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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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, 1997
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:
$9,382,824 as of March 12, 1998
Indicate the number of shares outstanding of each of the Registrant's
classes of common stock, as of the latest practicable date.
4,094,628 shares of Common Stock, par value $.001 per share,
outstanding as of March 12, 1998.
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 1998 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, 1997 in Parts II and IV.
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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..........................................................................6
ITEM 2. PROPERTIES........................................................................6
ITEM 3. LEGAL PROCEEDINGS.................................................................6
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...............................6
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 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 ...........................................................8
ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ...................8
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS ...................................8
PART IV.............................................................................................8
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
ON FORM 8-K......................................................................8
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PART I
ITEM 1. BUSINESS
THE COMPANY
Boyd Bros. Transportation Inc. ("Boyd") 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. Giving effect to Boyd's acquisition of Welborn
Transport, Inc. (described immediately below), Boyd owns and operates over 950
tractors and over 1,200 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.
In general, 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 330 tractors and over 350 flatbed trailers. Owner-operators own
280 of the 330 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 attempted to develop
relationships with its customers directly.
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, during June of 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. Management believes that Boyd's newly
implemented 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.
STRATEGY
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 so as to use 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. Boyd's strategy has been to utilize technology to provide
better service to its customers and to improve operating efficiency. Boyd 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
Boyd to monitor equipment locations and schedules more effectively and to
communicate with both drivers and customers. Currently, Welborn does not utilize
satellite tracking technology; however, management is considering implementing
such technology in Welborn's operations in the future. Boyd has also installed
computers on board each of its tractors to monitor fuel efficiency and other
operational data. Boyd will continue to monitor and implement technological
developments that will enable Boyd to improve customer service and operating
efficiency.
Premium Quality Tractors. Boyd continuously upgrades its fleet of
tractors. 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 largest 25, 10 and 5 customers accounted for approximately
63.5%, 47% and 34%, respectively, of Boyd's revenues during 1997. Many of Boyd's
largest 25 customers are large, publicly-held companies. During 1997, the only
customer that accounted for more than 10% of Boyd's revenues was USG Interiors,
Inc. ("USG"), which together with certain of its affiliates accounted for
approximately 12.8% of Boyd's revenues. Boyd's contract with USG specifies that
USG will permit Boyd to transport at least 100 tons of USG's goods each year,
has no minimum term, and is terminable by either party upon sixty days' written
notice. The loss of any of Boyd's major customers could adversely affect the
Company's profitability.
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 recruiting
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's terminal locations include Memphis, TN; Decatur, AL; and Columbia, SC.
Welborn utilizes independent agents located in Birmingham, AL; Atlanta, GA; and
Jackson, MS. All of Welborn's terminal locations are utilized for dispatching
purposes, including the home office in Tuscaloosa. Welborn currently does not
use satellite tracking systems in its operations.
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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 record, driving experience and personal
evaluation, including drug testing.
To maintain high equipment utilization, particularly during periods of
growth, the Company strongly emphasizes continuous driver and owner-operator
recruiting and training. Drivers are recruited at all 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, and must pass a rigorous
road test prior to 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 prior 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 the fleet.
At December 31, 1997, Welborn and Boyd combined employed 905 persons,
of whom approximately 698 were drivers and driver-trainees and the balance of
whom were mechanics, other equipment maintenance personnel and support
personnel, including management and administration. In addition, owner-operators
accounted for the operation of approximately 355 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 relations with
its employees are excellent.
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 Boyd's tractors is 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, 1997, the Company owned 950 tractors and 1,220 flatbed
trailers. The tractors are manufactured by Freightliner, Kenworth and
International, and the trailers are manufactured by Utility, Dorsey, Fruehauf,
Fontaines 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, fleet-wide implementation of two computer systems.
Boyd was the first major flatbed carrier to be fully equipped 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, as well as an enhanced capability 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.
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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.
Boyd has also equipped its entire fleet of tractors with the
SENSORTRACS(C) on-board computer system ("Sensortracs"), which is also produced
by QUALCOMM and which 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.
Management is currently contemplating the implementation of similar
satellite and on-board computer technology in the operations of the Welborn
fleet. As there are further technological developments or enhancements in the
computer systems currently utilized by Boyd, management intends to remain
committed to investing in and utilizing such advanced technology to better serve
its customers.
SAFETY AND INSURANCE
Both Welborn and Boyd's respective safety departments are 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 respective Directors of Safety for both Boyd and Welborn
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. Boyd 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. Boyd 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. Boyd's fuel expense comprised 15.0% and 16.5% of revenues in 1997 and
1996, respectively. Through on-board computers, Boyd 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.
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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, 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, Boyd 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, Boyd 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 to the Company of qualified drivers.
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 Boyd'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 Boyd's use of fuels and underground storage tanks at its regional
service centers.
During 1994, Boyd retained an environmental consulting firm to conduct
an audit of its compliance with applicable federal, state and local laws and
regulations concerning the environment. The environmental consulting firm
detected the presence of soil contamination and potential groundwater
contamination related primarily to the use of underground storage tanks,
including tanks used by a prior owner of the property, at Boyd's terminal in
Birmingham, Alabama. Boyd notified the Alabama Department of Environmental
Management of this contamination and subsequently removed and replaced all
currently known underground storage tanks at the Birmingham terminal. Boyd also
replaced all underground storage tanks at the Clayton, Alabama terminal. Based
upon cost estimates provided by its environmental consulting firm and
contractors in 1994, Boyd recorded an $800,000 charge to establish a reserve for
the removal and replacement of underground storage tanks at Boyd's service
centers. Based on subsequent reviews of this project by management and its
independent consultants, Boyd reduced this reserve during 1995 to $293,652,
reflecting a decline in the current estimated costs of remedying the sites. The
environmental remediation liability in the accompanying balance sheet at
December 31, 1996 is $145,122 and $74,512 at December 31, 1997. 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, 1997 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
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to recruit and retain qualified drivers, the ability to control internal costs
as well as fuel costs, 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, which Boyd purchased during
1993. 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 following table sets forth information regarding the
location and ownership of each of Boyd's service center 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:
Memphis, TN......................... Leased
Decatur, AL......................... Leased
Columbia, SC........................ Leased
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, 1997, either through the
solicitation of proxies or otherwise.
EXECUTIVE OFFICERS OF THE REGISTRANT
Set forth below is information concerning the Executive Officers of the
Company as of March 12, 1998.
Dempsey Boyd, age 71, 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.
Donald G. Johnston, age 61, has served as President and Chief Executive
Officer of Boyd since April 1980, and as a Director since December 1979. Prior
to that time, he served as Vice President and General Manager since joining Boyd
in 1979. Mr. Johnston has a background in industrial management and sales, and
is active in, and has previously served as chairman of, the Alabama Trucking
Association and the University of Georgia Trucking Profitability Strategies
Conference. Mr. Johnston received a B.S. in industrial management from Auburn
University.
Richard C. Bailey, age 47, has served as Senior Vice President and
Chief Financial Officer 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.
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Gail B. Cooper, age 47, has been the Secretary of Boyd since December
1969, and served as a Director of Boyd from December 1969 until March 1994. 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.
Ginger B. Tibbs, age 44, has been the Treasurer of Boyd since December
1979, and served as a Director from December 1978 until March 1994. 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.
Gary Robinson, age 49, has been the Vice President of Operations of
Boyd since May 1997. From February of 1989 to August 1997, Mr. Robinson served
as Director of Sales and Marketing for the flatbed division of Prime, Inc., a
truckload carrier based in Springfield, Missouri.
Miller Welborn, age 39, co-founded Welborn Transport, Inc., an
Alabama-based flatbed trucking company, in 1989 and has served as its Chief
Executive Officer since such date.
Steven Rumsey, age 34, co-founded Welborn Transport, Inc., an
Alabama-based flatbed trucking company, in 1989 and has served as its President
since such date. He holds a B.A. in communications from the University of
Alabama.
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 12, 1998, the Common Stock was held by
approximately 100 holders of record. 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 1997.
Price Range
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1997 High Low
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First Quarter .................................... $ 8 $ 4-1/4
Second Quarter ................................... 7-3/4 4-3/8
Third Quarter .................................... 10-3/8 6-3/4
Fourth Quarter ................................... 10-3/4 6
Price Range
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1996 High Low
---- ------- -------
First Quarter .................................... $ 8-1/2 $ 7
Second Quarter ................................... 9 7
Third Quarter .................................... 8-3/4 7-1/2
Fourth Quarter ................................... 9 7
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. Furthermore, certain of the
Company's financing arrangements contain covenants that may restrict the payment
of cash dividends for 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.
In connection with the Welborn Acquisition consummated on December 8,
1997, an aggregate of 393,940 shares of the Company's Common Stock were issued
to Miller Welborn and Steven Rumsey, the sole shareholders of Welborn, as a part
of the consideration pursuant to the plan of merger. Such shares were not
registered under the Securities Act of 1933 (the "1933 Act") and were issued to
Messrs. Welborn and Rumsey in reliance upon Section 4(2) of the 1933 Act and
Regulation D of the General Rules and Regulations promulgated thereunder.
7
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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, 1997.
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, 1997.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this item is incorporated by reference from
the Financial Statements contained in the Company's Annual Report to
Stockholders for the year ended December 31, 1997.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
With the exception of information relating to the executive officers of
the Company, which is provided in Part I hereof, all information required by
Part III (Items 10, 11, 12 and 13) is incorporated by reference to the Company's
definitive Proxy Statement relating to the 1997 Annual Meeting of Stockholders,
which is scheduled to be filed on or before April 30, 1997.
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,
1997:
Independent Auditors' Report
Balance Sheets at December 31, 1997 and 1996
Statements of Operations for the years ended December 31, 1997, 1996
and 1995
Statements of Stockholders' Equity for the years ended December 31,
1997, 1996 and 1995
Statements of Cash Flows for the years ended December 31, 1997, 1996
and 1995
Notes to Financial Statements
2. Financial Statement Schedules. None.
Financial Statement Schedules are 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.
3. Exhibits required by Item 601 of Regulation S-K.
The following exhibits are included in this Form 10-K:
8
12
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
13 Those portions of the Company's Annual Report to
Stockholders for the year ended December 31, 1997 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
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
10.4* Description of Senior Management Bonus Plan
10.5* Description of Key Employee Bonus Program
10.11 Master Note for Business and Commercial Loans dated July 22, 1992
providing for a $1,500,000 line of credit from AmSouth Bank N.A.
to the Company
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.
10.22 Modification of the Continuation of Credit and Security Agreement
and Loan Modification Agreement dated March 4, 1994 by and
between the Company and Compass Bank
10.26 Credit and Security Agreement dated February 1, 1994 by and
between the Company and Compass Bank
- --------------------
* 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.
9
13
EXHIBIT
NO. DESCRIPTION
- ------- -----------
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.
10.38 Trucking Contract dated May 2, 1988 by and between the Company
and USG Interiors, Inc.
The following exhibits are incorporated by reference to the Company's
Amendment to Quarterly Report on Form 10-Q filed on August 5, 1997:
EXHIBIT
NO. DESCRIPTION
- ------- -----------
10.33 OMNITRACS contract dated February 5, 1997, by and between the
Company and QUALCOMM, Inc.
The following exhibits are incorporated by reference to the Company's
Current 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) Current Reports on Form 8-K
1. In connection with the Welborn Acquisition, the Company filed a
Report on Form 8-K on December 19, 1997 announcing the merger.
10
14
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/ DONALD G. JOHNSTON
--------------------------------------
Donald G. Johnston
President and Chief Executive Officer
Date: March 30, 1998
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/ DONALD G. JOHNSTON President, Chief Executive March 30, 1998
- ---------------------------------- Officer and Director (Principal
Donald G. Johnston Executive Officer)
/s/ RICHARD C. BAILEY Chief Financial Officer and March 30, 1998
- ---------------------------------- Director (Principal Financial
Richard C. Bailey and Accounting Officer)
/s/ DEMPSEY BOYD Chairman and Director March 30, 1998
- ----------------------------------
Dempsey Boyd
/s/ GLYN E. NEWTON Director March 30, 1998
- ----------------------------------
Glyn E. Newton
/s/ W. WYATT SHORTER Director March 30, 1998
- ----------------------------------
W. Wyatt Shorter
/s/ PAUL G. TAYLOR Director March 30, 1998
- ----------------------------------
Paul G. Taylor
/s/ BOYD WHIGHAM Director March 30, 1998
- ----------------------------------
Boyd Whigham
/s/ STEPHEN J. SILVERMAN Director March 30, 1998
- ----------------------------------
Stephen J. Silverman