<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 Sept. 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________________
to _____________________
Commission File Number 0-23948
-------------------------------------------------------
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
-----------------------------------------
(Address of principal executive offices)
(Zip Code)
(334) 775-1400
--------------
(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 Sept. 30, 1996.
Common Stock, $.001 Par Value 3,700,688
----------------------------- ---------
(Class) (Number of Shares)
<PAGE> 2
INDEX
<TABLE>
<CAPTION>
Page Number
-----------
<S> <C> <C>
Part I. Financial Information (Unaudited)
Item 1. Condensed Financial Statements
Condensed Balance Sheets
Sept. 30, 1996 and December 31, 1995 3
Condensed Statements of Operations
Three-month period ended Sept. 30, 1996 and 1995 and
Nine-month period ended Sept. 30, 1996 and 1995 5
Condensed Statements of Cash Flows
Nine-month period ended Sept. 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 9
</TABLE>
2
<PAGE> 3
BOYD BROS. TRANSPORTATION INC.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
Sept. 30, December 31,
1996 1995
---- ----
(unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $2,252,103 $1,481,910
Marketable securities 100,000 100,000
Notes and accounts receivable (less
allowance for doubtful accounts of
$125,108) 6,373,604 5,779,409
Refundable income taxes - 1,161,311
Other 110,012 842,508
Inventories 288,591 397,062
Prepaid tire expense 962,416 558,750
Other prepaid expenses 1,648,161 737,690
Deferred income tax 328,678 328,678
----------- -----------
Total current assets 12,063,565 11,387,318
----------- -----------
PROPERTY AND EQUIPMENT:
Land and land improvements 1,082,510 1,055,606
Buildings 3,240,496 3,174,363
Revenue equipment 50,026,078 46,139,369
Other equipment 7,804,739 7,481,290
Leasehold improvements 380,727 373,561
----------- -----------
Total 62,534,550 58,224,189
Less accumulated depreciation and
amortization 17,687,720 21,035,800
----------- -----------
Property and equipment, net 44,846,830 37,188,389
----------- -----------
OTHER ASSETS 331,146 316,012
----------- -----------
TOTAL $57,241,541 $48,891,719
=========== ===========
</TABLE>
See notes to condensed financial statements.
3
<PAGE> 4
BOYD BROS TRANSPORTATION INC.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
Sept. 30, December 31,
1996 1995
---- ----
(Unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS# EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $4,966,716 $4,090,561
Accounts payable - trade and interline 999,832 932,524
Accrued liabilities:
Self-insurance claims 1,923,282 1,664,465
Salaries and wages 1,030,834 1,297,116
Environmental Remediation 152,358 200,000
Other 785,628 526,416
----------- -----------
Total current liabilities 9,858,650 8,711,082
LONG-TERM DEBT 16,517,712 9,227,851
DEFERRED INCOME TAXES 7,224,727 6,964,156
-----------
Total liabilities 33,601,089 24,903,089
----------- -----------
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; 3,700,688
shares issued and
outstanding 3,701 3,823
Additional paid-in capital 13,780,616 14,708,994
Retained earnings 9,856,135 9,275,813
----------- -----------
Total stockholders' equity 23,640,452 23,988,630
----------- -----------
TOTAL $57,241,541 $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 Sept. 30, Nine Months Ended Sept. 30,
----------------------- ---------------------------
1996 1995 1996 1995
---- ---- ---- ----
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
OPERATING REVENUES $17,528,798 $15,826,763 $48,807,561 $46,452,705
OPERATING EXPENSES:
Salaries, wages and employee benefits 7,397,758 7,367,398 21,405,410 20,684,285
Fuel 2,737,145 2,293,815 7,888,791 6,704,898
Operating supplies 2,254,896 2,219,768 6,543,028 6,049,975
Taxes and licenses 608,275 533,472 1,718,443 1,329,709
Insurance and claims 704,320 849,910 2,594,655 2,494,835
Communications and utilities 303,380 270,185 871,121 740,871
Depreciation and amortization 2,093,418 1,885,221 6,082,447 5,367,407
Gain on disposition of property
and equipment, net 46,468 (369,072) (761,849) (554,780)
Environmental remediation (Note 2) - (100,000) 13,900 (150,000)
Other 140,488 114,634 417,489 353,566
----------- ----------- ----------- -----------
Total operating expenses 16,286,148 15,065,331 46,773,435 43,020,766
----------- ----------- ----------- -----------
OPERATING INCOME 1,242,650 761,432 2,034,126 3,431,939
----------- ----------- ----------- -----------
OTHER (INCOME) EXPENSES:
Interest income (30,368) (12,125) (77,122) (41,449)
Interest expense 400,715 218,914 1,025,723 560,599
----------- ----------- ----------- -----------
Other expenses, net 370,347 206,789 948,601 519,150
----------- ----------- ----------- -----------
INCOME BEFORE PROVISION FOR
INCOME TAXES 872,303 554,643 1,085,525 2,912,789
PROVISION FOR INCOME TAXES 365,000 242,234 505,183 1,140,604
----------- ----------- ----------- -----------
NET INCOME $ 507,303 $ 312,409 $ 580,342 $ 1,772,185
=========== =========== =========== ===========
NET INCOME PER SHARE $ 0.137 $ 0.082 $ 0.155 $ 0.464
=========== =========== =========== ===========
WEIGHTED AVERAGE SHARES
OUTSTANDING 3,714,873 3,823,000 3,734,745 3,823,000
</TABLE>
See notes to condensed financial statements.
5
<PAGE> 6
BOYD BROS. TRANSPORTATION INC.
CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended Sept. 30,
1996 1995
---- ----
(Unaudited)
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 580,342 $1,772,185
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 6,082,447 5,367,407
Gain on disposal of property and
equipment, net (761,849) (554,780)
Provision for deferred income taxes 505,183 1,140,604
Changes in assets and liabilities provided (used) cash:
Marketable Securities (250,000)
Notes and accounts receivable 567,116 (2,843,754)
Other assets (488,304) (623,760)
Accounts payable trade and interline 67,308 102,831
Accrued liabilities 204,105 55,166
Deferred income taxes (244,612) (1,204,980)
----------- -----------
6,511,736 2,960,919
----------- -----------
INVESTING ACTIVITIES:
Capital expenditures (19,947,839) (9,566,663)
Proceeds from disposals of property and equipment 6,968,800 1,925,090
----------- -----------
(12,979,039) (7,641,573)
----------- -----------
FINANCING ACTIVITIES:
Proceeds from long-term debt 16,823,364 7,194,212
Principal payments on long-term debt (8,657,348) (3,546,362)
Repurchase of common stock (928,500) -
----------- -----------
7,237,516 3,647,850
----------- -----------
NET DECREASE IN CASH AND
CASH EQUIVALENTS 770,213 (1,032,804)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 1,481,910 1,285,545
----------- -----------
BALANCE AT END OF PERIOD $ 2,252,123 $ 252,741
=========== ===========
</TABLE>
See notes to condensed financial statements.
6
<PAGE> 7
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
$150,000 during the first nine months of 1995. The environmental remediation
liability included in the accompanying balance sheet at Sept. 30, 1996 and
December 31, 1995 was $152,358 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 third quarter of 1996 the Company repurchased 15,000 shares of its
own stock for $123,750. For the first nine months ended 1996 the Company
repurchased an aggregate of 122,300 shares for $928,590. A total of 150,000
shares were authorized for repurchase under the repurchase program.
7
<PAGE> 8
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Operating revenues increased 10.75% for the three-month period ended Sept. 30,
1996 compared to the same period in 1995. Operating revenues increased 5.1% for
the nine-month period ended Sept. 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 nine months of 1996 with 554 tractors compared with
524 tractors as of Sept. 30, 1995.
Operating expenses increased by 8.1% for the three-month period ended Sept. 30,
1996 compared with the three months ended Sept. 30, 1995. Fuel expense
increased 19.3% because of higher fuel prices for the three month period ended
Sept. 30, 1996 vs. 1995. Taxes and license expense increased 14% due to higher
ad valorem taxes in 1996. Depreciation and amortization expense increased 11.0%
due to the addition of new trucks. Insurance and claims were down 17.1% due to
a decrease in safety liability reserves. The operating ratio for the third
quarter of 1996 was 92.9% compared with 95.2% for the third quarter of 1995.
For the three-month period ended Sept. 30, 1996 vs. 1995 interest expense was up
83.1% due primarily to increased debt. Gain on sale decreased from $369,072
during the third quarter of 1995 to a loss of $46,468 in 1996.
Operating expenses increased 8.7% for the nine-month period ended Sept.30, 1996,
compared to the same period in 1995. Fuel costs increased 17.7% during the
first nine months of 1996 over 1995 because of higher fuel prices. Operating
supplies increased 8.2% because of higher auxiliary costs for the nine-month
period ended Sept. 30, 1996 vs. 1995. Tax and license expense increased 29.2%
due to higher ad valorem taxes and other credits received during 1995.
Depreciation and amortization expense increased 13.3% due to the addition of new
trucks and lower utilization. Gain on sale increased from $554,780 during the
first nine months of 1995 to $761,849 in 1996. The Company traded a substantial
number of tractors during the first nine months of 1996 vs. 1995. The operating
ratio for the first nine months of 1996 was 95.8% compared to 92.6% in 1995.
For the nine-month period ended Sept. 30, 1996 vs. 1995 interest expense was up
83.0% 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 $150,000 during the nine-month period ended Sept. 30, 1995.
LIQUIDITY AND CAPITAL RESOURCES
Net cash flow provided by operating activities was $6,511,736 during the first
nine months of 1996, compared to $2,960,919 during the first nine months of
1995. The Company had a working capital surplus of $2,204,915 at Sept. 30,
1996.
Management anticipates increasing the Company's fleet in 1996 by an aggregate of
53 tractors net of replacements, at an anticipated cost of approximately $4.0
million. During the first nine months of 1996, the Company purchased
approximately $20.3 million of replacement tractors and trailers, of which $17.0
million was financed with various lenders. As of Sept 30, 1996 the Company has
acquired 30 net additional 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 Sept. 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.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 27 - Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Registrant during
the quarter ended September 30, 1996.
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: November 11, 1996 /s/ Richard C. Bailey
------------------------------------------
Richard C. 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> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 2,252,103
<SECURITIES> 100,000
<RECEIVABLES> 6,373,604
<ALLOWANCES> 0
<INVENTORY> 288,591
<CURRENT-ASSETS> 12,063,565
<PP&E> 62,534,550
<DEPRECIATION> 17,687,720
<TOTAL-ASSETS> 57,241,541
<CURRENT-LIABILITIES> 9,858,650
<BONDS> 0
0
0
<COMMON> 3,701
<OTHER-SE> 23,636,751
<TOTAL-LIABILITY-AND-EQUITY> 57,241,541
<SALES> 0
<TOTAL-REVENUES> 48,807,561
<CGS> 0
<TOTAL-COSTS> 46,773,435
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 948,601
<INCOME-PRETAX> 1,085,525
<INCOME-TAX> 505,183
<INCOME-CONTINUING> 580,342
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 580,342
<EPS-PRIMARY> .155
<EPS-DILUTED> .155
</TABLE>
