TRANSIT GROUP COMPLETES TWO ACQUISITIONS AND SIGNS AGREEMENT IN
THIRD TRANSACTION; COMPANY REPORTS SECOND QUARTER RESULTS
August 18, 1997 9:04 AM EDT
ATLANTA--(BUSINESS WIRE)--Aug. 18,1997--Transit Group, Inc.
(Nasdaq Small Cap: TRGP), formerly General Parcel Service, Inc.
(former Nasdaq symbol GPSX), today announced that it has
completed acquisitions involving two privately held southeastern
U.S.-based truckload carriers and has signed a definitive
agreement relating to the acquisition of a third trucking
company. Letters of intent for these all-stock acquisitions
were previously announced in May 1997. A fourth acquisition
announced in May, involving Carolina Pacific Distributors, Inc.,
was completed last month.
Effective Aug. 15, 1997, Transit Group has acquired Capitol
Warehouse, Inc., based in Louisville, Kentucky, and Service
Express, Inc., based in Tuscaloosa, Alabama. Capitol Warehouse,
the largest private truckload carrier in Kentucky, serves
customers nationwide and has annual revenues of approximately
$16 million. Service Express, which operates primarily in the
southeastern United States, has annual revenues of approximately
$5 million. Under the terms of the acquisitions, Transit Group
has issued a total of approximately 1.54 million new shares of
common stock valued at approximately $9.85 million.
Separately, the Company said it has executed a definitive
agreement to acquire privately held Carroll Fulmer Group, Inc.,
headquartered in Groveland, Florida. A family business tracing
its origin to the purchase of two trucks in 1961, Carroll Fulmer
now has a fleet of 200 company-owned and 600 owner/operated dry
van and refrigerated units that haul freight from coast to
coast, generating annual revenues of approximately $70 million.
In this transaction, which is expected to be completed by Sept.
1, 1997, Transit Group expects to issue 4,166,000 shares of
common stock. Closing of the transaction is subject to final
due diligence, third-party approvals and finalization of related
agreements.
Commenting on the announcement, Philip A. Belyew, President and
Chief Executive Officer of the Company, said, "We are pleased to
announce ongoing success in acquiring profitable, well-run
trucking companies, which is central to our strategy to build a
significant presence in the truckload carrier industry. Now
with the completion of three acquisitions, we have added
approximately $35 million in annual revenues to our base of
business, and assuming the Carroll Fulmer acquisition is
finalized in a few weeks, Transit Group will surpass the $100
million mark in annual revenues. Importantly, all the companies
we have added as a part of our new strategic direction are
currently profitable and we believe are well-positioned for
continued growth. With these additions, and assuming the
planned divestiture of our unprofitable parcel delivery and
courier operations is completed, we believe the Company is
positioned for profitable operations during the second half of
the year, and we hope to add to that momentum with additional
acquisitions during the remainder of 1997."
Belyew noted that the addition of Carroll Fulmer to the
Company's operations will provide important infrastructure
support for Transit Group's expansion plans. With sophisticated
marketing, safety, logistics, tracking, and control systems,
along with one of the most successful driver recruitment
programs in the industry, Carroll Fulmer will serve as a
pedestal for Transit Group's continued growth.
Upon completion of the acquisition, Mr. Carroll Fulmer (age 63),
Chairman of Carroll Fulmer Group, will join Transit Group's
Board of Directors, filling a vacancy on the Board and
increasing its number to four. Fulmer, who is a Past Chairman
of the Board of the National Agricultural Transportation League,
will remain active in the strategic operations of Carroll
Fulmer, as will his wife, Barbara (who serves as Treasurer of
the company), daughter, Cynthia (who is a regional manager in
the company's Huntsville, Alabama office), and sons, Philip (in
charge of all administrative areas of the company), Tony (head
of marketing and sales) and Timothy (over sales and dispatching
for the company's 30 field locations).
Commenting on the proposed acquisition, Fulmer said, "By joining
forces with Transit Group, I believe we gain several advantages
for the company, our family, and our customers. Not only does
this transaction establish liquidity and value for our business,
it allows us to become a part of a larger company with the
financial resources that are so important for a company like
ours to grow, extend its reach to new markets, and leverage the
technological advances that are reshaping the trucking industry.
As one of the 200 largest in the industry, I believe Carroll
Fulmer will provide important momentum to Transit Group's
efforts to consolidate additional trucking companies and achieve
greater scale economies and synergies in the trucking industry."
In connection with Transit Group's new strategic direction, the
Company has announced that it intends to dispose of its parcel
delivery and courier businesses, with such divestitures expected
to be completed during the third quarter of 1997 subject to the
completion of due diligence, execution of definitive agreements,
and other customary conditions. Accordingly, all of its
revenues and expenses for the second quarter and six-month
periods ended June 30, 1997, as well as those for prior year
periods, have been aggregated and reported as discontinued
operations. For the second quarter of 1997, the loss from
continuing operations attributable to common shareholders,
representing essentially corporate overhead expenses and
preferred dividend requirements, totaled $367,158 or $.06 per
share versus a loss of $124,829 or $.03 per share in the same
period last year. Losses from discontinued operations,
including an estimated loss on disposal totaling $7,455,966 or
$1.23 per share, increased the net loss for the period to
$11,502,110 or $1.90 per share compared with a net loss of
$792,429 or $.21 per share in the second quarter of 1996. The
Company's net losses for the six-month periods ended June 30,
1997 and 1996, inclusive of losses from discontinued operations,
totaled $14,223,440 million or $2.90 per share and $1,475,603
million or $.39 per share, respectively.
Comments in this news release regarding the Company's business
which are not historical facts are forward looking statements
that involve risks and uncertainties. Among these risks are
that the Company is in a highly competitive business, has
history of operating losses, and is pursuing a growth strategy
that relies in part on the completion of acquisitions of
companies in the trucking industry. There can be no assurance
that in its highly competitive business environment, the Company
will successfully improve its operating profitability or
consummate such acquisitions.
Transit Group, headquartered in Atlanta, Georgia, is a holding
company formed to acquire and consolidate short and long-haul
trucking companies, particularly truckload carriers based in the
southeastern United States. Trucking companies that operate as
parts of Transit Group are located in Alabama, Kentucky and
North Carolina, and comprise a fleet of more than 400 trucks and
1,000 trailers, serving customers nationwide.
Transit Group, Inc. Unaudited Financial Results
Three Months Ended June 30 Six Months Ended June 30
-------------------------------------- ------------------------------------
1997 1996 1997 1996
----------------- ------------------- --------------- -------------------
Revenues $ -- $ -- $ -- $ --
Loss from continuing operations (174,658) (59,205) (268,066) (233,863)
Discontinued operations:
Loss from discontinued
operations (3,678,986) (667,600) (6,114,408) (1,082,711)
Estimated loss on disposal (7,455,966) -- (7,455,966) --
--------------- ---------------- --------------- ----------------
Net loss (11,309,610) (726,805) (13,838,440) (1,316,574)
Preferred stock dividend
requirement (192,500) (65,624) (385,000) (159,029)
--------------- ---------------- --------------- ----------------
Loss to common shareholders $ (11,502,110) $ (792,429) $ (14,223,440) $ (1,475,603)
=============== ================ =============== ================
Net loss per share:
Continuing operations $ (0.06) $ (0.03) $ (0.13) $ (0.10)
Discontinued operations (0.61) (0.18) (1.25) (0.29)
Estimated loss on disposal (1.23) -- (1.52) --
--------------- ---------------- --------------- ----------------
Net loss $ (1.90) $ (0.21) $ (2.90) $ (0.39)
=============== ================ =============== ================
Weighted average number of
shares outstanding 6,047,738 3,758,671 4,909,528 3,758,671
=============== ================ =============== ================
Note: Transit Group's continuing operations consist of
transportation services provided by the Company's subsidiary
trucking companies. The Company's first trucking company
acquisition was completed subsequent to the end of the second
quarter, hence there were no revenues from continuing operations
prior to June 30, 1997.