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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 September 30, 1997
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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)
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<S> <C>
Delaware 63-6006515
(State or other jurisdiction of (IRS Employer Identification
incorporation or organization) Number)
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3275 Highway 30, Clayton, Alabama 36016
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(Address of principal executive offices)
(Zip Code)
(334) 775-1400
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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 November 4, 1997.
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<CAPTION>
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Common Stock, $.001 Par Value 3,700,688
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(Class) (Number of Shares)
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INDEX
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Page Number
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Part I. Financial Information (Unaudited)
Item 1. Condensed Financial Statements
Condensed Balance Sheets
September 30, 1997 and December 31, 1996 3
Condensed Statements of Operations
Three- and nine-month periods ended September 30, 1997 and 1996 5
Condensed Statements of Cash Flows
Nine-month period ended September 30, 1997 and 1996 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
Item 6. Exhibits and Reports on Form 8-K 10
Signatures 10
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2
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BOYD BROS. TRANSPORTATION INC.
CONDENSED BALANCE SHEETS
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<CAPTION>
September 30, December 31,
1997 1996
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(unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 2,638,299 $ 3,593,206
Marketable securities 0 100,000
Notes and accounts receivable
Trade and interline 7,621,869 5,541,471
Refundable income taxes 0 579,573
Accounts receivable - lease purchase 519,251
Other 869,424 274,876
Inventories 274,749 230,920
Prepaid tire expense 573,465 711,208
Other prepaid expenses 1,412,077 761,324
Deferred income tax 549,776 551,623
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Total current assets 14,458,910 12,344,201
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PROPERTY AND EQUIPMENT:
Land and land improvements 1,082,510 1,082,510
Buildings 3,229,613 3,240,496
Revenue equipment 54,925,609 51,513,665
Other equipment 8,477,826 8,111,012
Leasehold improvements 426,185 406,577
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Total 68,141,743 64,354,260
Less accumulated depreciation and
amortization 21,476,851 19,761,532
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Property and equipment, net 46,664,892 44,592,728
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OTHER ASSETS 161,636 346,050
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TOTAL $61,285,438 $57,282,979
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See notes to condensed financial statements.
3
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BOYD BROS. TRANSPORTATION INC.
CONDENSED BALANCE SHEETS
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<CAPTION>
September 30, December 31,
1997 1996
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(Unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $ 4,912,264 $ 4,625,204
Accounts payable - trade and interline 2,784,524 2,122,561
Accrued liabilities:
Self-insurance claims 2,392,814 2,203,999
Salaries and wages 999,449 465,665
Other 467,174 411,206
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Total current liabilities 11,556,225 9,828,635
LONG-TERM DEBT 15,366,699 15,197,840
DEFERRED INCOME TAXES 8,745,454 8,368,757
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Total liabilities 35,668,378 33,395,232
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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; 3,700,688
shares issued and
outstanding 3,701 3,701
Additional paid-in capital 13,780,616 13,780,616
Retained earnings 11,832,743 10,103,430
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Total stockholders' equity 25,617,060 23,887,747
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TOTAL $61,285,438 $57,282,979
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See notes to condensed financial statements.
4
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BOYD BROS. TRANSPORTATION INC.
CONDENSED STATEMENTS OF OPERATIONS
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Three Months Ended Nine Months Ended
September 30, September 30,
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1997 1996 1997 1996
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(unaudited) (unaudited)
<S> <C> <C> <C> <C>
OPERATING REVENUES $ 19,573,508 $ 17,528,798 $ 56,442,904 $ 48,807,561
OPERATING EXPENSES:
Salaries, wages and employee benefits 8,021,629 7,397,758 24,163,300 21,405,410
Fuel 2,808,239 2,737,145 8,781,072 7,888,791
Operating supplies 2,694,459 2,254,896 7,118,648 6,543,028
Taxes and licenses 596,281 608,275 1,661,226 1,718,443
Insurance and claims 923,768 704,320 2,629,391 2,594,655
Communications and utilities 330,572 303,380 943,985 871,121
Depreciation and amortization 2,289,882 2,093,418 6,802,829 6,082,447
Gain on disposition of property
and equipment, net (174,936) 46,468 (218,144) (761,849)
Other 71,480 140,488 304,629 431,389
Purchased transportation 300,640 0 318,471 0
------------ ------------ ------------ ------------
Total operating expenses 17,862,014 16,286,148 52,505,407 46,773,435
------------ ------------ ------------ ------------
OPERATING INCOME 1,711,494 1,242,650 3,937,497 2,034,126
OTHER (INCOME) EXPENSES:
Interest income (28,194) (30,368) (76,190) (77,122)
Interest on installments 370,954 400,715 1,014,335 1,025,723
------------ ------------ ------------ ------------
Other expenses, net 342,760 370,347 938,145 948,601
------------ ------------ ------------ ------------
INCOME BEFORE PROVISION
FOR INCOME TAXES 1,368,734 872,303 2,999,352 1,085,525
PROVISION FOR INCOME TAXES 579,170 365,000 1,270,035 505,183
------------ ------------ ------------ ------------
NET INCOME $ 789,564 $ 507,303 $ 1,729,317 $ 580,342
============ ============ ============ ============
NET INCOME PER SHARE $ 0.213 $ 0.137 $ 0.467 $ 0.155
============ ============ ============ ============
WEIGHTED AVERAGE SHARES
OUTSTANDING 3,700,688 3,714,873 3,700,688 3,734,745
</TABLE>
See notes to condensed financial statements.
5
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BOYD BROS. TRANSPORTATION INC.
CONDENSED STATEMENTS OF CASH FLOWS
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Nine Months Ended
September 30,
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1997 1996
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(Unaudited)
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OPERATING ACTIVITIES:
Net income $ 1,729,317 $ 580,342
Adjustments to reconcile net income:
to net cash provided by operating activities:
Depreciation and amortization 6,802,829 6,082,447
Gain on disposal of property and
equipment, net (218,144) (761,849)
Provision for deferred income taxes 1,270,035 505,183
Changes in assets and liabilities provided (used) cash:
Marketable securities 100,000 0
Notes and accounts receivable (3,000,165) 567,116
Other assets (372,425) (488,304)
Accounts payable trade and interline 661,963 67,308
Accrued liabilities 1,164,108 204,105
Deferred income taxes (891,491) (244,612)
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7,246,027 6,511,736
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INVESTING ACTIVITIES:
Capital expenditures (12,389,506) (19,947,839)
Proceeds from disposals of property and equipment 3,732,657 6,968,800
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(8,656,849) (12,979,039)
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FINANCING ACTIVITIES:
Proceeds from long-term debt 12,411,109 16,823,364
Principal payments on long-term debt (11,955,194) (8,657,348)
Repurchase of common stock 0 (928,500)
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455,915 7,237,516
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NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (954,907) 770,213
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 3,593,206 1,481,910
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BALANCE AT END OF PERIOD $ 2,638,299 $ 2,252,123
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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, 1996. 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.
3. CAPITAL TRANSACTIONS
In January 1996, the Company's Board of Directors authorized the repurchase of
up to 150,000 shares of common stock. During the first quarter of 1996 the
company repurchased 82,300 shares for $617,250. Through the first nine months of
1996 the company repurchased a total of 122,300 shares for $928,590. No shares
were repurchased during the first nine months of 1997.
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 11.66% For the three-month period ended September
30, 1997 compared to the same period in 1996 due to increased demand for the
Company's services and higher rates. 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 1997 with 594 tractors compared with
574 tractors as of September 30, 1996. Additionally, revenue per truck increased
due to better utilization and reduced deadhead.
Total operating expenses increased 9.68% during the three-month period ended
September 30, 1997 compared to the three months ended September 30, 1996, a
slower rate of increase than revenue. Operating supplies expense increased
19.49% during the three-month period ended September 30, 1997 compared to the
three months ended September 30, 1996. The increase was attributed to an
increase in maintenance costs. For the three-month period ended September 30,
1997, salaries, wages, and benefits were 8.43% higher than in the corresponding
period last year due to an increase in the number of drivers. Fuel expense
increased only 2.6% for the three-month period ended September 30, 1997 versus
1996. Decreasing diesel prices caused fuel costs to increase slower than revenue
for the quarter. Taxes and license expense decreased 1.97% for the three-month
period ended September 30, 1997 versus 1996. Depreciation and amortization
expense increased 9.38% due to the addition of new trucks. Insurance and claims
were up 31.16% for the three-month period ended September 30, 1997 versus 1996
due to inferior safety performance and resulting increases in reserves. The
operating ratio for the 3rd quarter of 1997 was 91.3% compared with 92.9% for
the third quarter of 1996. For the three-month period ended September 30, 1997
versus 1996, interest expense was down 7.45% due primarily to decreased debt.
Gain (loss) on sale of equipment increased from a loss of $46,468 during the
third quarter of 1996 to a gain of $174,936 in 1997. More trailers were sold
during the third quarter of 1997 than in the third quarter of 1996. Purchased
transportation expenses were $300,640 during the third quarter of 1997 compared
to no such expenses in 1996 since the owner-operator program was not in
existence in 1996. Other expense for the third quarter of 1997 was down $69,008,
or 49.1%. Environmental and professional fees were lower.
Operating revenues increased 15.64% during the nine month period ended September
30, 1997 compared with the same period in 1996. Operating expenses increased
12.25% during the nine-month period ended September 30, 1997 compared with the
same period in 1996. Salaries and wages increased 12.88% due to increased driver
wages. Fuel expense increased 11.31% for the nine-month period ended September
30, 1997 versus 1996. Fuel costs increased at a lower rate than revenue due to
decreasing diesel prices. For the first nine months ended September 30, 1997
versus 1996, operating supplies increased 8.8%, a much slower rate than revenue
growth. Maintenance expenses were down compared with last year, causing the rate
of increase in operating supplies to be lower than revenue growth. Tax and
license expenses decreased 3.33% due to credits received from states.
Depreciation and amortization expense increased 11.84% due to the addition of
new trucks. Insurance and claims were up only 1.34% compared with the same
period in 1996. Improved safety and lower accident claims over the full
nine-month period contributed to the improvement. Gain on sale of equipment
decreased from $761,849 during the first nine months of 1996 to $218,144 in 1997
as the Company traded fewer tractors than the previous year. The operating ratio
for the first nine months of 1997 was 93.02% compared with 95.83% for the same
period of 1996. For the nine-month period ended September 30, 1997 versus 1996,
interest expense was slightly lower, by 1.1%, due primarily to lower debt
levels. Other expenses decreased 29.38% for the nine months ended September 30,
1997 compared to 1996. Lower uncollectible reserves contributed to the decrease.
LIQUIDITY AND CAPITAL RESOURCES
Net cash flow provided by operating activities was $7,246,027 during the first
nine months of 1997, compared to $6,511,736 during the first nine months of
1996. The Company had a working capital surplus of $2,902,685 at September 30,
1997.
8
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During the first nine months of 1997, the Company purchased approximately
$12,400,000 of replacement tractors and trailers, along with 19 additional
tractors, of which $400,000 was financed with various lenders. 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
September 30, 1997 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.
9
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Part II. Other Information.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial data schedule (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, 1997.
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 7, 1997 /s/ Richard C. Bailey
---------------------
Richard C. Bailey, Chief Financial Officer
(Principal Accounting Officer)
10
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 2,638,299
<SECURITIES> 0
<RECEIVABLES> 7,621,869
<ALLOWANCES> 0
<INVENTORY> 274,749
<CURRENT-ASSETS> 14,458,910
<PP&E> 68,141,743
<DEPRECIATION> 21,476,851
<TOTAL-ASSETS> 61,285,438
<CURRENT-LIABILITIES> 11,556,225
<BONDS> 0
0
0
<COMMON> 3,701
<OTHER-SE> 25,613,659
<TOTAL-LIABILITY-AND-EQUITY> 61,285,438
<SALES> 0
<TOTAL-REVENUES> 56,442,904
<CGS> 0
<TOTAL-COSTS> 52,505,407
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 938,145
<INCOME-PRETAX> 2,999,352
<INCOME-TAX> 1,270,035
<INCOME-CONTINUING> 1,729,317
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,729,317
<EPS-PRIMARY> .467
<EPS-DILUTED> .467
</TABLE>
