Transit Group Inc.’s lenders have given the company another 30 days to comply with loan covenants.
The Atlanta-based Transit Group
is a holding company in the business of acquiring and consolidating trucking companies. Since 1977 it has purchased 19 transportation companies: Carolina Pacific Distributors, Service Express, Transit Leasing, Carroll Fulmer Group, Rainbow Trucking, Certified Transport, KJ Transportation, Network Transportation, Diversified Trucking, Northstar Transportation, Priority Transportation, Massingill Trucking Service, KAT, R&M Enterprises, MDR Cartage, Bestway Trucking, Fox Midwest, Land Transportation, and Transportation Resources and Management. It also has a web site, www.transitgroup.com,
offering a variety of transportation products and services.
Last year the company replaced its $35 million revolving credit facility with a $150 million loan agreement that contained customary financial covenants such as limits on dividends, indebtedness, mergers, and collateral. Transit Group didn’t give details but said in an SEC filing that it hasn’t been in compliance with all covenants in its agreement since December 1999 and has received a series of waivers while participating banks considered amendments. This latest waiver expires Oct. 15, 2000, and the company said it “continues to believe that its negotiations with lenders. . .are proceeding in a positive and constructive manner.” Approximately $105 million on the credit agreement is currently outsanding.
For second quarter 2000 Transit Group reported a pre-tax loss of $9.32 million on revenues of $132.1 million. In the same period last year the company posted pre-tax income of $4.2 million on revenues of $120.4 million. Company officials said continued cost pressures for fuel, drivers and interest have severely impacted its operating results. Because of the depressed used truck market, Transit Group took a $2.2 million loss on the disposal of excess equipment. The company says it is now concentrating its growth efforts on non-asset based revenue including owner-operator, brokerage and logistics operations.