UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK
REPURCHASE SAVINGS AND SIMILAR PLANS
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
|X|ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 2005
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from to
Commission File Number 001-11141
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
CENTRAL FREIGHT LINES, INC.
401(k) SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
CENTRAL FREIGHT LINES, INC.
5601 W. WACO DRIVE
WACO, TEXAS 76702
CENTRAL FREIGHT LINES, INC.
401(k) Savings Plan
TABLE OF CONTENTS
Page
Number
Report of Independent Registered Public Accounting Firm.............................................. 1
Statements of Net Assets Available for Benefits...................................................... 2
Statement of Changes in Net Assets Available for Benefits............................................ 3
Notes to Financial Statements........................................................................ 4 - 8
Supplemental Schedule: *
Schedule H, Line 4.i. - Schedule of Assets (Held at End of Year)................................ 9
Exhibits
Exhibit 23.1 Consent of Independent Registered Public Accounting Firm
* Other schedules required by 29 CFR 2520.103-10 of the Department of Labor's
Rules and Regulations for Reporting and Disclosure under ERISA have been omitted
because they are not applicable.
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
The Plan Sponsor of the
Central Freight Lines, Inc. 401(k) Savings Plan
We have audited the accompanying statements of net assets available for
benefits of the Central Freight Lines, Inc. 401(k) Savings Plan as of December
31, 2005 and 2004, and the related statements of changes in net assets available
for benefits for the year ended December 31, 2005. These financial statements
are the responsibility of the Plan's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. We were not engaged to
perform an audit of the Plan's internal control over financial reporting. Our
audits included consideration of internal control over financial reporting as a
basis for designing audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the
Plan's internal control over financial reporting. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for benefits of the Plan at
December 31, 2005 and 2004, and the changes in its net assets available for
benefits for the year ended December 31, 2005, in conformity with U. S.
generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying supplemental schedule of
assets (held at end of year) as of December 31, 2005, is presented for purposes
of additional analysis and are not a required part of the financial statements
but are supplementary information required by the Department of Labor's Rules
and Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974. These supplemental schedules are the responsibility
of the Plan's management. The supplemental schedules have been subjected to the
auditing procedures applied in our audits of the financial statements and, in
our opinion, are fairly stated in all material respects in relation to the
financial statements taken as a whole.
/s/ Pattillo, Brown & Hill, L.L.P.
Waco, Texas
May 26, 2006
401 WEST HIGHWAY 6 P. O. BOX 20725 WACO, TX 76702-0725 (254) 772-4901
FAX: (254) 772-4920 www.pbhcpa.com
AFFILIATE OFFICES: BROWNSVILLE, TX (956) 544-7778 HILLSBORO, TX (254) 582-2583
TEMPLE, TX (254) 791-3460 ALBUQUERQUE, NM (505) 266-5904
Page 1
CENTRAL FREIGHT LINES, INC.
401(k) SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2005 AND 2004
2005 2004
--------------------- --------------------
ASSETS
Investments, at fair value:
Mutual funds $ 118,318,681 $ 120,215,249
Interest in collective trust fund 14,431,318 14,228,555
Company stock 30,334 19,637
Participant loans 8,875,464 9,519,988
----------------- -----------------
141,655,797 143,983,429
Contributions receivable - employer
483,536 519,097
Contributions receivable - employee 205,696 213,482
----------------- -----------------
Net Assets Available for Benefits $ 142,345,029 $ 144,716,008
================= =================
See accompanying notes to financial statements.
Page 2
CENTRAL FREIGHT LINES, INC.
401(k) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 2005
2005
---------------------------
ADDITIONS
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation) in fair value
of investments $ 1,975,930
Interest and dividends 5,124,090
Contributions:
Participants 5,771,546
Employer 1,916,931
---------
Total Additions 14,788,497
----------
DEDUCTIONS
Deductions from net assets attributed to:
Benefits paid to participants 17,080,588
Administrative expenses 78,888
----------
Total Deductions 17,159,476
----------
NET DECREASE (2,370,979)
NET ASSETS AVAILABLE FOR BENEFITS,
BEGINNING OF YEAR 144,716,008
-----------
NET ASSETS AVAILABLE FOR BENEFITS,
END OF YEAR $ 142,345,029
===========
See accompanying notes to financial statements.
Page 3
CENTRAL FREIGHT LINES, INC.
401(k) Savings Plan
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2005 AND 2004
1. DESCRIPTION OF PLAN
The following description of Central Freight Lines, Inc.'s (the Company) 401(k)
Savings Plan (the Plan) provides only general information. Participants should
refer to the Plan agreement for a more complete description of the Plan's
provisions.
General
The Plan is a defined contribution plan available to all fulltime employees of
the Company who have three months of service and are age 21 or older. The Plan
is subject to the provisions of the Employee Retirement Income Security Act of
1974 (ERISA).
Contributions
Each year, participants are permitted to contribute up to the lessor of 20% of
their annual compensation or $14,000 for 2005 and $13,000 for 2004 to the Plan
on a tax-deferred basis. Participants may also contribute an additional 1% to
10% on an after-tax basis with total contributions not exceeding 20% of their
annual compensation. The Company contributes a matching amount of participants'
eligible contributions, ranging from 50% to 100% of each participant's eligible
contributions, up to 5% of the employee's earnings. The matching percentage is
calculated quarterly based on an operating ratio, which is defined in the Plan
agreement. Participants direct the investment of their contributions and Company
contributions into various investment options offered by the Plan. The Plan
currently offers 22 mutual funds, a collective trust fund, and Company stock as
investment options for participants.
Profit-sharing amounts may be contributed at the option of the Company's Board
of Directors and are allocated to participant accounts on the last day of the
Plan's fiscal year based on an equal dollar amount per participant. No
discretionary contributions were made during 2005 and 2004. Contributions are
subject to certain limitations.
Participant Accounts
Each participant's account is credited with the participant's contribution, the
Company's matching contribution, and an allocation of Plan earnings and charged
with an allocation of administration expenses. Allocations are based on
participant annual earnings or account balances, as defined in the Plan. The
benefit to which a participant is entitled is the benefit that can be provided
from the participant's vested account.
(continued)
Page 4
1. DESCRIPTION OF PLAN (Continued)
Vesting
Participants are vested immediately in their contributions plus actual earnings
thereon. Vesting in the Company's matching contributions is graduated at 20% per
year, beginning at 40% at the end of the second year of service, up to 100%
after the earlier of five full years of service, age 59, death or total
disability.
Participants' Loans
Participants may borrow from the vested portion of their account balance a
minimum of $1,000 up to a maximum of $50,000 or 50% of their account balance,
whichever is less. Plan loans must be repaid within five years; however, if the
loan is used to acquire a principal residence of the participant, the loan may
be repaid within 10 years. Rates of interest range from 5% to 10.5%.
Payment of Benefits
On termination of service, a participant may elect to receive (i) an immediate
lump sum payment; (ii) a deferred lump sum in cash; or (iii) periodic
installments over a period not to exceed the life expectancy of the participant
and beneficiary for the vested portion of the participant's account.
Additionally, participants whose account balance was transferred from the Jaguar
Fast Freight, Inc. 401(k) Savings Plan may elect to receive (i) an annuity for
life; (ii) an annuity for life, and upon death, a 100%, 66(2)/3%, or 50% annuity
for the participant's spouse; or (iii) an annuity for the joint lives of the
participant and spouse with 100%, 66(2)/3%, or 50% of such amount payable after
the death of both participant and spouse, or (iv) an annuity for life with
installment payments for a certain period (limited to life expectancy).
Forfeitures
A forfeiture is the non-vested portion of a terminated participant's account
balance. These forfeitures are used first to pay Plan fees and expenses and then
reduce Company contributions in the year the forfeitures occurred.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The financial statements of the Plan are prepared under the accrual method of
accounting in accordance with accounting principles generally accepted in the
United States of America.
(continued)
Page 5
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Investments
The Plan's investments in units of the collective trust fund, mutual funds and
Company stock are accounted for at fair value as determined by quoted market
prices. Participant loans are valued at the unpaid principal balance, which
approximates fair value. Purchases and sales of securities are recorded on a
trade-date basis.
Payment of Benefits
Benefits are recorded when paid.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles 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 changes in net assets during the reporting periods.
Actual results could differ from those estimates.
3. INVESTMENTS
The following table presents the investments at December 31, 2005 and 2004, all
of which are participant directed. Investments that represent five percent or
more of the Plan's net assets are separately identified.
2005 2004
---------------- ----------------
Investments at fair value as determined
by quoted market price:
Mutual Funds:
Fidelity U.S. Bond Index $ 34,543,022 $ 36,941,619
Fidelity Dividend Growth Fund 25,062,513 27,650,229
Vanguard Institutional Index Fund 22,230,810 24,168,737
Columbia Acorn Fund - Class Z 9,050,730 8,306,763
Others 27,431,606 23,147,901
---------------- ----------------
Total Mutual Funds 118,318,681 120,215,249
---------------- ----------------
Interest in Collective Trust Fund:
Fidelity Managed Income Portfolio 14,431,318 14,228,555
---------------- ----------------
Total Interest in Collective Trust Fund 14,431,318 14,228,555
---------------- ----------------
Company stock:
Central Freight Lines, Inc. common stock 30,334 19,637
---------------- ----------------
Total Company stock 30,334 19,637
---------------- ----------------
Investments at Estimated Fair Value
Unpaid principal of participants' loans
(5% - 10.5%) 8,875,464 9,519,988
---------------- ----------------
$ 141,655,797 143,983,429
================ ================
(continued)
Page 6
3. INVESTMENTS (Continued)
During 2005, the Plan's investments (including gains and losses on investments
bought and sold, as well as held during the year) appreciated (depreciated) in
value as follows:
2005
------------
Mutual Funds $ 1,975,930
============
4. TRUSTEE CERTIFICATION
As of and for the year ended December 31, 2005, the investment and related
activity for which the statement of net assets available for Plan benefits, the
statement of changes in net assets available for Plan benefits, and the
supplemental schedules were derived, has been certified by the Trustee of the
Plan, as being complete and accurate as required by 29 CFR 2520, 103-8 of the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
ERISA.
5. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and terminate the
Plan subject to the provisions of ERISA. In the event of termination,
participants will become 100% vested in their accounts.
6. TAX STATUS
The Plan was amended and restated on March 1, 2002, to reflect certain
provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001. The
provisions of the Plan amendment are effective for the year ended December 31,
2002, and do not have a significant effect on net assets. The Plan obtained its
latest determination letter on April 16, 2001, in which the Internal Revenue
Service stated that the Plan, as then designed, was in compliance with the
applicable requirements of the Internal Revenue Code. The Plan Administrator and
the Plan's tax counsel believe that the Plan is currently designed and being
operated in compliance with the applicable requirements of the Internal Revenue
Code. Therefore, no provision for income taxes has been included in the Plan's
financial statements.
7. PARTY-IN-INTEREST TRANSACTIONS
All Plan investments are managed by Fidelity Investments Institutional
Operations Company, Inc. Fidelity Investments Institutional Operations Company,
Inc. is trustee of the Plan and, therefore, these transactions qualify as
party-in-interest transactions. The Plan added Company stock as an investment
election in January 2004. At December 31, 2005 and 2004, the Plan held
investments in Company common stock with fair value of $30,334 and $19,637,
respectively.
(continued)
Page 7
7. PARTY-IN-INTEREST TRANSACTIONS (Continued)
The Plan has not considered Company contributions to the Plan or benefits paid
by the Plan for participants as party-in-interest transactions.
Page 8
CENTRAL FREIGHT LINES
401(K) SAVINGS PLAN
PLAN SPONSOR'S EMPLOYER IDENTIFICATION NUMBER (EIN) - 91-1811311
PLAN NUMBER (PN) - 001
SCHEDULE H, PART 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
AS OF DECEMBER 31, 2005
- ------- ------------------------------ -------------------------------------------------------- ------ -------------------
(a) (b) (c) (d) (e)
Identity of issue, borrower, Description of investment including maturity date, Cost Current Value
lessor or similar party rate of interest, collateral, par or maturity value
- ------- ------------------------------ -------------------------------------------------------- ------ -------------------
Mutual funds:
Pacific Mgmt PIMCO Total Return Fund - Admin $ 847,996
Columbian Mgmt Columbia Acorn Fund - Class Z 9,050,730
Vanguard Group Vanguard Institutional Index Fund 22,230,810
Dodge & Cox Dodge & Cox Stock Fund 7,026,595
Artisan Partners Artisan Mid Cap Fund 820,162
Lord, Abbett & Co. Lord Abbett Mid Cap Value Fund 1,453,291
Capital Mgmt Growth Fund of America - Class R4 997,535
NFJ Inv Group PIMCO NFJ Small Cap Value Fund 1,514,679
* Fidelity Fidelity Diversified International Fund 2,785,824
* Fidelity Fidelity Dividend Growth Fund 25,062,513
* Fidelity Fidelity Freedom Income Fund 966,402
* Fidelity Fidelity Freedom 2010 Fund 1,447,859
* Fidelity Fidelity Freedom 2020 Fund 4,775,664
* Fidelity Fidelity Freedom 2030 3,883,908
* Fidelity Fidelity U. S. Bond Index Fund 34,543,022
* Fidelity Fidelity Freedom 2040 Fund 53,309
* Fidelity Fidelity Freedom 2000 Fund 66,550
* Fidelity Fidelity Retirement Money Market 67,043
* Fidelity Fidelity Freedom 2005 126,927
* Fidelity Fidelity Freedom 2015 264,781
* Fidelity Fidelity Freedom 2025 238,271
* Fidelity Fidelity Freedom 2035 94,810
-------------
Total Mutual funds 118,318,681
-------------
Collective trust fund:
* Fidelity Fidelity Managed Income Portfolio 14,431,318
-------------
Total Collective trust fund 14,431,318
-------------
Company stock:
* Central Freight Lines, Inc. Central Freight Lines, Inc. Common stock 30,334
-------------
Total Company stock 30,334
-------------
* Participant Loans Notes bearing interest from 5% to 10.5%
with various due dates 8,875,464
-------------
Total Participant loans 8,875,464
-------------
Total Investments $ 141,655,797
==============
Represents a
party-in-interest to the
* Plan.
Page 9
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned hereunto
duly authorized.
CENTRAL FREIGHT LINES, INC.
401(K) SAVINGS PLAN
By: /s/ Jeffrey A. Hale
Jeffrey A. Hale, on behalf of Central Freight
Lines, Inc. as the Plan Administrator
Date: June 29, 2006
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statement
No. 333-111795 on Form S-8 of Central Freight Lines, Inc. of our report dated
May 26, 2006 appearing in this Annual Report on Form 11-K of Central Freight
Lines, Inc. 401(k) Savings Plan for the year ended December 31, 2005.
/s/ Pattillo, Brown & Hill, L.L.P.
Waco, Texas
May 26, 2006