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 March 31, 1996 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
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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 April 29, 1996
- ---------------------------- -----------------------------
Common Stock, par value $.01 5,099,517
per share
BUILDERS TRANSPORT, INCORPORATED
INDEX TO FORM 10-Q
Part I FINANCIAL INFORMATION Page No.
- ------------------------------- --------
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
Condensed Consolidated Balance Sheets as of March 31, 1996
and December 31, 1995 1
Condensed Consolidated Statements of Income for the Three
Months Ended March 31, 1996 and 1995 3
Condensed Consolidated Statements of Cash Flows for the Three
Months Ended March 31, 1996 and 1995 4
Notes to Condensed Consolidated Financial Statements 5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 6
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 *
ITEM 5. OTHER INFORMATION *
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 8
* No information submitted under this caption.
PART 1. FINANCIAL INFORMATION
CONDENSED CONSOLIDATED BALANCE SHEETS
BUILDERS TRANSPORT, INCORPORATED AND SUBSIDIARIES
March 31 December 31
1996 1995
----------- -----------
(Unaudited) (Note)
(Dollars in Thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 53 $ 109
Accounts receivable, less allowances
(March 31, 1996 - $547
December 31, 1995 - $591) 36,522 28,815
Prepaid expenses 18,260 17,171
Repair parts and operating supplies 3,188 3,233
--------- ---------
TOTAL CURRENT ASSETS 58,023 49,328
PROPERTY AND EQUIPMENT 295,105 301,924
Less accumulated depreciation
and amortization (101,342) (102,662)
--------- ---------
TOTAL PROPERTY AND EQUIPMENT 193,763 199,262
OTHER ASSETS 23,379 23,471
--------- ---------
TOTAL ASSETS $ 275,165 $ 272,061
========= =========
-1-
March 31 December 31
1996 1995
----------- -----------
(Unaudited) (Note)
(Dollars in Thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 9,111 $ 9,551
Other current liabilities 12,373 12,572
Current maturities of long-term debt 36,142 36,367
--------- ---------
TOTAL CURRENT LIABILITIES 57,626 58,489
LONG-TERM DEBT
Revolving credit agreement 10,823 3,469
Convertible Subordinated Debentures 46,789 46,789
Capital leases and other 110,653 114,504
--------- ---------
TOTAL LONG-TERM DEBT 168,265 164,762
DEFERRED CREDITS AND OTHER LIABILITIES
Deferred income taxes 2,013 2,013
Other 8,894 8,508
--------- ---------
TOTAL OTHER LIABILITIES 10,907 10,521
STOCKHOLDERS' EQUITY
Preferred stock, par value $.01 per share
Authorized 1,000,000 shares; no shares issued
at March 31, 1996 or December 31, 1995
Common stock, par value $.01 per share
Authorized 25,000,000 shares; Issued
6,270,100 shares at March 31, 1996 and
6,218,347 shares at December 31, 1995 63 62
Paid-in capital 33,671 33,281
Unearned compensation related to
ESOP receivable (4,442) (4,477)
Retained earnings 23,872 24,201
--------- ---------
53,164 53,067
Less cost of common stock in treasury
(1,170,583 shares at March 31, 1996 and
1,168,083 shares at December 31, 1995) (14,797) (14,778)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 38,367 38,289
--------- ---------
CONTINGENT LIABILITIES
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 275,165 $ 272,061
========= =========
Note: The balance sheet at December 31, 1995 has been derived from 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-
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
BUILDERS TRANSPORT, INCORPORATED AND SUBSIDIARIES
Three Months Ended
March 31 March 31
1996 1995
----------- -----------
(Note)
(In thousands, except per
share amounts)
OPERATING REVENUE $ 70,487 $ 73,114
OPERATING EXPENSES:
Wages, salaries, and employee benefits 29,391 30,275
Operations and maintenance 14,549 14,833
Operating taxes and licenses 6,974 6,990
Insurance and claims 3,873 3,373
Communications and utilities 1,239 1,276
Depreciation and equipment rents 6,610 5,965
(Gain) loss on disposition of operating assets (839) (141)
Rents and purchased transportation 4,874 4,393
Other operating expenses 230 338
--------- ---------
Total Operating Expenses 66,901 67,302
--------- ---------
OPERATING INCOME 3,586 5,812
OTHER DEDUCTIONS:
Interest and other expenses 4,124 3,474
INCOME (LOSS) BEFORE INCOME TAXES AND
CUMULATIVE EFFECT OF ACCOUNTING CHANGE (538) 2,338
PROVISION FOR INCOME TAXES (210) 912
--------- ---------
NET INCOME (LOSS) BEFORE CUMULATIVE
EFFECT OF ACCOUNTING CHANGE (328) 1,426
--------- ---------
CUMULATIVE EFFECT OF ACCOUNTING CHANGE -- (7,291)
--------- ---------
NET INCOME (LOSS) $ (328) $ (5,865)
========= =========
NET INCOME PER SHARE BEFORE
CUMULATIVE EFFECT $ (0.06) $ 0.27
--------- ---------
CUMULATIVE EFFECT $ -- $ (1.37)
--------- ---------
EARNINGS PER SHARE $ (0.06) $ (1.10)
========= =========
WEIGHTED AVERAGE SHARES OF
COMMON STOCK OUTSTANDING 5,236,522 5,331,091
NOTE: The quarter ended March 31, 1995 has been restated for the adoption of
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of."
See notes to condensed consolidated financial statements
-3-
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
BUILDERS TRANSPORT, INCORPORATED AND SUBSIDIARIES
Three Months Ended
March 31 March 31
1996 1995
----------- -----------
(In thousands)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES $ (2,836) $ 7,550
INVESTING ACTIVITIES
Purchases of property and equipment 216 (1,832)
Proceeds from disposal of property and equipment 3,436 1,582
--------- ---------
NET CASH PROVIDED BY (USED IN) INVESTING
ACTIVITIES 3,652 (250)
FINANCING ACTIVITIES
Proceeds from lines of credit and
long-term borrowings 7,353 1,599
Principal payments on lines of credit,
long-term debt and capital lease obligations (8,596) (8,804)
Proceeds from the issuance of common stock 390 6
Purchase of Treasury Stock (19) (74)
--------- ---------
NET CASH USED BY FINANCING ACTIVITIES (872) (7,273)
--------- ---------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (56) 27
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 109 9
--------- ---------
CASH AND CASH EQUIVALENTS AT END
OF PERIOD $ 53 $ 36
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest $ 4,204 $ 3,547
Noncash investing activity:
Property and equipment acquired
through capital leases $ 4,521 $ 29,093
Noncash financing activity:
Common stock issued under employee
benefit plans $ 357 $ 0
See notes to Condensed Consolidated Financial Statements
-4-
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 and Article 10
of Regulation S-X. 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 three-month period ended March 31,
1996, are not necessarily indicative of the results that may be expected for
the year ended December 31, 1996. 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, 1995.
Note B -- EARNINGS PER SHARE
Three Months Ended
March 31 March 31
1996 1995
----------- -----------
PRIMARY:
Average shares outstanding 6,234,737 6,207,112
Assumed exercise of stock options 172,313 236,962
Treasury stock (1,170,528) (1,112,983)
----------- -----------
Totals 5,236,522 5,331,091
=========== ===========
Net income (loss) $ (328,000) $(5,865,000)
=========== ===========
Per share amount:
Net income $ (0.06) $ (1.10)
=========== ===========
FULLY DILUTED:
Average shares outstanding 6,234,737 6,207,112
Assumed exercise of stock options 316,175 269,509
Assumed conversion of 8% Convertible
Subordinated Debentures issued
September 9, 1985 1,089,918 1,104,508
Assumed conversion of 6 1/2% Convertible
Subordinated Debentures issued
May 9, 1986 592,079 621,219
Treasury stock (1,170,528) (1,112,983)
----------- -----------
Totals 7,062,381 7,089,365
=========== ===========
Net income (loss) $ (328,000) $(5,865,000)
Add 8% Convertible Subordinated Debentures
interest, net of income tax effect 327,000 324,000
Add 6 1/2% Convertible Subordinated Debentures
interest, net of income tax effect 223,000 229,000
----------- -----------
Adjusted net income $ 222,000 $(5,312,000)
=========== ===========
Per share amount:
Net income $ 0.03* $ (0.75)*
=========== ===========
* Anti-dilutive
-5-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OPERATING RESULTS
Operating revenues for the first quarter of 1996 were $70.5 million, compared
to $73.1 million for the first quarter of 1995.
The Company had a net loss of $328,000 for the first quarter of 1996, as
compared to a net loss of $5.9 million for the first quarter of 1995
(including the cumulative effect of the accounting change resulting from the
adoption of Statement of Financial Accounting Standards No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of" as of January 1, 1995).
The operating ratio (operating expenses as a percentage of operating revenues)
was 94.9% during the first quarter of 1996 as compared to 92.1% in the first
quarter of 1995. Operating income for the first quarter of 1996 was $3.6
million, compared to $5.8 million for the first quarter of 1995. Operating
expenses as a percentage of revenues, were generally higher in 1996 as compared
to 1995 primarily as a result of very severe winter weather throughout the
Company's operating area in January and February. Fuel prices increased
significantly during the first quarter of 1996. This caused operations and
maintenance expense to be higher than it otherwise would have been and offset
the operating and maintenance costs reductions realized as a result of a lower
average age of equipment in the first quarter of 1996 compared to the same
period last year. The Company increased its use of owner-operators to 193
contractors, on average, during the first quarter of 1996, compared to an
average of 164 owner-operators during the corresponding period in 1995. This
resulted in an increase in the Company's rents and purchased transportation
expenses during the first quarter of 1996, as compared to the first quarter of
1995. The Company's gains on asset disposals increased to $839,000 in the
first quarter of 1996, compared to a gain of $141,000 in 1995. The Company
realized the higher gain on disposal primarily as a result of selling older
trailers in 1996 with very low net book values.
Weather-related disruptions hampered operations and resulted in lower overall
revenues during the quarter. During periods when the Company's operations
were not impacted by weather, freight volumes actually exceeded the relatively
strong 1995 revenue levels. Several new accounts were added during the
quarter, which have helped offset the impact on the Company of over-capacity
in the truckload market. Recently, freight demand has improved in all three
of the Company's divisions. If the freight market continues to rebound, the
Company's operations should continue to improve.
FINANCIAL CONDITION, LIQUIDITY AND SOURCES OF CAPITAL
The current ratio was 1.01 at March 31, 1996, compared to .84 at December 31,
1995. Prepaid expenses increased by approximately 6% since December 31, 1995,
primarily due to the normal annual prepayment of licenses and taxes.
Accounts Receivable increased by 27%, as compared to December 31, 1995,
due to seasonal increases in volume and an increase in other receivables.
Cash used by operations was $2.8 million in the first quarter of 1996. Cash
provided by operations was $7.6 million in the first quarter of 1995. Lower
operating income and increased accounts receivable caused operating cash flows
-6-
to decline sharply in 1996 as compared to 1995. Management expects that cash
generated from operations will increase as the Company collects its receivables
and continues to improve its operating profitability. The Company's cash flow
and cash requirements tend to fluctuate during the year. Generally more cash
is required during the first part of the year, primarily to fund the Company's
annual prepayments of operating taxes and licenses and less profitable
operations. Cash flow from operations generally increases consistently
beginning in the second quarter through year end. The Company uses its
revolving credit facility to smooth cyclical cash flows associated with its
operations.
The Company has adopted a very conservative capital expenditure budget for
1996, due to the fact that the Company is nearing completion of its program to
reduce the average age of its fleet. Thus far in 1996, the Company has
replaced 500 older 48-foot van trailers with new 53-foot trailers. As a
result of acquiring this new equipment, our van division's trailer pool has
been converted to almost entirely 53-foot trailers.
The Company expects to replace some flatbed trailers during the second quarter
of 1996.
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 performances 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. During the second half of 1995, the Company
experienced weakened freight demand and is uncertain as to how long this
situation may continue through future periods. It appears that some of the
Company's competitors have over-expanded their fleets and are discounting
their rates in order to maintain the volume needed to support their excess
equipment capacity. To the extent, if any, that the weaker freight level and
equipment over-capacity situation continues, its impact on the Company's
results of operations would be negative. In response to the weakened freight
levels, the Company reduced non-driver payroll by approximately 5% in mid-1995,
adopted a very conservative future capital expenditure budget, increased
marketing efforts, and is considering other actions. Except for the impact of
severe weather, the Company's volume in early 1996 has improved, primarily as a
result of our more aggressive marketing program. While the Company is more
optimistic about future business levels, it cannot predict whether this
positive trend will continue.
-7-
Fuel prices were sharply higher during the first quarter of 1996. Among other
actions, the Company has passed some of the additional costs along to its
customers by collecting fuel surcharges. The Company cannot predict when fuel
prices will return to more normal levels or how much of the additional costs
will be offset by surcharges.
PART II. OTHER INFORMATION
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 March 31, 1996.
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: May 14, 1996 By: ROBERT Y. FOX
-------------------- ---------------------------
Robert Fox
Executive 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
-8-
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<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 53
<SECURITIES> 0
<RECEIVABLES> 36,522
<ALLOWANCES> 547
<INVENTORY> 3,188
<CURRENT-ASSETS> 58,023
<PP&E> 295,105
<DEPRECIATION> 101,342
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<CURRENT-LIABILITIES> 57,626
<BONDS> 168,265
0
0
<COMMON> 63
<OTHER-SE> 38,304
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<SALES> 70,487
<TOTAL-REVENUES> 70,487
<CGS> 0
<TOTAL-COSTS> 66,901
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,124
<INCOME-PRETAX> (538)
<INCOME-TAX> (210)
<INCOME-CONTINUING> (328)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (328)
<EPS-PRIMARY> (.06)
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<F1>Fully diluted EPS calculation is anti-dilutive
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