U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 For the quarterly period ended March 31, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the transition period ended to
Commission File Number: 33-30123-A
TRANSIT GROUP, INC.
(Exact name of small business issuer in its charter)
State of Florida 59-2576629
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2859 Paces Ferry, Suite 1740, Atlanta, Georgia 30039
(Address of principal executive offices)
(770) 444-0240
(Issuer's telephone number)
Check whether issuer (1) has filed all reports required to be filed by Section
13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes X No
There were 20,940,583 shares of the Company's common stock outstanding as of
April 30, 1998.
Transitional Small Business Disclosure Format (Check One) Yes No X
TRANSIT GROUP, INC.
FORM 10-QSB
INDEX
PART I.FINANCIAL INFORMATION Page Number
Item 1
Financial Statements
Consolidated Balance Sheets
as of March 31, 1998 and December 31, 1997 2
Consolidated Statements of Operations for the three
months ended March 31, 1998 and 1997 3
Consolidated Statement of Changes in Total Non Redeemable
Preferred Stock, Common Stock and other Shareholder's Equity 4
Consolidated Statements of Cash Flows for the three
months ended March 31, 1998 and 1997 5
Notes to Consolidated Financial Statements 6
Item 2
Management's Discussion and Analysis or Plan of Operation 9
PART II. OTHER INFORMATION 12
Item 1
Legal Proceedings
Item 2
Changes in Securities and Use of Proceeds
Item 3
Defaults Upon Senior Securities
Item 4
Submission of Matters to a Vote of Security Holders
Item 5
Other Information
Item 6
Exhibits and Reports on Form 8-K
TRANSIT GROUP, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, December 31,
1998 1997
----------- -----------
(Unaudited)
Current assets:
Cash $ 1,039,139 $ 789,791
Accounts receivable (net of allowance of $159,000 and $173,000) 12,019,343 11,314,417
Other current assets 1,980,753 1,429,181
--------------- ----------------
Total current assets 15,039,235 13,533,389
--------------- ----------------
Noncurrent assets:
Equipment, at net book value 31,432,180 30,045,866
Goodwill 31,525,523 30,706,028
Other assets 774,381 769,522
--------------- ----------------
Total noncurrent assets 63,732,084 61,521,416
--------------- ----------------
Total assets $ 78,771,319 $ 75,054,805
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt and capital leases $ 9,178,119 $ 8,176,975
Accounts payable and accrued expenses 9,166,417 9,551,527
Current portion of deferred taxes 582,548 582,548
Net current liabilities of discontinued operations 510,727 565,886
-------------- ---------------
Total current liabilities 19,437,811 18,876,936
-------------- ---------------
Noncurrent liabilities:
Long-term obligations under capital leases 8,512,532 8,026,808
Long-term debt 16,260,943 15,624,955
Note payable to affiliate of Chairman 4,000,000 4,000,000
Deferred taxes 2,357,425 2,357,425
-------------- ---------------
Total noncurrent liabilities 31,130,900 30,009,188
-------------- ---------------
Total liabilities 50,568,711 48,886,124
-------------- ---------------
Redeemable common stock 7,127,007 7,452,007
-------------- ---------------
Non redeemable preferred stock, common stock
and other shareholders' equity:
Preferred stock, $.01 par value, 800,000 shares authorized ----- -----
Common Stock, $.01 par value, 30,000,000 shares
authorized, 20,940,583 and 20,574,626 shares issued and outstanding 190,263 185,770
Treasury stock (75,000) -----
Additional paid-in capital 52,453,894 50,650,534
Note receivable secured by stock (891,167) (675,000)
Accumulated deficit (30,602,389) (31,444,630)
-------------- ---------------
Total non redeemable preferred stock, common stock
and other shareholders' equity 21,075,601 18,716,674
=============== ==============
Total liabilities and shareholders' equity $ 78,771,319 $ 75,054,805
=============== ==============
See accompanying notes to consolidated financial statements.
TRANSIT GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended March 31,
---------------------------------------
1998 1997
------------------ ------------------
Revenues and other income:
Freight and transportation revenue $ 25,932,740 $ -----
Other income 497,744 -----
------------------ ------------------
Total revenues and other income 26,430,484 -----
------------------ ------------------
Operating Expenses:
Purchased transportation 5,700,732 -----
Salaries, wages and benefits 5,598,544 -----
Fuel 2,019,748 -----
Operating supplies and expenses 8,778,156 -----
Insurance 525,946 -----
Depreciation and amortization expense 1,349,117 -----
General and administrative expense 711,084 93,408
------------------ ------------------
Total operating expenses 24,683,327 93,408
------------------ ------------------
Operating income (loss) 1,747,157 (93,408)
Interest expense 804,659 -----
------------------ ------------------
Income (loss) from continuing operations
before income taxes 942,498 (93,408)
Income taxes attributable to continuing operations 100,257 -----
------------------ ------------------
Income (loss) from continuing operations 842,241 (93,408)
Loss from discontinued operations ----- (2,435,422)
------------------ ------------------
Net income (loss) 842,241 (2,528,830)
Preferred stock dividend requirement ----- (192,500)
------------------ ------------------
Income (loss) to common shareholders $ 842,241 $ (2,721,330)
================== ==================
Income (loss) per common share -- basic and diluted
Continuing operations $ 0.04 $ (0.07)
Loss from discontinued operations 0.00 (0.65)
------------------ ------------------
Net income (loss) per basic and diluted common share $ 0.04 $ (0.72)
================== ==================
Weighted average number of common shares
outstanding - basic 20,822,664 3,758,671
================== ==================
Weighted average number of common shares
outstanding - diluted 22,061,261 3,758,671
================== ==================
See accompanying notes to consolidated financial statements.
TRANSIT GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended March 31,
----------------------------------------------
1998 1997
--------------------- ---------------------
Cash flows from operating activities:
Income (loss) from continuing operations $ 842,241 $ (93,408)
--------------------- ---------------------
Adjustments to reconcile income (loss) to cash provided by (used in)
operating activities:
Depreciation and amortization 1,349,117 -----
Gain on sale of equipment (142,282) -----
Changes in assets and liabilities:
Increase in accounts receivable (620,875) -----
Increase in other assets (400,566) (93,527)
(Decrease) increase in accounts payable and accrued expenses (907,785) 48,166
Other (67,131) -----
--------------------- ---------------------
Total adjustments (789,522) (45,361)
--------------------- ---------------------
Net cash provided by (used in) continuing operations 52,719 (138,769)
Net cash used in discontinued operations (55,159) (698,864)
--------------------- ---------------------
Net cash provided by (used in) operating activities (2,440) (837,633)
--------------------- ---------------------
Cash flows from investing activities:
Business combinations (210,196) -----
Proceeds from disposal of equipment 843,510 -----
Purchase of equipment (188,606) (56,636)
--------------------- ---------------------
Net cash provided by (used in) investing activities 444,708 (56,636)
--------------------- ---------------------
Cash flows from financing activities:
Purchase of treasury stock (75,000) -----
Repayment of capital lease obligations and long-term debt (3,237,851) (567,864)
Increase in borrowings 3,119,931 2,086,900
Decrease in bank overdraft ----- (683,337)
--------------------- ---------------------
Net cash (used in) provided by financing activities (192,920) 835,699
--------------------- ---------------------
Increase in cash 249,348 (58,570)
Cash, beginning of period 789,791 6,455
--------------------- ---------------------
Cash, end of period $ 1,039,139 $ 6,458
===================== =====================
Supplemental cash flow data
Cash paid for interest $ 910,279 $ -----
===================== =====================
Business combinations
Fair value of assets acquired $ 4,550,000 $ -----
Fair Value of liabilities assumed (2,800,000) -----
Common stock issued (1,540,000) -----
--------------------- ---------------------
Net cash payments $ 210,000 $ -----
===================== =====================
See accompanying notes to consolidated financial statements.
TRANSIT GROUP, INC.
CONSOLIDATED STATEMENT OF CHANGES IN TOTAL
NON REDEEMABLE PREFERRED STOCK, COMMON STOCK
AND OTHER SHAREHOLDERS' EQUITY
Total
Common Treasury Additional Note receivable Accumulated shareholders'
stock stock paid-in capital secured by stock deficit equity
--------- ----------- --------------- ---------------- -------------- ---------------
Balance at December 31, 1997 $ 185,770 $ ----- $ 50,650,534 $ (675,000) $ (31,444,630) $ 18,716,674
Stock issued for acquisitions 3,660 ----- 1,479,193 ----- ----- 1,482,853
Stock subject to redemption 833 (75,000) 324,167 ----- ----- 250,000
Accrued interest ----- ----- ----- (16,167) ----- (16,167)
Note secured by stock ----- ----- ----- (200,000) ----- (200,000)
Net income ----- ----- ----- ----- 842,241 842,241
=========== ============== ================ ================= ================= =================
Balance March 31, 1998 $ 190,263 $ (75,000) $ 52,453,894 $ (891,167) $ (30,602,389) $ 21,075,601
=========== ============== ================ ================= ================= =================
See accompanying notes to consolidated financial statements.
TRANSIT GROUP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
The information presented herein as of March 31, 1998, and for the three months
ended March 31, 1998 and 1997 is unaudited. The December 31, 1997 balance sheet
was derived from audited financial statements, but does not include all
disclosures required by generally accepted accounting principles.
1. Basis of Presentation
The consolidated balance sheet of Transit Group, Inc. ("Transit Group" or the
"Company") as of March 31, 1998, it's consolidated statements of operations,
and its consolidated statements of cash flows for the three month periods ended
March 31, 1998 and 1997 reflect the disposal of the parcel delivery and courier
operations and the acquisition of six truckload carriers (see Note 3).
These financial statements include the consolidated balance sheets of
the Company and it's six acquired subsidiaries, Carolina Pacific
Distributors, Inc. ("Carolina Pacific"), Capitol Warehouse, Inc.
("Capitol Warehouse"), Service Express, Inc. ("Service Express"), Carroll
Fulmer Group, Inc. ("Carroll Fulmer"), Rainbow Trucking ("Rainbow"), and
Transportation Resource Management ("TRM") at March 31, 1998 and the
results of operations and cash flows for the periods since acquisition:
Company Date Acquired
- ------------------------ -------------
Carolina Pacific July 12, 1997
Capitol Warehouse August 16, 1997
Service Express August 16, 1997
Carroll Fulmer August 30, 1997
Rainbow December 30, 1997
TRM January 30, 1998
The Company's consolidated statement of operations for the three month period
ended March 31, 1997 and it's consolidated statement of cash flows for the
three month period ended March 31, 1997 have been restated to reflect the
disposal of the company's parcel delivery and courier operations.
2. Summary of Significant Accounting Policies
Management's Representation
The accompanying interim consolidated financial statements have been prepared
by the Company in accordance and consistent with the accounting policies stated
in the Company's 1997 Annual Report on Form 10-KSB and should be read in
conjunction with the consolidated financial statements appearing therein. In
the opinion of management, all adjustments necessary for a fair presentation of
such consolidated financial statements are reflected in the interim periods
presented. The consolidated financial statements for the three months ended
March 31, 1997 have been restated in accordance with APB No. 30 to reflect the
Company's decision to dispose of the courier and package delivery operations.
Interim results are not necessarily indicative of results for a full year.
The consolidated financial statements and notes are presented as permitted by
Form 10-QSB and do not contain certain information included in the annual
consolidated financial statements and notes of Transit Group.
3. Business Combinations
The Company acquired five truckload carriers in 1997 and one company in the
first quarter of 1998. On January 30, 1998 the company acquired TRM a regional
truckload carrier located in Fort Wayne, Indiana. TRM operates approximately 50
tractors and 90 trailers with the bulk of their business concentrated in a
seven state area surrounding Indiana.
In connection with this acquisition, the Company paid $.2 million in cash and
issued approximately 366,000 shares of common stock. The TRM acquisition as
well as the previous five acquisitions have been accounted for under the
purchase method of accounting. Accordingly, the operating results of the
acquired companies have been included in the Company's consolidated financial
statements since their respective dates of acquisition. The purchase price has
been preliminarily allocated to the assets acquired and liabilities assumed
based on their estimated fair market value at the date of acquisition. The
purchase price of the respective companies exceeded the fair value of net
assets acquired by approximately $32.0 million, which is being amortized on a
straight-line basis over 40 years. The following unaudited pro forma
consolidated results of operations of the Company for the three month periods
ended March 31, 1998 and 1997 account for the six acquisitions and the disposal
of the Company's parcel delivery and courier operations as if they had occurred
on January 1, 1998 and 1997, respectively. The pro forma results give effect to
the amortization of goodwill, the effects of additional interest expense and
certain other adjustments.
Unaudited Pro Forma Combined Results of Operations
For the Three Months Ended March 31
1998 1997
---- ----
Revenues $ 26,843,000 $ 29,948,000
===================== ======================
Income from continuing operations
available to common shareholders $ 842,000 $ 83,000
===================== ======================
Income per basic common share $ .04 $ .01
===================== ======================
Income per diluted common share $ .04 $ .01
===================== ======================
Weighted average number of basic common
shares outstanding 20,940,583 13,204,474
===================== ======================
Weighted average number of diluted common
shares outstanding 22,179,180 14,049,416
===================== ======================
The above pro forma statements do not necessarily purport to be indicative of
the results of operations which would have occurred had the acquisition been
made on January 1, 1998 or 1997, nor are they indicative of future results.
4. Income Taxes
At March 31, 1998, the Company has approximately $30.1 million of net operating
loss carryforwards potentially available to offset taxable income which expire
during the years 2000 to 2012. The Company has not given recognition to tax
benefits of net operating loss carryforwards in the financial statements,
except for those net operating loss carryforwards which can be offset against
current income, because management believes the Company's history of operating
losses diminishes the Company's immediate ability to demonstrate that more
likely than not, the future benefits will be realized. Accordingly, the Company
has provided a valuation allowance of $12.2 million against those net operating
loss carryforwards. Additionally, these net operating loss carryforwards are
subject to limitation in any given year in the event of significant changes in
ownership as set forth in the Internal Revenue Code and related Treasury
Regulations.
The difference between the provision for income taxes attributable to
continuing operations and the amount that would be expected using the Federal
statutory income tax of 34% is related to the reduction in the valuation
allowance due to the generation of taxable income in the current period as well
as certain nondeductible expenses.
5. Subsequent Events
In May 1998, the Company acquired Certified Transport, Inc. and Venture
Logistics ("Certified") a privately held short to medium haul dry van carrier
based in Indianapolis, Indiana. TGI issued approximately 1,072,000 shares of
its common stock in addition to a cash payment of $1,500,000 for all of the
common stock of Certified.
Also in May 1998, the Company announced that it had executed a letter of intent
to acquire Network Transport, Inc., a privately held trucking company based in
Toronto, Canada.
The business combinations described above will be accounted for under the
purchase method of accounting. Assets acquired and liabilities assumed will be
recorded at fair market value. The purchase price of the respective companies
is expected to exceed their fair value of net assets acquired by approximately
$2 million, which will be amortized on a straight-line basis over 40 years. The
following unaudited pro forma consolidated results of operations of the Company
for the three month periods ended March 31, 1998 and 1997 account for the
Company's five 1997 acquisitions, the acquisition of TRM, the acquisition of
Certified, the proposed acquisition of Network Transport, Inc. and the disposal
of the Company's parcel delivery and courier operations as if they had occurred
on January 1, 1998 and 1997, respectively. The pro forma results give effect to
the amortization of goodwill, the effects of additional interest expense, and
certain adjustments.
Unaudited Pro Forma Combined Results of Operations
For the Three Months Ended March 31,
1998 1997
---- ----
Revenues $ 33,762,000 $ 36,633,000
===================== ======================
Income from continuing operations
available to common shareholders $ 1,219,000 $ 384,000
===================== ======================
Income per basic common share $ .05 $ .03
===================== ======================
Income per diluted common share $ .05 $ .03
===================== ======================
Weighted average number of basic common
shares outstanding 22,203,749 14,467,639
===================== ======================
Weighted average number of diluted common
shares outstanding 23,442,346 15,312,581
===================== ======================
The above pro forma statements do not necessarily purport to be indicative of
the results of operations which would have occurred had the acquisition been
made on January 1, 1998 or 1997, nor are they indicative of future results.
TRANSIT GROUP, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis or
Plan of Operation
The following discussion should be read in conjunction with the Consolidated
Financial Statements, including the footnotes, and is qualified in its entirety
by the foregoing and other more detailed financial information appearing
elsewhere herein. Historical results of operations and the percentage
relationships among any amounts included in the Consolidated Statements of
Operations, and any trends which may appear to be inferable therefrom, should
not be taken as being necessarily indicative of trends in operations or results
of operations for any future periods.
Comments in this Management's Discussion and Analysis or Plan of Operation
regarding the Company's business which are not historical facts are forward
looking statements that involve risks and uncertainties. Among these risks are
the Company is in a highly competitive business, has a 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.
The following discussion and analysis reflect the Company's financial position,
results of operations and cash flows as restated to reflect the disposal of the
parcel delivery and courier operations in accordance with APB No. 30.
Liquidity and Capital Resources
The Company has incurred substantial operating losses and cash flow deficits
since inception. From September 1985 through March 31, 1998, the Company had
accumulated a deficit from operating losses of $29.3 million and has paid
dividends on its preferred stock of approximately $1.3 million and has
purchased treasury stock of $.1 million. As of March 31, 1998, the Company had
raised $59.8 million, net of notes receivable secured by stock in the amount of
$.9 million, from (i) private placements of preferred stock (which has been
converted to common stock), (ii) its initial public offering of November 2,
1989, (iii) the sale of restricted and unrestricted common shares and (iv)
stock issued in connection with the acquisition of the six truckload carriers.
As a result of equity placements, dividends on preferred stock and cumulative
losses, shareholders' equity as of March 31, 1998, was $21.1 million, and
common stock issued subject to put arrangements was $7.1 million.
Redemption Rights for Selling Shareholders in Acquisitions
In connection with the acquisitions of Capitol Warehouse, Service Express, and
Carroll Fulmer, the Company granted the selling shareholders the right to
require the Company to redeem a portion of the shares which they received in
exchange for selling their businesses to the Company. The dollar amount of
stock subject to mandatory redemption by the Company aggregated approximately
$8.1 million. Of this $8.1 million, options in the amount of $4.6 million are
exercisable before August 29, 1998 when an additional $3.5 million become
exercisable. The redemption rights expire in the amounts of $2.1 million at
August 15, 1998 and $6.0 million at August 29, 2003.
Holders of redemption rights with respect to $6.0 million of stock may require
either the Company to redeem the stock or a major shareholder of the Company to
acquire the stock at a price of $3.60 per share. Holders of redemption rights
with respect to $1.8 million of stock at $3.875 per share and $0.3 million at
$6.75 per share have the right to require the Company to redeem their shares,
with the guarantee from a major shareholder.
Through March 31, 1998, the Company has received notification that shareholders
have exercised their redemption rights with respect to approximately $2.9
million. Of this amount, approximately $.9 million of stock was purchased by
third parties and $75,000 was redeemed by the Company, thereby reducing the
Company's obligation to $7.1 million. In April 1998 an additional $1.45 million
of stock was purchased by third parties thereby reducing the obligation under
redemption rights to $5.67 million. To the extent such redemption rights are
exercised, the Company will be required to fund the cash required to meet its
obligations under the redemption rights by drawing on bank lines which may be
available to its subsidiaries, or to call upon a major shareholder to purchase
the stock under such shareholder's obligations and guarantees associated with
the acquisition contracts.
Management believes, but can offer no assurances, that it can improve operating
performance and cash flows through the following measures:
Eliminating Parcel Delivery and Courier Operations. Management has sold its
unprofitable parcel delivery operations to a company controlled by its Chairman
and its courier operations to an unrelated third party.
Acquiring Profitable Trucking Operations. The Company has reorganized into a
"holding company" based in Atlanta, Georgia. This new corporate structure is
intended to increase the Company's flexibility to pursue the acquisition and
operation of profitable truckload motor carriers. The Company's intent is to
continue to identify and acquire additional mid-size trucking companies,
primarily with annual revenues between $5 million and $100 million, that
possess strong market positions, sound management and a commitment to a high
level of service and quality. The Company has completed the acquisition of six
companies at March 31, 1998 and acquired a seventh company in the second
quarter of 1998.
Relying on Equity Sales to or Loans from Major Shareholders. In July 1997, an
affiliate of the Company's Chairman loaned the Company $4 million to consummate
the acquisition of Carolina Pacific Distributors, Inc. During August, September
and October of 1997, the affiliate loaned the Company an additional $2.6
million to fund the continuing operations of the parcel delivery and courier
operations and fund certain expenses associated with the acquisition of the
truckload companies. Of the $6.6 million borrowed, $2.6 million was assumed by
the purchaser of the parcel delivery and courier operations, leaving a balance
of $4 million at March 31, 1998.
Obtaining Bank Financing. Management has negotiated new lines of bank financing
to provide working capital financing and financing for acquisitions of
additional truckload motor carriers. The Company has entered into a $20 million
revolving credit facility from a bank to make available to Capitol Warehouse,
Carroll Fulmer, Service Express, Rainbow Trucking, Carolina Pacific, and TRM an
asset based line of credit secured by accounts receivable.
Financial Condition
As of June 30, 1997, the Company treated its parcel delivery and courier
business as discontinued operations. The Company's outstanding vehicle and
equipment indebtedness, $2.6 million of indebtedness to an affiliate of the
Company's Chairman, and certain operating leases were assumed by the companies
purchasing the operations. The Company remains contingently liable on certain
leases.
Results of Operations - Three months ended March 31, 1998
The Company discontinued its parcel delivery and courier business effective
June 30, 1997. Accordingly, the Company had no revenues from continuing
operations until July 11, 1997 with the purchase of Carolina Pacific and such
revenues continued to increase with the acquisitions of five additional
companies.
The following table sets forth items in the Consolidated Statement of
Operations for the three months ended March 31, 1998 as a percentage of
operating revenue. Because all truckload operations were acquired during the
second half of 1997 and in the first quarter of 1998, the table is not
comparative to an earlier period.
Percentage of
Operating Revenues
Revenues and other income 100.0%
----------
Operating expenses
Purchased transportation 21.6
Salaries, wages and benefits 21.2
Fuel 7.6
Operating supplies and expenses 33.2
Insurance 2.0
Depreciation and amortization expense 5.1
General and administrative expense 2.7
----------
Total operating expenses 93.4
----------
Operating income 6.6
Interest expense 3.0
----------
Income from continuing operations
Before income taxes 3.6
Income taxes attributable to continuing
Operations 0.4
----------
Income from continuing operations 3.2%
==========
The Company incurred corporate administration expenses for the three months
ended March 31, 1998 of approximately $0.7 million as compared to approximately
$93,000 for the three months ended March 31, 1997. These increases are
attributable to administrative costs of reorganizing into a holding company
structure, the opening of a new corporate office in Atlanta, and the increased
costs associated with its acquisition activities.
Revenues attributable to the discontinued businesses were $5.1 million for the
three months ended March 31, 1997.
Year 2000
The Company operates two primary software applications: its accounting and
financial reporting systems and its integrated dispatch and billing systems.
The accounting and financial reporting systems were acquired from a third party
vendor in 1996 and were compliant with Year 2000 issues at acquisition. The
vendors of the Company's integrated dispatch and billing systems have advised
the Company that all Year 2000 software modifications will be completed by the
third quarter of 1998. The cost of these modifications will be covered by the
Company's existing software maintenance agreements. Accordingly, the Company
does not anticipate incurring any material incremental costs in complying with
year 2000 issues that will adversely affect its results of operations or
financial condition.
TRANSIT GROUP, INC. AND SUBSIDIARIES
Part II - Other Information
Item 1 - Legal Proceedings
Not applicable
Item 2 - Changes in Securities and Use of Proceeds
Not applicable
Item 3 - Defaults on Senior Securities
Not applicable
Item 4 - Submission of Matters to a Vote of Security Holders
Not applicable
Item 5 - Other Information
Not applicable
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 3 - Articles of Incorporation and Bylaws
3.1 Articles of Incorporation, as amended, (incorporated by
reference from Exhibit 3.1 to the Registrant's Form S-18,
Registration No. 33-30123A).
3.2 By Laws, as amended and restated, (incorporated by
reference from Exhibit 3.2 to Registrant's Form S-18,
Registration No. 33-30123A).
3.3 Certificate of Amendment to the Articles of
Incorporation of General Parcel Service, Inc., dated
May 14, 1992, (incorporated by reference from
Exhibit F to Registrant's 1992 Form 10-KSB,
Registration No. 33-30123A).
3.4 Certificate of Amendment to the Articles of
Incorporation of General Parcel Service, Inc., dated
December 29, 1993, (incorporated by reference from
Exhibit C to Registrant's 1992 Form 10-KSB,
Registration No. 33-30123A).
3.5 Certificate of Amendment to the Articles of Incorporation
of General Parcel Service, Inc., dated March 5, 1996
(incorporated by reference from Exhibit A to Registrant's
Form 8-K, dated March 5, 1996).
3.6 Certificate of Amendment to the Articles of
Incorporation of General Parcel Service, Inc., dated
September 30, 1996, (incorporated by reference from
Exhibit A to Registrant's Form 8-K, dated September
18, 1996).
3.7 Certificate of Amendment to the Articles of
Incorporation of General Parcel Service, Inc., dated
December 20, 1996, (incorporated by reference from
Exhibit A to Registrant's Form 8-K, dated December
20, 1996).
Exhibit 4 - Instruments defining the Rights of Security Holders
4.1 Specimen Stock Certificate (incorporated by reference from
Exhibit 4.1 to the Registrant's Form S-18, Registration No.
33-30123A).
4.2 Warrant granting stock purchase warrants to J. Ray
Gatlin (incorporated by reference from Exhibit 4.2
to the Registrant's Form S-18, Registration No.
33-30123A).
4.3 Warrant granting stock purchase rights to T. Wayne
Davis (incorporated by reference from Exhibit 4.3 to
Registrant's Form S-18, Registration No. 33-30123A).
4.4 Warrant granting stock purchase rights to T. Wayne Davis
(incorporated by reference from Exhibit 4.4 to
Registrant's Form S-18, Registration No. 33-30123A).
4.5 Warrant granting stock purchase rights to Drue B.
Linton (incorporated by reference from Exhibit 4.5
to Registrant's Form S-18,Registration No 33-30123A).
4.6 Warrant granting stock purchase rights to Steven C.
Koegler (incorporated by reference from Exhibit 4.7
to Registrant's Form S-18, Registration No. 33-30123A).
4.7 Warrant granting stock purchase rights to J. Ray Gatlin
(incorporated by reference from Exhibit 4.8 to
Registrant's Form S-18,Registration No. 33-30123A).
4.8 Form of Warrant issued (incorporated by reference from
Exhibit 4.9 to Registrant's Form S-18, Registration No.
33-30123A).
4.9 Form of Warrant Agreement between the Company and American
Transtech, Inc., as Warrant Agent (incorporated by
reference from Exhibit 4.10 to Registrant's Form S-18,
Registration No. 33-30123A).
4.10 Preferred Stock Purchase Agreement and specimen
stock certificate between the Company and T. Wayne
Davis (incorporated by reference from Exhibit Z to
Registrant's 1993 Form 8-K, Registration No.
33-30123A).
Exhibit 10 - Material Contracts
10.1 Incentive Stock Option Plan (incorporated by referencefrom
Exhibit 10.2 to Registrant's Form S-18, Registration No.
33-30123A).
10.2 Lease Agreement governing the Company's terminal in
Columbia, South Carolina dated May 31, 1996 between
the Company and Angoria Columbia Enterprises.
(incorporated by reference from Exhibit 10.1 to
Registrant's June 30, 1996 10-QSB, Registration No.
33-30123A).
10.3 Assignment of Lease Agreement governing the
Company's terminal in Greensboro, North Carolina
dated June 13, 1996 between the Company, ABF
Freight System, Inc., Bob G. Gibson and Defco
Company (incorporated by reference from Exhibit
10.2 to Registrant's June 30, 1996 10-QSB,
Registration No. 33-30123A).
10.4 Lease Agreement governing the Company's terminal in
Charlotte, North Carolina dated July 30, 1996
between the Company and Lincoln National Life
Insurance Company (incorporated by reference from
Exhibit 10.7 to Registrant's June 30, 1996 10-QSB,
Registration No.
33-30123A).
10.5 Lease Agreement governing the Company's terminal in
Charleston, South Carolina dated July 9, 1996 between th
Company and J. P. Gaillard, ET AL. (incorporated by
reference from Exhibit 10.8 to Registrant's June 30, 1996
10-QSB, Registration No. 33-30123A).
10.6 Lease Agreement governing the Company's terminal in
Tampa, Florida dated November 30, 1994 and amended
on January 26, 1996 and February 19, 1996 between
the Company and Scott Steel, Inc. (incorporated by
reference from Exhibit 10.1 to Registrant's
September 30, 1996 10-QSB, Registration No.
33-30123A).
10.7 Resignation agreement dated December 20, 1996
between the Company, E. Hoke Smith, Jr., and T.
Wayne Davis as guarantor (incorporated by reference
from Exhibit 10.31 to Registrant's 1996 10-KSB,
Registration No. 33-30123A).
10.8 Purchase Agreement governing purchase by Transit of
the stock of Carolina Pacific (incorporated by
reference from Exhibit 2.1 to Registrant's Form 8-K
dated July 11, 1997).
10.9 Purchase Agreement governing purchase by Transit of the
stock of Service Express (incorporated by reference from
Exhibit 2.1 to Registrant's Form 8-K dated August 15,
1997).
10.10 Purchase Agreement governing purchase by Transit of the
stock of Capitol Warehouse (incorporated by reference from
Exhibit 2.2 to Registrant's Form 8-K dated August 15,
1997).
10.11 Agreement and Plan of Reorganization under which
Carroll Fulmer was merged with and into Transit
Group Sub., Inc., a wholly-owned Florida subsidiary
of Transit Group incorporated by reference from
Exhibit 2.1 to Registrant's Form 8-K dated August
29, 1997.
10.12 Purchase Agreement governing purchase by Transit of the
stock of Rainbow Trucking (incorporated by reference from
Exhibit 2.1 to Registrant's Form 8-K dated December 30,
1997).
10.13 Loan Agreement dated December 18, 1997 between the
Company and AmSouth Bank (incorporated by reference
from Exhibit 2.1 to Registrant's Form 8-K dated
December 18, 1997).
10.14 Advised Revolving Line of Credit Agreement dated as
of December 18, 1997, as amended by Amendment to
Advised Revolving Line of Credit Agreement dated as
of January 14, 1998, by and among the Lender,
the Co-Borrowers and the Registrant (incorporated
by reference from Exhibit 99.1 to Registrant's
Form 8-K dated March 16, 1998).
10.15 Revolving Credit Note dated as of December 18,1997,
by and among the Lender and the Co-Borrowers
(incorporated by reference from Exhibit 99.2 to
Registrant's Form 8-K dated March 16, 1998).
10.16 Security Agreement dated as of December 18, 1997, by and
among the Lender and the Co-Borrowers (incorporated by
reference from Exhibit 99.3 to Registrant's Form 8-K dated
March 16, 1998).
10.17 Joinder to Advised Revolving Line of Credit Agreement and
Joinder to Security Agreement dated as of January 14, 1998
by Rainbow Trucking Services, Inc. (incorporated by
reference from Exhibit 99.4 to Registrant's Form 8-K dated
March 16, 1998).
11.1 Statement Regarding Computation of Earnings per Share.
(b) The Company filed the following Current Reports on Form 8-K during the
first quarter of 1998:
(i) A report on Form 8-K dated December 30, 1997, filed on
January 13, 1998 reporting the closing of the acquisition of
Rainbow Trucking Services, Inc., the acquisition of Hawks
Enterprises, Inc. and the acquisition of T.W. Transport, Inc.;
(ii) A report on Form 8-K dated December 18, 1997, filed on
February 10, 1998 reporting that the Company and certain of
its subsidiaries entered into an Advised Revolving Line of
Credit Agreement with the AmSouth for a revolver/term credit
facility of up to $20 million; and
(iii) A report on Form 8-K/A dated December 31, 1997, filed on
March 16, 1998, reporting that the Company's management has
determined that the acquisition of Rainbow Trucking, Hawks
Enterprises and T.W. Transport were not material and,
therefore, certain financial statements were not required to
be filed.
Signature
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 thereunto duly authorized.
Transit Group, Inc.
Date: May 14, 1998
By: /s/Wayne N. Nellums
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Wayne N. Nellums
Vice President,
Chief Financial Officer
and Secretary