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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
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<S> <S>
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED,
EFFECTIVE OCTOBER 7, 1996).
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
FOR THE TRANSITION PERIOD FROM ________ TO ________
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COMMISSION FILE NUMBER 0-11300
BUILDERS TRANSPORT, INCORPORATED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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<C> <C>
DELAWARE 58-1186216
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
2029 W. DEKALB ST., 29020-7005
POST OFFICE BOX 7005, CAMDEN, SC (Zip Code)
(Address of Principal Executive Offices)
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(803) 432-1400
(Registrant's Telephone Number, Including Area Code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
COMMON STOCK, PAR VALUE $.01 PER SHARE
8% CONVERTIBLE SUBORDINATED DEBENTURES DUE AUGUST 15, 2005
6 1/2% CONVERTIBLE SUBORDINATED DEBENTURES DUE MAY 1, 2011
(Titles of Classes)
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 by check mark if disclosure of delinquent files pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
State the aggregate market value of the voting stock held by non-affiliates
of the registrant: $16,830,665 as of March 21, 1997.
Indicate the number of shares outstanding of each of the registrant's
classes of common stock as of the latest practicable date: the number of shares
outstanding as of March 21, 1997, of the registrant's only issued and
outstanding class of stock, its $0.01 per share par value common stock, was
5,284,019.
DOCUMENTS INCORPORATED BY REFERENCE
The information set forth under Items 10, 11, 12 and 13 of Part III of this
Report is incorporated by reference from the registrant's definitive proxy
statement for the 1997 annual meeting of stockholders that will be filed no
later than April 30, 1997.
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PART I
ITEM 1. BUSINESS.
GENERAL
Builders is a truckload carrier that transports a wide range of commodities in
both intrastate and interstate commerce. From its origins as a Southeastern
regional, high service, flatbed carrier for a limited number of building
materials shippers, the Company has expanded and developed into a carrier that
provides dedicated contract carriage, dry van and flatbed service for shippers
of a variety of products in the medium- and short-haul and regional markets.
These products include, among others, textiles, tires, paper products, metal
products, chemicals, consumer goods and building materials. Throughout its
history, the Company has concentrated on tailoring its services to the specific
requirements of individual customers. As a result, the preponderance of
Builders' business involves providing high-quality, specialized services to
service-sensitive shippers.
To assure the most efficient response to the differing requirements of customers
at numerous shipping locations, Builders has a network of terminals where
over-the-road tractors are based and drivers are domiciled. This terminal
network is supplemented by miscellaneous staging lots near certain major
shipping points. The Company utilizes a computerized operations system to
control and facilitate the movement of freight. Builders' operating philosophy
is founded on maintaining the highest level of service in the most efficient
manner possible.
Builders is headquartered in Camden, South Carolina, and its total operation
encompasses thousands of plants, warehouses and shipping points of regularly
served customers in the eastern two-thirds of the United States and the
Provinces of Ontario and Quebec, Canada. The Company holds common and contract
carrier authority to transport general commodities in interstate commerce
between all points in the United States. (See "Regulation.")
No single customer (including groups of customers under common control and
affiliated customers) accounted for as much as ten percent of Builders'
consolidated revenues in 1996.
OPERATIONS
Builders currently conducts operations from 44 terminals. Each terminal is the
base for specific over-the-road tractors and is the domicile of the drivers who
operate those tractors. Thirty-three of these terminals have facilities and
staff to provide fueling and routine and heavy maintenance. The Company also
operates miscellaneous staging lots near certain major shipping points. The
Company believes this network of facilities enhances its ability to provide
highly responsive, specialized services at its customers' major shipping
locations in an efficient manner. This extensive terminal network also should
give Builders an advantage over much of its competition in responding to the
increasing regional carrier requirements of many shippers.
Each customer's shipment is accorded exclusive use of a trailer: goods of more
than one customer are not carried on the same trailer. Builders' preferred
operating procedure is for a unit carrying a shipment to proceed directly from
origin to destination with no delay enroute occasioned by a change of drivers,
relays or circuitous routing via terminals. The Company operates computerized
Central Control Departments for van, flatbed and dedicated operations. These
departments strive to maintain fleet balance by locating and procuring freight
shipments that originate near the destination of another shipment that is
enroute or already scheduled. The Central Control Departments send this
information to the terminal, and each terminal then dispatches its domiciled
drivers accordingly.
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Builders believes its range of services is one of the most comprehensive offered
by any truckload carrier. The Company's services are divided into three major
categories.
Flatbed Operations. Builders' Flatbed Division provides customized
transportation to service-sensitive shippers. The Company strives to meet all
specific pickup and delivery schedules requested by both single and
multi-location shippers. This customized service is designed to accommodate the
increasing number of shippers that utilize just-in-time delivery techniques or
that seek to reduce costs by controlling their inventory levels. In recent
years, the Flatbed Division has diversified its commodity mix that now includes,
among other things, lumber, steel, aluminum, wallboard, roofing materials and
pipe. This makes the division less vulnerable to periodic downturns in any
single business segment represented in the Flatbed Division's customer base. The
Flatbed Division also now acts as a single source provider of logistics support
(that is, supervising all of a shipper's trucking needs, even though some of
those needs may be met by carriers other than Builders) for certain customers.
Dry Van Operations. The Company's Dry Van Division services a broad array of
customers with a variety of shipping needs. Its primary traffic consists of
medium-haul routes and is geographically confined to the eastern two-thirds of
the United States and the Provinces of Ontario and Quebec, Canada. The
Division's customers include many Fortune 500 companies who subscribe to a
"core-carrier" strategy as well as smaller companies with regional shipping
needs. Services include just-in-time delivery, EDI and mobile satellite
communications, as well as tailored services required to meet specific customer
needs such as dedicated capacity and team operations.
Dedicated Contract Carriage. Builders' Dedicated Fleet Division provides
dedicated equipment and personnel on a contractual basis to each of its
customers for that customer's exclusive use, frequently as a lower cost
alternative to private carriage. In some instances, Dedicated Fleet supplements
this dedicated service with customized linehaul service. While providing
shippers with a higher level of service, Dedicated Fleet frees for other uses
that portion of a shipper's capital that would have been invested in a private
fleet. This allows shippers to deploy resources to their primary businesses that
otherwise would be diverted to transportation. Dedicated Fleet's service also
includes the administrative staffing associated with operating a private fleet.
Other Specialized Services. In addition to those already noted, other
specialized services that all Builders' divisions offer to a shipper when
required to meet its needs include the following: (i) assignment of a specific
number of linehaul units to the shipper on a continuing basis; (ii)
establishment of a trailer pool on the shipper's property or on a Company lot
near the shipper's property; (iii) close coordination with the shipper to assure
delivery at specified times; (iv) establishment of individualized pricing
formats and information exchange systems, including electronic data interchange,
to complement the shipper's systems designs and information flows; and (v)
utilization of two-driver teams in those instances where a shipper's needs can
be met more efficiently in that manner.
MARKETING
The primary focus of Builders' marketing strategy is to increase freight density
within defined market areas that are consistent with the Company's growth and
profit objectives. The goal is to provide optimal equipment utilization and
superior customer service in furtherance of Builders' aim to be a leader in the
truckload industry. The Company vigorously markets all its services including
Flatbed, Van, Dedicated Fleet and logistics management.
The directors of sales for the Flatbed and Van Divisions supervise the
activities of regional sales managers in obtaining strategically located
business to balance traffic flows. The directors of sales
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report directly to their respective division vice presidents. The vice president
of Dedicated Fleet and two sales vice presidents within that division are
responsible for developing contacts with shippers who desire dedicated services.
Builders compiles and publishes its own pricing schedules to maintain
flexibility in responding rapidly to the varying service demands of its
customers. It does not participate in any collective rate making with other
carriers through rate bureaus or tariff publishing agents. The Company does not
compete for, or handle, any less-than-truckload business.
REVENUE EQUIPMENT
At December 31, 1996, Builders' linehaul fleet, including owner-operators'
equipment, consisted of 2,728 over-the-road tractors and 6,723 trailers. The
equipment is assigned to the three operating divisions as follows: Flatbed
Division 1,072 tractors and 1,877 trailers; Van Division 895 tractors and 2,625
trailers; and Dedicated Fleet 761 tractors and 2,221 trailers. The average age
of Builders' tractors and trailers at December 31, 1996, was 2.5 years and 5.0
years, respectively. (See "Developments in the Company's Business -- Acquisition
of Equipment.")
All Company-owned tractors are manufactured using consistent drive-train
specifications. This standardization enables the Company to repair and service
any unit of equipment at any of the Company's full-service terminal locations,
provide a consistent and simplified driver training program, and reduce spare
parts inventory to a minimum level. Virtually all tractors are now equipped with
fully electronic engine systems.
Additionally, all tractors purchased since late 1994 have been premium tractors
that represent a significant upgrade over the Company's previously existing
tractor specifications. These new tractors include, among other things, extra
large cabins, double sleeper bunks and more powerful electronic engines. The
Company believes that this exceptional equipment will help, over time, to
attract and retain high-quality, professional drivers by improving their work
environment. The Company has over 1,300 two-way mobile satellite communication
systems in the tractors that operate primarily in the Van Division.
COMPETITION
Competition is based largely on the price and quality of service offered.
Builders competes predominately with private carriage and other truckload
carriers. The Company competes to a lesser degree with railroads, intermodal
carriers, air freight carriers, freight forwarding companies and
less-than-truckload motor common carriers.
Builders concentrates on providing high quality, specialized transportation in
the most efficient manner possible to service-sensitive customers operating in
the eastern two-thirds of the United States and the Provinces of Ontario and
Quebec, Canada. Builders believes its extensive terminal network gives it an
advantage over much of its competition in responding to the increasing regional
carrier requirements of many shippers. Builders is often the primary carrier at
the shipping locations that it serves.
EMPLOYEES
At December 31, 1996, Builders employed over 3,700 people of whom approximately
2,900 were drivers. None of the Company's employees is a member of any
collective bargaining unit, and Builders' management believes employee relations
are excellent.
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Drivers. Builders has established several programs to increase driver loyalty
and to give drivers a stake in the Company. Drivers are compensated on the basis
of miles driven, and base pay for miles driven increases with a driver's length
of employment with Builders. The Company maintains a KSOP benefit plan for
drivers and most other employees. Under this plan, Builders matches some portion
of the employees' contribution in the form of Builders' common stock. (See Note
6 to Consolidated Financial Statements.)
Safety and Training. Builders conducts comprehensive training programs to
promote safety, customer relations, service standards, productivity and positive
attitudes. Driver training and safety programs are developed jointly by the
Company's Safety and Fleet Development Departments. The Company's goal is to
earn the reputation of being the safest truckload carrier in the industry.
All drivers meet or exceed all DOT qualifications. All driver qualification
files are updated at least annually in an effort to ensure that compliance with
DOT regulations is maintained. Since 1994, Builders has operated or contracted
with driver schools to provide training for inexperienced, newly hired drivers
and to help them acquire the federally mandated Commercial Drivers License. The
Company believes that these driver schools will consistently produce better
trained and more safety conscious drivers.
In addition, Builders has a comprehensive training program for all drivers newly
hired by Builders including those with previous driving experience. Each driver
applicant must pass a driving skills road test as part of the employment
application and screening process. Once accepted for employment, each driver
attends the Company's New Driver Orientation. New Driver Orientation is a
three-day training program that is conducted at one of Builders' five regional
training terminals. Among the topics included in Builders' training program,
are: defensive driving; pre-trip inspection; regulatory compliance; hazardous
materials handling; load fastening and protection; equipment maintenance;
equipment operations; company policies; and emergency reporting procedures. This
training is conducted by full-time training specialists. Drivers, regardless of
past driving experience, must successfully complete this training prior to being
released to a Driver Trainer. New drivers may be assigned to a qualified Driver
Trainer for a period of up to three weeks, depending on their past driving
experience and their skills mastery. The Driver Trainers complete evaluations of
the new drivers, ensuring competence in basic driving and customer service
skills.
Ongoing training is conducted through drivers' safety meetings at each terminal.
The Company's Safety Department provides training topics and content. The focus
of these safety efforts is the prevention of accidents and injuries.
Additionally, Builders utilizes the services of an outside firm to conduct road
observations to identify any drivers who may need counseling or retraining. The
Company marks its trailers with a toll-free number to facilitate the motoring
public's reporting of driving behaviors. Compliments and complaints are
investigated and directed to the appropriate terminal manager for follow-up. As
part of the Company's corrective action process, remedial training is available
to all drivers upon request. Builders also requires remedial training for
drivers with excessive log errors or who are involved in preventable accidents.
OWNER-OPERATORS
During 1996, the Company continued to expand its fleet with equipment purchased
by independent contractors ("owner-operators"). This provides marketing,
operating, safety, recruiting, driver retention and financial advantages to the
Company. In addition, the Company believes that the owner-operators with whom it
contracts are generally more experienced than the general driver
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population and that they have a vested interest in protecting their own
equipment that motivates them to operate in a cautious manner. Owner-operators
are responsible for paying all their operating expenses including fuel,
maintenance, equipment payments and all other equipment-related expenses.
Owner-operators are compensated by the Company on a rate per mile or percentage
of revenue basis. At December 31, 1996, the Company had contracts with 223
owner-operators.
REGULATION
Builders' operations in interstate commerce were regulated by the Interstate
Commerce Commission (the "ICC") through 1995. Effective December 31, 1995, the
ICC was eliminated by the ICC Termination Act and certain of the ICC's authority
was transferred to the United States Department of Transportation ("DOT"). Under
the Termination Act, the DOT has assumed responsibility for motor carrier
licensing, financial reporting, motor carrier self-insurance and certain other
matters formerly under the ICC's jurisdiction. In this connection, the
Termination Act created the Surface Transportation Board, an independent body
within the DOT, to assume certain duties previously performed by the ICC. The
remaining motor carrier oversight is now conducted by other departments in the
DOT. There was no appreciable impact on the Company's operations during 1996 as
a result of the transfer of authority to the DOT. The Termination Act also
mandates that the DOT review over the next several years matters such as driver
fatigue, registration of carrier insurance and cargo liability. The Company
cannot assess at this time what effect, if any, these reviews may have on its
operations.
The federal government and state agencies continue to regulate such matters as
weight and dimensions of equipment. Safety requirements for motor carrier
operations continue to be prescribed by the DOT. Additionally, Builders is
subject to regulation by certain governmental agencies in Ontario and Quebec due
to the Company's operations in those Provinces.
Builders' operations are subject to regulation by the Environmental Protection
Agency and by various state environmental regulatory agencies with respect to
matters involving water quality and effluent limitation, underground storage
tanks and the handling, storage and disposal of solid waste and hazardous
materials. (See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Environmental Matters.")
RISK MANAGEMENT AND INSURANCE
Builders' Risk Management program provides a multi-faceted approach to the
protection of the Company's assets and interests through a combination of
insurance, self-insurance, and excess and umbrella coverages. The Company
believes that the coverages described below are adequate and appropriate.
The Company self-insures its automobile liability and general liability
exposures with a retention of $1,000,000 and $500,000, respectively, combined
single limits per occurrence. The funding obligation within the retention is
secured by a letter of credit in the amount of $1,000,000 payable to a trustee
for potential claimants. Several umbrella liability policies increase both
automobile and general liability coverage to $35,000,000.
Workers' compensation and employer's liability exposure is covered by a
combination of self-insurance programs, self-insured excess insurance contracts
and insurance contracts. A self-insured retention of $500,000 per occurrence
applies to the self-insured states of Alabama, Arkansas, Georgia, Indiana,
Kansas, Mississippi, North Carolina, Oklahoma, South Carolina and Tennessee with
underwriters assuming excess liability up to statutory limits for workers'
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compensation and $1,000,000 per occurrence for employer's liability. Workers'
compensation and employer's liability exposure is covered by insurance policies
in Florida, Kentucky, Virginia, Illinois, Louisiana, Massachusetts, Michigan,
New Jersey, New York and Pennsylvania. Coverage is provided to statutory limits
with a deductible/retention of $250,000 per occurrence. Employer's liability
coverage is $1,000,000 per occurrence. The Company's funding obligation within
the deductible retention is secured by letters of credit in favor of the
underwriter. The Company participates in state funds providing workers'
compensation coverage in Ohio. In Texas, occupational accident, full medical and
indemnity benefits are provided under a self-insured ERISA plan. The previously
noted umbrella policy provides liability coverage of $34,000,000 in excess of
the underlying coverages for workers' compensation and employer's liability.
Executive liability, fiduciary liability and commercial crime coverage is
provided by a policy with limits of $5,000,000 annual aggregate for executive
liability with a deductible of $500,000; $2,500,000 each loss and annual
aggregate for fiduciary liability with a deductible of $50,000; and $2,500,000
for designated commercial crime acts with a deductible of $25,000.
The Company has cargo insurance coverage with limits of $500,000 per loss with
deductibles of $500,000, $500,000 and $25,000 per occurrence, respectively, for
the flatbed, dedicated fleet and van divisions.
DEVELOPMENTS IN THE COMPANY'S BUSINESS
Operations. The Company experienced a driver shortage throughout 1996. It
reached its most serious level in the second quarter, and its severity gradually
lessened during the remainder of the year. The driver shortage combined with
inflationary costs, primarily in driver wages, a significant increase in fuel
costs and a fourth quarter increase in the reserves for claims severely hampered
1996 operating results. Competitive pricing restraints in certain markets, as
competitors discounted their rates, made it difficult to obtain adequate rate
relief sufficient to cover the rise in fixed costs for the majority of the year.
During the early part of 1997 the Company successfully obtained rate increases
from several customers and by mid-March of 1997 the Company's trucks were fully
manned.
Acquisition of Equipment. In 1996, Builders acquired 64 over-the-road tractors
and 1,356 53-foot van and flatbed trailers. Capital expenditures during 1996
aggregated approximately $29.5 million relating primarily to the acquisition of
revenue equipment. These expenditures were financed through internally generated
funds and long-term financing.
Credit Agreement. In January 1997, the Company increased the revolving credit
facility under its credit agreement to $22 million. The term loan portion of the
credit facility (aggregating $2 million at December 31, 1996) was restructured
to be payable in installments of $500,000 in the second and third quarters of
1997 with a final payment of $1 million in December 1997. (See Note 3 to
Consolidated Financial Statements.) In January and March 1997 the Company and
its lenders also amended other provisions of the Company's credit agreement to
reflect 1996 results and 1997 projections. (See Note 3 to Consolidated Financial
Statements.)
Potential Debt Restructuring. In Late March 1997, the Company retained Alex.
Brown & Sons Incorporated as financial advisor to review various alternatives
with respect to restructuring certain of the Company's debt obligations. In its
announcement, the Company stated that it expected to begin preliminary
discussions shortly with its equipment lessors and lenders and with
representatives of the holders of its two series of Convertible Subordinated
Debentures.
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ITEM 2. PROPERTIES.
At March 21, 1997, Builders operated 44 terminals, at the following locations:
Birmingham, Alabama -- Flatbed
Cuba, Alabama (Meridian, Mississippi area) -- Van and Flatbed
Decatur, Alabama* -- Dedicated Fleet
Hartselle, Alabama -- Dedicated Fleet
Mobile, Alabama -- Flatbed
West Memphis, Arkansas -- Flatbed and Dedicated Fleet
Tampa, Florida* -- Flatbed
Lakeland, Florida* -- Dedicated Fleet
Forest Park, Georgia (Atlanta area) -- Dedicated Fleet
Ft. Valley, Georgia (Atlanta area)* -- Dedicated Fleet
McDonough, Georgia (Atlanta area) -- Flatbed and Van
Newnan, Georgia -- Dedicated Fleet
Savannah, Georgia -- Flatbed and Dedicated Fleet
Akron, Indiana -- Dedicated Fleet
Portage, Indiana* -- Flatbed
Iowa City, Iowa* -- Dedicated Fleet
Medicine Lodge, Kansas -- Flatbed
Nicholson, Mississippi (New Orleans, Louisiana area) -- Flatbed
Kalamazoo, Michigan* -- Dedicated Fleet
Halifax, North Carolina -- Flatbed
Lexington, North Carolina -- Van, Flatbed and Dedicated Fleet
Lumberton, North Carolina -- Flatbed
Monroe, North Carolina* -- Dedicated Fleet
North Wilkesboro, North Carolina -- Dedicated Fleet
Cincinnati, Ohio -- Dedicated Fleet
Munroe Falls, Ohio* -- Dedicated Fleet
Newark, Ohio -- Van
Sidney, Ohio* -- Dedicated Fleet
Youngstown, Ohio -- Flatbed
Tulsa, Oklahoma -- Flatbed and Dedicated Fleet
Carlisle, Pennsylvania -- Dedicated Fleet
Hartsville, South Carolina -- Dedicated Fleet
Laurens, South Carolina -- Van
Lugoff, South Carolina (Camden area) -- Van, Flatbed and Dedicated Fleet
North Augusta, South Carolina -- Dedicated Fleet, Flatbed and Van
Spartanburg, South Carolina -- Van, Flatbed and Dedicated Fleet
Carthage, Tennessee -- Dedicated Fleet
Nashville, Tennessee -- Flatbed and Dedicated Fleet
Newport, Tennessee* -- Dedicated Fleet
White Pine, Tennessee -- Van
Dallas, Texas -- Van and Flatbed
Rotan, Texas -- Flatbed
Kinsale, Virginia -- Flatbed
Parkersburg, West Virginia -- Dedicated Fleet
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* These 11 terminals, while being the base for over-the-road tractors and the
domicile for drivers, do not include the facilities for both routine and heavy
maintenance that is otherwise characteristic of Builders' full-service
terminal network.
Of the 44 terminals, 22 are owned outright (subject to encumbrances securing the
Company's credit facility), and 22 are operated under lease agreements.
The Company's general offices and division headquarters for Flatbed, Van and
Dedicated Fleet, comprising 32,000 square feet, are located in Camden, South
Carolina. Builders also operates a corporate maintenance support facility in a
55,000-square foot building in Lugoff, South Carolina, near the Company's
general offices. This facility includes shops where new tractors are prepared
for service, and tractor and trailer body work and painting are done. Builders'
general offices and division headquarters were sold during 1995 in a sale and
leaseback transaction. (See Note 8 to Consolidated Financial Statements.) This
lease is for a five-year term with four successive optional renewal terms of
five years each. The corporate maintenance facility is owned outright by the
Company.
Builders believes that its general offices and division headquarters, its
corporate maintenance support facility and terminal network are suitable for
their intended purposes. Each of these properties is adequate for the Company's
current needs. From time to time Builders opens new terminals and closes old
terminals depending upon its customers' requirements. Each terminal is the base
for specified over-the-road tractors and is the domicile of the drivers who
operate those tractors. The Company believes this network of facilities enhances
its ability to provide highly responsive, specialized services at its customers'
major shipping locations in an efficient manner.
In addition, Builders operates miscellaneous staging lots near major shipping
points. The Company also owns certain small real estate parcels; 55 acres of
unimproved property on Hutchinson Island and a 22-acre tract of unimproved
property, both near Savannah, Georgia; and commercial property which was
formerly used for terminals in Grand Prairie, Texas, Midlothian, Texas (both
near Dallas), and Amarillo, Texas. The Grand Prairie property is under lease.
ITEM 3. LEGAL PROCEEDINGS.
The Company is a party to routine litigation incidental to its business,
primarily involving claims for personal injury and property damage incurred in
the transportation of freight. The Company believes that adverse results in one
or more of these cases would not have a material adverse effect on its results
of operations or financial position. The Company maintains excess insurance
above its self-insured levels which covers extraordinary liabilities resulting
from such claims to a level that management considers adequate. (See
"Business -- Risk Management and Insurance" and Note 4 to the Consolidated
Financial Statements.)
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There were no matters submitted to a vote of stockholders of the Company during
the fourth quarter of 1996.
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EXECUTIVE OFFICERS OF THE REGISTRANT
Pursuant to General Instruction G(3) of Form 10-K, the following list is
included as an unnumbered Item in Part I of this Report in lieu of being
included in the Proxy Statement for the 1997 Annual Meeting of Stockholders.
The table set forth below includes, as of March 21, 1997, the names and ages of
all executive officers of the Company and all positions and offices with the
Company held by such persons. Each such person has been elected to serve until
the next annual meeting of the Company's Board of Directors and until his
successor is duly elected and qualified, or until his earlier death, resignation
or removal. Each of the officers listed below, except Daniel P. Braatz has,
throughout the past five years, served in one or more executive capacities with
the Company and/or its affiliates. There are no family relationships among
executive officers or other significant employees.
Mr. Braatz was elected to his position as Vice President, Flatbed Division in
December 1996. Prior to joining Builders in August 1996, Mr. Braatz served in
several management positions with J. B. Hunt Transport for more than the past
five years. His most recent position with J. B. Hunt was Senior Vice President
Sales and Marketing.
<TABLE>
<CAPTION>
Name Age Current Position
- ---- --- ----------------
<S> <C> <C>
David C. Walentas............................... 58 Chairman of the Board
Stanford M. Dinstein............................ 49 Vice Chairman and Chief Executive Officer
John R. Morris.................................. 53 President and Chief Operating Officer
T. M. Guthrie................................... 49 Chief Financial Officer and Treasurer
Philip M. Adams................................. 47 Vice President, Van Division
P. Michael Davis................................ 56 Vice President, Dedicated Fleet Division
Daniel P. Braatz................................ 47 Vice President, Flatbed Division
</TABLE>
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
Builders Transport, Incorporated's Common Stock trades on The Nasdaq Stock
Market under the ticker symbol "TRUK". As of March 21, 1997, there were
approximately 2,000 holders of the Company's Common Stock (including individual
participants in security position listings). The following table sets forth, for
the calendar periods indicated, the range of high and low sales prices from
January 1, 1995:
<TABLE>
<CAPTION>
1995 High Low
- ---- ------ ------
<S> <C> <C>
First Quarter............................................... 12.625 10.500
Second Quarter.............................................. 12.000 10.875
Third Quarter............................................... 13.500 11.000
Fourth Quarter.............................................. 12.250 7.375
</TABLE>
<TABLE>
<CAPTION>
1996 HIGH LOW
- ---- ------ -----
<S> <C> <C>
First Quarter............................................... 10.125 7.375
Second Quarter.............................................. 9.875 7.625
Third Quarter............................................... 8.875 6.500
Fourth Quarter.............................................. 6.875 2.500
</TABLE>
On March 21, 1997, the last sale price for the Common Stock was $3.625 per
share.
The Company has never paid a cash dividend on its Common Stock. The Company has
agreed, in some of the financing agreements to which it is a party, to certain
restrictions on the payment of dividends. (See Note 3 to Consolidated Financial
Statements.) The Company reviews its dividend policy from time to time. Future
dividends, if any, will be determined by the Company's Board of Directors in
light of circumstances existing from time to time, including the Company's
growth, profitability, financial condition, results of operations, continued
existence of the restrictions described above and other factors deemed relevant
by the Company's Board of Directors.
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ITEM 6. SELECTED FINANCIAL DATA.
<TABLE>
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Year Ended December 31,
----------------------------------------------------
1996 1995 1994 1993(1) 1992
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(In thousands, except per share amounts)
<S> <C> <C> <C> <C> <C>
STATEMENTS OF OPERATIONS DATA
Operating revenues.................... $289,419 $289,527 $286,243 $250,009 $221,908
Provision for special charge(2)....... 1,420 -- -- --
Operating income...................... (2,500) 15,149 19,710 17,131 12,206
Interest expense and other expenses... 16,033 15,145 12,593 11,499 11,183
-------- -------- -------- -------- --------
Income (loss) before income taxes and
cumulative effect of accounting
changes............................. (18,533) 4 7,117 5,632 1,023
Provision (benefit) for income
taxes............................... (3,300) (215) 2,602 2,590 797
-------- -------- -------- -------- --------
Income (loss) before cumulative effect
of accounting changes............... (15,233) 219 4,515 3,042 226
Cumulative effect of accounting
changes,
net of taxes(3)..................... -- (7,291) -- -- --
-------- -------- -------- -------- --------
Net income (loss)..................... $(15,233) $ (7,072) $ 4,515 $ 3,042 $ 226
======== ======== ======== ======== ========
Earnings (loss) per common share:
Income (loss) before cumulative effect
of accounting change................ $ (2.91) $ .04 $ .81 $ .57 $ .04
Cumulative effect of accounting
change.............................. -- (1.38) -- -- --
-------- -------- -------- -------- --------
Net income (loss)(4).................. $ (2.91) $ (1.34) $ .81 $ .57 $ .04
======== ======== ======== ======== ========
BALANCE SHEET DATA
Total assets.......................... $268,346 $272,061 $244,067 $207,665 $167,874
Long-term debt including current
maturities ......................... 207,144 201,128 163,199 130,869 106,544
Total stockholders' equity............ 23,323 38,289 45,578 43,087 36,802
</TABLE>
- ---------------
(1) Includes operations of VMC truckload division since August 27, 1993.
(2) Special charge relates to the sale and exiting of the tire loading and
warehousing operations in February 1996.
(3) Cumulative effect adjustment relates to the adoption of SFAS No. 121
"Accounting for the Impairment of Long-Lived Assets and For Long-Lived
Assets To Be Disposed Of."
(4) The computation of fully diluted earnings (loss) per common share is
antidilutive for all periods presented.
11
<PAGE> 13
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The following table sets forth the percentage relationship of revenue and
expense items to operating revenue for the periods indicated.
<TABLE>
<CAPTION>
Percentage of Operating Revenue
Year Ended December 31
---------------------------------
1996 1995 1994
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating revenue........................................... 100.0% 100.0% 100.0%
----- ----- -----
Operating expenses:
Wages, salaries and employee benefits....................... 41.7 41.2 41.5
Operations and maintenance.................................. 23.3 20.5 22.4
Operating taxes and licenses................................ 9.4 9.5 9.8
Insurance and claims........................................ 7.5 6.2 4.8
Communications and utilities................................ 1.7 1.6 1.7
Depreciation and equipment rents............................ 9.3 8.5 9.2
(Gain) on disposition of carrier property and equipment..... (.2) (.2) (.2)
Rents and purchased transportation.......................... 7.6 6.6 3.6
Miscellaneous operating expenses............................ .6 .4 .3
Special charges............................................. -- .5 --
----- ----- -----
Total operating expenses.................................... 100.9 94.8 93.1
----- ----- -----
Operating income............................................ (.9) 5.2 6.9
Interest and other expenses................................. 5.5 5.2 4.4
Provision (benefit) for income taxes........................ (1.1) (.1) .9
----- ----- -----
Net income before cumulative effect of accounting change.... (5.3) .1 1.6
Cumulative effect of accounting change...................... -- (2.5) --
----- ----- -----
Net income (loss)........................................... (5.3)% (2.4)% 1.6%
===== ===== =====
</TABLE>
The following table sets forth certain industry data regarding the operations of
the Company.
<TABLE>
<CAPTION>
Year Ended December 31
-----------------------------
1996 1995 1994
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Truckloads per week....................................... 9,621 9,879 9,251
Average miles per trip.................................... 514 495 519
Total tractor miles (in thousands)........................ 257,000 254,000 250,000
Total tractors operated (at year end):
Company-owned............................................. 2,562 2,606 2,474
Owner-operators........................................... 223 204 150
Total tractors............................................ 2,785 2,810 2,624
Total trailers operated (at year end)..................... 6,765 6,283 6,214
</TABLE>
RESULTS OF OPERATIONS
Year Ended December 31, 1996 Compared to Year Ended December 31, 1995
Operating revenues for the year ended December 31, 1996 were $289.4 million
compared to $289.5 million in 1995. Operating revenues for 1995 included
revenues totaling $5.7 million associated with the tire loading and warehousing
operations closed in February 1996. The Company's revenue was negatively
impacted by the large number of unmanned tractors during 1996 due to the
Company's inability to hire and retain an adequate number of qualified drivers.
12
<PAGE> 14
During 1996, the Company recorded an operating loss of $2.5 million and a net
loss of $15.2 million ($2.91 loss per share). In 1995, the Company recorded
operating income of $15.1 million and a net loss of $7.1 million, after
cumulative effect of an accounting change ($1.34 loss per share).
The operating ratio (operating expenses as a percentage of operating revenues)
was 100.9% for 1996 compared to 94.8% for 1995. The increased operating ratio
resulted from the following:
Operating revenues suffered from an inability to obtain adequate rate relief to
cover inflationary costs, primarily driver wages.
Wages, salaries and employee benefits as a percentage of revenues increased, due
to an increase in driver wages and workers' compensation costs that were
partially offset by a reduction in non-driver employees, an increase in the use
of owner-operators, and the closing of the tire loading and warehousing
operations. Driver wages increased one cent per mile in January 1996. Workers'
compensation costs increased $2.4 million compared to 1995, primarily, as a
result of an increase in the frequency and severity of accidents and injuries
due in part to the bad winter weather in early 1996.
Operations and maintenance expenses increased 14 percent due to a substantial
increase in fuel, repair and tire costs. Fuel costs increased $5.2 million,
repair costs increased $1.4 million and tire costs increased $1.6 million during
1996.
Insurance and claim expenses rose 22 percent due to the number and severity of
accidents during 1996 and the high amount required to settle several of the
claims. This resulted in upward revisions in some open claims files.
Depreciation and equipment rents increased ten percent due to the pace of
depreciation accompanying the Company's equipment replacement program. 1996
depreciation expenses included a full year's depreciation on equipment acquired
in 1995, as well as, a partial year's depreciation on equipment added in 1996.
Increased reliance on owner-operators partially offset this increase.
Rents and purchased transportation costs increased 14 percent reflecting the
continued increase in use of owner-operators. The number of owner-operators
employed by the Company increased to 208, on average, during 1996. In 1995 the
average number of owner-operators employed by the Company was 182. This increase
caused a redistribution of certain costs from expense categories related to
Company-owned equipment (fuel, driver wages, depreciation, etc.) to the rents
and purchased transportation expense account.
Interest and other expenses rose six percent in relation to revenue to $16.0
million in 1996, due in large part to the additional interest charges associated
with debt incurred as a result of the Company's equipment replacement program.
During 1996, a full year's interest was incurred on obligations used to purchase
equipment added in 1995, as well as a partial year's interest on obligations
used to purchase equipment added in 1996.
The Company made certain year-end adjustments in 1996 resulting from changes in
estimates relating to reserves for claims payable that were material to the
results of the fourth quarter. These adjustments, after applicable income tax
reduction reduced net income by approximately $3,000,000 or $.58 per share.
The income tax benefit for 1996 was reduced by recording an income tax valuation
allowance of $3.2 million based on the Company's assessment of the likelihood of
not realizing a portion of the net operating loss and credit carryforwards. The
Company expects to generate future taxable
13
<PAGE> 15
income to realize the remaining net operating loss and credit carryforwards.
(See Note 5 to Consolidated Financial Statements.)
Year Ended December 31, 1995 Compared to Year Ended December 31, 1994
Operating revenues for the year ended December 31, 1995 were $289.5 million as
compared to $286.2 million in 1994. The Company's revenue growth was negatively
impacted by the weakened freight demand that was experienced industry-wide
during 1995. The Company's Van and Flatbed divisions were more significantly
affected by the weakened demand than was the Dedicated Fleet division. Rather
than depending on gradual improvement in the overall market, the Company more
aggressively added new business during late 1995 and early 1996. Except for the
impact of severe weather experienced early in 1996, the Company's current volume
has improved substantially as a result of this marketing program. It is expected
that volume should increase further during 1996 as the Company began service in
March 1996 on new dedicated contracts that have annual revenues of approximately
$10 million.
During 1995, the Company recorded operating income of $15.1 million and a net
loss of $7.1 million ($1.34 loss per share). In 1994, the Company recorded
operating income of $19.7 million and net income of $4.5 million ($.81 per
share).
Results for 1995 were affected by the adoption of Statement of Financial
Accounting Standards Number 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed of", which resulted in an $7.3
million after-tax charge ($1.38 per share). During 1994, the Company initiated a
plan to dispose of certain older revenue equipment and to significantly reduce
the average age of its fleet. Throughout 1995 the Company had been actively
disposing of its older equipment. The modernization plan is expected to be
completed during 1996. The adoption of SFAS No. 121 as of January 1, 1995,
requires the Company to recognize a cumulative effect adjustment to the extent
the carrying value of the affected assets exceeds the estimated fair value less
costs to sell.
Results for 1995 also include pre-tax special charges of $1.4 million ($840,000
after-tax, or $.17 per share) associated with the sale and closing of its tire
loading and warehousing operations in February 1996. These operations generated
less than 2% of the Company's 1995 total revenues. However, the operating loss
from these operations was approximately $600,000 in 1995. The withdrawal from
these unprofitable activities should have a positive impact on results of
operations in 1996. (See Note 10 to Consolidated Financial Statements.)
Excluding the cumulative effect of the accounting changes and the special
charges and operations relating to the tire loading and warehousing operation,
the net income for 1995 was $1.5 million ($.29 per share) and operating income
was $17.2 million.
The operating ratio (operating expenses as a percentage of operating revenues)
was 94.8% for 1995 as compared to 93.1% for 1994. If the special charges and
operations associated with the tire loading and warehousing business were
excluded, the operating ratio for 1995 would have been 93.9%. The increased
operating ratio resulted from unfavorable claims settlement experience and
weakened freight demand.
Wages, salaries and employee benefits as a percentage of revenues decreased
slightly, due to a reduction in non-driver employees and an increase in the use
of owner-operators that was partly offset by increased driver training-related
salary costs. The reduction in non-driver staffing occurred in mid-1995 and was
made in response to the weakened freight demand experienced industry-wide.
14
<PAGE> 16
Operations and maintenance related expenses as a percentage of revenues
decreased 8%, primarily as a result of maintenance cost reductions attributable
to the replacement of approximately 1,000 five-to-eight-year-old tractors with
new tractors. These costs were further reduced by the increased use of
owner-operators, who pay their own fuel and maintenance expenses.
Insurance and claims expense as a percentage of revenues rose 30%, as a result
of a claim settlement at an unanticipated level that cost the Company $2.5
million and as a result of general upward revisions in other open claims. The
$2.5 million claim settlement was unique in the Company's experience in terms of
both its size and its impact on results of operations. The Company has increased
its liability insurance limit to $35 million primarily in response to this loss.
Management expects that insurance claim expenses will stabilize near a more
traditional level in the future, as this unprecedented claim was fully settled
during 1995.
Depreciation and equipment rents as a percentage of revenue decreased
principally as a result of increased use of owner-operators, certain groups of
assets becoming fully depreciated during the year, the disposal of
under-utilized assets and the adoption of SFAS 121.
Rents and purchased transportation increased to 6.6% of revenue from 3.6% in
1994, reflecting the continued increase in the number of owner-operators used.
The increase in owner-operators caused a redistribution of certain costs from
expense categories related to company-owned equipment (fuel, driver wages,
depreciation, etc.) to the rents and purchased transportation expense account.
Interest and other expenses rose 20% to $15.1 million, principally due to the
additional interest charges associated with the debt incurred as a result of the
Company's equipment replacement program. The Company expects that interest
expense will increase slightly during 1996 as a full year's interest charges
will be incurred on the debt added in 1995.
LIQUIDITY AND CAPITAL RESOURCES
Cash generated from operations decreased to $15.7 million in 1996 from $29.9
million during 1995. The Company's cash flows 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. 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.
Outstanding borrowings under the revolver increased to $13.3 million at December
31, 1996, compared to $3.5 million at December 31, 1995. Borrowing availability
after a January 1997 amendment was $8.7 million. (See Note 3 to Consolidated
Financial Statements.)
In addition to the $22 million revolving credit facility, the other items
available in the $36.5 million credit agreement were a $2 million term loan and
an irrevocable letter of credit facility of up to $12.5 million.
Borrowings under the revolving credit facility are limited to a specified
percentage of customer accounts receivable, as defined in the credit agreement,
or $22 million, whichever is less. The interest rate on borrowings under the
credit agreement is prime plus 1%. Fees on outstanding letters of credit are
2 1/4% per annum, and fees on the unused portion of the revolving credit and
letter of credit facilities are 1/2% per annum. The credit agreement
obligations are secured by substantially all the Company's assets that are not
collateralized under other financing agreements. The credit agreement includes
certain financial covenants and restrictions on payments of dividends, capital
expenditures, indebtedness and the sale of certain assets, all of
15
<PAGE> 17
which the Company anticipates that it should be able to comply with in the
foreseeable future. The $2,000,000 term portion of the credit agreement is
payable in installments of $500,000 for the second and third quarters of 1997
with a final payment of $1,000,000 in December 1997. The entire credit agreement
is scheduled to expire at December 31, 1999.
Traditionally, the Company has replaced its then existing credit agreements well
in advance of their scheduled maturities in response to changing needs and
credit environments. Based on past experience and its relationships with its
current lead lender, Builders anticipates that it should be able to negotiate an
extension to, or replacement of, the current credit agreement well in advance of
scheduled maturities, if necessary. Management believes that cash flows
generated from operations will be adequate to meet cash requirements for 1997.
On a longer term basis, the Company believes it has the ability to finance its
capital expenditure needs for the foreseeable future.
Capital expenditures during 1996 were $29.5 million including capitalized leases
of $27.4 million. These capital expenditures and capital leases were primarily
for new, more efficient revenue equipment that replaced older equipment that was
sold. Proceeds from the sale of property and equipment amounted to $10.1
million.
The Company has adopted a very conservative capital expenditure budget for 1997,
due to the newer fleet. The Company has not made any 1997 capital purchase
commitments.
As a result of the reduced capital expenditure budget for 1997, the Company
currently plans to repay a significant amount of equipment debt during 1997. The
Company will remain highly leveraged for the foreseeable future, however,
without a significant equity infusion. The majority of the Company's debt
relates to equipment financing and is closely matched with the expected useful
lives of the equipment collateralizing the debt. (See "-- Factors That May
Affect Future Results -- Recent Developments and Trends.")
At December 31, 1996, the Company had available for issuance (and not otherwise
reserved) 17 million authorized shares of its $.01 per share par value common
stock and 1,000,000 authorized shares of its $.01 per share par value preferred
stock. This stock could be issued, at any time, in connection with an
acquisition, to increase working capital, or for any other business purpose
deemed appropriate by the Board of Directors. Currently, there are no specific
plans for the use of the available authorized stock.
SEASONALITY
In the trucking industry generally, results of operations reflect a seasonal
pattern as customers reduce shipments during and after the winter, holiday
season and its attendant weather variations. Accordingly, without growth in
business, the first and fourth quarters of a year would account for less revenue
and net income than the second and third quarters. Builders' quarterly results
have traditionally reflected this seasonality. Moreover, the extent of these
seasonal variations can change significantly from one year to the next
depending, particularly, on the severity of winter weather and its impact on
travel conditions and the economy.
IMPACT OF INFLATION
Inflation has in the past been, and may in the future be, a significant factor
in the economy. While the Company does not believe that inflation had a
significant impact on its results of operations in 1996, Builders continues to
monitor closely the impact of inflation, if any, and to optimize its impact on
prevailing price trends.
16
<PAGE> 18
Equipment. The service lives of the Company's revenue equipment are relatively
short (five to ten years), and a regular cycle of equipment replacement ensures
that depreciation, as reported in the financial statements, reasonably
approximates current costs. This tends to neutralize, over time, the impact of
inflation in the cost of new equipment on results of operations.
Fuel. The cost and availability of fuel is significant to Builders' results of
operations. Historically, the Company has never experienced a situation in which
fuel shortages were so severe that adequate supplies could not be obtained, nor
is the Company aware of this having ever been the case for other companies in
the truckload segment of the industry. Fuel shortages do impact prices, however,
and from time to time in the past, fuel costs have been volatile. During 1996
fuel prices soared. Prices peaked in late 1996 and early 1997 and have recently
dropped, although not to the level of January 1996. When fuel prices have spiked
in the past, the Company and others in the industry have been able to
ameliorate, to some extent, the negative effect on results of operations by
imposing fuel surcharges. Shippers' acceptance of fuel surcharges typically lags
behind the increase in fuel prices. Thus, the level of such surcharges is
sometimes not sufficient to offset totally the negative impact of the increased
costs until fuel prices recede toward their historic norms. This was the case in
1996 as the Company was able to offset only approximately 30% of the increase in
fuel costs through surcharges compared to current recoveries of 80% to 90%.
The Company tries to minimize fuel costs by purchasing in bulk. Builder's bulk
purchase program is facilitated by its 523,000 gallon active storage capacity at
16 terminals. Additionally, the Company has a network of 210 authorized truck
stops, where it has negotiated fuel pump prices at an average wholesale rack
price plus a small pumping fee for the vendor. The Company believes that this
pricing arrangement helps to prevent the vendor from realizing excessive retail
profit margins in certain less competitive areas. The Company has hedged its
fuel costs on a limited basis in the past, and is currently considering hedging
part of its 1997 fuel requirements.
ENVIRONMENTAL MATTERS
The Environmental Protection Agency and various state environmental regulatory
agencies regulate the Company's operations with respect to matters involving
water quality and effluent limitation, underground storage tanks and the
handling, storage and disposal of solid waste and hazardous materials.
Capital expenditures include amounts spent for various environmental matters. In
addition, the Company provides for costs related to contingencies when a loss is
probable and the amount is reasonably determinable (based on case by case
consultation with environmental specialists). Receivables relating to claims for
recovery are recorded only when realization is probable. Recorded recoveries
were not material at December 31, 1996.
Capital expenditures for all environmental control efforts were not material in
1996, and they are not expected to be material in 1997.
FORWARD LOOKING STATEMENTS
Statements in this document that are not historical facts are hereby identified
as "forward looking statements" for the purpose of the safe harbor provided by
Section 21E of the Securities Exchange Act of 1934 and Section 27A of the
Securities Act of 1933. The Company cautions readers that such "forward looking
statements," including without limitation, those relating to the Company's
future business prospects, revenues, working capital, liquidity, capital needs,
interest costs and income, wherever they occur in this document or in other
statements attributable to the
17
<PAGE> 19
Company are necessarily estimates reflecting the best judgment of the Company's
senior management and involve a number of risks and uncertainties that could
cause actual results to differ materially from those suggested by the "forward
looking statements." Such "forward looking statements" should, therefore, be
considered in light of various important factors including those set forth below
and others set forth from time to time in the Company's reports and registration
statements filed with the SEC.
These "forward looking statements" are found at various places throughout this
document. Additionally, the foregoing discussions under "Liquidity and Capital
Resources," "Seasonality," "Impact of Inflation," and "Environmental Matters"
are susceptible to the risks and uncertainties discussed below. Moreover, the
Company through its senior management may from time to time make "forward
looking statements" about the matters described herein or other matters
concerning the Company.
The Company disclaims any intent or obligation to update "forward looking
statements."
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. The Company's recent freight volume has been
relatively strong. While the Company is more optimistic about future business
levels, the Company cannot predict whether this positive trend will continue.
The Company has been focusing on opportunities within the Company to enhance
revenue, to reduce operating costs and to improve the productivity of the work
force. Recently, the Company has been successful in obtaining meaningful rate
increases from a significant portion of its customers. The Company has made
consistent progress for several months toward manning its empty tractors, and by
mid-March 1997, they were fully manned. The Company has been successful in
implementing fuel surcharges and is now recovering 80% to 90% of the additional
cost of fuel that resulted from the 1996 price increases. Fuel prices appear to
be declining from their peak in late 1996 and early 1997. This past winter was
relatively mild in the Company's operating areas. Through mid-March 1997,
accidents have decreased substantially. Of course, this favorable trend may or
may not continue. During the latter part of 1996 the Company has identified
numerous areas of potential cost reduction that, in the aggregate, should save
the Company approximately $6 million in 1997. Most of these cost saving measures
were in place by mid-March 1997. The Company is working on all of these
activities simultaneously and expects to see a noticeable improvement in its
operating results by the second quarter of 1997.
In late March 1997, the Company retained Alex. Brown & Sons Incorporated as
financial advisor to review various alternatives with respect to restructuring
certain of the Company's debt
18
<PAGE> 20
obligations. The Company announced that it expected to begin preliminary
discussions shortly with its equipment lessors and lenders and with
representatives of the holders of its two series of Convertible Subordinated
Debentures.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Consolidated financial statements of the Company meeting the requirements of
Regulation S-X are filed on the succeeding pages of this Item 8 of this Annual
Report on Form 10-K.
BUILDERS TRANSPORT, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
THREE YEARS ENDED DECEMBER 31, 1996
CONTENTS
<TABLE>
<S> <C>
Report of Independent Auditors.............................. 20
Audited Consolidated Financial Statements
Consolidated Statements of Operations..................... 21
Consolidated Balance Sheets............................... 22
Consolidated Statements of Stockholders' Equity........... 23
Consolidated Statements of Cash Flows..................... 24
Notes to Consolidated Financial Statements................ 25
</TABLE>
19
<PAGE> 21
REPORT OF INDEPENDENT AUDITORS
Stockholders and Board of Directors
Builders Transport, Incorporated
We have audited the accompanying consolidated balance sheets of Builders
Transport, Incorporated and subsidiaries as of December 31, 1996 and 1995, and
the related consolidated statements of operations, stockholders' equity, and
cash flows for each of the three years in the period ended December 31, 1996.
Our audits also included the financial statement schedule listed in the index at
item 14(a). These financial statements and the schedule are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements and the schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Builders Transport, Incorporated and subsidiaries at December 31, 1996 and 1995,
and the consolidated results of their operations and their cash flows for each
of the three years in the period ended December 31, 1996, in conformity with
generally accepted accounting principles. Also, in our opinion, the related
financial statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.
As discussed in Notes 1 and 10 of the Notes to the Consolidated Financial
Statements, the Company adopted Statement of Financial Accounting Standards No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of" in 1995.
ERNST & YOUNG LLP
Winston-Salem, North Carolina
March 28, 1997
20
<PAGE> 22
BUILDERS TRANSPORT, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------
1996 1995 1994
- ---------------------------------------------------------------------------------------------------
(in thousands, except per share amounts)
<S> <C> <C> <C>
Operating revenues...................................... $289,419 $289,527 $286,243
Operating expenses:
Wages, salaries and employee benefits................. 120,707 119,236 118,729
Operations and maintenance............................ 67,452 59,370 64,247
Operating taxes and licenses.......................... 27,158 27,611 27,903
Insurance and claims.................................. 21,832 17,846 13,675
Communications and utilities.......................... 4,919 4,670 4,721
Depreciation and equipment rents...................... 27,040 24,559 26,306
Gain on disposition of carrier property and
equipment.......................................... (493) (643) (545)
Rents and purchased transportation.................... 21,883 19,164 10,548
Miscellaneous operating expenses...................... 1,421 1,145 949
Special charges....................................... -- 1,420 --
-------- -------- --------
291,919 274,378 266,533
-------- -------- --------
Operating income (loss)................................. (2,500) 15,149 19,710
Interest and other expenses, net........................ 16,033 15,145 12,593
-------- -------- --------
Income (loss) before income taxes and cumulative effect
of accounting change.................................. (18,533) 4 7,117
Income tax benefit (provision).......................... 3,300 215 (2,602)
-------- -------- --------
Income (loss) before cumulative effect of accounting
change................................................ (15,233) 219 4,515
Cumulative effect of accounting change, net of income
taxes of $4,096....................................... -- (7,291) --
-------- -------- --------
Net (loss) income....................................... $(15,233) $ (7,072) $ 4,515
======== ======== ========
Earnings (loss) per common share:
Earnings (loss) per common share before cumulative
effect of accounting change........................ $ (2.91) $ .04 $ .81
Cumulative effect of accounting change................ -- (1.38) --
-------- -------- --------
Earnings (loss) per common share...................... $ (2.91) $ (1.34) $ .81
======== ======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
21
<PAGE> 23
BUILDERS TRANSPORT, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
--------------------
1996 1995
- ----------------------------------------------------------------------------------
(in thousands)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 50 $ 109
Accounts receivable:
Customers, less allowances of $456 in 1996 and $511 in
1995.................................................. 26,118 22,147
Other.................................................. 7,990 6,668
-------- --------
34,108 28,815
Prepaid expenses:
Tires in service....................................... 12,957 13,897
Taxes, licenses and other.............................. 1,964 3,274
Repair parts and operating supplies.................... 3,538 3,233
-------- --------
18,459 20,404
-------- --------
Total current assets.............................. 52,617 49,328
Property and equipment, net................................. 192,243 199,262
Other assets:
Costs in excess of net assets of businesses acquired...... 19,305 19,865
Deferred income taxes..................................... 537 --
Miscellaneous, less allowances of $168 in 1996 and 1995... 3,644 3,606
-------- --------
23,486 23,471
-------- --------
$268,346 $272,061
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable and accrued expenses............... $ 11,756 $ 9,551
Taxes other than income................................... 1,315 1,866
Wages, salaries and benefits.............................. 3,496 3,043
Claims payable............................................ 9,426 5,285
Deferred income taxes..................................... 1,613 2,378
Current portion of long-term debt and capital lease
obligations............................................ 38,156 36,366
-------- --------
Total current liabilities......................... 65,762 58,489
Long-term debt and capital lease obligations, less current
portion................................................... 168,988 164,762
Deferred income taxes....................................... -- 2,013
Reserve for claims payable and other........................ 10,273 8,508
Stockholders' equity:
Preferred stock, par value $.01 per share: authorized
1,000,000 shares; none outstanding..................... -- --
Common stock, par value $.01 per share: authorized
25,000,000 shares; issued 6,270,600 shares in 1996 and
6,218,347 shares in 1995............................... 63 62
Capital in excess of par value............................ 33,675 33,281
Unearned compensation related to employee stock benefit
plan (KSOP) receivable................................. (4,337) (4,477)
Retained earnings......................................... 8,968 24,201
-------- --------
38,369 53,067
Less treasury stock, 1,207,051 shares in 1996 and 1,168,083
shares in 1995, at cost................................... 15,046 14,778
-------- --------
Total stockholders' equity........................ 23,323 38,289
-------- --------
$268,346 $272,061
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
22
<PAGE> 24
BUILDERS TRANSPORT, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Unearned
Compensation
Capital Related to
Common in Excess KSOP Retained Treasury
Stock of Par Receivable Earnings Stock Total
- -----------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C> <C> <C> <C>
Balance at December
31, 1993........... $61 $32,261 $(4,763) $ 26,758 $(11,230) $ 43,087
Net income........... -- -- 4,515 -- 4,515
Issuance of common
stock to 401(k)
plan............... -- 248 -- -- -- 248
Exercise of stock
options............ 1 669 -- -- -- 670
Purchase of treasury
stock.............. -- -- -- -- (3,088) (3,088)
Contribution to
KSOP............... -- -- 146 -- -- 146
--- ------- ------- -------- -------- --------
Balance at December
31, 1994........... 62 33,178 (4,617) 31,273 (14,318) 45,578
Net loss............. -- -- -- (7,072) -- (7,072)
Issuance of common
stock to 401(k)
plan............... -- 25 -- -- -- 25
Exercise of stock
options............ -- 78 -- -- -- 78
Purchase of treasury
stock.............. -- -- -- -- (460) (460)
Contribution to
KSOP............... -- -- 140 -- -- 140
--- ------- ------- -------- -------- --------
Balance at December
31, 1995........... 62 33,281 (4,477) 24,201 (14,778) 38,289
Net loss............. (15,233) (15,233)
Issuance of common
stock to 401(k)
plan............... 1 357 358
Exercise of stock
options............ 37 37
Purchase of treasury
stock.............. (268) (268)
Contribution to
KSOP............... 140 140
--- ------- ------- -------- -------- --------
BALANCE AT DECEMBER
31, 1996........... $63 $33,675 $(4,337) $ 8,968 $(15,046) $ 23,323
=== ======= ======= ======== ======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
23
<PAGE> 25
BUILDERS TRANSPORT, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------
1996 1995 1994
- ----------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income (loss)..................................... $(15,233) $ (7,072) $ 4,515
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization, net of (gain) loss on
dispositions..................................... 27,215 24,584 26,946
Deferred income taxes............................... (3,281) 33 1,895
Cumulative effect of accounting change.............. -- 7,291 --
Special charges..................................... -- 1,420 --
Changes in operating assets and liabilities:
Accounts receivable.............................. (5,293) 2,218 (3,208)
Trade accounts payable and accrued expenses...... 2,171 659 (1,437)
Reserve for claims payable....................... 5,341 1,206 131
Other............................................ 4,794 (461) 516
-------- -------- --------
Net cash provided by operating activities... 15,714 29,878 29,358
INVESTING ACTIVITIES
Purchases of equipment................................ (2,093) (6,810) (6,407)
Proceeds from disposal of equipment................... 10,074 11,421 5,997
Acquisition of business net of cash acquired.......... -- -- (550)
-------- -------- --------
Net cash provided by (used in) investing
activities................................ 7,981 4,611 (960)
FINANCING ACTIVITIES
Proceeds from lines of credit and long-term
borrowings.......................................... 14,331 4,000 1,606
Principal payments on line of credit, long-term debt
and capital lease obligations....................... (37,854) (38,007) (27,585)
Proceeds from issuance of common stock................ 37 78 670
Purchase of common stock for treasury from related
party............................................... -- -- (2,400)
Purchase of common stock for treasury................. (268) (460) (688)
-------- -------- --------
Net cash used in financing activities................. (23,754) (34,389) (28,397)
-------- -------- --------
Increase (decrease) in cash and cash equivalents...... (59) 100 1
Cash and cash equivalents at beginning of year........ 109 9 8
-------- -------- --------
Cash and cash equivalents at end of year.............. $ 50 $ 109 $ 9
======== ======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
24
<PAGE> 26
BUILDERS TRANSPORT, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE YEARS ENDED DECEMBER 31, 1996
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF BUSINESS: Builders Transport, Incorporated (the "Company"), through
its wholly-owned subsidiaries, operates as a truckload carrier transporting a
wide range of commodities in both interstate and intrastate commerce.
PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiaries. All significant
intercompany accounts and transactions have been eliminated.
CASH EQUIVALENTS: The Company considers all highly liquid investments readily
convertible into cash or having a maturity of three months or less when
purchased to be cash equivalents.
REVENUE RECOGNITION: Operating revenues and related expenses are recognized on
the date the freight is picked up for shipment.
PREPAID TIRES: The cost of tires acquired with revenue equipment, together with
replacement tires, is capitalized and amortized on the straight-line method over
the tires' estimated useful life. The average amortization period for new
additions to prepaid tires is approximately three years. Recapping costs are
expensed as incurred.
PROPERTY AND EQUIPMENT: Carrier property and equipment is carried at cost
including expenditures for readying the assets for use. Major additions and
betterments are capitalized while maintenance and repairs that do not improve or
extend the lives of the respective assets are charged to expense as incurred.
Depreciation is computed on the straight-line method over the estimated useful
life. Leasehold improvements are amortized over the lives of the leases. Non-
carrier property comprises terminal facilities and staging lots no longer
utilized in the Company's operations and land held for investment purposes.
Gains and losses on property dispositions are included in operations.
INTANGIBLE ASSETS: Excess cost over the fair value of net assets acquired
(goodwill) generally is amortized on a straight-line basis over forty years. The
carrying value of goodwill is reviewed if the facts and circumstances suggest
that it may be impaired. If this review indicates that goodwill will not be
recoverable, as determined based on the undiscounted cash flows of the business
acquired over the remaining amortization period, the Company's carrying value of
the goodwill will be reduced to the estimated discounted cash flows. Accumulated
amortization was $2,837,000 and $2,277,000 at December 31, 1996 and 1995,
respectively.
EARNINGS (LOSS) PER COMMON SHARE: The calculation of primary earnings (loss)
per share of common stock is based on the weighted average number of shares
outstanding, during each period as adjusted for the effect of issuance of stock
options. Weighted average common and common equivalent shares outstanding were
5,239,642 in 1996, 5,262,429 in 1995, and 5,608,701 in 1994. The fully diluted
earnings per share calculation assumes conversion of convertible subordinated
debentures and exercise of stock options as of the beginning of the year (or
date of issue, if later), if dilutive, and shares contingently issuable. The
computation of fully diluted earnings per common share is anti-dilutive for all
periods presented.
25
<PAGE> 27
BUILDERS TRANSPORT, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
STOCK BASED COMPENSATION: The Company accounts for stock options grants under
Accounting Principals Board Opinion No. 25, "Accounting for Stock Issued to
Employees". Accordingly, compensation expense for stock options is measured as
the excess, if any, of the quoted market price of the Company's stock at the
date of grant over the exercise price. In October 1995, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No. 123 (SFAS
No. 123) "Accounting for Stock-Based Compensation." SFAS No. 123 encourages, but
does not require, adoption of a fair value method of accounting for employee
stock-based compensation plans. As permitted by SFAS No. 123, the Company has
elected to disclose the pro forma net income (loss) and earnings (loss) per
share as if the fair value method had been applied in measuring compensation
expense.
FAIR VALUES OF FINANCIAL INSTRUMENTS: At December 31, 1996 and 1995, the
carrying value of financial instruments such as cash equivalents, accounts
receivable and payable and the long-term credit agreement approximated their
fair values. The fair value of the Company's 8% and 6 1/2% convertible
subordinated debentures are estimated using the average of the quoted market bid
and ask prices. The fair value of these debentures at December 31, 1996, was
approximately $26,257,000. The carrying value of the debentures at December 31,
1996, was $46,788,000.
ACCOUNTING CHANGES: The Company implemented Statement of Financial Accounting
Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of" (SFAS No. 121) as of January 1, 1995. This
statement establishes accounting standards for determining impairment of
long-lived assets. The Company periodically assesses the realizability of its
long-lived assets and evaluates such assets for impairment whenever events or
changes in circumstances indicate the carrying amount of an asset may not be
recoverable. For assets to be held, impairment is determined to exist if
estimated future cash flows, undiscounted and without interest charges, are less
than the carrying amount. For assets to be disposed of, impairment is determined
to exist if the estimated net realizable value is less than the carrying amount.
As discussed in Note 10, the Company recognized a cumulative effect adjustment
as of January 1, 1995, for certain assets that were planned to be disposed of.
CREDIT RISK: Financial investments that potentially subject the Company to
concentrations of credit risk consist primarily of accounts receivable.
Concentrations of credit risk with respect to account receivable are limited due
to the Company's diversified freight base with no one customer, industry, or
geographic region making up a large percentage of the account receivable or
revenues. As of December 31, 1996, the Company had no significant concentrations
of credit risk.
USE OF ESTIMATES: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amount reported in the financial statements and
accompanying notes. Estimates made by the Company relate primarily to self
insurance accruals, valuation of long-lived assets, realization of deferred tax
assets and allowances for uncollectible accounts. Actual results could differ
from these estimates.
RECLASSIFICATION: Certain prior year amounts have been reclassified for
comparative purposes.
26
<PAGE> 28
BUILDERS TRANSPORT, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 2. PROPERTY AND EQUIPMENT
Property and equipment consisted of the following (in thousands):
<TABLE>
<CAPTION>
December 31,
---------------------
1996 1995
- -----------------------------------------------------------------------------------
<S> <C> <C>
Carrier property:
Land...................................................... $ 4,941 $ 4,941
Buildings................................................. 20,741 20,583
Revenue equipment......................................... 257,657 250,906
Service equipment and other............................... 19,666 18,973
--------- ---------
303,005 295,403
Non-carrier property........................................ 6,473 6,521
--------- ---------
309,478 301,924
Less reserves for depreciation and amortization............. (117,235) (102,662)
--------- ---------
$ 192,243 $ 199,262
========= =========
</TABLE>
NOTE 3. CREDIT AGREEMENT, DEBT, AND CAPITAL LEASES
Long-term debt is summarized as follows (in thousands):
<TABLE>
<CAPTION>
December 31,
-------------------
1996 1995
- ---------------------------------------------------------------------------------
<S> <C> <C>
Credit agreement:(a)
Term loan................................................. $ 2,000 $ 4,000
Revolver.................................................. 13,321 3,469
8% convertible subordinated debentures(b)................. 24,437 26,594
6 1/2% convertible subordinated debentures(c)............. 22,351 22,351
Capital leases(d)......................................... 145,035 144,714
-------- --------
207,144 201,128
Less current portion...................................... 38,156 36,366
-------- --------
Portion classified as long-term debt...................... $168,988 $164,762
======== ========
</TABLE>
- ---------------
(a) The credit agreement, which expires December 31, 1999, provides for a
maximum availability of $32 million (increased to 36.5 million on January
10, 1997), comprising a $2 million term loan, a revolving credit facility of
up to $17.5 million (increased to $22 million on January 10, 1997), of which
$13.3 million was outstanding at December 31, 1996, and irrevocable letters
of credit of up to $12.5 million that may be reduced to $8.5 million at the
request of the lenders. The Company may increase the letter of credit
facility by up to an additional $2 million, however, by reducing the
revolving credit facility by a like amount. The term portion of the credit
agreement is payable in installments of $500,000 in the second and third
quarters of 1997 with a final payment of $1,000,000 in December 1997.
Borrowings under the revolving credit facility are limited to a specified
percentage of customer accounts receivable, as defined in the credit
agreement. The interest rate on borrowings under the
27
<PAGE> 29
BUILDERS TRANSPORT, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
credit agreement is prime plus 1%. Fees on outstanding letters of credit
are 2 1/4% per annum, and fees on the unused portion of the revolving
credit and letter of credit facilities are 1/2% per annum. The credit
agreement obligations are secured by substantially all the Company's assets
that are not collateralized under other financing agreements.
(b) The 8% convertible subordinated debentures issued in 1985 are convertible
(until maturity or prior redemption) into common stock at $24.40 per share
(equal to 1,001,516 shares at December 31, 1996). The debentures are subject
to certain optional redemption provisions, sinking fund requirements from
1997 to 2004, inclusive, and optional retirement provisions, and are
subordinated to all present and future senior indebtedness of the Company.
(c) The 6 1/2% convertible subordinated debentures issued in 1986 are
convertible (until maturity or prior redemption) into common stock at $37.75
per share (equal to 592,079 shares at December 31, 1996). The debentures are
subject to certain optional redemption provisions, sinking fund requirements
from 2002 to 2010, inclusive, and optional retirement provisions, and are
subordinated to all present and future senior indebtedness of the Company.
(d) Capital leases represent primarily leased revenue equipment capitalized for
$204,373,000 and $180,312,000 with accumulated amortization of $53,816,000
and $32,812,000 at year end 1996 and 1995, respectively. The leases are for
periods of up to seven years and provide for various renewal options. The
tractor and trailer leases also provide a purchase option, any time after
36, 48, 60, or 84 months, at predetermined termination values. The
termination values have been included in the capital lease obligation.
The credit agreement, and certain capital lease agreements contain financial
covenants and restrictions on payments of dividends, capital expenditures,
indebtedness and the sale of certain assets. At December 31, 1996, the Company
was in compliance with or has received waivers for the covenants under the
credit agreement. In addition, on March 28, 1997, the credit agreement was
amended and the covenants were restated for 1997 and future periods. As a result
of these restrictive covenants, there are no retained earnings available for
payment of dividends at December 31, 1996.
The aggregate annual maturities and sinking fund requirements of long-term debt,
capital leases, and noncancelable operating leases at December 31, 1996, are as
follows (in thousands):
<TABLE>
<CAPTION>
Operating Long-Term Capital
Year Leases Debt Leases Total
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1997................................... $2,259 $ 4,156 $ 43,341 $ 49,756
1998................................... 960 2,156 38,636 55,073
1999................................... 619 15,477 30,616 33,391
2000................................... 382 2,156 30,725 33,263
2001................................... 4 2,156 11,323 13,483
Thereafter............................. 16 36,008 14,647 50,671
------ ------- -------- --------
4,240 62,109 169,288 235,637
Less amounts representing interest..... (24,253) (24,253)
------ ------- -------- --------
$4,240 $62,109 $145,035 $211,384
====== ======= ======== ========
</TABLE>
28
<PAGE> 30
BUILDERS TRANSPORT, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Interest expense on debt and capital leases amounted to $15,905,000 in 1996,
$14,794,000 in 1995, and $12,427,000 in 1994. During 1995, approximately
$600,000 of interest was capitalized.
Rental expense for revenue equipment, facilities, and office equipment amounted
to $4,009,000 in 1996, $3,846,000 in 1995, $3,189,000 and in 1994.
NOTE 4. RESERVE FOR CLAIMS PAYABLE
Under an agreement with its insurance underwriters, the Company is liable up to
$1,000,000 for any single occurrence for bodily injury and personal liability
claims. Excess liability is assumed by the underwriters for claims up to
$35,000,000. The Company's agreement with its underwriters is secured by letters
of credit totaling $2,900,000. Additionally, $1,301,000 and letters of credit
aggregating $4,784,000 have been deposited with various regulatory agencies to
satisfy self-insurance requirements. That portion of the reserve for claims
estimated to be payable within one year is classified as a current liability.
Reserves for workers' compensation are based upon historical trends, claim
frequency, severity, the Company's experience and other factors, and are
discounted to present value. Adjustments to previously established reserves, are
included in operating results. At December 31, 1996 and 1995, estimated future
payments for these claims aggregated approximately $4,526,000 and $2,494,000,
respectively. The present value of these estimated future payments was
approximately $2,953,000 at December 31, 1996, and $1,928,000 at December 31,
1995, discounted at rates of 7.3% for 1996 and 7.4% for 1995. The estimated
future payments at December 31, 1996, are $774,000 in 1997, $728,000 in 1998,
$463,000 in 1999, $327,000 in 2000, $256,000 in 2001, and $1,978,000 thereafter.
NOTE 5. INCOME TAXES
The provision (benefit) for income taxes consists of the following (in
thousands):
<TABLE>
<CAPTION>
1996 1995 1994
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Current........................................... $ (19) $(111) $ 707
Deferred.......................................... (3,281) (104) 1,895
------- ----- ------
$(3,300) $(215) $2,602
======= ===== ======
</TABLE>
29
<PAGE> 31
BUILDERS TRANSPORT, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax liabilities and assets are (in thousands):
<TABLE>
<CAPTION>
December 31,
--------------------
1996 1995
- ----------------------------------------------------------------------------------
<S> <C> <C>
Deferred tax liabilities:
Tax over book depreciation................................ $ 13,183 $ 14,004
Capital leases and other.................................. 2,929 3,538
-------- --------
Total deferred tax liabilities.............................. 16,112 17,542
Deferred tax assets:
Allowances for accounts receivable and claims reserves.... (5,498) (3,815)
Net operating loss carryforwards.......................... (4,300) (2,074)
General business, minimum tax and other credit
carryforwards.......................................... (6,155) (6,048)
Other deferred tax assets................................. (2,333) (1,214)
-------- --------
Total deferred tax assets................................... (18,286) (13,151)
Valuation allowance......................................... 3,250 --
-------- --------
Net deferred tax assets..................................... (15,036) (13,151)
-------- --------
Net deferred tax liabilities...................... $ 1,076 $ 4,391
======== ========
</TABLE>
Realization of the deferred tax assets associated with the NOL and credit
carryforwards is dependent upon generating sufficient taxable income prior to
their expiration. Management believes that there is a risk that certain of these
NOL and credit carryforwards may expire unused and, accordingly, has established
a valuation allowance against them.
The reasons for the difference between total income tax expense (benefit) and
the amount computed by applying the statutory federal income tax rate to income
before income taxes are as follows (in thousands):
<TABLE>
<CAPTION>
1996 1995 1994
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
Computed tax expense (benefit) using the statutory federal
income tax rate......................................... $(6,301) $ (1) $2,420
Increase (decrease) in taxes arising from:
State taxes, net of federal benefit..................... (361) 7 72
Increase (reduction) of valuation allowance............. 3,250 -- (521)
Tax rate increases (decreases).......................... 18 (228) 430
Prior year (over) under accrual......................... -- (100) 64
Nondeductible expenses.................................. 94 86 121
Other items............................................. -- 21 16
------- ----- ------
$(3,300) $(215) $2,602
======= ===== ======
</TABLE>
At December 31, 1996, the Company had net operating loss carryforwards for
federal tax purposes of $11,600,000 expiring in the years 2010 and 2011, general
business credit carryforwards of $5,404,000 expiring in years 1997 through 2004,
state net operating loss carryforwards of
30
<PAGE> 32
BUILDERS TRANSPORT, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
$18,800,000 expiring in years 1997 through 2008, and minimum tax credits of
$750,000 that carry forward indefinitely.
NOTE 6. BENEFIT PLANS
The Company has a stock option plan that permits the granting of options to
purchase up to an aggregate of 1,450,000 shares of common stock to officers and
key employees. Under this Plan, options to purchase shares of common stock may
be granted at not less than 100% of the fair market value at the date of grant,
or 110% of fair market value in the case of any employee who holds more than 10%
of the combined voting power of the Company's common stock as of the date of
grant if the option is designated as an incentive stock option.
The Company also has a Non-employee Directors' Stock Option Plan. This plan
provides for the granting of options to purchase up to an aggregate of 100,000
shares of common stock to members of the Board of Directors of the Company who
are not employees of the Company or any of its subsidiaries. Under the Plan,
options to purchase 10,000 shares of common stock were granted to each
non-employee director upon the Board's adoption of this plan, and options to
purchase 10,000 shares will be granted to any new Non-employee Director upon his
or her election to the Board of Directors. Each Non-employee Director shall
receive additional options to purchase 2,000 shares each even numbered year
during the Plan's existence beginning March 29, 1994, at not less than 100% of
the fair market value at the date of the grant.
In November 1996, the Company canceled options to purchase 1,080,000 shares,
with exercise prices ranging from $6.0625 to $15.375, and concurrently issued
1,080,000 options with an exercise price of $3 per share. The Company's stock
option plans have authorized the grant of options to employees and directors for
up to 1,247,774 shares of the Company's common stock. All options granted have
ten year terms and vest and become fully exercisable at the end of four years of
continued employment.
The fair value for these options was estimated at the date of grant using a
Black-Scholes option pricing model with the following weighted-average
assumptions for risk-free interest rates of 6.3%, a dividend yield of 0%;
volatility factors of the expected market price of the Company's common stock of
.72; and a weighted-average expected life of the option of five years.
The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options which have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions including the expected stock price volatility. Because
the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its employee stock options.
31
<PAGE> 33
BUILDERS TRANSPORT, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
For purposes of pro forma disclosures, the estimated fair value of the options
is amortized to expense over the options' vesting period. The Company's pro
forma information follows (in thousands except for earnings per share
information):
<TABLE>
<CAPTION>
1996
-------
<S> <C>
Pro forma net loss.......................................... $15,698
Pro forma loss per share.................................... $ 3.00
</TABLE>
The effects of SFAS No. 123 in this proforma disclosure are not indicative of
future amounts. SFAS 123 does not apply to options granted prior to 1995.
The following table summarizes the changes in options outstanding and related
price ranges for shares of Common Stock under options:
<TABLE>
<CAPTION>
Number Option Price
of Shares Per Share
- -----------------------------------------------------------------------------------
<S> <C> <C>
Outstanding at December 31, 1994.................. 1,199,026 $ 3.75 - $15.375
---------
Exercised....................................... (9,699) $ 7.0625 - $ 10.50
Expired or canceled............................. (102,181) $ 7.0625 - $ 14.75
Granted......................................... 22,500 $12.4375
---------
Outstanding at December 31, 1995.................. 1,109,646 $ 3.75 - $15.375
---------
Exercised....................................... (5,375) $ 6.0625 - $7.9375
Expired or canceled............................. (1,462,830) $ 6.0625 - $15.375
Granted......................................... 1,606,333 $ 3.00 - $9.8125
---------
OUTSTANDING AT DECEMBER 31, 1996.................. 1,247,774 $3.00 - $ 10.50
=========
</TABLE>
At December 31, 1996, options to purchase 372,567 shares were exercisable, and
40,382 shares were reserved for future grants.
Effective January 1, 1994, the Company's 401 (k) Plan and the ESOP were merged
and amended to form the Builders Transport, Incorporated Employee's Retirement
Savings & Profit Sharing Plan (the "KSOP"). The KSOP is available to
substantially all Company employees who meet the eligibility requirements. The
KSOP utilizes the shares of common stock that were acquired by the ESOP in 1989
and that remain unallocated to make the Company's future 401(k) matching
contributions under the KSOP. The amount of the Company's 401(k) matching
contribution under the KSOP is now discretionary. However, it is anticipated
that by December 31, 2011, all of the common stock acquired by the ESOP in 1989
will have been allocated as the KSOP loan is repaid.
The KSOP will obtain the funds to repay the loan through tax deductible
contributions made by the Company to the KSOP. The Company incurred interest
expense of $379,000, $390,000, and $398,000 and compensation expense of
$229,000, $234,000, and $244,000 related to the KSOP during the years ended
December 31, 1996, 1995, and 1994, respectively. Compensation expense is
recognized under the shares allocated method.
Contributions accrued for all defined contribution plans were $1,537,000 in
1996, $1,278,000 in 1995, and $856,000 in 1994.
32
<PAGE> 34
BUILDERS TRANSPORT, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 7. SUPPLEMENTAL INFORMATION TO CONSOLIDATED STATEMENTS
OF CASH FLOWS
Additional information related to the consolidated statements of cash flows with
regard to certain cash payments and noncash investing and financing activities
is as follows (in thousands):
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------
1996 1995 1994
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash paid:
Interest............................................. $16,172 $15,098 $11,915
Income taxes......................................... -- 200 376
Noncash investing activity:
Equipment acquired through capital leases............ 27,412 69,718 59,226
Noncash financing activity:
Common stock issued under employee benefit plans..... 498 165 394
</TABLE>
NOTE 8. RELATED PARTY TRANSACTIONS
During 1995, the Company entered into an agreement with Two Trees, a New York
general partnership for the sale and leaseback of the building that houses the
Company's offices and division headquarters and related land, located in Camden,
South Carolina. The Company's Chairman of the Board is a general partner of Two
Trees. The Company has purchase and lease renewal options at projected future
fair market values under the agreement.
The cost and associated accumulated depreciation of the building, approximately
$3,473,000 and $899,000, respectively, have been removed from the accounts and
the gain realized on the sale of approximately $392,000 has been deferred. The
deferred gain will be credited to income as rent expense adjustments over the
lease term of five years. Payments under the lease approximate $454,000
annually, commencing in October 1995. The Company has an outstanding letter of
credit totaling $1,600,000 to Two Trees in support of the lease payments.
In connection with the sale and leaseback, the Company paid $200,000 in
brokerage commissions to Two Trees. The fees paid are based on ordinary and
customary standards for such services and the lease payments are based on the
fair market value of the property.
In connection with a 1993 acquisition, the Company paid investment banking fees
in 1994 of $650,000 to Two Trees. The fees were based on ordinary and customary
standards for such services.
In October 1994, the Company purchased 200,000 shares of its common stock at
$12.00 per share from its Chairman of the Board, who made these shares available
for sale due to his short-term liquidity needs. The Company's Board of Directors
approved this purchase and a general common stock repurchase program on the open
market, because they viewed the market price of common stock as undervalued in
late 1994.
In November 1996, the disinterested members of the Company's Board of Directors
unanimously approved a $300,000 principal amount, short-term loan to the
Company's Chairman of the Board
33
<PAGE> 35
BUILDERS TRANSPORT, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
at the market level interest rate. The loan was repaid in full with accrued
interest prior to December 31, 1996.
NOTE 9. SPECIAL CHARGES
In the fourth quarter of 1995, the Company recorded special charges of
$1,420,000 associated with exiting the tire loading and warehousing business.
The special charges comprise principally the loss on sale of equipment
(consummated in February 1996) and write-downs of accounts receivable,
intangibles and other assets.
NOTE 10. IMPAIRMENT OF LONG-LIVED ASSETS
During 1994, the Company initiated a plan to dispose of certain older revenue
equipment and to reduce the average age of its fleet. The adoption of SFAS No.
121 "Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to
be Disposed Of," as of January 1, 1995, required the Company to recognize a
cumulative effect adjustment to the extent the carrying value of the affected
assets exceeded the estimated net realizable value.
Prior to the cumulative effect adjustment, this revenue equipment to be disposed
of had a carrying amount of $19,408,000 as of January 1, 1995. The Company
recorded a pre-tax cumulative effect adjustment of $11,387,000 to reduce the
carrying amount to the estimated net realizable value of $8,021,000. The
after-tax cumulative effect adjustment was a charge of $7,291,000 or $1.38 per
share. The carrying amount of assets remaining to be disposed of is $2,128,000
and $6,031,000 as of December 31, 1996 and 1995, respectively.
NOTE 11. CONTINGENCIES
The Company is involved in various legal proceedings and claims that have arisen
in the ordinary course of its business that have not been finally adjudicated.
Many of these proceedings are covered in whole or in part by insurance. These
actions, when finally concluded and determined will not, in the opinion of
management, have a material adverse effect upon the financial position of the
Company.
NOTE 12. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The following is a summary of unaudited quarterly results of operations for the
years ended December 31, 1996 and 1995. The computation of fully diluted
earnings per common share is anti-dilutive for all periods presented (in
thousands, except per share amounts).
<TABLE>
<CAPTION>
1996 QUARTER ENDED
---------------------------------------------------
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating revenue.................... $70,487 $73,442 $73,462 $ 72,028
Operating expenses(1)................ 66,901 68,822 72,781 83,415
Net income (loss).................... (328) 357 (2,098) (13,164)
Net income (loss) per common
share(2)........................... (.06) .07 (.41) (2.52)
</TABLE>
34
<PAGE> 36
BUILDERS TRANSPORT, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
1995 Quarter Ended
---------------------------------------------------
March 31 June 30 September 30 December 31
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating revenue.................... $73,114 $74,847 $73,249 $ 68,317
Operating expenses................... 68,357 68,742 70,991 65,288
Income (loss) before effect of
accounting change.................. 1,426 2,145 (700) (2,653)
Cumulative effect of accounting
change............................. (7,291) -- -- --
Net (loss) income.................... (5,865) 2,145 (700) (2,653)
Earnings (loss) per common share
before cumulative effect of
accounting change.................. .15 .30 (.19) --
Cumulative effect of accounting
change............................. (1.38) -- -- --
Net income (loss) per common
share(1)(2)........................ (1.11) .40 (.13) (.53)
</TABLE>
- ---------------
(1) The Company made certain year-end adjustments in 1996 resulting from changes
in estimates relating to reserves for claims payable that were material to
the results of the fourth quarter. These adjustments, after applicable
income tax reductions, reduced net income by approximately $3,000,000 or
$.58 per share.
(2) The sum of the quarter's earnings per share does not equal the year-to-date
earnings per share due to changes in average share calculations. This is in
accordance with prescribed reporting requirements.
35
<PAGE> 37
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
PART III
ITEMS 10, 11, 12 AND 13. DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT, EXECUTIVE COMPENSATION;
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT;
AND CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS.
For information with respect to the executive officers of the Company, see
"Executive Officers of the Registrant" at the end of Part I of this Report. The
information set forth under the captions "Election of Directors", "Committees of
the Company's Board of Directors and Meeting Attendance," "Executive
Compensation and Other Information", "Security Ownership of Certain Beneficial
Owners and Management", and "Certain Relationships and Related Transactions" in
the Proxy Statement for the 1997 Annual Meeting of Stockholders is incorporated
herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) LIST OF DOCUMENTS FILED AS PART OF THIS REPORT.
(1) FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
PAGE
NUMBER
------
<S> <C>
Report of Independent Auditors, Ernst & Young LLP........... 20
Consolidated Statements of Operations for the years ended
December 31, 1996, 1995 and 1994.......................... 21
Consolidated Balance Sheets as of December 31, 1996 and
1995...................................................... 22
Consolidated Statements of Stockholders' Equity for the
years ended December 31, 1996, 1995, 1994................. 23
Consolidated Statements of Cash Flows for the years ended
December 31, 1996, 1995 and 1994.......................... 24
Notes to Consolidated Financial Statements.................. 25
(2) FINANCIAL STATEMENT SCHEDULE.
Consolidated Schedule as of and for the years ended December
31, 1996, 1995 and 1994...................................
II -- Valuation and Qualifying Accounts..................... 43
</TABLE>
All other financial statements and schedules have been omitted because they are
not required or are not applicable.
36
<PAGE> 38
(3) EXHIBITS (NUMBERED IN ACCORDANCE WITH ITEM 601 OF REGULATION S-K).
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT
- ------- -------
<C> <C> <S>
3.1 -- Amended and Restated Certificate of Incorporation of the
Company, incorporated by reference to Exhibit 3.1 to the
Company's Quarterly Report for the quarter ended June 30,
1992, on Form 10-Q, filed August 14, 1992
3.2 -- Amended and Restated Bylaws of the Company, as amended,
incorporated by reference to Exhibit 3.2 to the Company's
Annual Report on Form 10-K for the year ended December 31,
1993, filed March 31, 1994
4.1 -- Indenture between the Company and The First National Bank of
Maryland, dated as of August 15, 1985, incorporated by
reference to Exhibit (4)B to the Company's Amendment No. 1
to Registration Statement on Form S-1, filed August 29, 1985
(No. 2-99727)
4.2 -- Indenture between the Company and The First National Bank of
Maryland, dated as of May 1, 1986, incorporated by reference
to Exhibit (4)B to the Company's Amendment No. 1 to
Registration Statement on Form S-1, filed May 1, 1986 (No.
33-5057)
4.3 -- First Supplemental Indenture between the Company and The
First National Bank of Maryland, dated as of September 1,
1986, incorporated by reference to Exhibit 4a1 to the
Company's Quarterly Report for the quarter ended September
30, 1986 on Form 10-Q, filed November 14, 1986
10.1* -- Builders Transport, Incorporated Restated 1986 Incentive
Stock Option Plan, incorporated by reference to Exhibit 10.1
to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1994, filed August 11, 1994
10.2 -- Stock Purchase Agreement dated as of December 21, 1989, by
and between the Company and AmSouth Bank N.A., as Trustee
(subsequently assigned to National Bank of Commerce) under
the stock benefit plan, incorporated by reference to Exhibit
1 to the Company's Report on Form 8-K, filed December 29,
1989
10.3 -- Secured Loan Agreement dated as of December 21, 1989, by and
among Builders Transport, Incorporated, the Subsidiaries,
and AmSouth Bank N.A., as Trustee (subsequently assigned to
National Bank of Commerce) under the stock benefit plan,
incorporated by reference to Exhibit 4 to the Company's
Report on Form 8-K, filed December 29, 1989
10.4 -- First Amendment dated as of January 1, 1994, to Secured Loan
Agreement dated as of December 21, 1989 (subsequently
assigned to National Bank of Commerce) incorporated by
reference to Exhibit 10.4 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1993, filed March
31, 1994
10.5 -- Pledge Agreement dated as of December 21, 1989, by and among
the Company, the Subsidiaries, and AmSouth Bank N.A., as
Trustee (subsequently assigned to National Bank of Commerce)
under the stock benefit plan, incorporated by reference to
Exhibit 5 to the Company's Report on Form 8-K filed December
29, 1989
10.6 -- Assignment dated as of December 22, 1992, of Promissory
Note, Secured Loan Agreement, Pledge Agreement, Stock
Purchase Agreement and Indemnification Agreement to National
Bank of Commerce as Successor Trustee pursuant to the
Builders Transport, Incorporated and Subsidiaries Employee
Stock Benefit Trust, incorporated by reference to Exhibit
10.8 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1992, filed March 22, 1993
10.7* -- Builders Transport, Incorporated Employees Retirement
Savings & Profit Sharing Plan, as amended and restated,
incorporated by reference to Exhibit 10.7 to the Company's
Annual Report on Form 10-K for the year ended December 31,
1994, filed March 31, 1995
</TABLE>
37
<PAGE> 39
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT
- ------- -------
<C> <C> <S>
10.8 -- Trust Agreement under the Builders Transport, Incorporated
Employees Retirement Savings & Profit Sharing Plan,
incorporated by reference to Exhibit 10.8 to the Company's
Annual Report on Form 10-K for the year ended December 31,
1994, filed March 31, 1995
10.9* -- Employment Agreement dated March 1, 1991, between the
Company and Stanford M. Dinstein, incorporated by reference
to Exhibit 10.11 to the Company's Annual Report on Form 10-K
for the year ended December 31, 1993, filed March 31, 1994
10.10* -- Employment Agreement dated December 16, 1993, between the
Company and John R. Morris, incorporated by reference to
Exhibit 10.13 to the Company's Annual Report on Form 10-K
for the year ended December 31, 1993, filed March 31, 1994
10.11 -- Consulting Agreement dated April 30, 1993, between the
Company and Two Trees, a New York general partnership,
incorporated by reference to Exhibit 10.14 to the Company's
Annual Report on Form 10-K for the year ended December 31,
1993, filed March 31, 1994
10.12 -- Amended and Restated Financing Agreement among the CIT
Group/Business Credit, Inc., National Canada Finance Corp.
and Builders Transport, Inc. dated as of May 28, 1993,
incorporated by reference to Exhibit 10.1 to the Company's
Quarterly Report for the quarter ended June 30, 1993, on
Form 10-Q, filed August 12, 1993
10.13 -- Amendment No. 1 dated as of November 11, 1993, to the
Amended and Restated Financing Agreement among the CIT
Group/Business Credit, Inc., National Canada Finance Corp.
and Builders Transport, Inc. dated as of May 28, 1993,
incorporated by reference to Exhibit 10.16 to the Company's
Annual Report on Form 10-K for the year ended December 31,
1994, filed March 31, 1995
10.14 -- Amendment No. 2 effective as of March 31, 1994, to the
Amended and Restated Financing Agreement among the CIT
Group/Business Credit, Inc., National Canada Finance Corp.
and Builders Transport, Inc. dated as of May 28, 1993,
incorporated by reference to Exhibit 10.2 to the Company's
Quarterly Report on Form 10-Q for the quarter ended March
31, 1994, filed May 11, 1994
10.15 -- Amendment No. 3 effective as of October 1, 1994, to the
Amended and Restated Financing Agreement among the CIT
Group/Business Credit, Inc., National Canada Finance Corp.
and Builders Transport, Inc. dated as of May 28, 1993,
incorporated by reference to Exhibit 10.18 to the Company's
Annual Report on Form 10-K for the year ended December 31,
1994, filed March 31, 1995
10.16 -- Amendment No. 4 effective as of February 28, 1995, to the
Amended and Restated Financing Agreement among the CIT
Group/Business Credit, Inc., National Canada Finance Corp.
and Builders Transport, Inc. dated as of May 28, 1993,
incorporated by reference to Exhibit 10.19 to the Company's
Annual Report on Form 10-K for the year ended December 31,
1994, filed March 31, 1995
10.17 -- Registration Rights Agreement dated August 27, 1993, by and
between Vernon Milling Company, Inc., Elmer Thomas, Builders
Transport, Incorporated and Builders Transport, Inc.,
incorporated by reference to Exhibit 4.1 to the Company's
Report on Form 8-K, filed September 10, 1993
10.18* -- Builders Transport, Incorporated Amended and Restated
Non-Employee Directors' Stock Option Plan, incorporated by
reference to Exhibit 10.1 to the Company's Quarterly Report
on Form 10-Q for the quarter ended March 31, 1994, filed May
11, 1994
10.19 -- Agreement of Purchase and Sale by and between Builders
Transport, Incorporated and Two Trees, incorporated by
reference to Exhibit 10.22 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1995, filed March
29, 1996
</TABLE>
38
<PAGE> 40
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT
- ------- -------
<C> <C> <S>
10.20 -- Lease Agreement by and between Two Trees and Builders
Transport, Incorporated, incorporated by reference to
Exhibit 10.23 to the Company's Annual Report on Form 10-K
for the year ended December 31, 1995, filed March 29, 1996
10.21 -- Amendment No. 5 effective as of December 29, 1995, to the
Amended and Restated Financing Agreement among the CIT
Group/Business Credit, Inc.; National Bank of Canada, as
assignee of National Canada Finance Corp.; and Builders
Transport, Inc. dated as of May 28, 1993, incorporated by
reference to Exhibit 10.24 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1995, filed March
29, 1996
10.22 -- Amendment No. 6 effective as of March 25, 1996, to the
Amended and Restated Financing Agreement among the CIT
Group/Business Credit, Inc.; National Bank of Canada, as
assignee of National Canada Finance Corp.; and Builders
Transport, Inc. dated as of May 28, 1993, incorporated by
reference to Exhibit 10.25 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1995, filed March
29, 1996
10.23* -- Amendment No. 1 to the Builders Transport, Incorporated
Employees Retirement Savings & Profit Sharing Plan,
incorporated by reference to Exhibit 10.26 to the Company's
Annual Report on Form 10-K for the year ended December 31,
1995, filed March 29, 1996
10.24* -- First Amendment made as of March 27, 1996, to Employment
Agreement dated December 16, 1993, between the Company and
John R. Morris
10.25 -- Amendment No. 7 effective as of June 10, 1996, to the
Amended and Restated Financing Agreement among the CIT
Group/Business Credit, Inc., National Bank of Canada and
Builders Transport, Inc. dated May 28, 1993, incorporated by
reference to Exhibit 10.1 to the Company's Quarterly Report
on Form 10-Q for the quarter ended June 30, 1996, filed
August 14, 1996
10.26 -- Amendment No. 8 dated as of January 10, 1997, to the Amended
and Restated Financing Agreement among the CIT
Group/Business Credit, Inc., National Bank of Canada and
Builders Transport, Inc. dated May 28, 1993
10.27 -- Builders Transport, Incorporated press release dated March
21, 1997, relating to Alex. Brown & Sons Incorporated's
retention as financial advisor to review various
alternatives with respect to restructuring the Company's
debt obligations
10.28 -- Amendment to the Builders Transport, Inc. Restated 1986
Incentive Stock Option Plan adopted by resolution dated
September 1, 1996, of the Executive Committee of the Board
of Directors of Builders Transport, Incorporated
10.29 -- Amendment to the Builders Transport, Incorporated Amended
and Restated Non-Employee Directors' Stock Option Plan
adopted by resolution dated November 18, 1996, of the Board
of Directors of Builders Transport, Incorporated
11 -- Statement re: Computation of Per Share Earnings
21 -- Subsidiaries of the Company, incorporated by reference to
Exhibit 21 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1994, filed March 31, 1995
23 -- Consent of Independent Auditors
24 -- Powers of Attorney
27 -- Financial Data Schedule
</TABLE>
- ---------------
* Denotes a management contract or compensatory plan or arrangement.
(b) REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the last quarter of 1996.
39
<PAGE> 41
(c) EXHIBITS.
The exhibits required to be filed with this Annual Report on Form 10-K pursuant
to Item 601, of Regulation S-K are listed under "Exhibits" in Part IV, Item
14(a) (3) of this Annual Report on Form 10-K, and are incorporated herein by
reference.
(d) FINANCIAL STATEMENT SCHEDULES.
The Financial Statement Schedule required to be filed with this Annual Report on
Form 10-K is listed under "Financial Statement Schedule" in Part IV, Item 14(a)
(2) of this Annual Report on Form 10-K, and are incorporated herein by
reference.
40
<PAGE> 42
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.
BUILDERS TRANSPORT, INCORPORATED
By *
------------------------------------
Stanford M. Dinstein
Vice Chairman, Chief Executive
Officer and Director
March 28, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
on Form 10-K has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* Chairman of the Board and March 28, 1997
- ----------------------------------------------------- Director
David C. Walentas
* Vice Chairman, Chief Executive March 28, 1997
- ----------------------------------------------------- Office and Director
Stanford M. Dinstein
* President, Chief Operating March 28, 1997
- ----------------------------------------------------- Officer and Director
John R. Morris
* Chief Financial Officer and March 28, 1997
- ----------------------------------------------------- Treasurer (Principal
T. M. Guthrie Financial Officer and
Principal Accounting Officer)
* Director March 28, 1997
- -----------------------------------------------------
Arthur C. Baxter
* Director March 28, 1997
- -----------------------------------------------------
Pierson G. Mapes
* Director March 28, 1997
- -----------------------------------------------------
Frederick S. Morton
</TABLE>
41
<PAGE> 43
<TABLE>
<CAPTION>
SIGNATURE
---------
<C> <S>
For the Directors and officers indicated above.
/s/ T.M. GUTHRIE March 28, 1997
- -----------------------------------------------------
T. M. Guthrie
Attorney-in-fact
* T. M. Guthrie, pursuant to Powers of Attorney dated
prior to the date hereof, executed by the officers
and Directors listed above and filed with the
Securities and Exchange Commission, by signing his
name hereto does hereby sign and execute this
Report on Form 10-K of Builders Transport,
Incorporated, on behalf of the Company and each of
the Directors and officers indicated above, in the
capacities in which such names appear above.
</TABLE>
42
<PAGE> 44
BUILDERS TRANSPORT, INCORPORATED AND SUBSIDIARIES
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
- -------- ------------ ------------------------- ------------- -------------
ADDITIONS
-------------------------
CHARGED TO
BALANCE AT CHARGED TO OTHER
BEGINNING OF COSTS AND ACCOUNTS -- DEDUCTIONS -- BALANCE AT
DESCRIPTIONS PERIOD EXPENSES DESCRIBE DESCRIBE END OF PERIOD
- ------------ ------------ ----------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Reserves and allowances
deducted from asset
accounts:
Allowance for
uncollectible
accounts
receivable
-- current........ $ 511,684 $ 91,990 $(311,000)(2) $ (163,413)(1) $ 456,087
-- noncurrent..... 168,330 59(1) 168,271
----------- ----------- --------- ----------- -----------
$ 680,014 $ 91,990 $(311,000) $ (163,354) $ 624,358
=========== =========== ========= =========== ===========
Reserve for claims
payable as
self-insurer......... $ 5,752,000 $ 1,200,000 $ 6,952,000
Portion of claims
payable in current
liabilities.......... 5,284,904 22,453,730 792,092(2) 19,105,019(3) $ 9,425,707
----------- ----------- --------- ----------- -----------
$11,036,904 $23,653,730 $ 792,092 $19,105,019 $16,377,707
=========== =========== ========= =========== ===========
</TABLE>
- ---------------
(1) Uncollectible accounts written off, net of recoveries.
(2) Transfers between account classifications.
(3) Payments of claims, net of recoveries.
43
<PAGE> 45
BUILDERS TRANSPORT, INCORPORATED AND SUBSIDIARIES
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
- -------- -------- ------------------------- -------- --------
ADDITIONS
-------------------------
CHARGED TO
BALANCE AT CHARGED TO OTHER
BEGINNING OF COSTS AND ACCOUNTS -- DEDUCTIONS -- BALANCE AT
DESCRIPTION PERIOD EXPENSES DESCRIBE DESCRIBE END OF PERIOD
- ----------- ------------ ----------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Reserves and allowances
deducted from asset
accounts:
Allowance for
uncollectible
accounts receivable
-- current......... $ 353,779 $ 261,000 $ (1,205)(2) $ 101,890(1) $ 511,684
-- noncurrent...... 258,210 10,119 99,999(1) 168,330
----------- ----------- --------- ----------- -----------
$ 611,989 $ 271,119 $ (1,205) $ 201,889 $ 680,014
=========== =========== ========= =========== ===========
Reserve for claims
payable as
self-insurer.......... $ 6,152,000 $(400,000)(2) $ 5,752,000
Portion of claims
payable in current
liabilities........... 4,478,640 20,665,221 937,109(2) 20,796,066(3) 5,284,904
----------- ----------- --------- ----------- -----------
$10,630,640 $20,665,221 $ 537,109 $20,796,066 $11,036,904
=========== =========== ========= =========== ===========
</TABLE>
- ---------------
(1) Uncollectible accounts written off, net of recoveries.
(2) Transfers between account classifications.
(3) Payments of claims, net of recoveries.
44
<PAGE> 46
BUILDERS TRANSPORT, INCORPORATED AND SUBSIDIARIES
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
YEAR ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
- -------- -------- ------------------------- -------- --------
ADDITIONS
-------------------------
CHARGED TO
BALANCE AT CHARGED TO OTHER
BEGINNING OF COSTS AND ACCOUNTS -- DEDUCTIONS -- BALANCE AT
DESCRIPTION PERIOD EXPENSES DESCRIBE DESCRIBE END OF PERIOD
- ----------- ------------ ----------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Reserves and allowances
deducted from asset
accounts:
Allowance for
uncollectible
accounts receivable
-- current......... $ 200,386 $ 155,441 $ 2,048(1) $ 353,779
-- noncurrent...... 334,706 76,496(1) 258,210
----------- ----------- --------- ----------- -----------
$ 535,092 $ 155,441 $ 0 $ 78,544 $ 611,989
=========== =========== ========= =========== ===========
Reserve for claims
payable as
self-insurer.......... $ 6,156,000 $ (4,000)(2) $ 6,152,000
Portion of claims
payable in current
liabilities........... 3,969,236 14,503,706 374,500(4) 14,312,498(3) 4,478,640
(56,304)(2)
----------- ----------- --------- ----------- -----------
$10,125,236 $14,503,706 $ 314,196 $14,312,498 $10,630,640
=========== =========== ========= =========== ===========
</TABLE>
- ---------------
(1) Uncollectible accounts written off, net of recoveries.
(2) Transfers between account classifications.
(3) Payments of claims, net of recoveries.
(4) Reserves resulting from acquisitions.
45
<PAGE> 47
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL
NO. EXHIBIT PAGE NO.
- ------- ------- ----------
<C> <S> <C> <C>
3.1 -- Amended and Restated Certificate of Incorporation of the
Company, incorporated by reference to Exhibit 3.1 to the
Company's Quarterly Report for the quarter ended June 30,
1992, on Form 10-Q, filed August 14, 1992...................
3.2 -- Amended and Restated Bylaws of the Company, as amended,
incorporated by reference to Exhibit 3.2 to the Company's
Annual Report on Form 10-K for the year ended December 31,
1993, filed March 31, 1994..................................
4.1 -- Indenture between the Company and The First National Bank of
Maryland, dated as of August 15, 1985, incorporated by
reference to Exhibit (4)B to the Company's Amendment No. 1
to Registration Statement on Form S-1, filed August 29, 1985
(No. 2-99727)...............................................
4.2 -- Indenture between the Company and The First National Bank of
Maryland, dated as of May 1, 1986, incorporated by reference
to Exhibit (4)B to the Company's Amendment No. 1 to
Registration Statement on Form S-1, filed May 1, 1986 (No.
33-5057)....................................................
4.3 -- First Supplemental Indenture between the Company and The
First National Bank of Maryland, dated as of September 1,
1986, incorporated by reference to Exhibit 4a1 to the
Company's Quarterly Report for the quarter ended September
30, 1986 on Form 10-Q, filed November 14, 1986..............
10.1* -- Builders Transport, Incorporated Restated 1986 Incentive
Stock Option Plan, incorporated by reference to Exhibit 10.1
to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1994, filed August 11, 1994..........
10.2 -- Stock Purchase Agreement dated as of December 21, 1989, by
and between the Company and AmSouth Bank N.A., as Trustee
(subsequently assigned to National Bank of Commerce) under
the stock benefit plan, incorporated by reference to Exhibit
1 to the Company's Report on Form 8-K, filed December 29,
1989........................................................
10.3 -- Secured Loan Agreement dated as of December 21, 1989, by and
among Builders Transport, Incorporated, the Subsidiaries,
and AmSouth Bank N.A., as Trustee (subsequently assigned to
National Bank of Commerce) under the stock benefit plan,
incorporated by reference to Exhibit 4 to the Company's
Report on Form 8-K, filed December 29, 1989.................
10.4 -- First Amendment dated as of January 1, 1994, to Secured Loan
Agreement dated as of December 21, 1989 (subsequently
assigned to National Bank of Commerce) incorporated by
reference to Exhibit 10.4 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1993, filed March
31, 1994....................................................
10.5 -- Pledge Agreement dated as of December 21, 1989, by and among
the Company, the Subsidiaries, and AmSouth Bank N.A., as
Trustee (subsequently assigned to National Bank of Commerce)
under the stock benefit plan, incorporated by reference to
Exhibit 5 to the Company's Report on Form 8-K filed December
29, 1989....................................................
10.6 -- Assignment dated as of December 22, 1992, of Promissory
Note, Secured Loan Agreement, Pledge Agreement, Stock
Purchase Agreement and Indemnification Agreement to National
Bank of Commerce as Successor Trustee pursuant to the
Builders Transport, Incorporated and Subsidiaries Employee
Stock Benefit Trust, incorporated by reference to Exhibit
10.8 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1992, filed March 22, 1993..........
</TABLE>
<PAGE> 48
<TABLE>
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10.7* -- Builders Transport, Incorporated Employees Retirement
Savings & Profit Sharing Plan, as amended and restated,
incorporated by reference to Exhibit 10.7 to the Company's
Annual Report on Form 10-K for the year ended December 31,
1994, filed March 31, 1995..................................
10.8 -- Trust Agreement under the Builders Transport, Incorporated
Employees Retirement Savings & Profit Sharing Plan,
incorporated by reference to Exhibit 10.8 to the Company's
Annual Report on Form 10-K for the year ended December 31,
1994, filed March 31, 1995..................................
10.9* -- Employment Agreement dated March 1, 1991, between the
Company and Stanford M. Dinstein, incorporated by reference
to Exhibit 10.11 to the Company's Annual Report on Form 10-K
for the year ended December 31, 1993, filed March 31,
1994........................................................
10.10* -- Employment Agreement dated December 16, 1993, between the
Company and John R. Morris, incorporated by reference to
Exhibit 10.13 to the Company's Annual Report on Form 10-K
for the year ended December 31, 1993, filed March 31,
1994........................................................
10.11 -- Consulting Agreement dated April 30, 1993, between the
Company and Two Trees, a New York general partnership,
incorporated by reference to Exhibit 10.14 to the Company's
Annual Report on Form 10-K for the year ended December 31,
1993, filed March 31, 1994..................................
10.12 -- Amended and Restated Financing Agreement among the CIT
Group/Business Credit, Inc., National Canada Finance Corp.
and Builders Transport, Inc. dated as of May 28, 1993,
incorporated by reference to Exhibit 10.1 to the Company's
Quarterly Report for the quarter ended June 30, 1993, on
Form 10-Q, filed August 12, 1993............................
10.13 -- Amendment No. 1 dated as of November 11, 1993, to the
Amended and Restated Financing Agreement among the CIT
Group/Business Credit, Inc., National Canada Finance Corp.
and Builders Transport, Inc. dated as of May 28, 1993,
incorporated by reference to Exhibit 10.16 to the Company's
Annual Report on Form 10-K for the year ended December 31,
1994, filed March 31, 1995..................................
10.14 -- Amendment No. 2 effective as of March 31, 1994, to the
Amended and Restated Financing Agreement among the CIT
Group/Business Credit, Inc., National Canada Finance Corp.
and Builders Transport, Inc. dated as of May 28, 1993,
incorporated by reference to Exhibit 10.2 to the Company's
Quarterly Report on Form 10-Q for the quarter ended March
31, 1994, filed May 11, 1994................................
10.15 -- Amendment No. 3 effective as of October 1, 1994, to the
Amended and Restated Financing Agreement among the CIT
Group/Business Credit, Inc., National Canada Finance Corp.
and Builders Transport, Inc. dated as of May 28, 1993,
incorporated by reference to Exhibit 10.18 to the Company's
Annual Report on Form 10-K for the year ended December 31,
1994, filed March 31, 1995..................................
10.16 -- Amendment No. 4 effective as of February 28, 1995, to the
Amended and Restated Financing Agreement among the CIT
Group/Business Credit, Inc., National Canada Finance Corp.
and Builders Transport, Inc. dated as of May 28, 1993,
incorporated by reference to Exhibit 10.19 to the Company's
Annual Report on Form 10-K for the year ended December 31,
1994, filed March 31, 1995..................................
</TABLE>
<PAGE> 49
<TABLE>
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10.17 -- Registration Rights Agreement dated August 27, 1993, by and
between Vernon Milling Company, Inc., Elmer Thomas, Builders
Transport, Incorporated and Builders Transport, Inc.,
incorporated by reference to Exhibit 4.1 to the Company's
Report on Form 8-K, filed September 10, 1993................
10.18 -- Builders Transport, Incorporated Amended and Restated
Non-Employee Directors' Stock Option Plan, incorporated by
reference to Exhibit 10.1 to the Company's Quarterly Report
on Form 10-Q for the quarter ended March 31, 1994, filed May
11, 1994....................................................
10.19 -- Agreement of Purchase and Sale by and between Builders
Transport, Incorporated and Two Trees, incorporated by
reference to Exhibit 10.22 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1995, filed March
29, 1996....................................................
10.20 -- Lease Agreement by and between Two Trees and Builders
Transport, Incorporated, incorporated by reference to
Exhibit 10.23 to the Company's Annual Report on Form 10-K
for the year ended December 31, 1995, filed March 29,
1996........................................................
10.21 -- Amendment No. 5 effective as of December 29, 1995, to the
Amended and Restated Financing Agreement among the CIT
Group/Business Credit, Inc.; National Bank of Canada, as
assignee of National Canada Finance Corp.; and Builders
Transport, Inc. dated as of May 28, 1993, incorporated by
reference to Exhibit 10.24 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1995, filed March
29, 1996....................................................
10.22 -- Amendment No. 6 effective as of March 25, 1996, to the
Amended and Restated Financing Agreement among the CIT
Group/Business Credit, Inc.; National Bank of Canada, as
assignee of National Canada Finance Corp.; and Builders
Transport, Inc. dated as of May 28, 1993, incorporated by
reference to Exhibit 10.25 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1995, filed March
29, 1996....................................................
10.23* -- Amendment No. 1 to the Builders Transport, Incorporated
Employees Retirement Savings & Profit Sharing Plan,
incorporated by reference to Exhibit 10.26 to the Company's
Annual Report on Form 10-K for the year ended December 31,
1995, filed March 29, 1996..................................
10.24* -- First Amendment made as of March 27, 1996, to Employment
Agreement dated December 16, 1993 between the Company and
John R. Morris..............................................
10.25 -- Amendment No. 7 effective as of June 10, 1996, to the
Amended and Restated Financing Agreement among the CIT
Group/Business Credit, Inc., National Bank of Canada and
Builders Transport, Inc. dated May 28, 1993, incorporated by
reference to Exhibit 10.1 to the Company's Quarterly Report
on Form 10-Q for the quarter ended June 30, 1996, filed
August 14, 1996.............................................
10.26 -- Amendment No. 8 dated as of January 10, 1997, to the Amended
and Restated Financing Agreement among the CIT
Group/Business Credit, Inc., National Bank of Canada and
Builders Transport, Inc. dated May 28, 1993.................
10.27 -- Builders Transport, Incorporated press release dated March
21, 1997, relating to Alex. Brown & Sons Incorporated's
retention as financial advisor to review various
alternatives with respect to restructuring the Company's
debt obligations............................................
10.28 -- Amendment to the Builders Transport, Inc. Restated 1986
Incentive Stock Option Plan adopted by resolution dated
September 1, 1996, of the Executive Committee of the Board
of Directors of Builders Transport, Incorporated............
</TABLE>
<PAGE> 50
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10.29 -- Amendment to the Builders Transport, Incorporated Amended
and Restated Non-Employee Directors' Stock Option Plan
adopted by resolution dated November 18, 1996, of the Board
of Directors of Builders Transport, Incorporated............
11 -- Statement re: Computation of Per Share Earnings.............
21 -- Subsidiaries of the Company, incorporated by reference to
Exhibit to the Company's Annual Report on Form 10-K for the
year ended December 31, 1994, filed March 31, 1995..........
23 -- Consent of Independent Auditors.............................
24 -- Powers of Attorney..........................................
27 -- Financial Data Schedule.....................................
</TABLE>
- ---------------
* Denotes a management contract or compensatory plan or arrangement.
<PAGE> 1
EXHIBIT 10.24
FIRST AMENDMENT
TO
EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Amendment") is made as of March 27, 1996, by and between
John R. Morris, an individual and a resident of the State of South Carolina (the
"Executive"), and Builders Transport, Incorporated, a corporation organized
under the laws of the State of Delaware having its executive offices located at
2029 West DeKalb Street, Camden, South Carolina, and its subsidiaries (Builders
Transport, Incorporated and its subsidiaries being hereinafter collectively
referred to as the "Corporation") for the purpose of amending an Employment
Agreement (the "Agreement") dated December 16, 1993, entered into by such
parties.
WITNESSETH:
WHEREAS, until December, 1993, the Executive had been employed by the
Corporation as President and Chief Operating Officer for the previous five
years;
WHEREAS, the Chairman of the Board and the Chief Executive Officer of the
Corporation requested that the Executive relinquish that position effective
December 16, 1993, to accept the newly created executive position as President
of its Dedicated Services and Contract Logistics Group;
WHEREAS, the Executive has again been appointed to serve as the President and
Chief Operating Officer of the Corporation;
WHEREAS, the Executive's acceptance of the position of President and Chief
Operating Officer requires certain changes to be made to the Agreement;
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:
1. Paragraph a of Section 1 of the Agreement is amended to read in its
entirety as follows:
The Corporation agrees to employ the Executive, and the Executive
agrees to accept employment by the Corporation, in an executive capacity
as the President and Chief Operating Officer of the Corporation. If at
any time, the Executive is asked to step down, or steps down upon his
own volition, as the President and Chief Operating Officer of the
Corporation, then the Executive shall again serve as the President of
the Corporation's Dedicated Services and Contract Logistics Group.
2. Paragraph c of Section 1 is amended by replacing the first sentence
[with] the following:
During the Term of Employment (as hereinafter defined), the
Executive's minimum gross annual salary shall be $225,000. The remainder
of paragraph c shall remain unchanged.
<PAGE> 2
3. Section 2 is amended by replacing the first sentence thereof with the
following:
Notwithstanding that the period of the employment of the Executive
pursuant to this Agreement shall commence on December 16, 1993, the
period of the employment of the Executive pursuant hereto shall be for a
"Term of Employment" of four consecutive Contract Years from January 1,
1994 (the "Effective Date").
The remainder of Section 2 remains the same.
4. Every provision of the Agreement not herein specifically amended
remains in full force and effect. However, to the extent there is any
conflict between the terms of this Amendment and the terms of the
Agreement, the terms of this Amendment shall control.
IN WITNESS WHEREOF, the Corporation has caused this Amendment to be executed by
its officers thereunto duly authorized, and the Executive has signed this
Amendment, effective as of the date first above written.
BUILDERS TRANSPORT, INCORPORATED,
and its subsidiaries
By /s/ STANFORD M. DINSTEIN
------------------------------------
Authorized Signatory
ATTEST:
/s/ NANCY BEAN
- --------------------------------------
EXECUTIVE
By /s/ JOHN R. MORRIS
------------------------------------
John R. Morris
WITNESS:
/s/ NANCY BEAN
- --------------------------------------
<PAGE> 1
EXHIBIT 10.26
AMENDMENT AND WAIVER
TO
AMENDED AND RESTATED
FINANCING AGREEMENT
DATED AS OF MAY 28, 1993
THIS AMENDMENT AND WAIVER dated as of January 10, 1997 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 3 hereof, effective
as of the date hereof, by
(a) amending Section 1 Definitions by amending the definition
"Revolving Line of Credit" by deleting therefrom the figure
"$17,500,000.00" appearing therein and substituting therefor the figure
"$22,000,000.00"; and
(b) 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 paragraph (a).
Section 2. Waiver. The Lenders and the Agent hereby waive, subject to
the provisions of Section 3, compliance and the effects of non-compliance
by the Company with the provisions of Section 4 of the Financing Agreement
and provisions of the Promissory Notes evidencing Term Loan I [and/or Term
Loan II] that require repayment of principal thereof on December 31, 1996
or March 31, 1997 and agree that the amount of any principal installments
that would otherwise have been payable on the Term Loans will be deferred
to the final maturity date of December 31, 1997.
<PAGE> 2
Section 3. Effectiveness of Amendment. Sections 1 and 2 of this
Amendment shall become effective as of the date hereof upon receipt by the
Agent of an amendment fee in the amount of $10,000, 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
increase in the Revolving Line of Credit effected by this Amendment, in
the form attached as Annex 1 to this Amendment (the "1997 Revolving
Credit Notes");
(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 1997 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 in the form attached to this Amendment;
(f) a legal opinion letter of Haskell Slaughter Young & Johnston,
counsel for the Company, 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 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
<PAGE> 3
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.
BUILDERS TRANSPORT, INC.,
a Georgia corporation, as the
Company
By: /s/ T.M. Guthrie
------------------------------------
Title: Vice President,
Administration and
Treasurer
---------------------------------
[CORPORATE SEAL]
ATTEST:
/s/ J. Ray Hardy
- --------------------------------------
[Assistant] Secretary
THE CIT GROUP/BUSINESS CREDIT, INC.,
a New York corporation, as Agent and
as a Lender
By: /s/ R. Bernier
------------------------------------
Title: Vice President
------------------------------------
NATIONAL BANK OF CANADA,
a Canadian chartered bank
By: /s/ C. Collie
------------------------------------
Title: Vice President and Manager
------------------------------------
By: /s/ Dan Shaw
------------------------------------
Title: Assistant Vice President
------------------------------------
<PAGE> 4
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: January 10, 1997
BUILDERS TRANSPORT OF TEXAS, INC.
By /s/ T.M. Guthrie
------------------------------------
Name: T.M. Guthrie
Title: Vice President,
Administration and Treasurer
CCG CORP.
By /s/ T.M. Guthrie
------------------------------------
Name: T.M. Guthrie
Title: Vice President,
Administration and Treasurer
BUILDERS TRANSPORT, INCORPORATED
By /s/ T.M. Guthrie
------------------------------------
Name: T.M. Guthrie
Title: Vice President,
Administration and Treasurer
<PAGE> 5
ANNEX 1
FORM OF
SUPPLEMENTAL REVOLVING CREDIT NOTE
$ January , 1997
FOR VALUE RECEIVED, the undersigned, BUILDERS TRANSPORT, INC., a Georgia
corporation (the "Company"), hereby absolutely and unconditionally promises to
pay to the order of [THE CIT GROUP/BUSINESS CREDIT, INC./NATIONAL BANK OF
CANADA] [("CITBC" or the "Agent")/("Lender")), with offices at [900 Ashwood
Parkway, Atlanta, Georgia 30338, at its office/125 West 55th Street, New York,
New York 10019, at the Agent's office (referred to below)], in lawful money of
the United States of America and in immediately available funds, the principal
amount of ----------------------- MILLION ----------------------- HUNDRED
- ----------- THOUSAND AND NO/100s DOLLARS ($ ) or such other
principal amount advanced pursuant to the Amended and Restated Financing
Agreement (as hereinafter defined) under the Revolving Credit Line, such
Revolving Loan advances shall be repaid on a daily basis as a result of the
application of the proceeds of collections of the Accounts and the making of
additional Revolving Loans as described in Section 3 of the Amended and Restated
Financing Agreement. The Revolving Loans may be borrowed, repaid and reborrowed
by the Company, provided that no single advance or overadvance may be
outstanding more than thirty-five months from the date of such advance. A final
balloon payment in the amount equal to the outstanding aggregate balance of
principal and interest remaining unpaid, if any, under this Note as shown on the
books and records of the Agent shall be due and payable on the earlier of one
business day prior to December 31, 1999 or the termination of the Amended and
Restated Financing Agreement.
The Company further absolutely and unconditionally promises to pay to the order
of (CITBC/Lender) at the Agent's office [at 900 Ashwood Parkway, Atlanta,
Georgia 30338], interest, in like money, on the unpaid principal amount owing
hereunder from time to time from the date hereof on the dates and at the rates
specified in Section 8, paragraph 1 of the Amended and Restated Financing
Agreement.
If any payment on this Note becomes due and payable on a day other than a
business day, the maturity thereof shall be extended to the next succeeding
business day, and with respect to payments of principal, interest thereon shall
be payable at the then applicable rate during such extension.
This Note is one of the Promissory Notes referred to in the Amended and Restated
Financing Agreement, dated as of May 28, 1993, as the same may be amended and
restated and in effect from time to time, pursuant to which this Promissory Note
is delivered, among the Company, the Lenders and the Agent (the "Amended and
Restated Financing Agreement"), and is subject to, and entitled to, all
provisions and benefits thereof an is subject to optional and mandatory
prepayment, in whole or in part, as provided therein. All capitalized terms used
herein shall have the meaning provided therefor in the Amended and Restated
Financing Agreement, unless otherwise defined herein.
The date and amount of the advances(s) made hereunder may be recorded on the
grid page or pages which are attached hereto and hereby made part of this Note
or the separate ledgers
<PAGE> 6
maintained by the Agent. The aggregate unpaid principal amount of all advances
made pursuant hereto may be set forth in the balance column on said grid page or
such ledgers maintained by the Agent. All such advances, whether or not so
recorded, shall be due as a part of this Note.
The Company confirms that any amount received by or paid to the Agent in
connection with the Amended and Restated Financing Agreement and/or any balances
standing to it credit on any of its accounts on the Agent's books under the
Amended and Restated Financing Agreement be applied in reduction of this Note,
but no balance or amounts shall be deemed to effect payment in whole or in part
of this Note unless the Agent shall have actually charged such account or
accounts for the purposes of such reduction or payment of this Note.
Upon the occurrence of any one or more of the Events of Default specified in the
Amended and Restated Financing Agreement or upon termination of the Amended and
Restated Financing Agreement, all amounts then remaining unpaid on this Note may
become, or be declared to be, immediately due and payable as provided in the
Amended and Restated Financing Agreement.
BUILDERS TRANSPORT, INC.
By:
------------------------------------
Title:
ATTEST:
- ----------------------------------------------------
[Assistant] Secretary
<PAGE> 1
EXHIBIT 10.27
BUILDERS TRANSPORT TO EXPLORE
RESTRUCTURING OF OBLIGATIONS
Camden, South Carolina, March 21, 1997 -- Builders Transport, Incorporated
(NASDAQ-TRUK) announced today that it has retained Alex. Brown & Sons as
financial advisor to review various alternatives with respect to restructuring
the Company's debt obligations.
The Company expects to begin preliminary discussions shortly with
representatives of the holders of its 8% Convertible Subordinated Debentures due
2005, its 6 1/2% Convertible Subordinated Debentures due 2011, and its equipment
lessors and lenders.
David C. Walentas, Chairman of the Board, stated, "Our operational cost
reduction program has been essentially completed and should provide
approximately $6 million in savings during 1997. Additionally, we have recently
obtained rate increases from a significant number of customers and our fleet is
fully manned. Fuel prices have been declining since early January. Builders is
now making steady progress toward returning to profitability. With the support
of our creditors, a restructuring of our debt obligations will further improve
the Company's financial structure and better position Builders Transport for
long-term growth."
Builders Transport is a truckload carrier transporting a wide range of general
commodities.
Statements contained in this press release that are not historical facts
constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. In addition, Builders Transport,
through its senior management, may, from time to time, make forward-looking
public statements about the matters described herein or other matters concerning
the Company. All such forward-looking statements are necessarily estimates
reflecting the best judgment of the Company's senior management based upon
current information and involve a number of risks and uncertainties. Such
forward-looking statements should also be considered in light of certain factors
set forth in Builders Transport's filings with the Securities and Exchange
Commission that could affect future accuracy of those statements. Builders
Transport, however, disclaims any intent or obligation to update such
forward-looking statements.
For information on Builders Transport contact:
Stanford M. Dinstein
Vice Chairman, Chief Executive Officer
(212) 765-5610
<PAGE> 1
EXHIBIT 10.28
RESOLVED, that, pursuant to Section 12 of the Plan, the last sentence of Section
11 of the Plan is hereby amended by substituting in the place of the word
"option" the word "ISO". Such sentence to now read as follows: "No ISO shall be
granted pursuant to this Plan after ten years from the effective date of this
Plan."
<PAGE> 1
EXHIBIT 10.29
RESOLVED, that in accordance with Section 10 of the Amended and Restated
Builders Transport, Incorporated Non-employee Directors' Stock Option Plan Dated
March 15, 1994 (the "Plan"), this Board of Directors does hereby amend the Plan
as follows:
(c) By inserting at the end of Subparagraph 5(a) thereof a new sentence
to read as follows:
Notwithstanding the foregoing, the Administrator may, from time to
time, re-price downward options previously granted under the Plan to a
price that is not less than the fair market value of the Shares subject
to such Options on the date of re-pricing.
(d) By deleting Subparagraph 5(c) thereof in its entirety and inserting
in lieu thereof a new Subparagraph 5(c) to read as follows:
The Administrator may, in its discretion, authorize all or a portion
of the Options granted to an optionee to be on terms which permit
transfer by such optionee to (i) the spouse, children or grandchildren
of the optionee ("Immediate Family Members"), (ii) a trust or trusts for
the exclusive benefit of such Immediate Family Members, or (iii) a
partnership in which such Immediate Family Members are the only
partners, provided that (x) there may be no consideration for any such
transfer, (y) the Award Agreement pursuant to which such options are
granted must be approved by the Administrator, and must expressly
provide for transferability in a manner consistent with this Section,
and (z) subsequent transfers of transferred options shall be prohibited
except those by will or the laws of descent and distribution. Following
transfer, any such Options shall continue to be subject to the same
terms and conditions as were applicable immediately prior to transfer,
provided that for purposes of this Plan, the term "optionee" shall be
deemed to refer to the transferee. In the hands of any transferee
permitted hereunder, Options shall still be subject to the provisions of
Subparagraphs (d), (e), (f) and (g) of this Paragraph 5. Notwithstanding
the foregoing, should the Administrator provide that options granted be
transferable, the Company by such action incurs no obligation to notify
or otherwise provide notice to a transferee of early termination of the
option. In the event of a transfer, as set forth above, the original
optionee is and will remain subject to and responsible for any
applicable withholding taxes upon the exercise of such options.
(e) By deleting the first sentence of Subparagraph 5(d) thereof in its
entirety and inserting in lieu thereof a new sentence reading as follows:
Subject to Subparagraph (g) of this Paragraph 5 and subject to
Paragraph 7 with respect to death or total disability, all Options shall
have a term not to exceed ten (10) years and shall become cumulatively
exercisable as to 20% of the Shares covered thereby on the date of grant
and on each of the first, second, third and fourth anniversaries of the
date of grant, so that on and after the fourth anniversary the Option
shall be exercisable (to the extent not theretofore exercised) as to all
of the Shares covered thereby.
<PAGE> 2
(f) By inserting after the word "order" in the parenthetical phrase in
Subparagraph 9(b) thereof the following:
or pursuant to Subparagraph 5(c) hereof
Except as specifically amended above, all the terms and provisions of the Plan
shall remain in full force and effect, and the Plan and this Amendment shall
from and after the date hereof be read as a single integrated document
incorporating the changes made therein and hereby.
<PAGE> 1
EXHIBIT 11
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------
1996 1995 1994
------------ ----------- ----------
<S> <C> <C> <C>
PRIMARY:
Average shares outstanding....................... 6,261,519 6,212,517 6,187,196
Net effect of dilutive stock options -- based on
the treasury method........................... 159,699 178,177 326,719
Weighted average number of shares held in
treasury...................................... (1,181,576) (1,128,265) (905,214)
------------ ----------- ----------
Shares used to compute primary per share income
(loss)........................................ 5,239,642 5,262,429 5,608,701
============ =========== ==========
Income (loss) before cumulative effect of
accounting change................................ $(15,233,063) $ 218,890 $4,515,088
Cumulative effect of accounting change............. (7,290,621)
------------ ----------- ----------
Net income (loss).................................. $(15,233,063) $(7,071,731) $4,515,088
============ =========== ==========
Net income (loss) per Common Share:
Net income before cumulative effect of accounting
change........................................ $ (2.91) $ .04 $ .81
Cumulative effect of accounting change........... (1.38)
------------ ----------- ----------
Net income (loss) per common share............... $ (2.91) $ (1.34) $ .81
============ =========== ==========
FULLY DILUTED:
Average shares outstanding....................... 6,261,519 6,212,517 6,187,196
Net effect of dilutive stock options -- based on
the treasury stock method using the year-end
market price, if higher than average market
price......................................... 195,664 250,432 326,719
Assumed conversion of 8% subordinated convertible
debentures.................................... 1,038,230 1,089,918 1,155,260
Assumed conversion of 6 1/2% subordinated
convertible debentures........................ 592,079 599,344 651,665
Weighted average number of shares held in
treasury...................................... (1,181,576) (1,128,265) (905,214)
------------ ----------- ----------
Shares used to compute fully diluted per share
income (loss)................................. 6,905,916 7,023,946 7,415,626
============ =========== ==========
Net income before cumulative effect of accounting
change and adjustments........................... $(15,233,063) $ 218,890 $4,515,088
Add 8% subordinated convertible debenture interest,
net of income tax effect......................... 1,243,183 1,297,787 1,491,385
Add 6 1/2% subordinated convertible debenture
interest, net of income tax effect............... 891,072 889,687 1,060,504
Cumulative effect of accounting change............. (7,290,621)
------------ ----------- ----------
Adjusted net income (loss)......................... $(13,098,808) $(4,884,257) $7,066,977
============ =========== ==========
Net income (loss) per Common Share:
Net income before cumulative effect of accounting
change........................................ $ (1.90) $ .34 $ .95
Cumulative effect of accounting change........... (1.04)
------------ ----------- ----------
Net income (loss) per common share............... $ (1.90) $ (.70) $ .95
============ =========== ==========
</TABLE>
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statements
(Form S-8 Nos. 33-14988, 33-59948 and 33-86626) pertaining to the Incentive
Stock Option Plan, Non-employee Directors' Stock Option Plan and the Employee
Retirement Plan of Builders Transport, Incorporated and subsidiaries and in the
related Prospectuses of our report dated March 28, 1997, with respect to the
consolidated financial statements and schedule of Builders Transport,
Incorporated and subsidiaries included in the Annual Report (Form 10-K) for the
year ended December 31, 1996.
ERNST & YOUNG LLP
Winston-Salem, North Carolina
March 28, 1997
<PAGE> 1
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned Director or officer of
Builders Transport, Incorporated, a Delaware corporation (the "Company"), hereby
constitutes and appoints Stanford M. Dinstein, John R. Morris, T. Michael
Guthrie or Robert E. Lee Garner the true and lawful agents and attorneys-in-fact
of the undersigned with full power and authority in each of said agents and
attorneys-in-fact, acting singly, to sign for the undersigned as Director or an
officer of the Company, or as both, the Company's 1996 Annual Report on Form
10-K to be filed with the Securities and Exchange Commission, Washington, D.C.
under the Securities Exchange Act of 1934, and to sign any amendment or
amendments to such Annual Report, including an Annual Report pursuant to Form
11-K to be filed as an amendment to the Form 10-K; hereby ratifying and
confirming all acts taken by such agents and attorneys-in-fact as herein
authorized.
DATED: February 6, 1997.
/s/ DAVID C. WALENTAS
--------------------------------------
David C. Walentas
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF BUILDERS TRANSPORT, INC. FOR THE YEAR ENDED DECEMBER 31,
1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 50
<SECURITIES> 0
<RECEIVABLES> 34,108
<ALLOWANCES> 456
<INVENTORY> 3,538
<CURRENT-ASSETS> 52,617
<PP&E> 309,478
<DEPRECIATION> 117,235
<TOTAL-ASSETS> 268,346
<CURRENT-LIABILITIES> 65,762
<BONDS> 168,988
0
0
<COMMON> 63
<OTHER-SE> 23,260
<TOTAL-LIABILITY-AND-EQUITY> 268,346
<SALES> 289,419
<TOTAL-REVENUES> 289,419
<CGS> 0
<TOTAL-COSTS> 291,919
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 16,033
<INCOME-PRETAX> (18,533)
<INCOME-TAX> (3,300)
<INCOME-CONTINUING> (15,233)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (15,233)
<EPS-PRIMARY> (2.91)
<EPS-DILUTED> 0
</TABLE>
