<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, 1997
-------------
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 July 31, 1997.
Common Stock, $.001 Par Value 3,700,688
----------------------------- ---------
(Class) (Number of Shares)
<PAGE> 2
INDEX
<TABLE>
<CAPTION>
Page Number
<S> <C>
Part I. Financial Information (Unaudited)
Condensed Balance Sheets
June 30, 1997 and December 31, 1996 3
Condensed Statements of Operations
Three- and six-month periods ended June 30, 1997 and 1996 5
Condensed Statements of Cash Flows
Six-month period ended June 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 4. Submission of Matters to a Vote of Security Holders 10
Item 6. Exhibits and Reports on Form 8-K 10
Signatures 11
</TABLE>
2
<PAGE> 3
BOYD BROS. TRANSPORTATION INC.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
----------- -----------
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 2,162,595 $ 3,593,206
Marketable securities -- 100,000
Notes and accounts receivable
Trade and interline 7,286,417 5,541,471
Refundable income taxes -- 274,876
Other 905,414 579,573
Inventories 209,840 230,920
Prepaid tire expense 509,707 711,208
Other prepaid expenses 1,575,376 761,324
Deferred income tax 549,776 530,623
----------- -----------
Total current assets 13,199,125 12,323,201
----------- -----------
PROPERTY AND EQUIPMENT:
Land and land improvements 1,082,510 1,082,510
Buildings 3,240,496 3,240,496
Revenue equipment 54,300,903 51,513,665
Other equipment 8,335,989 8,111,012
Leasehold improvements 426,185 406,577
----------- -----------
Total 67,386,083 64,354,260
Less accumulated depreciation and
amortization 21,324,895 19,761,532
----------- -----------
Property and equipment, net 46,061,188 44,592,728
----------- -----------
OTHER ASSETS 161,636 346,050
----------- -----------
TOTAL $59,421,949 $57,261,979
=========== ===========
</TABLE>
See notes to condensed financial statements.
3
<PAGE> 4
BOYD BROS TRANSPORTATION INC.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
----------- -----------
(UNAUDITED)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $ 4,954,941 $ 4,625,204
Accounts payable - trade and interline 1,089,320 2,122,561
Accrued liabilities:
Self-insurance claims 2,364,061 2,203,999
Salaries and wages 1,120,974 465,665
Other 719,811 411,206
----------- -----------
Total current liabilities 10,249,107 9,828,635
LONG-TERM DEBT 16,012,119 15,197,840
DEFERRED INCOME TAXES 8,329,908 8,347,757
----------- -----------
Total liabilities 34,591,134 33,374,232
----------- -----------
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 11,046,498 10,103,430
----------- -----------
Total stockholders' equity 24,830,815 23,887,747
----------- -----------
TOTAL $59,421,949 $57,261,979
=========== ===========
</TABLE>
See notes to condensed financial statements.
4
<PAGE> 5
BOYD BROS. TRANSPORTATION INC.
CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
----------------------------- -----------------------------
1997 1996 1997 1996
------------ ------------ ------------ ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
OPERATING REVENUES $ 19,303,013 $ 16,349,678 $ 36,499,919 $ 31,278,763
OPERATING EXPENSES:
Salaries, wages and employee benefits 8,613,211 7,235,860 16,141,671 14,007,762
Fuel 2,870,959 2,597,275 5,603,368 --
Operating supplies 2,236,107 2,316,146 4,424,419 9,439,265
Taxes and licenses 598,374 498,027 1,064,944 1,110,169
Insurance and claims 841,917 820,416 1,705,623 1,890,336
Communications and utilities 306,626 295,224 613,413 567,741
Depreciation and amortization 2,340,852 2,030,619 4,512,947 3,989,056
Gain on disposition of property
and equipment, net (92,981) (470,927) (42,981) (808,317)
Other 103,894 137,020 247,203 290,901
------------ ------------ ------------ ------------
Total operating expenses 17,818,959 15,459,660 34,270,607 30,486,913
------------ ------------ ------------ ------------
OPERATING INCOME 1,484,054 890,018 2,229,312 791,850
OTHER (INCOME) EXPENSES:
Interest income (28,217) (21,899) (47,997) (46,753)
Interest expense 328,456 354,469 643,381 625,008
------------ ------------ ------------ ------------
Other expenses, net 300,239 332,570 595,384 578,255
------------ ------------ ------------ ------------
INCOME BEFORE PROVISION
FOR INCOME TAXES 1,183,815 557,448 1,633,928 213,595
PROVISION FOR INCOME TAXES 510,840 250,415 690,865 140,208
------------ ------------ ------------ ------------
NET INCOME $ 672,975 $ 307,033 $ 943,063 $ 73,387
============ ============ ============ ============
NET INCOME PER SHARE $ 0.18 $ 0.08 $ 0.26 $ 0.02
============ ============ ============ ============
WEIGHTED AVERAGE SHARES
OUTSTANDING 3,700,688 3,728,050 3,700,688 3,744,773
</TABLE>
See notes to condensed financial statements.
- --------------------------------------------------------------------------------
5
<PAGE> 6
BOYD BROS. TRANSPORTATION INC.
CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
-----------------------------
1997 1996
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 943,063 $ 73,387
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 4,512,947 3,989,056
Gain on disposal of property and
equipment, net (42,981) (808,317)
Provision for deferred income taxes 690,865 140,208
Changes in assets and liabilities provided (used) cash:
Marketable securities 100,000 --
Notes and accounts receivable (1,795,911) (735,340)
Other assets (407,057) (1,224,235)
Accounts payable trade and interline (1,033,241) 782,580
Accrued liabilities 1,123,976 (61,110)
Deferred income taxes (727,867) (57,683)
------------ ------------
3,363,794 2,098,546
------------ ------------
INVESTING ACTIVITIES:
Capital expenditures (7,620,459) (16,724,988)
Proceeds from disposals of property and equipment 1,682,033 6,330,706
------------ ------------
(5,938,426) (10,394,282)
------------ ------------
FINANCING ACTIVITIES:
Proceeds from long-term debt 8,285,130 11,850,906
Principal payments on long-term debt (7,141,109) (3,749,740)
Repurchase of common stock -- (804,750)
------------ ------------
1,144,021 7,296,416
------------ ------------
NET DECREASE IN CASH AND
CASH EQUIVALENTS (1,430,611) (999,320)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 3,593,206 1,481,910
------------ ------------
BALANCE AT END OF PERIOD $ 2,162,595 $ 482,590
============ ============
</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, 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 half of 1996,
the Company repurchased a total of 122,300 shares for $928,590. No shares were
repurchased during the first six months of 1997.
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Operating revenues increased 18.06% for the three-month period ended June 30,
1997, compared with 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 six months of 1997 with 592 tractors compared with
522 tractors as of June 30, 1996. Additionally, revenue per truck increased due
to better utilization and reduced deadhead.
Total operating expenses increased 15.26% during the three-month period ended
June 30, 1997 compared with the three-month period ended June 30, 1996, a slower
rate of increase than revenue. Operating supplies expense decreased 3.46% or
$80,039 during the three-month period ended June 30, 1997 compared with the
three months ended June 30, 1996, attributable to a reduction in maintenance
costs. For the three-month period ended June 30, 1997, salaries, wages, and
benefits were 19.04% higher than in the corresponding period last year due to an
increase in the number of drivers and higher job injury costs. Additionally,
bonus expense was up due to significant improvements in profitability. Fuel
expense increased 10.54% for the three-month period ended June 30, 1997 versus
1996. Decreasing diesel prices caused fuel costs to increase slower than revenue
increases. Taxes and license expense increased 20.15% due to the timing of
permit and tag purchases for the three-month period ended June 30, 1997 versus
1996. Depreciation and amortization expense increased 15.28% due to the addition
of new trucks. Insurance and claims were up only 2.62% for the three-month
period ended June 30, 1997 versus 1996. Lower safety costs caused a slower
increase in insurance and claims expense compared with revenue increases. The
operating ratio for the second quarter of 1997 was 92.3% compared with 94.6% for
the second quarter of 1996. For the three-month period ended June 30, 1997
versus 1996, interest expense was down 7.3% due primarily to decreased debt.
Gain on sale of equipment decreased from a gain of $470,927 during the second
quarter of 1996 to a gain of $92,981 in 1997 as a fewer number of trucks were
sold during the second quarter of 1997 than in the second quarter of 1996.
Additionally, the trade packages were not as profitable as previous quarters.
Operating expenses increased 12.41% during the six-month period ended June 30,
1997 compared with the same period in 1996. Salaries and wages increased 15.23%
due to increase driver wages and workers' compensation costs. Fuel expense
increased 8.78% for the six-month period ended June 30, 1997 versus 1996. Fuel
costs increased at a slower rate than revenue due to decreasing diesel prices.
For the first six months ended June 30, 1997 versus 1996, operating supplies
increased only 3.18%, 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 expense
decreased 4.07% due to credits received from states. Depreciation and
amortization expense increased 13.13% due to the addition of new trucks.
Insurance and claims were down 9.77% compared with the same period in 1996.
Improved safety and lower accident claims contributed to the improvement. Gain
on sale of equipment decreased from $808,317 during the first six months of 1996
to $42,981 in 1997 as the Company traded fewer tractors than the previous year.
The operating ratio for the first six months of 1997 was 93.9% compared with
97.5% for the same period of 1996. For the six-month period ended June 30, 1997
versus 1996, interest expense was up 2.96% due primarily to higher interest
rates.
LIQUIDITY AND CAPITAL RESOURCES
Net cash flow provided by operating activities was $3,363,794 during the first
six months of 1997, compared with $2,098,546 during the first six months of
1996. The Company had a working capital surplus of $2,950,018 at June 30, 1997.
Management anticipates increasing the Company's fleet in 1997 by an aggregate of
48 tractors net of replacements, at an anticipated cost of approximately $3.6
million. During the first six months of 1997, the Company purchased
approximately $6,261,500 of replacement tractors and trailers, of which
$7,600,000 was financed with various lenders. As of June 30, 1997, the Company
has added 18 net tractors. Management expects to continue financing
8
<PAGE> 9
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, 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
<PAGE> 10
PART II. Other Information.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On May 27, 1997, the Company held its 1997 annual meeting of stockholders. A
total of 3,622,074 shares, or 97.9% of the Company's outstanding shares, were
represented at the meeting either in person or by proxy.
Three directors were nominated by the Company's Board of Directors to serve new
three-year terms expiring in 2000 and one director was nominated to hold office
for a two-year term expiring in 1999. These nominees, and the voting results for
each, are listed below:
<TABLE>
<CAPTION>
Term Expires For Withheld
------------ --- --------
<S> <C> <C> <C>
Stephen J. Silverman 1999 3,618,124 3,950
Donald G. Johnston 2000 3,619,924 2,150
Glyn E. Newton 2000 3,618,924 2,150
W. Wyatt Shorter 2000 3,619,924 2,150
</TABLE>
Incumbent directors not standing for election at the 1997 annual meeting of
stockholders and whose terms continued after the meeting were:
<TABLE>
<CAPTION>
Term Expires
------------
<S> <C>
Dempsey Boyd 1998
Boyd Whigham 1998
Richard C. Bailey 1999
Paul G. Taylor 1999
</TABLE>
Also at the meeting, stockholders considered and voted on three additional items
of business:
Stockholders ratified an amendment to the Company's 1994 Stock Option Plan,
removing the requirement regarding the maximum number of shares that may be
issued and sold under the Plan to any one employee. A total of 3,291,081 shares
were voted in favor of this proposal, 324,100 shares were voted against, and
1,800 shares abstained.
Stockholders approved a plan of Internal Restructuring whereby the Board of
Directors is authorized to (a) cause the formation of a wholly owned Alabama
subsidiary and (b) effect the transfer of all, substantially all or any portion
of the assets and liabilities of the Company to such subsidiary in exchange for
stock of the subsidiary. A total of 3,382,995 shares were voted in favor of this
proposal, 116,800 shares were voted against, and 1,900 shares abstained.
Stockholders ratified the appointment of Deloitte & Touche LLP as the Company's
independent auditors for the year ending December 31, 1997. A total of 3,621,524
shares were voted in favor of this proposal, no shares were voted against, and
540 shares abstained.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
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 June 30, 1997.
10
<PAGE> 11
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: August 11, 1997 /s/ Richard C. Bailey
------------------------------------------
Richard C. Bailey, Chief Financial Officer
(Principal Accounting Officer)
11
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 2,162,595
<SECURITIES> 0
<RECEIVABLES> 7,286,417
<ALLOWANCES> 0
<INVENTORY> 209,840
<CURRENT-ASSETS> 13,199,125
<PP&E> 67,386,083
<DEPRECIATION> 21,324,895
<TOTAL-ASSETS> 59,421,949
<CURRENT-LIABILITIES> 10,249,107
<BONDS> 0
0
0
<COMMON> 3,701
<OTHER-SE> 24,827,114
<TOTAL-LIABILITY-AND-EQUITY> 59,421,949
<SALES> 0
<TOTAL-REVENUES> 36,499,919
<CGS> 0
<TOTAL-COSTS> 34,270,607
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 595,384
<INCOME-PRETAX> 1,633,928
<INCOME-TAX> 690,865
<INCOME-CONTINUING> 943,063
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 943,063
<EPS-PRIMARY> .25
<EPS-DILUTED> .25
</TABLE>
