.7
                                           -----        -----        -----        -----        -----        -----
Total operating expenses                    97.9         98.3         98.1         96.9         96.6        105.8
                                           -----        -----        -----        -----        -----        -----
Operating income                             2.1          1.7          1.9          3.1          3.4         (5.8)
Interest expense, net                       (1.4)        (2.0)        (1.5)        (2.2)        (0.7)        (1.0)
Other income                                  --           --           --           --           --           --
                                           -----        -----        -----        -----        -----        -----
Income (loss) before income taxes            0.7         (0.3)         0.4          0.9          2.7         (6.8)
    Income taxes (benefit)                   0.3         (0.0)         0.2          0.4          1.1         (2.1)
                                           -----        -----        -----        -----        -----        -----
Net income (loss)                            0.4%        (0.3)%        0.2%         0.5%         1.6%        (4.7)%
                                           =====        =====        =====        =====        =====        =====





                                                 COMPANY                     BOYD                       WTI
                                        ----------------------    ----------------------      --------------------
                                                                  YEARS ENDED DECEMBER 31,
                                            2002         2001          2002         2001         2002         2001
                                            ----         ----          ----         ----         ----         ----
                                                                                        
Company operated tractors                    560          610          523          570           37           40
Owner-operated tractors                      395          362          213          190          182          172
                                         -------      -------      -------      -------      -------      -------
Total tractors                               955          972          736          760          219          212
Total trailers                             1,354        1,395        1,056        1,099          298          296

Average length of haul in miles (1)          683          688          734          749          401          380
Average number of tractor loads
    per week (2)                           2,852        2,872        2,188        2,290          664          672
Average revenues per total mile (3)      $  1.19      $  1.20      $  1.20      $  1.17      $  1.17     $   1.17



(1)  The average length of haul in miles is calculated by dividing the total
     line-haul miles for the year by the total number of loads for the year.

(2)  The average number of tractor loads per week is calculated by dividing
     the total number of loads for the year by the number of working weeks in
     the year.

(3)  The average revenue per total mile is calculated by dividing the total
     line-haul revenue for the year (excluding logistics revenue) by the total
     line-haul miles driven.

The Company's total operating revenues increased $0.2 million or 0.2% to $127.8
million compared to $127.6 million for 2001. Boyd division revenues (83.6% of
consolidated revenues) decreased $1.1 million or 1% from 2001 while WTI division
revenues (16.4% of consolidated revenues) increased $1.4 million or 6.9% over
2001. Fuel surcharge revenue decreased $2.2 million or 58.5% from $3.7 million
in 2001 to $1.5 million in 2002. Fuel prices


decreased in the fourth quarter of 2001 and did not increase upwards until the
latter part of 2002. The fuel surcharge is a function of the cost of fuel that
the Company has negotiated with its vendors. These fuel surcharges, which
automatically adjust from week to week depending on the cost of fuel, enable the
Company to recoup the higher cost of fuel when prices increase. Conversely, when
fuel prices decrease, fuel charges decrease. As a flatbed carrier, a significant
portion of the Company's business relates to the steel industry, which has been
in a virtual recession for more than two years, and the building products
industry, which has remained flat due to the downturn in commercial construction
offset by the ongoing resiliency of the residential housing market. Given these
market conditions, the Company has had less success over the past two years
passing through fuel cost increases. The net increase in consolidated revenues
is reflective of diversification outside of the steel and building materials
industries and also is reflective of an increase in revenue resulting from the
Company's brokerage of freight to third-party carriers via its logistics
department. Excluding revenue from Boyd's logistics department, Boyd division
revenues decreased $4.4 million or 4.2% from 2001. Logistics revenue for 2002
increased $3.2 million or 84.5% over 2001.

Total operating expenses decreased $0.3 million or 0.2% to $125.0 million for
the year ended December 31, 2002, compared to $125.3 for the year ended December
31, 2001. The change in the Company's operating expenses reflected primarily
lower expenses for salaries, wages and employee benefits, operating supplies
(including fuel), depreciation and amortization, and other expenses, together
with an increase in taxes and licenses. These changes were offset primarily by
higher net cost of independent contractors (owner-operators) reflecting the
Company's strategy to utilize a higher percentage of owner-operators as compared
to Company drivers. Owner-operators are responsible for payment of the expenses
they incur including fuel, operating supplies, and taxes and licenses, while the
Company incurs these expenses related to Company drivers. Consequently, the
amount paid per mile (shown as salaries and wages for Company drivers and within
cost of independent contractors for owner-operators) for owner-operators is
greater than that of Company drivers.

The Company's operating ratio (operating expenses stated as a percentage of
operating revenues) improved from 98.3% in 2001 to 97.9% in 2002 due to better
margins provided by logistics revenue. As a percentage of consolidated revenues,
the following operating expense accounts decreased from the prior year:
salaries, wages and employee benefits; operating supplies; depreciation and
amortization; and other expenses. Expenses related to Company drivers and the
equipment they use are primarily reflected in these accounts. These expenses
decreased primarily due to the shift in the utilization of the Company fleet. Of
the total miles driven for 2002, 61% were driven by Company drivers, compared to
68% during 2001.

Salaries, wages and employee benefits for 2002 decreased $2.6 million, or 6.6%,
to $37.0 million compared to $39.6 million in 2001. This decrease is directly
related to the shift in fleet utilization of Company drivers versus owner
operators as mentioned above. Company drivers are paid on a per mile basis, and
they accounted for 7.7 million fewer miles in 2002. The Company anticipates that
the competition for qualified drivers will continue to be intense, and cannot
predict whether it will experience shortages in the future. If such a shortage
occurs and increases in driver pay rates become necessary to attract and retain
drivers, the Company's results of operations would be negatively impacted to the
extent that corresponding freight increases are not obtained.

Cost of independent contractors (owner-operators) for 2002 increased $7.2
million, or 22.6%, to $39.0 million from $31.8 million in 2001. Independent
contractors are owner-operators that either supply their own tractor or
lease-purchase a tractor from the Company. Of the 101 million total miles driven
for the year ended December 31, 2002, 39% were driven by owner-operators,
compared to 32% in 2001. Owner-operators accounted for 6.2 million more miles in
2002 than in 2001, an increase of 18.8%. Owner-operators are responsible for
their operating expenses including fuel, supplies and maintenance, health
insurance, licenses and taxes. Thus, owner-operators are paid a higher per mile
rate than Company drivers. Owner-operator compensation is included in the cost
of independent contractors. Gains on sales-type leases to owner-operators, net
of reserves, and interest income on the leases amounted to $1.9 million in 2002
compared to $0.5 million in 2001. The increase was due to the increased number
of owner-operators in the lease program in 2002 compared to 2001. As of December
31, 2002, the Boyd division had an owner-operator fleet of 213 operators
compared to 190 operators as of December 31, 2001, a 12% increase. WTI had 182
owner-operators as of December 31, 2002 compared to 172 operators in 2001, a
5.9% increase. The retention of independent contractors could remain difficult
in the foreseeable future due to the uncertainty of fuel prices and continuing
weaknesses in certain sectors of the U.S. economy. Historically, the Company has
experienced higher driver turnover in their owner- operator lease program during
periods of rising fuel prices.




Operating supplies expense for 2002 decreased $4.2 million, or 14.1%, to $26.0
million compared with $30.2 million for 2001. The decrease in operating
supplies, which includes fuel costs, is partly due to the increase in
owner-operator utilization. Fuel costs decreased $3.1 million or 17.1% from
$18.3 million in 2001 to $15.2 million in 2002, despite a 30% increase in cost,
from less than $1.20 per gallon at the beginning of 2002 to $1.50 per gallon by
the end of 2002. The decrease in operating supplies is also attributable to
younger tractors in the Company-owned fleet, which require fewer repairs and
replacements of auxiliary equipment (e.g. tarps, chains, etc.). Shortages of
fuel, increases in fuel prices, or rationing of petroleum products could have
materially adverse effects on the operations and profitability of the Company.
The trend in higher fuel costs does not appear to abating and the Company faces
the prospect of record level fuel prices in 2003. As of December 31, 2002, the
Company had no derivative financial instruments to reduce its exposure to fuel
price fluctuations.

Taxes and licenses expense for 2002 increased $0.4 million, or 16.0%, to $2.6
million compared to $2.2 million in 2001. The amounts due for taxes and
licensing are based on the value of the associated property. The higher values
of newer equipment resulted in higher taxes, permits, and licenses.

Insurance and claims expense for 2002 increased $0.1 million, or 1.2%, to $6.5
million compared to $6.4 million in 2001. The slight increase was primarily due
to an increase in accident claims and self-insurance claims, offset by lower
insurance premiums resulting from increased retention levels. The Company's
insurance costs were also lower in 2002 due to the higher percentage of
owner-operators incurring these costs.

Communications and utilities expense for 2002 decreased $0.1 million, or 7.0%,
to $1.3 million from $1.4 million in 2001. The decrease was primarily due to an
increase in the overall owner-operator fleet, which has resulted in an increase
in the fees the Company charges for the use of the Company's satellite units.
The Company also continually monitors monthly usage and costs, making changes
accordingly.

Depreciation and amortization expense for 2002 decreased $0.7 million, or 5.6%,
to $11.6 million from $12.3 million in 2001. The decrease in depreciation and
amortization was primarily associated with the Boyd division, which during the
past year has converted certain depreciable Company tractors to non-depreciable,
owner-operated tractors subject to lease-purchase arrangements, thereby
contributing to the increase in cost of independent contractors. Effective
January 1, 2002, the Company discontinued amortization of goodwill at its WTI
division in accordance with SFAS No. 142. Goodwill amortization expense was
$223,800 in 2001 and, primarily because of this change, the WTI division
recognized approximately $377,000 less expense during 2002 as compared to 2001.

Gain on disposition of property and equipment decreased $0.1 million or 10.9%,
to $0.4 million from $0.5 million. The trade values of tractors were depressed
during 2002. An increased supply of used tractors caused in part by trucking
company business failures and slower fleet growth by many carriers have all
contributed to a decline in the market value of used tractors. See "Factors that
May Affect Future Results - Revenue Equipment" and "Recently Issued Accounting
Standards - SFAS No. 144".

Other expenses for 2002 decreased approximately $0.3 million, or 17.2%, to $1.6
million in 2002 from $1.9 million in 2001. Other expenses include, but are not
limited to, consulting fees, legal fees, advertising costs, bank charges, rent
and bad debts. During 2001, the Boyd division recognized an additional charge of
approximately $0.4 million in bad debts due to certain of its customers filing
for bankruptcy. Such events were not prevalent during 2002. Interest expense
(net of interest income) decreased $0.8 million, or 31.2%, to $1.8 million from
$2.6 million in 2001. Interest expense decreased due to a decrease in the LIBOR
rate, which is the interest rate charged on a large majority of the Company's
debt. The Company also reduced debt levels by $5.6 million, which contributed to
the reduction in interest expense.

The effective tax rates for 2002 and 2001 are different from the U.S. federal
statutory rate due to the permanent non-deductibility of certain expenses for
tax purposes, including goodwill amortization in 2001. See Note 6 to the
consolidated financial statements for further discussion of income tax items.

As a result of the foregoing, the Company's net income in 2002 increased
approximately $0.9 million, to $0.5 million compared to a $0.4 million net loss
in 2001.




COMPARISON OF YEAR ENDED DECEMBER 31, 2001 TO YEAR ENDED DECEMBER 31, 2000:

The following tables set forth, by segment, the percentage relationship of
expense items to operating revenues and certain other operating statistics for
the periods indicated:




                                                 COMPANY                     BOYD                      WTI
                                          --------------------     ---------------------      -------------------
                                                                    YEARS ENDED DECEMBER 31,
                                            2001         2000         2001         2000         2001         2000
                                            ----         ----         ----         ----         ----         ----
                                                                                          
Operating revenues                         100.0%       100.0%       100.0%       100.0%       100.0%       100.0%
Operating expenses
    Salaries, wages, and employee
       benefits                             31.0         29.8         34.1         34.2         14.0         11.3
    Cost of independent contractors         24.9         26.7         17.8         16.8         64.1         68.3
    Operating supplies                      23.7         23.0         25.9         26.6         11.1          7.8
    Taxes and licenses                       1.8          2.2          1.9          2.2          1.2          2.3
    Insurance and claims                     5.1          5.4          5.1          5.1          5.0          6.2
    Communications and utilities             1.1          1.2          1.1          1.1          1.1          1.2
    Depreciation and amortization            9.6          8.8         10.2          9.9          6.6          4.4
    Gain on disposition of property
       and equipment, net                   (0.4)        (0.8)        (0.5)        (0.8)         0.0         (1.0)
    Other                                    1.5          1.5          1.3          1.0          2.7          3.9
                                         -------        -----        -----        -----        -----        -----
Total operating expenses                    98.3         97.8         96.9         96.1        105.8        104.4
                                         -------        -----        -----        -----        -----        -----
Operating income                             1.7          2.2          3.1          3.9         (5.8)        (4.4)
Interest expense, net                       (2.0)        (3.0)        (2.2)        (3.5)        (1.0)        (1.2)
Other income                                  --           --           --           --           --           --
                                         -------        -----        -----        -----        -----        -----
Income (loss) before income taxes           (0.3)        (0.8)         0.9          0.4         (6.8)        (5.6)
    Income taxes (benefit)                  (0.0)        (0.0)         0.4          0.3         (2.1)        (1.4)
                                         -------        -----        -----        -----        -----        -----
Net income (loss)                           (0.3)%       (0.8)%        0.5%         0.1%        (4.7)%       (4.2)%
                                         =======        =====        =====        =====        =====        =====





                                                 COMPANY                    BOYD                        WTI
                                         --------------------     ---------------------      --------------------
                                                                  YEARS ENDED DECEMBER 31,
                                            2001         2000          2001        2000         2001         2000
                                            ----         ----          ----        ----         ----         ----
                                                                                         
Company operated tractors                    610          686          570          656           40           30
Owner-operated tractors                      362          331          190          111          172          220
                                         -------      -------      -------      -------      -------      -------
Total tractors                               972        1,017          760          767          212          250
Total trailers                             1,395        1,398        1,099        1,104          296          294

Average length of haul in miles (1)          688          661          749          737          380          347
Average number of tractor loads per
    week (2)                               2,872        3,145        2,290        2,294          672          851
Average revenues per total mile (3)      $  1.20      $  1.20      $  1.17      $  1.18      $  1.17      $  1.23



(1)  The average length of haul in miles is calculated by dividing the total
     line-haul miles, for the year by the total number of loads for the year.

(2)  The average number of tractor loads per week is calculated by dividing the
     total number of loads for the year by the number of work weeks in the year.

(3)  The average revenue per total mile is calculated by dividing the total
     line-haul revenue for the year by the total line-haul miles driven.

Operating revenues for 2001 decreased $4.0 million, or 3.0%, to $127.6 million
compared to $131.6 million for 2000. The average loads shipped per week for 2001
decreased 273 loads, or 9.0%, to 2,872 compared to 3,145 in 2000. Freight demand
during 2001, primarily in the first six months, was soft due to a weaker U.S.
economy as compared to 2000. Steel comprised 42% of the Company's freight that
was shipped in both 2001 and 2000, during which time the U.S. steel industry was
severely impacted by the sluggish economy.

Salaries, wages and employee benefits for 2001 increased $0.3 million, or 0.8%,
to $39.6 million compared to $39.3 million in 2000. Salaries increased at Boyd
due to an increase in the number of non-driver associates, primarily in the
logistics and health claims department. Workers' compensation and health
insurance expense increased due to rising medical costs and to the Company's
change to becoming self-insured for workers' compensation as of July 1, 2001.
The market for attracting experienced drivers improved during 2001; however, the
Company anticipates the competition for qualified drivers will continue to be
intense, and cannot predict whether it will experience shortages




in the future. If such a shortage was to occur and increases in driver pay rates
become necessary to attract and retain drivers, the Company's results of
operations would be negatively impacted to the extent that the corresponding
freight increases are not obtained.

Cost of independent contractors (owner-operators) for 2001 decreased $3.4
million, or 9.6%, to $31.8 million from $35.2 million in 2000. Independent
contractors are owner-operators that either supply their own tractor or
lease-purchase one from the Company. Owner-operators are responsible for their
operating expenses including fuel, supplies and maintenance, and fuel taxes. As
of December 31, 2001, Boyd had an owner-operator fleet of 190 operators compared
to 111 operators as of December 31, 2000. The increase in the number of
owner-operators at Boyd occurred during the last five months of the year. WTI
had 172 owner-operators as of December 31, 2001 compared to 220 operators in
2000. The decrease was primarily attributable to owner-operators leaving the
industry altogether and, to a lesser extent, WTI closing its specialized freight
business during 2000. During the fourth quarter of 2001, WTI increased reserves
on its receivables associated with owner-operator leases in the amount of $0.3
million. The retention of independent contractors could remain difficult in the
foreseeable future due to the uncertainty of global fuel prices and continuing
weaknesses in certain sectors of the U.S. economy.

Operating supplies expense for 2001 decreased $0.1 million, or 0.3%, to $30.2
million compared with $30.3 million for 2000. The slight decrease in operating
supplies is partly due to a $0.8 million or 4.2% decrease in fuel costs from
$19.1 million in 2000 to $18.3 million in 2001. This was offset by an increase
in maintenance expense attributable to the Company's fleet aging and requiring
more repairs. The average age of the Company's fleet at December 31, 2001 was
27.1 months compared to 16.3 months in 2000. Shortage of fuel, increases in fuel
prices, or rationing of petroleum products can have materially adverse effects
on the operations and profitability of the Company. The Company is unable to
accurately predict whether fuel prices will decrease or will increase in the
future or to the extent to which fuel surcharges will be collected from
customers. As of December 31, 2001, the Company had no derivative financial
instruments to reduce its exposure to fuel price fluctuations.

Taxes and licenses expense for 2001 decreased $0.7 million, or 24.4%, to $2.2
million compared to $2.9 million in 2000. Taxes and licenses decreased due to
the decrease in the overall Company fleet, as well as a net increase in the
owner-operator fleet during the last quarter of the year. Taxes and licenses
also decreased due to cost savings initiatives implemented by the Company during
the end of 2000.

Insurance and claims expense for 2001 decreased $0.6 million, or 8.5%, to $6.4
million compared to $7.0 million in 2000. The decrease was primarily due to a
decrease in accident claims and insurance rates. Insurance rates were reduced as
the Company increased their retention rate per accident occurrence during 2001.

Communications and utilities expense for 2001 decreased $0.1 million, or 9.8%,
to $1.4 million from $1.5 million in 2000. The decrease was primarily due to an
increase in the overall owner-operator fleet, which has resulted in an increase
in the fees the Company charges for the use of the Company's satellite units.
Also, the Company changed to a lower rate long-distance service provider in
2001. The Company continually monitors monthly usage and costs and makes changes
accordingly.

Depreciation and amortization expense for 2001 increased $0.7 million, or 5.8%,
to $12.3 million from $11.6 million in 2000. During the first quarter of 2001,
Boyd placed into service the new $5.0 million Birmingham, Alabama terminal.
During the fourth quarter of 2001, WTI reduced the carrying value of certain
revenue equipment by $0.4 million due to expected reductions in trade-in values.

Gain on disposition of property and equipment decreased $0.6 million or 52.8%,
to $0.5 million from $1.1 million. The Company traded fewer units during 2001
and the trade values were depressed during the year. Record levels of tractors
manufactured during 1999 and 2000, an increased supply of used tractors caused
in part by trucking company business failures, and slower fleet growth by many
carriers have all contributed to a decline in the market value of used tractors.

Other expenses for 2001 decreased approximately $0.1 million, or 2.9%, to $1.9
million in 2001 from $2.0 million in 2000. Other expenses include, but are not
limited to, consulting fees, legal fees, advertising costs, bank charges, rent
and bad debts. During the second half of 2001, the Company experienced an
increase in bad debt write-offs. Due to the difficult economic conditions facing
the steel industry in particular, additional bad debt reserves may be required
if industry conditions continue to deteriorate. Rent expense decreased due to
the Company's cancellation of leases on trailers.




Interest expense (net of interest income) decreased $1.2 million, or 31.5%, to
$2.6 million from $3.8 million in 2000. Interest expense decreased due to an
approximate 400 basis points decrease in the LIBOR rate, which is the interest
rate charged on a large majority of the Company's debt. The Company also reduced
debt levels, which contributed to the reduction in interest expense.

The effective tax rates for 2001 and 2000 are different from the federal
statutory rate due to the permanent non-deductibility for tax purposes of
goodwill amortization and other expenses.

As a result of the foregoing, the Company's net loss in 2001 decreased
approximately $0.6 million, or 58.3%, to $(0.4) million compared to $(1.0)
million in 2000.

LIQUIDITY AND CAPITAL RESOURCES

The Company's primary cash requirements are for capital expenditures and
operating expenses, including labor costs, fuel costs and operating supplies,
and the payment of current debt maturities. Historically, the Company's primary
sources of cash have been continuing operations, bank borrowings and, in the
last two years, dealer financings. The following table summarizes cash flows for
the periods indicated:




                                            2002             2001            2000
                                            ----             ----            ----
                                                               
      Operating activities            $  12,264,939    $  13,418,514    $ 10,108,834
      Investing activities               (3,913,078)       1,969,285      (6,578,204)
      Financing activities              (10,280,802)     (14,439,625)     (3,264,175)



CASH FLOWS FROM OPERATING ACTIVITIES

Cash flow from operations decreased by $1.2 million, or 8.6%, from 2001 to 2002,
and increased by $3.3 million, or 32.7%, from 2000 to 2001. Net income (loss)
adjusted for non-cash income and expense items provided cash of $7.3 million,
$11.5 million and $11.5 million for 2002, 2001 and 2000, respectively. Non-cash
income and expense items include depreciation and amortization, provisions for
bad debt losses, gains on disposals of property and equipment, income related to
owner operator sales-type leases, and deferred income taxes. Working capital
items provided cash of $5.0 million and $1.9 million in 2002 and 2001,
respectively, and used cash of $1.3 million in 2000. The cash flow from
operations enabled the Company to repay current maturities of debt and make
capital expenditures as discussed below.

The decrease in net income (loss) adjusted for non-cash items from 2001 to 2002
of $4.2 million, or 36.7%, was due to increased income related to
owner-operators ($1.9 million), lower deferred tax liabilities ($2.6 million)
and lower bad debt provision in 2002 as compared to 2001, offset somewhat by a
$0.9 million increase in net income. Income from owner-operators was higher in
2002 due to a 9.1% increase in the number of drivers compared to 2001. Deferred
tax liabilities decreased due primarily to increased insurance claims which are
not deductible for tax purposes until paid, and higher gains recognized on
disposals of property and equipment for tax purposes compared to financial
reporting purposes. Bad debt provisions decreased from $625,000 in 2001 to
$79,000 in 2002 as the Company had less exposure to customer bankruptcies in
2002.

The increase in cash provided by working capital items from 2001 to 2002 of $3.1
million, or 158.6%, was due to increased accident claims accruals and other
accrued liabilities of $3.5 million and a decrease in accounts receivable of
$1.3 million, offset by a decrease in accounts payable of $1.0 million. The
increase in accident claims and other accrued liabilities was attributable to an
increase in self-insurance claims and multiple accidents involving Company
drivers in 2002. The Company became self-insured for workers' compensation as of
July 1, 2001 and, thus, during 2001 the Company was self-insured for only six
months versus the entire year for 2002. Rising medical and insurance costs have
increased the amounts necessary for accrual. Included in these accruals are
amounts estimated by management that are necessary to account for the Company's
exposure to claims incurred in 2002. The decrease in accounts receivable is
attributable to improved collection efforts as well as reduced Company exposure
to customer bankruptcies in 2002 as compared to 2001. These bankruptcies were
occurring primarily in the steel industry.

In 2001, the increase in cash proceeds from operating activities was due to
improved operating results over 2000, income tax refunds of $1.6 million and an
increase of $0.8 million in trade payables. Trade payables increased due in part
to required increases in maintenance supplies at the new Birmingham, Alabama
terminal.



The decrease in cash generated by operations in 2000 was driven by the decrease
in accrued liabilities and other current liabilities and also the decrease in
accounts payable. These amounts were somewhat offset by the increase in other
current assets and also the increase in accounts receivable. The increase in
accounts receivable was related to increases in load volume and not due to
inefficiency in collecting.

CASH FLOWS FROM INVESTING ACTIVITIES

The growth of the Company's business and maintenance of its modern fleet has
required significant investments in new tractors and trailers, which has been
financed largely through long-term debt, including dealer-financed purchases of
revenue equipment in the past two years. Historically, the Company financed its
major capital equipment purchases consisting primarily of revenue equipment and,
to a lesser extent, construction of terminals, through bank financings.

In 2002, the Company invested $8.0 million in cash for revenue equipment and
other property and equipment. As the Company began financing with dealers in
2001, the proceeds from disposals began decreasing as the Company began trading
in more tractors to the dealers rather than selling them for cash. Dealer
financed purchases in 2002 amounted to $4.5 million. Also, as the number of
owner-operators increased in 2002, the payments received on sales-type leases
increased. During 2002, the Company's fleet was 39% owner-operators compared to
32% in 2001. Thus, owner-operator payments to the Company increased from $2.3
million in 2001 to $3.6 million in 2002.

During 2001, the Company acquired $5.5 million in revenue equipment financed
through the manufacturer's financing company rather than the Company securing
the financing through one of its existing lenders. There were no such dealer
financings in 2000. All other equipment purchases consisting of service
vehicles, computer and office equipment are purchased through cash flow from
operations. The amount of revenue equipment purchased decreased in 2001 compared
to 2000 due to the Company increasing the length of its trade cycle from 42
months to 45 months.

CASH FLOWS FROM FINANCING ACTIVITIES

During 2002, the Company paid $15.4 million towards the reduction of its
long-term debt. At December 31, 2002, the Company had debt (including current
maturities) of $33.6 million. New debt was incurred primarily to purchase
revenue equipment. Revenue equipment was also acquired through dealer financing
rather than securing additional financing through existing lenders. These
financing activities supported the Company's investing activities.

During 2001, the Company paid $13.1 million towards the reduction of its
long-term debt. At December 31, 2001, the Company had debt (including current
maturities) of $39.2 million, which was primarily incurred to purchase revenue
equipment and to construct the terminal located in Birmingham, Alabama. The
Company purchased in negotiated transactions 223,239 and 126,000 shares of
common stock from the former vice-chairman of the Company and the CEO of WTI
during 2001 and 2000, respectively, at a price per share of $6.50. The Company
funded these purchases using working capital.

Pursuant to the Company's stock repurchase program, the Company purchased 6,500,
244,463 and 370,463 shares of the Company's common stock in open market or
negotiated transactions during 2002, 2001 and 2000, respectively, for aggregate
purchase prices of $42,250, $1,521,056 and $2,248,941, respectively. From time
to time, the Company has repurchased, and may continue to repurchase, shares of
its common stock. The timing and amount of such purchases depends on the market
and other factors. The Company's board of directors has authorized the
repurchase of up to 600,000 shares, excluding 822,739 shares related to various
executives. As of December 31, 2002, the Company had purchased 561,405 shares
pursuant to this authorization and has 38,595 shares remaining available for
repurchase.

ANTICIPATED SOURCES AND USES OF FUNDS

The Company's bank debt relates largely to its revenue equipment, although a
portion was incurred for the construction of the terminal in Birmingham,
Alabama. The construction loan was converted to a term loan in January 2001. The
Company's bank debt bears interest ranging from LIBOR plus 1.25% to LIBOR plus
2.50%, all payable in monthly installments and with maturities through July
2009. The bank debt is collateralized by revenue equipment and the real property
related to the Birmingham terminal. The Company has dealer-financed debt
collateralized by revenue equipment with fixed rates ranging from 5.60% to
5.75%. The Company also has a line of credit totaling $2.5 million, bearing
interest at the bank's prime rate (4.25% at December 31, 2002) minus 0.25%.
Accounts receivable and other working capital assets collateralize the line of
credit. As of December 31, 2002, the Company had letter of credit commitments of
$2.5 million against this line of credit with no outstanding borrowings or
availability at year-end.


The Company anticipates generating sufficient cash from operations in 2003 to
cover planned capital expenditures and servicing current maturities of long-term
debt. The Company anticipates purchasing 92 new tractors and trading or selling
82 used tractors in 2003 at a net cost of approximately $5.7 million.
Historically, the Company has relied on cash generated from operations to fund
its working capital requirements. Over the long term, the Company will continue
to have significant capital needs that may require it to seek additional
borrowings or equity capital. The availability of debt financing or equity
capital will depend on prevailing market conditions, the market price of its
common stock, and other factors over which the Company has no control, as well
as the Company's financial condition and results of operations.

The Company's loan agreements with its major lenders require the Company, among
other things, to maintain a tangible net worth, as defined in the agreements,
and to maintain certain financial ratios. In February 2003, the Company received
waivers executed by two of its lenders due to non-compliance with its debt
service coverage ratio and for exceeding annual capital expenditure limits. The
Company is currently negotiating with its lenders to adjust certain covenant
requirements including its debt service coverage ratio. Management anticipates
the Company will be in compliance with these covenants in 2003. While management
believes that the Company's relationships with its lenders are good, there is no
absolute assurance that the Company will be able to comply with its covenants in
the future. If the Company is unable to comply with its covenants in the future,
there can be no assurance that the Company's lenders will provide additional
waivers with respect to any such noncompliance.

The following tables set forth information regarding the Company's contractual
obligations and commercial commitments in thousands of dollars. These
disclosures are also included in the Notes to the Consolidated Financial
Statements and such Notes are cross-referenced in the tables below.

CONTRACTUAL OBLIGATIONS (in thousands)




                                                                              YEARS                                FOOTNOTE
                                   ----------------------------------------------------------------------------------------
                                    TOTAL           1          2           3            4          5          >5       REF.
                                   -------       ------      -----       -----        -----      -----       -----    -----
                                                                                              
Long-term debt                     $33,625      $14,489      $7,556      $4,046      $5,868      $1,178      $  487      3
Operating leases                       154          126          28          --          --          --          --      2
                                   -------      -------      ------      ------      ------      ------      ------    ---
Total contractual obligations      $33,779      $14,615      $7,581      $4,046      $5,868      $1,178      $  487
                                   =======      =======      ======      ======      ======      ======      ======


The Company has decreased its operating lease commitments through increased
Company-owned facilities and revenue equipment. Primarily all of the Company's
operating lease commitments in effect at December 31, 2002 are on a
month-to-month basis.

The Company entered into a consulting agreement with its Chairman Emeritus,
Dempsey Boyd, effective January 1, 2002 through December 31, 2003. Mr. Boyd will
be paid $145,000 in 2003 under this consulting agreement.

OTHER CONTRACTUAL OBLIGATIONS (in thousands)




                                                                            YEARS                                   FOOTNOTE
                                   -----------------------------------------------------------------------------------------
                                    TOTAL          1           2           3           4           5           >5      REF.
                                   -------      ------       -----        ----       -----       ------       -----   ------
                                                                                              
Unused lines of credit             $ 2,500      $ 2,500          --          --          --          --          --      3
Letters of credit                    6,300        6,300          --          --          --          --          --      4
                                   -------      -------      ------      ------      ------      ------      ------    ---
Total contractual obligations      $ 8,800      $ 8,800          --          --          --          --          --
                                   =======      =======      ======      ======      ======      ======      ======


As of December 31, 2002, the Company had letter of credit commitments of
approximately $2.5 million against the line of credit and no outstanding
borrowings against it.

With the Company's improving financial performance, the Company expects it could
obtain additional financing, if necessary, with favorable terms. The letters of
credit are primarily required by insurance providers.

FACTORS THAT MAY AFFECT FUTURE RESULTS

The Company's future results may be affected by a number of factors over which
the Company has little or no control. Fuel prices, insurance and claims costs,
liability claims, interest rates, the availability of qualified drivers,
fluctuations in the resale value of revenue equipment, economic and customer
business cycles, and shipping demands are economic factors over which the
Company has little or no control. Significant increases or rapid fluctuations in
fuel prices, interest rates, insurance costs or liability claims, to the extent
not offset by increases in freight rates, and the resale value of revenue
equipment could result in Company losses. Weakness in the general economy,
including a weakness in consumer demand for goods and services, could adversely
affect customers and result in customers reducing their demand for
transportation services, which, in turn, could adversely affect the Company's
growth



and revenues. Weakness in customer demand for the Company's services or in
the general rate environment also may restrain the Company's ability to increase
rates or obtain fuel surcharges.

The following issues and uncertainties, among other things, should be considered
in evaluating the Company's growth outlook:

FUEL PRICE TREND

Many of the Company's operating expenses, including fuel costs and fuel taxes,
are sensitive to the effects of inflation, which could result in higher
operating costs. During 2002, 2001, and 2000, the Company experienced
fluctuations in fuel costs as a result of conditions in the petroleum industry.
The Company also has periodically experienced some wage increases for drivers.
Increases in fuel costs and driver compensation are expected to continue during
2003 and may affect operating income, unless the Company is able to pass those
increased costs to customers through rate increases and fuel surcharges. The
Company has initiated a program to obtain rate increases and fuel surcharges
from customers in order to cover increased costs due to these increases in fuel
prices, driver compensation, and other expenses and has been successful in
implementing some fuel surcharges and certain rate increases. Competitive
conditions in the transportation industry, including lower demand for
transportation services, could limit the Company's ability to obtain rate
increases or fuel surcharges in the future. As of December 31, 2002, the Company
had no derivative financial instruments to reduce its exposure to fuel price
fluctuations. The motor carrier industry depends upon the availability of diesel
fuel. Fuel shortages or increases in fuel taxes or fuel costs have adversely
affected, and may in the future adversely affect, the financial condition and
results of operations of the Company. Fuel prices have fluctuated greatly, and
fuel taxes have generally increased in recent years. The tensions in the Middle
East, as well as reduced fuel supplies from Venezuela, have caused an increase
in oil and fuel prices during the first quarter of 2003. The Company has not
experienced difficulty in maintaining necessary fuel supplies and, in the past,
the Company generally has been able to partially offset significant increases in
fuel costs and fuel taxes through increased freight rates and through a fuel
surcharge which increases incrementally as the price of fuel increases. However,
there can be no assurance that the Company will be able to recover any future
increases in fuel costs and fuel taxes through increased rates. If fuel prices
continue to increase or are sustained at these higher levels for a continuing
period of time, the higher fuel costs may have a materially adverse effect on
the financial condition and business operations of the Company. Additionally,
the increased fuel costs may continue to have a materially adverse effect on the
Company's efforts to attract and retain owner-operators, expand its pool of
available trucks, and diversify its operations.

INSURANCE

The Company's future insurance and claims expenses could exceed historical
levels, which could have a material adverse effect on earnings. The Company
currently self-insures for a portion of the claims exposure resulting from cargo
loss, personal injury, and property damage, combined up to $750,000 per
occurrence, effective July 1, 2002. In addition, costs above the $750,000
self-insured amount, up to the Company's coverage amount of two million dollars,
will be shared by the Company at a rate of fifty percent. Costs and claims in
excess of the Company's coverage amount of two million dollars will be borne
solely by the Company. Also, effective July 1, 2002, the workers' compensation
self-insurance level increased to a maximum of $500,000, and the health
insurance self-insurance level is $175,000 per person per year. If the number or
dollar amount of claims for which the Company is self-insured increases,
operating results could be adversely affected.

The Company was involved in two accidents in the first quarter and two accidents
in the third quarter of 2002 that resulted in third party fatalities. The
Company was involved in another accident resulting in a fatality during the
first quarter of 2003. During the first quarter of 2002, the self-insured amount
for cargo loss, personal injury, and property damage, combined was $500,000 per
occurrence, which would be the amount applicable to the two accidents during the
first quarter of 2002. The self-insured amount for the two accidents in the
third quarter of 2002 and the accident in the first quarter of 2003 was
$750,000. Each of these accidents, taken separately, has the potential to cause
the Company to reach its total per occurrence retention amount for insurance
purposes. To date, four lawsuits have been filed against the Company with
respect to these accidents. If the Company is ultimately found to have some
liability for one or more of these accidents, the Company believes that its
operating cash flows and, if needed, additional bank financing would be
sufficient to cover any amounts payable. Also, the Company maintains insurance
coverage of up to two million dollars with licensed insurance companies above
the amounts for which the Company is self-insured. As discussed above, effective
July 1, 2002, the Company shares fifty percent of claims amounts within its two
million dollars of insurance coverage. The terrorist attacks in the United
States on September 11, 2001, and subsequent events, have resulted in additional
increases in the Company's insurance expenses. If these expenses continue to
increase, and the Company is unable to offset the increase with higher freight
rates, the Company's earnings could be adversely affected.



REVENUE EQUIPMENT

The Company's growth has been made possible through the addition of new revenue
equipment. Difficulty in financing or obtaining new revenue equipment (for
example, delivery delays from manufacturers or the unavailability of independent
contractors) could have an adverse effect on the Company's operations and
financial condition.

In the past the Company has acquired new tractors and trailers at favorable
prices and has entered into agreements with the manufacturers to repurchase the
tractors from the Company at agreed prices. Current developments in the
secondary tractor and trailer resale market have resulted in a large supply of
used tractors and trailers on the market. This has depressed the market value of
used equipment to levels significantly below the prices at which the
manufacturers have agreed to repurchase the equipment. Accordingly, some
manufacturers may refuse or be financially unable to keep their commitments to
repurchase equipment according to their repurchase agreement terms.

BUSINESS UNCERTAINTIES

The Company has experienced significant growth in revenue since the initial
public offering of the Company's stock in May 1994. There can be no assurance
that the Company's business will continue to grow in a similar fashion in the
future or that the Company can effectively adapt its management, administrative,
and operational systems to respond to any future growth. Further, there can be
no assurance that the Company's operating margins will not be adversely affected
by future changes in and expansion of the Company's business or by changes in
economic conditions.

RECENTLY ISSUED ACCOUNTING STANDARDS

In June 2001, the Financial Accounting Standards Board (the "FASB") issued SFAS
No. 141, "Business Combinations," and SFAS No.142, "Goodwill and Other
Intangible Assets." SFAS No. 141 requires the use of the purchase method of
accounting and prohibits the use of the pooling-of-interests method of
accounting for business combinations initiated after June 30, 2001. This
statement also requires that the Company recognize acquired intangible assets
apart from goodwill if the acquired intangible assets meet certain criteria.
SFAS No.142 requires, among other things, that companies no longer amortize
goodwill, but instead test goodwill for impairment at least annually.

The Company adopted SFAS Nos. 141 and 142 on January 1, 2002 and, accordingly,
ceased amortization of goodwill at that time. Goodwill amortization expense of
$223,800 was included in the consolidated financial statements for the years
ended December 31, 2001 and 2000. Had goodwill amortization expense not been
recognized in those years, loss per share would have decreased from $(0.14) per
share to $(0.07) per share for the year ended December 31, 2001 and from $(0.32)
per share to $(0.24) per share for the year ended December 31, 2000. See Note 1
to the consolidated financial statements for further discussion of SFAS No. 142.

In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations." SFAS No. 143 addresses financial accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and
associated retirement costs. SFAS No. 143 is effective for fiscal years
beginning after June 15, 2002. The Company anticipates the adoption of this
statement will not have a material impact on its consolidated financial position
and results of operations.

In August 2001, the FASB issued Statement of Financial Accounting Standards No.
144, "Accounting for the Impairment or Disposal of Long-Lived Asset" ("SFAS No.
144"). SFAS No. 144 establishes a single accounting model for the impairment or
disposal of long-lived assets and new standards for reporting discontinued
operations. SFAS No. 144 superseded Statement of Financial Accounting Standards
No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of," and APB Opinion No. 30, "Reporting the Results of
Operations - Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions." The
provisions of SFAS No. 144 are effective in fiscal years beginning after
December 15, 2001 and, in general, are to be applied prospectively. The Company
adopted SFAS No. 144 effective January 1, 2002 and such adoption did not have a
material impact on the Company's consolidated financial position and results of
operations.

In June 2002, the FASB issued Statement of Financial Accounting Standards No.
146, "Accounting for Costs Associated with Exit or Disposal Activities" ("SFAS
No. 146"). SFAS No. 146 requires companies to recognize costs associated with
exit or disposal activities when they are incurred rather than at the date of a
commitment to an exit or disposal plan. SFAS No. 146 is to be applied
prospectively to exit or disposal activities initiated after December 31, 2002.
The adoption of SFAS No. 146 is not expected to have a material impact on the
Company's financial position or results of operations.



In December 2002, the FASB issued Statement of Financial Accounting Standards
No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure"
("SFAS No. 148"). SFAS No. 148 amends Statement No. 123, Accounting for
Stock-Based Compensation ("SFAS No. 123"), to provide alternative methods for
voluntary transition to SFAS No. 123's fair value method of accounting for
stock-based employee compensation ("the fair value method"). SFAS No. 148 also
requires disclosure of the effects of an entity's accounting policy with respect
to stock-based employee compensation on reported net income (loss) and earnings
(loss) per share in annual and interim financials statements. The transition
provisions of SFAS No. 148 are effective in fiscal years beginning after
December 15, 2002. The Company is currently evaluating the transition provisions
of SFAS No. 148 but expects that it will not have a material adverse impact on
the Company's consolidated financial position and results of operations upon
adoption since the Company has not adopted the fair value method. The Company
adopted the required disclosure provisions of SFAS No. 148, see Note 1 to the
Consolidated Financial Statements included in Item 8 of this report.

In November 2002, the FASB issued FASB Interpretation No. 45 ("FIN 45"),
"Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees and Indebtedness of Others." FIN 45 elaborates on the
disclosures to be made by the guarantor in its interim and annual financial
statements about its obligations under certain guarantees that it has issued. It
also requires that a guarantor recognize, at the inception of a guarantee, a
liability for the fair value of the obligation undertaken in issuing the
guarantee. The initial recognition and measurement provisions of this
interpretation are applicable on a prospective basis to guarantees issued or
modified after December 31, 2002; while the provisions of the disclosure
requirements are effective for financial statements of interim or annual reports
ending after December 15, 2002. The Company adopted the disclosure provisions of
FIN 45 during the fourth quarter of fiscal 2002 and such adoption did not have a
material impact on the Company's consolidated financial statements. The Company
is currently evaluating the recognition provisions of FIN 45 but expects that it
will not have a material adverse impact on the Company's consolidated results of
operations or financial position upon adoption.

In January 2003, the FASB issued FASB Interpretation No. 46 ("FIN 46"),
"Consolidation of Variable Interest Entities." In general, a variable interest
entity is a corporation, partnership, trust, or any other legal structure used
for business purposes that either (a) does not have equity investors with voting
rights or (b) has equity investors that do not provide sufficient financial
resources for the entity to support its activities. FIN 46 requires certain
variable interest entities to be consolidated by the primary beneficiary of the
entity if the investors do not have the characteristics of a controlling
financial interest or do not have sufficient equity at risk for the entity to
finance its activities without additional subordinated financial support from
other parties. The consolidation requirements of FIN 46 apply immediately to
variable interest entities created after January 31, 2003. The consolidation
requirements apply to older entities in the first fiscal year or interim period
beginning after June 15, 2003. Certain of the disclosure requirements apply in
all financial statements issued after January 31, 2003, regardless of when the
variable interest entity was established. Since the Company currently has
identified no variable interest entities, management expects that the adoption
of the provisions of FIN 46 will not have a material impact on the Company's
consolidated results of operations or financial position.

There were no other recently issued accounting pronouncements with delayed
effective dates that would currently have a material impact on the Company's
consolidated financial position and results of operations.




CONSOLIDATED BALANCE SHEETS





DECEMBER 31,                                                        2002               2001
                                                                    ----               ----
                                                                            
ASSETS
CURRENT ASSETS:

   Cash and cash equivalents                                   $    292,514       $  2,221,455
   Short-term investments                                           288,000            278,000
   Accounts receivable, less allowance for doubtful
     accounts of $341,338 (2002) and $318,981 (2001):
       Trade and interline                                        9,083,921         10,055,894
       Other                                                        542,963            956,576
   Income tax receivable                                                 --            339,220
   Current portion of net investment in sales-type leases         1,427,617          1,200,175
   Parts and supplies inventory                                     521,201            497,637
   Prepaid licenses and permits                                     547,460            946,054
   Other prepaid expenses                                           965,995          1,309,670
   Deferred income taxes                                          2,378,688          1,497,047
                                                               ------------       ------------
       Total current assets                                      16,048,359         19,301,728
                                                               ------------       ------------
PROPERTY AND EQUIPMENT:
   Land and land improvements                                     2,948,297          2,800,523
   Buildings                                                      7,804,015          7,635,280
   Revenue equipment                                             64,644,891         70,927,529
   Other equipment                                               12,466,476         12,090,626
   Leasehold improvements                                           386,384            384,884
                                                               ------------       ------------
       Total                                                     88,250,063         93,838,842
   Less accumulated depreciation and amortization                33,525,571         35,325,568
                                                               ------------       ------------
       Property and equipment, net                               54,724,492         58,513,274
                                                               ------------       ------------
OTHER ASSETS:
   Net investment in sales-type leases                            6,706,848          3,850,821
   Goodwill, net of accumulated amortization of $912,077          3,452,446          3,452,446
   Revenue equipment held for lease                                 310,405            500,125
   Deposits and other assets                                        339,531            465,112
                                                               ------------       ------------
       Total other assets                                        10,809,230          8,268,504
                                                               ------------       ------------
TOTAL                                                          $ 81,582,081       $ 86,083,506
                                                               ============       ============

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
   Accounts payable - trade and interline                      $  2,375,475       $  3,339,973
   Line of credit                                                        --            210,540
   Income taxes payable                                           1,424,791                 --
   Accrued liabilities:
     Self-insurance claims                                        4,537,857          2,820,773
     Salaries and wages                                             447,911            485,599
     Other                                                        1,324,364            953,694
   Current maturities of long-term debt                          14,488,695         13,580,359
                                                               ------------       ------------
   Total current liabilities                                     24,599,093         21,390,938
LONG-TERM DEBT                                                   19,135,870         25,606,297
DEFERRED INCOME TAXES                                            12,122,259         13,798,144
                                                               ------------       ------------
       Total liabilities                                         55,857,222         60,795,379
                                                               ------------       ------------
COMMITMENTS AND CONTINGENCIES (Note 4)
STOCKHOLDERS' EQUITY:
   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; 4,069,640 shares issued and outstanding              4,070              4,070
   Additional paid-in capital                                    16,884,622         16,884,622
   Retained earnings                                             18,474,441         18,008,625
   Treasury stock, at cost; 1,359,684 shares (2002)
     and 1,355,041 shares (2001)                                 (9,638,274)        (9,609,190)
                                                               ------------       ------------
       Total stockholders' equity                                25,724,859         25,288,127
                                                               ------------       ------------
TOTAL                                                          $ 81,582,081       $ 86,083,506
                                                               ============       ============


See accompanying notes to consolidated financial statements.




 CONSOLIDATED STATEMENTS OF OPERATIONS




 FOR THE YEARS ENDED DECEMBER 31,                           2002                2001                2000
                                                            ----                ----                ----
                                                                                      
OPERATING REVENUES                                     $ 127,792,396       $ 127,559,594       $ 131,629,805
                                                       -------------       -------------       -------------

OPERATING EXPENSES
  Salaries, wages and employee benefits                   36,960,066          39,560,825          39,262,650
  Cost of independent contractors                         38,967,610          31,779,119          35,172,619
  Operating supplies                                      25,965,633          30,216,514          30,308,598
  Operating taxes and licenses                             2,599,431           2,241,198           2,965,480
  Insurance and claims                                     6,534,920           6,457,919           7,060,347
  Communications and utilities                             1,275,475           1,370,598           1,520,342
  Depreciation and amortization                           11,604,696          12,289,710          11,611,081
  Gain on disposal of property and equipment, net           (468,321)           (525,808)         (1,113,574)
  Other                                                    1,614,719           1,950,109           2,008,131
                                                       -------------       -------------       -------------

      Total operating expenses                           125,054,229         125,340,184         128,795,674
                                                       -------------       -------------       -------------

OPERATING INCOME                                           2,738,167           2,219,410           2,834,131
                                                       -------------       -------------       -------------
OTHER (EXPENSE) INCOME:
  Interest expense                                        (1,752,390)         (2,684,429)         (3,904,241)
  Other (expense) income                                     (51,196)             63,357              80,338
                                                       -------------       -------------       -------------

Other expense, net                                        (1,803,586)         (2,621,072)         (3,823,903)
                                                       -------------       -------------       -------------

INCOME (LOSS) BEFORE PROVISION (BENEFIT)
  FOR INCOME TAXES                                           934,581            (401,662)           (989,772)

PROVISION (BENEFIT) FOR INCOME TAXES                         460,149               5,038             (15,318)
                                                       -------------       -------------       -------------

NET INCOME (LOSS)                                      $     474,432       $    (406,700)      $    (974,454)
                                                       =============       =============       =============

BASIC NET INCOME (LOSS) PER SHARE                      $        0.18       $       (0.14)      $       (0.32)
                                                       =============       =============       =============

DILUTED NET INCOME (LOSS) PER SHARE                    $        0.17       $       (0.14)      $       (0.32)
                                                       =============       =============       =============

BASIC WEIGHTED AVERAGE SHARES
  OUTSTANDING                                              2,709,333           2,829,614           3,090,292
                                                       =============       =============       =============

DILUTED WEIGHTED AVERAGE SHARES
  OUTSTANDING                                              2,788,234           2,829,614           3,090,292
                                                       =============       =============       =============



See accompanying notes to consolidated financial statements.




CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY




FOR THE YEARS ENDED                             ADDITIONAL
DECEMBER 31,                        COMMON       PAID-IN          RETAINED           TREASURY
2002, 2001 AND 2000                 STOCK        CAPITAL          EARNINGS            STOCK             TOTAL
                                    -----        -------          --------            -----             -----
                                                                                      
Balance, January 1, 2000           $4,070      $16,864,622      $ 19,438,142       $(5,913,543)      $ 30,393,291
  Sale of common stock
     under employee stock
     purchase plan                     --               --           (11,999)           24,525             12,526
   Purchase of treasury stock          --               --                --        (2,248,941)        (2,248,941)
   Net loss                            --               --          (974,454)               --           (974,454)
                                   ------      -----------      ------------       -----------       ------------

Balance, December 31, 2000          4,070       16,864,622        18,451,689        (8,137,959)        27,182,422
   Sale of common stock
     under employee stock
     purchase plan                     --               --           (36,364)           49,825             13,461
   Capital contribution                --           20,000                --                --             20,000
   Purchase of treasury stock          --               --                --        (1,521,056)        (1,521,056)
   Net loss                            --               --          (406,700)               --           (406,700)
                                   ------      -----------      ------------       -----------       ------------

Balance, December 31, 2001          4,070       16,884,622        18,008,625        (9,609,190)        25,288,127
  SALE OF COMMON STOCK
     UNDER EMPLOYEE STOCK
     PURCHASE PLAN                     --               --            (8,616)           13,166              4,550
   PURCHASE OF TREASURY STOCK          --               --                --           (42,250)           (42,250)
   NET INCOME                          --               --           474,432                --            474,432
                                   ------      -----------      ------------       -----------       ------------

BALANCE, DECEMBER 31, 2002         $4,070      $16,884,622      $ 18,474,441       $(9,638,274)      $ 25,724,859
                                   ======      ===========      ============       ===========       ============



See accompanying notes to consolidated financial statements.





CONSOLIDATED STATEMENTS OF CASH FLOWS





FOR THE YEARS ENDED DECEMBER 31,                                          2002                2001              2000
                                                                          ----                ----              ----
                                                                                                   
OPERATING ACTIVITIES:
   Net income (loss)                                                 $    474,432       $   (406,700)      $   (974,454)
   Adjustments to reconcile net income (loss) to net
     cash provided by operating activities:
     Depreciation and amortization                                     11,604,696         12,289,710         11,611,081
     Provision for bad debts                                               78,565            625,000             84,000
     Gain on disposal of property and equipment, net                     (468,321)          (525,808)        (1,113,574)
     Net effect of sales-type leases on cost of independent
       contractors                                                     (1,857,793)          (526,707)           253,990
     (Benefit from) provision for deferred income taxes                (2,557,526)            33,357          1,590,614
   Changes in assets and liabilities that provided (used) cash:
       Accounts receivable                                              1,307,021            (40,159)         1,818,149
       Other current assets                                             1,047,925          1,155,901          1,158,104
       Deposits and other assets                                          125,581            (10,373)           (16,367)
       Accounts payable - trade and interline                            (964,498)           764,297         (1,436,371)
       Accrued liabilities and other current liabilities                3,474,857             59,996         (2,866,338)
                                                                     ------------       ------------       ------------

Net cash provided by operating activities                              12,264,939         13,418,514         10,108,834
                                                                     ------------       ------------       ------------

INVESTING ACTIVITIES:
   Payments received on sales-type leases                               3,622,436          2,288,643          3,407,859
   Capital expenditures:
     Revenue equipment                                                 (7,366,910)        (1,642,936)       (14,459,770)
     Other property and equipment                                        (602,969)        (1,234,350)        (1,617,129)
   Proceeds from disposals of property and equipment                      434,365          2,557,928          6,090,836
                                                                     ------------       ------------       ------------

Net cash (used in) provided by investing activities                    (3,913,078)         1,969,285         (6,578,204)
                                                                     ------------       ------------       ------------

FINANCING ACTIVITIES:
   Proceeds from sales of common stock                                      4,550             13,461             12,526
   Proceeds from capital contribution                                          --             20,000                 --
   Purchase of treasury stock                                             (42,250)        (1,521,056)        (2,248,941)
   (Payments) proceeds on line of credit                                 (210,540)          (839,291)         1,049,831
   Proceeds from long-term debt                                         5,333,183          1,012,949          9,949,052
   Principal payments on long-term debt                               (15,365,745)       (13,125,688)       (12,026,643)
                                                                     ------------       ------------       ------------

Net cash used in financing activities                                 (10,280,802)       (14,439,625)        (3,264,175)
                                                                     ------------       ------------       ------------

Net (decrease) increase in cash and cash equivalents                   (1,928,941)           948,174            266,455

CASH AND CASH EQUIVALENTS:
BEGINNING OF YEAR                                                       2,221,455          1,273,281          1,006,826
                                                                     ------------       ------------       ------------
END OF YEAR                                                          $    292,514       $  2,221,455       $  1,273,281
                                                                     ============       ============       ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
   INFORMATION
     Cash paid (received) during the year for:
       Interest                                                      $  1,752,390       $  2,684,429       $  3,904,593
                                                                     ============       ============       ============
       Income taxes, net of refunds                                  $  1,252,497       $ (1,508,026)      $  1,138,562
                                                                     ============       ============       ============

SUPPLEMENTAL NON-CASH INVESTING AND
   FINANCING ACTIVITIES
     Net investment in sales-type leases                             $ (4,848,112)      $ (1,065,389)      $ (3,160,246)
                                                                     ============       ============       ============
     Dealer financed purchases of revenue equipment                  $  4,470,471       $  5,545,820       $         --
                                                                     ============       ============       ============




See accompanying notes to consolidated financial statements.





1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS - Boyd Bros. Transportation Inc. and its subsidiary (the
"Company") are flatbed carriers, transporting a variety of products, primarily
steel and building materials. The Company has authority to operate throughout
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.

PRINCIPLES OF CONSOLIDATION - The consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiary, WTI Transport, Inc.
("WTI"). All significant intercompany items have been eliminated in
consolidation.

USE OF ACCOUNTING ESTIMATES - The preparation of financial statements in
conformity with accounting principles generally accepted in the United States of
America 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. Estimates and assumptions are used when accounting
for, among other areas, depreciation, allowance for doubtful accounts, valuation
of long-lived tangible and intangible assets, accident claims and commitments
and contingencies.

REVENUE RECOGNITION - Operating revenue and related costs, including revenue and
costs related to the Company's brokerage services, are recognized upon delivery
of freight to customers provided that pervasive evidence of an arrangement
exists, the contract price is fixed and determinable, and collectibility of the
resulting receivables is probable.

Substantially all gains recognized on sales-type lease transactions are deferred
and amortized into income over the life of the lease, typically 36 - 42 months.

FUEL SURCHARGES - Prior to January 1, 2002, the Company recorded reimbursement
by its customers for fuel surcharges as a decrease to operating supplies. The
Company's results of operations for the fiscal years ended December 31, 2002,
2001 and 2000 have been reclassified for comparable purposes in accordance with
Emerging Issues Task Force release 01-14, "Income Statement Characterization of
Reimbursements Received for Out of Pocket Expenses Incurred". The effect of this
reclassification was to increase both operating revenues and operating supplies
expense by $1,538,028, $3,703,315 and $4,905,019 for fiscal years 2002, 2001 and
2000, respectively.

CASH AND CASH EQUIVALENTS - Cash and cash equivalents include cash on hand, cash
on deposit, and highly liquid investments with maturity of three months or less
at purchase date.

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS - Accounts receivable
are customer obligations due under normal trade terms. The Company sells its
services primarily to manufacturers and consumers of building materials and
related products. Senior management performs continuing credit evaluations of
its customers' financial condition and although the Company generally does not
require collateral, letters of credit may be required from its customers in
certain circumstances. The Company records an allowance for doubtful accounts
based on specifically identified amounts that senior management believes to be
uncollectible. The Company also records additional allowance based on certain
percentages of its aged receivables, which are determined based on historical
experience and the assessment of the general financial conditions affecting its
customer base. After all attempts to collect a receivable have failed, the
receivable is written off against the allowance. Based on the information
available to management, the Company believes its allowance for doubtful
accounts as of December 31, 2002 is adequate. However, actual write-offs might
exceed the recorded allowance.




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.

PROPERTY AND EQUIPMENT - Property and equipment are stated at the lower of fair
value or 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                                                         5-30 years
Revenue equipment                                                  4-7 years
Other equipment                                                   3-10 years
Leasehold improvements                                            3-20 years



Depreciation is computed using accelerated methods for income tax purposes.
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 period of disposal.

In accordance with SFAS No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets," the Company periodically evaluates the carrying value of
long-lived assets to be held and used when events and circumstances warrant such
a review. The carrying value of long-lived assets is considered impaired when
the anticipated undiscounted cash flow from such assets is less than its
carrying value. In that event, a loss is recognized based on the amount by which
the carrying value exceeds the fair market value of the long-lived assets.

REVENUE EQUIPMENT HELD FOR LEASE - Revenue equipment held for lease and not in
use is stated at cost, less accumulated depreciation, which approximates net
realizable value. Depreciation expense is suspended while the asset is in
revenue equipment held for lease.

GOODWILL - In June 2001, the Financial Accounting Standards Board (the "FASB")
issued SFAS No. 141, "Business Combinations," and SFAS No. 142, "Goodwill and
Other Intangible Assets." SFAS No. 141 requires the use of the purchase method
of accounting and prohibits the use of the pooling-of-interests method of
accounting for business combinations initiated after June 30, 2001. This
statement also requires that the Company recognize acquired intangible assets
apart from goodwill if the acquired intangible assets meet certain criteria.
SFAS No. 142 requires, among other things, that companies no longer amortize
goodwill, but instead test goodwill for impairment at least annually.

In addition, SFAS No. 142 requires that the Company identify reporting units for
purposes of assessing potential future impairments of goodwill, reassess the
useful lives of other existing recognized finite-lived intangible assets, and
cease amortization of intangible assets with an indefinite useful life. An
intangible asset with an indefinite useful life should be tested for impairment
in accordance with the guidance in SFAS No. 142. This statement is required to
be applied in fiscal years beginning after December 15, 2001, to all goodwill
and other intangible assets recognized at that date, regardless of when those
assets were initially recognized. The Company has no intangible assets other
than goodwill. SFAS No. 142 requires the Company to complete a transitional
goodwill impairment test within six months from the date of adoption and
reassess the useful lives of other intangible assets within the first interim
quarter after adoption.

The Company adopted SFAS Nos. 141 and 142 on January 1, 2002 and, accordingly,
ceased amortization of goodwill at that time. Goodwill amortization expense of
$223,800 was included in the consolidated financial statements for each of the
years ended December 31, 2001 and 2000. Had goodwill amortization expense not
been recognized in those years, loss per share would have decreased from $(0.14)
per share to $(0.07) per share for the year ended December 31, 2001 and from
$(0.32) per share to $(0.24) per share for the year ended December 31, 2000.


The following table presents the impact of SFAS No. 142 on operating income and
net loss, as if it had been in effect for the years ended December 31, 2001 and
2000.




                                                     2001              2000
                                                     ----              ----
                                                           
Operating income, as reported                    $  2,219,410    $  2,834,131
Add back:  Goodwill amortization                      223,800         223,800
                                                 ------------    ------------
Adjusted operating income                        $  2,443,210    $  3,057,931
                                                 ============    ============

Net loss, as reported                            $   (406,700)   $   (974,454)
Add back:  Goodwill amortization                      223,800         223,800
Tax effect                                                 --              --
                                                 ------------    ------------
Adjusted net loss                                $   (182,900)   $   (750,654)
                                                 ============    ============


As of June 30, 2002, the Company completed the first phase of transitional
testing for the potential impairment of goodwill relating to its WTI subsidiary.
This goodwill impairment test will be completed annually on October 1 unless
events or evidence exist that would significantly alter amounts used in the
annual calculation. The Company used a multiple of EBITDA (earnings before
interest, tax, depreciation and amortization expenses) in evaluating the fair
value of WTI. This was consistent with the valuation method used in calculating
the original purchase price of WTI in 1997. As a result of such testing, the
Company determined there was no impairment of goodwill that should be included
in the accompanying financial statements. At June 30, 2002, the net book value
recorded for goodwill was $3,452,446. No events have occurred since this
assessment to cause a significant change in the values used for computation.
Thus, another impairment test was not performed.

STOCK-BASED COMPENSATION PLANS - The Company adopted the disclosure provisions
of Statement of Financial Accounting Standards (SFAS or Statement) No. 148,
"Accounting for Stock-Based Compensation-Transition and Disclosure", which
amends SFAS No. 123, "Accounting for Stock-Based Compensation." SFAS No. 148
provides alternative methods of transition for a voluntary change to the fair
value based method of accounting for stock-based employee compensation, which
was originally provided under SFAS No. 123. The Statement also improves the
timeliness of disclosures by requiring the information be included in interim,
as well as annual, financial statements. The adoption of these disclosure
provisions did not have a material affect on the Company's 2002 consolidated
results of operations, financial position, or cash flows.

SFAS No. 123 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 market value of the stock at the
grant date. As such, no compensation expense is recorded in the accompanying
consolidated financial statements.

Had compensation cost been determined based upon the fair value at the grant
date for awards under the stock option plan consistent with the methodology
prescribed under SFAS No. 123, the Company's pro forma net income (loss) and net
income (loss) per share would have differed from the amounts reported as
follows:





FOR THE YEARS ENDED DECEMBER 31,                            2002             2001            2000
                                                            ----             ----            ----
                                                                              
Net income (loss), as reported                        $    474,432     $   (406,700)   $    (974,454)
Stock-based employee compensation expense
   determined under fair value basis, net of tax          (388,892)        (322,067)        (532,539)
                                                      ------------     ------------    -------------
Proforma net income (loss)                            $     85,540     $   (728,767)   $  (1,506,993)
                                                      ============     ============    =============




                                                                              
Earnings per share:
   Basic - as reported                                $       0.18     $      (0.14)   $       (0.32)
   Basic - proforma                                   $       0.03     $      (0.26)   $       (0.49)
   Diluted - as reported                              $       0.17     $      (0.14)   $       (0.32)
   Diluted - proforma                                 $       0.03     $      (0.26)   $       (0.49)




The weighted-average fair value per share for options granted was $2.20 and
$1.98 for the years ended December 31, 2002 and 2001, respectively. No options
were granted in 2000. The fair value was estimated at the date of the grant
using the Black-Scholes option pricing model with the following weighted-average
assumptions:




                                                       2002             2001            2000
                                                       ----             ----            ----
                                                                              
Risk-free interest rate                                 4.6%            4.6%             --
Dividend yield                                          0.0%            0.0%             --
Expected volatility                                   104.4%           82.4%             --
Weighted average expected life (in years)               6               6                --



INCOME TAXES - The Company accounts for income taxes under the asset and
liability method that requires the recognition of deferred tax assets and
liabilities for the expected future tax consequences of events that have been
recognized in the Company's financial statements or tax returns. In estimating
future tax consequences, the Company generally considers all expected future
events other than possible enactments of changes in the tax laws or rates.

NET INCOME (LOSS) PER SHARE - In accordance with SFAS No. 128, "Earnings per
Share", the Company reports two separate net income (loss) per share numbers,
basic and diluted, for all periods presented. These per share amounts have been
computed using the weighted-average number of shares of common stock outstanding
during each period. Diluted earnings per share amounts are presented to include
the effect of potentially dilutive securities.

Options that could potentially dilute basic net income (loss) per share in the
future were not included in the computation of diluted net income (loss) per
share for the years ended December 31, 2001 and 2000, because to do so would
have been antidilutive. Antidilutive options were 85,200 and 408,300 for the
years ended December 31, 2001 and 2000, respectively.

FAIR VALUE OF FINANCIAL INSTRUMENTS - The carrying value of the Company's cash
equivalents, short-term investments, trade receivables, short-term lease
receivables, trade payables and accrued expenses approximates fair value because
of the short-term nature of these instruments. The fair value of long-term
sales-type lease receivables and long-term debt approximates its carrying value
and are estimated using a discounted cash flow analysis. Discounted cash flows
for long-term debt are based on borrowing rates currently available to the
Company for bank loans with similar terms and average maturities.

RECENT ACCOUNTING PRONOUNCEMENTS - In August 2001, the FASB issued SFAS No. 143,
"Accounting for Asset Retirement Obligations." SFAS No. 143 addresses financial
accounting and reporting for obligations associated with the retirement of
tangible long-lived assets and the associated retirement costs. SFAS No. 143 is
effective for fiscal years beginning after June 15, 2002. The Company
anticipates the adoption of this statement will not have a material impact on
its consolidated financial position and results of operations.

In August 2001, the FASB issued Statement of Financial Accounting Standards No.
144, "Accounting for the Impairment or Disposal of Long-Lived Asset" ("SFAS No.
144"). SFAS No. 144 establishes a single accounting model for the impairment or
disposal of long-lived assets and new standards for reporting discontinued
operations. SFAS No. 144 superseded Statement of Financial Accounting Standards
No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of", and APB Opinion No. 30, "Reporting the Results of
Operations--Reporting the Effects of Disposal


of a Segment of a Business, and Extraordinary, Unusual and Infrequently
Occurring Events and Transactions". The provisions of SFAS No. 144 are effective
in fiscal years beginning after December 15, 2001 and, in general, are to be
applied prospectively. The Company adopted No. SFAS 144 effective December 31,
2001 and such adoption did not have a material impact on the Company's
consolidated financial position and results of operations.

In June 2002, the FASB issued Statement of Financial Accounting Standards No.
146, "Accounting for Costs Associated with Exit or Disposal Activities" ("SFAS
No. 146"). SFAS No. 146 requires companies to recognize costs associated with
exit or disposal activities when they are incurred rather than at the date of a
commitment to an exit or disposal plan. SFAS No. 146 is to be applied
prospectively to exit or disposal activities initiated after December 31, 2002.
The adoption of SFAS No. 146 is not expected to have a material impact on the
Company's financial position or results of operations.

In December 2002, the FASB issued Statement of Financial Accounting Standards
No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure"
("SFAS No. 148"). SFAS No. 148 amends Statement No. 123, Accounting for
Stock-Based Compensation ("SFAS No. 123"), to provide alternative methods for
voluntary transition to SFAS No. 123's fair value method of accounting for
stock-based employee compensation ("the fair value method"). SFAS No. 148 also
requires disclosure of the effects of an entity's accounting policy with respect
to stock-based employee compensation on reported net income (loss) and earnings
(loss) per share in annual and interim financials statements. The transition
provisions of SFAS No. 148 are effective in fiscal years beginning after
December 15, 2002. The Company is currently evaluating the transition provisions
of SFAS No. 148 but expects that it will not have a material adverse impact on
the Company's consolidated financial position and results of operations upon
adoption since the Company has not adopted the fair value method. The Company
adopted the disclosure provisions of SFAS No. 148, which are included in
Note 1 - Stock-Based Compensation Plans herein.

In November 2002, the FASB issued FASB Interpretation No. 45 ("FIN 45"),
"Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees and Indebtedness of Others." FIN 45 elaborates on the
disclosures to be made by the guarantor in its interim and annual financial
statements about its obligations under certain guarantees that it has issued. It
also requires that a guarantor recognize, at the inception of a guarantee, a
liability for the fair value of the obligation undertaken in issuing the
guarantee. The initial recognition and measurement provisions of this
interpretation are applicable on a prospective basis to guarantees issued or
modified after December 31, 2002; while the provisions of the disclosure
requirements are effective for financial statements of interim or annual reports
ending after December 15, 2002. The Company adopted the disclosure provisions of
FIN 45 during the fourth quarter of fiscal 2002 and such adoption did not have a
material impact on the Company's consolidated financial statements. The Company
is currently evaluating the recognition provisions of FIN 45 but expects that it
will not have a material adverse impact on the Company's consolidated results of
operations or financial position upon adoption.

In January 2003, the FASB issued FASB Interpretation No. 46 ("FIN 46"),
"Consolidation of Variable Interest Entities." In general, a variable interest
entity is a corporation, partnership, trust, or any other legal structure used
for business purposes that either (a) does not have equity investors with voting
rights or (b) has equity investors that do not provide sufficient financial
resources for the entity to support its activities. FIN 46 requires certain
variable interest entities to be consolidated by the primary beneficiary of the
entity if the investors do not have the characteristics of a controlling
financial interest or do not have sufficient equity at risk for the entity to
finance its activities without additional subordinated financial support from
other parties. The consolidation requirements of FIN 46 apply immediately to
variable interest entities created after January 31, 2003. The consolidation
requirements apply to older entities in the first fiscal year or interim period
beginning after June 15, 2003. Certain of the disclosure requirements apply in
all financial statements issued after January 31, 2003, regardless of when the
variable interest




entity was established. Since the Company currently has identified no variable
interest entities, management expects that the adoption of the provisions of FIN
46 will not have a material impact on the Company's consolidated results of
operations or financial position.

There were no other recently issued accounting pronouncements with delayed
effective dates that would currently have a material impact on the Company's
consolidated financial position and results of operations.

RECLASSIFICATIONS - Certain previously reported amounts have been reclassified
to conform to the current period presentation.

2. LEASES

LESSEE

OPERATING LEASES - The Company leases certain terminal buildings, land, and
equipment under agreements that expire at various dates through 2004. 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 are insignificant.

Total rental expense for all operating leases was $139,158, $170,741, and
$356,791, for the years ended December 31, 2002, 2001 and 2000, respectively.

LESSOR

SALES-TYPE LEASES - The Company leases revenue equipment to certain of its
owner-operators and accounts for these transactions as sales-type leases. These
receivables have terms of three and one-half to four years and are
collateralized by a security interest in the related revenue equipment. Certain
revenue equipment under these leases have a guaranteed residual value from the
vendor which will be redeemed by the Company at the end of the lease term.

The components of the net investment in sales-type leases at December 31, 2002
and 2001 are as follows:




                                                           2002            2001
                                                           ----            ----
                                                               
Minimum lease receivable                            $  12,643,883    $  7,929,530
Allowance for uncollectible receivables                (2,141,106)     (1,590,153)
                                                    -------------    ------------
Net minimum lease receivable                           10,502,777       6,339,377
Unearned interest income                               (2,368,312)     (1,288,381)
                                                    -------------    ------------
Net investment in sales-type leases                     8,134,465       5,050,996
Less current portion                                   (1,427,617)     (1,200,175)
                                                    -------------    ------------
Net amount due after one year                       $   6,706,848    $  3,850,821
                                                    =============    ============


Future minimum lease rentals for sales-type leases are as follows:




YEAR
                                                              
2003                                                             $    4,088,035
2004                                                                  3,359,738
2005                                                                  3,036,139
2006                                                                  2,159,971
                                                                 --------------
Total                                                            $   12,643,883
                                                                 ==============



Gains on disposition of revenue equipment leased to owner-operators, interest
income on these leases, and provisions for bad debts related to sales-type
leases are included as components of cost of independent contractors in the
accompanying consolidated statements of operations. The income from these items
totaled $1,857,793, $526,707, and $(253,990) for the years ended December 31,
2002, 2001, and 2000, respectively.



OPERATING LEASES - The Company leases revenue equipment to certain of its
owner-operators and accounts for these transactions as operating leases. These
leases have terms of three to three and one-half years. The revenue equipment
under these leases had a cost of $664,519 and $1,423,174, and accumulated
depreciation of $295,302 and $414,076 at December 31, 2002 and 2001,
respectively. Total rental income from operating leases was $384,946, $328,331,
and $273,360 for the years ended December 31, 2002, 2001, and 2000,
respectively, and is included as a component of cost of independent contractors
in the accompanying Consolidated Statements of Operations. Future minimum lease
rentals for operating leases are not significant.

3. BORROWING ARRANGEMENTS

Long-term debt at December 31, 2002 and 2001 is summarized as follows:





Revenue equipment obligations:                                                               2002             2001
                                                                                             ----             ----
                                                                                                   
   LIBOR plus 1.25% subject to 3.625% minimum (3.625% - 2002 and 2001)
     Notes payable to banks in monthly installments through July 2009                   $ 8,541,151      $11,478,728

   LIBOR plus 2.00% (3.82% - 2002 and 3.83% - 2001)
     Notes payable to banks in monthly installments through November 2006                 1,436,593        2,054,475

   LIBOR plus 2.50% (3.63% - 2002 and 4.13% - 2001)
     Notes payable to banks in monthly installments through May 2004                      8,519,700       16,718,438

   LIBOR plus 2.38% (4.15% - 2002)
     Notes payable to banks in monthly installments through June 2007                     2,878,004               --

   Fixed rate of 5.60%
     Notes payable to finance company in monthly installments through January 2007          539,939               --

   Fixed rate of 5.75%
     Notes payable to finance company in monthly installments through July 2007           8,090,630        5,058,384

Other obligations:

   LIBOR plus 1.50% (2.93% - 2002 and 3.38% - 2001)
     Notes payable to banks in monthly installments through February 2006                 3,618,548        3,876,631
                                                                                        -----------      -----------

   Total                                                                                 33,624,565       39,186,656
Less current maturities                                                                  14,488,695       13,580,359
                                                                                        -----------      -----------
   Long-term debt                                                                       $19,135,870      $25,606,297
                                                                                        ===========      ===========


Revenue equipment obligations are collateralized by revenue equipment. Other
obligations are collateralized by the Birmingham, Alabama terminal building.

The notes payable to banks bear interest ranging from LIBOR plus 1.25% to LIBOR
plus 2.50% based on the Company's level of cash flows as defined in their loan
agreements.

Long-term debt is scheduled to mature as follows:




YEAR
                                                                    
2003                                                                   $   14,488,695
2004                                                                        7,556,289
2005                                                                        4,046,302
2006                                                                        5,867,833
2007                                                                        1,178,050
Thereafter                                                                    487,396
                                                                       --------------
Total                                                                  $   33,624,565
                                                                       ==============





The Company also has a $2,500,000 line of credit under a commercial revolving
note expiring May 29, 2003, bearing interest at the bank's prime rate (4.25% at
December 31, 2002) minus 0.25% and collateralized by trade accounts receivable
and other working capital asset items. The line had letters of credit
commitments of $2,495,639 and no outstanding balance at December 31, 2002.

Covenants under these loan agreements require the Company, among other things,
to maintain tangible net worth, as defined, and to maintain certain financial
ratios. On February 3 and February 10, 2003, the Company received waivers from
certain lenders due to non-compliance with its debt service coverage ratio and
for exceeding annual capital expenditure limits. The Company is currently
negotiating with its lenders to adjust certain covenant requirements including
its debt service coverage ratio. Management anticipates the Company will be in
compliance with these covenants in 2003.

4. COMMITMENTS AND CONTINGENCIES

SELF INSURANCE ACCRUALS - At December 31, 2002, the Company is self-insured as
follows:




                                                                  RETENTION AMOUNT
                                                                   PER OCCURRENCE
                                                                   --------------
                                                               
Workers' compensation                                               $    500,000
Liability - body injury                                             $    750,000 *
Liability - property damage                                         $    750,000 *
Employee medical and hospitalization                                $    175,000**
Cargo loss and damage                                               $    750,000 *
General liability                                                   $    750,000 *
Environmental losses                                                    No limit



*     These coverages are all included in one retention amount per occurrence.
      Maximum retention is $750,000 per occurrence.

**    Retention amount is per person per year.

The above retention amounts represent rates that were negotiated with the
Company's insurance carriers at June 30, 2002. Retention amounts under other
previous insurance programs may vary from those stated above. At December 31,
2002, the Company has recorded liabilities for retention amounts related to
claims under previous insurance coverage. From July 1, 2000, through June 30,
2002, the Company had a retention amount per occurrence under workers'
compensation of $250,000. Prior to June 30, 2000, workers' compensation
insurance was provided under fully insured policies.

The Company currently self-insures for a portion of the claims exposure
resulting from cargo loss, personal injury, and property damage, combined up to
$750,000 per occurrence, effective July 1, 2002. In addition, costs above the
$750,000 self-insured amount, up to the Company's coverage amount of two million
dollars, will be shared by the Company at a rate of fifty percent. Costs and
claims in excess of the Company's coverage amount of two million dollars will be
borne solely by the Company. Also, effective July 1, 2002, the health insurance
self-insurance level is $175,000 per person per year.

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.

Company drivers were involved in two accidents in the first quarter and two
accidents in the third quarter of 2002 that resulted in third party fatalities.
The Company would expect to absorb up to its self-insured level of $500,000 per
occurrence for cargo loss, personal injury, and property damage, if found liable
for the two accidents during the first quarter. Retention of $750,000 was in
effect for the two accidents in the third quarter of 2002. To date, four
lawsuits have been filed against the Company with respect to these accidents. If
the Company is ultimately found to have some liability for one or more of these




accidents, the Company believes that its operating cash flows and, if needed,
additional bank financing would be sufficient to cover any amounts payable.
Also, the Company maintains insurance coverage of up to two million dollars with
licensed insurance companies above the amounts for which the Company is
self-insured. As discussed above, effective July 1, 2002, the Company shares
fifty percent of claims amounts within its two million dollars of insurance
coverage.

LETTERS OF CREDIT - The Company has outstanding letters of credit at December
31, 2002 totaling approximately $6.3 million to cover liability insurance claims
and claims related to its previous self-insured workers' compensation program,
and to purchase revenue equipment.

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, 2002, 2001 and 2000 were $241,940, $226,731, and
$165,562, respectively.

LITIGATION - As discussed above, Company drivers were involved in two accidents
in the first quarter and two accidents in the third quarter of 2002 that
resulted in third party fatalities. Suits have been filed against the Company
with respect to each of these matters. Each of these matters is in the
preliminary stage; therefore, it is not possible for management to fully assess
the potential liability of the Company in these matters. However, based on
current information available to management, it is the view of management that,
in the event the Company is ultimately found to have some liability for one or
more of these accidents, operating cash flows, insurance proceeds and, if
needed, additional bank financing would be sufficient to cover any amounts
payable. However, the potential exists for unanticipated material adverse
judgments against the Company.

The Company is a party from time to time to various legal proceedings that are
incidental to its business. Certain of these cases filed against the Company and
other companies engaged in businesses similar to the Company often allege, among
other things, personal injury and property damage. These types of suits
sometimes seek the imposition of large amounts of compensatory and punitive
damages and trials by juries. In the opinion of the Company's management, the
ultimate liability, if any, with respect to the proceedings in which the Company
is currently involved is not presently expected to have a material adverse
effect on the Company. However, the potential exists for unanticipated material
adverse judgments against the Company.

5. STOCKHOLDERS' EQUITY

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.

EMPLOYEE STOCK PURCHASE PLAN - The Company has an Employee Stock Purchase Plan
under which 175,000 shares of the Company's common stock may be issued to
eligible employees at a price equal to the lesser of 90% of the market price of
the stock as of the first or last day of the offering periods (as defined).
Employees may elect to have a portion of their compensation withheld, subject to
certain limits, to purchase the Company's common stock. The expense associated
with this plan in 2002, 2001 and 2000 was insignificant.

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. An aggregate of 500,000 shares of the Company's common stock are
reserved for this Plan. 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 2002, 2001
and 2000.



Information regarding the Plan is summarized below:



                                                                            WEIGHTED
                                                                             AVERAGE
                                                                            EXERCISE
                                                            SHARES             PRICE
                                                            ------             -----
                                                                   

Outstanding at December 31, 1999                           456,100       $      9.53
   Terminated                                              (47,800)             8.58
                                                        ----------       -----------
Outstanding at December 31, 2000                           408,300              9.62
   Granted                                                  20,000              2.55
   Terminated                                             (343,100)             9.54
                                                        ----------       -----------
Outstanding at December 31, 2001                            85,200              8.28
   Granted                                                 390,450              2.67
                                                        ----------       -----------
Outstanding at December 31, 2002                           475,650       $      3.67
                                                        ==========       ===========

Options exercisable at December 31, 2000                   262,380       $      9.88

Options exercisable at December 31, 2001                    65,650       $      7.75

Options exercisable at December 31, 2002                    83,600       $      7.33



The following table summarizes information concerning stock options outstanding
and options exercisable at December 31, 2002:





                                        OPTIONS OUTSTANDING                             OPTIONS EXERCISABLE
                          --------------------------------------------------       --------------------------------
                                             WEIGHTED AVERAGE      WEIGHTED                               WEIGHTED
          RANGE OF           NUMBER OF           REMAINING         AVERAGE           NUMBER OF            AVERAGE
          EXERCISE            SHARES            CONTRACTUAL        EXERCISE            SHARES             EXERCISE
           PRICES          OUTSTANDING             LIFE             PRICE            EXERCISABLE            PRICE
           ------          -----------             ----             -----            -----------            -----
                                                                                         
    $2.00 - $6.00              410,450                 8.6          $  2.66              30,500             $  2.62
    $6.00 - $11.00              65,200                 4.6          $ 10.04              53,100             $ 10.03
                           -----------          ----------        ---------         -----------          ----------
                               475,650                 8.4          $  3.67              83,600             $  7.33
                           ===========          ==========        =========         ===========          ==========


6. INCOME TAXES (BENEFIT)

The provision (benefit) for income taxes for the years ended December 31, 2002,
2001 and 2000 consisted of the following:




                                                      2002                      2001               2000
                                                      ----                      ----               ----
                                                                                     
Current:
  Federal                                         $ 2,660,536             $   (24,428)        $ (1,603,762)
  State                                               357,139                  (3,893)              (2,170)
                                                  -----------             -----------         ------------
Total current provision (benefit)                   3,017,675                 (28,321)          (1,605,932)

Deferred:
   Federal                                         (2,362,812)                 21,990            1,625,520
   State                                             (194,714)                 11,369              (34,906)
                                                  -----------             -----------         ------------
Total deferred (benefit) provision                 (2,557,526)                 33,359            1,590,614
                                                  -----------             -----------         ------------
Total provision (benefit) for income taxes       $    460,149                   5,038        $     (15,318)
                                                 ============             ===========        =============


Total income tax provisions (benefit) for 2002, 2001 and 2000 are different from
the amount that would be computed by applying the statutory federal income tax
rate of 34% to income before income taxes. The reasons for this difference are
as follows (in thousands):




                                                      2002                    2001                2000
                                                      ----                    ----                ----
                                                                                    
Income tax provision (benefit) at expected
  federal income tax rate                         $   317,758             $ (136,565)        $    (336,522)
State income taxes, net of federal tax effect         107,201                  4,934               (24,470)
Nondeductible operating expenses                       42,692                 72,381                58,254
Nondeductible goodwill amortization                        --                 76,592                76,592
Other                                                  (7,502)               (12,304)              210,828
                                                  -----------             ----------         -------------
                                                  $   460,149             $    5,038         $     (15,318)
                                                  ===========             ==========         =============





At December 31, 2002, the Company had state net operating loss carryforwards of
approximately $758,000, which will expire in 2022.

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. The sources of the
Company's deferred tax liabilities and assets as of December 31, 2002 and 2001
are as follows:




                                                             2002             2001
                                                             ----             ----
                                                                   
Deferred tax liabilities:
   Tax over book depreciation                          $  12,179,379     $  13,837,035
   Prepaid expenses deductible when paid                     476,943           755,526
                                                       -------------     ------------
Total deferred tax liabilities                         $  12,656,322     $  14,592,561
                                                       =============     =============

Deferred tax assets:
   Accrued self insurance claims                       $   1,750,732     $     995,612
   Other accrued expenses not deductible until paid          117,519           179,247
   Allowance for losses on receivables                       962,681           751,296
   State NOL carryforward                                     45,492           296,904
   Other                                                      36,327            68,405
                                                       -------------     -------------
Total deferred tax assets                                  2,912,751         2,291,464
                                                       -------------     -------------
Net deferred tax liabilities                           $   9,743,571     $  12,301,097
                                                       =============     =============


The above amounts are reflected in the accompanying consolidated balance sheets
as:

                                                                   
Current assets                                         $   2,378,688     $   1,497,047
Noncurrent liabilities                                   (12,122,259)      (13,798,144)
                                                       -------------     -------------
Net deferred tax liabilities                           $   9,743,571     $  12,301,097
                                                       =============     =============



7. MAJOR CUSTOMERS

The Company's largest 25, 10, and 5 customers, predominately within the Boyd
division, accounted for approximately 40%, 23% and 15%, respectively, of the
Company's consolidated revenues during the year ended December 31, 2002. Many of
the Company's largest 25 customers are publicly-held companies. The Company does
not believe that it is dependent upon any single customer. Sales to the
Company's largest customer amounted to 10%, 10%, and 9% of consolidated
operating revenues during 2002, 2001 and 2000, respectively. Customers in the
steel industry accounted for 39%, 42% and 42% of the Company's consolidated
operating revenues for the years ended December 31, 2002, 2001 and 2000,
respectively.

8. SEGMENT INFORMATION

The Company has identified two reportable segments based on the criteria of SFAS
No. 131: Boyd and WTI. The Boyd segment is a flatbed carrier that hauls
primarily steel and building products throughout most of the continental United
States. The Boyd segment operates 736 tractors, including 523 Company drivers
and 213 owner-operators as of December 31, 2002. The WTI segment is a flatbed
carrier that hauls steel and roofing products over shorter routes than those
typically provided by Boyd, primarily in the southeastern United States, and
operates 219 tractors. WTI had 37 Company drivers and 182 owner-operators as of
December 31, 2002. Management of the Company evaluates segment performance based
on measures of revenues, operating ratio, depreciation, interest and capital
expenditures. The accounting policies of the segments are the same as those
described in the summary of significant accounting policies.




Summary information by segment follows:




                                                                                   INTERSEGMENT
                                                BOYD                 WTI           ELIMINATIONS           TOTAL
                                                ----                 ---           ------------           -----
                                                                                       
RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 2002
   OPERATING REVENUES                   $   106,847,880     $    20,944,516                 --     $    127,792,396
   OPERATING EXPENSES                       104,812,519          20,241,710                 --          125,054,229
   OPERATING INCOME                           2,035,361             702,806                 --            2,738,167
   OPERATING RATIO                                 98.1%               96.6%                                   97.9%

Year Ended December 31, 2001
   Operating revenues                   $   108,119,522     $    19,587,412       $   (147,340)    $    127,559,594
   Operating expenses                       104,762,470          20,725,054(a)        (147,340)         125,340,184
   Operating income                           3,357,052          (1,137,642)                --            2,219,410
   Operating ratio                                 96.9%              105.8%                                   98.3%

Year Ended December 31, 2000
   Operating revenues                   $   106,318,376     $    25,664,006       $   (352,577)    $    131,629,805
   Operating expenses                       102,375,826          26,772,425(a)        (352,577)         128,795,674
   Operating income (loss)                    3,942,550          (1,108,419)                --            2,834,131
   Operating ratio                                 96.3%              104.3%                                   97.8%

IDENTIFIABLE ASSETS

AS OF DECEMBER 31, 2002
   CASH AND CASH EQUIVALENTS            $        97,157     $       195,357                        $        292,514
   PROPERTY AND EQUIPMENT                    50,272,130           4,452,362                              54,724,492
   GOODWILL, NET                                     --           3,452,446                               3,452,446
   LONG-TERM DEBT, INCLUDING CURRENT
     MATURITIES                              31,551,103           2,073,462                              33,624,565

As of December 31, 2001
   Cash and cash equivalents            $       943,574     $     1,277,881                        $      2,221,455
   Property and equipment                    54,740,848           3,772,426                              58,513,274
   Goodwill, net                                     --           3,452,446                               3,452,446
   Long-term debt, including current
     maturities                              37,587,257           1,599,399                              39,186,656

As of December 31, 2000
   Cash and cash equivalents            $       (44,234)    $     1,317,515                        $      1,273,281
   Property and equipment                    62,137,993           4,599,375                              66,737,368
   Goodwill, net                                     --           3,676,246                               3,676,246
   Long-term debt, including current
     maturities                              43,451,096           3,405,479                              46,856,575



(a)  Amounts for 2001 and 2000 included goodwill amortization expense of
     $223,800. Upon the adoption of SFAS No. 142 on January 1, 2002, the
     Company ceased amortization of goodwill.




9. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

The following is a summary of the quarterly results of operations for the years
ended December 31, 2002 and 2001 (in thousands, except per share data). The
summary of quarterly earnings per share may not agree with annual earnings per
share.





                                                                     2002
                                  -------------------------------------------------------------------
                                     March 31,         June 30,         September 30,   December 31,
                                     ---------         --------         -------------   ------------
                                                                            
OPERATING REVENUES (a)            $   30,633         $    33,059         $  33,618      $    30,482
OPERATING INCOME (LOSS)                  (55)              1,530             1,342              (79)
NET INCOME (LOSS)                       (288)                607               495             (340)
BASIC NET (LOSS) INCOME
   PER SHARE                           (0.11)               0.22              0.18            (0.13)
DILUTED NET (LOSS) INCOME
   PER SHARE                           (0.11)               0.22              0.18            (0.13)






                                                                    2001 (b)
                                  -------------------------------------------------------------------
                                     March 31,          June 30,         September 30,  December 31,(c)
                                     ---------          --------         -------------  ---------------
                                                                            
Operating revenues (a)            $   31,420         $    32,732         $  33,404      $    30,004
Operating income (loss)                  453               1,172               980             (386)
Net income (loss)                       (293)                283               230             (627)
Basic and diluted net income
   (loss) per share                    (0.10)               0.10              0.08            (0.22)



(a)  As discussed in Note 1, amounts for each period have been reclassified to
     reflect the inclusion of fuel surcharges in revenues rather as reductions
     of operating expenses.

(b)  Amounts for 2001 included quarterly goodwill amortization expense of
     $55,950. Upon the adoption of SFAS No. 142 on January 1, 2002, the Company
     ceased amortization of goodwill.

(c)  The fourth quarter of 2001 included a reduction in the carrying value of
     revenue equipment and charges to increase reserves for receivables
     associated with owner-operator leases at WTI of approximately $725,000.




INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders of
     Boyd Bros. Transportation Inc.
Clayton, Alabama

We have audited the consolidated balance sheets of Boyd Bros. Transportation
Inc. and subsidiary as of December 31, 2002 and 2001, and the related statements
of operations, stockholders' equity and cash flows for the years then ended.
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. The financial statements of Boyd Bros. Transportation Inc. for
the year ended December 31, 2000, were audited by other auditors whose report
dated February 9, 2001 (March 28, 2001 as to the waiver letters described in
Note 4), expressed an unqualified opinion on those statements.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits 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, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Boyd Bros.
Transportation Inc. and subsidiary as of December 31, 2002 and 2001, and the
results of their operations and their cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.

As discussed in Note 1 to the consolidated financial statements, the Company
adopted Statement of Financial Accounting Standards No. 142, "Goodwill and Other
Intangible Assets" on January 1, 2002.

As discussed in Note 1 to the consolidated financial statements, during the year
ended December 31, 2002 the Company changed the manner in which it records fuel
surcharges upon the adoption of the accounting standards in Emerging Issues Task
Force Issue 01-14.


                                                      /s/ BDO Seidman, LLP




January 31, 2003, except for Note 3,
     which is as of February 10, 2003

EX-21

                                                                      EXHIBIT 21



Subsidiaries of Boyd Bros. Transportation, Inc.

The following companies are subsidiaries of the Registrant:


Subsidiary                                State of Incorporation
- ----------                                ----------------------
WTI Transport, Inc.                       Alabama

EX-23.1

                                                                    Exhibit 23.1





CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


Boyd Bros. Transportation Inc.
Clayton, Alabama

We hereby consent to the incorporation by reference in the Registration
Statements Nos. 33-83768 and 33-78925 on Form S-8 of our reports dated January
31, 2003, except for Note 3, which is as of February 10, 2003, relating to the
2002 consolidated financial statements and schedule of Boyd Bros. Transportation
Inc. and subsidiary appearing in and incorporated by reference in the Company's
Annual Report on Form 10-K for the year ended December 31, 2002.


                                       /s/ BDO Seidman, LLP


Atlanta, Georgia
March 28, 2003

EX-23.2

                                                                    EXHIBIT 23.2

                          INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders of Boyd Bros. Transportation Inc.:

We have audited the accompanying consolidated statements of operations,
stockholders' equity, and cash flows of Boyd Bros. Transportation Inc. and
subsidiary for the year ended December 31, 2000. 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 audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. 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 audit provides a
reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the results of Boyd Bros. Transportation Inc. and subsidiary
operations and their cash flows for the year ended December 31, 2000 in
conformity with accounting principles generally accepted in the United States of
America.


/s/ Deloitte & Touche LLP

Birmingham, Alabama
February 9, 2001 (March 28, 2001 as to the
  waiver letters described in Note 4)

EX-23.3

                                                                    EXHIBIT 23.3

INDEPENDENT AUDITORS' CONSENT AND REPORT ON SCHEDULES

To the Board of Directors and Stockholders of
Boyd Bros. Transportation Inc.:

We consent to the incorporation by reference in Registration Statement Nos.
33-83768 and 33-78925 of Boyd Bros. Transportation Inc. and subsidiary on Form
S-8 of our report dated February 9, 2001 (March 28 as to the waiver letters
described in Note 4), appearing in this Annual Report on Form 10-K of Boyd
Bros. Transportation Inc. and subsidiary for the year ended December 31, 2002.

Our audit of the consolidated financial statements referred to in our
aforementioned report also included the financial statement schedule of Boyd
Bros. Transportation Inc. and subsidiary, listed in Item 14 (a) for the year
ended December 31, 2000. This financial statement schedule is the responsibility
of the Company's management. Our responsibility is to express an opinion based
on our audit. In our opinion, such financial statement schedule, when considered
in relation to the basic 2000 consolidated financial statements as a whole,
presents fairly in all material respects the information set forth therein.

/s/ Deloitte & Touche LLP

Birmingham, Alabama
March 28, 2003

EX-99.1

                                                                    EXHIBIT 99.1

                            CERTIFICATION PURSUANT TO
                                 18 U.S.C. 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     In connection with the Annual Report of Boyd Bros. Transportation Inc. (the
"Company") on Form 10-K for the year ended December 31, 2002, as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Gail B.
Cooper, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C.
1350, as adopted pursuant to Section 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 (15 U.S.C. 78m or 78o(d);
          and

     (2)  The information contained in the Report fairly presents, in all
          material respects, the financial condition and results of operations
          of the Company.


                                By: /s/  GAIL B. COOPER
                                    --------------------------------------------
                                    Gail B. Cooper
                                    Chief Executive Officer
                                    March 28, 2003

EX-99.2

                                                                    EXHIBIT 99.2


                            CERTIFICATION PURSUANT TO
                                 18 U.S.C. 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     In connection with the Annual Report of Boyd Bros. Transportation Inc. (the
"Company") on Form 10-K for the year ended December 31, 2002, as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Richard
C. Bailey, Chief Financial Officer of the Company, certify, pursuant to 18
U.S.C. 1350, as adopted pursuant to Section 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 (15 U.S.C. 78m or 78o(d);
          and

     (2)  The information contained in the Report fairly presents, in all
          material respects, the financial condition and results of operations
          of the Company.


                                By: /s/ RICHARD C. BAILEY
                                    --------------------------------------------
                                    Richard C. Bailey
                                    Chief Financial Officer
                                    March 28, 2003