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, 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
-------------
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, 1996
- ---------------------------- -----------------------------
Common Stock, par value $.01 5,100,017
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 June 30, 1996
and December 31, 1995 1
Condensed Consolidated Statements of Income for the Three
Months Ended June 30, 1996 and 1995 and the Six Months
Ended June 30, 1996 and 1995 3
Condensed Consolidated Statements of Cash Flows for the Six
Months Ended June 30, 1996 and 1995 5
Notes to Condensed Consolidated Financial Statements 6,7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 8
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 11
ITEM 5. OTHER INFORMATION *
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 12
* No information submitted under this caption.
PART 1. FINANCIAL INFORMATION
CONDENSED CONSOLIDATED BALANCE SHEETS
BUILDERS TRANSPORT, INCORPORATED AND SUBSIDIARIES
June 30 December 31
1996 1995
----------- -----------
(Unaudited) (Note)
(Dollars in Thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 82 $ 109
Accounts receivable, less allowances
(June 30, 1996 - $633
December 31, 1995 - $511) 37,284 28,815
Prepaid expenses 16,852 17,171
Repair parts and operating supplies 2,907 3,233
--------- ---------
TOTAL CURRENT ASSETS 57,125 49,328
PROPERTY AND EQUIPMENT 301,536 301,924
Less accumulated depreciation
and amortization (105,231) (102,662)
--------- ---------
TOTAL PROPERTY AND EQUIPMENT 196,305 199,262
OTHER ASSETS 23,810 23,471
--------- ---------
TOTAL ASSETS $ 277,240 $ 272,061
========= =========
-1-
June 30 December 31
1996 1995
----------- -----------
(Unaudited) (Note)
(Dollars in Thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 9,356 $ 9,551
Other current liabilities 11,713 12,572
Current maturities of long-term debt 34,191 36,366
--------- ---------
TOTAL CURRENT LIABILITIES 55,260 58,489
LONG-TERM DEBT
Revolving credit agreement 13,642 3,469
Convertible Subordinated Debentures 46,789 46,789
Capital leases and other 112,520 114,504
--------- ---------
TOTAL LONG-TERM DEBT 172,951 164,762
DEFERRED CREDITS AND OTHER LIABILITIES
Deferred income taxes 2,013 2,013
Other 8,292 8,508
--------- ---------
TOTAL OTHER LIABILITIES 10,305 10,521
STOCKHOLDERS' EQUITY
Preferred stock, par value $.01 per share
Authorized 1,000,000 shares; no shares issued
at June 30, 1996 or December 31, 1995
Common stock, par value $.01 per share
Authorized 25,000,000 shares; Issued
6,270,600 shares at June 30, 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 24,229 24,201
--------- ---------
53,521 53,067
Less cost of common stock in treasury
(1,170,583 shares at June 30, 1996 and
1,168,083 shares at December 31, 1995) (14,797) (14,778)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 38,724 38,289
--------- ---------
CONTINGENT LIABILITIES
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 277,240 $ 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 Six Months Ended
June 30 June 30 June 30 June 30
1996 1995 1996 1995
--------- --------- --------- ---------
(In thousands, except (In thousands, except
per share amounts) per share amounts)
OPERATING REVENUE $ 73,442 $ 74,847 $ 143,929 $ 147,961
OPERATING EXPENSES:
Wages, salaries, and employee
benefits 29,922 29,952 59,312 60,227
Operations and maintenance 14,980 15,009 29,529 29,842
Operating taxes and licenses 6,850 6,937 13,823 13,927
Insurance and claims 3,689 3,710 7,562 7,083
Communications and utilities 1,198 1,056 2,437 2,332
Depreciation and equipment rents 6,767 6,168 13,377 12,130
(Gain) on disposition of
operating assets (483) (180) (1,322) (320)
Rents and purchased transportation 5,524 4,848 10,397 9,242
Other operating expenses 375 321 608 659
--------- --------- --------- ---------
Total Operating Expenses 68,822 67,821 135,723 135,122
--------- --------- --------- ---------
OPERATING INCOME 4,620 7,026 8,206 12,839
OTHER DEDUCTIONS:
Interest and other expenses 4,036 3,510 8,160 6,984
INCOME BEFORE INCOME TAXES
AND CUMULATIVE EFFECT OF
ACCOUNTING CHANGE 584 3,516 46 5,855
PROVISION FOR INCOME TAXES 227 1,371 17 2,283
-------- --------- --------- ---------
NET INCOME BEFORE
CUMULATIVE EFFECT OF
ACCOUNTING CHANGE 357 2,145 29 3,572
--------- --------- --------- ---------
CUMULATIVE EFFECT OF
ACCOUNTING CHANGE -- -- -- (7,291)
--------- --------- --------- ---------
NET INCOME (LOSS) $ 357 $ 2,145 $ $29 $ (3,719)
========= ========= ========= =========
-3-
PRIMARY INCOME (LOSS) PER SHARE:
NET INCOME PER SHARE BEFORE
CUMULATIVE EFFECT $ .07 $ .40 $ .01 $ 0.67
--------- -------- --------- ---------
CUMULATIVE EFFECT $ -- $ -- $ -- $ (1.36)
--------- ---------- --------- ---------
EARNINGS PER SHARE $ .07 $ .40 $ .01 $ (.69)
========= ========= ========= =========
FULLY DILUTED INCOME (LOSS) PER SHARE:
NET INCOME PER SHARE BEFORE
CUMULATIVE EFFECT $ .07 $ .38 $ .01 $ 0.67
--------- -------- --------- ---------
CUMULATIVE EFFECT $ -- $ -- $ -- $ (1.36)
--------- ---------- --------- ---------
EARNINGS PER SHARE $ .07 $ .38 $ .01 $ (.69)
========= ========= ========= =========
See notes to condensed consolidated financial statements
-4-
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
BUILDERS TRANSPORT, INCORPORATED AND SUBSIDIARIES
Six Months Ended
June 30 June 30
1996 1995
----------- -----------
(In thousands)
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 5,240 $ 18,806
INVESTING ACTIVITIES
Purchases of property and equipment (1,475) (4,139)
Proceeds from disposal of property and equipment 5,492 3,628
--------- ---------
NET CASH PROVIDED BY (USED IN) INVESTING
ACTIVITIES 4,017 (511)
FINANCING ACTIVITIES
Proceeds from lines of credit and
long-term borrowings 14,468 --
Principal payments on lines of credit,
long-term debt and capital lease obligations (23,732) (18,188)
Proceeds from the issuance of common stock -- 12
Purchase of Treasury Stock (19) (74)
--------- ---------
NET CASH USED BY FINANCING ACTIVITIES (9,283) (18,250)
--------- ---------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (26) 45
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 108 9
--------- ---------
CASH AND CASH EQUIVALENTS AT END
OF PERIOD $ 82 $ 54
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest $ 7,966 $ 6,604
Noncash investing activity:
Property and equipment acquired
through capital leases $ 15,278 $ 49,501
Noncash financing activity:
Common stock issued under employee
benefit plans $ -- $ 25
See notes to Condensed Consolidated Financial Statements
-5-
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 June 30,
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 Six Months Ended
June 30 June 30 June 30 June 30
1996 1995 1996 1995
----------- ----------- ----------- -----------
PRIMARY:
Average shares outstanding 6,270,100 6,210,113 6,252,418 6,208,621
Assumed exercise of stock
options 225,147 241,060 198,730 276,941
Treasury stock (1,170,583) (1,114,333) (1,170,556) (1,113,662)
----------- ----------- ----------- -----------
Totals 5,324,664 5,336,840 5,280,592 5,371,900
=========== =========== =========== ===========
Net income (loss) $ 357,113 $ 2,145,374 $ 28,723 $(3,719,490)
=========== =========== =========== ===========
Per share amount:
Net income $ .07 $ .40 $ .01 $ (.69)
=========== =========== =========== ===========
FULLY DILUTED:
Average shares outstanding 6,270,100 6,210,113 6,252,418 6,208,621
Assumed exercise of stock
options 225,147 250,179 270,661 297,774
Assumed conversion of 8%
Convertible Subordinated
Debentures issued
September 9, 1985 1,060,775 1,104,508 1,075,346 1,104,508
Assumed conversion of
6 1/2% Convertible
Subordinated Debentures
issued May 9, 1986 592,079 592,079 592,079 606,649
Treasury stock (1,170,583) (1,114,333) (1,170,556) (1,113,662)
----------- ----------- ----------- -----------
Totals 6,977,518 7,042,546 7,019,948 7,103,890
=========== =========== =========== ===========
Net income (loss) $ 357,113 $ 2,145,374 $ 28,723 $(3,719,490)
-6-
Add 8% Convertible
Subordinated Debentures
interest, net of
income tax effect 314,906 324,286 642,019 648,572
Add 6 1/2% Convertible
Subordinated Debentures
interest, net of
income tax effect 220,947 218,519 444,322 447,793
----------- ----------- ----------- -----------
Adjusted net income $ 892,966 $ 2,688,179 $ 1,115,064 $(2,623,125)
=========== =========== =========== ===========
Per share amount:
Net income $ .13* $ .38 $ .16* $ (.37)*
=========== =========== =========== ===========
* Anti-dilutive
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
BUILDERS TRANSPORT, INCORPORATED AND SUBSIDIARIES (continued)
Note C -- CREDIT AGREEMENT
During the second quarter the Company and its lenders amended the revolving
credit facility to provide to the Company, among other things, lower rates and
fees, increased borrowing capacity and an extension of the scheduled
expiration date of the credit agreement.
-7-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OPERATING RESULTS
Operating revenues for the second quarter of 1996 were $73.4 million, compared
to $74.8 million for the second quarter of 1995, and for the first six months
of 1996, were $143.9 million, compared to $148.0 million for the first six
months of 1995.
Net income for the second quarter of 1996 was $357,000, compared to $2,145,000
for the second quarter of 1995, and net income for the first six months of
1996 was $29,000 compared to a net loss of $3,719,000 (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 93.71% and 94.3% for the second quarter and first six months of 1996,
respectively, compared to 90.61% and 91.32% for the same periods in 1995.
Operating income during the second quarter was $4.6 million, compared to $7.0
million in the second quarter of 1995 and for the first six months of 1996 was
$8.2 million, compared to $12.8 million for the first six months of 1995. The
increase in operating expenses as a percentage of revenues, was primarily
attributable to a very substantial increase in fuel prices in 1996. Operating
profitability in the second quarter of 1996 was negatively impacted by
approximately $1,000,000 as a result of the significantly higher fuel costs.
A shortage of truck drivers negatively impacted operating profitability,
resulting in approximately 5% of the tractor fleet going unmanned. The
Company experienced a revenue shortfall of $3-$4 million as a result of the
driver shortage. In response to the driver situation, the Company brought in
a new recruiting team during April. This team has initiated a company-wide
approach to keeping tractors manned and to growing the Company's owner-
operator fleet aggressively. The Company has already made substantial
progress in manning its equipment since changing its recruiting staff and its
approach to manning equipment.
The Company increased its use of owner-operators to 212 contractors, on
average, during the second quarter of 1996, compared to an average of 188
owner-operators during the corresponding period in 1995. This caused an
increase in the Company's rents and purchased transportation expenses during
the second quarter of 1996, as compared to the second quarter of 1995.
The Company's freight volume was relatively strong throughout the second
quarter. The Company's management is cautiously optimistic that the freight
market will continue to improve and that increased demand, along with some of
the new business that has been recently added, will result in long-term
revenue growth. If freight demand continues to be solid and the Company can
get its equipment fully manned, operations and profitability should continue
to improve.
-8-
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. Over the past year or so, the Company
experienced weakened freight demand. However, this situation is continuing to
improve and the Company's freight volume has been relatively strong recently.
While the Company is more optimistic about future business levels, the Company
cannot predict whether this positive trend will continue or when it can obtain
meaningful rate increases from the majority of its customers.
Fuel prices were sharply higher during the second quarter of 1996. Among
other actions, the Company has passed some of the additional costs along to
its customers by collecting fuel surcharges. Fuel prices have decreased some
recently, but the Company cannot predict if fuel prices will return to a more
nearly normal level.
The Company experienced a shortage of qualified drivers during the second
quarter, resulting in approximately 5% of its tractor fleet going unmanned.
Recently, the Company has improved its driver situation as a result of changes
in driver recruiting personnel and in its approach to manning equipment. The
Company believes that it has improved its ability to recruit and retain
quality drivers by these initiatives and anticipates moving toward full
capacity over the coming months. However, driver availability and retention
are industry-wide issues, and the Company expects that finding and keeping
high quality drivers will continue to be a significant challenge for the
Company.
FINANCIAL CONDITION, LIQUIDITY AND SOURCES OF CAPITAL
The current ratio was 1.03 at June 30, 1996, compared to .84 at December 31,
1995. Accounts Receivable increased by 29%, as compared to December 31, 1995,
due to seasonal increases in volume, receivable collections delays resulting
from problems associated with the conversion to new computer software and an
increase in other receivables.
Cash provided by operations was $5.2 million for the first six months of 1996,
as compared to $18.8 million for the first six months of 1995. Lower
operating income and increased accounts receivable caused operating cash flows
to decline in 1996 as compared to 1995. Management expects that cash
-9-
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.
During the quarter the Company and its lenders amended the revolving credit
facility. This agreement benefits the Company in several ways. It provides
to the Company, among other things, lower rates and fees, increased borrowing
capacity and an extension of the scheduled expiration date of the credit
agreement to December 31, 1999. The credit agreement fits the Company's
current credit needs. The Company also believes that it is very advantageous
to continue the long-standing banking relationship with the Company's current
lenders. They have a proven track record for responding quickly to the
Company's evolving credit requirements.
The Company has, essentially, completed its program to reduce the
average age of its fleet. The Company may replace up to 200 older tractors
during the latter part of 1996. 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, the Company's van division's trailer pool has
been converted to almost entirely 53-foot trailers. The Company is currently
replacing 220 flatbed trailers and may replace some older tractors during the
latter part of 1996.
-10-
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 4, 1996.
(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.
(i) Nominees Votes Against Broker
for Directors Votes For or Withheld Abstentions Non-Votes
-------------------- --------- ----------- ----------- ---------
David C. Walentas 4,596,223 282,537 --- ---
Stanford M. Dinstein 4,591,812 286,948 --- ---
John R. Morris 4,597,284 281,476 --- ---
Arthur C. Baxter 4,596,414 282,346 --- ---
Frederick S. Morton 4,591,125 287,635 --- ---
Pierson G. Mapes 4,586,142 292,618 --- ---
(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.
Votes Against Broker
Votes For or Withheld Abstentions Non-Votes
--------- ----------- ----------- ---------
4,852,730 8,583 17,447 ---
(iii) To approve the Amended and Restated Builders Transport, Incorporated
Non-Employee Director s Stock Option Plan and reserve 100,000 of the
Company s Common Stock to be used by this plan.
Votes Against Broker
Votes For or Withheld Abstentions Non-Votes
--------- ----------- ----------- ---------
4,246,100 594,863 35,320 2,477
-11-
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 10.1 Amendment and Waiver to the Amended and Restated Financing
Agreement, dated as of May 28, 1993.
Exhibit 27 Financial Date 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, 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: August 14, 1996 By: /S/ ROBERT Y. 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
-12
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<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 82
<SECURITIES> 0
<RECEIVABLES> 37,284
<ALLOWANCES> 633
<INVENTORY> 2,907
<CURRENT-ASSETS> 57,125
<PP&E> 301,536
<DEPRECIATION> 105,231
<TOTAL-ASSETS> 277,240
<CURRENT-LIABILITIES> 55,260
<BONDS> 172,951
0
0
<COMMON> 63
<OTHER-SE> 38,661
<TOTAL-LIABILITY-AND-EQUITY> 277,240
<SALES> 73,442
<TOTAL-REVENUES> 73,442
<CGS> 0
<TOTAL-COSTS> 68,822
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,036
<INCOME-PRETAX> 584
<INCOME-TAX> 227
<INCOME-CONTINUING> 357
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 357
<EPS-PRIMARY> .07
<EPS-DILUTED> .07<F1>
<FN>
<F1>Fully diluted EPS calculation is anti-dilutive.
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</TABLE>
[Execution Copy]
AMENDMENT AND WAIVER
TO
AMENDED AND RESTATED
FINANCING AGREEMENT
dated as of May 28, 1993
THIS AMENDMENT dated as of June 10, 1996 is made by and among THE CIT
GROUP/BUSINESS CREDIT, INC., a New York corporation ("CITBC"), NATIONAL BANK
OF CANADA, a Canadian chartered bank ("NBC", and together with CITBC, the
"Lenders"), CITBC, in its capacity as the agent for the Lenders ("Agent"), and
BUILDERS TRANSPORT, INC., a Georgia corporation ("Company").
Preliminary Statement
The Company, the Agent, NBC, and CITBC are parties to that certain
Amended and Restated Financing Agreement, dated as of May 28, 1993, as amended
to date (the "Financing Agreement"). Terms defined in the Financing Agreement
and not otherwise defined herein are used herein as therein defined.
The Company has requested increases in the maximum principal amounts of
certain of the credit facilities available pursuant to the Financing
Agreement, an extension of the term of the Financing Agreement and certain
other modifications of the terms of the Financing Agreement, and the Agent and
the Lenders have agreed, upon and subject to all of the terms, conditions and
provisions of this Amendment, to such requests.
NOW, THEREFORE, in consideration of the Financing Agreement, the
advances and other financial accommodations made thereunder, the mutual
promises hereinafter set forth and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
Section 1. Amendments to Financing Agreement. The Financing Agreement
is hereby amended, subject to the provisions of Section 2 hereof, effective as
of the date hereof, by
(a) amending Section 1 Definitions by
(i) amending the definition "Chemical Bank Rate" by inserting
after the phrase "announced by Chemical Bank" appearing therein, the
parenthetical phrase "(or any successor by merger to Chemical Bank)";
(ii) amending the definition "Collateral Management Fee" by
inserting after the phrase "payable on each Anniversary Date" appearing
therein, the phrase "or, as to Anniversary Dates occurring on and after
December 31, 1996, $50,000.00 per year payable on each such Anniversary
Date,";
(iii) amending the definition "Early Termination Fee" in its
entirety to read as follows:
Early Termination Fee shall mean the fee the Agent is entitled to
charge the Company in the event the Company terminates the Line of
Credit or this Amended and Restated Financing Agreement on a date
prior to the Anniversary Date that occurs on December 31, 1998,
which fee shall be in the amount of (a) $250,000 if such
termination occurs on or prior to December 31, 1997 and (b)
$150,000 if such termination occurs after December 31, 1997 and on
or prior to the thirtieth (30th) day prior to December 31, 1998,
and shall be payable upon termination. The Company shall give the
Agent and the Lenders ninety (90) days notice of termination prior
to any such termination date.
(iv) amending the definition "Eligible Accounts Receivable" by
deleting from clause (iii) of the proviso therein, the figure
"$2,500,000" and substituting therefor the figure "$3,500,000";
(v) amending the definition "Revolving Line of Credit" by
deleting therefrom the figure "$15,000,000.00" appearing therein and
substituting therefor the figure "$17,500,000.00;
(vi) amending the definition "Term Loan II" by deleting therefrom
the figure "$10,000,000.00" and substituting therefor the figure
"$12,500,000.00";
(b) amending Section 4 Term Loans by amending paragraph 5 thereof
by deleting therefrom the figure "$10,000,000.00" both times it appears in
said paragraph, and substituting therefor the figure "$12,500,000.00";
(c) with respect to Section 5, subparagraph 1(a), the Agent
acknowledges that the Lenders have not, as of the date of this Amendment,
elected to require any reduction in the aggregate maximum amount of
outstanding standby Letters of Credit and that pursuant to the provisions of
Section 1(b), the allowable maximum aggregate amount of outstanding standby
Letters of Credit will be increased from $10,000,000 to $12,500,000 (but
without any allowance for Additional Letters of Credit) and the necessary
conforming change to Section 5 shall be deemed to be made by this reference;
(d) amending Section 8 Interest, Fees and Expenses by inserting
in paragraphs 1 and 2 thereof, in each case immediately before the period
following the phrase "so as to remain one percent (1%) above the Chemical Bank
Rate" appearing in each thereof, the following proviso:
, provided that if EBIT for the fiscal year of the Company ending
December 31, 1996 is equal to or greater than $17,250,000.00 and
the Interest Coverage Ratio for the fiscal year of the Company
ending December 31, 1996 is at least 1.0 to 1, in each case based
upon the audited Consolidated Balance Sheet and related
consolidated statements of income, cash flow and shareholders'
equity delivered by the Company to the Agent and the Lenders in
compliance with the provisions of Section 7, paragraph 8 hereof,
such margin shall, effective the first day of the month following
the month in which such financial statements are delivered (but
not earlier than April 1, 1997), be reduced from one percent (1%)
to three-quarters of one percent (3/4%)
(e) amending Section 11 Termination in its entirety to read as
follows:
SECTION 11. Termination
Except as otherwise permitted herein (including as permitted
in the definition of "Early Termination Fee" in Section 1 of this
Amended and Restated Financing Agreement), the Company may
terminate this Amended and Restated Financing Agreement and the
Line of Credit at any time after December 31, 1998 upon ninety
(90) days prior written notice. Any Lender may terminate this
Amended and Restated Financing Agreement and the Line of Credit on
December 31, 1999 or any subsequent Anniversary Date upon sixty
(60) days prior written notice, provided that, notwithstanding the
foregoing, the Required Lenders may terminate the Amended and
Restated Financing Agreement immediately upon the occurrence of an
Event of Default, provided, however, that if the Event of Default
is an event listed in paragraph 1(c) of Section 10 of this Amended
and Restated Financing Agreement, the Agent and the Lenders may
regard the Amended and Restated Financing Agreement as terminated
and notice to that effect is not required. The Company may
terminate this Amended and Restated Financing Agreement and the
Line of Credit at any time prior to December 31, 1998 upon sixty
(60) days' prior written notice to the Agent and the Lenders,
provided that the Company pays to the Agent, for the ratable
benefit of the Lenders, immediately upon demand any applicable
Early Termination Fee. All Obligations shall become due and
payable as of any termination hereunder or under Section 10 hereof
and, pending a final accounting, the Agent may withhold any
balances in the Company's account (unless supplied with an
indemnity satisfactory to the Agent) to cover all of the Company's
Obligations, whether absolute or contingent. All of the Agent's
and the Lenders' rights, liens and security interests shall
continue after any notice of termination until all Obligations
have been paid and satisfied in full.
(f) the Financing Agreement is further amended as may be
necessary conform the provisions thereof not expressly amended hereby to the
amendments expressly effected by the foregoing paragraphs (a), (b), (c), (d)
and (e).
Section 2. Effectiveness of Amendment. Section 1 of this Amendment
shall become effective as of the date hereof upon receipt by the Agent of an
amendment fee in the amount of $15,000, for the ratable account of the
Lenders, and of the following, each in form and substance satisfactory to the
Agent and the Lenders:
(a) at least five copies of this Amendment, each duly executed
and delivered by the Company and each Lender;
(b) replacement Promissory Notes, dated the effective date of
this Amendment and duly executed and delivered by the Company, payable to the
order of each Lender, evidencing such Lender's pro rata share of the increases
in Term Loan II and the Revolving Line of Credit and the extension of the
final maturity date effected by this Amendment, in the forms attached as Annex
1 and Annex 2, respectively, to this Amendment (the "1996 Term Loan II Notes"
and the "1996 Revolving Credit Notes," respectively);
(c) a certificate of the Secretary or an Assistant Secretary of
the Company as to the Company's articles or certificate of incorporation and
bylaws as in effect on the effective date of this Amendment (and having copies
thereof attached thereto or certifying that there has been no amendment
thereto since the last date on which such constituent documents were delivered
to the Agent and the Lenders pursuant to the Financing Agreement), as to the
resolutions of the Company's Board of Directors (and shareholder approvals, if
necessary) adopted in connection with the Company's execution and delivery of
this Amendment and as to the incumbency of officers of the Company authorized
to sign this Amendment, the 1996 Term Loan II Notes, the 1996 Revolving Credit
Notes and the other instruments, certificates and documents contemplated to be
delivered by the Company in connection with the effectiveness of this
Amendment;
(d) an Officer's Certificate executed by an authorized officer
of the Company to the effect that, both before and after giving effect to this
Amendment (i) all representations and warranties of the Company set forth in
the Financing Agreement and in any other document, instrument or agreement
entered into in connection with the Financing Agreement (together with the
Financing Agreement, the "Loan Documents") are true and correct in all
material respects on and as of the date thereof and (ii) the Company is in
compliance with all of the terms and provisions set forth in the Financing
Agreement and the other Loan Documents;
(e) confirmations duly executed and delivered by the Guarantors
of their Guaranties and the Pledge Agreements in the form attached to this
Amendment;
(f) a legal opinion letter of Nelson, Mullins, Riley &
Scarborough in such form and as to such matters relevant to the effectiveness
of this Amendment as the Agent may reasonably request; and
(g) such other documents, instruments and certificates as the
Agent or any Lender may reasonably request in connection with the transactions
contemplated by this Amendment.
Section 3. Confirmation of Consent. The Lenders hereby confirm that
the Borrower's pre-purchase of its 8% Subordinated Debentures in the face
amount of $2,157,000 at a discount of 92.25% (or cash outlay of $1,989,832.50,
plus interest accrued on such debentures), in anticipation of its obligation
to make a sinking fund payment in June 1996, was consented to by the Lenders
at the time of the pre-purchase, that such pre-purchase shall not be deemed to
be a breach of paragraph 1(h) of Section 10 of the Financing Agreement, and
the Lenders hereby confirm their agreement to waive any such Default or Event
of Default.
Section 4. Effect of Amendment. From and after the effectiveness of
this Amendment, all references in the Financing Agreement and in the Loan
Documents to "the Amended and Restated Financing Agreement," "the Financing
Agreement," "hereunder," "hereof" and words of like import referring to the
Financing Agreement, shall mean and be references to the Financing Agreement
as amended by this Amendment. Except as expressly amended hereby, the
Financing Agreement and all terms, conditions and provisions thereof remain in
full force and effect and are hereby ratified and confirmed. The execution,
delivery and effectiveness of this Amendment shall not, except as expressly
provided herein, operate as a waiver of any right, power or remedy of any
Lender or the Agent under any of the Loan Documents, nor constitute a waiver
of any provision of any of the Loan Documents.
Section 5. Counterpart Execution; Governing Law.
(a) Execution in Counterparts. This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which taken together shall constitute but one and
the same agreement.
(b) Governing Law. This Amendment shall be governed by and
construed in accordance with the internal laws of the State of Georgia,
without giving effect to principles of conflicts of laws.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be executed by their respective officers thereunto duly authorized, as of
the date first above written.
[CORPORATE SEAL] BUILDERS TRANSPORT, INC.,
a Georgia corporation, as the
ATTEST: Company
/s/ J. Ray Hardy
- ---------------------------------
[Assistant] Secretary By: /s/ T. M. Guthrie
-------------------------------------
Title: Treasurer
THE CIT GROUP/BUSINESS
CREDIT, INC., a New York
corporation, as Agent and as
a Lender
By: /s/ Robert Bernier
-------------------------------------
Title: Vice President
NATIONAL BANK OF CANADA,
a Canadian chartered bank
By: /s/ Charles Collie
-------------------------------------
Title: VP & Mgr.
By: /s/ Dan Shaw
-------------------------------------
Title: Asst. Vice President
CONSENT, RELEASE AND CONFIRMATION OF GUARANTORS
Each of the undersigned, each a "Guarantor" as defined in the Amended
and Restated Financing Agreement dated May 28, 1993 among Builders Transport,
Inc., as borrower, The CIT Group/Business Credit, Inc., as Agent for the
Lenders (as such term is defined therein) and as a Lender and National Bank of
Canada, as a Lender, hereby acknowledges receipt of the foregoing Amendment
and Waiver to Amended and Restated Financing Agreement and confirms for the
benefit of the Agent and the Lenders, that each of the Guaranty or Non-
Recourse Guaranty, as the case may be, dated January 3, 1992, as amended,
executed and delivered by the undersigned continues in full force and effect
as a guaranty in accordance with its terms and continues to be secured by any
collateral therefor and that each of the undersigned hereby waives and
releases any and all claims it may have against the Agent or any Lender or any
of their respective shareholders, directors, employees or agents arising out
of any event or circumstance existing on or prior to the date hereof and
arising under the Original Financing Agreement (as defined in the aforesaid
Amended and Restated Financing Agreement), the aforesaid Amended and Restated
Financing Agreement, the Guaranty, the Non-Recourse Guaranty or any related
document or in connection with the transactions contemplated thereby.
Dated: June 10, 1996
BUILDERS TRANSPORT OF TEXAS, INC.
By: /s/ T. M. Guthrie
-------------------------------------
Name: T. M. Guthrie
Title: Treasurer
CCG, INC.
By: /s/ T. M. Guthrie
-------------------------------------
Name: T. M. Guthrie
Title: Treasurer
BUILDERS TRANSPORT, INCORPORATED
By: /s/ T. M. Guthrie
-------------------------------------
Name: T. M. Guthrie
Title: Treasurer
