UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

(Mark One)

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.

[ X ] Yes       [ ] No

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 the 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.      [ X ]

Indicate by check mark whether the registrant has filed all documents and reports to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to distribution of securities under a plan confirmed by a court.

[ X ] Yes       [ ] No

The aggregate market value of the voting stock held by non-affiliates of the registrant, computed by reference to the closing sales price as quoted on the OTC Bulletin on April 30, 2001 was $2,000,000.

As of April 30, 2001, 2,000,000 shares of TRISM, Inc.'s common stock, par value $.01 per share, were outstanding.

Page 1 of 58 Pages
Exhibit Index located on page 52

Trism, Inc. (the "Company"), a Delaware corporation, entered the transportation business in January 1990 with the acquisition of Tri-State Motor Transit Co. The Company's operations include a group of carriers primarily specializing in the transportation of heavy machinery and equipment and over-dimensional commodities, building materials, steel and metal products (Heavy Haul), hazardous waste, explosives, military munitions and radioactive materials (Secured Materials), and a contract logistics provider (Logistics). The Company conducts these operations principally through its subsidiaries, Trism Specialized Carriers, Inc. ("TSC"), Tri-State Motor Transit Co. ("TSMT"), Diablo Systems, Inc. ("Diablo"), C.I. Whitten Transfer ("CIW"), and Trism Logistics, Inc. ("TLI").

On September 16, 1999, the Company filed (the "Filing") for protection under Chapter 11 of the United States Bankruptcy Code (the "Code") in the District of Delaware. The Company operated as a Debtor-in-Possession ("DIP") under the Code. Subsequent to the Filing, the Company obtained a $42.4 million senior collateralized DIP credit facility to meet its ongoing working capital needs and replace its pre-petition revolving credit facility. The DIP facility provided for borrowings up to $35 million on a revolving credit facility, with availability depending upon a borrowing base formula based on accounts receivable. Additionally, the DIP facility provided additional borrowing capacity of $2.4 million to refinance an existing term loan collateralized by five hundred and forty-one trailers and an incremental $5 million of borrowings, if drawn, to be collateralized by identified real property and other unencumbered trailers. The borrowings bore interest at rates ranging from prime rate plus .25% to .50% or from LIBOR rates plus 2.25% to 2.50%. The DIP facility was repaid in full on February 15, 2000, the effective date of the Plan of Reorganization (the "Plan"). On October 25, 1999 the Court signed an order approving the second amended disclosure statement for a joint plan of reorganization. On December 9, 1999, the Plan was confirmed by the United States Bankruptcy Court, District of Delaware (the "Court").

On February 15, 2000, the consummation of the Company's Plan of Reorganization was completed, and the Company exited from Chapter 11. The Company converted the existing Senior Subordinated Notes ("Notes") and common equity as outlined under the terms of the restructuring agreement.

The agreement provided for the Notes to be converted into (i) new notes in the aggregate principal amount of $30 million, due February 15, 2005, with interest at the rate of 12% per annum (the first semi-annual interest payment was paid on March 15, 2000), and (ii) 95% of the new common equity of the Company to be issued post-recapitalization. The agreement also provided that the Company's old common equity would be converted into 5% of the new common equity issued po st-recapitalization.

In connection with the exit from Chapter 11, the Company executed a new, three-year $42.5 million revolving credit facility ("Revolver"). The Revolver provides for borrowings up to $42.5 million based on a borrowing base formula determined by eligible accounts receivable, certain unencumbered trailers, and the Company's real property in Kennesaw, Georgia. The Revolver also provides for the issuance of letters of credit up to $17 million. The Revolver bears interest at the prime rate plus .25% or LIBOR plus 2.25%. No financial covenants exist unless availability, as defined, initially falls below $5 million for ten consecutive business days. Required covenants if availability falls below $5 million include a minimum net worth threshold, minimum fixed charge coverage ratio and a maximum leverage ratio. The Revolver also limits debt incurrence, capital expenditures, changes in control and management, mergers and certain material asset sales, irrespective of the $5 million availability threshold.

The results of operations for the year ended December 31, 2000 represents the mathematic addition of the historical amounts for the predecessor company period January 1 through February 15, 2000, and the reorganized company period, February 16 through December 31, 2000. Management believes that a combined discussion of predecessor and reorganized company periods is reasonable and appropriate because there were no material adjustments to the presented items (other than depreciation, amortization and interest expense) resulting from the Fresh Start Reporting. See Note 4 of the Notes to the Company's Consolidated Financial Statements for further discussion.

On October 19, 2000, the Company was notified by CIT Business Credit that an event of default had occurred under the Revolver concerning a change in management restriction as a result of the resignation of the former Chief Executive Officer and Chief Financial Officer of the Company. On October 27, 2000, the Company was notified by CIT Business Credit that an event of default had occurred under the Revolver concerning a materially adverse effect evidenced by, (a) the Company's current and projected future negative earnings and cash flow, (b) the change in management discussed in notice of default on October 19, 2000, (c) the increase in fuel costs to the Company and (d) a proposed sixty percent increase in insurance premiums to the Company.

On November 8, 2000, the Company executed a forbearance agreement with CIT Business Credit that modified certain terms with the Revolver, including a $3.0 million forbearance reserve on collateral availability, and increased interest rates to 2.0% above Prime and required the payment of a forbearance fee of $150,000. The forbearance agreement has been subsequently amended and extended for additional fees totalling $425,000. The most recent amendment, dated April 27, 2001, extends the forbearance period until May 18, 2001. The Company has agreed, during the period of forbearance, not to pay the interest due on its outstanding Senior Subordinated Notes Due 2005. Under the terms of the Notes, the Company had a thirty-day grace period on its interest payment due March 15, 2001. The Company did not make the interest payment on April 15 and this constituted an Event of Default under the terms of the indenture pursuant to which the New Notes were issued. In addition, the Company is delinquent on all of its equipment debt obligations. See Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources and Note 6 of the Notes to the Company's Consolidated Financial Statements for further discussion.

As a result of the Company's negative earnings and cash flow and its resulting failure to make the March 15, 2001 interest payment in the amount of $1.8 million on the Notes and its continuing defaults under the Revolver with CIT Business Credit , there is substantial doubt as to the Company's ability to continue as a going concern. The Company's ability to continue as a going concern is dependent on obtaining additional financing and/or negotiating a restructuring of its indebtedness, including the Notes and the Revolver.

On March 9, 2001, the Company announced the Board of Directors has engaged the Carreden Group, Inc., investment bankers located in New York City, as financial advisor to explore strategic alternatives. With the assistance of Carreden Group, the Company is currently exploring alternative financing to replace the Revolver and is also engaged in preliminary discussions with potential purchasers of substantially all of the Company's assets who have indicated their interests in pursuing such a transaction. There can be no assurances that the Company will be successful in accomplishing either of these objectives. Moreover, the consummation of either of these alternatives may require a restructuring of the Company's existing indebtedness. In order to effect any such sale or restructuring of its indebtedness, it may be necessary for the Company to file for protection under Chapter 11 of the Bankruptcy Code.

On April 18, 2001, the Board of Directors authorized the retention of Transport Management, a trucking management firm, to assist in the management of the Company.

The Company's consolidated financial statements for the year ended December 31, 2000 included in its Annual Report have been prepared assuming that the Company and its subsidiaries will continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of the uncertainties described above. See the Independent Auditors' Report on such financial statements included elsewhere in this Report.

Shareholder Rights Plan

On April 27, 2001, the Company's Board of Directors adopted a Shareholder Rights Plan designed to assure that all of the Company's securityholders are offered a full and fair price in the event a potential acquirer seeks to gain control of the Company and to protect securityholders from attempts to acquire effective control through open market and/or private purchases of common stock without paying a fair control premium to either selling or remaining stockholders.  Under the terms of the Rights Plan, under certain circumstances the Rights will become exercisable if a person or group (other than those eligible to report such ownership on Schedule 13G) acquires beneficial ownership of 30% or more of the Company's outstanding common stock, in which case each Right not held by such person or group will enable the holder to purchase that number of shares of the Company's common stock having a market value at that time of two times the $1.50 exercise price of the Right.  Details of the Rights Plan are described in the Company's Current Report on Form 8-K dated April 27, 2001 and a copy of the Rights Agreement establishing the Plan is filed as an Exhibit to such Current Report.

TSC, the Company's largest business segment, is comprised of three fleets. Each fleet specializes in servicing customers with unique shipping needs.

This fleet services customers in the industrial and public construction markets. Approximately 40% of loads hauled in this division are permitted and require special handling. The general fleet solicits freight under 50,000 lbs.

This fleet hauls loads ranging from 50,000 pounds to 70,000 pounds, which all require special permitting and escorts retained to meet specific state rules and regulations. Heavy Haul's largest markets are equipment transportation for the U.S. government, power industry, modular buildings for the communications industry, and agricultural equipment.

This fleet specializes in loads over 70,000 pounds and is capable of handling load exceeding 150,000 pounds and 125 feet in length. The fleet services the power industry, U.S. Government, automotive, engineering, and construction markets. The fleet owns and employs highly specialized, multi-axle trailer configurations and uniquely built tractors to properly handle overdimensional loads. All of this fleet's loads are permitted and most require escorts to meet individual state requirements.

The following table includes Heavy Haul's contribution of revenue, exclusive of intersegment elimination adjustments, for the three years ended December 31:

The Secured Materials segment of the Company is one of the largest nationwide carriers of hazardous materials for the Department of Defense and the Department of Energy. The Secured Division consists of Tri-State Motor Transit Co. ("TSMT"), Trism Environmental Services (a division of TSMT), Diablo Transportation and C.I. Whitten Transport. These companies hold authorities to transport all classes of explosive materials, nuclear fuel cycle, and radioactive materials, as well as all other toxic and hazardous materials allowed for highway movement throughout the forty-eight (48) states and provinces of Canada.

Trism Environmental Services ("TES") provides service to customers in the hazardous waste and radioactive materials market. TES operates throughout the continental United States.

The Secured Materials segment provides cleared drivers and teams to transport full truckload and less-than-truckload (dromedary) shipments of sensitive materials for all government agencies and commercial markets where required.

The Secured Materials segment of Trism has long been a leader offering transportation services to customers in specific market niches. Secured specializes in transporting cargo which requires careful handling due to their explosive or contaminant nature. Exceptional performance in safety and customer service continues to be a hallmark of the Company.

The following table includes Secured Material's contribution of revenue, exclusive of intersegment elimination adjustments, for the three years ended December 31:

TLI is a logistics firm that specializes in freight management services for the overdimensional, open equipment marketplace. TLI manages/contracts transportation services for its customers in all transport modes. TLI's client base includes the power industry, engineering and construction companies, and major equipment manufacturers. Along with TLI's freight management responsibilities, TLI also manages terminal services for the rail industry through its Intermodal division and develops software for use in managing the administrative side of the logistics industry. Whether it is an individual shipment or an entire project TLI's service offerings can provide a single source solution for its customers.

The following table includes TLI's contribution of revenue, exclusive of intersegment elimination adjustments, for the three years ended December 31:

The Company's business strategy is to offer high quality, specialized transportation services in specific markets of the trucking industry to service-sensitive customers. The key components of the Company's strategy are as follows:

The Company has sought to enter niche-trucking markets in which it can become the preeminent carrier. These markets generate higher revenues per mile than general freight carriage. There are substantial service and productivity advantages to having a large specialized equipment fleet including high route density and a large, diverse customer base.

The Company's nationwide coordinated operations, and careful compliance by the Company's drivers and field personnel, along with a synchronized network load plan are key elements in its strategy. In order to minimize down time and to reduce empty miles, the Company coordinates its nationwide operations by utilizing systems designed to match driver and equipment availability to customer and geographic demand. As part of this process, the Company has equipped substantially all of its tractors with satellite communications equipment that enables the Company's drivers and dispatchers to communicate with each other at any time regardless of where a tractor is in the continental United States. This system enables the Company to provide its customers with current information on the location and status of cargo while in transit.

The Company generally has the capability of handling all of an individual shipper's freight in the Company's niche markets. The Company's operating capabilities include a variety of specialized equipment, regulatory permits and compliance expertise, satellite communications and technology, specialized terminals including segregated munitions storage areas, and driver selectivity and training. The Company operates 32 types of trailers in order to meet the specialized needs of shippers. Because of the number and variety of trailers in the Company's fleet, the Company is able to accommodate large nationwide shippers' needs on a timely basis. The breadth of these equipment options is an integral part of the Company's position with its major customers.

The Company's operations are subject to seasonal trends common to the trucking industry. Results of operations for the quarters ending in December and March are significantly lower than the quarters ending in June and September due to reduced shipments and higher operating costs as a percentage of revenues in the winter months.

The Company's largest customer is the U.S. Government (principally the Department of Defense and the Department of Energy) which accounted for approximately 14 percent of consolidated revenues in 2000. The remainder of the Company's customer base is diversified in terms of customer concentration, industry and geography. No other customer accounted for more than 5 percent of the Company's consolidated revenues.

At December 31, 2000, the Company had 1,987 employees of whom 1,487 were drivers, compared to 2,258 employees at December 31, 1999 of whom 1,641 were drivers. Like other trucking operations, the Company experiences a high turnover rate (approximately 124.9% for 2000) of its Company-employed drivers and contract operators. The inability to attract and retain qualified driving employees could negatively impact the operations of the Company.

The primary risk areas in the Company's businesses are liability for bodily injury and property damage, workers' compensation, and cargo loss and damage. In November 2000, the Company began an insurance program with a deductible for bodily injury and property damage of $500,000 per occurrence. Prior to November 2000, the Company maintained a first dollar premium-based insurance program against liability for bodily injury and property damage and was not subject to deductibles. Prior to November 1999, the Company maintained liability insurance for bodily injury and property damage, with a deductible for bodily injury and property damage of $500,000 per occurrence plus the satisfaction of an additional $750,000 deductible per year for claims which exceed $500,000. The Company is a qualified workers' compensation self-insurer in the State of Missouri where most of its drivers are domiciled, with losses in excess of $500,000 insured by an excess workers' compensation policy. In all other states statutory workers' compensation insurance is maintained with a deductible of $500,000 loss limit per occurrence to the Company. The Company has issued standby letters of credit in the amount of $9.3 million and collateralized an additional $2.5 million in the form of restricted deposits at December 31, 2000, to collateralize its self-insured and previous liability for bodily injury and property damage deductible insurance programs.

The Company also self-insures as to damage or loss to the property and equipment it owns or leases, subject to insurance coverage maintained in the event of a catastrophic loss in excess of $50,000 for property and $100,000 for equipment. Certain shipments transported by the Company are very valuable. The Company currently maintains cargo loss and damage insurance with a current deductible of $250,000 per occurrence. In addition to following Department of Transportation ("DOT") regulations requiring random drug testing and post-accident drug testing, the Company rigorously enforces its accident and incident reporting and follow-up standards.

The Company employs safety specialists and maintains safety programs designed to meet its specific needs. In addition, the Company employs specialists to perform compliance checks and to conduct safety tests throughout the Company's operations. The Company conducts a number of safety programs designed to promote compliance with rules and regulations and to reduce accidents and cargo claims. These programs include an ongoing Substance Abuse Prevention Program, driver safety meetings, distribution of safety bulletins to drivers, and participation in national safety associations.

The Company's fuel requirements are met by commercial fuel stops. The Company has entered into agreements with national truckstop chains that provide for discounts on fuel. The Company may, from time to time, enter into the forward purchases of fuel for delivery through its truckstop network for up to 40 percent of its monthly usage, though no agreements were in place during 2000. The Company believes that a portion of any increase in fuel costs or fuel taxes generally would be recoverable from its customers in the form of higher rates. However, a sharp, unexpected rise in fuel prices could negatively impact profitability due to a time lag in implementing and collecting these costs and the inability to fully recover these costs from customers.

The average fuel prices increased from $1.07 per gallon in 1999 to $1.43 per gallon in 2000. The Company has adjusted its freight rates to mitigate these increased costs.

The trucking industry is highly competitive. The Company competes with other truckload carriers, private carriage fleets and, to a lesser extent, railroads. Although the increased competition resulting from deregulation has created downward pressure on rates, the Company has mitigated this decline by setting rates on the basis of its quality of service and its ability to provide specialized services.

The trucking industry has been substantially deregulated since the Motor Carrier Act of 1980. Although the Company is still subject to the regulatory powers of the DOT (which has assumed the trucking regulation responsibilities from the Interstate Commerce Commission), as are all interstate common carriers by motor vehicle, many of the previous regulatory barriers for entry into the trucking business have been eased. Further, as a result of deregulation, operating authorities for handling commodities in individual states are more easily obtained by new and existing carriers, and certain restrictions on transportation have been eased.

The DOT sets safety and equipment standards, as well as hours of service regulations for drivers. Federal, state and local governments regulate the transportation of hazardous waste and hazardous materials. Generally, certain procedures must be followed, pre-notifications given, and permits obtained when transporting these materials.

The Company's operations as well as those of its competitors are subject to extensive federal, state and local environmental regulations. In order to comply with such regulations and to be consistent with the Company's corporate environmental policy, normal operating procedures include practices to protect the environment. Amounts expended relating to such practices are part of the normal day-to-day costs of the Company's business operations.

The Company owns executive and administrative offices in Kennesaw, Georgia and Joplin, Missouri, which are the Company's principal operational headquarters. These facilities provide sufficient space for the Company to coordinate its nationwide operations.

As of December 31, 2000, the Company operated 40 total facilities including 10 owned facilities and 30 leased facilities, compared to a total of 44 facilities at December 31, 1999. The Company has identified certain facilities for downsizing and closure. The Company expects to complete this process by the end of the second quarter of 2001. Our facilities are strategically located in 25 states throughout the United States, and include operating terminals, maintenance facilities, equipment drop and exchange yards, and customer storage facilities. From these facilities, the Company caters to service-sensitive customers transporting cargo in truckload quantities to single destinations throughout the continental United States and Canada. The Company arranges for shipments into Mexico primarily through agreements it maintains with Mexican trucking companies.

The Company utilizes a wide range of specialized equipment designed to meet its customers' varied transportation requirements which distinguishes the Company from many other large truckload carriers. To meet its customers' specialized needs, the Company's trailer fleet consists of 32 types of trailers, including closed vans, flat beds, drop frames, double drops, extendibles, low-boy and dromedary trailers.

The Company's policy is to replace tractors on a four to five year cycle. At December 31, 2000, the average age of the Company's tractor fleet was 3.4 years. The Company's policy is to replace trailers on a seven to fifteen year cycle. At December 31, 2000, the average age of the Company's trailer fleet was 9.3 years.

TRISM operated the following tractors and trailers at December 31:

(1) Operated by Company-employed drivers.

The information required by this item is included in Item 7 and Note 10 of the Notes to the Company's Consolidated Financial Statements.

During the fourth quarter of 2000, no matters were submitted to a vote of security holders.

The Company's common stock is believed to be owned by more than 500 beneficial stockholders as of December 31, 2000. The Company's common stock was traded on the OTC Bulletin under the stock symbol of "TSMX". Under the terms of the Plan of Reorganization the old common stock was exchanged for new common stock based upon certain exchange ratios at the time the Company emerged from bankruptcy on February 15, 2000. See Note 4 of the Notes to the Company's Consolidated Financial Statements for discussion regarding the reorganization and issuance of new common stock. The Company did not receive any proceeds from this new stock issuance. The Company's old common stock (as defined as common stock relating to the Predecessor Company) was traded on the National Association of Securities Dealers Automated Quotation National Market System (NASDAQ) until July 21, 1999, and was traded on the OTC Bulletin Board for the remainder of 1999. The following table sets forth the high and low closing sales prices for the Company's old and new common stock for 2000 and 1999.

2000	High	Low	Close
First quarter (b)	6	2 3/4	4 1/8
Second quarter (b)	1 5/8	1 5/8	1 5/8
Third quarter (b)	1 3/4	7/8	7/8
Fourth quarter (b)	1 1/4	5/8	5/8

1999	High	Low	Close
First quarter (a)	1 1/2	1 1/18	1 3/16
Second quarter (a)	1 1/8	5/8	3/4
Third quarter (b)	5/8	1/4	1/4
Fourth quarter (b)	1/4	1/8	5/32

The Company has never paid a cash dividend on its common stock. It is the current intention of the Company's Board of Directors to continue to retain earnings to finance the Company's business rather than to pay dividends. Future payment of cash dividends will depend upon the financial condition, results of operations and capital commitments of the Company as well as other factors deemed relevant by the Board of Directors. Furthermore, the Senior Subordinated Notes and the Revolver have covenants that restrict the payment of dividends. See Note 6 of the Notes to the Company's Consolidated Financial Statements.

(b)  Quotations on OTC Bulletin Board

The following table sets forth selected consolidated financial data for the periods indicated and should be read in conjunction with the consolidated financial statements and related notes. The selected financial data for each of the five years for the period ended December 31, 2000 was derived from the Company's audited consolidated financial statements. The results of operations are presented for the Predecessor Company period January 1 through February 15, 2000, ("Predecessor Company, February 15, 2000"), and the years ended December 31, 1999, 1998, 1997 and 1996. The results of operations are presented for the Reorganized Company period February 16 through December 31, 2000, ("Reorganized Company, December 31, 2000").

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1. Includes restructuring charges of $0.4 million, $0.8 million and $0.8 million for the years ended December 31, 2000, 1999 and 1998, respectively.
2. The Company recorded a loss on adjustment of assets to fair market value of $39.5 million upon fresh start reporting for the one and one-half month period ended February 15, 2000.
3. The Company recorded an extraordinary gain related to the early extinguishment of debt during the one and one-half month period ended February 15, 2000 and for the year ended December 31, 1998.
4. The Company recorded a cumulative effect of accounting change related to tires in service for the year ended December 31, 1999.
5. Operating ratio represents operating expenses as a percentage of revenues.
6. Freight revenues exclude brokerage and other revenues.
7. Load factor represents loaded miles as a percentage of total book miles.
8. Based on weighted average number of tractors during the period.
9. Calculated as the average distance from origin to the destination of the shipments.
10. Includes part-time employees.
11. Administrative employees include all non-driver employees except mechanics.
12. Includes the monthly average of owned, leased and independent contractor units.

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The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Certain statements in Items 1, 3, 6, 7 and 8 of this Form 10-K include information that is forward looking, such as the Company's opportunities to grow revenues and increase operational efficiency, its anticipated liquidity and capital requirements, and the results of legal proceedings. The matters referred to in forward-looking statements could be affected by the risks and uncertainties involved in the Company's business.

These risks and uncertainties include, but are not limited to, the effect of economic and market conditions, the expenses associated with and the availability of drivers and fuel, as well as certain other risks described above in this Item and in Item 1 in "Business". Subsequent written and oral forward looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements in this paragraph and elsewhere in this Form 10-K. The following discussion and analysis should be read in conjunction with the Selected Consolidated Financial Data and the Company's consolidated financial statements and related notes.

To facilitate a meaningful comparison of the Company's yearly operating performance in years 2000, 1999 and 1998, the following discussion of results of operations is presented on a traditional comparative basis for all periods. Accordingly, the results of operations for the year ended December 31, 2000 represents the mathematic addition of the historical amounts for the Predecessor Company period January 1 through February 15, 2000, and the Reorganized Company period February 16 through December 31, 2000. Consequently, the current year's information presented below does not comply with reporting requirements for companies upon emergence from bankruptcy which calls for separate reporting.

for the newly reorganized company and the predecessor company. Management believes that a combined discussion of predecessor and reorganized company periods is reasonable and appropriate because there were no material adjustments to the presented items (other than depreciation, amortization and interest expense) resulting from the Fresh Start Reporting.

The following tables set forth certain financial information and operating data for the three years ended December 31:

Pertinent financial and operating data is summarized in Selected Financial Data and Operating Statistics on page 10 of this document.

Operating revenue was approximately $281.4 million in 2000 compared to $274.6 million in 1999. Operating loss for 2000 was approximately $3.8 million compared to an operating loss $1.2 million in 1999. The net loss for 2000 was $11.8 million compared to a net loss of $18.4 million in 1999. The results for 2000 include restructuring and severance charges of $0.4 million, loss on adjustment of assets to fair market value of $39.5 million and an extraordinary gain on the discharge of indebtedness relating to the Senior Subordinated Notes of $42.7 million. In addition, results for 2000 include $1.2 million expenses relating to the write-off of deferred loan costs and financial restructuring. The results for 1999 include a cumulative effect of accounting change of $0.3 million, restructuring and severance charges of $0.8 million and $4.1 million reorganization expenses relating to the write-off of deferred loan costs and financial restructuring.

The Company's performance in 2000 was negatively impacted by driver retention issues and the general softening of the Heavy Haul and Secured Materials markets in the latter part of the third quarter and the entire fourth quarter of 2000. Additionally, the financial results were primarily affected by increased costs associated with attracting and retaining qualified drivers, lower asset productivity and increased fuel costs.

The Company embarked upon a reorganization and recapitalization initiated in early 1999. Below is a summary of these events, which culminated in the Company's exit from Chapter 11 on February 15, 2000.

• The Company had approximately $86.2 million of Notes outstanding as of December 31, 1998, which were to mature on December 15, 2000. The Company failed to make a scheduled interest payment on the Notes due on June 15, 1999 or during the thirty-day grace period ended July 15, 1999.
• On July 15, 1999, the Company reached an agreement in principle with the steering committee representing major holders of the Notes. This agreement in principle was formally documented in a restructuring agreement executed on September 10, 1999.
• The terms of the restructuring agreement provided for the Notes to be converted into (i) new notes in the aggregate principal amount of $30 million, due February 15, 2005, with interest at the rate of 12% per annum, and (ii) 95% of the new common equity of the Company issued post-recapitalization. The agreement also provided that the Company's old common equity would be converted into 5% of the new common equity issued post-recapitalization.
• On September 16, 1999, the Company filed for protection under Chapter 11 of the Code in the District of Delaware. The pre-arranged Filing allowed the Company to continue to operate as a Debtor-in-Possession. In connection with the Filing, the Company obtained a $42.4 million senior collateralized Debtor-in-Possession credit facility to meet its on-going working capital needs during the course of the Filing.
• On October 25, 1999, the Court signed an order approving the second amended disclosure statement for the Plan.
• On December 9, 1999, the Plan was confirmed by the Court.
• On February 15, 2000, the Plan was consummated. The Company exited Chapter 11, converted the Notes and recapitalized the Company in accordance with the provisions of the restructuring agreement. In connection with the exit from Chapter 11, the Company executed a new, three-year $42.5 million revolving credit facility. The Revolver provides for borrowings up to $42.5 million based on a borrowing base formula, determined by eligible accounts receivable, certain unencumbered trailers, and the Company's real property in Kennesaw, Georgia. See Note 1 and Note 6 of the Notes to the Company's Consolidated Financial Statements and "Liquidity and Capital Resources" within this Item for further discussion.

On October 19, 2000, the Company was notified by CIT Business Credit that an event of default had occurred under the Revolver concerning a change in management restriction as a result of the resignation of the former Chief Executive Officer and Chief Financial Officer of the Company. On October 27, 2000, the Company was notified by CIT Business Credit that an event of default had occurred under the Revolver concerning a materially adverse effect evidenced by, (a) the Company's current and projected future negative earnings and cash flow, (b) the change in management discussed in notice of default on October 19, 2000, (c) the increase in fuel costs to the Company and (d) a proposed sixty percent increase in insurance premiums to the Company.

On November 8, 2000, the Company executed a forbearance agreement with CIT Business Credit that modified certain terms with the Revolver, including a $3.0 million forbearance reserve on collateral availability, and increased interest rates to 2.0% above Prime and required the payment of a forbearance fee of $150,000. The forbearance agreement has been subsequently amended and extended for additional fees totalling $425,000. The most recent amendment, dated April 27, 2001, extends the forbearance period until May 18, 2001. The Company has agreed, during the period of forbearance, not to pay the interest due on its outstanding Senior Subordinated Notes Due 2005. Under the terms of the Notes, the Company had a thirty-day grace period on its interest payment due March 15, 2001. The Company did not make the interest payment on April 15 and this constituted an Event of Default under the terms of the indenture pursuant to which the New Notes were issued. In addition, the Company is delinquent on all of its equipment debt obligations. See Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources and Note 6 of the Notes to the Company's Consolidated Financial Statements for further discussion.

As a result of the Company's negative earnings and cash flow and its resulting failure to make the March 15, 2001 interest payment in the amount of $1.8 million on the Notes and its continuing defaults under the Revolver with CIT Business Credit , there is substantial doubt as to the Company's ability to continue as a going concern. The Company's ability to continue as a going concern is dependent on obtaining additional financing and/or negotiating a restructuring of its indebtedness, including the Notes and the Revolver

On March 9, 2001, the Company announced the Board of Directors has engaged the Carreden Group, Inc., investment bankers located in New York City, as financial advisor to explore strategic alternatives. With the assistance of Carreden Group, the Company is currently exploring alternative financing to replace the Revolver and is also engaged in preliminary discussions with potential purchasers of substantially all of the Company's assets who have indicated their interests in pursuing such a transaction. There can be no assurances that the Company will be successful in accomplishing either of these objectives. Moreover, it is expected that any sale of the Company or other alternatives would require a restructuring of the Company's existing indebtedness, with the holders of the Notes receiving significantly less than the face amount of their Notes. In order to effect any such sale or restructuring of its indebtedness, it may be necessary for the Company to file for protection under Chapter 11 of the Bankruptcy Code.

On April 18, 2001, the Board of Directors authorized the retention of Transport Management, a trucking management firm, to assist in the management of the Company.

The Company's consolidated financial statements for the year ended December 31, 2000 included in its Annual Report have been prepared assuming that the Company and its subsidiaries will continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of the uncertainties described above. See the Independent Auditors' Report on such financial statements included elsewhere in this Report.

Operating revenue for 2000 increased $6.7 million, or 2.5%, from 1999 to 2000 and decreased $17.0 million, or 5.8%, from 1998 to 1999. Revenue per total mile amounted to $1.58, $1.50 and $1.47 in 2000, 1999 and 1998, respectively. Total miles driven amounted to approximately 149.9 million miles in 2000, 161.3 million miles in 1999, and 181.7 million miles in 1998. Operating revenues by segment were as follows (in thousands):

Operating revenues declined by $17.0 million, or 5.8%, from 1998 to 1999. Heavy Haul's operating revenues were negatively impacted by a decline in shipments associated with the U.S. Government and customers in the aerospace, agriculture, construction and machinery industries. Heavy Haul operating revenues declined also as a result of a reduction in asset productivity as miles per tractor per day decreased by 6.3%. Secured's operating revenues were primarily affected by the loss of two dedicated fleet contracts at TES due to consolidation in the waste industry and declining military munitions shipments. Secured operating revenues also declined as a result of a 6.6% decline in asset utilization partially offset by a 1% improvement in freight rates per total mile. TLI revenues increased as a result of new business generated in 1999, and the full year effect of revenues in the intermodal services division.

Operating (loss) income by segment were as follows (in thousands):

Operating loss increased $2.6 million in 2000 as compared to 1999 and operating income decreased $7.5 million in 1999 as compared to 1998. The operating expense ratio was 101.4%, 100.4%, and 97.8% in 2000, 1999, and 1998, respectively.

The decline in the consolidated operating performance in 2000 from 1999 resulted from an increase in fuel costs of $8.1 million, an increase in independent contractor costs of $3.4 million, an increase in insurance costs of $2.4 million and a decrease in freight revenues of $5.4 million. These changes were partially offset by a $5.2 million reduction in tractor ownership costs and a $3.6 million reduction in fixed operating costs.

Heavy Haul's operating income decreased by $2.6 million from 1999 to 2000 as a result of those factors noted above. Total miles driven decreased by 4% from 1999 and overall loaded miles as a percentage of total miles declined. Additionally, variable operating costs increased in the areas of fuel, driver wages, independent contractors and insurance. All of these factors were partially offset by a reduction in tractor ownership costs, fixed operating costs and overhead.

Secured's operating income decreased by $0.6 million in 2000 from 1999 in conjunction with a decline in freight revenues of $6.8 million. The decline in revenues and increases in fuel, insurance and driver related costs were partially offset by a reduction in tractor and trailer ownership costs, fixed operating costs and overhead.

TLI operating income increased by $0.2 million in 2000. TLI's revenues increased due to new business growth.

The decline in the consolidated operating performance in 1999 from 1998 resulted from a decline in freight revenues of $25.1 million due to those factors noted above, an 11% decline in total miles driven, an overall 4.7% decline in revenue per tractor per day productivity, an increase in fuel costs of $2.6 million, an increase in driver recruiting, retention and wage costs of approximately $1.9 million, and an increase in insurance costs of $1.9 million. These changes were partially offset by a $4.0 million reduction in tractor ownership costs and a $2.4 million reduction in fixed operating costs.

Heavy Haul's operating income decreased by $8.7 million from 1998 to 1999 as a result of those factors noted above. Total miles driven decreased by 9% from 1998 and overall revenue per tractor per day productivity declined by 3.8%. Additionally, variable operating costs increased in the areas of fuel, driver recruiting, retention and wages, and insurance. All of these factors were partially offset by a reduction in tractor ownership costs, fixed operating costs and overhead.

Secured's operating income increased by $1.2 million in 1999 from 1998 in spite of a decline in freight revenues of $12.3 million. The decline in revenues and increases in fuel, insurance and driver related costs were more than offset by a reduction in tractor and trailer ownership costs, fixed operating costs and overhead.

TLI operating income remained relatively flat in 1999 despite an increase in revenues. TLI's revenues increased due to new business growth and the full year effect of the intermodal services divisions. Operating income was negatively impacted primarily as a result of start-up costs of the intermodal services division and new business contracts.

ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued

Total operating expenses increased $9.3 million from 1999 to 2000. Total operating expenses decreased $9.5 million from 1998 to 1999. Operating expenses as a percentage of revenue were 101.4%, 100.4% and 97.8% in 2000, 1999, and 1998, respectively. The following expense categories increased or decreased significantly as a percentage of revenue between the periods indicated below:

• Salaries, wages and fringe benefits decreased 3.6% from 1999 to 2000. The decrease relates to lower driver wages as a percentage of revenue due to an overall increase in the use on independent contractors and lower non-driver wages.
• Operating supplies and expenses increased 2.2% from 1999 to 2000 due to an increase in fuel costs of $8.1 million as a result of an increase in the average fuel cost per gallon from $1.07 in 1999 to $1.43 in 2000.
• Broker carrier expense increased 3.9% from 1999 to 2000 as a result of an increase in logistics and brokerage revenues from $31.9 million in 1999 to $44.7 million in 2000. Broker carrier expense increased to 82.5% of related revenues in 2000 from 79.2% in 1999 due primarily to higher third party logistics costs.
• Contractor equipment expenses increased by 3.0% from 1999 to 2000 attributable to an overall increase in the number of independent contractors, which increased from 270 in 1999 to 336 in 2000.
• Depreciation and amortization expenses decreased by 2.1% from 1999 to 2000. The decrease in depreciation resulted primarily from a decline in the number of company owned tractors and trailers and the write down of property, plant and equipment and intangible assets to fair market value relating to Fresh Start Reporting.
• Claims and insurance costs increased by 0.8% from 1999 to 2000 primarily as a result of increased insurance premium costs relating to the Company's insurance program on liability for bodily injury and property damage.
• Revenue equipment rents declined by 2.0% from 1999 to 2000 primarily as a result of a reduction in the number of tractors under operating leases from 380 in 1999 to 83 in 2000 and a decrease in short-term trailer rentals.

• Salaries, wages and fringe benefits decreased 2.1% from 1998 to 1999. The decline resulted primarily from reductions in non-driving personnel and reduced workers' compensation costs. Additionally, the Company increased its use of independent contractors as a percentage of overall freight operations.
• Operating supplies and expenses decreased 0.1% from 1998 to 1999 despite an increase in fuel costs of $2.6 million as a result of an increase in fuel cost per gallon from $0.99 in 1998 to $1.07 in 1999. Cost reductions in the area of maintenance partially offset the rise in fuel prices.
• Broker carrier expense increased from 1998 to 1999 as a result of an increase in logistics and brokerage revenues from $23.7 million in 1998 to $31.9 million in 1999. Broker carrier expense decreased to 79.2% of related revenues in 1999 from 81.1% in 1998 due primarily to higher third party logistics costs.
• Contractor equipment expenses increased by 1.9% from 1998 to 1999 attributable to an overall increase in the number of independent contractors, which increased from 244 in 1998 to 270 in 1999.
• Operating taxes and licenses decreased 0.8% from 1998 to 1999 due to a decline in the Company owned tractor fleet and an increase in the number of independent contractors.

• Depreciation and amortization expenses increased by 0.7% from 1998 to 1999. The increase in depreciation resulted primarily from an increase in owned tractors to 1,126 in 1999 from 925 in 1998.
• Claims and insurance costs increased by 0.7% from 1998 to 1999 as a result of a higher frequency of accidents relating to cargo claims.
• Equipment rents declined by 0.6% from 1998 to 1999 primarily as a result of a reduction in the number of tractors under operating leases from 787 in 1998 to 380 in 1999.

Net cash provided by operating activities was $5.6 million in 2000 compared to $13.8 million in 1999. The decrease is primarily due to lower income from operations, and an increase in insurance payments. These changes were partially offset by an increase in accounts payable due to increase in the payment cycle.

Net cash provided by investing activities was $3.4 million in 2000 compared to $1.2 million in 1999. The increase in investing activities results from a increase in proceeds from the sale of assets of $1.9 million from 1999. The Company significantly reduced its replacement capital expenditures as a result of the reorganization and decreased liquidity.

Net cash used in financing activities was $11.0 million in 2000 compared to cash used of $15.8 million in 1999. The decrease in cash used in financing activities in 2000 resulted from increased borrowings under the revolving credit facility and a reduction in the repayment long-term debt, due to the restructuring, and capital lease obligations, due to decreased liquidity.

The Company's performance in 2000 was negatively impacted by an increase in fuel and insurance costs. Additionally, the financial results were primarily affected by increased costs associated with attracting and retaining qualified drivers and lower asset productivity. Industry conditions remained severe in fourth quarter of 2000 due to extremely high fuel prices, a slowdown in the freight-moving economy, collapsing used truck values and increased insurance costs. The Company's overall liquidity position has been negatively impacted from the current environment.

The Company was notified by CIT Business Credit that an event of default had occurred under the Revolver concerning a materially adverse effect evidenced by, (a) the Company's current and projected future negative earnings and cash flow, (b) the change in management discussed in notice of default on October 19, 2000, (c) the increase in fuel costs to the Company and (d) a proposed sixty percent increase in insurance premiums to the Company. On November 8, 2000, the Company executed a forbearance agreement with CIT Business Credit that modified certain terms with the Revolver, including a forbearance reserve on collateral availability and default interest rates of 2.0% above Prime, or 11.5% as of December 31, 2000. The Company had approximately $0.6 million in availability under its Revolver at December 31, 2000. The Company had a forbearance reserve of $3.0 million placed on the Revolver because of the event of default at the end of October 2000, which has since increased to $3.8 million by subsequent amendments through April 27, 2001. The Company has agreed, during the period of forbearance, not to pay the interest due on its outstanding Senior Subordinated Notes Due 2005. Under the terms of the Notes, the Company had a thirty-day grace period on its interest payment due March 15, 2001. The Company did not make the interest payment on April 15 and this constituted an Event of Default under the terms of the indenture pursuant to which the New Notes were issued. In addition, the Company is delinquent on all of its equipment obligations and has slowed its payment cycle on accounts payable in order to operate the business during the forbearance period. See Note 6 of the Notes to the Company's Consolidated Financial Statements.

Existing credit facilities are not expected to be sufficient to cover liquidity requirements for the next twelve months and the Company is facing the prospect of not having adequate funds to operate its business. Due to a number of uncertainties, many of which are outside the control of the Company, there can be no assurance that additional credit facilities can be arranged or that any long term restructuring can be successfully initiated or implemented, in which case the Company may be compelled to file for protection under Chapter 11 of the Bankruptcy Code. Moreover, it may be necessary for the Company to file under Chapter 11 to implement any consensually negotiated restructuring of its indebtedness or a sale of the Company as discussed above.

The Company intends to use proceeds from unencumbered assets for general business capital expenditures in 2001. However, the Company does not have any plans to replace or increase its tractor and trailer fleet in 2001. The Company has residual obligations of approximately $5.0 million, primarily relating to certain capital lease obligations, that will mature in 2001, and the Company will have the option to extend the maturity of the residual, purchase the revenue equipment for the residual amount, sell the equipment and repay the residual, or return the equipment to the lessor at the end of the lease term.

Operating revenues derived from U.S. Governmental Agencies were approximately $39.7 million, $40.7 million and $43.9 million for the years ended December 31, 2000, 1999, and 1998, respectively, which represents 14 percent, 15 percent and 15 percent of total operating revenues for 2000, 1999, and 1998, respectively. No other single customer exceeded 5 percent of operating revenues during these periods.

Under the Comprehensive Environmental Responses, Compensation and Liability Act ("CERCLA") and similar state laws, a transporter of hazardous substances may be liable for the costs of responding to the release or threatened release of hazardous substances from disposal sites if such transporter selected the site for disposal. Because it is the Company's practice not to select the sites where hazardous substances and wastes will be disposed, the Company does not believe it will be subject to material liability under CERCLA and similar laws. Although the Company has been identified as a "potentially responsible party" (PRP) at four sites, solely because of its activities as a transporter of hazardous substances, the Company does not believe it will be subject to material liabilities at such sites.

The Company is a party to certain legal proceedings incidental to its business, primarily involving claims for personal injury or property damage arising from the transportation of freight. The Company does not believe that these legal proceedings, or any other claims or threatened claims of which it is aware, are likely to materially and adversely affect the Company's financial condition. With regard to personal injury, property damage, workers' compensation claims, and cargo claims, the Company is and has been covered by insurance. Such matters may include claims for punitive damages. It is an open question in some jurisdictions in which the Company does business as to whether or not punitive damages awards are covered by insurance.

Inflation can be expected to have an impact on the Company's earnings; however, the effect of inflation has been minimal over the past three years. The average fuel prices increased from $1.07 per gallon in 1999 to $1.43 per gallon in 2000. An extended period of inflation or increase in fuel costs would adversely affect the Company's results of operations without a corresponding freight rate increase from customers and a continuation of fuel surcharges.

Market Risk

The Company is exposed to market risk from changes in interest rates and fuel prices. The Company manages its exposure to these market risks through its regular operating and financing activities and may utilize fuel forward purchase commitments, though no agreements were in place during 2000.

The fair value of the Company's cash and cash equivalents at December 31, 2000 approximated carrying value due to its short-term duration. Market risk was estimated as the potential decrease in fair value resulting from a hypothetical 10% increase in interest rates for the issues contained in the investment portfolio and was not materially different from the year-end carrying value.

The Company has no material future earnings or cash flow exposures from changes in interest rates related to the senior subordinated notes or the Company's equipment obligations, as these long-term debt obligations have fixed rates. The fair value of the Company's long-term debt, including current maturities, was estimated to be $97.2 million at December 31, 2000, and was below the carrying value by $12.6 million. A hypothetical 10% increase in the interest rates on the Company's revolving credit facility for a duration of one year would not have a material impact on interest expense and cash flows in 2001.

The Company may use forward purchase commitments to reduce the exposure to fluctuations in fuel prices by entering into short-term fuel price agreements for the actual delivery of fuel. These forward purchase commitments have the effect of locking in for specified periods the price the Company will receive for the fuel volumes to which the forward purchase commitment relates. As a result, while these forward purchase commitments are structured to reduce the Company's exposure to increases in the price of fuel, they also limit the benefit the Company might otherwise have received from any price decreases associated with the fuel volumes. At December 31, 2000, the Company did not have any outstanding forward purchase commitments.

The average fuel prices increased from $1.07 per gallon in 1999 to $1.43 per gallon in 2000. The Company has adjusted its freight rates to mitigate these increased costs.

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS 133 establishes accounting and reporting standards for derivatives and hedging. It requires that all derivatives be recognized as either assets or liabilities at fair value and establishes specific criteria for the use of hedge accounting. The Company adopted SFAS 133 on January 1, 2001. There was no material effect on consolidated results of operations, financial position, cash flows or stockholders' equity upon adoption of SFAS 133.

See "Management's Discussion and Analysis of Financial Condition and Results of Operations - Market Risk" noted above.

See notes to the consolidated financial statements.

See notes to the consolidated financial statements.

See notes to the consolidated financial statements.