<PAGE> 1
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 June 30, 1996
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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
(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 ___
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of June 30, 1996.
Common Stock, $.001 Par Value 3,728,050
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(Class) (Number of Shares)
1
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INDEX
Page Number
<TABLE>
<S> <C> <C>
Part I. Financial Information (Unaudited)
Item 1. Condensed Financial Statements
Condensed Balance Sheets
June 30, 1996 and December 31, 1995 3
Condensed Statements of Operations
Three-month period ended June 30, 1996 and 1995 and
Six-month period ended June 30, 1996 and 1995 5
Condensed Statements of Cash Flows
Six-month period ended June 30, 1996 and 1995 6
Notes to Condensed Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Part II. Other Information 9
Signatures 10
</TABLE>
2
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BOYD BROS. TRANSPORTATION INC.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
---- ----
(unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 482,590 $1,481,910
Marketable securities 100,000 100,000
Notes and accounts receivable (less
allowance for doubtful accounts of
$125,108)
Trade and interline 6,407,469 5,779,409
Refundable income taxes 1,080,707 1,161,311
Other 1,030,392 842,508
Inventories 368,265 397,062
Prepaid tire expense 982,167 558,750
Other prepaid expenses 1,551,604 737,690
Deferred income tax 328,678 328,678
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Total current assets 12,331,872 11,387,318
----------- -----------
PROPERTY AND EQUIPMENT:
Land and land improvements 1,082,510 1,055,606
Buildings 3,235,034 3,174,363
Revenue equipment 48,368,239 46,139,369
Other equipment 7,648,503 7,481,290
Leasehold improvements 373,561 373,561
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Total 60,707,847 58,224,189
Less accumulated depreciation and
amortization 16,305,915 21,035,800
Property and equipment, net 44,401,932 37,188,389
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OTHER ASSETS 331,136 316,012
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TOTAL $57,064,940 $48,891,719
=========== ===========
</TABLE>
See notes to condensed financial statements.
3
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BOYD BROS TRANSPORTATION INC.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
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(Unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS# EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt S 5,197,652 $ 4,090,561
Accounts payable - trade and interline 1,715,104 932,524
Accrued liabilities:
Self-insurance claims 2,042,961 1,664,465
Salaries and wages 849,624 1,297,116
Environmental remediation (Note 2) 162,938 200,000
Other 571,364 526,416
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Total current liabilities 10,539,643 8,711,082
LONG-TERM DEBT 16,221,926 9,227,851
DEFERRED INCOME TAXES 7,046,681 6,964,156
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Total liabilities 33,808,250 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; 3,728,050
shares issued and
outstanding 3,716 3,823
Additional paid-in capital 13,904,351 14,708,994
Retained earnings 9,348,623 9,275,813
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Total stockholders' equity 23,256,690 23,988,630
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TOTAL $57,064,940 $48,891,719
=========== ===========
</TABLE>
See notes to condensed financial statements.
4
<PAGE> 5
BOYD BROS. TRANSPORTATION INC.
CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
QUARTER ENDED JUNE 30, SIX MONTH ENDED JUNE 30,
1996 1995 1996 1995
---- ---- ---- ----
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
OPERATING REVENUES $16,349,678 $15,987,342 $31,278,763 $30,625,077
OPERATING EXPENSES:
Salaries, wages and employee benefits 7,235,860 7,035,806 14,007,762 13,316,888
Operating supplies 4,913,421 4,374,239 9,439,265 8,241,420
Taxes and licenses 498,027 401,118 1,110,169 796,237
Insurance and claims 820,416 937,401 1,890,336 1,644,925
Communications and utilities 295,224 252,443 567,741 470,686
Depreciation and amortization 2,030,619 1,760,441 3,989,056 3,482,185
Gain on disposition of property
and equipment, net (470,927) (168,075) (808,317) (185,708)
Environmental remediation (Note 2) 0 0 0 (50,000)
Other 137,020 153,346 290,901 238,931
----------- ----------- ---------- -----------
Total operating expenses 15,459,660 14,746,719 30,486,913 27,955,564
----------- ----------- ---------- -----------
OPERATING INCOME 890,018 1,240,623 791,850 2,669,513
----------- ----------- ---------- -----------
OTHER (INCOME) EXPENSES:
Interest income (21,899) (19,396) (46,753) (29,324)
Interest expense 354,469 174,711 625,008 341,687
----------- ----------- ---------- -----------
Other expenses, net 332,570 155,315 578,255 312,363
----------- ----------- ---------- -----------
INCOME BEFORE PROVISION FOR
INCOME TAXES 557,448 1,085,308 213,595 2,357,150
PROVISION FOR INCOME TAXES 250,415 404,899 140,208 898,370
NET INCOME $ 307,033 $ 680,409 $ 73,387 $ 1,458,780
=========== =========== ========== ===========
NET INCOME PER SHARE $ 0.082 $ 0.178 $ 0.020 $ 0.382
=========== =========== ========== ===========
WEIGHTED AVERAGE SHARES
OUTSTANDING 3,728,050 3,823,000 3,744,773 3,823,007
</TABLE>
See notes to condensed financial statements.
5
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BOYD BROS. TRANSPORTATION INC.
CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Quarter Ended June 30,
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1996 1995
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(Unaudited)
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $73,387 $1,458,780
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 3,989,056 3,482,185
Gain on disposal of property and
equipment, net (808,317) (185,708)
Provision for deferred income taxes 140,208 893,370
Changes in assets and liabilities provided (used) cash:
Marketable Securities 0 (500,000)
Notes and accounts receivable (735,340) (1,582,691)
Other assets (1,224,235) (728,777)
Accounts payable trade and interline 782,580 1,529,027
Accrued liabilities (61,110) (92,361)
Deferred income taxes (57,683) (929,138)
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2,098,546 3,344,687
INVESTING ACTIVITIES:
Capital expenditures (16,724,988) (5,444,800)
Proceeds from disposals of property and equipment 6,330,706 791,200
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(10,394,282) (4,653,600)
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FINANCING ACTIVITIES:
Proceeds from long-term debt 11,850,906 3,187,006
Principal payments on long-term debt (3,749,740) (2,469,408)
Repurchase of common stock (804,750) 0
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7,296,416 717,598
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NET DECREASE IN CASH AND
CASH EQUIVALENTS (999,320) (591,315)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 1,481,910 1,285,545
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BALANCE AT END OF PERIOD $ 482,590 $ 694,230
============ ============
</TABLE>
See notes to condensed financial statements.
6
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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 six months of
1995. The environmental remediation liability included in the accompanying
balance sheet at June 30, 1996 and December 31, 1995 was $162,938 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, 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 second quarter of 1996 the Company repurchased 25,000 shares of its
own stock for $187,500. For the first six months ended 1996 the Company
repurchased an aggregate of 107,300 shares for $804,840. A total of 150,000
shares were authorized for repurchase under the repurchase program.
7
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Operating revenues increased 2.3% for the three-month period ended June 30,
1996 compared to the same period in 1995. Operating revenues increased 2.1% for
the six-month period ended June 30, 1996. The Company continued to focus on
increasing its fleet size to meet the anticipated demands of new and existing
customers, ending the first six months of 1996 with 522 tractors compared with
511 tractors as of June 30, 1995.
Operating expenses increased by 4.8% for the three-month period ended June 30,
1996 compared with the three months ended June 30, 1995. Salaries and wages
increased 2.84% for the quarter due primarily to increased driver wages and
workmen's compensation. Operating supplies increased 12.3% because of higher
maintenance and fuel costs for the three month period ended June 30, 1996 vs.
1995. Taxes and license expense increased 24% due to higher ad valorem taxes in
1996. Depreciation and amortization expense increased 15.4% due to the
addition of new trucks and lower utilization. Insurance and claims were down
12.5% due to a decrease in safety liability reserves. The operating ratio for
the second quarter of 1996 was 94.6% compared with 92.2% for the second quarter
of 1995. For the three-month period ended June 30, 1996 vs. 1995 interest
expense was up 102.9% due primarily to increased debt. Gain on sale increased
from $168,075 during the second quarter of 1995 to $470,927 in 1996. The
Company traded a substantial number of tractors during the second quarter of
1996.
Operating expenses increased 9.1% for the six-month period ended June 30, 1996,
compared to the same period in 1995. Salaries and wages increased 5.19% due to
increased driver wages and workmen's compensation costs. Operating supplies
increased 14.5% because of higher fuel and maintenance costs for the six-month
period ended June 30, 1996 vs. 1995. Tax and license expense increased 39.4%
due to higher ad valorem taxes and other credits received during 1995.
Depreciation and amortization expense increased 14.6% due to the addition of
new trucks and lower utilization. Insurance and claims were up 14.9% due to an
increase in safety liability reserves. Gain on sale increased from $185,708
during the first six months of 1995 to $808,317 in 1996. The Company traded a
substantial number of tractors during the first six months of 1996 vs. 1995.
The operating ratio for the first six months of 1996 was 97.5% compared to
91.3% in 1995. For the six-month period ended June 30, 1996 vs. 1995 interest
expense was up 82.9% due primarily to increased debt.
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 six-month period ended June 30, 1995.
LIQUIDITY AND CAPITAL RESOURCES
Net cash flow provided by operating activities was $2,098,546 during the first
six months of 1996, compared to $3,344,687 during the first six months of 1995.
The Company had a working capital surplus of $1,792,229 at June 30, 1996.
Management anticipates increasing the Company's fleet in 1996 by an aggregate
of 48 tractors net of replacements, at an anticipated cost of approximately
$3.6 million. During the first six months of 1996, the Company purchased
approximately $16.7 million of replacement tractors and trailers, of which
$11.8 million was financed with various lenders. As of June 30, 1996 the
Company has added no net addition of tractors. Management expects to continue
financing 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 June 30, 1996 the Company had no
outstanding borrowings on 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.
8
<PAGE> 9
PART II. Other Information.
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)
/s/ Richard Bailey
Date: August 9, 1996 ---------------------------------------
Richard Bailey, Chief Financial Officer
(Principal Accounting Officer)
9
<PAGE> 10
Exhibit Index
Exhibit 27 Financial Data Schedule (for SEC use only)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 482,590
<SECURITIES> 100,000
<RECEIVABLES> 6,407,469
<ALLOWANCES> 125,108
<INVENTORY> 368,265
<CURRENT-ASSETS> 12,331,872
<PP&E> 44,401,932
<DEPRECIATION> 16,305,915
<TOTAL-ASSETS> 57,064,940
<CURRENT-LIABILITIES> 10,539,643
<BONDS> 0
0
0
<COMMON> 3,716
<OTHER-SE> 23,256,690
<TOTAL-LIABILITY-AND-EQUITY> 57,064,940
<SALES> 31,278,763
<TOTAL-REVENUES> 31,278,763
<CGS> 0
<TOTAL-COSTS> 30,486,913
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 578,255
<INCOME-PRETAX> 213,595
<INCOME-TAX> 140,208
<INCOME-CONTINUING> 73,387
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 73,387
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
