SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of Earliest Event Reported): July 11, 1997
TRANSIT GROUP, INC.
(Exact name of Registrant as specified in its charter)
Florida 33-30123-A 59-2576629
(State or other (Commission File No.) (IRS Employer
jurisdiction of Identification No.)
incorporation or
organization)
8423 Western Way
Jacksonville, Florida 32256
(Address of principal executive offices, including zip code)
(904) 363-0089
(Registrant's telephone number, including area code)
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
On July 11, 1997, Transit Group Inc. ("Transit Group"), formerly
known as "General Parcel Service, Inc." consummated the
acquisition of Carolina Pacific Distributors, Inc. ("Carolina
Pacific"), a North Carolina corporation and the business and
related assets operated by the owners of Carolina Pacific.
Pursuant to the Stock Purchase Agreement executed at closing
(the "Agreement"), Transit Group purchased all of the
outstanding capital stock of Carolina Pacific and the business
and related assets operated and owned by the shareholders of
Carolina Pacific for a purchase price of approximately $ 11.3
million. The purchase price was paid with the payment of $3.5
million in cash at closing and the issuance of 1,733,000 shares
of common stock of Transit Group to the shareholders of
Carolina Pacific.
At the time Form 8-K was filed to report the acquisition of
Carolina Pacific, it was impractical to provide the required
financial statements for Carolina Pacific relative to the
Carolina Pacific acquisition as required by Article 11 of
Regulation S-X and this Item 7 of Form 8-K. Transit Group is
now filing such pro forma financial information under cover of
Form 8-K/A.
(a) Financial Statements of Business Acquired
CAROLINA PACIFIC DISTRIBUTORS, INC.
FINANCIAL STATEMENTS FOR THE YEARS
ENDED SEPTEMBER 30, 1996 AND 1995
<PAGE>
Report Of Independent Accountants
July 11, 1997
To the Board of Directors and Stockholders of
Carolina Pacific Distributors, Inc.
In our opinion, the accompanying balance sheet and the related
statements of operations and stockholders' equity and of cash
flows present fairly, in all material respects, the financial
position of Carolina Pacific Distributors, Inc. at September 30,
1996 and 1995, and the results of its operations and its cash
flows for the years then ended in conformity with generally
accepted accounting principles. These financial statements are
the responsibility of the Company's management; our
responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of
these statements in accordance with generally accepted auditing
standards which 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, assessing the
accounting principles used and significant estimates made by
management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for the opinion expressed above.
(Signed)
PRICE WATERHOUSE LLP
<PAGE>
<TABLE>
<CAPTION>
CAROLINA PACIFIC DISTRIBUTORS, INC.
BALANCE SHEET
September 30,
1996 1995
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 102,855 $ 226,058
Accounts receivable 900,692 703,683
Prepaid expenses 67,345 74,150
Deferred tax asset 48,720 93,935
------------- -------------
Total current assets 1,119,612 1,097,826
Long term assets
Properties and equipment, net 2,314,194 3,147,371
------------- -------------
Total assets $ 3,433,806 $ 4,245,197
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long term debt $ 676,672 $ 663,069
Accounts payable 220,717 148,298
Accrued expenses 318,192 500,925
------------- -------------
Total current liabilities 1,215,581 1,312,292
------------- -------------
Long term liabilities
Long term debt 1,514,377 2,191,049
Deferred tax liability 115,786 58,109
------------- -------------
Total liabilities 2,845,744 3,561,450
------------- -------------
Stockholders' equity
Common Stock, S. 0 1 par value;
10,0000,000 shares authorized;
841,214 and 844,183 shares
outstanding at September 30, 1996
and 1995, respectively 8,412 8,441
Additional paid-in capital 2,379 2,387
Retained earnings 577,271 672,919
------------- -------------
Total stockholders' equity 588,062 683,747
------------- -------------
Total liabilities & stockholders'
equity $ 3,433,806 $ 4,245,197
============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
CAROLINA PACIFIC DISTRIBUTORS, INC.
STATEMENT OF OPERATIONS
Year ended
September 30,
1996 1995
<S> <C> <C>
Revenue $ 11,690,758 $ 11,092,626
Operating expenses
Operations salaries and benefits 4,527,578 4,318,304
Fuel 2,419,799 2,104,116
Insurance 266,511 419,139
Tires and maintenance 621,723 543,501
Depreciation 957,206 1,112,851
Facilities expense 126,175 122,679
Other operating costs 374,826 339,886
Selling and administrative expenses 2,135,917 2,109,949
------------- -------------
Total operating expenses 11,429,735 11,070,425
------------- -------------
Operating profit 261,023 22,201
Interest expense 225,719 206,885
------------- -------------
Profit (loss) before income taxes 35,304 (184,684)
Provision for deferred income taxes 102,892 23,336
------------- -------------
Net loss $ (67,588) $ (208,020)
============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
CAROLINA PACIFIC DISTRIBUTORS, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
Common Additional
shares Common paid-in Retained
outstanding stock capital earnings
<S> <C> <C> <C> <C>
Balance at September 30, 1994 847,308 $ 8,473 $ 2,396 $ 914,067
Net loss (208,020)
Retirement of ESOP shares
repurchased (3,125) (32) (9) (33,128)
---------- ---------- ---------- -----------
Balance at September 30, 1995 844,183 8,441 2,387 672,919
Net loss (67,588)
Retirement of ESOP shares
repurchased (2,942) (29) (8) (28,060)
---------- ---------- ---------- -----------
Balance at September 30, 1996 841,241 $ 8,412 $ 2,379 $ 577,271
========== ========== ========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
CAROLINA PACIFIC DISTRIBUTORS, INC.
STATEMENT OF CASH FLOWS
For the year ended
September 30,
1996 1995
<S> <C> <C>
Cash flows from operating activities
Net loss $ (67,588) $ (208,020)
Items not requiring (providing) cash
included in net income
Depreciation 957,206 1,112,851
Gain on sale of property and equipment - (25,063)
Deferred income taxes 102,892 23,336
Changes in assets and liabilities
Accounts receivable (197,009) (391,439)
Prepaid expenses 6,805 (14,740)
Accounts payable 72,419 1,300
Other accrued liabilities (182,733) 350,022
------------- -------------
Net cash provided by operating activities 691,992 848,247
------------- -------------
Cash flows from investing activities
Property and equipment expenditures (199,250) (1,774,117)
Proceeds on disposal of property
and equipment 75,221 138,145
------------- -------------
Net cash used in investing activities (124,029) (1,635,972)
------------- -------------
Cash flows from financing activities
Repayment of long-term debt (663,069) (561,079)
Proceeds from issuance of long-term debt - 1,460,000
Repurchase of common stock (28,097) (33,169)
------------- -------------
Net cash (used in) provided by
financing activities (691,166) 865,752
------------- -------------
Net (decrease) increase in cash and
cash equivalents (123,203) 78,027
Cash and cash equivalents at
beginning of year 226,058 148,031
------------- -------------
Cash and cash equivalents at end of year $ 102,855 $ 226,058
============= ============
Supplemental disclosure of
cash flow information:
Cash paid during the year for:
Income taxes $ 8,225 $ 3,822
Interest 225,719 206,885
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
CAROLINA PACIFIC DISTRIBUTORS, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1996 AND 1995
- ------------------------------------------------
1. THE COMPANY AND ITS SIGNIFICANT ACCOUNTING POLICIES
Carolina Pacific Distributors, Inc. (the Company) is engaged in
the transportation business, serving customers located primarily
on the east and west coast of the United States. The Company's
specialty is shipping less than full truckloads of goods from
one coast of the United States to another.
Revenue recognition
The Company recognizes revenue when shipments are delivered to
the consignee.
Property and equipment
Property, plant and equipment are stated at the lower of cost or
estimated net realizable value and are depreciated over their
useful lives by the straight line and accelerated methods.
Major renewals and betterments are charged to the property
accounts while replacements, maintenance and repairs which do
not improve or extend the lives of the respective assets are
expensed currently. When properties are retired or otherwise
disposed, the appropriate accounts are relieved of costs and
accumulated depreciation and any gain or loss is credited or
charged to income.
The estimated useful lives of buildings and building
improvements range from 15 to 31.5 years; useful lives of
tractors and trailers range from 3 to 7 years; useful lives of
machinery and equipment range from 3 to 5 years; useful lives of
office furniture and equipment range from 3 to 7 years.
Concentrations of credit risk
Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of trade
accounts receivable.
Concentrations of credit risk with respect to trade accounts
receivable are dispersed across different industries and
geographic areas. Of contract and product revenues earned, the
Company derived approximately 28% from one customer in 1996 and
28% and I 1% from two customers in 1995.
Cash and cash equivalents
The Company considers all short-term investments having an
initial maturity of three months or less to be cash equivalents.
Included in cash and cash equivalents are certificates of
deposit with a carrying value of $78,776 and $225,582 at
September 30, 1996 and 1995, respectively.
Income taxes
The Company accounts for income taxes using the liability
method, whereby deferred tax assets and liabilities are
determined based on differences between financial reporting and
tax bases of assets and liabilities measured using enacted tax
rates and laws that will be in effect when the differences are
expected to reverse.
Use of estimates in the preparation of financial statements
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
2. TRADE AND OTHER RECEIVABLES
<TABLE>
<CAPTION>
September 30,
1996 1995
<S> <C> <C>
Accounts receivable trade $ 802,950 $ 678,673
Other receivables 32,375 25,010
Receivable from Carolina Southern 65,367 -
------------ ------------
$ 900,692 $ 703,683
============ ============
</TABLE>
3. PROPERTIES AND EQUIPMENT
<TABLE>
<CAPTION>
September 30,
1996 1995
<S> <C> <C>
Building and improvements $ 939,716 $ 789,961
Tractors and trailers 6,796,446 6,871,667
Machinery and equipment 103,173 103,173
Office furniture and equipment 107,120 107,120
------------ ------------
7,946,455 7,871,921
Less-accumulated depreciation 5,632,261 4,724,550
------------ ------------
$ 2,314,194 $ 3,147,371
============ ============
4. ACCRUED EXPENSES
</TABLE>
<TABLE>
<CAPTION>
September 30,
1996 1995
<S> <C> <C>
Accrual for worker's compensation $ 103,941 $ 249,609
Customer deposits 124,750 155,900
Accrued payroll and vacation 75,802 74,818
Other 13,699 20,598
----------- ------------
$ 318,192 $ 500,925
=========== ============
</TABLE>
5. LONG-TERM DEBT
<TABLE>
<CAPTION>
Long-term debt at September 30, 1996 and 1995 consists of the
following:
September 30,
1996 1995
<S> <C> <C>
Bank term loan, secured by tractors, trailers
and equipment, payable in monthly instalments
of principal and interest of $40,000, with
principal and interest due on October 15,
1999, bearing interest at the bank's prime
rate (8.25% and 8.75% at September 30, $ 1,290,227 $ 1,637,655
1996 and 1995 respectively)
Bank term loan, secured by tractors and
trailers, payable in monthly instalments
of principal and interest of $20,000,
with principal and interest due
on July 1, 2000, bearing interest at
the bank's prime rate (8.25% and 8.75%
at September 30, 1996 and 1995 754,360 922,317
respectively)
Unsecured term note, payable in monthly
instalments of $5,000 commencing June 15,
1995 through January 15, 1996, bearing
interest at 8% - 17,375
Term loan with major stockholder, payable
over 12 months, commencing November 1994
through October 1995, bearing interest
at 10% - 35,406
Term loan with major stockholder, payable
over 3 years, commencing March 1995 through
February 1998, bearing interest at 10% 146,462 241,365
-------------- ------------
2,191,049 2,854,118
Less current portion (676,672) (663,069)
-------------- ------------
$ 1,514,377 $ 2,191,049
============== ============
</TABLE>
Aggregate principal payments on borrowings for each of the next
five years are estimated as follows:
<TABLE>
<S> <C>
1997 $ 676,672
1998 658,512
1999 673,327
2000 182,538
-------------
Total debt $ 2,191,049
=============
</TABLE>
Certain of the Company's debt agreements contain restrictive
covenants which among another things, require the Company to
maintain certain minimum financial ratios. The Company was in
compliance with all covenants at September 30, 1996 and 1995.
6. INCOME TAXES
The components of the provision for income taxes are summarized
as follows:
<TABLE>
<CAPTION>
September 30,
1996 1995
<S> <C> <C>
Current:
Federal $ - $ -
State - -
---------- ----------
- -
---------- ----------
Deferred:
Federal 87,458 19,835
State 15,431 3,501
---------- ---------
Totals $ 102,892 $ 23,336
========== =========
</TABLE>
The provision for income taxes differs from the federal
statutory income tax rate as follows:
<TABLE>
<CAPTION>
September 30,
1996 1995
<S> <C> <C>
Provision (benefit) at
federal statutory rate $ 12,003 $ (62,793)
Non-deductible expenses 120,163 105,739
Other (29,274) (19,610)
----------- ----------
Net provision for
income taxes $ 102,892 $ 23,336
=========== ==========
</TABLE>
A net deferred income tax liability results from temporary
differences in recognition of certain items for tax and
financial statement purposes. The primary sources of these
differences and the (asset liability at September 30, 1996 and
1995 from each were as follows:
<TABLE>
<CAPTION>
September 30,
1996 1995
<S> <C> <C>
Depreciation methods $ 115,786 $ 58,109
Other (48,720) (93,935)
------------- -------------
Totals $ 67,066 $ (35,826)
============= =============
</TABLE>
For income tax purposes, the Company has available net operating
loss carryforwards which may be used to reduce taxable income of
the Company for subsequent years. The carryfor-wards expire in
2007.
7. RELATED PARTY TRANSACTIONS
The Company and Carolina Southern are related parties because a
common stockholder holds a substantial ownership interest in
both companies. Carolina Southern performs similar services as
the Company, but does not travel cross country, focusing its
delivery within the southeastern United States. During the year
ended September 30, 1996, the Company incurred several expenses
on behalf of Carolina Southern. The Company has billed Carolina
Southern for these costs. These billings are reflected in
revenue for the year ended September 30, 1996, and total
$100,423. A receivable from Carolina Southern in the amount of
$65,367 is recorded on the Company's books at September 30,
1996. There were no such transactions during 1995.
During 1996 and 1995, the Company had a land lease agreement
with the Company's President. During the years ended September
30, 1996 and 1995 the Company paid $96,000 in operating lease
expenses.
During the year ended September 30, 1995, the Company borrowed a
total of $500,000 from the Company's President, and repaid
approximately $223,000 in principal. During the year ended
September 30, 1996, no additional funds were borrowed and
principal repayments totaled approximately $130,000. The
interest rate on the borrowings is 10%, and interest payments
totaled approximately $21,761 and $29,256 for the years ended
September 30, 1996 and 1995, respectively. See additional
discussion of this debt in Note 5.
8. COMMITMENTS AND CONTINGENCIES
The Company leases certain facilities and equipment under
operating leases which expire at various dates through 2002.
The minimum rental obligations under these leases are as follows:
<TABLE>
<S> <C>
1997 $ 97,307
1998 99,138
1999 99,138
2000 99,138
2001 and thereafter 153,830
-----------
$ 548,551
===========
Rent expense totaled $102,900 and $102,033 in 1996 and 1995,
respectively.
The Company has certain contingent liabilities resulting from
litigation and claims incident to the ordinary course of
business. Management believes that the probable resolution of
such contingencies will not materially affect the financial
position or results of operations of the Company.
9. EMPLOYEE STOCK OWNERSHIP PLAN
In October 1988, the Company established an Employee Stock
Ownership Plan (ESOP) which covers substantially all of its
employees. The Company made one contribution in the amount of
$2,545,500 to the ESOP in August 1989 and has made no
contributions since that time. The original contribution was
used to purchase 254,550 shares of stock from the Company's
President, all of which are currently allocated to employees.
In fiscal 1995, the Company adopted the provisions of AICPA
Statement of Position No. 93-6 "Employer's Accounting for
Employee Stock Ownership Plans" (the SOP). As allowed by the
SOP, the Company has elected not to apply the SOP's provisions
to shares acquired prior to fiscal 1994. The adoption of the
SOP did not have a material impact on the financial statements.
The Company is required to repurchase shares at the employee's
option. The repurchase price is determined based upon the
annual appraisal of an independent firm. During fiscal 1995,
the Corn any purchased 3,125 shares for a total of $33,169.
During fiscal 1996, the Company purchased 2,942 shares for a
total of $28,097. The shares were retired upon purchase,
resulting in allocated shares outstanding at the end of fiscal
year 1995 of 250,233 and at the end of fiscal year 1996 of
247,291.
10. BENEFIT PLAN
The Company has a defined contribution 401 (k) plan in which
substantially all employees can participate. The Company
matches participant contributions to the plan up to specified
percentages of the employee's salary. The Company's
contributions to the plan were approximately $4,725 and $4,375
in 1996 and 1995, respectively.
11. SUBSEQUENT EVENTS
As discussed in Note 7, the Company leased land from the
Company's President. In May 1997 the Company terminated this
lease. One of the provisions of the lease agreement was that
any improvements placed upon the land became the property of the
lessor upon termination of the lease. A building and certain
improvements appropriately capitalized at acquisition date will
revert to the Company's President in fiscal 1997. The net book
value of these items was $433,758 at September 30, 1996.
On July 11, 1997 all outstanding stock of the Company was
acquired by Transit Group, Inc. for a purchase price of
approximately $11.3 million consisting of $3.7 million in cash,
the issuance of 1,733,000 of Transit Group, Inc. stock for all
issued and outstanding common stock of the Company and
assumption of approximately $0.6 million of the Company's debt.
In connection with the business combination, the Company's ESOP
was frozen.
(b) Pro Forma Financial Information
TRANSIT GROUP, INC.
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
JUNE 30, 1997 (a)
(in thousands, except shares)
</TABLE>
<TABLE>
<CAPTION>
Unaudited Unaudited
Transit Carolina Pro Forma Pro Forma
Group, Inc. Pacific Adjustments Combined
<S> <C> <C> <C> <C> <C>
Current assets $ 284 $ 973 $ - $ 1,257
Property and equipment 4 1,787 660 (b) 2,451
Goodwill - - 15,213 (c) 15,213
Other noncurrent assets 6,764 - - 6,764
--------- --------- --------- ----------
Total assets $ 7,052 $ 2,760 $ 15,873 $ 25,685
========= ========= ========= ==========
Current debt $ 12,887 $ 711 $ 132 (b) $ 13,730
Other current liabilities - 407 - 407
Long-term debt - 1,441 3,500 (c) 5,469
528 (b)
--------- --------- --------- ----------
Total liabilities 12,887 2,559 3,632 19,606
--------- --------- --------- ----------
Stockholder's equity (deficit) (5,835) 201 11,713 (c) 6,079
--------- --------- --------- ----------
Total liabilities &
stockholders' equity $ 7,052 $ 2,760 $ 15,345 $ 25,685
========= ========= ========= ==========
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
TRANSIT GROUP, INC.
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (a)
(in thousands, except shares)
Unaudited Unaudited
Transit Carolina Pro Forma Pro Forma
Group, Inc. Pacific Adjustments Combined
<S> <C> <C> <C> <C> <C>
Revenues $ - $ 4,722 $ 1,500 (b) $ 6,222
Expenses
Salaries and wages expense 1,780 (200) (d) 2,048
468 (b)
Operating expense 1,498 794 (b) 2,292
Depreciation and amortization 1,460 (500) (e) 1,279
253 (c)
66 (b)
General and administration
expense 268 43 311
Interest expense 68 140 (f) 208
Other expense 18 18
------------ ------------ ------------ ------------
Total expenses 268 4,867 1,021 - 6,156
------------ ------------ ------------ ------------
Operating income (loss) (268) (145) 479 66
Provision (benefit) for
income taxes
------------ ------------ ------------ -------------
Income (loss) before
discontinued operations (268) (145) 479 - 66
Discontinued operations (13,570) (13,570)
------------ ------------ ------------ -------------
Net income (loss) $ (13,838) $ (145) $ 479 $ (13,504)
============ ============ ============ =============
Loss per common share:
Continuing operations $ (0.13) $ (0.05)
Discontinued operations (2.77) (2.04)
------------ -------------
Total $ (2.90) $ (2.09)
============ =============
Weighted average number
of shares 4,909,528 6,642,528
============ =============
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
TRANSIT GROUP, INC.
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996 (a)
(in thousands, except shares)
Unaudited Unaudited
Transit Carolina Pro Forma Pro Forma
Group, Inc. Pacific Adjustments Combined
<S> <C> <C> <C> <C> <C>
Revenues $ 23,404 $ 11,691 $ 3,000 (b) $ 14,691
(23,404) (g)
Expenses
Salaries and wages expense 13,377 4,528 (800) (d) 4,663
935 (b)
(13,377) (g)
Operating expense 7,126 3,434 1,587 (b) 5,021
(7,126) (g)
Depreciation and amortization 1,857 957 (40) (e) 1,556
507 (c)
132 (b)
(1,857) (g)
General and administration
expense 5,335 2,136 (4,585) (g) 2,886
Interest expense 717 226 280 (f) 506
(717) (g)
Other expense 141 375 (141) (g) 375
------------- ------------- ------------- -------------
Total expenses 28,553 11,656 (25,202) 15,007
------------- ------------- ------------- -------------
Operating income (loss) (5,149) 35 4,798 (316)
Provision for deferred income
taxes (103) 103 (h) -
------------- ------------- ------------- -------------
Net income (loss) $ (5,149) $ (68) $ 4,901 - $ (316)
============= ============= ============= =============
Loss per common share $ (1.48) $ (0.14)
============= =============
Weighted average number of shares 3,758,671 5,491,561
============= =============
See accompanying notes.
<PAGE>
TRANSIT GROUP, INC.
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL
STATEMENTS
(a) On July 11, 1997, Transit Group, Inc. (the "Company")
completed the acquisition of Carolina Pacific Distributors, Inc.
("Carolina Pacific"). Pursuant to the Stock Purchase Agreement
executed at closing (the "Agreement"), the Company purchased all
of the outstanding capital stock of Carolina Pacific and the
business and related assets operated and owned by the
shareholders of Carolina Pacific for a purchase price of
approximately $11.3 million consisting of $3.7 million in cash,
issuance of 1,733,000 shares of common stock of the Company to
the shareholders of Carolina Pacific and assumption of
approximately $0.6 million of debt. The Company's financial
statements are prepared on a calendar year-end basis while
Carolina Pacific used a fiscal year ended September 30, 1996.
Accordingly, the accompanying unaudited pro forma combined
financial statements combine the December 31, 1996 and June 30,
1997 financial statements of the Company and the September 30,
1996 and June 30, 1997 financial statements of Carolina Pacific,
respectively. Such financial information is intended to
reflect the combined financial position and results of
operations as of each of the periods presented and is not
necessarily indicative of future combined financial position or
results of operations.
(b) To reflect the purchase by the Company of certain additional
productive assets from an affiliate of Carolina Pacific and the
assumption of related borrowings.
(c) To reflect the APB 16 purchase accounting adjustments
including the financing of $3.5 million in cash paid at
closing, the issuance of 1,733,000 shares at fair market value
of the Company's common stock to the shareholders of Carolina
Pacific, resulting goodwill of $15.2 million and amortization of
goodwill recorded in connection with the acquisition over a
30-year period.
(d) To reflect certain adjustments to salaries and employee
benefits expense resulting from the acquisition.
(e) To eliminate the depreciation expense associated with certain
assets not acquired in the purchase of Carolina Pacific.
(f) To reflect interest expense associated with new borrowings
acquired in connection with the acquisition at an average annual
interest rate of 8.0%.
(g) To eliminate the discontinued parcel delivery and courier
operations at Transit Group, Inc.
(h) To reflect the utilization of the Company's net operating
loss carryforwards to offset Carolina Pacific taxable income.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
TRANSIT GROUP, INC.
Date: September 24, 1997
/s/ Wayne N. Nellums
- -----------------------
Wayne N. Nellums
Vice President,
Chief Financial Officer
and Secretary
</TABLE>
