<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended June 30, 1995 Commission File No 0-11300
BUILDERS TRANSPORT, INCORPORATED
--------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 58-1186216
-------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
POST OFFICE BOX 7005, 2029 WEST DEKALB STREET, CAMDEN, SOUTH CAROLINA 29020
--------------------------------------------------------------------------------
(address of principal executive offices and zip code)
Registrant's telephone number, including area code (803) 432-1400
--------------
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 2, 1995
-------------------------------- -----------------------------
Common Stock, par value $.01 5,090,392
per share
<PAGE> 2
BUILDERS TRANSPORT, INCORPORATED
INDEX TO FORM 10-Q
<TABLE>
<CAPTION>
Part I FINANCIAL INFORMATION Page No.
------------------------------- ---------
<S> <C>
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
Condensed Consolidated Balance Sheets as of June 30, 1995
and December 31, 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Condensed Consolidated Statements of Income for the Three
Months Ended June 30, 1995 and 1994 and the Six Months
Ended June 30, 1995 and 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Condensed Consolidated Statements of Cash Flows for the Six
Months Ended June 30, 1995 and 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Notes to Condensed Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . 5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL
CONDITION AND RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . 7
Part II OTHER INFORMATION
----------------------------
ITEM 1. LEGAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
ITEM 2. CHANGES IN SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
ITEM 3. DEFAULTS UPON SENIOR SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS . . . . . . . . . . . . . . . . . . 9
ITEM 5. OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
</TABLE>
* No information submitted under this caption.
<PAGE> 3
PART 1. FINANCIAL INFORMATION
CONDENSED CONSOLIDATED BALANCE SHEETS
BUILDERS TRANSPORT, INCORPORATED AND SUBSIDIARIES
<TABLE>
<CAPTION>
June 30 December 31
1995 1994
----------- -----------
(Unaudited) (Note)
ASSETS (Dollars in Thousands)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 54 $ 9
Accounts receivable, less allowances
(June 30, 1995 - $512
December 31, 1994 - $354) 30,493 31,033
Prepaid expenses 17,795 17,501
Repair parts and operating supplies 3,276 3,073
--------- ---------
TOTAL CURRENT ASSETS 51,618 51,616
PROPERTY AND EQUIPMENT 320,487 284,755
Less accumulated depreciation
and amortization (117,592) (116,431)
--------- ---------
TOTAL PROPERTY AND EQUIPMENT 202,895 168,324
OTHER ASSETS 23,971 24,127
--------- ---------
TOTAL ASSETS $ 278,484 $ 244,067
========= =========
</TABLE>
-1-
<PAGE> 4
<TABLE>
<CAPTION>
June 30 December 31
1995 1994
----------- -----------
(Unaudited) (Note)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 9,293 $ 8,892
Other current liabilities 10,569 10,849
Current maturities of long-term debt 30,937 27,217
-------- --------
TOTAL CURRENT LIABILITIES 50,799 46,958
LONG-TERM DEBT
Revolving credit agreement 5,717 7,393
Convertible Subordinated Debentures 48,945 50,401
Capital leases and other 108,914 78,188
-------- --------
TOTAL LONG-TERM DEBT 163,576 135,982
DEFERRED CREDITS AND OTHER LIABILITIES
Deferred income taxes 7,707 6,951
Other 8,423 8,598
-------- --------
TOTAL OTHER LIABILITIES 16,130 15,549
STOCKHOLDERS' EQUITY
Preferred stock, par value $.01 per share
Authorized 1,000,000 shares; no shares
issued at June 30, 1995 or
December 31, 1994
Common stock, par value $.01 per share
Authorized 25,000,000 shares; Issued
6,210,272 shares at June 30, 1995 and
6,206,220 shares at December 31, 1994 62 62
Paid-in capital 33,216 33,178
Unearned compensation related to
ESOP receivable (4,547) (4,617)
Retained earnings 33,640 31,273
-------- --------
62,371 59,896
Less, cost of common stock in treasury
(1,123,633 shares at June 30, 1995 and
1,117,133 shares at December 31, 1994) (14,392) (14,318)
-------- --------
TOTAL STOCKHOLDERS' EQUITY 47,979 45,578
-------- --------
CONTINGENT LIABILITIES
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $278,484 $244,067
======== ========
</TABLE>
NOTE: The balance sheet at December 31, 1994 has been derived for the audited
financial statements at that date, but does not include all of the information
and footnotes required by generally accepted accounting principles.
See notes to condensed consolidated financial statements
-2-
<PAGE> 5
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
BUILDERS TRANSPORT, INCORPORATED AND SUBSIDIARIES
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
1995 1994 1995 1994
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Operating Revenue $ 74,847 $ 71,433 $ 147,961 $ 140,257
Operating Expenses:
Wages, salaries, and employee benefits 29,952 29,441 60,227 58,437
Operations and maintenance 15,009 15,940 29,841 32,202
Operating taxes and licenses 6,937 6,894 13,927 14,159
Insurance and claims 3,710 3,607 7,083 6,945
Communications and utilities 1,056 1,201 2,332 2,463
Depreciation and equipment rents 7,075 6,658 13,947 12,984
(Gain) on disposition of operating assets (166) (218) (159) (867)
Rents and purchased transportation 4,848 2,068 9,242 3,657
Other operating expenses 321 282 659 524
---------- ---------- ---------- ----------
Total Operating Expenses 68,742 65,873 137,099 130,504
---------- ---------- ---------- ----------
Operating Income 6,105 5,560 10,862 9,753
Other Deductions:
Interest and other expenses 3,509 3,242 6,984 6,355
Income Before Income Taxes 2,596 2,318 3,878 3,398
Provision for Income Taxes 1,013 904 1,511 1,347
---------- ---------- ---------- ----------
NET INCOME $ 1,583 $ 1,414 $ 2,367 $ 2,051
========== ========== ========== ==========
NET INCOME PER COMMON SHARE $ .30 $ .25 $ .44 $ .36
========== ========== ========== ==========
WEIGHTED AVERAGE SHARES OF
COMMON STOCK OUTSTANDING 5,336,840 5,706,834 5,333,970 5,751,830
</TABLE>
See notes to Condensed Consolidated Financial Statements
-3-
<PAGE> 6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
BUILDERS TRANSPORT, INCORPORATED AND SUBSIDIARIES
<TABLE>
<CAPTION>
Six Months ended June 30
1995 1994
-------- --------
(In thousands)
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 18,806 $ 12,130
INVESTING ACTIVITIES
Purchases of property and equipment (4,139) (1,978)
Proceeds from disposal of property and equipment 3,628 3,007
Purchase of Applied Logistical Systems net assets 0 (550)
-------- --------
NET CASH (USED) PROVIDED BY INVESTING
ACTIVITIES (511) 479
FINANCING ACTIVITIES
Proceeds from lines of credit and long-term borrowings 0 0
Principal payments on lines of credit, long-term debt
and capital lease obligations (18,188) (13,268)
Proceeds from the issuance of common stock 12 659
Purchase of Treasury Stock (74) 0
-------- --------
NET CASH USED BY FINANCING ACTIVITIES (18,250) (12,609)
--------- --------
INCREASE IN CASH AND CASH
EQUIVALENTS 45 0
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 9 8
-------- --------
CASH AND CASH EQUIVALENTS AT END
OF PERIOD $ 54 $ 8
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest $ 6,604 $ 5,759
Noncash investing activity:
Property and equipment acquired
through capital leases $ 49,501 $ 39,367
Noncash financing activity:
Common stock issued under employee
benefit plans $ 25 $ 249
</TABLE>
See notes to Condensed Consolidated Financial Statements
-4-
<PAGE> 7
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
BUILDERS TRANSPORT, INCORPORATED AND SUBSIDIARIES
Note A -- BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and the instructions to Form 10-Q. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In management's
opinion, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
six-month period ended June 30, 1995, are not necessarily indicative of the
results that may be expected for the year ended December 31, 1995. For further
information, refer to the consolidated financial statements and notes thereto
included in the Company's Annual Report on Form 10-K for the year ended December
31, 1994.
Note B -- EARNINGS PER SHARE
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
1995 1994 1995 1994
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
PRIMARY:
Average shares outstanding 6,210,113 6,201,278 6,208,621 6,168,992
Assumed exercise of stock options 241,060 361,056 239,011 438,338
Treasury stock (1,114,333) (855,500) (1,113,662) (855,500)
----------- ----------- ----------- -----------
Totals 5,336,840 5,706,834 5,333,970 5,751,830
=========== =========== =========== ===========
Net income $ 1,582,504 $ 1,413,509 $ 2,367,374 $ 2,051,245
=========== =========== =========== ===========
Per share amount:
Net income $ .30 $ .25 $ .44 $ .36
=========== =========== =========== ===========
FULLY DILUTED:
Average shares outstanding 6,210,113 6,201,278 6,208,621 6,168,992
Assumed exercise of stock options 250,179 361,056 259,844 438,340
Assumed conversion of 8% Convertible
Subordinated Debentures issued
September 9, 1985 1,104,508 1,178,279 1,104,508 1,178,279
Assumed conversion of 6 1/2% Convertible
Subordinated Debentures issued
May 9, 1986 592,079 663,444 606,649 663,444
Treasury stock (1,114,333) (855,500) (1,113,662) (855,500)
----------- ----------- ----------- -----------
Totals 7,042,546 7,548,557 7,065,960 7,593,555
=========== =========== =========== ===========
Net income $ 1,582,504 $ 1,413,509 $ 2,367,374 $ 2,051,245
Add 8% Convertible Subordinated
Debentures interest, net of income
tax effect 324,286 379,500 648,572 759,000
Add 6 1/2% Convertible Subordinated
Debentures interest, net of income
tax effect 218,519 268,608 447,793 537,215
----------- ----------- ----------- -----------
Net income $ 2,125,309 $ 2,061,617 $ 3,463,739 $ 3,347,460
=========== =========== =========== ===========
Per share amount:
Net income $ .30* $ .27* $ .49* $ .44*
=========== =========== =========== ===========
</TABLE>
* Anti-dilutive
-5-
<PAGE> 8
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
BUILDERS TRANSPORT, INCORPORATED AND SUBSIDIARIES (continued)
Note C -- LEASES
During the first six months of 1995, the Company financed the acquisition of
670 new tractors and 101 trailers through capital leases totaling approximately
$50 million. The terms of the leases are 60 months for tractors and 84 months
for trailers with purchase options at the end of the leases.
Note D --PENDING ACCOUNTING PRONOUNCEMENT
The Financial Standards Accounting Board has recently issued Statement No. 121,
"Accounting for the Impairment of Long-Life Assets and for Long-Life Assets to
be disposed of." The statement is effective for years beginning after December
15, 1995, with earlier application encouraged. The Company has not completed
the analysis necessary to determine what effect, if any, the new standard will
have on the financial results or position of the Company, and whether it will
adopt the provisions of the statement in 1995 or 1996.
-6-
<PAGE> 9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OPERATING RESULTS
Operating revenues for the second quarter of 1995 were $74.8 million, compared
to $71.4 million for the second quarter of 1994, and for the first six months of
1995, were $148.0 million, compared to $140.3 million for the first six months
of 1994.
Income before income taxes for the second quarter and the first six months of
1995 was $2.6 million and $3.9 million respectively, compared to $2.3 million
and $3.4 million for the comparable periods in 1994. Net income for the second
quarter and first six months of 1995 was $1.6 million and $2.4 million,
respectively, compared to $1.4 million and $2.1 million for the comparable
periods in 1994.
The operating ratio (operating expenses as a percentage of operating revenues)
was 91.8% and 92.7% in the second quarter and the first six months of 1995,
respectively, compared to 92.2% and 93% in the same 1994 periods. Operating
income during the second quarter was $6.1 million, compared to $5.6 million in
the second quarter of 1994 and for the first six months of 1995 was $10.9
million, compared to $9.8 million for the first six months of 1994.
During 1995, the Company replaced 670 of its old tractors with new tractors.
These newer, more efficient tractors have improved the Company's operating
results in several key areas and have helped the Company to increase operating
profits. The operational benefits have been somewhat offset by greater interest
costs resulting from the additional debt incurred to purchase these units.
FACTORS THAT MAY AFFECT FUTURE RESULTS
The Company's future operating results may be affected by a number of factors
such as: uncertainties relative to economic conditions; industry factors
including, among others, competition, rate pressure, driver availability and
fuel prices; and, the Company's ability to sell its services profitably,
successfully increase market share in its core businesses and effectively manage
expense growth relative to revenue growth in anticipation of continued pressure
on gross margins. The Company's operating results could be adversely affected
should the Company be unable to anticipate customer demand accurately or to
effectively manage the impact on the Company of changes in the trucking,
transportation and logistics industries.
Because of the foregoing factors, as well as other factors affecting the
Company's operating results, past financial performance should not be considered
to be a reliable indicator of future performance, and investors should not use
historical trends to anticipate results or trends in future periods.
Recent Developments and Trends. The Company's business ordinarily results in
legal actions alleging negligence related primarily to highway accidents. The
Company recently agreed to settle the last claim arising from one such accident
that could potentially result in an additional charge to future earnings, net of
taxes, of up to approximately $1.1 million. This is in addition to significant
amounts previously reserved for that accident. After intensive negotiations,
the Company recently elected to settle the last claim arising from that accident
for an amount that is considerably higher than the Company's experience with
other claims arising from that accident and the evaluations of the Company's
lawyers had previously led the Company to anticipate. The Company concluded
that it was prudent to settle this last claim for an amount higher than
previously anticipated due to a series of unfavorable rulings in the case which
caused the Company to decide that a trial to conclusion presented an
unreasonable risk of adverse results of a magnitude that could have materially
impacted the Company's financial condition. Although this has been the only
accident in the Company's thirty-four year history in which claims have
approached this level, the Company has re-evaluated its general liability and
excess insurance policies and elected to increase its coverage by an additional
$10 million per occurrence.
Additionally, the Company has recently experienced weakening freight demand and
is uncertain as to whether this signals the beginning of a trend that may
continue through future periods. To the extent, if any, that weaker freight
demand does continue, its impact on the Company's results of operations would be
negative. In response to the possibility of soft freight demand, the Company
has recently reduced its non-driver payroll by approximately 5%, has
consolidated several under-utilized terminals, and is considering other actions.
-7-
<PAGE> 10
FINANCIAL CONDITION, LIQUIDITY AND SOURCES OF CAPITAL
The current ratio was 1.02 as of June 30, 1995, compared to 1.10 at December
31, 1994. Cash provided by operating activities was $18.8 million during the
first six months of 1995, compared to $12.1 million during the first six months
of 1994. The Company acquired 670 new tractors and 101 new trailers during the
first six months of 1995 and disposed of 371 tractors. The newer tractor fleet
helped the Company reduce its maintenance and operating costs and improve
operating profits. During the first six months of 1995, the Company's capital
expenditures were approximately $50 million, most of which related to new
equipment purchases.
-8-
<PAGE> 11
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
(a) Builders Transport, Incorporated's Annual Meeting of Stockholders
was held on June 6, 1995.
(b) Proxies for the meeting were solicited pursuant to Regulation 14
under the Securities Exchange Act of 1934, and there was no
solicitation in opposition to management's nominees as listed in
the proxy statement, all of whom were elected.
(c) Set forth below are the number of votes cast for, against or
withheld, as well as the number of abstentions and broker non-votes
as to each such matter, including a separate tabulation with
respect to each nominee for office.
<TABLE>
<CAPTION>
Votes Against Broker
(I) Nominees for Directors Votes For or Withheld Abstentions Non-Votes
--------- -------------- ----------- ---------
<S> <C> <C> <C> <C>
David C. Walentas 4,400,759 6,544 --- ---
Stanford M. Dinstein 4,400,859 6,444 --- ---
Jacob D. Wood 4,400,859 6,444 --- ---
John R. Morris 4,400,859 6,444 --- ---
Arthur C. Baxter 4,400,859 6,444 --- ---
Jan S. Mirsky 4,400,859 6,444 --- ---
Frederick S. Morton 4,400,859 6,444 --- ---
Jack Weprin 4,400,859 6,444 --- ---
</TABLE>
(ii) Ratification of the Board of Directors' reappointment of Ernst
& Young as the Company's independent auditors to audit the
financial statements of the Company for the current fiscal
year.
<TABLE>
<CAPTION>
Votes Against Broker
Votes For or Withheld Abstentions Non-Votes
--------- -------------- ----------- ---------
<S> <C> <C> <C>
4,390,936 5,931 10,436 ---
</TABLE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 27 Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K. There were no reports on Form 8-K filed for the
quarter ended June 30, 1995.
-9-
<PAGE> 12
SIGNATURES
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.
BUILDERS TRANSPORT, INCORPORATED
Date: 8/14/95 By: Robert Fox
------------------------- --------------------------------------
Robert Fox
Vice President
and Chief Financial Officer
Signed in the dual capacity of a
duly authorized officer of the
Registrant and the Principal
Accounting Officer of the Registrant
-10-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF BUILDERS TRANSPORT FOR THE THREE MONTHS ENDED JUNE 30,
1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> APR-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 54
<SECURITIES> 0
<RECEIVABLES> 31,005
<ALLOWANCES> 512
<INVENTORY> 3,276
<CURRENT-ASSETS> 51,618
<PP&E> 320,487
<DEPRECIATION> 117,592
<TOTAL-ASSETS> 278,484
<CURRENT-LIABILITIES> 50,799
<BONDS> 163,576
<COMMON> 47,979
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 278,484
<SALES> 74,847
<TOTAL-REVENUES> 74,847
<CGS> 0
<TOTAL-COSTS> 68,742
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,509
<INCOME-PRETAX> 2,596
<INCOME-TAX> 1,013
<INCOME-CONTINUING> 1,583
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,583
<EPS-PRIMARY> .30
<EPS-DILUTED> .30<F1>
<FN>
<F1>FULLY DILUTED EPS IS ANTI-DILUTIVE
</FN>
</TABLE>
