1
EXHIBIT 13
Boyd Bros. Transportation Inc. and Subsidiary
Selected Financial Data
The following tables set forth selected financial data and selected pro forma
financial data of the Company. The selected financial data presented below for
the five-year period ended December 31, 2000, are derived from the Company's
audited financial statements. The data presented below should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations," the Consolidated Financial Statements and Notes
thereto.
Year Ended December 31,
2000 1999 1998 1997 1996
- -------------------------------------------------------------------------------------------------------------------------
Statement of Operations Data: (in thousands, except per share data)
Operating revenues $ 126,725 $ 133,137 $ 118,123 $ 77,215 $ 65,523
Operating expenses:
Salaries, wages and employee benefits 39,263 35,461 36,608 32,427 28,420
Cost of independent contractors 35,173 45,132 31,818 2,500 --
Operating supplies 25,404 22,934 21,429 20,832 19,550
Taxes and licenses 2,965 2,847 2,566 2,306 2,222
Insurance and claims 7,060 6,111 5,393 3,439 3,379
Communications and utilities 1,520 1,480 1,554 1,305 1,186
Depreciation and amortization 11,611 10,720 10,320 9,181 8,261
Gain on disposition of property and
equipment, net (1,113) (1,627) (433) (577) (805)
Other 2,008 1,862 1,541 711 660
- -------------------------------------------------------------------------------------------------------------------------
Total operating expenses 123,891 124,920 110,796 72,124 62,873
- -------------------------------------------------------------------------------------------------------------------------
Operating income (loss) 2,834 8,217 7,327 5,091 2,650
Interest income 80 92 97 136 164
Interest expense (3,904) (2,422) (1,608) (1,391) (1,408)
Other -- -- 82 -- --
- -------------------------------------------------------------------------------------------------------------------------
Income (loss) before income taxes (990) 5,887 5,898 3,836 1,406
Income taxes (benefit) (15) 2,430 2,326 1,519 578
- -------------------------------------------------------------------------------------------------------------------------
Net income (loss) $ (975) $ 3,457 $ 3,572 $ 2,317 $ 828
=========================================================================================================================
Basic and diluted net income (loss) per
share $ (0.32) $ 0.99 $ 0.87 $ 0.62 $ 0.22
=========================================================================================================================
December 31,
2000 1999 1998 1997 1996
- -------------------------------------------------------------------------------------------------------------------------
(in thousands)
Balance Sheet Data:
Working capital $ (1,481) $ (1,049) $ 4,360 $ 3,785 $ 2,495
Net property and equipment 66,737 61,882 48,691 48,859 44,593
Total assets 95,052 99,456 77,047 71,526 57,262
Long-term debt, less current maturities 33,322 34,689 18,049 19,252 15,198
Total liabilities 67,870 69,062 44,186 42,071 33,374
Stockholders' equity 27,182 30,393 32,862 29,455 23,888
Selected Operating Data:
The following table sets forth certain operating data regarding the Company.
Year Ended December 31,
2000 1999 1998 1997 1996
- -------------------------------------------------------------------------------------------------------------------------
Operating ratio 97.76% 93.83% 93.80% 93.41% 95.95%
Average length of haul in miles 661 634 576 663 677
Average number of truckloads per week 3,145 3,368 3,330 1,908 1,607
Average revenues per total mile $ 1.19 $ 1.18 $ 1.17 $ 1.17 $ 1.14
Equipment at period end:
Tractors 1,017 1,112 1,032 950 575
Trailers 1,398 1,451 1,337 1,227 916
2
BOYD BROS. TRANSPORTATION INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following is a discussion of the financial condition and results of
operations of the Company for each of the years in the three-year period ended
December 31, 2000. This discussion should be read in conjunction with the
Consolidated Financial Statements and Notes thereto included elsewhere herein.
GENERAL
The Company was founded in 1956 by Dempsey Boyd and his brothers as a small
regional flatbed trucking operation with three tractors. Since that time, the
Company has grown to one with 1,017 tractors and 1,398 trailers operating in the
eastern two-thirds of the United States. Historically, the Company owned its
revenue equipment and operated through employee drivers. The Company's expansion
in the past, therefore, has required significant capital expenditures that have
been funded through secured borrowings. During 1997, as a strategy to expand the
Company's potential for growth without the increase in capital expenditures
typically related to owned equipment, the Company began adding owner-operators
to its fleet. The Company then accelerated the implementation of this strategy
in December 1997 with the acquisition of Welborn Transport, Inc. ("Welborn"),
which specializes in short-haul routes using largely an owner-operated fleet.
RESULTS OF OPERATIONS
The following table sets forth the percentage relationship of the expense items
to operating revenues for the periods indicated.
Percentage of Operating Revenues
Year Ended December 31,
2000 1999 1998
Operating revenues 100.00% 100.00% 100.00%
------------------------------------------------------------------------------------------------
Operating expenses
Salaries, wages, and employee benefits 30.98 26.64 31.00
Cost of independent contractors 27.76 33.89 26.94
Operating supplies 20.06 17.23 18.14
Taxes and licenses 2.34 2.14 2.17
Insurance and claims 5.58 4.59 4.57
Communication and utilities 1.20 1.11 1.31
Depreciation and amortization 9.16 8.05 8.74
Gain on disposition of property and equipment, net (0.90) (1.22) (0.37)
Other 1.58 1.40 1.30
Total operating expenses 97.76 93.83 93.80
------------------------------------------------------------------------------------------------
Operating income 2.24 6.17 6.20
Interest expense, net (3.02) (1.75) (1.28)
Other income -- -- 0.07
Income (loss) before income taxes (0.78) 4.42 4.99
------------------------------------------------------------------------------------------------
Income taxes (benefit) (0.01) 1.83 1.97
Net income (loss) (0.77)% 2.59% 3.02%
------------------------------------------------------------------------------------------------
3
COMPARISON OF YEAR ENDED DECEMBER 31, 2000 TO YEAR ENDED DECEMBER 31, 1999
Operating revenues for 2000 decreased $6.4 million, or 4.8%, to $126.7 million
compared to $133.1 million for 1999. The decrease was due in part to the closing
of the brokerage company at Welborn Transport, which was replaced by a new
freight brokerage company at the Boyd division, and also the closing of the
specialized division at Welborn. This interruption in brokerage services and the
closing of the specialized division at Welborn accounted for $4.0 million of the
decrease in revenues. The remainder of the decrease in revenues was attributable
to a reduction in freight volume, especially in the steel industry.
Salaries, wages and employee benefits for 2000 increased $3.8 million, or 10.7%,
to $39.2 million compared to $35.5 million in 1999. Salaries increased due to
the decrease in the owner-operator fleet, and therefore, an increase in
employee drivers. Owner-operators left the business due to reduced freight
volume and increased fuel costs during 2000. Salaries made up 31.0% of operating
revenue in 2000 compared to 26.6% in 1999.
Cost of independent contractors for 2000 decreased $10.0 million, or 22.1%, to
$35.1 million from $45.1 million in 1999. As of December 31, 2000 the Boyd Bros.
division had an owner-operator fleet of 111 operators compared to 209
owner-operators as of December 31, 1999. Additionally, Welborn Transport, had
161 owner-operators as of December 31, 2000 compared to 298 operators in 1999.
Operating supplies expense for 2000 increased $2.5 million, or 10.8%, to $25.4
million compared with $22.9 million for 1999. The increase in operating
supplies, which includes fuel costs, net of fuel surcharges, is partly due to
the decrease in the owner-operator fleet which has resulted in an increase of
Company-operated units. The Company absorbs all of the variable costs for the
Company-operated units. The increase in fuel cost per gallon has also impacted
overall fuel costs.
Taxes and licenses expense for 2000 increased $.1 million, or 4.2%, to $2.9
million compared to $2.8 million in 1999. Taxes and licenses increased due to
the decrease in the owner-operator leased fleet, which has resulted in an
increase of Company-operated trucks for which the Company bears all of the
licensing and permitting expenses.
Insurance and claims expense for 2000 increased $.9 million, or 15.5%, to $7.0
million compared to $6.1 million in 1999. The increase was primarily due to an
increase in accident claims and insurance rates.
Communications and utilities expense for 2000 increased $.01 million, or 2.8%,
to $1.51 million from $1.5 million in 1999. The increase was primarily due to a
decrease in the owner-operator fleet, which has resulted in a decrease of the
fees the Company charges for the use of the Company's satellite units.
Depreciation and amortization expense for 2000 increased $.9 million, or 8.3%,
to $11.6 million from $10.7 million in 1999. Depreciation expense increased due
to the Company's absorption of leased owner-operator tractors back into the
Company fleet.
4
Gain on disposition of property and equipment decreased $.5 million or 31.6%, to
$1.1 million from $1.6 million. The Company traded less units during 2000 ,and
additionally trade values were depressed during 2000.
Rent expense for 2000 decreased $.1 million, or 9.3%, to $.4 million from $.5
million in 1999. Rent expense includes operating leases for both trailers and
terminals. Rent expense decreased due to the Company's cancellation of leases at
some of its outlying facilities.
Other expenses for 2000 increased approximately $.1 million, or 10.6%, to $1.5
million in 2000 from $1.4 million in 1999. Other expenses include, but are not
limited to, consulting fees, legal fees, advertising costs, bank charges and bad
debts. The Company incurred higher bad debt writeoffs in 2000. Also, the Company
contracted with more Consultants in 2000.
Interest expense (net of interest income) increased $1.4 million, or 64.1%, to
$3.8 million from $2.4 million in 1999. Interest expense increased due to an
approximately 125 basis points increase in the LIBOR rate, on which the interest
rate charged on all of the Company's debt is based.
Net income for 2000 decreased approximately $4.4 million, or 128.2%, to ($.9)
million compared to $3.5 million for 1999.
COMPARISON OF YEAR ENDED DECEMBER 31, 1999 TO YEAR ENDED DECEMBER 31, 1998
Operating revenues for 1999 increased $15.0 million, or 12.7%, to $133.1 million
compared to $118.1 million for 1998. Revenues increased due to better equipment
utilization and the addition of 80 tractors.
Salaries, wages and employee benefits decreased $1.1 million, or 3.1%, to $35.5
million compared to $36.6 million in 1998. Salaries decreased due to the
increase in the owner-operator fleet, and therefore, a decrease in employee
drivers. Salaries made up 26.6% of operating revenue in 1999 compared to 31.0%
in 1998.
Cost of independent contractors for 1999 increased $13.3 million, or 41.8%, to
$45.1 million from $31.8 million in 1998. As of December 31, 1999 Boyd Bros. had
an owner-operator fleet of 209 operators compared to 150 owner-operators in
1998. Additionally, Welborn had 298 owner-operators as of December 31, 1999
compared to 281 operators in 1998.
Operating supplies expense for 1999 increased $1.5 million, or 7.0%, to $22.9
million compared with $21.4 million for 1998, despite the fact that a large
portion of the fleet is comprised of owner-operators. This increase is almost
entirely due to increased fuel prices.
Taxes and licenses expense for 1999 increased $.2 million, or 7.7%, to $2.8
million compared to $2.6 million in 1998. Taxes and licenses increased at a
slower rate than revenue due to the greater percentage of owner-operators.
Insurance and claims expense increased $.7 million, or 13.0%, to $6.1 million
compared to $5.4 million in 1998. The increase was primarily due to an increase
in accident claims.
5
Communications and utilities expense decreased $.1 million, or 6.3%, to $1.5
million from $1.6 million in 1998. Improved cost management contributed to the
decrease in communications costs.
Depreciation and amortization expense increased $.4 million, or 3.9%, to $10.7
million from $10.3 million in 1998. Depreciation expense increased due to the
addition of newer and more expensive tractors in order to reduce the age of the
Company's tractor fleet and due to the replenishing of the Company's trailer
fleet with longer and more expensive trailers.
Rent expense for 1999 increased $.2 million, or 67.0%, to $.5 million from $.3
million in 1998. Rent expense includes operating leases for both trailers and
terminals. Rent expense increased due to the Company entering into several lease
agreements for new trailers during 1999.
Other expenses for 1999 increased approximately $.2 million, or 17.0%, to $1.4
million in 1999 from $1.2 million in 1998. Other expenses include, but are not
limited to, consulting fees, legal fees, advertising costs and bank charges.
Interest expense (net of interest income) for 1999 increased $.8 million, or
50%, to $2.4 million from $1.6 million in 1998. During 1999 the Company incurred
additional indebtedness for the purpose of financing an increase in its tractor
and trailer fleets.
Net income for 1999 decreased approximately $.1 million, or 2.8%, to $3.5
million compared to $3.6 million for 1998.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary cash requirements are for capital expenditures and
operating expenses, including labor costs, fuel costs and operating supplies.
Historically, the Company's primary sources of cash have been continuing
operations, bank borrowings and the issuance of common stock of the Company.
The growth of the Company's business and maintenance of its modern fleet has
required significant investments in new tractors and trailers, and has been
financed largely through long-term debt. Capital expenditures, net of proceeds
from disposals of property and equipment related to Company tractors, was
approximately $8.4 million in 2000, compared to $28.4 million in 1999. At
December 31, 2000, the Company had long-term debt (including current portions)
of $46.9 million, which was primarily incurred to purchase revenue equipment.
In March 2001, the Company received waivers executed by two of its lenders
relating to certain financial covenant ratio requirements contained in two of
the Company's long-term debt loan agreements as to which the Company was not in
compliance as of December 31, 2000. There can be no assurance that the Company
will be able to comply with these covenants in the future. If the Company is
unable to comply with these covenants in the future, there can be no assurance
that the Company's lenders will provide any additional waivers with respect to
any such noncompliance.
Net cash flow provided by operating activities was approximately $10.1 million
during 2000 compared to approximately $11.6 million in 1999.
Historically, the Company has relied on cash generated from operations to fund
its working capital requirements. However, the Company has a bank line of credit
permitting short-term borrowings of up to $2.5 million. The revolving line of
credit is collateralized by accounts receivable and inventory. As of December
31, 2000, the Company had $1.0 million outstanding on its line of credit.
6
During the second half of 2000, as well as the first quarter of 2001, the
Company experienced an increase in bad debt writeoffs. Due to the difficult
economic conditions facing the steel industry, in particular, additional bad
debt reserves maybe required if industry conditions continue to deteriorate.
Pursuant to the Company's stock repurchase program, the Company purchased
263,940 and 370,463 shares of the common stock in open market or negotiated
transactions during 1999 and 2000, for an aggregate purchase prices of
$2,342,746 and $2,248,941, respectively, including an aggregate 126,000 shares
of Common Stock purchased from Miller Welborn, the Vice-Chairman of the
Company, during 2000 at a price per share of $6.50. 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.
The Company currently has outstanding letters of credit, totaling approximately
$3.7 million at December 31, 2000, to cover liability insurance claims and
outstanding claims related to its previous self-insured workers' compensation
program. Annual commitment fees relating to these letters of credit do not
exceed 1.5% of the face amounts thereof.
During the first quarter of 2001 the Company purchased 10 trucks for its'
Welborn fleet at a net cost of $.4 million (Net of 23 trade trucks). The Company
has no plans to purchase any additional tractors during the remainder of 2001.
Management believes that cash flow from future operations and borrowings
available under its line of credit will be sufficient to meet its needs for
working capital for the foreseeable future. Over the long term, the Company will
continue to have significant capital requirements that may require the Company
to seek additional borrowings or equity capital. The availability of debt
financing or equity capital will depend upon prevailing market conditions, the
market price of its Common Stock and other factors over which the Company has no
control, as well as the Company's financial condition and results of operations.
INTEREST RATE RISK
The Company is exposed to interest rate risk due to its long-term debt, which at
December 31, 2000, bore interest at rates ranging from 1.25% to 1.75% above the
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 $640,000. Management believes that
current working capital funds are sufficient to offset any adverse effects
caused by changes in the interest rates.
7
SEASONALITY
In the trucking industry, results of operations show a seasonal pattern because
customers generally reduce shipments during the winter season, and the Company
does experience some seasonality due to the open, flatbed nature of its
trailers. The Company has at times experienced delays in meeting its shipping
schedules as a result of severe weather conditions, particularly during the
winter months. In addition, the Company's operating expenses have historically
been higher in the winter months due to decreased fuel efficiency and increased
maintenance costs in colder weather.
FUEL PRICE TREND
The average price per gallon of diesel fuel increased from about $.96 per gallon
at the beginning of 1999 and peaked at $1.67 during the fourth quarter of 2000.
If fuel prices continue to increase or are sustained at these higher levels for
a continuing period of time, the higher fuel costs may have a materially adverse
effect on the financial condition and business operations of the Company.
Additionally, the increased fuel costs may continue to have a materially adverse
effect on the Company's efforts to attract and retain owner-operators, expand
its pool of available trucks and diversify its operations. Higher fuel costs
dilute the financial incentive for owner-operators, who are typically paid a
flat rate per mile; therefore, as a result of higher fuel prices about 50
drivers left the Company's owner-operator program in the fourth quarter of 2000,
and an additional 25 drivers have departed in the first quarter of 2001. The
diminishing number of owner-operators further impacts the Company's financial
condition - and therefore compounds the direct impact of higher fuel costs -
because each owner-operator that leaves the Company's program also leaves behind
a power unit that must then be absorbed into the Company's fleet. As a result,
each of these trucks can no longer be recorded as a variable expense that is
related to a contractual rate per mile and is incurred only if freight is moved,
but must instead be recorded as a Company-owned truck with indirect costs of
ownership, such as depreciation, maintenance and capital expenses. As a result,
the continuing higher fuel costs may lead to empty trucks, diminished fleet
efficiency, and reduced revenue potential.
SAFETY AND INSURANCE
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 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 is self insured for workers' compensation claims as well as physical
damage claims for its own tractors. The Company currently purchases excess
primary and umbrella insurance coverage in amounts that management believes are
adequate to supplement its retained liabilities. The Company will be facing an
increase in its auto and insurance rates during the second half of 2001. These
rates could increase as much as 25%, and in addition to an increase in the
retention per occurrence.
8
RECENTLY ISSUED ACCOUNTING STANDARD
Statement of Financial Accounting Standards ("SFAS") No. 133, Accounting for
Derivative Instruments and Hedging Activities, is effective for all fiscal years
beginning after June 15, 2000. SFAS 133, as amended, establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts and for hedging activities. Under SFAS
133, certain contracts that were not formerly considered derivatives may now
meet the definition of a derivative. The Company has adopted SFAS 133 effective
January 1, 2001. Management does not expect the adoption of SFAS 133 to have a
significant impact on the financial position, results of operations, or cash
flows of the Company.
9
BOYD BROS. TRANSPORTATION INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2000 AND 1999
- --------------------------------------------------------------------------------
2000 1999
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,273,281 $ 1,006,826
Short-term investments 250,000 250,000
Accounts receivable, less allowance for doubtful
accounts of $276,000 (2000) and $347,000 (1999):
Trade and interline 10,907,099 12,475,739
Other 690,212 1,082,615
Income tax receivable 1,954,786
Current portion of net investment in sales-type leases 1,562,329 3,620,723
Parts and supplies inventory 431,967 326,202
Prepaid tire expense 282,915 837,136
Other prepaid expenses 1,606,814 2,488,484
Deferred income taxes 919,811 281,834
------------ ------------
Total current assets 19,879,214 22,369,559
------------ ------------
PROPERTY AND EQUIPMENT:
Land and land improvements 2,263,326 2,263,326
Buildings 2,927,611 2,927,611
Revenue equipment 76,637,858 69,944,259
Other equipment 11,781,884 11,510,214
Leasehold improvements 384,884 377,831
Construction in progress 5,090,631 3,539,437
------------ ------------
Total 99,086,194 90,562,678
Less accumulated depreciation and amortization 32,348,826 28,680,556
------------ ------------
Property and equipment, net 66,737,368 61,882,122
------------ ------------
OTHER ASSETS:
Net investment in sales-type leases 2,908,691 8,522,614
Goodwill, net of accumulated amortization of $688,277 (2000)
and $464,378 (1999) 3,676,246 3,955,834
Revenue equipment held for lease 1,395,865 2,287,267
Deposits and other assets 454,739 438,372
------------ ------------
Total other assets 8,435,541 15,204,087
------------ ------------
TOTAL $ 95,052,123 $ 99,455,768
============ ============
10
BOYD BROS. TRANSPORTATION INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2000 AND 1999
- --------------------------------------------------------------------------------
2000 1999
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $ 13,534,198 $ 14,245,584
Line of credit 1,049,831
Accounts payable - trade and interline 2,575,676 4,070,946
Income taxes 802,395
Accrued liabilities:
Self-insurance claims 2,510,396 1,768,114
Salaries and wages 505,181 746,805
Other 1,184,493 1,785,087
------------ ------------
Total current liabilities 21,359,775 23,418,931
LONG-TERM DEBT 33,322,377 34,688,582
DEFERRED INCOME TAXES 13,187,549 10,954,964
------------ ------------
Total liabilities 67,869,701 69,062,477
------------ ------------
COMMITMENTS AND CONTINGENCIES (Note 5)
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value - 1,000,000 shares
authorized; no shares issued and outstanding
Common stock, $.001 par value - 10,000,000 shares
authorized; 4,069,640 shares issued and outstanding 4,070 4,070
Additional paid-in capital 16,864,622 16,864,622
Retained earnings 18,451,689 19,438,142
Treasury stock, at cost; 1,118,746 shares (2000) and
751,670 shares (1999) (8,137,959) (5,913,543)
------------ ------------
Total stockholders' equity 27,182,422 30,393,291
------------ ------------
TOTAL $ 95,052,123 $ 99,455,768
============ ============
See notes to consolidated financial statements.
11
BOYD BROS. TRANSPORTATION INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
- --------------------------------------------------------------------------------
2000 1999 1998
OPERATING REVENUES $126,724,786 $133,137,272 $118,123,424
------------ ------------ ------------
OPERATING EXPENSES:
Salaries, wages and employee benefits 39,262,650 35,461,400 36,607,732
Cost of independent contractors 35,172,619 45,132,153 31,817,649
Operating supplies 25,403,579 22,934,366 21,429,224
Taxes and licenses 2,965,480 2,846,677 2,565,842
Insurance and claims 7,060,347 6,110,604 5,392,526
Communications and utilities 1,520,342 1,479,546 1,553,511
Depreciation and amortization 11,611,081 10,719,647 10,320,379
Gain on disposal of property and equipment, net (1,113,574) (1,626,983) (433,023)
Other 2,008,131 1,862,170 1,542,703
------------ ------------ ------------
Total operating expenses 123,890,655 124,919,580 110,796,543
------------ ------------ ------------
OPERATING INCOME 2,834,131 8,217,692 7,326,881
------------ ------------ ------------
OTHER INCOME (EXPENSES):
Interest income 80,338 91,740 97,052
Interest expense (3,904,241) (2,421,910) (1,607,482)
Other income 82,308
------------ ------------ ------------
Other expenses, net (3,823,903) (2,330,170) (1,428,122)
------------ ------------ ------------
INCOME (LOSS) BEFORE PROVISION
(BENEFIT) FOR INCOME TAXES (989,772) 5,887,522 5,898,759
------------ ------------ ------------
PROVISION (BENEFIT) FOR INCOME
TAXES:
Current (1,605,932) 1,789,821 2,284,318
Deferred 1,590,614 640,331 41,703
------------ ------------ ------------
Total provision (benefit) for income taxes (15,318) 2,430,152 2,326,021
------------ ------------ ------------
NET INCOME (LOSS) $ (974,454) $ 3,457,370 $ 3,572,738
============ ============ ============
BASIC AND DILUTED NET INCOME
(LOSS) PER SHARE $ (0.32) $ 0.99 $ 0.87
============ ============ ============
BASIC AND DILUTED WEIGHTED
AVERAGE SHARES OUTSTANDING 3,090,292 3,507,311 4,090,175
============ ============ ============
See notes to consolidated financial statements.
12
BOYD BROS. TRANSPORTATION INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
- --------------------------------------------------------------------------------
ADDITIONAL
COMMON PAID-IN RETAINED TREASURY
STOCK CAPITAL EARNINGS STOCK TOTAL
BALANCE, JANUARY 1, 1998 $ 4,095 $ 17,030,222 $ 12,420,277 $ 29,454,594
Purchase and retirement of
common stock (25) (165,600) (165,625)
Net income 3,572,738 3,572,738
----------- ------------ ------------ ------------ ------------
BALANCE, DECEMBER 31, 1998 4,070 16,864,622 15,993,015 32,861,707
Exercise of stock options (4,932) $ 43,620 38,688
Sale of common stock under
employee stock purchase plan (7,311) 45,583 38,272
Purchase of treasury stock (6,002,746) (6,002,746)
Net income 3,457,370 3,457,370
----------- ------------ ------------ ------------ ------------
BALANCE, DECEMBER 31, 1999 4,070 16,864,622 19,438,142 (5,913,543) 30,393,291
Sale of common stock under
employee stock purchase plan (11,999) 24,525 12,526
Purchase of treasury stock (2,248,941) (2,248,941)
Net loss (974,454) (974,454)
----------- ------------ ------------ ------------ ------------
BALANCE, DECEMBER 31, 2000 $ 4,070 $ 16,864,622 $ 18,451,689 $ (8,137,959) $ 27,182,422
=========== ============ ============ ============ ============
See notes to consolidated financial statements.
13
BOYD BROS. TRANSPORTATION INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
- --------------------------------------------------------------------------------
2000 1999 1998
OPERATING ACTIVITIES:
Net income (loss) $ (974,454) $ 3,457,370 $ 3,572,738
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization 11,611,081 10,719,647 10,320,379
Gain on disposal of property and equipment, net (1,113,574) (1,626,983) (433,023)
Net effect of sales-type leases on cost of
independent contractors 253,990 (1,741,454) (1,800,538)
Provision for deferred income taxes 1,590,614 640,331 41,703
Changes in assets and liabilities provided
(used) cash:
Accounts receivable 1,902,149 (493,392) (3,372,491)
Other current assets 1,158,104 (666,292) (1,001,836)
Deposits and other assets (16,367) (257,291) (68,220)
Accounts payable - trade and interline (1,436,371) 2,414,894 131,319
Accrued liabilities and other current liabilities (2,866,338) (874,865) 1,776,724
------------ ------------ ------------
Net cash provided by operating activities 10,108,834 11,571,965 9,166,755
------------ ------------ ------------
INVESTING ACTIVITIES:
Payments received on sales-type leases 3,407,859 3,939,430 1,750,705
Capital expenditures:
Revenue equipment (14,459,770) (36,950,717) (12,117,225)
Other property and equipment (1,617,129) (4,650,303) (2,360,188)
Proceeds from disposals of property
and equipment 6,090,836 8,542,604 1,975,628
Receipt of acquisition escrow 55,788
------------ ------------ ------------
Net cash used in investing activities (6,578,204) (29,063,198) (10,751,080)
------------ ------------ ------------
FINANCING ACTIVITIES:
Purchase of common stock (165,625)
Proceeds from sales of common stock 12,526 38,272
Proceeds from exercise of stock options 38,688
Purchase of treasury stock (2,248,941) (6,002,746)
Proceeds from line of credit 1,049,831
Proceeds from long-term debt 9,949,052 36,785,635 12,572,123
Principal payments on long-term debt (12,026,643) (13,723,454) (12,877,683)
------------ ------------ ------------
Net cash provided by (used in)
financing activities (3,264,175) 17,136,395 (471,185)
------------ ------------ ------------
14
BOYD BROS. TRANSPORTATION INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
- --------------------------------------------------------------------------------
2000 1999 1998
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS $ 266,455 $ (354,838) $ (2,055,510)
CASH AND CASH EQUIVALENTS:
BEGINNING OF YEAR 1,006,826 1,361,664 3,417,174
------------ ------------ ------------
END OF YEAR $ 1,273,281 $ 1,006,826 $ 1,361,664
============ ============ ============
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION:
Cash paid during the year for:
Interest $ 3,904,593 $ 2,358,576 $ 1,612,715
============ ============ ============
Income taxes, net of refunds $ 1,138,562 $ 2,727,399 $ 816,729
============ ============ ============
SUPPLEMENTAL NONCASH INVESTING AND
FINANCING ACTIVITIES -
Net investment in sales-type leases $ (3,160,246) $ 1,817,598 $ 2,177,249
============ ============ ============
See notes to consolidated financial statements.
15
BOYD BROS. TRANSPORTATION INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS - Boyd Bros. Transportation Inc. and its
subsidiary (the "Company") are flatbed carriers, transporting a variety
of products, primarily steel and building materials. The Company has
authority to operate in the continental United States; however, its
market generally encompasses the eastern two-thirds of the United
States. The Company is headquartered in Clayton, Alabama and operates
regional and satellite terminals in locations near interstate highways
or customer facilities. All of the Company's operations (flatbed
trucking) constitute only one segment under the requirements of
Statement of Financial Accounting Standards ("SFAS") No. 131,
Disclosures about Segments of an Enterprise and Related Information.
PRINCIPLES OF CONSOLIDATION - The consolidated financial statements
include the accounts of the Company and its wholly-owned subsidiary,
Welborn Transport, Inc. All significant intercompany items have been
eliminated in consolidation.
ACCOUNTING ESTIMATES - The preparation of financial statements in
conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
CASH AND CASH EQUIVALENTS - Cash and cash equivalents include cash on
hand, cash on deposit and highly liquid investments with a maturity of
three months or less at purchase date.
SHORT-TERM INVESTMENTS - Short-term investments, which consist of
certificates of deposit with maturities of three to twelve months, are
stated at cost, which approximates market.
REVENUE EQUIPMENT HELD FOR LEASE - Revenue equipment held for lease and
not in use is stated at cost, less accumulated depreciation, which
approximates net realizable value.
TIRES IN SERVICE - Tires placed in service on newly purchased revenue
equipment are carried at cost and depreciated over their useful lives,
estimated to be eighteen months. The undepreciated cost of tires is
included in prepaid tire expense.
PROPERTY AND EQUIPMENT - Property and equipment is stated at cost.
Depreciation is computed using the straight-line method at rates
intended to distribute the cost of the assets over their estimated
service lives as follows:
Land improvements 15 years
Buildings 5 - 25 years
Revenue equipment 4 - 7 years
Other equipment 3 - 10 years
Leasehold improvements 3 - 20 years
16
Expenditures which significantly increase values or extend useful lives
of property and equipment are capitalized, whereas those for normal
maintenance and repairs are expensed. Gains and losses on disposal of
property and equipment are reflected in operations in the year of
disposal.
IMPAIRMENT OF LONG-LIVED ASSETS - The Company periodically evaluates
the carrying value of long-lived assets to be held and used, including
goodwill and other intangible assets, when events and circumstances
warrant such a review. The carrying value of long-lived assets is
considered impaired when the anticipated undiscounted cash flow from
such assets is less than its carrying value. In that event, a loss is
recognized based on the amount by which the carrying value exceeds the
fair market value of the long-lived assets.
CLAIMS - The Company accrues estimates for the uninsured portion of
claims relating to the Company's insurance programs (see Note 5).
REVENUE RECOGNITION - Operating revenue and related costs are recorded
upon shipment of products to customers provided that pervasive evidence
of an arrangement exists, the selling price is fixed and determinable,
and collectibility of the resulting receivables is probable.
NET INCOME (LOSS) PER SHARE - In accordance with SFAS No. 128, Earnings
per Share, the Company reports two separate net income (loss) per share
numbers, basic and diluted.
Options that could potentially dilute basic net income (loss) per share
in the future were not included in the computation of diluted net
income (loss) per share because to do so would have been antidilutive.
Antidilutive options were 408,300, 456,100 and 444,810 for the years
ended December 31, 2000, 1999 and 1998, respectively.
FAIR VALUE OF FINANCIAL INSTRUMENTS - The carrying value of the
Company's cash equivalents, short-term investments, trade receivables,
trade payables and accrued expenses approximates fair value because of
the short-term nature of these instruments. Additional fair value
disclosure for the Company's interest-bearing debt is presented in Note
4.
RECENT ACCOUNTING PRONOUNCEMENTS - SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities, is effective for all
fiscal years beginning after June 15, 2000. SFAS 133, as amended,
establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts and for hedging activities. Under SFAS 133, certain contracts
that were not formerly considered derivatives may now meet the
definition of a derivative. The Company will adopt SFAS 133 effective
January 1, 2001. Management does not expect the adoption of SFAS 133 to
have a significant impact on the financial position, results of
operations, or cash flows of the Company.
RECLASSIFICATIONS - Certain reclassifications have been made to the
1999 and 1998 consolidated financial statements to conform to the 2000
presentation.
2. EMPLOYEE BENEFIT PLAN
The Company has a contributory 401(k) retirement plan, which covers
employees who elect to participate and meet certain eligibility
requirements. The amounts charged to operations related to this plan
for the years ended December 31, 2000, 1999 and 1998 were $165,562,
$280,890 and $246,943, respectively.
17
3. LEASES
LESSEE:
OPERATING LEASES - The Company leases certain terminal buildings, land
and equipment under agreements which expire at various dates through
2001. The lease agreements generally include renewal options and the
Company is required to pay taxes, insurance and normal maintenance for
the facilities. Future minimum lease payments under all operating
leases are insignificant.
Total rental expense for all operating leases was $356,791, $384,723,
and $378,961 for the years ended December 31, 2000, 1999 and 1998,
respectively.
LESSOR:
SALES-TYPE LEASES - The Company leases revenue equipment to certain of
its owner-operators and accounts for these transactions as sales-type
leases. These receivables have terms of three and one-half to four
years and are collateralized by a security interest in the related
revenue equipment. Certain revenue equipment under these leases have a
guaranteed residual value from the vendor which will be redeemed by the
Company at the end of the lease term.
The components of the net investment in sales-type leases at December
31, 2000 and 1999 are as follows:
2000 1999
Minimum lease receivable $ 6,120,316 $ 16,212,485
Allowance for uncollectible receivables (677,910) (910,754)
------------ ------------
Net minimum lease receivable 5,442,406 15,301,731
Unearned interest income (971,386) (3,158,394)
------------ ------------
Net investment in sales-type leases 4,471,020 12,143,337
Less current portion (1,562,329) (3,620,723)
------------ ------------
Net amount due after one year $ 2,908,691 $ 8,522,614
============ ============
18
Future minimum lease rentals for sales-type leases are as follows:
Year
2001 $ 2,257,934
2002 1,966,285
2003 1,367,234
2004 520,836
2005 8,027
------------
Total $ 6,120,316
============
Gains on disposition of revenue equipment leased to owner-operators,
interest income on these leases, rental income on operating leases, and
provisions for bad debts related to sales-type leases have been
included as components of cost of independent contractors in the
accompanying consolidated statements of operations.
OPERATING LEASES - The Company also leases revenue equipment to certain
of its owner-operators and accounts for these transactions as operating
leases. These leases have terms of three to three and one-half years.
The revenue equipment under these leases had a cost of $550,751 and
$2,517,591, and accumulated depreciation of $197,223 and $477,298 at
December 31, 2000 and 1999, respectively.
Future minimum lease rentals for operating leases are as follows:
Year
2001 $ 181,560
2002 106,590
2003 1,000
---------
Total $ 289,150
=========
Total rental income from operating leases was $273,360, $713,030 and
$13,770 for the years ended December 31, 2000, 1999 and 1998,
respectively.
19
4. BORROWING ARRANGEMENTS
Long-term debt at December 31, 2000 and 1999 is summarized as follows:
2000 1999
Revenue equipment obligations:
LIBOR plus 1.25% (7.65% - 2000 and 7.00% to 7.25% - 1999)
notes payable in monthly installments through December 2005 $ 39,513,292 $ 48,321,070
LIBOR plus 1.50% (7.90% - 2000 and 7.50% - 1999)
notes payable in yearly installments through February 2006 3,621,086 571,429
LIBOR plus 1.75% (8.15% - 2000) notes payable
in monthly installments through November 2005 3,722,197
Other 41,667
------------ ------------
Total 46,856,575 48,934,166
Less current maturities 13,534,198 14,245,584
------------ ------------
Long-term debt $ 33,322,377 $ 34,688,582
============ ============
Revenue equipment obligations are collateralized by revenue equipment.
The notes payable bear interest ranging from LIBOR plus 1.00% to LIBOR
plus 1.75% based on the Company's level of cash flows as defined in
their loan agreements.
Long-term debt is scheduled to mature as follows:
Year
2001 $ 13,534,198
2002 12,527,230
2003 10,659,237
2004 5,947,120
2005 1,168,486
Thereafter 3,020,304
------------
Total $ 46,856,575
============
A construction line of credit with borrowings outstanding of
$3,621,086, due in 2001, became a term loan in January 2001. Current
and long-term portions of the amount outstanding at December 31, 2000
are reflected according to the subsequent loan agreement.
The Company also has a $2,500,000 line of credit under a commercial
revolving note expiring July 6, 2001, bearing interest at LIBOR plus
1.75%. There were borrowings of $1,049,831 outstanding at December 31,
2000 and no borrowings outstanding at December 31, 1999.
20
Covenants under these loan agreements require the Company, among other
things, to maintain a tangible net worth of $14,800,000, as defined,
and to maintain certain financial ratios. On March 28, 2001, the
Company received waivers from certain creditors due to non-compliance
with financial ratios at December 31, 2000. The amount of long-term
debt subject to these waivers was $23,672,979 and $20,163,184 at
December 31, 2000, and the waivers extended through the periods ended
April 30, 2001 and June 30, 2001, respectively.
The fair value of long-term debt approximates its carrying value and
was estimated using a discounted cash flow analysis, based on the
borrowing rate currently available to the Company for bank loans with
similar terms and average maturities.
5. COMMITMENTS AND CONTINGENCIES
At December 31, 2000, the Company is self-insured as follows:
RETENTION AMOUNT
PER OCCURRENCE
Workers' compensation $250,000
Liability - bodily injury 100,000
Liability - physical damage 100,000
Employee medical and hospitalization 100,000
Cargo loss and damage 10,000
Collision 10,000
Environmental losses No Limit
The above retention amounts represent rates which were negotiated with
the Company's insurance carriers at December 31, 2000. Retention
amounts under other previous insurance programs may vary from those
stated above. At December 31, 2000, the Company has recorded
liabilities for retention amounts related to claims under previous
insurance coverage. For claims prior to June 30, 1997, the Company had
a retention amount per occurrence under workers' compensation of
$300,000. For the period from July 1, 1997 to June 30, 2000, workers'
compensation insurance was provided under fully insured policies. As of
July 1, 2000, the Company has a retention amount per occurrence under
workers' compensation of $250,000.
The Company has excess primary coverage on a per claim and aggregate
basis beyond the deductible levels and also maintains umbrella policies
to supplement the primary liability coverage.
Effective January 2001, the Company became fully self-insured for
liability - physical damage, except for claims related to catastrophic
physical damage. The Company has a retention amount per occurrence
under liability - catastrophic physical damage of $10,000.
The liabilities for self-insurance are accrued based on claims
incurred, with liabilities for unsettled claims and claims incurred but
not yet reported being estimated based on management's evaluation of
the nature and severity of individual claims and the Company's past
claims experience.
The Company has outstanding letters of credit at December 31, 2000
totaling approximately $3,712,000 to cover liability insurance claims
and claims related to its previous self-insured workers' compensation
program, and to purchase revenue equipment.
There are sundry claims and suits pending against the Company in the
ordinary course of business. In the opinion of the Company's
management, any ultimate liability in these matters will have no
material adverse effect on the financial position, operations or cash
flows of the Company.
21
6. STOCKHOLDERS' EQUITY
PREFERRED STOCK - The Board of Directors is authorized to issue, at its
discretion, up to 1,000,000 shares of preferred stock at par value of
$.001. The terms and conditions of the preferred stock are to be
determined by the Board of Directors.
EMPLOYEE STOCK PURCHASE PLAN - During 1999, the Company established an
Employee Stock Purchase Plan under which 175,000 shares of the
Company's common stock may be issued to eligible employees at a price
equal to the lesser of 90% of the market price of the stock as of the
first or last day of the offering periods (as defined). Employees may
elect to have a portion of their compensation withheld, subject to
certain limits, to purchase the Company's common stock. The expense
associated with this plan in 2000 and 1999 was insignificant.
STOCK OPTION PLAN - The Company has a stock option plan (the "Plan")
that provides for the granting of stock options to key employees,
executive officers and directors. An aggregate of 500,000 shares of the
Company's common stock are reserved for this Plan. The options are
exercisable in increments over a five-year period beginning on the
first anniversary of the grant and will expire ten years after the date
of the grant. No options were exercised in 1998 or 2000.
Information regarding the Plan is summarized below:
WEIGHTED WEIGHTED
AVERAGE AVERAGE
EXERCISE FAIR VALUE
SHARES PRICE AT GRANT DATE
Outstanding at December 31, 1997 323,350 $ 9.62
Granted 174,900 8.84 $ 7.05
Terminated (53,440) 9.22
-------
Outstanding at December 31, 1998 444,810 $ 9.36
Granted 65,250 10.25 $ 7.93
Exercised (6,000) 6.00
Terminated (47,960) 9.40
-------
Outstanding at December 31, 1999 456,100 $ 9.53
Terminated (47,800) 8.58
-------
Outstanding at December 31, 2000 408,300 $ 9.62
======= ======
Options exercisable at December 31, 2000 262,380 $ 9.88
======= ======
Options exercisable at December 31, 1999 228,830 $10.04
======= ======
Options exercisable at December 31, 1998 171,420 $10.36
======= ======
At December 31, 2000, 85,700 shares were available for future grant
under the Plan.
22
The following table summarizes information concerning stock options
outstanding at December 31, 2000:
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
-------------------------------------------- ----------------------------
WEIGHTED
AVERAGE WEIGHTED
NUMBER REMAINING WEIGHTED NUMBER AVERAGE
RANGE OF OF SHARES CONTRACTUAL AVERAGE OF SHARES EXERCISE
EXERCISE PRICES OUTSTANDING LIFE EXERCISE PRICE EXERCISABLE PRICE
$6.00 - $11.00 408,300 5.9 $9.62 262,380 $9.88
SFAS No. 123, Accounting for Stock-Based Compensation, encourages, but
does not require companies to record compensation cost for stock-based
employee compensation plans at fair value. The Company has chosen to
continue to account for stock-based compensation using the intrinsic
value method prescribed in Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees, and related Interpretations.
Accordingly, compensation cost for stock options is measured as the
excess, if any, of the quoted market price of the Company's stock at
the date of the grant over the amount an employee must pay to acquire
the stock. The option price of all the Company's stock options is equal
to the market value of the stock at the grant date. As such, no
compensation expense is recorded in the accompanying consolidated
financial statements.
Had compensation cost been determined based upon the fair value at the
grant date for options awarded in 1999 and 1998 under the Plan
consistent with the methodology prescribed under SFAS No. 123, the
Company's pro forma net income (loss) and net income (loss) per share
would have differed from the amounts reported as follows:
AS REPORTED PRO FORMA
----------------------------------------- -------------------------------------------
2000 1999 1998 2000 1999 1998
Net income (loss) $ (974,454) $3,457,370 $3,572,738 $(1,506,993) $ 2,652,128 $2,813,516
Basic and diluted net
income (loss)
per share $ (.32) $ .99 $ .87 $ (.49) $ .76 $ .69
The fair value for options was estimated at the date of the grant using
a Black-Scholes option pricing model with the following
weighted-average assumptions:
2000 1999 1998
Risk-free interest rate 6.5% 6.5% 6.5%
Dividend yield 0% 0% 0%
Expected volatility 81.2% 81.2% 82.8%
Weighted average expected life 7 years 7 years 7 years
23
7. INCOME TAXES (BENEFIT)
The provision (benefit) for income taxes for the years ended December
31, 2000, 1999 and 1998 consisted of the following (in thousands):
2000 1999 1998
Current:
Federal $(1,604) $ 1,555 $ 1,944
State (2) 235 340
------- ------- -------
Total current (1,606) 1,790 2,284
------- ------- -------
Deferred:
Federal 1,626 550 31
State (35) 90 11
------- ------- -------
Total deferred 1,591 640 $ 42
------- ------- -------
Total provision (benefit) for income taxes $ (15) $ 2,430 $ 2,326
======= ======= =======
Total income tax provision (benefit) for 2000, 1999, and 1998 is
different from the amount that would be computed by applying the
statutory federal income tax rate of 35% to income before income taxes.
The reasons for this difference are as follows (in thousands):
2000 1999 1998
Income tax at expected federal income tax rate $ (340) $ 2,005 $ 2,006
State income taxes, net of federal tax effect (24) 214 214
Non-deductible operating expenses 58 38 29
Non-deductible goodwill amortization 77 77 77
Adjustment to estimated income tax accruals 192
Other 22 96 --
------- ------- -------
$ (15) $ 2,430 $ 2,326
======= ======= =======
The Company had approximately $1,920,000 of state net operating loss
carryforwards for tax purposes available to offset future state taxable
income through 2011. The Company also had approximately $630,000 of
alternative minimum tax credit carryforwards available to offset future
federal income tax. These carryforwards were utilized during 1998.
At December 31, 2000, the Company had state net operating loss
carryforwards of approximately $5,260,000, which will expire in 2021.
Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax
purposes. Significant components of the Company's deferred tax
liabilities and assets as of December 31, 2000 and 1999 are as follows
(in thousands):
24
2000 1999
Deferred tax liabilities:
Tax over book depreciation $13,497 $10,722
Prepaid expenses deductible when paid 501 797
Capitalized tires 111 327
Cash basis to accrual basis adjustment 271
Other 8
------- -------
Total deferred tax liabilities 14,109 12,125
------- -------
2000 1999
Deferred tax assets:
Accrued self insurance claims $ 710 $ 389
Other accrued expenses not deductible until paid 416 496
Allowance for losses on receivables 376 496
State NOL carryforward 269
Other 70 71
------- -------
Total deferred tax assets 1,841 1,452
------- -------
Net deferred tax liabilities $12,268 $10,673
======= =======
The above amounts are reflected in the accompanying consolidated
balance sheets as:
2000 1999
Current assets $ 920 $ 282
Noncurrent liabilities (13,188) 10,955
------- -------
Net deferred tax liabilities $12,268 $10,673
======= =======
8. MAJOR CUSTOMERS
The Company does not believe that it is dependent upon any single
customer. Sales to the Company's largest customer amounted to 9%, 8%
and 8% of operating revenues during 2000, 1999 and 1998, respectively.
25
9. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The following is a summary of the quarterly results of operations for
the years ended December 31, 2000 and 1999 (in thousands, except per
share data):
2000
--------------------------------------------------------
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
Operating revenues $33,826 $32,601 $31,202 $29,096
Operating income (loss) 1,406 1,393 896 (861)
Net income (loss) 231 208 (65) (1,349)
Basic and diluted net income (loss) per share 0.07 0.07 (0.02) (0.45)
1999
--------------------------------------------------------
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
Operating revenues $30,038 $33,247 $35,475 $34,377
Operating income 1,563 2,900 2,242 1,513
Net income 662 1,415 982 398
Basic and diluted net income per share 0.18 0.40 0.28 0.12
26
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of Boyd Bros. Transportation Inc.:
We have audited the accompanying consolidated balance sheets of Boyd Bros.
Transportation Inc. and subsidiary as of December 31, 2000 and 1999, and the
related consolidated statements of operations, stockholders' equity, and cash
flows for each of the three years in the period ended December 31, 2000. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Boyd Bros. Transportation Inc. and
subsidiary as of December 31, 2000 and 1999, and the results of their operations
and their cash flows for each of the three years in the period ended December
31, 2000 in conformity with accounting principles generally accepted in the
United States of America.
Birmingham, Alabama
February 9, 2001 (March 28, 2001 as to the
waiver letters described in Note 4)