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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the fiscal year ended December 31, 1999
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Act
of 1934
For the transition period from _______ to _______
COMMISSION FILE NO. 0-23948
BOYD BROS. TRANSPORTATION INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 63-6006515
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
3275 HIGHWAY 30 36016
CLAYTON, ALABAMA (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (334) 775-1400
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
-------------------- -------------------------
NONE NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
COMMON STOCK, PAR VALUE $.001 PER SHARE
(TITLE OF CLASS)
INDICATE BY CHECK MARK 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), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES [X] NO [ ]
AGGREGATE MARKET VALUE OF THE VOTING AND NON-VOTING COMMON EQUITY HELD
BY NON-AFFILIATES OF THE REGISTRANT:
$4,995,403 AS OF MARCH 17, 2000
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE REGISTRANT'S
CLASSES OF COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE.
3,275,970 SHARES OF COMMON STOCK, PAR VALUE $.001 PER SHARE,
OUTSTANDING AS OF MARCH 17, 2000.
DOCUMENTS INCORPORATED BY REFERENCE
DOCUMENTS INCORPORATED BY REFERENCE IN THIS ANNUAL REPORT ON FORM 10-K
ARE AS FOLLOWS: PORTIONS OF THE DEFINITIVE PROXY STATEMENT RELATING TO THE 2000
ANNUAL MEETING OF STOCKHOLDERS IN PART III, ITEMS 10 (AS RELATED TO DIRECTORS),
11, 12 AND 13. PORTIONS OF THE ANNUAL REPORT TO STOCKHOLDERS FOR THE YEAR ENDED
DECEMBER 31, 1999 IN PARTS II AND IV.
INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO
ITEM 405 OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED,
TO THE BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION
STATEMENTS INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY
AMENDMENT TO THIS FORM 10-K. [ ]
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TABLE OF CONTENTS
PAGE
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PART I.........................................................................1
ITEM 1. BUSINESS........................................................1
ITEM 2. PROPERTIES......................................................6
ITEM 3. LEGAL PROCEEDINGS...............................................7
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.............7
PART II........................................................................7
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.............................................7
ITEM 6. SELECTED FINANCIAL DATA.........................................8
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.............................8
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK......8
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.....................8
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE........................................8
PART III.......................................................................8
ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT..................8
ITEM 11 EXECUTIVE COMPENSATION .........................................9
ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT...........................................9
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..................9
PART IV........................................................................9
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, FINANCIAL STATEMENT
SCHEDULES AND REPORTS ON FORM 8-K...............................9
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PART I
ITEM 1. BUSINESS
THE COMPANY
Boyd Bros. Transportation Inc. ("Boyd" or the "Company") is a truckload
carrier that operates exclusively in the flatbed segment of the industry and
hauls primarily steel products and building materials. Since its founding in
1956, Boyd has grown into what management believes is one of the largest
exclusively flatbed carriers in the United States. The Company owns and operates
a total of over 1,112 tractors and 1,451 flatbed trailers.
On December 8, 1997, Boyd acquired Welborn Transport, Inc. ("Welborn")
located in Tuscaloosa, Alabama (the "Welborn Acquisition"). The acquisition was
accounted for using the purchase method of accounting and, accordingly, the
purchase price was allocated to the assets acquired, and liabilities assumed,
based upon their estimated fair market values at the acquisition date. Welborn
is operated by Boyd as a stand-alone subsidiary. References to the "Company"
contained herein refer to the combined operations of Boyd and Welborn.
References hereinafter to "Boyd" or "Welborn" describe the distinct operations
of the parent and subsidiary, respectively.
The Company's strategy is to offer high-quality flatbed transportation
services to high-volume, time-sensitive shippers. Because much of the freight
hauled by the Company consists of steel products and building materials,
time-definite delivery is required. A late delivery can result in a shutdown of
a production line at a plant or a delay in a construction project. Management
focuses its marketing efforts on those shippers who require time-definite
delivery because it believes that service, rather than price, generally will be
the primary factor that will dictate their choice of carrier.
Management believes that its ability to recruit and retain drivers has
been critical to its success, and Boyd has sought to attract and retain drivers
by using only high-quality, late-model tractors equipped with its two-way
satellite communication equipment, and offering financial and other incentives
to drivers. Management recognizes that getting drivers home frequently is
critical to driver retention. Accordingly, Boyd makes load assignments to
drivers that enable each driver to attain his or her goals with respect to both
miles driven as well as time at home.
Additionally, in June 1997, Boyd began contracting with independent
owner-operators to provide service to its customers. Boyd has also implemented a
lease-purchase program, providing Boyd's drivers with both career opportunities
at Boyd and the opportunity to own their own tractor. Under the program, the
driver leases the tractor from Boyd, along with an option to purchase the
tractor. In turn, the driver leases the use of the tractor and the driver's
services back to Boyd.
In 1998, Boyd added another option under the owner-operator program.
Owner-operators are able to lease a new tractor for three and one-half years.
Boyd will retain ownership of the tractor at the end of the lease, but this will
enable the owner-operator to operate a new tractor and maintain his or her
status as an independent contractor. Management believes that Boyd's
owner-operator program, along with the owner-operator program already in place
at Welborn, will aid in reducing driver turnover and better enable the Company
to meet its growth projections.
Welborn provides transportation services over shorter routes than
traditionally provided by Boyd. Welborn operates primarily in the southeastern
United States, with an average length of haul of less than 400 miles. Management
believes this enhances Welborn's ability to retain quality drivers, as drivers'
time away from home is thereby minimized. Welborn operates approximately 352
tractors and over 490 flatbed trailers. Owner-operators own 323 of the 352
tractors utilized by Welborn, while Welborn owns the rest. The owner-operators
of these units are compensated by Welborn based upon a percentage of revenue.
Over 50% of Welborn's loads are booked through commissioned agents, whereas Boyd
has traditionally developed direct relationships with its customers.
STRATEGY
As discussed above, the Company's business strategy is to offer
high-quality flatbed transportation services in the truckload carrier market
primarily to high-volume, time-sensitive customers. The key components of the
Company's strategy are as follows:
Time-Sensitive Shippers. The Company focuses its marketing efforts on
high-volume, time-sensitive shippers that are involved primarily in the steel
and building materials businesses and require time-definite delivery. Management
believes that many large volume shippers in this segment of the industry have
reduced the number of carriers they use to only those "core carriers" that offer
consistently superior service. The Company intends to continue its focus on
developing relationships as a core-carrier for high-volume, time-sensitive
shippers.
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Technology. The Company's strategy has been to utilize technology to
provide better service to its customers and to improve operating efficiency. The
Company became the first major flatbed carrier in the country to install a
satellite tracking system, manufactured by QUALCOMM, in its tractors. The
tracking system enables the Company to monitor equipment locations and schedules
more effectively and to communicate with both drivers and customers. The Company
has also installed computers on board each of its tractors to monitor fuel
efficiency and other operational data. The Company will continue to monitor and
implement technological developments that will enable the Company to improve
customer service and operating efficiency.
Premium Quality Tractors. Boyd continuously upgrades its fleet of
tractors. The Company's management believes that maintaining a young,
high-quality fleet of tractors facilitates Boyd's ability to recruit and retain
drivers, achieve maximum on-time reliability, maximize fuel economy and convey
an image of quality to existing and potential customers. While Welborn maintains
a fleet of high-quality tractors, the shorter routes over which its vehicles are
dispatched enables these units to be serviced more frequently. Accordingly, it
has not been necessary for Welborn to replace its fleet as frequently as Boyd.
CUSTOMERS AND MARKETING
The Company markets itself on the basis of quality service and
employees, its satellite communication system, the capabilities of its
information system to interface with the information systems of its customers,
its record of on-time deliveries, and its efficient and well-maintained tractors
and trailers. The Company's marketing efforts concentrate on attracting
customers that require time-definite delivery and ship multiple loads to and
from locations that complement the Company's existing traffic flows.
Boyd has written contracts with most of its customers. The contracts
generally require the customer to use Boyd for a specified minimum amount of
shipments each year and may be terminated by either party upon 30 to 60 days'
written notice.
The Company's largest 25, 10 and 5 customers accounted for
approximately 53.9%, 37.4% and 24.9%, respectively, of the Company's revenues
during the year ended December 31,1999. Many of the Company's largest 25
customers are publicly-held companies. No single customer accounted for more
than 10% of the Company's revenues during the year ended December 31,1999.
OPERATIONS
The Company's operations are designed to maximize efficiency and
provide quality service to customers. All of Boyd's fleet operations, routing
and scheduling are centrally coordinated through a satellite tracking system
from its corporate headquarters in Clayton, Alabama. Through the use of Boyd's
satellite-based communication system, which is complemented by its
fully-integrated mainframe computer system, dispatchers monitor the location and
delivery schedules of all shipments and equipment to coordinate routes and
maximize utilization of Boyd's drivers and equipment. See "Transportation
Technology."
Boyd conducts its operations through a network of 10 regional and
satellite service centers in strategic locations in the eastern two-thirds of
the United States. See "Item 2 - Properties." Boyd operates regional service
centers in Clayton and Birmingham, Alabama; Springfield, Ohio; and Greenville,
Mississippi. These regional service centers are supported by smaller satellite
service centers, each having between one to three employees, located in Calvert
City, Kentucky; Danville, Virginia; Lisbon Falls, Maine; Blytheville, Arkansas;
Baltimore, Maryland; and Walworth, Wisconsin. These service centers allow Boyd
to re-dispatch equipment terminating in a given area, enhance driver recruitment
and return drivers to their homes more regularly. Boyd also has arrangements to
deposit trailers near various major customers or shipping locations to
facilitate pre-loading of shipments and thereby increase efficiency.
Welborn's corporate offices are located in Tuscaloosa, Alabama. Welborn
utilizes independent agents located in Atlanta, GA.
DRIVERS AND EMPLOYEES
Recruiting and retaining professional, well-trained drivers is critical
to the Company's success, and all of the Company's drivers must meet specific
guidelines relating primarily to safety records, driving experiences and
personal evaluations, including drug testing.
To maintain high-equipment utilization, particularly during periods of
growth, the Company strongly
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emphasizes continuous driver and owner-operator recruitment and training.
Drivers are recruited at all of the Company's regional terminal locations and at
the Company's corporate headquarters.
Drivers are trained in Company policies and operations, safety
techniques and fuel efficient operation of equipment. In addition, each driver
must pass a rigorous road test prior to his or her assignment to a vehicle. The
Company's training programs range from two to eight weeks of concentrated
schooling, depending on a driver's level of experience. In addition, all drivers
are required to participate in annual safety training and defensive driving
courses for recertification by the Company. Recognizing the importance of driver
contact while drivers are on the road for extended periods, the Company
maintains toll-free telephone lines and publishes a newsletter containing
Company information, in addition to maintaining daily contact between
dispatchers and drivers.
Competition for qualified drivers is intense. The short- to medium-haul
truckload segment of the trucking industry, including the Company, experiences
significant driver and owner-operator turnover, and the Company anticipates that
the intense competition for qualified drivers in the trucking industry will
continue. In order to attract quality drivers, management is actively pursuing
the services of independent owner/operators to complement its fleet.
At December 31, 1999, the Company had 815 employees; of these,
approximately 598 were drivers and driver-trainees, and the balance were
mechanics, other equipment maintenance personnel and support personnel,
including management and administration. In addition, owner-operators accounted
for the operation of approximately 507 tractors. None of the Company's employees
is subject to a collective bargaining agreement, and the Company has never
experienced a work stoppage. Management believes that its relationship with its
employees is good.
REVENUE EQUIPMENT
The Company's philosophy is to purchase premium quality tractors to
help attract and retain drivers and to promote safe operations, and management
believes the higher initial cost of such equipment is recovered through better
resale marketability. Each of the Company's tractors are equipped with a sleeper
cab to permit all drivers to comply conveniently and cost-effectively with the
United States Department of Transportation ("DOT") hours of service guidelines
and to facilitate team operations when necessary.
At December 31, 1999, the Company owned and operated 1,112 tractors and
1,451 flatbed trailers. The tractors are manufactured by Freightliner, Kenworth
and International, and the trailers are manufactured by Utility, Dorsey,
Fruehauf, Fontaines, Wabash and Great Dane.
TRANSPORTATION TECHNOLOGY
Management believes that the application of technology is an ongoing
part of providing high-quality service at competitive prices, and further
believes that Boyd has enhanced its strong reputation for customer satisfaction
through the early and fleet-wide implementation of two computer systems.
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Boyd was the first major flatbed carrier to fully equip its vehicles with the
two-way satellite communication system produced by QUALCOMM. The satellite-based
OMNITRACS(C) system ("Omnitracs") was installed and operational in the entire
Boyd fleet by the end of 1990. Omnitracs has improved the quality and efficiency
of Boyd's operations by allowing drivers and dispatchers to have instant,
on-the-road communication ability and by enabling Boyd to provide its customers
with accurate information on the status and estimated delivery time of cargo
shipments.
Omnitracs permits more efficient transmission of load assignments to
drivers, and enhances the Company's ability to monitor loads in transit and
rapidly bill customers for completed deliveries. Once a load is assigned by a
load planner, the assignment is transmitted to Boyd's operations department
where it is reviewed by a dispatcher who then relays the assignment to the
appropriate driver through the Omnitracs display unit in each of Boyd's
vehicles. The driver can respond to the dispatcher through Omnitracs in a matter
of seconds, thereby eliminating waiting time and inefficient dependence on truck
stop telephones or other methods of communication between drivers and
dispatchers. Through Omnitracs, Boyd can electronically record a load
assignment, report the load to the billing department and generate customer
invoices.
In addition, Boyd uses Omnitracs to automatically transmit location and
equipment information and other data to the dispatcher, thereby reducing the
need for drivers to stop to communicate with dispatchers in the event of a
problem. The system continually tracks every cargo load with accuracy within
one-tenth of a mile. This information, along with information concerning
available loads, is constantly updated on Boyd's on-line computer. Load planners
use this information to match available equipment with available loads, meet
delivery schedules and respond more quickly to customer inquiries.
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Boyd has also equipped its entire fleet of tractors with the
SENSORTRACS(C) on-board computer system ("Sensortracs"), which is also produced
by QUALCOMM. This system monitors fuel efficiency and other operational data.
Information from Sensortracs is periodically processed by one of Boyd's
computers, which generates reports on vehicle efficiency and driver performance.
Reports generated by this system enhance Boyd's ability to counsel its drivers
on strengths and deficiencies in their driving habits and fuel efficiency and to
monitor the effectiveness of driver training programs.
During 1998, Boyd developed load tendering and tracking capabilities.
Customers are able to track the progress of their loads during transport using
their own personal computer. Additionally, customers are able to book loads over
the internet. Customers submit potential loads to the appropriate regional load
planner, and the load planner will then contact the customer via the internet
e-mail system to acknowledge acceptance of the load. This technological
advancement enables customers to book loads routinely without having to complete
the same paperwork again. Additionally, in 1998, Boyd implemented a new software
program by The LOGISTICS.COM Group that enables Boyd to review each shipping
lane to determine overall profitability and also to determine which customers
are the most profitable within the lane. The Company's management believes that
as a result of these enhanced capabilities, Boyd will be in a position to direct
the movement of the fleet in a way that will yield the most results to the
bottom line without affecting the quality of the service.
SAFETY AND INSURANCE
The Company's safety department is responsible for training and
supervising personnel to keep safety awareness at its highest level. The Company
has implemented an active safety and loss prevention program. The emphasis on
safety begins in the hiring and training process, where prospective employees
and owner-operators are given physical examinations and drug tests, and newly
hired drivers and owner-operators, regardless of experience level, must
participate in an intensive training program. See "Drivers and Employees."
The directors of safety for the Company continuously monitor driver
performance and have final authority regarding employment and retention of
drivers. The Company is committed to securing appropriate insurance coverage at
cost-effective rates. The primary claims that arise in the trucking industry
consist of cargo loss and damage, personal injury, property damage and workers'
compensation. The Company currently retains liability up to $100,000 for each
claim for personal injury and property damage, $100,000 for each claim for
employee medical and hospitalization, and $10,000 for each claim for cargo
damage. The Company also maintains full coverage for workers' compensation
claims. The Company currently purchases excess primary and umbrella insurance
coverage in amounts that management believes are adequate to supplement its
retained liabilities.
FUEL
Motor carrier service is dependent upon the availability of diesel
fuel. The Company's fuel expense comprised 8.7% and 9.0% of revenues in 1999 and
1998, respectively. Through on-board computers, the Company continually monitors
fuel usage, miles per gallon, cost per mile and cost per gallon. The Company has
not experienced any difficulty in maintaining fuel supplies sufficient to
support its operations. Shortages of fuel, increases in fuel prices or fuel tax
rates or rationing of petroleum products could have a material adverse effect on
the operations and profitability of the Company.
COMPETITION
The trucking industry is highly competitive and fragmented. The Company
competes primarily with other short- to medium-haul, flatbed truckload carriers,
internal shipping conducted by existing and potential customers and, to a lesser
extent, railroads. Deregulation of the trucking industry during the 1980s
created an influx of new truckload carriers which, along with certain other
factors, continues to create substantial downward pressure on the industry's
rate structure. Competition for the freight transported by the Company is based
primarily on service and efficiency and, to a lesser degree, on freight rates.
There are other trucking companies, including truckload carriers that have
flatbed divisions, that have substantially greater financial resources, operate
more equipment or carry a larger volume of freight than the Company. The
existence of these other motor carriers has also resulted in increased
competition for qualified drivers.
REGULATION
The trucking industry is subject to regulatory oversight and
legislative changes that can affect the economics of the industry by requiring
certain operating practices or influencing the demand for, and the costs of
providing,
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services to shippers. The Intermodal Surface Transportation Board (the "ISTB"),
as well as various state agencies that have jurisdiction over the Company, have
broad powers, generally governing such matters as authority to engage in motor
carrier operations, rates and charges, accounting systems, certain mergers,
consolidations and acquisitions, and periodic financial reporting.
The Federal Motor Carrier Act of 1980 commenced a program to increase
competition among motor carriers and to diminish the level of regulation in the
industry. Following this deregulation, applicants have more easily been able to
obtain operating authority, and interstate motor carriers such as the Company
have been able to implement certain rate changes without federal approval. The
Motor Carrier Act also removed many route and commodity restrictions on
transportation of freight. In 1995, the Interstate Commerce Commission (the
"ICC") was eliminated, and the ISTB was established within the Department of
Transportation (the "DOT"). The ISTB performs all functions previously performed
by the ICC. Since 1981, the Company has held authority to carry general
commodities throughout the 48 contiguous states, as both a common and contract
carrier.
Interstate motor carrier operations are subject to safety requirements
prescribed by the DOT. Such matters as weight and dimensions of equipment are
also subject to federal and state regulation. All of the Company's drivers were
required to obtain national commercial driver's licenses by April 1, 1992
pursuant to the regulations promulgated by the DOT. Also, effective in 1989, DOT
regulations imposed mandatory drug testing of drivers. In addition, the Company
has completed the implementation of its own ongoing drug-testing program. The
DOT's national commercial driver's license and drug testing requirements have
not to date adversely affected the availability of qualified drivers to the
Company. DOT alcohol testing rules require certain tests, random and otherwise,
for alcohol levels in drivers and other safety personnel. See "Safety and
Insurance."
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 service centers.
The Company's consolidated balance sheets as of December 31, 1999 and
1998 include reserves for environmental remediation of $0 and $46,000,
respectively, to cover final costs related to contamination caused by
underground storage tanks. The tanks were replaced and clean-up was
substantially complete in 1995. Currently, management knows of no other
environmental remediation issues or liabilities. 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. Management does not believe these expenditures will have a material adverse
effect on the Company's financial condition.
FORWARD-LOOKING STATEMENTS
Certain statements incorporated by reference from the information under
the caption "Management's Discussion and Analysis of Financial Conditions and
Results of Operations" in the Company's Annual Report to Stockholders for the
year ended December 31, 1999 contained herein constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance,
or achievements of the Company to be materially different from any future
results, performance, or achievements expressed or implied by such
forward-looking statements. Such factors include, among other things, business
conditions and growth in the economy, including the transportation and
construction sectors in particular, competitive factors, including price
pressures and the ability to recruit and retain qualified drivers, the ability
to control internal costs, particularly fuel costs which have risen materially
during the fourth quarter of 1999, that are not passed on to the Company's
customers, and other factors referenced elsewhere herein.
ITEM 2. PROPERTIES
The Company's corporate headquarters and principal service center are
located on a 17.9 acre tract in Clayton, Alabama. Such facilities consist of
approximately 22,000 square feet of office space, 12,000 square feet of
equipment repair facilities and approximately 3 acres of parking space. The
Company is in the process of constructing a new "super terminal", containing
several maintenance and safety bays in Birmingham, Alabama. The super terminal
is estimated to be completed by June 2000.
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The following table sets forth information regarding the location and
ownership of each of Boyd's service centers and shuttle facilities:
Clayton, AL........................................ Owned
Springfield, OH.................................... Owned
Birmingham, AL..................................... Owned
Greenville, MS..................................... Owned
Calvert City, KY................................... Leased
Danville, VA....................................... Leased
Lisbon Falls, ME................................... Leased
Baltimore, MD...................................... Leased
Walworth, WI....................................... Leased
Blytheville, AR.................................... Leased
Additionally, Welborn owns its corporate offices in Tuscaloosa, Alabama and
leases service centers located as follows:
Birmingham, AL........................................ Leased
Memphis, TN........................................... Leased*
Decatur, AL........................................... Leased*
Columbia, SC.......................................... Leased*
Atlanta, GA........................................... Leased*
*In March 2000, Welborn Transport closed three service centers in Memphis,
TN; Decatur, AL; and Columbia, SC. These service centers were closed in an
effort to increase driver utilization and dispatch through one central dispatch
location in Tuscaloosa, AL. Additionally, Welborn Transport opened a service
center in Atlanta, GA in March 2000. This service center will dispatch and
settle with drivers.
ITEM 3. LEGAL PROCEEDINGS
The Company is routinely a party to litigation incidental to its
business, primarily involving claims for personal injury and property damage
incurred in the transportation of freight. The Company maintains insurance that
it believes is adequate to cover its liability risks. See "Item 1 - Business --
Safety and Insurance."
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the
fourth quarter of the year ended December 31, 1999, either through the
solicitation of proxies or otherwise.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Common Stock of the Company is listed on the Nasdaq National Market
under the symbol "BOYD." As of March 17, 2000, the Company had approximately 600
stockholders, including beneficial owners holding shares in nominee or "street"
name. The table below sets forth the reported high and low sales price per share
for the Common Stock as reported by the Nasdaq National Market for each fiscal
quarter during 1999 and 1998.
Price Range
-------------------
1999 High Low
- ---- -------------------
First Quarter....................................... $ 8-3/8 $6-1/8
Second Quarter...................................... 11-3/4 7-3/4
Third Quarter....................................... 11-5/8 8-3/4
Fourth Quarter...................................... 9-3/4 6-1/8
Price Range
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1998 High High
- ---- -------------------
First Quarter....................................... $10-3/8 $8-9/16
Second Quarter...................................... 12 8-1/2
Third Quarter....................................... 10-1/8 5-7/8
Fourth Quarter...................................... 8 5-5/8
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Management currently anticipates that all of its earnings will be
retained for development of the Company's business and does not anticipate
paying any cash dividends in the foreseeable future. Future cash dividends, if
any, will be at the discretion of the Company's Board of Directors and will
depend upon, among other things, the Company's future operations and earnings,
capital requirements and surplus, general financial condition, contractual
restrictions, and other factors as the Board of Directors may deem relevant.
Pursuant to the Company's stock repurchase program, the Company
purchased 25,000 and 263,940 shares of the common stock in open market or
negotiated transactions during 1998 and 1999, for aggregate purchase prices
of $165,625 and $2,342,746, respectively. The Company funded these purchases
using working capital. On January 8, 1999, the Company purchased 500,000 shares
of its outstanding common stock from a former Chief Executive Officer of the
Company for $3,660,000. The stock purchase was funded by available cash and a
bank line of credit.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this item is incorporated by reference from
the information under the caption "Selected Financial Data" in the Company's
Annual Report to Stockholders for the year ended December 31, 1999.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information required by this item is incorporated by reference from
the information under the caption "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the Company's Annual Report to
Stockholders for the year ended December 31, 1999.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
INTEREST RATE RISK
The Company is exposed to interest rate risk due to its long-term debt,
which at December 31, 1999, bore interest at rates ranging from 1.00% to 1.50%
above the applicable bank's LIBOR rate. Under the provisions of Statement of
Financial Accounting Standards ("SFAS") No. 107, Disclosures about Fair Value of
Financial Instruments, the Company has estimated the fair value of its long-term
debt approximates its carrying value, using a discounted cash flow analysis
based on borrowing rates available to the Company. The effect of a hypothetical
ten percent increase in interest rates would increase the estimated fair value
of the Company's long-term debt by approximately $600,000. Management believes
that current working capital funds are sufficient to offset any adverse effcts
caused by changes in these interest rates.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this item is incorporated by reference from
the Consolidated Financial Statements contained in the Company's Annual Report
to Stockholders for the year ended December 31, 1999.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Set forth below is information concerning the Directors and Executive
Officers of the Company as of March 17, 2000.
Dempsey Boyd, age 72, founded Boyd in 1956, and has been Chairman of
the Board since April 1980. Mr. Boyd served as President of Boyd from December
1962 until April 1980. Mr. Boyd is the father of Gail B. Cooper and Ginger B.
Tibbs.
8
11
Miller Welborn, age 41, has served as Vice-Chairman since February 17,
2000. Mr. Welborn served as President and Chief Executive Officer of the Company
from July 1998 until February 2000. Mr. Welborn co-founded Welborn Transport in
1989.
Gail B. Cooper, age 49, has served as President, Chief Executive
Officer and as a Director of the Company since February 17, 2000. Ms. Cooper
served as Secretary of Boyd from December 1969 until February 2000. Ms. Cooper
received a B.S. in business administration from Troy State University. She has
served Boyd in numerous administrative and accounting positions since joining
Boyd full-time in June 1972. Ms. Cooper is the daughter of Mr. Boyd and the
sister of Ms. Tibbs.
Richard C. Bailey, age 49, has served as Executive Vice President and
Chief Financial Officer of the Company since joining Boyd in August 1992, and
has served as a Director since February 1995. He served as President and
Director of Eastern Inter-Trans Services, Inc., a dry van truckload carrier
based in Columbus, Georgia, from December 1989 to August 1992. Mr. Bailey is a
certified public accountant with a B.S. in accounting from Georgia State
University. He was previously employed in various financial positions by Ernst &
Young, Intermet Corporation and Snapper Products (a division of The Actava Group
Inc.). Mr. Bailey has served on the Advisory Board of the University of Georgia
Trucking Profitability Strategies Conference.
Ginger B. Tibbs, age 46, has been the Secretary/ Treasurer of Boyd
since February 2000. Ms. Tibbs is primarily responsible for collection of Boyd's
accounts receivable and has served as Credit Manager since September 1980. Ms.
Tibbs received a degree in elementary education from Auburn University. She is
the daughter of Mr. Boyd and the sister of Ms. Cooper.
With the exception of information relating to the executive officers of
the Company, which is provided in Item 10 hereof, all information required by
Part III (Items 11, 12 and 13) is incorporated by reference to the Company's
definitive Proxy Statement relating to the 2000 Annual Meeting of Stockholders,
which is scheduled to be filed on or about April 7, 2000.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, FINANCIAL STATEMENT
SCHEDULES AND CURRENT REPORTS ON FORM 8-K
(a) Exhibits, Financial Statements and Schedules.
1. Financial Statements. The following financial statements for the
Company and Independent Auditors' Report are incorporated by reference
from the Company's Annual Report to Stockholders for the year ended
December 31, 1999:
Independent Auditors' Report
Consolidated Balance Sheets at December 31, 1999 and 1998
Consolidated Statements of Income for the years ended December 31,
1999, 1998 and 1997
Consolidated Statements of Stockholders' Equity for the years ended
December 31, 1999, 1998 and 1997
Consolidated Statements of Cash Flows for the years ended December
31, 1999, 1998 and 1997
Notes to Consolidated Financial Statements
2. Financial Statement Schedules.
The schedule listed below is included herein immediately after the
signature pages hereto. Schedules not listed below have been omitted
because of the absence of conditions under which they are required or
because the information is included in the financial statements or notes
thereto.
SCHEDULE
NUMBER DESCRIPTION
------ -----------
II Valuation and Qualifying Accounts and Reserves
for the Three Fiscal Years Ended December 31, 1999
9
12
3. Exhibits required by Item 601 of Regulation S-K.
The following exhibits are included in this Form 10-K:
EXHIBIT
NO. DESCRIPTION
------- -----------
10.1 Credit and Security Agreement dated March 16, 1999 between the
Company and Compass Bank in the amount of $10,000,000 for truck
equipment
10.2 Security Agreement dated March 16, 1999 between the Company and
Compass Bank in the amount of $10,000,000 for truck equipment
10.3 Master Note for Business and Commercial Loans dated April 9, 1999
between the Company and Amsouth Bank in the amount of $2,500,000.
10.4 Master Note for Business and Commercial Loans dated April 9, 1999
between the Company and Amsouth Bank in the amount of $1,750,000.
13 Those portions of the Company's Annual Report to Stockholders for
the year ended December 31, 1999 that are specifically incorporated
herein by reference
21 Subsidiaries of the Registrant
23 Consent of Deloitte & Touche LLP
27 Financial Data Schedule
The following exhibits are incorporated by reference to the Company's
Annual Report on Form 10-K for the year ended December 31, 1998 (File No.
000-23948):
EXHIBIT
NO. DESCRIPTION
------- -----------
10.1 Credit and Security Agreement dated February 28, 1996 between the
Company and Compass Bank in the amount of $5,000,000 for truck
equipment
10.2 Credit and Security Agreement dated May 29, 1998 between the
Company and Compass Bank in the amount of $4,500,000 for truck
equipment
10.3* Agreement and General Release between the Company and Donald
Johnston dated July 16, 1998
10.4 Consulting Agreement between the Company and Donald Johnston
dated July 16, 1998
10.5 Stock Repurchase Agreement between the Company and Donald Johnston
dated January 7, 1999
The following exhibits are incorporated by reference to the Company's
Annual Report on Form 10-K for the year ended December 31, 1997 (File no.
000-23948):
10
13
EXHIBIT
NO. DESCRIPTION
- ------- -----------
10.1* First Amendment to Boyd Bros. Transportation Inc. 1994 Stock
Option Plan
10.2* Employment Agreement between the Company and Miller Welborn dated
December 8, 1997
10.3* Employment Agreement between the Company and Steven Rumsey dated
December 8, 1997
The following exhibit is incorporated by reference to the Company's
Registration Statement on Form S-8 (File No. 333-78925), declared effective on
May 20, 1999:
EXHIBIT
NO. DESCRIPTION
------- -----------
4 Boyd Bros. Transportation Inc. 1999 Employee Stock Purchase Plan
The following exhibits are incorporated by reference to the Company's
Registration Statement on Form S-1 (File No. 33-76756), declared effective on
May 9, 1994:
EXHIBIT
NO. DESCRIPTION
- ------- -----------
3.1 Certificate of Incorporation of the Company
3.2 By-laws of the Company
10.1* Boyd Bros. Transportation Inc. 1994 Stock Option Plan
10.2* Form of the Company's Nonstatutory Stock Option Agreement
10.3* Form of the Company's Nonstatutory Stock Option Agreement for
Nonemployee Directors
10.13 Note for Business and Commercial Loans dated August 2, 1993 by the
Company in favor of AmSouth Bank N.A. in the principal amount of
$5,122,702.70
10.14 Security Agreement for Tangible Personal Property dated February
15, 1994 by the Company in favor of AmSouth Bank N.A.
10.15 Note for Business and Commercial Loans dated February 15, 1994 for
a $5,000,000 non-revolving draw note by the Company in favor of
AmSouth Bank N.A.
10.26 Credit and Security Agreement dated February 1, 1994 by and between
the Company and Compass Bank
10.27 Security Agreement dated February 1, 1994 by the Company in favor
of Compass Bank
10.37 Credit Agreement dated April 1, 1994 by and between the Company and
AmSouth Bank N.A.
The following exhibit is incorporated by reference to the Company's
Amendment to Report on Form 10-Q filed on August 5, 1997:
- -----------------
* Identifies each exhibit that is a "management contract or compensatory
plan or arrangement" required to be filed as an exhibit to this Annual
Report on Form 10-K pursuant to Item 14(c) of Form 10-K.
11
14
EXHIBIT
NO. DESCRIPTION
- ------ -----------
10.33 OMNITRACS contract dated February 5, 1997, between the Company
and QUALCOMM, Inc.
The following exhibit is incorporated by reference to the Company's
Report on Form 8-K filed on December 19, 1997:
EXHIBIT
NO. DESCRIPTION
- ------ -----------
2.1 Acquisition Agreement dated December 8, 1997, by and among the
Company, W-T Acquisition Company, Welborn Transport, Inc., Miller
Welborn and Steven Rumsey
(b) Reports on Form 8-K
None.
12
15
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
BOYD BROS. TRANSPORTATION INC.
By: /s/ GAIL B. COOPER
--------------------------------------
Gail B. Cooper
President and Chief Executive Officer
Date: March 30, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
SIGNATURES TITLE DATE
---------- ----- ----
/s/ GAIL B. COOPER
- -----------------------------------
Gail B. Cooper President, Chief Executive March 30, 2000
Officer, and Director (Principal
Executive Officer)
/s/ RICHARD C. BAILEY Executive Vice President,
- ----------------------------------- Chief Financial Officer and March 30, 2000
Richard C. Bailey Director (Principal Financial
and Accounting Officer)
/s/ DEMPSEY BOYD Chairman and Director March 30, 2000
- -----------------------------------
Dempsey Boyd
/s/ W. MILLER WELBORN Vice-Chairman and Director March 30, 2000
- -----------------------------------
W. Miller Welborn
/s/ W. WYATT SHORTER Director March 30, 2000
- ------------------------------------
W. Wyatt Shorter
/s/ BOYD WHIGHAM Director March 30, 2000
- -----------------------------------
Boyd Whigham
/s/ STEPHEN J. SILVERMAN Director March 30, 2000
- -----------------------------------
Stephen J. Silverman
16
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of Boyd Bros.
Transportation Inc.:
We have audited the consolidated financial statements of Boyd Bros.
Transportation Inc. and subsidiary as of December 31, 1999 and 1998, and the
related consolidated statements of income, stockholders' equity, and cash flows
for each of the three years in the period ended December 31, 1999, and have
issued our report thereon dated February 4, 2000; such consolidated financial
statements and report are included in your 1999 Annual Report to Shareholders
and are incorporated herein by reference. Our audits also included the
consolidated financial statement schedule of Boyd Bros. Transportation Inc. and
subsidiary, listed in Item 14. This consolidated financial statement schedule is
the responsibility of the Company's management. Our responsibility is to express
an opinion based on our audits. In our opinion, such consolidated financial
statement schedule, when considered in relation to the basic consolidated
financial statements as a whole, presents fairly in all material reflects the
information shown therein.
Deloitte & Touche LLP
Birmingham, Alabama
February 4, 2000
17
SCHEDULE II
BOYD BROS. TRANSPORTATION INC.
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE THREE YEARS ENDED DECEMBER 31, 1999
ADDITIONS ADDITIONS
BALANCE AT CHARGED TO CHARGED TO
BEGINNING OF COSTS AND OTHER BALANCE AT
DESCRIPTION YEAR EXPENSES ACCOUNTS(B) DEDUCTIONS(A) END OF YEAR
- ----------- ------------ ------------ ------------ ------------- --------------
Allowance for doubtful accounts--
deducted from trade receivables in
the balance sheet
Year ended December 31, 1997 $ 125,000 $ -- $ 112,000 $ -- $237,000
========= ========== ========= ========== ========
Year ended December 31, 1998 $ 237,000 $ 150,400 $ -- $ 115,400 $272,000
========= ========== ========= ========== ========
Year ended December 31, 1999 $ 272,000 $ 220,000 $ -- $ 145,000 $347,000
========= ========== ========= ========== ========
ADDITIONS
BALANCE AT CHARGED TO
BEGINNING OF COSTS AND BALANCE AT
DESCRIPTION YEAR EXPENSES DEDUCTIONS(A) END OF YEAR
- ----------- ------------ ------------ -------------- -------------
Allowance for uncollectible receivables
related to sales-type leases--
deducted from investment in sales-type
leases in the balance sheet
Year ended December 31, 1997 $ -- $ 380,000 $ -- $ 380,000
========== =========== ========== ===========
Year ended December 31, 1998 $ 380,000 $ 1,627,506 $ 806,261 $ 1,201,245
========== =========== ========== ===========
Year ended December 31, 1999 $1,201,245 $ 1,259,144 $1,549,635 $ 910,754
========== =========== ========== ===========
(a) Uncollectible accounts written off
(b) Addition of Welborn Transport, acquired on December 8, 1997