TRISM INC /DE/, 10-K, 1997-03-28

TRISM INC /DE/
10-K, 1997-03-28
TRUCKING (NO LOCAL)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)

[ X ] Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (Fee Required)

For the fiscal year ended December 31, 1996

[ ] 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 -----------------

Commission file number 0-23210

TRISM, INC.
(Exact name of registrant as specified in its charter)

DELAWARE 13-3491658
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)

4174 Jiles Road, Kennesaw, Georgia 30144
(Address of principal executive offices) (Zip Code)

(770) 795-4600
Registrant's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Name of each exchange on
which registered

-------------------- -------------------------

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, Par Value $.01
(Title of class)

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 filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of the 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. [ ]

The aggregate market value of the voting stock held by non-
affiliates of the registrant, computed by reference to the
closing sales price as quoted on NASDAQ on February 28, 1997 was
$14,611,362.

As of February 28, 1997, 5,737,337 shares of TRISM, Inc.'s common
stock, par value $.01 per share, were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of TRISM, Inc.'s proxy statement, to be filed not later
than 120 days after the end of the fiscal year covered by this
report, are incorporated by reference into Part III.

<PAGE>

TABLE OF CONTENTS

ITEM PAGE

PART I. 1. Business 3
2. Properties 8
3. Legal Proceedings 9
4. Submission of Matters to a
Vote of Security Holders 9
Executive Officers of the Registrant
and Principal Subsidiaries 9

PART II. 5. Market for the Registrant's Common
Equity and Related Stockholder
Matters 10
6. Selected Financial Data and Operating
Statistics 11
7. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 13
8. Financial Statements and Supplementary
Data 21
9. Changes in and Disagreements with
Accountants on Accounting and
Financial Disclosure 39

PART III. 10. Directors and Executive Officers
of the Registrant 39
11. Executive Compensation 39
12. Security Ownership of Certain
Beneficial Owners and Management 39
13. Certain Relationships and Related
Transactions 39

PART IV. 14. Exhibits, Financial Statement
Schedules and Reports on Form 8-K 40

Exhibit Index 40

<PAGE>

PART I.

ITEM 1. BUSINESS

OVERVIEW

TRISM, Inc. (TRISM or the Company) is incorporated in
Delaware and specializes in transporting heavy machinery and
equipment, hazardous waste, explosives and radioactive materials.
The Company conducts its business through operating subsidiaries.
The principal subsidiaries are Trism Specialized Carriers, Inc.
(TSC), Tri-State Motor Transit Co. (TSMT), and Trism Transport
Services, Inc. (TTSI). TSC transports oversized loads, including
heavy machinery and large equipment used in the agricultural,
construction, energy, manufacturing and aerospace industries.
TSMT transports explosives, hazardous waste and radioactive
materials for customers such as the United States government, and
the mining, road building, chemical processing and utility
industries. TTSI transports building materials, lumber, steel
and metal products for customers such as Georgia Pacific.

HISTORY

The Company entered the trucking business in January 1990
with the acquisition of TSMT, which was engaged in the
transportation of explosives, hazardous waste, radioactive
materials, aerospace equipment and heavy machinery. The Company
completed several strategic transactions in order to increase its
market share in the explosives, hazardous waste and radioactive
materials sector of its operations, to expand the geographic
scope of its operations and to obtain the necessary lane density
to achieve profitability in the heavy machinery sector of its
operations.

In March 1991, the Company acquired substantially all of
the fixed assets of Lucas Trucking & Leasing, Inc.
(Lucas), an Arkansas-based truckload carrier in the
explosives transportation business, which had revenues of
approximately $10 million in 1990.

In August 1991, the Company acquired McGil Specialized
Carriers, Inc. (McGil), a Georgia-based heavy machinery
truckload company, which had revenues of approximately $64
million in 1990.

In August 1991, the Company acquired a substantial portion
of the operating assets, such as fuel, tires and spare
parts, and directly assumed certain equipment obligations
of PST, Inc. (PST).

In January 1992, the Company acquired substantially all the
assets of Diversified Freight Services, Inc. (DFS), a
Houston-based heavy machinery freight broker, which had
revenues of approximately $11 million in 1991.

In January 1992, the Company founded TSC, Inc. by combining
the heavy machinery operations of TSMT with those of McGil
and DFS.

In December 1993, the Company issued $100 million of 10.75%
Senior Subordinated Notes, due 2000, the proceeds of which
were used to repay certain existing indebtedness, acquire
revenue equipment under lease and purchase new revenue
equipment.

In February 1994, the Company completed an initial public
offering of 1,800,000 shares of common stock at an initial
public offering price of $14 per share. The net proceeds
to the Company of $21,723,776 were used to repay notes and
miscellaneous equipment obligations.

In August 1994, the Company acquired Diablo Transportation,
Inc. (Diablo), a California-based truckload carrier of
explosives, hazardous waste and radioactive materials,
which had revenues of approximately $8 million in 1993.

In September 1994, the Company acquired E.L. Powell & Sons
Trucking Co., Inc. (Powell), an Oklahoma-based heavy
machinery truckload company, which had revenues of
approximately $11.5 million in 1993.

<PAGE>

In March 1995, the Company acquired Kavanagh & Associates,
Inc. (Kavanagh), a Clinton, New Jersey based logistics
firm which specializes in the same type freight most
frequently hauled by TRISM.

In August 1995, the Company acquired the assets of C.I.
Whitten Transfer Co. (Whitten), a trucking firm based in
Indianapolis, Indiana, and a subsidiary of Intrenet, Inc.
Whitten specializes in the transportation of explosives
and munitions, which is compatible with the market segment
of TSMT.

In October 1995, the Company acquired certain assets of
Eastern Flatbed Systems, Inc., a trucking firm based near
Salt Lake City, Utah. Eastern Flatbed specialized in
flatbed trailer service to the building materials markets
in the Southwest and Southeast Regions of the United
States. The Company formed TTSI to continue service to the
general commodity flatbed market and to provide lane
balancing freight for the Company's specialized operating
units.

In August 1996, the Company acquired the business and
certain assets of the Special Commodities division of J.B.
Hunt Transport, Inc. (Special Commodities). Special
Commodities specialized in the transportation of hazardous
waste and radioactive materials. The acquired operations
were combined into the Hazardous Waste division of TSMT.

As a result of continued operating losses at Trism Transport
Services, Inc. during 1996, the Company elected to shut
down component operations in the West, consolidate
operations in Kennesaw, Georgia, and write off unamortized
goodwill associated with the acquisition in the amount of
$4.1 million. Accordingly, 1996 results were significantly
impacted by these actions.

In February 1997, the Company announced an organizational
restructuring to consolidate certain sales, operations and
administrative functions and reengineer certain business
processes to reduce overhead costs and increase operational
efficiency. The Company will include in its 1997 results
restructuring charges for the termination of certain
employees, relocation of key personnel, engagement of an
outside consultant and the closing of unproductive
facilities. The Company estimates these charges to
approximate $2.5 million to $3.5 million in the first and
second quarters of 1997.

STRATEGY

TRISM's business strategy is to offer high quality, specialized
transportation services in specific markets of the trucking industry
to service-sensitive customers. The key components of the Company's
strategy are as follows:

MARKET LEADERSHIP

TRISM has sought to enter niche trucking markets in which it
can become the preeminent carrier. These markets generate higher
revenues per mile than general freight carriage. There are
substantial service and productivity advantages to having a large
specialized equipment fleet including high route density and a
large and diverse customer base.

NATIONWIDE COORDINATION OF OPERATIONS

TRISM's coordinated nationwide operations and careful compliance by the
Company's drivers and field personnel with a synchronized network load plan
are key elements in its strategy. In order to minimize down time and to
reduce empty miles, the Company coordinates its nationwide operations by
utilizing systems designed to match driver and equipment availability to
customer and geographic demand. As part of this process the Company has
equipped substantially all of its tractors with satellite communications
equipment which enables the Company's drivers and dispatchers to communicate
with each other at any time regardless of where a tractor is in the
continental United States. This system enables the Company to provide its
customers with current information on the location and status of cargo while
in transit. In addition, the Company believes that its reliance predominantly
on Company-employee drivers and field sales personnel, rather than
independent contractors and third-party sales agents or brokers, aids its
ability to coordinate operations.

<PAGE>

SPECIALIZED OPERATING CAPABILITIES AND EQUIPMENT

TRISM has the capability of handling all of an individual shipper's
freight in the Company's niche markets. The Company's operating capabilities
include a variety of specialized equipment, regulatory permits and compliance
expertise, satellite communications and technology, specialized terminals
including segregated munitions storage areas and driver selectivity and
training. The Company owns 27 types of trailers in order to meet the
specialized needs of shippers. Because of the number and variety of trailers
in the Company's fleet, the Company is able to accommodate large nationwide
shippers' needs on a timely basis. The breadth of these equipment options
is an integral part of the Company's position with its major customers.

SELECTED ACQUISITIONS AND PRIVATE FLEET CONVERSIONS

The Company was established and has grown through
acquisitions which demonstrated sufficient growth potential and
which broadened its geographic scope and customer base. The
Company does not intend to acquire additional businesses until
the corporate restructuring is complete and the benefits
therefrom are realized. However, the Company believes that the
continuing consolidation in the trucking industry and conversion
of private fleets will provide profitable acquisition
opportunities in the future.

MARKET GROUPS

The Company has three market groups: one which specializes
in the transportation of heavy machinery and large equipment, one
which specializes in the transportation of hazardous waste,
explosives and radioactive materials, and one which specializes
in the transportation of building materials, lumber, steel and
metal products. Set forth in the following tables are
contributions of revenues for each of the Company's market groups
for the three years ended December 31, 1996. Revenues and
percent of revenues exclude corporate adjustments and
intercompany eliminations.

HEAVY HAUL GROUP
1996 1995 1994
Revenues (in thousands) $180,325 $174,683 $151,447
Percent of revenues 58% 64% 66%

The heavy haul group specializes in the transportation of
oversized loads. The largest markets for the heavy haul group
are construction and farm machinery manufacturers and dealers,
manufacturers of transformers, turbines, electric switchgear and
power transmission equipment, importers of industrial durable
goods, the United States military, suppliers and contractors to
industrial and public construction, metal and platework
fabricators, manufacturers of aircraft engines and parts, and
manufacturers of vessels to contain inorganic chemicals.
Approximately one-fourth of the loads transported require a
special permit from state or local governments or an escort.

Its principal operating center is located in Kennesaw,
Georgia, and it operates 30 terminals strategically located
throughout the continental United States. The operating
companies within the heavy specialized group have operating
authority in the entire continental United States and nine
provinces of Canada.

SECURED MATERIALS GROUP
1996 1995 1994
Revenues (in thousands) $97,930 $91,502 $78,740
Percent of revenues 31% 34% 34%

The secured materials group is characterized by the toxic
or explosive nature and special packing and handling requirements
of the cargo. The cargo typically consists of hazardous waste,
spent nuclear fuel from power plants, military and commercial
weapons and radioactive materials. Customers include various
agencies of the United States government and the United States
military, waste generators and environmental clean-up firms. As
the safety and security of the cargo is critical in this market,
permits, specialized equipment and specially-trained drivers are
frequently required.

Its principal operating center is located in Joplin,
Missouri, and it operates 28 terminals strategically located
throughout the continental United States. The operating companies
within the secured materials group have operating authority in
the entire continental United States and eight provinces of
Canada.

<PAGE>

TRISM TRANSPORT GROUP
October 1 to
December 31
1996 1995

Revenues (in thousands) $34,390 $6,786
Percent of revenues 11% 2%

The transport group serves the shipping needs of building
materials, lumber, steel and metal industries. By operating
light weight tractors and flatbed trailers, TTSI is able to offer
an increased payload to its customers and obtain a premium
freight rate in turn.

Its principal operations have been combined with TSC in
Kennesaw, Georgia.

SEASONALITY

The Company's operations are subject to seasonal trends
common to the trucking industry. Results of operations for the
quarters ending in December and March are materially lower than
the quarters ending in June and September due to reduced
shipments and higher operating costs in the winter months.

CUSTOMERS

TRISM's largest customer is the United States government
(principally the Department of Defense) which accounted for
approximately 17 percent of consolidated revenues in 1996. The
remainder of the Company's customer base is diversified in terms
of customer concentration, industry and geography, and none of
which accounted for more than 10 percent of the Company's
consolidated revenues. The Company's customers include such
industrial companies as Westinghouse Electric Corp., General
Electric Co., J.I. Case Company, Imperial Chemical Industries
PLC, The Boeing Co., Caterpillar Inc., Chem Waste Management,
Inc. and Georgia Pacific.

EMPLOYEES

At December 31, 1996, the Company had 3,137 employees of
whom 2,220 were drivers. Like other trucking operations, TRISM
experiences a high turnover rate (approximately 106% for 1996) of
its Company-employed drivers and contract operators; however,
management believes that the turnover rate of its drivers in
certain operations is below the industry average. Regardless,
the turnover of drivers often results in idle tractors and loss
of available revenues. To combat this issue, the Company
increased driver pay in March 1997 and September 1994, and has
significantly intensified driver recruitment efforts. Safety and
dependability of all drivers are of great importance to the
Company's operations. Driver applicants are required to pass,
among other things, a drug test. The Company's employees are not
represented by unions.

RISK MANAGEMENT AND INSURANCE

The primary risk areas in the Company's businesses are
liability for bodily injury and property damage, workers'
compensation and cargo loss and damage. The Company maintains
insurance against these risks and is subject to liability for
deductibles with regard to personal injury and property damage
and self-insured retention with regard to workers' compensation
under the policies of insurance. The Company currently maintains
liability insurance for bodily injury and property damage in the
amount of $100 million per occurrence. The current deductible for
bodily injury and property damage is $500,000 per occurrence
subject to satisfaction of an additional $750,000. The Company
is a qualified workers' compensation self-insurer in the States
of Missouri and Oklahoma where most of it's drivers are
domiciled. Losses in excess of $500,000 are insured by an excess
workers' compensation policy up to $10 million per occurrence. In
all other states statutory workers' compensation insurance is
maintained with a deductible or retro program with a $500,000
loss limit per occurrence to the Company. The Company also
self-insures as to damage or loss to the property and equipment
it owns or leases, subject to insurance coverage maintained in
the event of a catastrophic loss in excess of $50,000 for
property and $100,000 for equipment. Certain of the shipments
transported by the Company are very valuable. The Company
currently maintains cargo loss and damage insurance in the amount
of $10 million per occurrence. The current deductible for cargo
loss and damage insurance is $250,000 per occurrence.

<PAGE>

The Company believes its safety record at TSC and TSMT are
above the industry average. Both TSC and TSMT, have received the
Department of Transportation (DOT) highest safety rating for more
than five consecutive years, (total accidents and reportable
accidents). In addition to following DOT regulations requiring
random drug testing and post-accident drug testing, the Company
rigorously enforces its accident and incident reporting and
follow-up standards.

SAFETY

The Company employs 53 safety specialists and maintains
safety programs designed to meet its specific needs. In addition,
the Company employs specialists to perform compliance checks and
to conduct safety tests throughout the Company's operations. The
Company conducts a number of safety programs designed to promote
compliance with rules and regulations and to reduce accidents and
cargo claims. These programs include an incentive pay program for
accident and claim-free driving, an ongoing Substance Abuse
Prevention Program, driver safety meetings, distribution of
safety bulletins to drivers and participation in national safety
associations. The Company reviews accidents and claims on a daily
basis to design prevention programs.

INFORMATION TECHNOLOGY

In 1995 and 1996, TRISM made major technological
advancements in the Company's continuing efforts to integrate the
operations of all TRISM companies. In 1996, all Trism Secured
Transportation companies were brought on line with other TRISM
operating companies. The Company also successfully moved its
informational hardware to its new corporate headquarters located
in Kennesaw, Georgia.

The Company completed the final stages of installing
satellite communications in all truck fleets. Not only does this
upgrade allow for real-time communications for customers, it
allows the Company to tap into onboard computers to retrieve
specific data on company tractors. This technology will link
TRISM to companies in the United States and around the world.

Additionally, the Company has begun to test and implement a
software program designed to optimize truckload decision making.
This software, called MICROMAP, will give load planners the power
to improve service while reducing costs.

FUEL AVAILABILITY AND COST

The Company's fuel requirements are met by commercial fuel
stops. The Company has entered into agreements with national
truckstop chains which provide for discounts on fuel. The
Company may, from time to time, enter into the forward purchases
of fuel for delivering through its truckstop network for up to 40
percent of its monthly usage. The Company believes that a portion
of any increase in fuel costs or fuel taxes generally would be
recoverable from its customers in the form of higher rates
although a time lag could occur in implementing and collecting
these costs.

COMPETITION AND REGULATION

The trucking industry is highly competitive. TRISM competes
with other truckload carriers, private carriage fleets and, to a
lesser extent, railroads. Although the increased competition
resulting from deregulation has created downward pressure on
rates, the Company has mitigated this decline by setting rates on
the basis of its quality of service and its ability to provide
specialized services.

The trucking industry has been substantially deregulated
since the Motor Carrier Act of 1980. Although the Company is
still subject to the regulatory powers of the Department of
Transportation (which has assumed the trucking regulation
responsibilities from the Interstate Commerce Commission), as are
all interstate common carriers by motor vehicle, many of the
previous regulatory barriers for entry into the trucking business
have been eased. Further, as a result of deregulation, operating
authorities for handling commodities in individual states are
more easily obtained by new and existing carriers and certain
restrictions on transportation have been eased.

The DOT sets safety and equipment standards, as well as
hours of service regulations for drivers. The transportation of
hazardous waste and hazardous materials is regulated by federal,
state and local governments. Generally, certain procedures must
be followed, pre-notifications given and permits obtained when
transporting these materials.

<PAGE>

ENVIRONMENTAL MATTERS

TRISM's operations as well as those of its competitors, are
subject to extensive federal, state and local environmental
regulations. In order to comply with such regulations and to be
consistent with the Company's corporate environmental policy,
normal operating procedures include practices to protect the
environment. Amounts expended relating to such practices are
part of the normal day-to-day costs of TRISM's business
operations.

ITEM 2. PROPERTIES

FACILITIES

The Company owns executive and administrative offices in
Kennesaw, Georgia and Joplin, Missouri and leases additional
executive and administrative offices in American Fork, Utah;
Tulsa, Oklahoma and Byron, California. The Company's principal
operational headquarters are in Kennesaw, Georgia and Joplin,
Missouri. These facilities provide sufficient space for the
Company to coordinate its nationwide operations.

As of December 31, 1996, the Company owned 18 terminals and
leased 28 terminals. All but one terminal are in present use by
the Company. These terminals are strategically located in 23
states throughout the United States. From these terminals, the
Company caters to service-sensitive customers transporting cargo
in truckload quantities to single destinations throughout the
continental United States and Canada. Mostly the Company
arranges for shipments into Mexico through agreements it maintains
with Mexican trucking companies.

The Company may consolidate operations throughout its
terminal network as a result of the 1997 restructuring. See Note
21 of Notes to the Company's Consolidated Financial Statements.

REVENUE EQUIPMENT AND MAINTENANCE

TRISM utilizes a wide range of specialized equipment
designed to meet its customers' varied transportation
requirements which distinguishes the Company from many other
large truckload carriers. To meet its customers' specialized
needs, the Company's trailer fleet consists of 27 types of
trailers, including closed vans, flat beds, drop frames, double
drops, extendibles, low-boy and dromedary trailers.

The Company's policy is to replace tractors on a four to
five year cycle, resulting in an average fleet age of two to
three years. At December 31, 1996, the average age of the
Company's tractor fleet was 2.45 years. The Company's policy is
to replace trailers on a five to ten year cycle resulting in an
average fleet age of four to eight years. At December 31, 1996,
the average age of the Company's trailer fleet was 6.65 years.

TRISM operated the following tractors and trailers at
December 31:
1996 1995
Tractors:
Owned(1) 1,031 1,278
Leased(1) 982 652
Independent contractors 161 281
----- -----
Total 2,174 2,211
===== =====
Trailers:
Owned 4,504 4,191
Leased 302 489
----- -----
Total 4,806 4,680
===== =====

(1) Operated by Company-employed drivers.

<PAGE>

ITEM 3. LEGAL PROCEEDINGS

The Company is a party to certain legal proceedings
incidental to its business, primarily involving claims for
personal injury or property damage, workers compensation, and
cargo loss and damage arising from the transportation of freight.
With regard to personal injury, property damage, workers'
compensation claims, and cargo claims, the Company is and has
been covered by insurance as noted above. Such matters may include
claims for punitive damages. It is an open question in
some jurisdictions in which the Company does business as to
whether or not punitive damages awards are covered by insurance.

The Company is a defendant in one additional litigation
pending in the Circuit Court of Jefferson County, Alabama which
is not noteworthy except for the plaintiff's excessive demand.
The case is captioned ROY A. REESE V. TRISM SPECIALIZED CARRIERS,
INC. AND TRI-STATE MOTOR TRANSIT COMPANY. It arises from a
lease, transfer and consulting agreement between the Company and
plaintiff (Mr. Reese and his wholly owned corporation) dated
August 24, 1992. Plaintiff alleges breach of contract,
promissory fraud, conversion and conspiracy claims arising from
the Company's termination of the contract. He seeks compensatory
and punitive damages. The Company maintains that it properly
terminated the contract because of misrepresentations and non-
performance by plaintiff and his company, and has asserted
certain counterclaims. The case was tried in August 1996 and
plaintiff was awarded $47,000 in rental fees admitted by TRISM to
be due for the use of plaintiff's trailer equipment after
cancellation of the original contract. This portion of the
plaintiff's claim was never contested by TRISM. All other claims
for damages were found in favor of the defendant (TRISM). The
case is currently on appeal by plaintiff. The Company is
vigorously contesting the appeal and believes it will prevail.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

During the fourth quarter of 1996, no matters were submitted
to a vote of security holders.

EXECUTIVE OFFICERS OF THE REGISTRANT AND PRINCIPAL SUBSIDIARIES

The following sets forth information about the executive
officers of the Company as of March 15, 1997. The business
address of each executive officer is the address of the Company,
4174 Jiles Road, Kennesaw, Georgia 30144, unless otherwise
indicated, and each executive officer is a United States citizen.

James M. Revie, age 60, has been Chief Executive Officer of
the Company since August 1995, Chairman of the Board of Directors
since May 1993, and a Director of the Company since August 1992.
He was Vice Chairman of Scott-Macon, Ltd., New York, NY, an
investment banking firm, from February 1991 until March 31, 1995.

John J. Kilcullen, age 55, has been President and Chief
Operating Officer of the Company since August 1995. He was
President and Chief Executive Officer of Chemical Lehman Tank
lines, Inc., a transporter of bulk chemicals and hazardous
materials, for more than five years prior to August 1995.

Gary W. Hartter, age 55, was named Executive Vice President
of Sales and Operations as well as the President of each
Subsidiary for the Company in February, 1997. Mr. Hartter was
the President and Chief Operating Officer of Trism Specialized
Carriers since September 1992, and was the Senior Vice President
of Marketing for the Company from August 1991 to September 1992.
He was the Executive Vice President of Marketing for McGil from
August 1991 to September 1992.

James G. Overley, age 33, has been Senior Vice President,
Chief Financial Officer and Treasurer of the Company since July
1996. He was the Vice President of Finance, Chief Financial
Officer and Treasurer at Burlington Motor Holdings, Inc. from
October 1995 to July 1996. He held various other financial
management positions with Burlington Motor Holdings, Inc. for
more than five years prior to October 1995.

Ralph S. Nelson, age 54, has been Senior Vice President,
General Counsel and Secretary of the Company since April 1996.
He was Senior Vice President, General Counsel and Secretary at
Burlington Motor Holdings, Inc. for more than five years prior to
April 1996.

<PAGE>

PART II.

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

The Company's common stock, owned by 96 stockholders of
record as December 31, 1996, is traded on the National
Association of Securities Dealers Automated Quotation National
Market System (NASDAQ) under the symbol "TRSM." The following
table sets forth the high and low closing sales prices for the
Company's common stock as reported by NASDAQ for 1996 and 1995.

<TABLE>
<CAPTION>
1995 High Low Close
<S> <C> <C> <C>
First quarter 9 1/2 6 3/4 8

Second quarter 8 3/4 6 3/4 7 1/2

Third quarter 9 3/4 6 1/2 7 1/4

Fourth quarter 8 1/2 5 1/2 6

1996 High Low Close

First quarter 6 9/16 4 3/4 6

Second quarter 6 1/4 4 3/4 5 5/8

Third quarter 6 3 7/8 4 1/8

Fourth quarter 4 5/8 3 1/2 3 3/4
</TABLE>

The Company has never paid a cash dividend on its common
stock. It is the current intention of the Company's Board of
Directors to continue to retain earnings to finance the growth of
the Company's business rather than to pay dividends. Future
payment of cash dividends will depend upon the financial
condition, results of operations and capital commitments of the
Company as well as other factors deemed relevant by the Board of
Directors.

<PAGE>

ITEM 6. SELECTED FINANCIAL DATA AND OPERATING STATISTICS

The following table sets forth selected consolidated
financial data for the periods indicated and should be read in
conjunction with the consolidated financial statements and
related notes. The selected financial data for each of the five
years in the period ended December 31, 1996 was derived from the
Company's audited consolidated financial statements.

YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1995 1994 1993 1992
SELECTED FINANCIAL DATA (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
For the year:
Revenues $310,033 $268,444 $225,191 $210,590 $210,601
Operating income 5,082 19,593 19,401 11,378 3,529
Income (loss) before extraordinary
items and cumulative effect of
change in accounting method $ (6,598) $ 3,874 $ 4,781 $ 1,548 $ (4,840)
Extraordinary loss, net of tax (a) (231) (385) (1,140)
Cumulative effect of change in
accounting for income taxes,
net of tax (b) 222
-------- ------- ------- ------ -------
Net income (loss) (6,598) 3,874 4,550 1,385 (5,980)
Cumulative preferred stock dividends 300 302
-------- ------- ------- ------ -------
Net income (loss) available to
common stockholders $ (6,598) $ 3,874 $ 4,550 $ 1,085 $ (6,282)
======== ======= ====== ======= =======
Earnings (loss) per common share:
Income (loss) before extraordinary items
and cumulative effect of change in
accounting method $ (1.15) $ .67 $ .82 $ .46 $ (2.08)
Extraordinary loss (.04) (.11) (.49)
Cumulative effect of change in
accounting for income taxes .06
Cumulative preferred stock dividends (.09) (.13)
------- ------- ------ ------ -------
Earnings (loss) per common share $ ( 1.15) $ .67 $ .78 $ .32 $ (2.70)
======= ======= ====== ====== =======
Number of shares used in computation
of earnings (loss) per common share 5,735 5,759 5,846 3,391 2,330

At year end:
Total assets $ 232,497 $218,771 $208,001 $168,649 $116,893
Long-term debt (including
current portion) 163,223 137,647 139,711 116,468 56,889
Redeemable preferred stock 3,658 4,584
Common stockholders' equity (deficit) 28,750 35,107 32,206 5,552 (1,603)
Common stockholders' equity (deficit)
per common share 5.01 6.12 5.48 1.40 (.59)
Common shares outstanding 5,737 5,733 5,879 3,978 2,740

Selected operating data
For the year:
Operating ratio 98.4% 92.7% 91.4% 94.4% 98.3%
Revenue per loaded mile (c) $1.69 $1.71 $1.73 $1.66 $1.62
Revenue per total mile (c) $1.40 $1.41 $1.45 $1.39 $1.33
Load factor (d) 82.9% 82.4% 84.0% 83.7% 82.0%
Daily revenue per tractor (e) $505 $527 $555 $540 $499
Average length of haul in miles (f) 819 900 953 941 900

Weighted average number of:
Employees (g)
Drivers 2,173 1,920 1,630 1,611 1,789
Mechanics 168 144 148 132 121
Other 758 688 622 564 575
Tractors (h) 2,220 1,893 1,522 1,429 1,618

(a) During the years ended December 31, 1994, 1993 and 1992, the Company
recorded extraordinary losses related to the early extinguishment of
debt.
(b) Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes." The
cumulative effect of the change in accounting method at the time of
adoption increased 1993 net income by $222.
(c) Freight revenues exclude brokerage and other revenues.
(d) Load factor represents loaded miles as a percentage of total book miles.
(e) Based on weighted average number of tractors during the period.
(f) Calculated as the average distance from origin to the destination of
the shipments.
(g) Includes part-time employees.
(h) Includes the monthly average of owned, leased and independent
contractor units.
</TABLE>
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward looking statements. Certain statements in Items 1, 3, 7
and 8 of this Form 10-K include information that is forward looking, such as
the Company's opportunities to reduce overhead costs and increase operational
efficiency, its anticipated liquidity and capital requirements and the results
of legal proceedings. The matters referred to in forward looking statements
could be affected by the risks and uncertainties involved in the Company's
business. These risks and uncertainties include, but are not limited to,
the effect of economic and market conditions, the expenses associated with
and the availability of drivers and fuel, as well as certain other
risks described above in this Item and in Item 1 in "Business"
and in Item 3 in "Legal Proceedings." Subsequent written and
oral forward looking statements attributable to the Company or
persons acting on its behalf are expressly qualified in their
entirety by the cautionary statements in this paragraph and
elsewhere in this Form 10-K. The following discussion and
analysis should be read in conjunction with the Selected
Consolidated Financial Data and the Company's Consolidated
Financial Statements and notes.

OVERVIEW

TRISM, INC.

TRISM, Inc. (TRISM or the Company) is incorporated in
Delaware and specializes in transporting heavy machinery and
equipment, hazardous waste, explosives, radioactive materials and
building materials, lumber, steel and metal products. The
Company conducts its business through operating subsidiaries.
The principal subsidiaries are Trism Specialized Carriers, Inc.
(TSC) which operates in the heavy specialized market and Tri-
State Motor Transit Co. (TSMT) which operates in the hazardous
materials market and Trism Transport Services, Inc. (TTSI) which
transports general flatbed commodities.

HEAVY HAUL MARKET GROUP

The heavy haul market group specializes in the
transportation of oversized loads. The largest markets for the
heavy specialized group are construction and farm machinery
manufacturers and dealers, manufacturers of transformers,
turbines, electric switchgear and power transmission equipment,
importers of industrial durable goods, the United States
military, suppliers and contractors to industrial and public
construction, metal and platework fabricators, manufacturers of
aircraft engines and parts, and manufacturers of vessels to
contain inorganic chemicals. Approximately one-fourth of the
loads transported require a special permit from state or local
governments or an escort.

SECURED MATERIALS MARKET GROUP

The secured materials market group is characterized by the
toxic or explosive nature and special packing and handling
requirements of the cargo. The cargo typically consists of
hazardous waste, spent nuclear fuel from power plants and
military weapons. Customers include various agencies of the
United States government and the United States military, waste
generators and environmental clean-up firms. As the safety and
security of the cargo is critical in this market, permits,
specialized equipment and specially-trained drivers are
frequently required.

TRISM TRANSPORT GROUP

The transport group serves the shipping needs of building
materials, lumber, steel and metal industries. By operating
light weight tractors and flatbed trailers, Trism Transport is
able to offer an increased payload to its customers and obtain a
premium freight rate in turn. Trism Transport also serves a lane
balancing function for the Heavy Haul and Secured Materials
Groups. As a result of lower than expected results from TTSI in
1996, the Company elected to shutdown the western operations of
TTSI, write-off goodwill associated with the acquisition of $4.1
million and consolidate remaining operations into TSC.
Accordingly, 1996 results were significantly impacted by these
actions.

LOGISTICS

In March 1995, TRISM, Inc. acquired Kavanagh & Associates
(renamed as Trism Logistics, Inc.), a logistics firm specializing
in the types of freight most frequently hauled by TRISM's
companies. Trism Logistics, based in Annandale, New Jersey,
manages specialized freight by truck, rail and water in the
domestic and international markets of Europe, South America and
the Far East. Trism Logistics' client base includes major
engineering and construction companies, suppliers to the European
Community, Fortune 500 companies and major utility companies.

<PAGE>

CORPORATE RESTRUCTURING

In February 1997, the Company announced an organizational
restructuring to consolidate certain sales, operations and
administrative functions and reengineer certain business
processes to reduce overhead costs and increase operational
efficiency. The Company will include in its 1997 results
restructuring charges for the termination of certain employees,
relocation of key personnel, engagement of an outside consultant
and the closing of unproductive facilities. The Company
estimates these charges to approximate $2.5 million to $3.5
million in the first and second quarters of 1997.

RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 1996 COMPARED WITH YEAR ENDED DECEMBER 31, 1995

REVENUES

Operating revenues increased by $41.6 million, or 15.5
percent, compared with 1995. Approximately $29.4 million, or
70.7%, of the increase was attributable to acquisitions made
during 1995. The following table presents a comparison of
revenues by market group.

<TABLE>
<CAPTION>
1996 1995
(In thousands) Operating Operating
Revenues Ratio Revenues Ratio
<S> <C> <C> <C> <C>
Heavy Haul $180,325 94.0% $174,683 91.9%
Secured Materials 97,930 95.6% 91,502 92.1%
Trism Transport 34,390 118.4% 6,786 98.5%
Logistics 6,090 103.1% 4,254 101.1%
Eliminations and others (8,702) (8,781)
-------- ----- ------- -----
$310,033 98.4% $268,444 92.7%
======== ===== ======= =====

</TABLE>

HEAVY HAUL revenues grew by 3.2% in 1996 over 1995. Revenue
per total mile improved to $1.471 in 1996 from $1.463 in 1995,
primarily due to an increase in the loaded mile ratio which
improved to 84.8% from 83.8%. Direct operating costs per mile
increased to $1.181 in 1996 from $1.132 in 1995, due to increased
driver wages and fringe benefits, higher fuel prices and
financing new and replacement tractors and trailers with
operating leases. Indirect costs were $23.2 million in 1996
compared to $23.1 million in 1995.

SECURED MATERIALS revenues grew by 7.0% in 1996 over 1995.
Revenue per total mile improved to $1.392 in 1996 from $1.367 in
1995. A breakdown of product mix is as follows:

1996 1995 Change
(% of Loaded Miles)
Munitions and Explosives 30.3% 32.4% (2.1%)
Hazardous Materials 30.2% 20.6% 9.6%
Radioactive Materials 8.4% 8.6% (.2%)
Other Special Commodities 4.6% 5.2% (.6%)
Freight all kinds 26.5% 33.2% (6.7%)
---- ---- ----
100.0% 100.0%
===== =====

The growth in the hazardous materials market results from the
acquisition of certain assets and customers of the Special
Commodities division of J.B. Hunt Transport, Inc. ("Special
Commodities") for $7.4 million on August 30, 1996. The
acquisition price included payment for certain customer lists, a
covenant not to compete and approximately 250 trailers. The
acquisition allowed the Company to increase its revenue per total
mile during the fourth quarter of 1996 and reduce its reliance on
freight all kinds.

<PAGE>
Direct operating costs increased to $1.119 in 1996 from $1.045 in
1995, primarily due to increased driver wages and fringe
benefits, higher fuel prices and financing new and replacement
tractors with operating leases. Indirect cost were $14.4 million
in 1996 compared to $14.2 million in 1995.

TRISM TRANSPORT revenues relate to the acquisition of
certain assets of Eastern Flatbed as of October 1, 1995.
Transport's revenue per mile, average length of haul and cost
structure is markedly different from Heavy Haul and Secured
Materials. Revenue per mile for 1996 was $1.109 with an average
length of haul of 462 miles. Additionally, approximately 27% of
its revenues were sub-contracted to other trucking companies,
including other Trism subsidiaries. Transports operating results
were negatively impacted by higher fuel costs and lower than
expected asset utilization due to an increase in competition for
drivers. As a result of lower than expected results from
Transport in 1996, the Company elected to shutdown Western
Operations, consolidate remaining operations into TSC and write
off unamortized goodwill associated with the acquisition of $4.1
million.

LOGISTIC revenues relate to the March 1995 acquisition of
Kavanagh and Associates, renamed Trism Logistics, Inc. in
December, 1996. Trism Logistics has benefitted from the
acquisition of hazardous materials segment from Hunt growing its
gross revenues by approximately $100,000 per month subsequent to
the acquisition.

EXPENSES

The following table sets forth operating expenses as a
percent of operating revenues and the related variance from 1996
to 1995.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, INCREASE
1996 1995 (DECREASE)
<S> <C> <C> <C>
Salaries, wages and fringe benefits 36.7% 36.9% (0.2)%
Purchased transportation 18.5% 14.6% 3.9%
Operating supplies and expenses 15.0% 13.7% 1.3%
Operating taxes and licenses 9.3% 9.3%
General supplies and expenses 5.8% 5.5% .3%
Claims and insurance 3.2% 3.3% (0.1)%
Depreciation 6.1% 6.7% (0.6)%
Amortization of prepaid leases 0.2% 0.6% (0.4)%
Communications and utilities 1.9% 1.9%
Gain on sale of equipment 0.1% (0.1)% 0.2%
Amortization of intangibles and
write-off of goodwill 1.6% 0.3% 1.3%
---- ---- ---
98.4% 92.7% 5.7%
==== ==== ===
</TABLE>
Purchased transportation costs increased by $18.1 million in 1996 over
1995. This category includes the following expenditure types:

<TABLE>
<CAPTION>
Percent of Percent of
(In thousands) 1996 Revenues 1995 Revenues
<S> <C> <C> <C> <C>
Independent contractors $18,636 6.0% $18,019 6.7%
Sub-contractor carriers 25,732 8.3% 16,735 6.2%
Tractor and trailer lease 13,013 4.2% 4,561 1.7%
------ ---- ------ ---
$57,381 18.5% $39,315 14.6%
</TABLE>

Sub-contractor carrier expense increased with revenues,
which are primarily attributed to Kavanagh Logistics and Trism
Transport. The increase in lease expense results from financing
new tractors and trailers with operating leases in 1995 and 1996
due to the financial benefits associated with leasing.

<PAGE>
For 1996, operating supplies and expenses increased on a
percentage of revenue basis by 1.3%. This increase was primarily
attributable to higher fuel costs per gallon in 1996 of $1.19
compared to $1.06 in 1995. This variance caused operating cost
to increase by $4.1 million in 1996 over 1995. The Company
implemented fuel surcharges in April 1996, and has recovered $2.3
million to help defray the increase in fuel prices.

The change in mix of owned versus leased tractors and
trailers caused the reduction in depreciation expense as a
percentage of revenue.

In 1996, the Company wrote off the unamortized portion of
goodwill associated with the acquisition of TTSI in the amount of
$4.1 million as a result of a shutdown of a portion of the
business, lower than expected operating results and combination
with TSC.

Interest expense increased from $14.1 million in 1995 to
$14.5 million in 1996. The increase in interest expense relates
to additional borrowings under the Company's revolving credit
facility, debt incurred with the acquisition of Special
Commodities and financing new revenue equipment.

Income tax benefit for 1996 was $3.3 million compared to
income tax expense of $1.6 million in 1995 resulting in an
effective tax rate of 33.3% and 29.7% in 1996 and 1995,
respectively. The tax rate increase primarily relates to changes
in the valuation allowance and state income taxes from 1995 to
1996.

YEAR ENDED DECEMBER 31, 1995 COMPARED WITH YEAR ENDED DECEMBER
31, 1994

REVENUES

Operating revenues increased by $43.3 million, or 19.2
percent, compared with 1994. Approximately $27.2 million, or
62.8%, of the increase was attributable to acquisitions made
during 1994 and 1995. The following table presents a comparison
of revenues by market group.

<TABLE>
<CAPTION>
1995 1994
Operating Operating
(In thousands) Revenues Ratio Revenues Ratio
<S> <C> <C> <C> <C>
Heavy Haul $174,683 91.9% $151,447 92.6%
Secured Materials 91,502 92.1% 78,740 86.4%
Trism Transport 6,786 98.5%
Logistics 4,254 101.1%
Eliminations and others (8,781) (4,996)
-------- ----- ------- -----
$268,444 92.7% $225,191 91.4%
======== ===== ======= =====

</TABLE>

HEAVY HAUL revenues grew by 15.3% in 1995 over 1994, with
approximately one-fourth of the growth related to the acquisition
of Powell Trucking and the balance provided by increased
shipments from its core customer base. Revenue per total mile
improved to $1.463 in 1995 from $1.455 in 1994, primarily due to
a strong specialized freight demand in the first half of 1995.
Direct operating costs per mile increased to $1.132 in 1995 from
$1.120 in 1994, due to increased driver wages, company tractor
ownership costs, satellite communication costs, offset by a
reduction in independent contractor expense. Indirect costs were
$23.1 million in 1995 compared to $21.8 million in 1994.

SECURED MATERIALS revenues grew by 16.2% in 1995 over 1994,
with approximately three-fourths of the growth related to the
acquisitions of Diablo Transportation and C. I. Whitten. The
balance of the increase was provided by TSMT, which encountered a
dramatic change in its freight mix in 1995 from 1994 levels.

(% of Loaded Miles) 1995 1994 CHANGE
Munitions and explosives 32.4% 37.9% (5.5%)
Hazardous materials 20.6% 14.5% 6.1%
Radioactive materials 8.6% 14.8% (6.2%)
Other special commodities 5.2% 4.4% .8%
Freight all kinds 33.2% 28.4% 4.8%
---- ---- ----
100.0% 100.0%
<PAGE>
The negative change in freight mix caused revenue per total
mile for Secured Materials to drop to $1.367 in 1995 from $1.435
in 1994. Direct operating costs declined to $1.045 in 1995 from
$1.046 in 1994, primarily due to reduced reliance on high cost
independent contractor units, lower insurance costs and
communications expense. Indirect costs were $14.2 million in
1995 compared to $11.0 million in 1994.

TRISM TRANSPORT revenues relate to the acquisition of
certain assets of Eastern Flatbed as of October 1, 1995.
Transport's revenue per mile, average length of haul and cost
structure is markedly different from Heavy Specialized and Trism
Secured. Revenue per mile for the last three months of 1995 were
$1.075 with an average length of haul of 516 miles.
Additionally, approximately 30% of its revenues were sub-
contracted to other trucking companies, including other Trism
subsidiaries.

LOGISTIC revenues relate to the acquisition of Kavanagh and
Associates in March, 1995. Corporate eliminations increased in
1995 as a result of improved freight sharing among the Trism
operating subsidiaries.

EXPENSES

The following table sets forth operating expenses as a
percent of operating revenues and the related variance from 1995
to 1994.

YEAR ENDED DECEMBER 31, INCREASE
1995 1994 (DECREASE)

Salaries, wages and fringe benefits 36.9% 36.7% 0.2 %
Purchased transportation 14.6% 12.0% 2.6 %
Operating supplies and expenses 13.7% 14.8% (1.1)%
Operating taxes and licenses 9.3% 9.3%
General supplies and expenses 5.5% 6.2% (0.7)%
Claims and insurance 3.3% 3.6% (0.3)%
Depreciation 6.7% 6.2% 0.5 %
Amortization of prepaid leases 0.6% 1.0% (0.4)%
Communications and utilities 1.9% 1.8% 0.1 %
Gain on sale of equipment (0.1)% (0.6)% 0.5 %
Amortization of intangibles 0.3% 0.4% (0.1)%
---- ---- ---
92.7% 91.4% 1.3 %
==== ==== ===

Salaries, wages and fringe benefits increased by $16.2
million in 1995 compared with 1994. Approximately $12.3 million
of the increase was related to driver wages and related fringe
benefits. Of this $12.3 million increase, $9.6 million was due to
a 17.2% increase in 1995 total company driver miles over 1994.
An increase in base driver pay of approximately 8.0% was
partially offset by lower workers compensation and group health
costs per driver, which improved due to successfully implementing
innovative managed care and network medical provider programs in
late 1994. This increase relates to an increase in the number of
non-driver employees related to the acquisition of Diablo,
Powell, Kavanagh, Whitten and Eastern Flatbed, a one time charge
of $.4 million relating to the Separation and Consulting
Agreement between the Company and Michael L. Lawrence, former
President, Chief Executive Officer and Director of the Company
and general increase in business levels.

Purchased transportation costs increased by $12.2 million in
1995 over 1994. This category includes the following expenditure
types:

<TABLE>
<CAPTION>
Percent of Percent of
(In thousands) 1995 Revenues 1994 Revenues
<S> <C> <C> <C> <C>
Independent contractors $18,019 6.7% $14,517 6.4%
Sub-contractor carriers 16,735 6.2% 10,875 4.7%
Tractor and trailer lease 4,561 1.7% 1,698 .8%
------ --- ------ ----
$39,315 14.6% $27,090 12.0%
====== ==== ====== ====
</TABLE>
<PAGE>
Independent contractor capacity increased to an average of
225 units in 1995 from 178 units in 1994, mostly related to
acquired companies. Sub-contractor carrier expense increased
with revenues, which are primarily attributed to Kavanagh
Logistics and Trism Transport. The increase in lease expense
results from financing new tractors and trailers with operating
leases in 1995 due to the financial benefits of the method.

For 1995, operating supplies and expenses decreased on a
percentage of revenue basis by 1.1%. This improvement was
primarily attributable to the replacement of older tractors with
new tractors, thereby decreasing maintenance and repair cost and
improving fuel efficiency.

General supplies and expenses increased $.7 million in 1995
over 1994, but on a percentage of revenue basis, these expenses
decreased by .7%. The increase in actual cost resulted from
increases that fluctuate with volume such as driver motel costs
and advertising costs. Most other costs included in this
category do not relate directly to volume and remained consistent
with the prior year.

Claims and insurance expense dropped to 3.3% of revenue in
1995 from 3.6% in 1994. This change resulted from lower
insurance premiums, the effect of increased revenues from freight
transported by sub-contractor carriers, for which the Company has
little claim exposure, and an overall reduction in accidents per
million miles.

An increase in the number of tractors and trailers owned and
operated by the Company principally accounted for the $4.1
million increase in depreciation expense in 1995 over 1994.

During 1994, the Company prepaid amounts due under various
equipment operating leases and is amortizing the prepaid balance
over the life of the leases which extend to 1997. As leases
expire, this cost will continue to decrease until the prepaid
balance has been fully amortized.

Interest expense increased $1.3 million during 1995 compared
with 1994 due to an increase in the average debt balance, which
was partially offset by a decrease in the average interest rate.
The increase in the average debt balance resulted from the
financing of revenue equipment purchases and use of the revolving
line of credit facility.

Overall, the Company's profitability was negatively impacted
from growing its operations internally and through acquisitions
during a difficult freight environment. The transportation
industry had too much capacity for the existing freight volumes
and Trism was further impacted by a downturn in U.S. military and
radioactive shipments. Steps have been taken at Trism Secured to
reduce its dependence on general commodity freight which will
improve the composite revenue per total mile and operating
income.

CONTINGENCIES

Company does not believe it will be subject to material liability
under CERCLA and similar laws. Although the Company has been
identified as a "potentially responsible party" (PRP), solely
because of its activities as a transporter of hazardous
substances, at two sites, the Company does not believe it will be
subject to material liabilities at such sites.

The EPA has designated an area of several hundred square
miles of Missouri as a potential Superfund site. The Company's
Joplin, Missouri terminal is within the boundaries of the area.
However, the Company's property has not been designated as a PRP.
The Company believes that it has no liability with respect to
this site and that it would have strong defenses to any action
for cost recovery, as neither it nor its predecessors created the
conditions which are the cause of the environmental problems at
the site.

The Company is a party to certain legal proceedings
incidental to its business, primarily involving claims for
personal injury or property damage arising from the
transportation of freight. The Company does not believe that
these legal proceedings, or any other claims or threatened claims
of which it is aware, are likely to materially and adversely
affect the Company's financial condition. With regard to personal
injury, property damage, workers' compensation claims, and cargo
claims, the Company is and has been covered by insurance as noted
above. Such matters may include claims for punitive damages. It
is an open question in some jurisdictions in which the Company
does business as to whether or not punitive damages awards are
covered by insurance.

<PAGE>

In addition to matters referred to above, the Company is a
party to several additional lawsuits, none of which is believed
to involve a significant risk of materially and adversely
affecting the Company's financial condition. The Company is a
defendant in one additional litigation pending in the Circuit
Court of Jefferson County, Alabama which is not noteworthy except
for the plaintiff's excessive demand. The case is captioned Roy
A. Reese v. Trism Specialized Carriers, Inc. and Tri-State Motor
Transit Company. It arises from a lease, transfer and
consulting agreement between the Company and plaintiff (Mr. Reese
and his wholly owned corporation) dated August 24, 1992.
Plaintiff alleges breach of contract, promissory fraud,
conversion and conspiracy claims arising from the Company's
termination of the contract. He seeks compensatory and punitive
damages. The Company maintains that it properly terminated the
contract because of misrepresentations and non-performance by
plaintiff and his company, and has asserted certain
counterclaims. The case was tried in August 1996 and plaintiff
was awarded $47,000 in rental fees admitted by TRISM to be due
for the use of plaintiff's trailer equipment after cancellation
of the original contract. This portion of the plaintiff's claim
was never contested by TRISM. All other claims for damages were
found in favor of the defendant (TRISM). The case is currently
on appeal by plaintiff. The Company is vigorously contesting the
appeal and believes it will prevail.

LIQUIDITY AND CAPITAL RESOURCES

OPERATING ACTIVITIES

Net cash used in operating activities was $4.2 million in
1996 compared to $24.7 million provided by operating activities
in 1995. The decrease in cash flow from operations relates
primarily to a decline in net income, a decrease in accounts
payable and an increase in accounts receivable. The increase in
accounts receivable relates to growth in revenues and an increase
in the collection cycle of approximately eight days.

INVESTING ACTIVITIES

Net cash used in investing activities was $15.7 million in
1996 compared to $26.1 million in 1995. The decrease primarily
relates to increased proceeds from the sale of property and
equipment of $5.4 million and lower purchases of property and
equipment of $6.7 million. The Company primarily utilized
operating leases in 1996 to replace a portion of its tractor
fleet. The Company acquired certain assets, customer lists and a
covenant not to compete from Hunt on August 30, 1996 for $5.2
million, net and paid additional amounts in connection with the
acquisition of the assets of EFB. The Company acquired three
companies in 1995 for $4.7 million. These acquisitions were
accounted for under the purchase method of accounting.

FINANCING ACTIVITIES

Net cash provided by financing activities was $20.7 million
in 1996 compared to $4.1 million used in financing activities in
1995. The increase in financing activities relates to borrowings
under the Company's revolving credit facility of $15.4 million to
meet working capital needs, borrowings of $8.0 million to acquire
revenue equipment and $7.2 million of borrowing under a sale-
leaseback arrangement to acquire certain assets and equipment
from Hunt. These borrowings were offset by scheduled principal
payments of $10.7 million.

In December 1996, the Company increased the maximum amount
of its revolving credit facility to $30 million. The facility is
to be reduced to $25 million by April 29, 1997 unless another
lender commits to lend the Company $10 million in which case the
maximum amount remains at $30 million. Borrowings under the
facility are secured by accounts receivable. The arrangement
also provides for the issuance of standby letters of credit which
reduce the availability of cash advances under the Agreement. At
December 31, 1996, letters of credit of $5.1 million were
outstanding. The Company was not in compliance with certain
covenants under the facility at December 31, 1996. The covenants
were waived and amended on March 10, 1997. As of March 7, 1997,
approximately $8.7 million was available under the facility.

CAPITAL REQUIREMENTS

The Company estimates 1997 capital expenditures of
approximately $25 million primarily related to the replacement of
tractors and trailers. The Company estimates proceeds from the
sale of the replaced equipment to amount to approximately $4.0
million. The Company has financing commitments of approximately
$9.0 million for these estimated expenditures. The Company
believes it will be able to obtain the balance of its financing
needs during 1997.

<PAGE>

The Company believes that it will be able to meet its on
going capital requirements, scheduled principal payments and
working capital needs from cash flow from operations,
availability under its working capital line, proceeds from the
sale of equipment and additional borrowing commitments. The
Company also has additional borrowing capacity supported by
unencumbered tangible assets.

INFLATION AND FUEL COSTS

Inflation can be expected to have an impact on the Company's
earnings; however, the effect of inflation has been minimal over
the past three years. An extended period of inflation or increase
in fuel costs would adversely affect the Company's results of
operations without a corresponding freight rate increase from
customers.

ACCOUNTING PRONOUNCEMENTS

In February 1997, the Financial Accounting Standards Board
("FASB") issued SFAS No. 128, Earnings per Share, which the
Company is required to adopt in 1997. SFAS No. 128 specifies the
computation, presentation and disclosure requirements for
earnings per share in order to be substantially similar to
International Accounting Standards. The adoption of SFAS No. 128
is not expected to have a material impact on the Company's
earnings per share or other per share disclosures.

Also in February 1997, the FASB issued SFAS No. 129,
Disclosure of Information About Capital Structure, which the
Company is required to adopt in 1997. SFAS No. 129 requires more
detailed disclosures about an entity's capital structure. As
such, SFAS No. 129 is a disclosure requirement only and will not
have an impact on the Company's financial position, annual
operating results or cash flows.

<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

<TABLE>
<CAPTION>
TRISM, INC.
CONSOLIDATED BALANCE SHEETS

December 31,
1996 1995
<S> <C> <C>
ASSETS

Current assets:
Cash and cash equivalents $ 1,467,535 $ 642,312
Restricted and insurance deposits 1,187,629 1,119,971
Accounts receivable, net of allowance
for doubtful accounts of $2,396,621
and $1,584,386 for 1996 and 1995,
respectively 57,502,840 44,830,006
Materials and supplies 2,449,697 2,307,288
Prepaid expenses 18,711,185 16,282,169
Current portion of deferred
income taxes 5,139,469 3,421,285
----------- -----------
Total current assets 86,458,355 68,603,031

Property and equipment, net 123,052,330 129,529,276
Other assets 22,986,039 20,638,634
----------- -----------
Total assets $232,496,724 $218,770,941
=========== ===========

LIABILITIES AND COMMON STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable $ 10,790,628 $ 14,014,776
Checks issued in excess of
bank balance 4,567,125 5,521,000
Claims and insurance accruals 6,011,935 5,808,006
Accrued expenses 6,551,439 6,008,141
Note Payable to J.B. Hunt 2,500,000
Current maturities of long-
term debt 11,845,207 9,229,889
---------- ----------
Total current liabilities 42,266,334 40,581,812

Long-term debt, less current
maturities 148,877,515 128,417,609
Claims, insurance accruals and other 6,442,728 6,316,772
Deferred income taxes 6,160,111 8,347,997
----------- -----------
Total liabilities 203,746,688 183,664,190
----------- -----------

Common stockholders' equity:
Common stock; $.01 par; 10,000,000
shares authorized; issued 5,903,337
and 5,899,137 shares in 1996 and
1995, respectively 59,034 58,992
Additional paid-in capital 37,327,293 37,086,039
Loans to stockholders (367,750) (367,750)
Accumulated deficit (6,719,541) (121,530)
Treasury stock, at cost,
166,000 shares in 1996 and 1995 (1,549,000) (1,549,000)
--------- ---------
Total stockholders' equity 28,750,036 35,106,751
---------- ----------
Total liabilities and
stockholders' equity $232,496,724 $218,770,941

See accompanying notes to consolidated financial statements.

</TABLE>
<PAGE>

<TABLE>
<CAPTION>
TRISM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

Year ended December 31,
1996 1995 1994
<S> <C> <C> <C>
Revenues $310,033,456 $268,443,541 $225,190,742
Operating expenses:
Salaries, wages and fringe benefits 113,902,545 98,934,917 82,771,414
Purchased transportation 57,380,626 39,314,819 27,089,526
Operating supplies and expenses 46,469,357 36,783,984 33,225,114
Operating taxes and licenses 28,785,062 24,850,181 20,904,249
General supplies and expenses 18,075,129 14,653,231 13,996,139
Claims and insurance 9,962,349 8,937,100 8,061,367
Depreciation 18,769,929 18,062,145 13,963,501
Amortization of prepaid leases 651,834 1,607,683 2,258,000
Communications and utilities 5,857,291 5,115,292 3,977,550
Loss (gain) on sale of equipment 236,851 (191,459) (1,282,657)
Amortization of intangibles 797,782 783,018 825,889
Write off of goodwill 4,062,301
----------- ----------- -----------
Total operating expenses 304,951,056 248,850,911 205,790,092

Operating income 5,082,400 19,592,630 19,400,650

Interest expense 14,503,826 14,063,537 12,738,077
Other expense, net 476,585 15,991 19,748
----------- ---------- -----------
Income (loss) before income
taxes and extraordinary items (9,898,011) 5,513,102 6,642,825
Income tax expense (benefit) (3,300,000) 1,639,000 1,862,614
----------- ---------- -----------
Income (loss) before
extraordinary items (6,598,011) 3,874,102 4,780,211
Extraordinary items, 230,511
loss on extinguishment of debt, net of tax ----------- ---------- -----------
Net income (loss) $ (6,598,011) $ 3,874,102 $ 4,549,700
Earnings (loss) per common share:
Income (loss) before extraordinary items $ (1.15) $ .67 $ .82
Extraordinary items (.04)
----------- --------- ------------
Earnings (loss) per common share $ (1.15) $ .67 $ .78
=========== ========= ============
Weighted average number of shares used in
computation of earnings (loss) per common
share 5,735,175 5,758,733 5,846,052
========== ========= ============

See the accompanying notes to the consolidated financial statements.
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
TRISM, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

Year ended December 31,
1996 1995 1994
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (6,598,011) $ 3,874,102 $ 4,549,700
Adjustments to reconcile net income to net cash
provided by operating activities:
Extraordinary loss 230,511
Depreciation 18,769,929 18,062,145 13,963,501
Amortization of prepaid operating leases 651,834 1,607,683 2,258,000
Amortization of intangibles and goodwill 1,454,066 1,390,337 1,397,328
Write off of goodwill 4,062,301
Accretion of discount on subordinated notes 31,433
Loss (Gain) on sale of assets 236,851 (191,459) (1,282,657)
Deferred income taxes (3,913,607) 2,171,393 1,793,548
Provision for uncollectible receivables 1,573,500 307,123 874,300
Changes in assets and liabilities:
Accounts receivable (14,746,334) (9,157,108) (3,357,507)
Accounts payable (3,224,148) 4,310,096 (2,892,320)
Claims and insurance accruals 315,436 (1,197,197) 879,502
Prepaid operating leases (6,236,320)
Other (2,605,554) (2,044,542) (1,791,070)
------------ ----------- -----------
Net cash provided by (used in)
operating activities (4,023,737) 19,132,573 10,417,949
------------ ----------- -----------
Cash flows from investing activities:
Refund of restricted deposits 246,568 2,512,922 1,587,592
Proceeds from sale of property and equipment 8,057,215 1,260,700 6,304,878
Proceeds from sale of property held for sale 290,573 188,372
Purchases of property and equipment (15,526,035) (25,431,128) (66,659,116)
Payment for purchase of companies, net of
cash acquired (7,053,104) (4,705,336) (5,067,315)
------------- ----------- -----------
Net cash used in investing activities (14,275,356) (26,072,269) (63,645,589)
------------- ----------- -----------
Cash flows from financing activities:
Retirement of redeemable preferred stock (2,780,000)
Issuance of common stock, stock options
and warrants 241,296 22,340,031
Purchase of treasury stock (996,250) (235,000)
Sale of treasury stock 22,500
Net repayment of accounts receivable financing (6,893,920)
Net proceeds under revolving credit agreement 15,369,244 6,144,178
Proceeds (repayment) of bank overdrafts (953,875) 5,521,000
Proceeds from issuance of long-term debt 15,247,123 9,565,307 34,531,021
Repayment of long-term debt (9,413,385) (17,010,829) (12,347,543)
Repayment of capitalized lease obligations (1,306,397) (1,841,361) (5,530,338)
Preferred stock dividend payments (877,862)
Other (59,690)
------------- ----------- -----------
Net cash (used in) provided by financing
activities 19,124,316 1,404,545 28,206,389
------------- ----------- -----------
(Decrease) increase in cash and cash equivalents 825,223 (5,535,151) (25,021,251)
Cash and cash equivalents, beginning of year 642,312 6,177,463 31,198,714
------------- ----------- -----------
Cash and cash equivalents, end of year $ 1,467,335 $ 642,312 $ 6,177,463
============= =========== ===========
Supplemental cash flow information:
Cash paid during the year for:
Interest (net of $444,392 and $25,608
capitalized in 1996 and 1995; none
capitalized in 1994) $ 14,480,090 $14,049,583 $ 12,564,264
============= =========== ===========
Income taxes $ 100,625 $ 236,667 $ 77,509
============= =========== ===========

See accompanying notes to the consolidated financial statements.
</TABLE>
<PAGE>
TRISM, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN COMMON STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Additional Total Common
Common Paid-In Loans to Accumulated Treasury Stockholders'
Stock Capital Stockholders Deficit Stock Equity
<C> <C> <C> <C> <C> <C>
Balance, December 31, 1993 $ 39,781 $ 14,765,219 $ (708,000) $(8,545,332) $ $ 5,551,668

Issuance of 1,800,000
shares of common stock 18,000 21,705,776 21,723,776

Exercise of 52,653 stock
options 527 87,228 87,755

Exercise of 68,400 warrants 684 527,816 528,500

Company purchase of 20,000
shares (235,000) (235,000)

Net income 4,549,700 4,549,700
------- ---------- ---------- ---------- ------- ---------

Balance, December 31, 1994 58,992 37,086,039 (708,000) (3,995,632) (235,000) 32,206,399

Company purchase of 148,500
shares (1,336,500) (1,336,500)

Repayment of loan to stockholder 340,250 340,250

Company sale of 2,500 shares 22,500 22,500

Net income 3,874,102 3,874,102

------- ---------- ---------- ---------- ------- ---------

Balance, December 31, 1995 58,992 37,086,039 (367,750) (121,530) (1,549,000) 35,106,751

Exercise of 4,200 warrants 42 27,958 28,000

Warrants issued 213,296 213,296

Net loss (6,598,011) (6,598,011)
------- ---------- ---------- ---------- --------- ----------

Balance, December 31, 1996 $59,034 $37,327,293 $(367,750) $(6,719,541) $(1,549,000) $28,750,036
======= ========== ========== ========== ========= ==========
See accompanying notes to the consolidated financial statements.
</TABLE>
<PAGE>

TRISM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

NATURE OF OPERATIONS

TRISM, Inc. was incorporated in Delaware and specializes in
transporting heavy machinery and equipment, hazardous waste,
explosives and radioactive materials. TRISM, INC conducts its
business through operating subsidiaries. The principal
subsidiaries are Trism Specialized Carriers, Inc. (TSC), Tri-
State Motor Transit Co. (TSMT), and Trism Transport Services,
Inc. (TTSI). TSC transports oversized loads, including heavy
machinery and large equipment used in the agricultural,
construction, energy, manufacturing and aerospace industries.
TSMT transports explosives, hazardous waste and radioactive
materials for customers such as the United States government, and
the mining, road building, chemical processing and utility
industries. TTSI transports building materials, lumber, steel
and metal products for customers such as Georgia Pacific.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts
of TRISM, Inc. and its wholly-owned subsidiaries (the Company).
All significant intercompany accounts and transactions have been
eliminated.

REVENUE RECOGNITION

Freight revenues and related direct costs are recognized
when freight is picked up for shipment. This method of revenue
recognition approximates the method deemed preferable by the
Financial Accounting Standards Board Emerging Issues Task Force
whereby revenues are allocated between reporting periods based on
relative transit time in each reporting period with expenses
recognized as incurred. This difference in revenue recognition
methods does not have a material effect on the Company's
financial position, results of operations or liquidity.

DEDUCTIBLES AND SELF-INSURANCE CLAIMS RESERVES

Claims and insurance accruals, both current and long-term,
reflect the estimated cost of claims for cargo loss and damage,
bodily injury and property damage, workers' compensation and
employee health and welfare program claims not covered by
insurance. The liability for self-insurance is accrued based on
claims incurred and on estimates of both unasserted and unsettled
claims which are assessed based on management's evaluation of the
nature and severity of individual claims and on the Company's
past claims experience.

INCOME TAXES

The annual change in the Company's deferred tax assets and
liabilities represents deferred tax expense or benefit. Income
tax expense or benefit is equal to the current liability or
refund for income taxes and a provision or benefit for deferred
income taxes. Deferred tax assets and liabilities record the
anticipated future tax effects attributable to temporary
differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax basis.
Deferred tax assets and liabilities are measured using the
enacted tax rates and laws that will be in effect when the
differences are expected to reverse.

PROPERTY, EQUIPMENT AND DEPRECIATION

Property and equipment are stated at cost. Depreciation is
generally calculated on a straight-line basis over the following
estimated useful lives:

Years

Structures and improvements 18-20
Revenue equipment 4-10
Service cars and equipment 3
Furniture, fixtures and equipment 5-10

<PAGE>

The cost of assets sold or retired and the related
accumulated depreciation are removed from the accounts at the
time of disposition, and any resulting gain or loss is reflected
in operations. Maintenance, repairs and minor replacements are
charged to operations as incurred; major replacements and
betterments are capitalized.

TIRES IN SERVICE

The cost of new and replacement tires is capitalized and
included in prepaid assets and amortized on a straight-line basis
over the estimated useful life of the tires.

AMORTIZATION OF EXCESS COST OVER FAIR VALUE OF NET ASSETS
ACQUIRED AND OTHER INTANGIBLE ASSETS

The excess cost over fair value of net assets acquired
(goodwill) is amortized on a straight-line basis over 13 to 40
years. Other intangible assets are recorded at cost and are
being amortized on a straight-line basis over 2 to 30 years.

The Company continually evaluates the propriety of the
carrying amount of goodwill and other intangible assets as well
as the amortization periods to determine whether current events
and circumstances warrant adjustments to the carrying value
and/or revised estimates of useful lives. The recoverability of
goodwill is evaluated at the operating unit level by an analysis
of operating results and consideration of other significant
events or changes in the business environment. If an operating
unit has current operating losses and based upon projections
there is a likelihood that such operating losses will continue,
the Company will evaluate whether impairment exists on the basis
of undiscounted expected future cash flows from operations before
interest for the remaining amortization period. If impairment
exists, the carrying amount of the goodwill is reduced by the
estimated shortfall of cash flows.

In 1996, the Company wrote off the unamortized portion of
goodwill associated with the acquisition of TTSI in the amount of
$4.1 million due to a deemed permanent impairment as a result of
a shutdown of a portion of the business, lower than expected
operating results and combination with TSC. At this time, the
Company believes that no significant other impairment of goodwill
or other intangible assets has occurred and that no reduction of
the estimated useful lives is warranted.

FINANCING FEES

The unamortized portion of financing fees is included in
other assets. Such amounts are amortized over the term of the
loan on a straight-line basis.

CASH AND CASH EQUIVALENTS

For purposes of disclosure in the consolidated balance
sheets and consolidated statements of cash flows, all highly
liquid investments that have original maturities of less than 90
days are considered cash equivalents, excluding restricted and
insurance deposits. Cash equivalents are stated at cost, which
approximates market value.

RESTRICTED AND INSURANCE DEPOSITS

The Company provides various cash and cash equivalents
deposits as collateral for self-insurance claims, insurance
premiums, equipment leases and letters of credit.

EARNINGS (LOSS) PER COMMON SHARE

Earnings (loss) per common share are computed by dividing
net income by the weighted average number of common shares and
common share equivalents outstanding during each period
presented.

RECLASSIFICATIONS

Certain prior year data has been reclassified to conform to
the current year presentation. These reclassifications had no
effect on previously reported net income, stockholders' equity or
net cash flows.

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 reported amounts
of assets and liabilities and disclosures of contingent assets
and liabilities at the dates of the financial statements and the
reported amounts of revenues and expenses during the reporting
periods. Actual results could differ from those estimates.

<PAGE>

ACCOUNTING PRONOUNCEMENTS

2. MERGERS AND ACQUISITIONS

In August 1996, the Company acquired the business and
certain assets of the Special Commodities division of J.B. Hunt
Transport, Inc. ("Hunt") for $7.4 million. The acquisition price
included payment for certain customer lists, goodwill, a covenant
not to compete and approximately 250 trailers. The Company
financed the acquisition price with $4.9 million of equipment
debt and a $2.5 million note payable to Hunt. The Company also
granted options to Hunt for the purchase of 300,000 shares of
TRISM, Inc. stock at $6.50 per share, with a term of five years.
The options are not transferable by Hunt and are immediately
exercisable. The following proforma disclosures are presented
for comparability purposes to reflect the Company's estimated
operating results and per share data as if the acquisition of
Hunt had occurred on January 1, 1996 and 1995, respectively.

1996 1995
(Unaudited) (Unaudited)
Revenues $ 337,733,456 $ 313,598,541
Net Income (loss) (7,198,011) 5,033,102
Earnings (loss) per common share (1.26) .87

In March 1995, the Company acquired Kavanagh and Associates,
Inc., a logistics firm, for $350,000 cash, which includes
goodwill of $383,000. In August 1995, the Company acquired the
assets of C.I. Whitten Transfer Co., a truckload carrier of
explosives and munitions, for $2,965,323 cash, which includes
goodwill of $104,000. In October 1995, the Company acquired
certain assets of Eastern Flatbed Services, Inc., a truckload
carrier of flatbed freight an initial purchase price of
$1,428,254 plus contingent consideration which was to have been
determined based on future earnings. Total payments to date,
including the original purchase price, have been $4,239,827.
Management accounted for this as a purchase and recorded
goodwill of $4,167,587.

These acquisitions have been accounted for using the
purchase method of accounting. Accordingly, the purchase price
was allocated to the assets acquired and liabilities assumed
based upon their estimated fair values at the dates of
acquisition. The results of operations of the acquired companies
are included in the combined financial statements from the
respective dates of acquisition.

3. PREPAID EXPENSES

Prepaid expenses at December 31, consist of the following:

1996 1995

Insurance, taxes,
licenses and other $ 7,650,207 $ 6,476,037
Tires in service 11,060,978 9,806,132
___________ ___________
$18,711,185 $16,282,169
=========== ===========
<PAGE>

4. PROPERTY AND EQUIPMENT, NET

Property and equipment, net at December 31, was as follows:

1996 1995
Land $ 11,078,844 $ 10,134,174
Structures and improvements 13,773,932 9,264,991
Revenue equipment 133,028,385 137,003,025
Other equipment 18,675,521 16,882,949
------------- -----------
176,556,682 173,285,139
Less accumulated depreciation 53,504,352 43,755,863
------------- -----------
$123,052,330 $129,529,276
============= ===========

A portion of property and equipment is pledged as collateral as
described in Note 8.

Effective for periods beginning October 1, 1994, the Company
changed the service lives and salvage values for certain revenue
equipment acquired during the period of October 1, 1993 through
September 30, 1994. These changes in estimates were made to more
accurately reflect future service lives and salvage values of the
equipment and increased 1994 net income by approximately $205,000
or $.04 per common share.

5. CAPITAL AND OTHER LEASES

A portion of the revenue and other equipment is financed
through long-term noncancellable leases. Assets under capital
leases at December 31, consist of the following:

1996 1995

Revenue equipment $32,485,573 $4,569,195
Other equipment 2,039,648 1,863,640
---------- ---------
34,525,221 6,432,835
Less accumulated amortization 13,154,425 2,565,405
---------- ---------
$21,370,796 $3,867,430
========== =========

Minimum annual lease commitments are as follows:
Capital Operating
Lease Lease

1997 $ 6,783,356 $ 14,820,337
1998 9,886,090 14,098,076
1999 2,237,376 9,325,099
2000 4,402,034 2,755,639
2001 37,951 125,000
Subsequent to 2001 73,825
----------- ----------
Total minimum lease payments 23,420,632 $ 41,124,151
Less amount representing interest 2,792,094 ==========
-----------
Present value of net minimum
lease payments $ 20,628,538
============

Rental expense for all operating leases was $15,215,177,
$6,648,547 and $3,700,084 for the years ended December 31, 1996,
1995 and 1994, respectively. Additionally, in 1994, the Company
prepaid $6,236,320 of operating leases. These leases are being
amortized over the life of the original lease agreements.
Amortization was $651,834, $1,607,683 and $2,258,000 for the
years ended December 31, 1996, 1995 and 1994, respectively.

6. OTHER ASSETS

Other assets at December 31 are summarized as follows:
1996 1995

Goodwill and other intangible assets $24,112,186 $18,224,230
Financing fees 4,188,829 4,129,139
Notes receivable and other 1,435,875 3,691,885
---------- ----------
29,736,890 26,045,254
Less accumulated amortization 6,750,851 5,406,620
---------- ----------
$22,986,039 $20,638,634
=========== ==========
7. ACCRUED EXPENSES

Accrued expenses at December 31 were as follows:
1996 1995

Payroll and amounts due contractors $3,805,973 $4,229,587
Taxes other than income 1,744,550 1,140,658
Interest 499,808 476,072
Other 501,108 161,824
---------- ----------
$6,551,439 $6,008,141
========== ==========

8. LONG-TERM DEBT

Long-term debt outstanding at December 31 was as follows:
1996 1995

Senior subordinated notes
maturing in 2000, with interest
at 10 3/4% $ 95,730,000 $ 95,730,000
Revolving credit facility maturing
in 1998, with interest at the
lower of prime plus 1/2% or the
LIBOR rate plus 2% 21,513,423 6,144,178
Capital lease obligations collateralized
by equipment maturing through 2002,
with interest rates ranging from 6.24%
to 10.40% 20,628,538 3,486,246
----------- ----------
Obligations collateralized by equipment
maturing through 2000 with interest
rates ranging from 7.1% to 11.25% 22,850,761 32,287,074
----------- ----------
Total 160,722,722 137,647,498
Less current maturities 11,845,207 9,229,889
----------- ----------
Long-term debt $148,877,515 $128,417,609
=========== ==========

Senior Subordinated Notes

On December 23, 1993, the Company completed a public
offering of $100 million principal amount of its 10 3/4% Senior
Subordinated Notes due December 15, 2000 (the Notes). Interest
is payable on June 15 and December 15 of each year, commencing on
June 15, 1994. The Notes are redeemable at the option of the
Company, in whole or in part, on or after December 15, 1998, at a
redemption price of 105% through December 15, 1999 and 102 1/2%
thereafter.

The Notes are subordinated in right of payment to all
existing and future senior indebtedness of the Company. The
indenture contains covenants that, subject to certain exceptions
and qualifications, limit the ability of the Company and its
subsidiaries to incur indebtedness, pay dividends, engage in
transactions with stockholders and affiliates, issue preferred
stock of its subsidiaries, create liens, sell assets, engage in
mergers or consolidations; and limit the ability of the
subsidiaries to guarantee indebtedness of the Company.
Furthermore, the indenture contains change of control provisions
which may require the Company to repurchase the Notes at an
amount equal to 101% plus accrued and unpaid interest to the date
of the repurchase.

During 1995 and 1994, the Company purchased $4.3 million of
the Notes at approximately face value.

REVOLVING CREDIT FACILITY

The Company's revolving credit facility (Agreement)
provides for borrowings of up to $30 million. The facility is to
be reduced to $25 million by April 29, 1997 unless another lender
commits to lend the Company $10 million in which case the maximum
amount remains at $30 million. Borrowings outstanding under the
Agreement are secured by accounts receivable. The Agreement
includes various covenants which limit the Company's ability to
incur indebtedness, pay dividends, prepay indebtedness and
consolidate or merge with another entity. The Company is also
required to maintain certain financial ratios as defined in the
Agreement. At December 31, 1996, the Company was not in
compliance with certain of these financial covenants; however,
the Company obtained a waiver on these covenants through December
31, 1996 and amended such covenants on March 19/, 1997.
Additionally, the Agreement requires an increase in the interest
rate of 1/4% if a net loss was incurred in 1996, effective January
1, 1997. The weighted average interest rate was 8.5% in 1996.

The Agreement also provides for the issuance of standby
letters of credit. The outstanding letters of credit reduce the
availability of cash advances under the Agreement. At December
31, 1996, $5,122,127 of letters of credit were outstanding.

Substantially all of the long-term debt, other than the
Notes and the Revolving Credit Facility, are fully collateralized
by equipment.

Aggregate long-term debt scheduled maturities are as
follows:

1997 $ 11,845,207
1998 38,843,589
1999 5,753,450
2000 103,283,660
2001 926,613
Subsequent to 2001 70,203
-------------
$ 160,722,722
=============

9. CONTINGENCIES

Under CERCLA and similar state laws, a transporter of
hazardous substances may be liable for the costs of responding to
the release or threatened release of hazardous substances from
disposal sites if such transporter selected the site for
disposal. Because it is the Company's practice not to select the
sites where hazardous substances and wastes will be disposed, the
Company does not believe it will be subject to material liability
under CERCLA and similar laws. Although the Company has been
identified as a "potentially responsible party" (PRP), solely
because of its activities as a transporter of hazardous
substances, at two sites, the Company does not believe it will be
subject to material liabilities at such sites.

The EPA has designated an area of several hundred square
miles of Missouri as a potential Superfund site. The Company's
Joplin, Missouri terminal is within the boundaries of the area,
however, the Company has not been designated as a PRP. The
Company believes that it has no liability with respect to this
site and that it would have strong defenses to any action for
cost recovery, as neither it nor its predecessors created the
conditions which are the cause of the environmental problems at
the site.

The Company is a party to certain legal proceedings
incidental to its business, primarily involving claims for
personal injury or property damage arising from the
transportation of freight. The Company does not believe that any
claims or threatened claims of which it is aware, are likely to
materially and adversely affect the Company's financial
condition. With regard to personal injury, property damage,
workers' compensation claims, and cargo claims, the Company is
and has been covered by insurance as noted above. Such matters
may include claims for punitive damages. It is an open question
in some jurisdictions in which the Company does business as to
whether or not punitive damages awards are covered by insurance.

<PAGE>

The Company is a defendant in one additional litigation
pending in the Circuit Court of Jefferson County, Alabama which
is not noteworthy except for the plaintiff's excessive demand.
The case is captioned Roy A. Reese v. Trism Specialized Carriers,
Inc. and Tri-State Motor Transit Company. It arises from a
lease, transfer and consulting agreement between the Company and
plaintiff (Mr. Reese and his wholly owned corporation) dated
August 24, 1992. Plaintiff alleges breach of contract,
promissory fraud, conversion and conspiracy claims arising from
the Company's termination of the contract. He seeks compensatory
and punitive damages. The Company maintains that it properly
terminated the contract because of misrepresentations and non-
performance by plaintiff and his company, and has asserted
certain counterclaims. The case was tried in August 1996 and
plaintiff was awarded $47,000 in rental fees admitted by TRISM to
be due for the use of plaintiff's trailer equipment after
cancellation of the original contract. This portion of the
plaintiff's claim was never contested by TRISM. All other claims
for damages were found in favor of the defendant (TRISM). The
case is currently on appeal by plaintiff. The Company is vigorously
contesting the appeal and believes it will prevail.

10. INCOME TAXES

Income tax (benefit) expense was as follows:

1996 1995 1994
Current
Federal $ 514,260 $ (532,393) $
State 99,347 69,066
---------- --------- ---------
613,607 (532,393) 69,066
---------- --------- ---------

Deferred
Federal (3,524,379) 1,923,484 1,617,308
State (389,228) 247,909 176,240
---------- --------- ---------
(3,913,607) 2,171,393 1,793,548
---------- --------- ---------

Expense (benefit)
for income taxes $ (3,300,000) $ 1,639,000 $1,862,614
========== ========= =========

A reconciliation of the federal statutory income tax rate to the effective
tax rate was as follows:

1996 1995 1994

Federal statutory income
tax rate of 34% $(3,365,324) $ 1,874,455 $2,258,561
Reduction to valuation
allowance (1,051,328) (413,681)
Exercise of stock options (249,545)
Nondeductible travel and
entertainment expenses 137,642 104,801 139,554
Fines and penalties
(abatement) 49,632 45,807 (151,548)
Amortization 92,590 82,160 104,320
Prior-year tax deficiencies 419,485 13,050
State income taxes and other,
net of federal tax benefit (214,540) 163,620 161,903
---------- ---------- ---------
Tax (benefit) expense $(3,300,000) $ 1,639,000 $1,862,614
========== ========== =========

Significant components of the Company's deferred tax assets and
liabilities were as follows:

1996 1995
Deferred tax assets:
Net operating loss and tax
credit carryforwards $13,160,978 $13,740,500
Accrued expenses and reserves 7,747,012 5,873,001
Purchase accounting 49,003 49,003
---------- ----------
Total gross deferred tax assets 20,956,993 19,662,504
Less valuation allowance (1,069,464) (1,069,464)
---------- ----------
Net deferred tax assets 19,887,529 18,593,040
---------- ----------

Deferred tax liabilities:
Depreciation and capital leases 20,758,163 23,372,254
Prepaid expenses 150,008 147,498
---------- ----------
Total gross deferred tax liabilities 20,908,171 23,519,752
---------- ----------

Net deferred tax liabilities $ 1,020,642 $ 4,926,712
========== ==========

<PAGE>
At December 31, 1996, the Company had consolidated regular
tax net operating loss carryforwards for federal income tax
purposes of approximately $34,000,000 which expire from 2005 to
2010 if not used. As a result of the public offering of common
stock in February 1994 (as further described in Note 13),
together with other common stock transactions, an "ownership
change" for federal income tax purposes occurred. Consequently,
a portion of the tax loss carryforwards (approximately
$9,000,000) available to offset future taxable income will be
subject to limitation.

The Company has investment tax credit carryforwards of
approximately $523,000 which expire from 1997 to 2001. The
Company also has alternative minimum tax credits of approximately
$132,000 which can be utilized against regular taxes in the
future.

11. COMMON STOCK TRANSACTIONS

In October 1996, the Company issued 4,200 shares of common
stock at $6.67 per share upon the exercise of warrants.

In March 1995, the Company repurchased, from its former
President and Chief Executive Officer, 148,500 shares of common
stock at $9.00 per share. His proceeds were reduced by $340,250,
the amount of an outstanding promissory note between him and the
Company.

In February 1994, the Company completed a public stock
offering of 1,800,000 shares of common stock obtaining net
proceeds of $21,723,776. Also in 1994, 52,653 options and 68,400
warrants were exercised obtaining net proceeds of $87,755 and
$528,500, respectively.

In January 1994, the Company's Board of Directors approved a
three for one stock split of the Company's common stock. The
financial statements have been retroactively adjusted to reflect
this transaction.

12. STOCK OPTIONS

The Company's stock option plans provide for the grant to
officers, other key employees and non-employee directors of
725,000 non-qualified options to purchase common stock. The Board
of Directors designates the period of time during which the
options vest and may be exercised. The term of options granted
to an officer or other key employee cannot exceed ten years from
date of grant. The term of options granted to a non-employee
director cannot exceed five years from date of grant. The per
share exercise price of an option granted may not be less than
100% of the fair market value of the common stock on the date of
the grant. Outstanding options totaling 334,219, 274,289 and
159,983 were exercisable at December 31, 1996,1995 and 1994,
respectively. The weighted average exercise price of options
exercisable at December 31, 1996 was $10.94.

Transactions under the plan are summarized as follows:

Number of Exercise price
options per option
Outstanding at December
31, 1993 103,653 $1.67 to $7.17
Granted 134,400 $14.00
Exercised (52,653) $1.67
-------
Outstanding at December
31, 1994 185,400 $7.17 to $14.00
Expired (51,000) $7.17 to $14.00
Granted 458,000 $8.75 to $12.00
-------
Outstanding at December
31, 1995 592,400 $7.17 to $14.00
Expired (97,500) $7.17 to $14.00
Granted 65,000 $6.00 to $8.75
-------
Outstanding at December
31, 1996 559,900 $6.00 to $14.00
=======

Total options outstanding at December 31, 1996 had a
weighted average exercise price of $9.94 and a weighted average
remaining contractual life of 7.3 years. Of the options
outstanding at December 31, 1996, 180,400 options had an exercise
price range of $12 - $14 per option and were granted to
directors, 379,500 had an exercise price range of $6 - $8.75 per
option and were granted to key employees and officers.
<PAGE>
To enable certain executive officers to exercise 260,400
options in 1993, the Company loaned them $708,000, evidenced by
five-year promissory notes. The notes bear interest at the
federal mid-term rate, are secured by the shares acquired and had
an outstanding balance of $367,750 at December 31, 1996 and 1995.

In August 1996, in connection with the acquisition of Hunt,
the Company granted options to Hunt for the purchase of 300,000
shares of stock at $6.50 per share with a term of five years.

The Company has adopted the disclosure - only provisions of
SFAS No. 123, "Accounting for Stock-Based Compensation."
Accordingly, no compensation expense has been recognized for the
stock options granted. Had compensation expense been determined
for the options granted in 1995 and 1996 consistent with the
provisions of SFAS No. 123, the Company's net earnings (loss) and
earnings (loss) per share would have been reduced to the proforma
amounts indicated below:

1996 1995

Net earnings (loss) - proforma $ (6,815,791) $ 3,449,114
Earnings (loss) per share-proforma $ (1.19) $ .60

The fair value of each option granted is estimated using the
Black-Scholes option pricing model with the following weighted-
average assumptions used for grants in 1995 and 1996:

Expected volatility 67%
Risk-free interest rate 6.5%
Expected lives 3-8 Years
Stock Price at Grant Date:
1996 $5.13
1995 $7.41

13. WARRANTS

In September of 1993, in conjunction with a private
placement offering of common stock, the Company offered warrants
at $.33 each to eligible stockholders. Each purchaser of common
stock was offered two warrants for every three shares of common
stock purchased at an exercise price of $6.67. As of December
31, 1996 all of these warrants had either been exercised or have
expired.

In October 1996, the Company issued 149,398 warrants at
$1.50 each to certain holders of expired warrants. The warrants
allow for the purchase of stock at an exercise price of $6.50 and
expire in September 2001.

Transactions are summarized as follows:
<TABLE>
<CAPTION>
Number of Exercise Price
warrants per warrant
<S> <C> <C>
Outstanding at December 31, 1993 427,200 $3.33 to $7.88
Exercised (68,400) $6.67 to $7.88
Outstanding at December 31, 1994 358,800 $3.33 to $7.88
Exercised
Expired (60,000) $7.88
Outstanding at December 31, 1995 298,800 $3.33 to $6.67
Exercised (4,200) $6.67
Expired (291,600) $6.67
Granted 149,398 $6.50
Outstanding at December 31, 1996 152,398 $3.33 to $6.50
</TABLE>
<PAGE>

14. EMPLOYEE BENEFIT PLAN

The Company sponsors a tax-qualified defined contribution
plan under Section 401(a) of the Internal Revenue Code covering
all full-time employees who have completed one year of service as
of a quarterly enrollment date. This Profit Sharing Plan includes
a "401(k)" arrangement pursuant to which participants may
contribute, subject to certain Code limitations, a percentage of
their salary on a "pre-tax" basis. The Company contributes a
matching contribution with respect to the contributions made by
participants at a rate determined by the Board of Directors of
the Company each year. The Company may also make an additional
contribution to the Profit Sharing Plan each year at the
discretion of the Board of Directors. The Company's 401(k)
matching contributions were $201,160, $136,437, and $116,557 in
1996, 1995 and 1994, respectively.

15. DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

SFAS No. 107, "Disclosures about Fair Value of Financial
Instruments," requires disclosures of the fair value of financial
instruments. The following methods and assumptions were used to
estimate the fair value of each class of financial instruments
held by the Company:

Cash and cash equivalents and restricted and insurance
deposits

The carrying amount approximates fair value because of the
short maturity of these instruments.

NOTES RECEIVABLE

The fair value of fixed rate notes receivable is estimated
by discounting future cash flows using current discount rates
that reflect the risks associated with similar types of loans.
At December 31, 1996 and 1995, the estimated fair value of the
Company's notes receivable approximates the carrying value.

ACCRUED INTEREST PAYABLE

The carrying amount approximates fair value as the majority
of interest payments are made semi-annually.

LONG-TERM DEBT

The fair value of the Company's long-term debt, excluding
unamortized discount, was calculated by discounting future cash
flows using an estimated fair market value interest rate. The
fair value used for the Senior Subordinated Notes was the
December 31, 1996 and 1995 bid price. The interest rate for all
other debt was estimated based on rates obtained by the Company
in 1996 and 1995.

The estimated fair values of the Company's financial
instruments at December 31 were as follows:
<TABLE>
<CAPTION>
1996 1995
Carrying Fair Carrying Fair
Amount Value Amount Value
<S> <C> <C> <C> <C>
Cash and cash equivalents $ 1,467,535 $1,467,535 $ 642,312 $ 642,312
Restricted and insurance deposits 1,187,629 1,187,629 1,119,971 1,119,971
Notes receivable 1,638,135 1,638,135 3,101,393 3,101,393
Accrued interest payable 499,808 499,808 476,072 476,072
Long-term debt 160,722,723 155,027,991 137,647,498 136,150,570
</TABLE>
16. INSURANCE

The Company is subject to liability for the deductible
portion as to policies of insurance, both past and present with
regard to bodily injury and property damage. The current per
occurrence deductible is $500,000, subject to satisfaction of an
additional aggregate annual deductible of $750,000. The Company's
operating subsidiaries act as self-insurers on workers'
compensation in several states in which the deductible is as high
as $500,000. The estimated liability for self-insured claims was
based on past loss experience, current trends and an adjustment
for abnormal claims experience related to the recent acquisitions
and other factors.
<PAGE>

Standby letters of credit in the amount of $5,122,127 and
$2,722,127 and deposits totaling $1,187,629 and $1,428,136 have
been furnished to insurance carriers as security for the
estimated cost of self-insured claims and for premium payments as
of December 31, 1996 and December 31, 1995, respectively. The
letters of credit are secured as described in Note 8.

17. MAJOR CUSTOMERS

Operating revenues derived from U. S. Governmental Agencies
were $52,510,980, $52,647,489 and $40,718,262 for the years ended
December 31, 1996, 1995 and 1994, respectively, which represents
17 percent, 20 percent and 18 percent of total operating revenues
for 1996, 1995 and 1994, respectively. There was no other single
customer that exceeded 10 percent of operating revenues during
this same period.

18. EXTRAORDINARY ITEMS

Due to the repayment of certain obligations in 1994, the
Company expensed the related unamortized discount of $366,511,
net of $136,000 income tax benefit, as an extraordinary item.

19. ADDITIONAL CASH FLOW INFORMATION

The Company entered into the following noncash transactions:

1996

A) At December 31, 1996, the Company recorded revenue equipment
and equipment payable of $273,500.

B) The Company acquired equipment of $3,178,639 by
incurring capital lease obligations.

1995

A) The Company sold property of $560,000 in exchange for a note
receivable.

B) At December 31, 1995, the Company recorded revenue
equipment and equipment payable of $635,170.

1994

A) The Company acquired equipment of $3,483,668 by incurring
capitalized lease obligations.

B) The Company sold revenue equipment and property of
$2,183,844 and $295,000, respectively in exchange for notes
receivable.
C) At December 31, 1994, the Company recorded revenue
equipment and equipment payable of $1,478,320.

20. RELATED PARTY TRANSACTIONS

In connection with the October 1995 acquisition of certain
assets of Eastern Flatbed Systems, Inc. (EFBS) which is partially
owned by an officer of the Company, the Company recorded goodwill
of $4.2 million. In 1996, the Company wrote off the unamortized
portion of the goodwill in the amount of $4.1 million due to a
deemed permanent impairment as a result of lower than expected
operating results and a shutdown of a portion of the division.

During 1994, the Company sold tractors, trailers and
satellite tracking devices, to EFBS in exchange for notes
receivable. The Company recognized a $537,000 gain associated
with the sale of these assets. The notes receivable relating to
the purchase of tractors and satellite tracking devices were
repaid in full in connection with the acquisition of certain assets of
EFBS in October 1995. The $712,500 note receivable
relating to the purchase of trailers has been assumed by a
stockholder of EFBS, bears interest at 10 percent, matures on
December 31, 1998 and had an outstanding balance of $380,583 and
$520,413 at December 31, 1996 and 1995, respectively.

As part of a transaction to prematurely terminate operating
leases for 134 high cost tractors, the Company was required to
lease 235 new tractors from the vendor, of which 100 were
subleased to EFBS from October 1994 through September 1995, for
monthly operating lease payments of $136,331 which exceed TRISM's
monthly lease expense of $120,231 by $16,100.

Stock option loans of $367,750 were outstanding at December
31, 1996 and 1995.

21. SUBSEQUENT EVENT -- CORPORATE RESTRUCTURING

In February 1997, the Company announced an organizational
restructuring to consolidate certain sales, operations and
administrative functions and reengineer certain business
processes to reduce overhead costs and increase operational
efficiency. The Company will include in its 1997 results
restructuring charges for the termination of certain employees,
relocation of key personnel, engagement of an outside consultant
and the closing of unproductive facilities. The Company
estimates these charges to approximate $2.5 to $3.5 million in
the first and second quarters of 1997.

<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of
TRISM, Inc.

We have audited the consolidated financial statements and
the financial statement schedule of TRISM, Inc. listed in Item 14
of this Form 10-K. These consolidated financial statements and
financial statement schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion
on these consolidated financial statements and financial
statement 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 TRISM, Inc. as of December 31,
1996 and 1995, and the consolidated results of its operations and
cash flows for each of the three years in the period ended
December 31, 1996 in conformity with generally accepted
accounting principles. In addition, in our opinion, the
financial statement schedule referred to above, when considered
in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information
required to be included therein.

COOPERS & LYBRAND L.L.P.

Atlanta, Georgia
March 19, 1997

<PAGE>
<TABLE>
<CAPTION>
QUARTERLY FINANCIAL DATA - UNAUDITED

First Second Third Fourth
Quarter Quarter Quarter Quarter
(In thousands, except per share amounts)
<S> <C> <C> <C> <C>
1996:
Revenues $73,040 $79,228 $80,166 $77,599
Operating income 250 3,573 4,857 (3,598)
Net income (loss) available to
common stockholders (2,198) 507 614 (5,521)
Earnings (loss) per share (.38) .09 .11 (.97)

Number of shares used in
computation of earnings
(loss) per common share 5,734 5,734 5,734 5,738

1995:
Revenues $62,176 $68,030 $67,658 $70,580
Operating income 4,006 7,001 4,864 3,722
Net income available to
common stockholders 352 2,224 1,205 93
Earnings per share
before extraordinary item .06 .39 .21 .01
Number of shares used in
computation of earnings
per common share 5,891 5,774 5,802 5,735

1994:
Revenues $48,998 $56,131 $59,870 $60,192
Operating income 2,372 5,925 6,576 4,528
Income (loss) before
extraordinary item (459) 2,050 2,288 902
Net income (loss) available to
common stockholders (690) 2,050 2,288 902
Earnings (loss) per share
before extraordinary item (.09) .34 .38 .15
Earnings (loss) per share (.13) .34 .38 .15
Number of shares used in
computation of earnings
(loss) per common share 5,329 6,084 6,067 5,999
</TABLE>
<PAGE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

NONE

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

A definitive proxy statement of TRISM, Inc. will be filed
not later than 120 days after the end of the fiscal year with the
Securities and Exchange Commission. The information regarding
directors will be included in the Company's Proxy Statement for
the 1997 Annual Meeting of Stockholders and is incorporated
herein by reference. The information with respect to the
executive officers of the Company required by this item is set
forth in Item 4 of this Form 10-K.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this item will be included in
the Company's Proxy Statement for the 1997 Annual Meeting of
Stockholders and is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT

Information required by this item will be included in the
Company's Proxy Statement for the 1997 Annual Meeting of
Stockholders and is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this item will be included in
the Company's Proxy for the 1997 Annual Meeting of Stockholders
and is incorporated herein by reference.
<PAGE>
PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K

Financial Statements ***
Consolidated Balance Sheets at December 31, 1996 and
December 31, 1995
Consolidated Statements of Operations for the three years
ended December 31, 1996
Consolidated Statements of Common Stockholders' Equity
for the three years ended December 31, 1996
Consolidated Statements of Cash Flows for the three years
ended December 31, 1996
Notes to Consolidated Financial Statements
Report of Independent Accountants

*** The financial statements of each of the Company's
subsidiaries are omitted because all of the
Company's subsidiaries guarantee the Company's
outstanding 10 3/4% Senior Subordinated Notes due
2000 on a full, unconditional, and joint and
several basis.

Financial Statement Schedule for the three years ended
December 31, 1996
Schedule II - Valuation and Qualifying Accounts

All other schedules for the Company are omitted because they
are not required or not applicable. The required information is
included in the financial statements or notes thereto.

EXHIBIT INDEX

The following exhibits are filed as part of this report.

Exhibit
Number Description

*3.1 -Certificate of Incorporation, as amended through
January 21, 1993, of TRISM, Inc.
*3.2 -By-laws of TRISM, Inc.
*4.1 -Form of Indenture
*4.2 -Specimen Certificate for the Common Stock, par
Value $.01 per share, of TRISM, Inc.
*10.1 -Profit Sharing Plan, as amended as of January 1, 1993.
*10.2 -Employment Contract, dated as of October 28, 1993,
between the Company and Michael L. Lawrence.
*10.3 -Employment Contract, dated as of October 28, 1993,
between the Company and Daryl W. Deel.
*10.4 -Employment Contract, dated as of October 28, 1993,
between Trism Specialized Carriers, Inc. and Gary W.
Hartter.
*10.5 -Promissory Note, dated as of October 28, 1993, of
Michael L. Lawrence in favor of the Company.
*10.6 -Promissory Note, dated as of October 28, 1993, of
Daryl W. Deel in favor of the Company.
*10.7 -Stock Option Plan for officers and key employees.
*10.8 -Form of Amended and Restated Stockholders Agreement,
dated January 29, 1993 between TRISM, Inc. and James
A. Carthaus, Frank P Cuscela, Janney Scott Montgomery
f/b/o, Joseph J. Daniero, Thomas Syracuse, Robert
Syracuse, Daniel Syracuse, James & Carol Syracuse,
John N. Irwin III, Jane Irwin, James F. Higgins
and Hillside Industries, Inc.
*10.9 -Agreement to Restructure, dated April 27, 1993, by and
between TSMB 2 Acquisition Corporation and Trism
Specialized Carriers, Inc. and Carrier Consultants,
Inc. (formerly PST, Inc.).
*10.10 -Promissory Note 1, dated February 12, 1993, by and
between TSMB 2 Acquisition Corporation and Trism
Specialized Carriers, Inc. and Carrier Consultants,
Inc. (formerly PST, Inc.).
*10.11 -Security Agreement, dated April 27, 1993, by and
between TSMB 2 Acquisition Corporation and Trism
Specialized Carriers, Inc. and Carrier Consultants,
Inc. (formerly PST, Inc.).
*10.12 -Trailer Purchase Agreement, dated April 27, 1993, by
and between Trism Specialized Carriers, Inc. and
TSMB 2 Acquisition Corporation and Carrier
Consultants, Inc. (formerly PST, Inc.).
*10.13 -Agreement to Restructure, dated April 27, 1993, by
and between Trism Specialized Carriers, Inc. and
TSMB 2 Acquisition Corporation and PTR&L Holding
Corporation (formerly PST Enterprises, Inc.).
*10.14 -Security Agreement, dated April 27, 1993, by and
between Trism Specialized Carriers, Inc. and TSMB 2
Acquisition Corporation and PTR&L Holding
Corporation (formerly PST Enterprises, Inc.).
*10.15 -Settlement Agreement to Restructure, dated January
15, 1993, by and between Trism Specialized Carriers,
Inc. and TSMB 2 Acquisition Corporation and PTR&L
Holding Corporation (formerly PST Enterprises,
Inc.).
*10.16 -Davenport Lease Agreement, dated January 15, 1993,
between Trism Specialized Carriers, Inc. and PTR&L
Holding Corporation (formerly PST Enterprises,
Inc.).
*10.17 -Promissory Note 2, dated February 1, 1993 by Trism
Specialized Carriers, Inc. and TSMB 2 Acquisition
Corporation and PTR&L Holding Corporation (formerly
PST Enterprises, Inc.) in connection with the
Restructure Agreement modifying the asset
acquisition agreement.
*10.18 -Promissory Note 3, dated February 1, 1993 by Trism
Specialized Carriers, Inc. and TSMB 2 Acquisition
Corporation and PTR&L Holding Corporation (formerly
PST Enterprises, Inc.) in connection with the
Restructure Agreement modifying the asset
acquisition agreement.
*10.19 -Promissory Note 4, dated March 1, 1993 by Trism
Specialized Carriers, Inc. and TSMB 2 Acquisition
Corporation and PTR&L Holding Corporation (formerly
PST Enterprises, Inc.) in connection with the
Restructure Agreement modifying the
asset acquisition agreement.
*10.20 -Stock Issuance Agreement, dated January 29, 1992,
between TRISM, Inc., TSMB 2 Acquisition Corporation,
Diversified Freight Services, Inc., Gary H. Smith,
Aubrey L. Scully and Michael R. Brannon.
*10.21 -Assumption of Liabilities Agreement, dated January
29, 1992, between TRISM, Inc., TSMB 2 Acquisition
Corporation, Diversified Freight Services, Inc.,
Gary H. Smith, Aubrey L. Scully and Michael R.
Brannon.
*10.22 -Non-Disclosure Agreement, dated April 22, 1993, by
and between Trism Specialized Carriers, Inc. and
certain employees of Trism Specialized Carriers,
Inc.
*10.23 -Consulting Agreements, dated June 1, 1993, by and
between Trism Management Services, Inc. and Walter
W. Lee (substantially similar in form to agreements
with Bradford Mills, Effective Leadership
Strategies, Inc. and Dunbar Associates).
**10.24 -Retainer Agreement, dated June 4, 1993, by and
between TRISM, Inc., Tri-State Motor Transit Co.,
McGil Special Services, Trism Specialized Carriers,
Inc. and Edward A. Vrooman.
**10.25 -Indenture, dated December 15, 1993, between TRISM,
Inc. and First National Trust Association, as
trustee.
**10.26 -Employment Contract, dated October 28, 1993,
between Tri-State Motor Transit Co. and Henry P.
Hoffman.
**10.27 -Agreement, dated as of January 1, 1994, between
TRISM, Inc. and Scott-Macon, Ltd.
**10.28 -Consulting Agreement, dated as of January 11, 1994,
between TRISM, Inc. and James M. Revie.
**10.29 -Form of Registration Rights Agreement, dated as of
January 24, 1994, between TRISM, Inc. and various
stockholders.
***10.30 Separation and Consulting Agreement between TRISM,
Inc. and Michael L. Lawrence dated March 1, 1995.
***10.31 Promissory Note dated June 3, 1994 in the amount of
$112,000.00 by L. Edward Berry, an officer of
TRISM, Inc.
11.1 Statement regarding computation of earnings per
common share.
*16.1 Letter regarding change in certified accountant.
21.1 Subsidiaries of TRISM, Inc.

*Exhibit is incorporated by reference to the Company's
Registration Statement on Form S-1, Registration No. 33-71222,
initially filed with the Securities and Exchange Commission on
November 4, 1993, as amended.

**Exhibit is incorporated by reference to the Company's Form 10-K
for the year ended December 31, 1993.

***Exhibit is filed with Form 10-K for the year ended December
31, 1994.

REPORTS ON FORM 8-K

During the fourth quarter of 1996, there were no reports
filed on Form 8-K.

<PAGE>
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.

TRISM, INC.

By: James M. Revie
James M. Revie
Director, Chairman of the
Board and Chief Executive
Officer

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below on March 13, 1997 by the
following persons on behalf of the Registrant and in the
capacities indicated.

Signature Title

James M. Revie Director, Chairman of the Board
James M. Revie and Chief Executive Officer

E. Virgil Conway Director
E. Virgil Conway

Julian H. Gingold Director
Julian H. Gingold

Norman Gross Director
Norman Gross

James F. Higgins Director
James F. Higgins

John J. Kilcullen Director, President and Chief
John J. Kilcullen Operating Officer

William M. Legg Director
William M. Legg

James L. McKenney Director
James L. McKenney

James G. Overley Senior Vice President of Finance
James G. Overley and Treasurer(Chief Financial
Officer)

John L. Ray Director
John L. Ray

<PAGE>
SCHEDULE II
<TABLE>
TRISM, INC.
VALUATION AND QUALIFYING ACCOUNTS
For the years ended December 31
<CAPTION>

COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
ADDITIONS
(1) (2)
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>
1996:
Allowance for doubtful accounts $1,584,386 $1,573,500 $ $761,265(B) $2,396,621

1995:
Allowance for doubtful accounts $1,709,634 $307,123 $ $432,371(B) $1,584,386

1994:
Allowance for doubtful accounts $1,093,900 $874,300 $66,264(A) $324,830(B) $1,709,634

(A) Diablo's and Powell's allowance at applicable acquisition date.

(B) Represents net write-offs of uncollectible accounts.

<PAGE>
EXHIBIT INDEX
Exhibit Number Description
11 Computation of earnings per common share
21 Subsidiaries of Trism, Inc.
27 Financial Data Schedule

<PAGE>

</TABLE>

[MULTIPLIER] 1,000
<TABLE>
<CAPTION>
For the years ended December 31,
1996 1995 1994
<S> <C> <C> <C>
Net income (loss)
Net income (loss) $(6,598) $3,874 $4,550
Undeclared dividends on
redeemable preferred stock
------ ----- ------
Net income (loss) available
to common stockholders $(6,598) $3,874 $4,550

Weighted average number of shares
Primary:
Average common shares
outstanding 5,734,187 5,757,054 5,637,842
Common share equivalents
resulting from
assumed exercise
of stock options 988 1,679 208,210
---------- --------- ---------
5,735,175 5,758,733 5,846,052
========== ========= =========
Fully diluted:
Average common shares
outstanding 5,734,187 5,757,054 5,637,842
Common share equivalents
resulting from
assumed exercise
of stock options 988 1,679 208,210
---------- --------- ---------
5,735,175 5,758,733 5,846,052
========= ========= =========
Earnings (loss) per common share:
Primary $(1.15) $.67 $.78
Fully $(1.15) $.67 $.78
</TABLE>

Primary earnings (loss) per common share are computed by
dividing net income (loss), after deduction of undeclared
dividends on redeemable preferred stock, by the weighted average
number of common shares and common share equivalents outstanding
during each presented period. Common share equivalents are
computed using the treasury stock method. Under the treasury
stock method, an average market price is used to determine the
number of common share equivalents for primary earnings (loss)
per common share. The higher of the average or the end of period
market price is used to determine the number of common share
equivalents for fully diluted earnings (loss) per common share.
<PAGE>

Trism Secured Transportation, Inc. Delaware

Tri-State Motor Transit Co. Delaware
Aero Body and Truck Equipment Company, Inc.,
Tri-State Transportation Service, Inc. Missouri

Diablo Systems Incorporated
d/b/a/ Diablo Transportation, Inc. California

Emerald Leasing, Inc. Nevada

McGil Special Services, Inc. Delaware

Trism Eastern, Inc.
d/b/a/ C.I. Whitten Transfer Delaware

Trism Heavy Haul, Inc. Delaware

Trism Specialized Carriers, Inc. Georgia
Trism Special Services, Inc. Georgia
AAA Truck Lease & Sales, Inc. Georgia

E.L. Powell & Sons Trucking Co., Inc. Oklahoma

Trism Transport Services, Inc. Utah

EFB, Inc. Delaware

TRISM Logistics, Inc. New Jersey

Trism Equipment, Inc. Delaware

TRISM Maintenance Services, Inc. Delaware

Transportation Recovery Systems, Inc. Delaware
<PAGE>

<ARTICLE> 5
<MULTIPLIER> 1,000
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 1,468
<SECURITIES> 0
<RECEIVABLES> 57,503
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 86,458
<PP&E> 176,557
<DEPRECIATION> 53,504
<TOTAL-ASSETS> 232,497
<CURRENT-LIABILITIES> 42,266
<BONDS> 148,878
0
0
<COMMON> 59
<OTHER-SE> 28,691
<TOTAL-LIABILITY-AND-EQUITY> 232,497
<SALES> 310,133
<TOTAL-REVENUES> 310,133
<CGS> 0
<TOTAL-COSTS> 304,951
<OTHER-EXPENSES> 497
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14,504
<INCOME-PRETAX> (9,898)
<INCOME-TAX> (3,300)
<INCOME-CONTINUING> (6,598)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,598)
<EPS-PRIMARY> (1.15)
<EPS-DILUTED> (1.15)

</TABLE>