UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 0-12321
TRANSFINANCIAL HOLDINGS, INC.
(Exact name of Registrant as specified in its charter)
Delaware 46-0278762
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8245 Nieman Road, Suite 100
Lenexa, Kansas 66214
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (913) 859-0055
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes ( X ) No ( )
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at August 1, 1997
Common stock, $0.01 par value 6,153,110 Shares
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
TRANSFINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED JUNE 30,
(In thousands, except per share amounts)
(Unaudited)
<CAPTION>
1997 1996
<S> <C> <C>
Operating Revenues.......................................................... $ 32,775 $ 28,345
Operating Expenses.......................................................... 31,710 27,919
Operating Income............................................................ 1,065 426
Nonoperating Income (Expense)
Interest income.......................................................... 172 217
Other.................................................................... 43 (8)
Total nonoperating income (expense).................................. 215 209
Income Before Income Taxes.................................................. 1,280 635
Income Tax Provision........................................................ 576 273
Net Income.................................................................. $ 704 $ 362
Average Common Shares Outstanding (Note 5).................................. 6,320 6,892
Net Income Per Share........................................................ $ 0.11 $ 0.05
<FN>
The accompanying notes to consolidated financial statements are an
integral part of these statements.
</TABLE>
<TABLE>
TRANSFINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30,
(In thousands, except per share amounts)
(Unaudited)
<CAPTION>
1997 1996
<S> <C> <C>
Operating Revenues.......................................................... $ 64,164 $ 53,561
Operating Expenses.......................................................... 62,165 52,941
Operating Income............................................................ 1,999 620
Nonoperating Income (Expense)
Interest income.......................................................... 390 608
Other.................................................................... 40 26
Total nonoperating income (expense).................................. 430 634
Income Before Income Taxes.................................................. 2,429 1,254
Income Tax Provision........................................................ 1,093 539
Net Income.................................................................. $ 1,336 $ 715
Average Common Shares Outstanding (Note 5).................................. 6,347 7,014
Net Income Per Share........................................................ $ 0.21 $ 0.10
<FN>
The accompanying notes to consolidated financial statements are an
integral part of these statements.
</TABLE>
<TABLE>
TRANSFINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
ASSETS (Unaudited)
<S> <C> <C>
Current Assets:
Cash and temporary cash investments...................................... $ 6,097 $ 9,021
Short-term investments................................................... 6,996 9,957
Freight accounts receivable, less allowance
for doubtful accounts of $441 and $419, respectively................. 11,190 9,233
Finance accounts receivable, less allowance
for doubtful accounts of $464 and $769, respectively................. 16,199 14,554
Current deferred tax assets.............................................. 474 618
Other current assets..................................................... 2,549 1,965
AFS net assets (Note 6).................................................. 7,793 7,570
Total current assets................................................. 51,298 52,918
Operating Property, at Cost:
Revenue equipment........................................................ 26,457 24,373
Land..................................................................... 3,585 3,489
Structures and improvements.............................................. 10,301 10,087
Other operating property................................................. 6,079 5,328
46,422 43,277
Less accumulated depreciation........................................ (21,194) (19,887)
Net operating property........................................... 25,228 23,390
Intangibles, net of accumulated amortization ............................... 9,174 9,497
Other Assets................................................................ 3,289 1,007
$ 88,989 $ 86,812
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable......................................................... $ 3,006 $ 2,980
Accrued payroll and fringes.............................................. 6,810 5,533
Claims and insurance accruals............................................ 251 246
Accrued income taxes..................................................... 331 --
Other accrued expenses................................................... 1,643 2,289
Total current liabilities............................................ 12,041 11,048
Deferred Income Taxes....................................................... 1,661 1,203
Other Non-Current Liabilities............................................... 461 --
Shareholders' Equity (Note 5)
Preferred stock with $0.01 par value, authorized 1,000,000 shares,
none outstanding..................................................... -- --
Common stock with $0.01 par value, authorized 13,000,000 shares,
issued 7,614,670 and 7,605,570 shares, respectively.................. 76 76
Paid-in capital.......................................................... 5,572 5,529
Retained earnings........................................................ 80,578 79,242
Treasury stock, 1,354,712 and 1,224,661 shares, respectively, at cost.... (11,400) (10,286)
Total shareholders' equity........................................... 74,826 74,561
$ 88,989 $ 86,812
<FN>
The accompanying notes to consolidated financial statements are an
integral part of these statements.
</TABLE>
<TABLE>
TRANSFINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30,
(In thousands)
(Unaudited)
<CAPTION>
1997 1996
<S> <C> <C>
Cash Flows From Operating Activities
Net income.......................................................... $ 1,336 $ 715
Adjustments to reconcile net income to
cash provided by operating activities
Gain on sale of operating property, net......................... (47) (41)
Depreciation and amortization................................... 2,212 1,678
Provision for credit losses..................................... 403 364
Deferred tax provision.......................................... 602 136
Net increase (decrease) from change in other
working capital items affecting operating activities........... (1,793) (247)
2,713 2,605
Cash Flows From Investing Activities
Purchase of finance subsidiaries (Note 2)........................... -- (11,979)
Purchase of operating property...................................... (5,441) (3,998)
Origination of finance accounts receivable.......................... (63,229) (53,556)
Sale of finance accounts receivable................................. 41,263 20,885
Collection of owned finance accounts receivable..................... 19,978 32,444
Purchases of short-term investments................................. (6,868) (10,515)
Maturities of short-term investments................................ 9,829 27,298
(4,468) 579
Cash Flows From Financing Activities
Payments to acquire treasury stock.................................. (1,114) (4,385)
Borrowings (repayments) on credit agreements, net................... -- 522
Other............................................................... (55) 135
(1,169) (3,728)
Net Increase (Decrease) in Cash and Temporary Cash Investments........ (2,924) (544)
Cash and Temporary Cash Investments at beginning of period............ 9,021 6,617
Cash and Temporary Cash Investments at end of period.................. $ 6,097 $ 6,073
Cash Paid During the Period for
Interest............................................................ $ -- $ 534
Income Tax.......................................................... $ 27 $ 12
<FN>
The accompanying notes to consolidated financial statements are an
integral part of these statements.
</TABLE>
<TABLE>
TRANSFINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(In thousands)
<CAPTION>
Total
Share
Common Paid-In Retained Treasury holders'
Stock Capital Earnings Stock Equity
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1995.................. $ 76 $ 5,357 $ 78,390 $ (3,543) $ 80,280
Net income.................................... -- -- 852 -- 852
Issuance of shares under Incentive Stock Plan -- 172 -- (87) 85
Purchase of 797,341 shares of common stock.... -- -- -- (6,656) (6,656)
Balance at December 31, 1996.................. 76 5,529 79,242 (10,286) 74,561
Net income.................................... -- -- 1,336 -- 1,336
Issuance of shares under Incentive Stock Plan. -- 43 -- -- 43
Purchase of 130,051 shares of common stock.... -- -- -- (1,114) (1,114)
Balance at June 30, 1997 (unaudited).......... $ 76 $ 5,572 $ 80,578 $(11,400) $ 74,826
<FN>
The accompanying notes to consolidated financial statements are an
integral part of these statements.
</TABLE>
TRANSFINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include TransFinancial Holdings, Inc.
("TransFinancial") and all of its subsidiary companies (the "Company").
Pursuant to the approval of shareholders the Company changed its name from
Anuhco, Inc. to TransFinancial Holdings, Inc. effective June 30, 1997. All
significant intercompany accounts and transactions have been eliminated in
consolidation. The condensed financial statements included herein have been
prepared pursuant to the rules and regulations of the Securities and Exchange
Commission ("SEC") and have not been examined or reviewed by independent public
accountants. In the opinion of management, all adjustments necessary to fairly
present the results of operations have been made.
Pursuant to SEC rules and regulations, certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted from these statements unless significant changes have taken place since
the end of the most recent fiscal year. TransFinancial believes that the
disclosures contained herein, when read in conjunction with the financial
statements and notes included, or incorporated by reference, in TransFinancial's
Form 10-K/A-3, filed with the SEC on May 5, 1997, are adequate to make the
information presented not misleading. It is suggested, therefore, that these
statements be read in conjunction with the statements and notes included, or
incorporated by reference, in the aforementioned report on Form 10-K/A-3.
2. ACQUISITION OF PREMIUM FINANCE SUBSIDIARIES
On March 29, 1996, TransFinancial completed the acquisition of all of the
issued and outstanding stock of Universal Premium Acceptance Corporation and
UPAC of California, Inc. (together referred to as "UPAC"). UPAC and Agency
Premium Resource, Inc. ("APR"), the Company's other finance subsidiary, offer
short-term collateralized financing of commercial and personal insurance
premiums through approved insurance agencies throughout the United States. At
March 31, 1996, UPAC had outstanding net finance receivables of approximately
$30 million. This transaction was accounted for as a purchase. TransFinancial
utilized a portion of its available cash and short-term investments to
consummate the purchase at a price of approximately $12 million. The terms of
the acquisition and the purchase price resulted from negotiations between
TransFinancial and William H. Kopman, the former sole shareholder of UPAC. In
connection with the purchase of UPAC, the Company has recorded goodwill of $6.6
million, which is being amortized on the straight-line basis over 25 years.
In addition to the Stock Purchase Agreement by which TransFinancial acquired
all of the UPAC stock, the Company entered into a consulting agreement with Mr.
Kopman. Under the consulting agreement, Anuhco is entitled to consult with Mr.
Kopman on industry developments as well as UPAC operations through December 31,
1998. In addition to retaining the services of Mr. Kopman under a consulting
agreement, certain executive management personnel of UPAC were retained under
multiyear employment agreements.
The unaudited pro forma operating results of TransFinancial for the six months
ended June 30, 1996, assuming the acquisition occurred as of the beginning of
the period, were operating revenues of $54,794,000, net income of $700,000, and
net income per share of $0.10. The pro forma results of operations are not
necessarily indicative of the actual results that would have been obtained had
the acquisition been made at the beginning of the period, or of results which
may occur in the future.
3. PROFIT SHARING
In September 1988, the employees of Crouse Cartage Company ("Crouse"), a
wholly owned subsidiary of TransFinancial, approved the establishment of a
profit sharing plan ("the Plan"). The Plan is structured to allow all employees
(union and non-union) to ratably share 50% of Crouse's income before income
taxes (excluding extraordinary items and gains or losses on the sale of assets)
in return for a 15% reduction in their wages. Plan distributions are made on a
quarterly basis. The Plan was recertified in 1991 and 1994, and shall continue
in effect through March 31, 1998, or until a replacement of the Collective
Bargaining Agreement is reached between the parties, whichever is the later.
The accompanying consolidated balance sheets as of June 30, 1997 include an
accrual for profit sharing costs of $1,047,000. The accompanying consolidated
statements of income include profit sharing costs of $1,047,000 and $724,000 for
the second quarter of 1997 and 1996, respectively, and $1,826,000 and $1,189,000
for the first six months of 1997 and 1996, respectively.
4. FINANCING AGREEMENTS
In December, 1996, TransFinancial, UPAC and APR Funding Corporation (a wholly-
owned subsidiary) entered into an extendible three year securitization agreement
whereby undivided interests in a designated pool of accounts receivable can be
sold on an ongoing basis. The maximum allowable amount of receivables to be
sold under the agreement is $50,000,000. This agreement replaced a similar
securitization agreement with another financial institution that was entered
into in October, 1995 and UPAC's secured credit agreement, dated July, 1994.
The purchaser permits principal collections to be reinvested in new financing
agreements. The Company had securitized receivables of $35.2 million at June
30, 1997. The cash flows from the sale of receivables are reported as investing
activities in the accompanying consolidated statement of cash flows. The
securitized receivables are reflected as sold in the accompanying balance sheet.
The proceeds from the initial securitization of the receivables were used to
purchase previous securitized receivables under the prior agreement and to pay
off the secured note payable under UPAC's secured credit agreement.
The terms of the agreement require UPAC to maintain a minimum tangible net
worth of $5 million and contain restrictions on the payment of dividends by UPAC
to TransFinancial without prior consent of the financial institution. The terms
of the agreement also require the Company to maintain a minimum tangible net
worth of $50 million. The Company was in compliance with all such provisions at
June 30, 1997. The terms of the securitization agreement also require that UPAC
maintain a default reserve at specified levels which serves as collateral. At
June 30, 1997, approximately $4.9 million of owned finance receivables served as
collateral under the default reserve provision.
Effective January 1, 1997, the Company adopted the requirements of Statement
of Financial Accounting Standards No. 125 ("SFAS No. 125"), "Accounting for the
Transfers and Servicing of Financial Assets and Extinguishment of Liabilities,"
for transfers occurring after December 31, 1996. The adoption of SFAS No. 125
did not have a material impact on the net income of the Company.
In September 1988, Crouse entered into a multi-year credit agreement with a
commercial bank which provided for maximum borrowings equaling the lesser of
$2,500,000 or the borrowing base, as defined in such agreement. In September,
1996 the term of this agreement was extended to June 30, 1998. There was no
outstanding balance on this revolving line of credit at June 30, 1997.
5. SHAREHOLDERS' EQUITY
Income per share is based on the average number of common shares outstanding
during each period. The average number of common shares so computed was
6,319,699 and 6,891,740 for the quarters ended June 30, 1997 and 1996,
respectively, and 6,347,201 and 7,013,878 for the first six months of 1997 and
1996, respectively.
On June 26, 1995, the Company adopted a program to repurchase up to 10% of its
outstanding shares of common stock. During the second quarter of 1996, the
Company completed this initial repurchase program and expanded the number of
shares authorized to be repurchased by an additional 10% of its then outstanding
shares. During the second quarter and first six months of 1997, the Company
repurchased an additional 105,051 shares and 130,051 shares of common stock,
respectively, bringing the total shares repurchased to 1,344,492 shares, or
17.8% of outstanding shares before initiating the program, at a total cost of
$11,314,000.
On June 26, 1997, the shareholders of the Company approved a 1-for-100 reverse
stock split followed by a 100-for-1 forward stock split. These stock splits
were effected on July 1, 1997. The result of this transaction was the
cancellation of approximately 107,000 shares of common stock held by holders of
fewer than 100 shares at a market price of $8.89 per share.
6. AFS NET ASSETS
Under the provisions of a Joint Plan of Reorganization ("the Joint Plan"), AFS
is responsible for the administration of pre-July 12, 1991 creditor claims and
conversion of assets owned before that date. As claims were allowed and cash
was available, distributions to the creditors occurred. The Joint Plan also
provided for distributions to TransFinancial as unsecured creditor distributions
occurred in excess of 50% of allowed claims. TransFinancial also will receive
the full benefit of any remaining assets of AFS through its ownership of AFS
stock, after unsecured creditors received distributions, including interest,
equivalent to 130% of their claims.
AFS has made the full payment of all its resolved claims and liabilities. The
remaining AFS net assets are estimated to have net realizable value of $9.8
million. The primary assets include approximately $6.6 million in cash and
investments. There are no material claims outstanding as of June 30, 1997. The
remaining AFS assets are recorded at their estimated net realizable value.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
RESULTS OF OPERATIONS
Second quarter and six months ended June 30, 1997 compared to the second quarter
and six months ended June 30, 1996
With the acquisition of APR on May 31, 1995, and UPAC on March 29, 1996,
TransFinancial now operates in two distinct industries; transportation, through
its subsidiary, Crouse; and financial services, through its subsidiaries, APR
and UPAC.
TRANSPORTATION
Operating Revenue - The changes in transportation operating revenue are
summarized in the following table (in thousands):
Qtr. 2 1997 Six Months 1997
vs. vs.
Qtr. 2 1996 Six Months 1996
Increase (decrease) from:
Increase in LTL tonnage........................ $3,063 $7,284
Increase in LTL revenue per hundredweight...... 968 1,233
Increase in truckload revenues................. 441 811
Net increase............................... $4,472 $9,328
Less-than-truckload ("LTL") operating revenues rose by 18.5% and 20.4% for the
second quarter and first six months of 1997, respectively, as compared to the
same periods in 1996. Crouse achieved increases of 14.1% and 17.4% in LTL tons
for the second quarter and first six months of 1997, respectively, compared to
1996. Crouse's LTL revenue yield improved approximately 3.9% and 2.5%,
respectively, from the second quarter and first six months of 1996 to the same
periods of 1997. These improvements were the result of a general rate increase
placed in effect January 1, 1997, negotiated rate increases on certain shipping
contracts and fuel surcharges to pass-through to customers the continuing high
cost of diesel fuel.
Truckload operating revenues were more than 9% higher in the periods of 1997,
on approximately 10% more shipments, offset by slight declines in revenue per
shipment.
Operating Expense - A comparative summary of transportation operating expenses
as a percent of transportation operating revenue follows:
<TABLE>
<CAPTION>
Percent of Operating Revenue
Second Quarter Six Months
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Salaries, wages and employee benefits................... 56.8% 55.7% 56.7% 55.7%
Operating supplies and expenses.......................... 12.1% 12.9% 12.6% 13.1%
Operating taxes and licenses............................. 2.7% 2.7% 2.8% 2.9%
Insurance and claims..................................... 1.9% 2.1% 1.9% 2.0%
Depreciation............................................. 3.0% 2.6% 3.0% 2.6%
Purchased transportation................................. 20.0% 21.2% 19.9% 21.3%
Total operating expenses............................. 96.5% 97.2% 96.9% 97.6%
</TABLE>
Crouse's operating expenses as a percentage of operating revenue, or operating
ratio, improved for the second quarter and first six months of 1997 as compared
to 1996. An increase in the proportion of LTL tons and revenues of total tons
and revenues resulted in the increases in salaries, wages and employee benefits
and depreciation and the decrease in purchased transportation as a percent of
revenues. The improvement in the 1997 operating ratios was the result of
spreading the fixed component of the Company's operating expenses over increased
operating revenues.
FINANCIAL SERVICES
In the second quarter and first six months of 1997, APR and UPAC financed
$32.4 million and $63.4 million, respectively, in insurance premiums at an
average annual yield of 14.5%. These operations generated net operating income
of $288,000 and $662,000, on net finance charges, fees and other income earned
of $2.1 million and $4.3 million for the second quarter and first six months of
1997, respectively. These results compare to second quarter and first six
months of 1996 financings of $35.9 million and $50.1 million at average annual
yields of 14.6% and 14.2%, respectively, which produced operating income of
$91,000 and $87,000 on net finance charges, fees and other income earned of $2.1
million and $3.0 million for the second quarter and first six months of 1996,
respectively. The increases in premium financed, net finance charges, fees and
other income are primarily the result of the Company's acquisition of UPAC
effective March 29, 1996, operating income was positively impacted by the
integration of the administrative operations of UPAC and APR. Also,
contributing to the increased operating income was the impact of the Company's
new securitization agreement and the increase in receivables sold through that
agreement by the inclusion of UPAC receivables. See Note 4 - Financing
Agreements in the Notes to Consolidated Financial Statements.
OTHER
Primarily as a result of its utilization of cash and short-term investments
for the acquisition of UPAC and the stock repurchase program since the first
quarter of 1996, TransFinancial recorded a substantial decrease in interest
income for the periods ended June 30, 1997, from the corresponding period of
1996. TransFinancial's effective tax rate increased for the second quarter and
first six months of 1997, to 45% from 43% for the same periods of 1996.
Outlook
The following statements are forward-looking statements, within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended, and as such
involve risks and uncertainties which are detailed below under the caption
"Forward-Looking Statements".
The Company's three-year strategic plan includes the goal of continuing the
growth of each of its business segments, and making the financial services
segment a more equal contributor to the Company's earnings per share. In the
transportation segment, the plan calls for the Company to continue to provide
and improve upon its already superior service to its customers in its primary
operating territory, while extending its operations throughout the Midwest. As
the Company makes the strategic investments necessary to support this expansion,
the Company intends to continue to improve the efficiency and effectiveness of
its existing base of operations.
The financial services segment will also focus on increasing its market
penetration in certain states with substantial population and industrial base.
The additional volumes of premium finance contracts is expected to be handled
within the Company's existing administrative operations without incurring
significant additional fixed costs.
In addition to the expansion of its existing operations in each of its
business segments, the Company continues to consider potential acquisitions
which would complement these operations.
Forward-Looking Statements
Certain statements contained in this Quarterly Report on Form 10-Q which are
not statements of historical fact constitute forward-looking statements within
the meaning of Section 21E of the Securities Exchange Act of 1934, as amended,
including, without limitation, the statements specifically identified as
forward-looking statements in this Form 10-Q. In addition, certain statements
in future filings by the Company with the Securities and Exchange Commission, in
the Company's press releases, and in oral statements made by or with the
approval of an authorized executive officer of the Company which are not
statements of historical fact constitute forward-looking statements within the
meaning of the Act. Examples of forward-looking statements include, but are not
limited to (i) projections of revenues, income or loss, earnings or loss per
share, capital expenditures, the payment or non-payment of dividends, capital
structure and other financial items, (ii) statements of plans and objectives of
the Company or its management or Board of Directors, including plans or
objectives relating to the products or services of the Company, (iii) statements
of future economic performance, and (iv) statements of assumptions underlying
the statements described in (i), (ii) and (iii). These forward-looking
statements involve risks and uncertainties which may cause actual results to
differ materially from those anticipated in such statements. The following
discussion identifies certain important factors that could affect the Company's
actual results and actions and could cause such results or actions to differ
materially from any forward-looking statements made by or on behalf of the
Company that related to such results or actions. Other factors, which are not
identified herein, could also have such an effect.
Transportation
Certain specific factors which may affect the Company's transportation
operation include: increasing competition from other regional and national
carriers for freight in the Company's primary operating territory; increasing
price pressure; changes in fuel prices; labor matters; including changes in
labor costs, and other labor contract issues; and, environmental matters.
Financial Services
Certain specific factors which may affect the Company's financial services
operation include: the performance of financial markets and interest rates; the
performance of the insurance industry; increasing competition from other premium
finance companies and insurance carriers for finance business in the Company's
key operating states; the successful acquisition and integration of additional
premium finance operations or receivables portfolios; and, the inability to
obtain continued financing at a competitive cost of funds.
General Factors
Certain general factors which could affect both the Company's transportation
operation and the Company's financial services operation include: changes in
general business and economic conditions; changes in governmental regulation,
and; tax changes. Expansion of these businesses into new states or markets is
substantially dependent on obtaining sufficient business volumes from existing
and new customers in these new markets at compensatory rates.
The cautionary statements made pursuant to Section 21E of the Securities
Exchange Act of 1934, as amended, are made as of the date of this Report and are
subject to change. The cautionary statements set forth in this Report are not
intended to cover all of the factors that may affect the Company's businesses in
the future. Forward-looking information disseminated publicly by the Company
following the date of this Report may be subject to additional factors hereafter
published by the Company.
FINANCIAL CONDITION
The Company's financial condition remained strong at June 30, 1997 with more
than $13 million in cash and investments at the TransFinancial level, as well as
approximately $6.6 million in cash and investments held in the discontinued
operation. In addition, during the first six months of 1997, the Company has
purchased $5.5 million of operating property and equipment, without incurring
any significant long term indebtedness.
A substantial portion of the capital required for UPAC's and APR's insurance
premium finance operations has been provided through the sale of undivided
interests in a designated pool of receivables on an ongoing basis under
receivables securitization agreements. The current securitization agreement,
which matures December 31, 1999, currently provides for the sale of a maximum of
$50 million of eligible receivables. As of June 30, 1997, $35.2 million of such
receivables had been securitized.
On June 26, 1995, the Company adopted a program to repurchase up to 10% of its
outstanding shares of common stock. During the second quarter of 1996 the
Company completed this program and expanded the program to include an additional
10% of its then outstanding shares. During the first six months of 1997, the
Company repurchased 130,051 shares of common stock bringing the total shares
repurchased to 1,344,492, or 17.8% of outstanding shares before initiating the
program, at a total cost of $11,314,000. This program is being funded from
available cash and investments.
On June 26, 1997, the shareholders of the Company approved a 1-for-100 reverse
stock split followed by a 100-for-1 forward stock split. These stock splits
were effected on July 1, 1997. The result of this transaction was the
cancellation of about 107,000 shares of common stock held by holders of fewer
than 100 shares at a market price of $8.89 per share.
Effective July 31, 1997, the Company entered into a subscription agreement with
a start-up venture, pursuant to which TransFinancial committed to a $2.9 million
capital contribution over two years in exchange for the exclusive lease and/or
sale rights to equipment produced by, and a controlling interest in, the
venture. The venture owns patent and other rights relating to a particle
reduction process. The venture intends to market equipment utilizing this
process to companies which require sub-micron materials in their manufacturing
processes. The Company does not believe this operation will have a material
impact on its consolidated results of operations or financial position during
1997.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings Reference is made to Item 3 of the Registrant's
Annual Report on Form 10-K for the year ended December 31, 1996.
Item 2 Changes in Securities None
Item 3. Defaults Upon Senior Securities None
Item 4. Submission of Matters to vote of Security Holders
(a) Annual Meeting of Shareholders was held on June 26, 1997.
(b) The nominees for the board of directors previously reported to the
Commission in the Company's Proxy Statement were elected.
(c) The matters voted upon at the Annual Meeting were as follows:
(1) The amendment of Article FOURTH of the Certificate of Incorporation to
effect a 1-for-100 reverse stock split followed by a 100-for-1 forward
stock split was approved with 4,477,214 shares voting for, 104,538
shares voting against, 32,077 shares abstaining and 43,075 shares
delivered by brokers not voted.
(2) The amendment of Article FIRST of the Certificate of Incorporation
changing the name of the Corporation to TransFinancial Holdings, Inc.
was approved with 4,492,009 shares voting for, 141,895 shares voting
against and 23,000 shares abstaining.
(3) All seven nominees for director were elected as follows:
Shares Voted
Nominees For Withheld
William D. Cox 4,586,239 70,665
Lawrence D. ("Larry") Crouse 4,587,914 68,990
J. Richard Devlin 4,586,721 70,183
Harold C. Hill, Jr. 4,587,297 69,607
Roy R. Laborde 4,617,033 39,871
Timothy P. O'Neil 4,567,771 89,133
Eleanor Brantley Schwartz 4,619,412 37,492
(4) The selection of Coopers & Lybrand L.L.P. as independent public
accountants was ratified with 4,614,239 shares voting for 19,821 shares
voting against, and 22,844 shares abstaining.
Item 5. Other Information
Effective July 31, 1997, the Company entered into a subscription agreement
with a start-up venture, pursuant to which TransFinancial committed to a
$2.9 million capital contribution over two years in exchange for the
exclusive lease and/or sale rights to equipment produced by, and a
controlling interest in, the venture. The venture owns patent and other
rights relating to a particle reduction process. The venture intends to
market equipment utilizing this process to companies which require sub-
micron materials in their manufacturing processes. The Company does not
believe this operation will have a material impact on its consolidated
results of operations or financial position during 1997.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3(a)* 1997 Amended and Restated Certificate of Incorporation of the
Registrant.
4* Specimen Certificate of the Common Stock, $.01 par value, of the
Registrant.
19(a)* Report to Shareholders for the Second Quarter, 1997, dated July
25, 1997.
27* Financial Data Schedule.
* Filed herewith.
(b) Reports on Form 8-K None
(SIGNATURE)
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TransFinancial Holdings, Inc.
Registrant
By: /s/Timothy P. O'Neil
Timothy P. O'Neil, President &
Chief Executive Officer
By: /s/Mark A. Foltz
Mark A. Foltz
Vice President, Finance and
Secretary
Date: August 5, 1997
EXHIBIT INDEX
Assigned
Exhibit
Number Description of Exhibit
3(a) 1997 Amended and Restated Certificate of Incorporation of the Registrant.
4 Specimen Certificate of the Common Stock, $.01 par value, of the
Registrant.
19(a) Report to Shareholders for the Second Quarter, 1997, dated July 25, 1997.
27 Financial Data Schedule.
ANUHCO, INC.
1997 AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
ANUHCO INC., a Corporation organized and existing under and by virtue of
The General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:
1. The name under which the Corporation was originally incorporated was
All-American Transport, Inc., and the date of filing its original Certificate of
Incorporation was April 6, 1976. The name of the Corporation was American
Freight System, Inc. from April 6, 1977 to April 27, 1978; A C T Companies Inc.
from April 27, 1978 to February 10, 1981; American Carriers, Inc. from February
10, 1981 to July 11, 1991; and Anuhco, Inc. from July 11, 1991 to June 30, 1997.
2. This Amended and Restated Certificate of Incorporation restates,
integrates and further amends the prior Restated Certificate of Incorporation by
amending Article FOURTH to provide for a 1-for-100 reverse stock split followed
by a 100-for-1 forward stock split and by amending Article FIRST to change the
name of the corporation to TRANSFINANCIAL HOLDINGS, INC.
3. This amendment to and restatement of the Certificate of Incorporation
has been duly adopted in accordance with the provisions of Sections 242 and 245
of the General Corporation law of the State of Delaware.
4. Pursuant to Section 103(d) of the General Corporation Law of the State
of Delaware, this Amended and Restated Certificate of Incorporation shall become
effective at 6:00 p.m. Eastern time on July 1, 1997.
5. The text of the Certificate of Incorporation, as restated, reads as
hereinbelow set forth in full:
FIRST. The name of the Corporation is TRANSFINANCIAL HOLDINGS, INC.
SECOND. The address of the Corporation's registered office in the State
of Delaware is 1209 Orange Street in the City of Wilmington, County of New
Castle. The name of its registered agent at such address is The Corporation
Trust Company.
THIRD. The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of Delaware.
FOURTH. The total number of shares of capital stock of all
classifications which the Corporation shall have the authority to issue is
fourteen million (14,000,000) shares, of which (a) one million (1,000,000)
shares shall be Preferred Stock of one cent ($0.01) par value per share; and (b)
thirteen million (13,000,000) shares shall be Common Stock of one cent ($0.01)
par value per share.
Any shares of capital stock issued shall have voting power and, if more
than one class of capital stock is issued, an appropriate distribution of such
power among such classes shall be made; including, in the case of capital stock
having a preference over another class of equity securities with respect to
dividends, adequate provisions for the election of directors representing such
preferred class in the event of default in the payment of such dividends.
The designations, powers, preferences and rights and the qualifications,
limitations or restrictions of the Preferred Stock and Common Stock are as
follows:
PART I
PREFERRED STOCK
The Preferred Stock may be issued from time to time in one or more series
and with such designation for each such series as shall be stated and expressed
in the resolution or resolutions providing for the issue of each such series
adopted by the Board of Directors. The Board of Directors in any such
resolution or resolutions is expressly authorized to state and express for each
such series:
A. The voting powers of the holders of stock of such series;
B. The rate per annum and the times at and conditions upon which the
holders of stock of such series shall be entitled to receive dividends, and
whether such dividends shall be cumulative or noncumulative and if cumulative
terms upon which such dividends shall be cumulative;
C. The price or prices and the time or times at and the number in which
the stock of such series shall be redeemable;
D. The rights to which the holders of the shares of such series shall
be entitled upon any voluntary or involuntary liquidation, dissolution or
winding-up of the Corporation;
E. The terms, if any, upon which shares of stock of such series shall
be convertible into, or exchangeable for, shares of stock of any other class or
classes or of any other series of the same or any other class or classes,
including the price or prices or the rate or rates of conversion of exchange and
the terms of adjustment, if any; and
F. Any other designations, preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof so far as they are not inconsistent with the provisions of
the Certificate of Incorporation, as amended, and to the full extent now or
hereafter permitted by the laws of Delaware.
G. The Preferred Stock, with respect to both dividends and distribution
of assets on liquidation, dissolution or winding-up, shall rank prior to the
Common Stock.
All shares of the Preferred Stock of any one series shall be identical to
each other in all respects, except that shares of any one series issued at
different times may differ as to the dates from which dividends thereon, if
cumulative, shall be cumulative. Each share of Preferred Stock shall rank on a
parity with each other share of Preferred Stock irrespective of series, with
respect to preferential dividends at the respective rates fixed for such series;
and no dividend shall be declared and paid or set apart for payment on the
Preferred Stock of any series unless at the same time a dividend in like
proportion to the dividends accrued upon the Preferred Stock of each other
series shall be declared and paid or set apart for payment, as the case may be,
on Preferred Stock of each other series then outstanding. Unless dividends at
the rate prescribed for each series shall be declared and paid or set apart for
payment in full on all outstanding shares of Preferred Stock for all previous
quarterly dividend periods and for the current quarterly dividend period, no
dividends shall be declared or paid upon, and no assets shall be distributed to
or set apart for, shares of junior stock. No shares of Preferred Stock shall be
purchased or redeemed by the Corporation unless all dividends on the Preferred
Stock for all past quarterly dividend periods shall have been declared and paid
or a sum sufficient for the payment thereof set apart and the full dividend
thereon for the current dividend period shall have been, or currently shall be,
paid or declared. Accrued and unpaid dividends on the Preferred Stock shall not
bear interest. The term "accrued and unpaid dividends", as used herein with
respect to the Preferred Stock, shall mean dividends on all outstanding
Preferred Stock at the rates fixed for the respective series thereof, from the
respective dates from which such dividends shall accrue to the date as of which
accrued and unpaid dividends are being determined, less the aggregate of
dividends theretofore declared and paid or set apart for payment upon such
outstanding Preferred Stock.
PART II
COMMON STOCK
A. Subject to the prior and superior rights of the Preferred Stock, as
set forth in the foregoing Part I, or in any directors' resolutions providing
for the issue of a series of the Preferred Stock, such dividends (payable in
cash, stock or otherwise), as may be determined by the Board of Directors, may
be declared and paid on Common Stock from time to time to the holders of the
Common Stock.
B. In the event of any liquidation, dissolution or winding-up of the
affairs of the Corporation, whether voluntary or involuntary, all assets
remaining after the payment to the holders of the Preferred Stock at the time
outstanding of the full amounts to which they shall be entitled shall be divided
and distributed among the holders of the Common Stock according to their
respective shares.
C. Each holder of the Common Stock shall have one vote for all purposes
in respect to each share of such stock held. Subject to the voting rights of
the Preferred Stock that may be provided for pursuant to this Article Fourth,
the holders of Common Stock shall possess the sole voting power of this
Corporation.
Reverse Stock Split
and Forward Stock Split
At 6:00 p.m. (Eastern time) on the effective date of the amendment adding
these paragraphs to Article FOURTH ("Effective Date"), each share of the
Corporation's Common Stock held of record as of 6:00 p.m. (Eastern time) on the
Effective Date shall be and hereby is automatically reclassified and converted,
without further action, into one-one hundredth (1/100) of one share of the
Corporation's Common Stock. No fractions of shares shall be issued to any Odd-
Lot Holder (as defined below), and from and after 6:00 p.m. on the Effective
Date, each Odd-Lot Holder shall have no further interest as a stockholder in
respect of such fractions of shares, and in lieu of receiving such fractions of
shares shall be entitled to receive, upon surrender of the certificate or
certificates representing shares of Common Stock held of record by such Odd-Lot
Holder, the cash value of such fractions of shares based upon the average
closing price per share of the Corporation's Common Stock on the American Stock
Exchange for the 10 trading days immediately preceding the Effective Date,
without interest. An "Odd-Lot Holder" is defined as a holder of record of fewer
than 100 shares of Common Stock as of 6:00 p.m. (Eastern time) on the Effective
Date, who would be entitled to less than one whole share of Common Stock in
respect of such shares as a result of such reclassification and conversion.
At 7:00 p.m. (Eastern time) on the Effective Date, each share of the
Corporation's Common Stock and any fraction thereof held by a holder of record
of one or more shares of Common Stock as of 7:00 p.m. (Eastern time) on the
Effective Date shall be and hereby is automatically reclassified and converted,
without further action, into the Corporation's Common Stock, on the basis of one
hundred (100) new shares of Common Stock for each whole share of Common Stock.
FIFTH. Other than as the Board of Directors in its discretion may
otherwise determine, no holder of stock of the Corporation of any class
heretofore authorized or which may hereafter be authorized or of any series of
any such class, shall, as such holder and because of his ownership of stock,
have any preemptive or other right to purchase or subscribe for any shares of
stock of the Corporation of any such class or of any series of any such class,
or any obligations or instruments which the Corporation has heretofore issued or
sold or may hereafter issue or sell that are or shall be convertible into or
exchangeable for or entitle the holders thereof to subscribe for or purchase any
shares of stock of the Corporation of any such class or of any series of any
such class. Any part of the stock of the Corporation and any part of the notes,
debentures, bonds or other securities convertible into or carrying options or
warrants to purchase stock of the Corporation which may hereafter be authorized
may at any time be issued, optioned for sale, and sold or disposed of pursuant
to resolutions of the Board of Directors to such persons and upon such terms and
conditions as may to the Board of Directors seem proper and advisable without
first offering said stock or such other securities or any part thereof to
existing stockholders.
SIXTH. The Board of Directors of the Corporation is expressly authorized
to adopt, amend or repeal the Bylaws of the Corporation.
SEVENTH. Elections of Directors need not be by written ballot, except and
to the extent provided in the Bylaws of the Corporation.
EIGHTH. 1. In addition to any affirmative vote required by law or this
Certificate of Incorporation, and except as expressly provided in Section 2 of
this Article EIGHTH, the affirmative vote of the holders of three-fourths (3/4)
or more of the outstanding shares of Voting Stock (as hereinafter defined) held
by stockholders other than the Interested Stockholder (as hereinafter defined)
involved in the Business Combination (as hereinafter defined) shall be required
for the approval or authorization of any Business Combination involving such
Interested Stockholder.
2. The provisions of Section 1 of this Article EIGHTH shall not be
applicable if:
A. The Business Combination shall have been approved by a majority
of the Continuing Directors (as hereinafter defined); or
B. The Business Combination is a merger or consolidation and the
cash or Fair Market Value (as hereinafter defined) as of the date of
the Business Combination of the property, securities or other
consideration to be received per share by the stockholders of each
class of stock of the Corporation in the Business Combination, if
applicable, is not less than the highest per share price paid by the
Interested Stockholder, with appropriate adjustments for stock splits,
stock dividends and like distributions, in the acquisition by the
Interested Stockholder of any of its holdings of each class of the
Corporation's capital stock.
3. For purposes of this Article EIGHTH:
A. The term "Business Combination" shall mean:
(i) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with (a) any Interested
Stockholder or (b) any other corporation (whether or not itself
an Interested Stockholder) which is, or after such merger or
consolidation would be, an "Affiliate" (as defined on January 6,
1984 in Rule 12b-2 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") of an Interested Stockholder;
(ii) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of
transactions) to or with any Interested Stockholder or any
Affiliate of any Interested Stockholder of any assets of the
Corporation or any Subsidiary that have an aggregate Fair Market
Value of $1,000,000 or more;
(iii) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of transactions) of
any securities of the Corporation or any Subsidiary to any
Interested Stockholder or any Affiliate of any Interested
Stockholder in exchange for cash, securities or other property
(or a combination thereof) having an aggregate Fair Market Value
of $1,000,000 or more;
(iv) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of any
Interested Stockholder or any Affiliate of any Interested
Stockholder; or
(v) any reclassification of securities (including any reverse
stock split), or recapitalization of the Corporation, or any
merger or consolidation of the Corporation with any of its
Subsidiaries or any other transaction (whether or not with or
into or otherwise involving any Interested Stockholder) which has
the effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any class of
equity or convertible securities of the Corporation or any
Subsidiary which is directly or indirectly owned by any
Interested Stockholder or any Affiliate of any Interested
Stockholder.
B. The term "Continuing Director" shall mean any member of the Board
of Directors of the Corporation who is unaffiliated with the
Interested Stockholder and was a member of the Board of Directors
prior to the time that the Interested Stockholder became an Interested
Stockholder, any successor of a Continuing Director if the successor
is unaffiliated with the Interested Stockholder and is recommended or
elected to succeed a Continuing Director by a majority of Continuing
Directors.
C. The term "Fair Market Value" shall mean:
(i) in the case of stock, the highest closing sale price during
the 30-day period immediately preceding the date in question of a
share of such stock on the principal United States securities
exchange registered under the Exchange Act on which such stock is
listed, or if such stock is not listed on any such exchange, the
highest closing sale price with respect to a share of such stock
during the 30-day period preceding the date in question on the
National Association of Securities Dealers, Inc. Automated
Quotation System or any system then in use, or if no such
quotations are available, the fair market value on the date in
question of a share of such stock as determined in good faith by
a majority of Continuing Directors; and
(ii) in the case of property or securities other than cash or
stock, the fair market value of such property or securities on
the date in question as determined in good faith by a majority of
Continuing Directors.
D. The term "Interested Stockholder" shall mean and include any
individual, corporation, partnership or other person or entity (other
than the Corporation or any Subsidiary) which, together with its
Affiliates and "Associates" (as defined on January 6, 1984 in Rule
12b-2 under the Exchange Act), "Beneficially Owns" (as defined on
January 6, 1984 in Rule 13d-3 under the Exchange Act) in the aggregate
five percent (5%) or more of the outstanding shares of Voting Stock,
and any Affiliate or Associate of any such individual, corporation,
partnership or other person or entity.
E. The term "Voting Stock" shall mean all of the outstanding shares
of capital stock of the Corporation entitled to vote generally in the
election of directors.
F. The term "Subsidiary" shall mean any corporation of which a
majority of any class of equity security is owned, directly or
indirectly, by the Corporation; provided, however, that for the
purposes of the definition of Interested Stockholder set forth in
paragraph D of this Section 3, the term "Subsidiary" shall mean only a
corporation of which a majority of each class of equity security is
owned, directly or indirectly, by the Corporation.
G. Without limitation, any share of Voting Stock that any Interested
Stockholder has the right to acquire at any time (notwithstanding the
fact that Rule 13d-3 under the Exchange Act deems such shares to be
Beneficially Owned only if such right may be exercised within 60 days)
pursuant to any agreement, or upon exercise of conversion rights,
warrants or options, or otherwise, shall be deemed to be "Beneficially
Owned" by the Interested Stockholder and to be outstanding for
purposes of Paragraph D of this Section 3.
H. In the event of any Business Combination in which the Corporation
survives, the term "other consideration to be received" as used in
Paragraph B of Section 3 of this Article EIGHTH shall include without
limitation any shares of capital stock of the Corporation retained by
the holders of such shares.
I. An Interested Stockholder shall be deemed to have acquired a
share of Voting Stock at the time when such Interested Stockholder
became the Beneficial Owner thereof. With respect to the shares owned
by Affiliates, Associates or other persons whose ownership is
attributed to an Interested Stockholder under the definition of
Interested Stockholder contained in Paragraph D of this Section 3, if
the price paid by such Interested Stockholder for such shares is not
determined by a majority of the Continuing Directors, the price so
paid shall be deemed to be the higher of:
(i) the price paid upon the acquisition thereof by the
Affiliate, Associate or other person, or
(ii) the Fair Market Value of the shares in question at the time
when the Interested Stockholder became the Beneficial Owner
thereof.
J. A majority of the Continuing Directors shall have the exclusive
right to determine for purposes of this Article EIGHTH, on the basis
of information known to them after reasonable inquiry, whether:
(i) a person is an Interested Stockholder;
(ii) the number of shares of Voting Stock Beneficially Owned by
any person;
(iii) whether a person is an Affiliate or Associate of another;
and
(iv) whether the assets which are the subject of any Business
Combination have, or the consideration to be received for the
issuance or transfer of securities by the Corporation or any
Subsidiary in any Business Combination has, an aggregate Fair
Market Value of $1,000,000 or more.
4. The provisions of this Article EIGHTH of the Certificate of
Incorporation may be amended, altered or repealed upon the affirmative vote of a
majority of the outstanding shares of the Corporation entitled to vote upon such
amendment; provided, however, that if there is an Interested Stockholder, such
action must also be approved by the affirmative vote of the holders of three-
fourths (3/4) or more of the outstanding shares of Voting Stock held by
stockholders other than the Interested Stockholder.
NINTH. No director shall be personally liable to the Corporation or its
stockholders for monetary damages for any breach of fiduciary duty by such
Director as a Director. Notwithstanding the foregoing sentence, a Director
shall be liable to the extent provided by applicable law:
(i) for breach of the Director's duty of loyalty to the
Corporation or its Stockholders;
(ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law;
(iii) pursuant to Section 174 of the Delaware General Corporation
Law; or
(iv) for any transaction from which the Director derived an
improper personal benefit.
No amendment to or repeal of this Article NINTH shall apply to or have any
effect on the liability or alleged liability of any Director of the Corporation
for or with respect to any acts or omissions of such Director occurring prior to
such amendment or repeal.
IN WITNESS WHEREOF, said ANUHCO, INC., has caused this Certificate to be
signed by Timothy P. O'Neil, its President, and attested by Mark A. Foltz, its
Secretary, this 26th day of June, 1997.
ANUHCO, INC.
/s/ Timothy P. O'Neil
Timothy P. O'Neil, President
ATTEST:
/s/ Mark A. Foltz
Mark A. Foltz,
Corporate Secretary
ACKNOWLEDGMENT
STATE OF KANSAS )
) ss.
COUNTY OF JOHNSON )
I, DIANA L. BARBARICK, the undersigned Notary Public within and for the
above County and State, do hereby certify that on this 26th day of June, 1997,
personally appeared before me Timothy P. O'Neil, who, being by me first duly
sworn, declared that he is the President of Anuhco, Inc., a Delaware
Corporation, and that he signed the foregoing document in his official capacity
on behalf of the Corporation, as the free act and deed of the Corporation, and
that the statements contained therein are true.
/s/ Diana L. Barbarick
Notary Public
My Commission Expires:
05/24/98
SPECIMEN STOCK CERTIFICATE EXHIBIT 4
TRANSFINANCIAL
(Company mark in two-color gray and green)
Common Stock Common Stock
Number Shares
TF
TransFinancial Holdings, Inc.
Incorporated Under the Laws of the State of Delaware
See reverse for certain definitions
CUSIP 89365P 10 6
This Certifies that
is the owner of
Fully paid and Non-Assessable Shares of Common Stock, $.01 par value, of
TransFinancial Holdings, Inc. transferable on the books of the Corporation in
person or by duly authorized attorney upon surrender of this Certificate
properly endorsed. This Certificate is not valid until countersigned by the
Transfer Agent and registered by the Registrar.
Witness the facsimile seal of the Company and the facsimile signatures of its
duly authorized officers.
Dated:
/s/Mark A. Foltz /s/Timothy P. O'Neil
Secretary President
Countersigned and Registered:
UMB Bank, N.A.
Transfer Agent and Registrar
BY:
Authorized Signature
TRANSFINANCIAL HOLDINGS, INC.
Corporate Seal
1976
Delaware
(Facsimile Corporate Seal)
The Corporation will furnish without charge to each stockholder who so requests
the powers, designations, preferences and relative, participating, optional, or
other special rights of each class of stock or series thereof and the
qualifications, limitations or restrictions of such preferences and/or rights.
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN- as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act
in common (State)
Additional abbreviations may also be used though not in the above list.
For value received, hereby sell, assign and transfer unto
Please Insert Social Security or Other
Identifying Number of Assignee:
(Please print or typewrite name and address including zip code of assignee)
of the Common Stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint
Attorney to transfer
the said stock on the books of the within named Corporation with full power of
substitution in the premises.
Dated
X
X
Notice: The signature to this assignment
must correspond with the name as written
upon the face of this Certificate in every
particular, without alteration or enlargement
or any change whatever.
Signature(s) Guaranteed:
BY
The signature(s) should be guaranteed by an eligible guarantor
Institution (Banks, Stock Brokers, Savings and Loan Associations
And credit unions with membership in an approved Signature
Guarantee Medallion program). Pursuant to S.E.C. Rule 17Ad-15.
TRANSFINANCIAL HOLDINGS, INC.
SECOND QUARTER 1997
REPORT TO SHAREHOLDERS
Our second quarter highlights included strong performances by Crouse Cartage
Company ("Crouse"), TransFinancial's general commodities motor carrier, and
Universal Premium Acceptance Corporation ("UPAC"), TransFinancial's insurance
premium finance operation. For the second quarter of 1997, TransFinancial
increased net income to $704,000, or $0.11 per share, on operating revenues of
$32.8 million, compared to net income of $362,000, or $0.05 per share on
operating revenues of $28.5 million for the second quarter of 1996.
Crouse earned operating income of $1,071,000 on revenues of $30.7 million in
second quarter 1997, compared to operating income of $737,000 on revenues of
$26.2 million for second quarter 1996. This improvement was principally the
result of a 14% increase in less-than-truckload ("LTL") tons handled. In
addition, Crouse achieved a 3.9% increase in revenue yield on LTL freight
through the combination of a general rate increase, negotiated increases in
contracted rates and the implementation of fuel surcharges.
UPAC reported operating income of $288,000 on net finance charges, fees and
other income earned of $2.1 million, compared to operating income of $91,000 on
comparable revenue for the second quarter of 1996. The primary factors
contributing to the improved profitability were the new securitization agreement
and the integrated administrative operations.
We are encouraged by the continued progress of our operating segments. Crouse
improved business volumes and profitability while simultaneously conducting the
first phase of an aggressive expansion plan. UPAC continued its first quarter
profitability while focusing on customer service, the foundation of the
Company's expansion and business success.
TransFinancial continues to maintain a strong balance sheet with cash and
investments of $13.1 million, excluding an additional $6.6 million included in
net assets of discontinued operations, and book value of $11.95 per share at
June 30, 1997. TransFinancial acquired 130,000 shares in the first half of 1997
under its stock repurchase program. Approximately 121,000 additional shares are
authorized to be repurchased under this program.
As approved by you, our fellow shareholders, the Company effected a 1-for-100
reverse stock split followed by a 100-for-1 forward stock split on July 1, 1997,
which resulted in the cancellation of an additional 107,000 shares held by odd-
lot shareholders. You also approved the change of the Company's name to
"TransFinancial Holdings, Inc." This change has been well received by
shareholders, brokers and analysts, and reflects our continued commitment to
each of our businesses. Look for our stock on the American Stock Exchange under
its new trading symbol "TFH."
We are confident in each of our businesses and believe our commitment to an
aggressive growth strategy will continue to enhance our industry position and
provide shareholder value.
/s/ Timothy P. O'Neil /s/ William D. Cox
Timothy P. O'Neil William D. Cox
President Chairman
July 25, 1997
"Safe Harbor" Statement under Private Securities Litigation Reform Act of 1995
The Company's 1997 outlook and all other statements in this report other than
historical facts are forward-looking statements that involve risks and
uncertainties and are subject to change at any time. The Company derives its
forward-looking statements from forecasts which are based upon assumptions about
many important factors such as the relationship of demand and capacity in the
freight market, the performance of finance and insurance markets, prevailing
short-term interest rates, general market conditions and competitive activities.
While the Company believes that its assumptions are reasonable, it cautions that
there are inherent difficulties in predicting the impact of certain factors,
which could cause actual results to differ materially from anticipated results.
These factors, as and when applicable, are discussed in the Company's filings
with the Securities and Exchange Commission, in particular its most recent Form
10-Q.
TRANSFINANCIAL HOLDINGS, INC.
UNAUDITED SUMMARY FINANCIAL STATEMENTS
(in thousands, except per share data)
CONSOLIDATED STATEMENTS OF INCOME
Second Quarter and Six Months Ended June 30, 1997 and 1996
Second Quarter Six Months
1997 1996 1997 1996
Operating Revenues.............. $ 32,775 $28,345 $64,164 $ 53,561
Operating Expenses.............. 31,710 27,919 62,165 52,941
Operating Income................ 1,065 426 1,999 620
Non-Operating Income............ 215 209 430 634
Income Before Income Taxes...... 1,280 635 2,429 1,254
Income Tax Provision............ 576 273 1,093 539
Net Income...................... $ 704 $ 362 $ 1,336 $ 715
Net Income Per Share............ $ 0.11 $ 0.05 $ 0.21 $ 0.10
Average Common Shares Outstanding 6,320 6,892 6,347 7,014
CONSOLIDATED BALANCE SHEETS
06/30/97 12/31/96
ASSETS
Cash and Short-Term Investments. $ 11,190 $ 9,233
Other Current Assets............ 10,816 10,153
Total Current Assets.......... 51,298 52,918
Operating Property, net......... 25,228 23,390
Intangible and Other Assets..... 12,463 10,504
$ 88,989 $86,812
LIABILITIES AND SHAREHOLDERS' EQUITY
Total Current Liabilities....... $ 12,041 $11,048
Deferred Income Taxes and Other
Liabilities................... 2,122 1,203
Shareholders' Equity............ 74,826 74,561
$ 88,989 $86,812
TransFinancial Holdings, Inc., 8245 Nieman Road, Suite 100, Lenexa, Kansas 66214
(913) 859-0055
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
TRANSFINANCIAL HOLDINGS, INC. CONSOLIDATED STATEMENT OF INCOME FOR THE SIX
MONTHS ENDED JUNE 30, 1997 AND CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1997,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000719271
<NAME> TRANFINANCIAL HOLDINGS, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 6,097
<SECURITIES> 6,996
<RECEIVABLES> 28,294
<ALLOWANCES> 905
<INVENTORY> 0
<CURRENT-ASSETS> 51,298
<PP&E> 46,422
<DEPRECIATION> 21,194
<TOTAL-ASSETS> 88,989
<CURRENT-LIABILITIES> 12,041
<BONDS> 0
0
0
<COMMON> 76
<OTHER-SE> 74,750
<TOTAL-LIABILITY-AND-EQUITY> 88,989
<SALES> 0
<TOTAL-REVENUES> 64,164
<CGS> 0
<TOTAL-COSTS> 62,165
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,429
<INCOME-TAX> 1,093
<INCOME-CONTINUING> 1,336
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,336
<EPS-PRIMARY> .21
<EPS-DILUTED> .21
</TABLE>
