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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from
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to
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Commission File Number 0-23948
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BOYD BROS. TRANSPORTATION INC.
(Exact name of Registrant as specified in its charter)
Delaware 63-6006515
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(State or other jurisdiction of (IRS Employer Identification
incorporation or organization) Number)
3275 Highway 30, Clayton, Alabama 36016
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(Address of principal executive offices)
(Zip Code)
(334) 775-3261
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(Registrant's telephone number, including area code)
Indicate by checkmark 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) Yes X No__, and (2) has been subject
to such filing requirements for the past 90 days. Yes X No
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Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of April 30, 1996.
Common Stock, $.001 Par Value 3,740,700
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(Class) (Number of Shares)
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BOYD BROS. TRANSPORTATION INC.
<TABLE>
<CAPTION>
INDEX
Page Number
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Part I. Financial Information (Unaudited)
Item 1. Condensed Financial Statements
Condensed Balance Sheets
December 31, 1995 and March 31, 1996 3
Condensed Statements of Operations
Three Month Period Ended March 31, 1996 and 1995 5
Condensed Statements of Cash Flows
Three Month Period Ended March 31, 1996 and 1995 6
Notes to Condensed Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
Part II. Other Information 10
Signatures 11
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BOYD BROS. TRANSPORTATION INC.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
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March 31 December 31
1996 1995
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(unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 260,925 $ 1,481,910
Marketable securities 100,000 100,000
Notes and accounts receivable (less
allowance for doubtful accounts of
$125,108)
Trade and interline 6,178,321 5,779,409
Refundable income taxes 1,161,311 1,161,311
Other - 842,508
Inventories 432,138 397,062
Prepaid tire expense 675,250 558,750
Other prepaid expenses 1,511,760 737,690
Deferred income tax 328,678 328,678
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Total current assets 10,648,383 11,387,318
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PROPERTY AND EQUIPMENT:
Land and land improvements 1,055,606 1,055,606
Buildings 3,205,827 3,174,363
Revenue equipment 49,078,974 46,139,369
Other equipment 7,561,695 7,481,290
Leasehold improvements 373,561 373,561
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Total 61,275,663 58,224,189
Less accumulated depreciation and
amortization 20,512,948 21,035,800
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Property and equipment, net 40,762,715 37,188,389
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OTHER ASSETS 331,136 316,012
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TOTAL $51,742,234 $48,891,719
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</TABLE>
See notes to condensed financial statements.
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BOYD BROS TRANSPORTATION INC.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
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March 31, December 31
1996 1995
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(Unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS# EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $ 4,841,195 $ 4,090,561
Accounts payable - trade and interline 774,620 932,524
Accrued liabilities:
Self-insurance claims 1,840,717 1,664,465
Salaries and wages 803,128 1,297,116
Environmental remediation (Note 2) 185,792 200,000
Other 440,549 526,416
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Total current liabilities 8,886,001 8,711,082
LONG-TERM DEBT 12,911,312 9,227,851
DEFERRED INCOME TAXES 6,807,946 6,964,156
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Total liabilities 28,605,259 24,903,089
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COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value - 1,000,000
shares authorized; no shares issued and
outstanding
Common stock, $.001 par value - 10,000,000
shares authorized; 3,823,000
shares issued and
outstanding 3,751 3,823
Additional paid-in capital 14,091,730 14,708,994
Retained earnings 9,041,494 9,275,813
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Total stockholders' equity 23,136,975 23,988,630
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TOTAL $51,742,234 $48,891,719
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</TABLE>
See notes to condensed financial statements.
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BOYD BROS. TRANSPORTATION INC.
CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
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Quarter Ended March 31,
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1996 1995
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(Unaudited)
<S> <C> <C>
OPERATING REVENUES $14,929,086 $14,637,735
OPERATING EXPENSES:
Salaries, wages and employee benefits 6,771,968 6,281,082
Operating supplies 4,526,272 3,867,181
Taxes and licenses 612,141 395,119
Insurance and claims 1,069,920 707,524
Communications and utilities 272,517 218,430
Depreciation and amortization 1,958,437 1,721,744
Gain on disposition of property
and equipment, net (334,970) (17,634)
Environmental remediation (Note 2) - (50,000)
Other 153,879 85,586
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Total operating expenses 15,030,164 13,209,032
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OPERATING INCOME (LOSS) (101,078) 1,428,703
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OTHER (INCOME) EXPENSES:
Interest income (24,854) (9,928)
Interest expense 268,119 166,976
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Other expenses, net 243,265 157,048
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INCOME (LOSS) BEFORE PROVISION FOR
INCOME TAXES (344,343) 1,271,655
PROVISION FOR INCOME TAXES (110,207) 493,471
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NET INCOME (LOSS) $ (234,136) $ 778,184
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NET INCOME (LOSS) PER SHARE $ (0.06) $ 0.20
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WEIGHTED AVERAGE SHARES
OUTSTANDING 3,763,368 3,823,000
</TABLE>
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BOYD BROS. TRANSPORTATION INC.
CONDENSED STATEMENTS OF CASH FLOWS
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<CAPTION>
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Quarter Ended March 31,
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1996 1995
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(Unaudited)
<S> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $ (234,136) $ 778,184
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization 1,958,437 1,721,744
Gain on disposal of property and
equipment, net (334,970) (17,634)
Provision for deferred income taxes (110,207) 493,471
Changes in assets and liabilities provided (used) cash:
Marketable securities - (250,000)
Notes and accounts receivable (398,912) (604,517)
Other assets (98,262) (97,981)
Accounts payable trade and interline (157,904) (72,951)
Accrued liabilities (417,994) (185,882)
Deferred income taxes (46,003) (544,395)
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160,049 1,220,039
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INVESTING ACTIVITIES:
Capital expenditures (6,669,593) (1,364,116)
Proceeds from disposals of property and equipment 1,471,800 35,500
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(5,197,793) (1,328,616)
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FINANCING ACTIVITIES:
Proceeds from long-term debt 6,026,499 800,000
Principal payments on long-term debt (1,592,404) (1,817,834)
Repurchase of common stock (617,336)
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3,816,759 (1,017,834)
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NET DECREASE IN CASH AND CASH EQUIVALENTS (1,220,985) (1,126,411)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 1,481,910 1,285,545
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BALANCE AT END OF PERIOD $ 260,925 $ 159,134
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</TABLE>
See notes to condensed financial statements.
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BOYD BROS. TRANSPORTATION INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying condensed financial statements have been prepared in
compliance with Form 10-Q instructions and thus do not include all the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, the condensed
statements reflect all adjustments, including those of a normal recurring
nature, necessary to present fairly the results of the reported interim
periods. The condensed statements should be read in conjunction with the
summary of accounting policies and notes to financial statements included in
the Company's Form 10-K for the year ended December 31, 1995. The results of
operations for interim periods presented are not necessarily indicative of the
operating results for an entire year.
2. ENVIRONMENTAL MATTERS
The Company's operations are subject to federal, state and local laws and
regulations concerning the environment. Certain of the Company's facilities
are located in historically industrial areas and, therefore, there is the
possibility of environmental liability as a result of operations by prior
owners as well as the Company's use of fuels and underground storage tanks at
its regional terminals.
During 1994 the Company retained an environmental consulting firm to conduct an
audit of its compliance with applicable federal, state and local laws and
regulations concerning the environment. The environmental consulting firm
detected the presence of soil contamination and potential ground water
contamination related primarily to the use of underground storage tanks,
including tanks used by a prior owner of the property, at the Company's
terminal in Birmingham, Alabama. The Company has notified the Alabama
Department of Environmental Management of this contamination. The Company has
initiated the process of removing and replacing all currently known underground
storage tanks at the Birmingham terminal. The Company also replaced all
underground storage tanks at the Clayton, Alabama terminal. Based upon cost
estimates provided by its environmental consulting firm and contractors in
1994, the Company recorded an $800,000 charge to establish a reserve for the
removal and replacement of underground storage tanks at the Company's
terminals. Based on subsequent reviews of this project by management and its
independent consultants, the Company reduced this reserve during 1995 by
$293,652, reflecting a decline in the current estimated costs of remediating
the sites. The reserve was reduced $50,000 during the first quarter of 1995.
The environmental remediation liability included in the accompanying balance
sheet at March 31, 1996 and December 31, 1995 was $185,792 and $200,000,
respectively. There can be no assurance that material liabilities or
expenditures will not arise from these or additional environmental matters that
may be discovered,
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or from future requirements of law. The Company does not believe that these
expenditures will have a material adverse effect on the Company's financial
condition.
3. CAPITAL TRANSACTIONS
During the first quarter of 1996 the Company repurchased 82,300 shares of its
own stock for $617,250. A total of 150,000 shares were authorized for
repurchase under the repurchase program.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Operating revenues increased 2% for the three month period ended March. 31,
1996 compared to the same period in 1995. The Company continued to focus on
increasing its fleet size to meet the anticipated demands of new and existing
customers, ending the first quarter of 1996 with 522 tractors compared with 480
tractors as of March 31, 1995.
Operating expenses increased by 13.8% for the three-month period ended March
31, 1996 compared with the three months ended March 31, 1995. Salaries and
wages increased 7.82% due primarily to increased driver wages and other
salaries for the three-month period ended March 31, 1996 vs. 1995. Operating
supplies increased 17.0% because of unusually high maintenance costs and higher
fuel costs for the three month period ended March 31, 1996 vs. 1995. Taxes and
license expense increased 55% due to credits received the first quarter of
1995. Depreciation and amortization expense increased 13.8% due to the
addition of new trucks and lower utilization. Insurance and claims were up 51%
due to an increase in safety liability reserves. The operating ratio for the
first quarter of 1996 was 100.7% compared with 90.2% for the first quarter of
1995. For the three-month period ended March 31 1996 vs. 1995 interest expense
was up 60.6 % due primarily to increased debt. Gain on sale increased from
$17,634 during the first quarter of 1995 to $334,970 in 1996. The Company
traded a substantial number of tractors during the first quarter of 1996.
The Company reserved $800,000 in the first quarter of 1994 for remediation
expenses associated with the removal and replacement of underground storage
tanks at some of its terminals. Due to an updated estimate on the total
environmental remediation costs, the Company reduced its environmental reserve
by $50,000 during the three-month period ended March 31, 1995.
LIQUIDITY AND CAPITAL RESOURCES
Net cash flow provided by operating activities was $160,049 during the first
three months of 1996, compared to $1,220,039 during the first three months of
1995. The Company had a working capital surplus of $1,762,382 at March 31,
1996.
Management anticipates increasing the Company's fleet in 1996 by an aggregate
of 78 tractors net of replacements, at an anticipated cost of approximately
$6.0 million. As of March 31, 1996 the Company has added no net addition of
tractors. Management expects to finance such equipment purchases through
equipment financing arrangements with various lenders. Historically, the
Company has relied on cash generated from operations to fund its working
capital requirements. However, the Company has a line of credit with AmSouth
Bank permitting short-term borrowings of up to $1.5 million at prime less
.125%. At March 31, 1996 the Company had no outstanding borrowings on
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its line of credit. Management believes that the line of credit, borrowing
facilities and cash flow from operations are sufficient to meet its financing
needs.
PART II. Other Information.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned duly authorized.
Boyd Bros. Transportation Inc.
(Registrant)
Date: May 13, 1996 /s/ Richard Bailey
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Richard Bailey, Chief Financial Officer
(Principal Accounting Officer)
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EXHIBITS
Exhibit 27 Financial Data Schedule (for SEC use only)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF BOYD BROS. TRANSPORTATION FOR THE THREE MONTHS ENDED
MARCH 31, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 260,925
<SECURITIES> 100,000
<RECEIVABLES> 6,178,321
<ALLOWANCES> 0
<INVENTORY> 432,138
<CURRENT-ASSETS> 10,648,383
<PP&E> 61,275,663
<DEPRECIATION> 20,512,948
<TOTAL-ASSETS> 51,742,234
<CURRENT-LIABILITIES> 8,886,001
<BONDS> 0
0
0
<COMMON> 3,751
<OTHER-SE> 23,133,224
<TOTAL-LIABILITY-AND-EQUITY> 51,742,234
<SALES> 14,929,086
<TOTAL-REVENUES> 14,929,086
<CGS> 15,030,164
<TOTAL-COSTS> 15,030,164
<OTHER-EXPENSES> 243,265
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 268,119
<INCOME-PRETAX> (344,343)
<INCOME-TAX> (110,207)
<INCOME-CONTINUING> (344,343)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (234,136)
<EPS-PRIMARY> (.06)
<EPS-DILUTED> (.06)
</TABLE>
