U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q



[X]  QUARTERLY  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
     OF 1934 For the quarterly period ended June 30, 1999

[ ] TRANSITION  REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
     ACT OF 1934 For the transition period from to_____



                        Commission File Number: 000-18601



                               TRANSIT GROUP, INC.
             (Exact name of registrant as specified in its charter)



                           State of Florida 59-2576629
                (State or other jurisdiction of (I.R.S. Employer
               incorporation or organization) Identification No.)



        2859 Paces Ferry, Suite 1740, Atlanta, Georgia 30339 (Address of
                    principal executive offices) - (zip code)


                                 (770) 444-0240
              (Registrant's telephone number, including area code)


Check whether  issuer (1) has filed all reports  required to be filed by Section
13 or 15(d) of the  Securities  and 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___

There were  27,322,933  shares of the Company's  common stock  outstanding as of
August 4, 1999.
<PAGE>
                               TRANSIT GROUP, INC.

                                    FORM 10-Q

                                      INDEX

PART I.    FINANCIAL INFORMATION                                    Page Number

Item 1
Financial Statements

Consolidated Balance Sheets
 as of June 30, 1999 (unaudited) and December 31, 1998                     2

Consolidated Statements of Income (unaudited) for the three
 and six month periods ended June 30, 1999 and 1998                        3

Consolidated Statement of Changes in Total Non Redeemable
 Preferred Stock, Common Stock and Other Shareholder's Equity (unaudited)  4

Consolidated Statements of Cash Flows (unaudited) for the six
 months ended June 30, 1999 and 1998                                       5

Notes to Consolidated Financial Statements (unaudited)                     6

Item 2
Management's Discussion and Analysis of Financial
 Condition and Results of Operations                                       9

Item 3
Quantitative and Qualitative Disclosures About
 Market Risk                                                               17


PART II.  OTHER INFORMATION

Item 4
Submission of Matters to a Vote of Security Holders                        17

Item 6
Exhibits and Reports on Form 8-K                                           17
<PAGE>

                                                  TRANSIT GROUP, INC.

                                             CONSOLIDATED BALANCE SHEETS

                                          (In thousands, except share data)

                                                       ASSETS
<TABLE>
<CAPTION>
                                                                                  June 30,             December 31,
                                                                                   1999                    1998
                                                                             ----------------        ----------------
                                                                                (Unaudited)

Current assets:
<S>                                                                          <C>                     <C>
  Cash                                                                       $         1,020         $         2,020

  Accounts receivable (net of allowance of $756 and $706)                             40,707                  28,437

  Other current assets                                                                 8,298                   5,611

  Deferred  income taxes                                                               1,103                   1,103
                                                                             ----------------        ----------------
      Total current assets                                                            51,128                  37,171
                                                                             ----------------        ----------------


Noncurrent assets:

  Property, equipment, and capitalized leases                                         62,986                  42,818

  Goodwill                                                                            55,226                  50,062

  Other assets                                                                           206                     476
                                                                             ----------------        ----------------
      Total noncurrent assets                                                        118,418                  93,356
                                                                             ----------------        ----------------

      Total assets                                                           $       169,546         $       130,527
                                                                             ================        ================

                                           LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

  Current maturities of long-term debt and capital leases                    $        17,390         $        12,273

  Accounts payable                                                                    12,026                   6,170

  Bank overdrafts                                                                        542                   1,319

  Accrued expenses and other current liabilities                                       7,738                  10,029

  Net current liabilities of discontinued operations                                      29                     273
                                                                             ----------------        ----------------
      Total current liabilities                                                       37,725                  30,064
                                                                             ----------------        ----------------
Noncurrent liabilities:

  Long-term debt and capital lease obligations                                        40,466                  38,963

  Note payable to affiliate of Chairman                                                -----                   3,500

  Other liabilities                                                                      385                   4,291

  Deferred income taxes                                                                3,531                     439
                                                                             ----------------        ----------------
     Total noncurrent liabilities                                                     44,382                  47,193
                                                                             ----------------        ----------------
     Total liabilities                                                                82,107                  77,257
                                                                             ----------------        ----------------
<PAGE>
Redeemable common stock                                                                3,675                   5,115
                                                                             ----------------        ----------------
Redeemable preferred stock                                                            24,912                   -----
                                                                             ----------------        ----------------
Non Redeemable preferred stock, common stock

 and other stockholders' equity:

  Preferred stock, no par value, 15,000,000 and 5,000,000 shares authorized            -----                   -----

  Common Stock, $.01 par value, 100,000,000 shares

   authorized, 26,058,376 and 23,610,190 shares issued and outstanding                   250                     222

  Note receivable secured by stock                                                      (756)                   (729)

  Additional paid-in capital                                                          76,868                  68,411

  Accumulated deficit                                                                (17,510)                (19,749)
                                                                             ----------------        ----------------
      Total non redeemable preferred stock, common stock

       and other stockholders' equity                                                 58,852                  48,155

                                                                             ----------------        ----------------
      Total liabilities and stockholders' equity                             $       169,546         $       130,527
                                                                             ================        ================
</TABLE>

See accompanying notes to consolidated financial statements.
<PAGE>

                                                  TRANSIT GROUP, INC.

                                          CONSOLIDATED STATEMENTS OF INCOME

                                          (In thousands, except share data)

                                                     (Unaudited)
<TABLE>
<CAPTION>
                                                       Three Months Ended June 30,            Six Months Ended June 30,
                                                  -----------------------------------      ---------------------------------
                                                        1999               1998                 1999              1998
                                                  ---------------     ---------------      ---------------   ---------------
<S>                                               <C>                 <C>                  <C>               <C>
Operating revenues                                $       75,167      $       35,402       $      140,011    $       61,747
                                                  ---------------     ---------------      ---------------   ---------------

Operating expenses:

Purchased transportation                                  26,916              15,091               52,433            26,842

Salaries, wages and benefits                              19,114               7,657               34,756            13,750

Fuel                                                       6,336               2,511               11,194             4,534

Operating supplies and expenses                            7,587               4,629               14,460             5,875

Lease expense - revenue equipment                          4,475                 377                8,611             1,102

Insurance                                                    990                 459                1,785             1,108

Depreciation and amortization expense                      2,850               1,670                5,145             2,992

General and administrative expense                         2,201                 873                3,968             1,688
                                                  ---------------     ---------------      ---------------   ---------------
     Total operating expenses                             70,469              33,267              132,352            57,891
                                                  ---------------     ---------------      ---------------   ---------------

     Operating income                                      4,698               2,135                7,659             3,856


Interest expense                                           1,517                 862                2,519             1,641
                                                  ---------------     ---------------      ---------------   ---------------

     Income before income taxes                            3,181               1,273                5,140             2,215

Income taxes                                               1,579                 109                2,605               209
                                                  ---------------     ---------------      ---------------   ---------------

     Net income                                            1,602               1,164                2,535             2,006


Preferred stock dividends                                   (296)              -----                 (296)            -----
                                                  ---------------     ---------------      ---------------   ---------------

     Income available to common shareholders      $        1,306      $        1,164       $        2,239    $        2,006
                                                  ===============     ===============      ===============   ===============

Income per common share -- basic                  $         0.05      $         0.05       $        0.09     $         0.09
                                                  ===============     ===============      ===============   ===============

Income per common share -- diluted                $         0.05      $         0.05       $        0.09     $         0.09
                                                  ===============     ===============      ===============   ===============

Weighted average number of common shares

  outstanding - basic                                 26,038,631          21,726,967           25,240,163        21,277,313
                                                  ===============     ===============      ===============   ===============

Weighted average number of common shares

  outstanding - diluted                               27,083,493          23,267,346           26,150,369        22,666,801
                                                  ===============     ===============      ===============   ===============
</TABLE>

See accompanying notes to consolidated financial statements.
<PAGE>

                                                 TRANSIT GROUP, INC.

                                    CONSOLIDATED STATEMENT OF CHANGES IN TOTAL

                                   ON REDEEMABLE PREFERRED STOCK, COMMON STOCK

                                           AND OTHER SHAREHOLDERS' EQUITY

                                                  (In thousands)

                                                    (Unaudited)
<TABLE>
<CAPTION>
                                                                                                               Total
                                          Common         Additional      Note receivable     Accumulated    shareholders'
                                           stock       paid-in capital   secured by stock      deficit          equity
                                      --------------   --------------     --------------   --------------  --------------
<S>                                   <C>              <C>                <C>              <C>             <C>
Balance at December 31, 1998          $         222    $      68,411      $        (729)   $     (19,749)  $      48,155


Issuance of preferred stock                   -----            -----              -----            -----           -----

Stock issued for acquisitions                    28            8,377              -----            -----           8,405

Stock purchased and retired                      (4)          (1,544)             -----            -----          (1,548)

Stock returned to settle

 contingencies and retired                       (1)            (118)             -----            -----            (119)

Accrued interest                              -----            -----                (27)           -----             (27)

Stock issued to affiliate of

 Chairman                                         1              230              -----            -----             231

Stock no longer subject to

 redemption                                       4            1,436              -----            -----           1,440

Preferred dividends                           -----            -----              -----             (296)           (296)

Stock options exercised                       -----               76              -----            -----              76

Net income                                    -----            -----              -----            2,535           2,535

                                      --------------   --------------     --------------   --------------  --------------
Balance June 30, 1999                 $         250    $      76,868      $        (756)   $     (17,510)  $      58,852
                                      ==============   ==============     ==============   ==============  ==============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
                                                 TRANSIT GROUP, INC.
                                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                    (In thousands)
                                                     (Unaudited)
<TABLE>
<CAPTION>
                                                                                    Six Months Ended June 30,
                                                                         ----------------------------------------------
                                                                                  1999                     1998
                                                                         ---------------------    ---------------------
<S>                                                                      <C>                      <C>
Cash flows from operating activities:
  Income from continuing operations                                      $              2,535     $              2,006
                                                                         ---------------------    ---------------------
    Adjustments to reconcile income to cash
     (used in) provided by continuing
      operations:
      Depreciation and amortization                                                     5,145                    2,992
      Gain on sale of equipment                                                          (213)                    (136)
    Changes in assets and liabilities
      Increase in accounts receivable                                                  (4,400)                    (671)
      (Increase) decrease in other assets                                                (531)                     136
      Decrease in accounts payable and accrued expenses                                (2,844)                  (1,061)
      Other                                                                              (458)                      21
                                                                         ---------------------    ---------------------
          Total adjustments                                                            (3,301)                   1,281
                                                                         ---------------------    ---------------------

          Net cash (used in) provided by continuing operations                           (766)                   3,287
          Net cash used in discontinued operations                                        (13)                     (67)
                                                                         ---------------------    ---------------------
              Net cash (used in ) provided by operating activities                       (779)                   3,220
                                                                         ---------------------    ---------------------

Cash flows from investing activities:
  Business combinations, net of cash acquired                                          (2,813)                  (3,244)
  Proceeds from disposal of equipment                                                   4,164                    2,367
  Purchase of equipment                                                                (3,818)                  (2,498)
  Stock redeemed and retired                                                           (1,548)                   -----
  Stock options issued                                                                     76                  -----
                                                                         ---------------------    ---------------------
              Net cash used in investing activities                                    (3,939)                  (3,375)
                                                                         ---------------------    ---------------------

Cash flows from financing activities:
  Proceeds from issuance of preferred stock                                            24,912                    -----
  Repayment of capital lease obligations and long-term debt                           (26,510)                  (8,496)
  Increase in long-term debt                                                            6,734                   11,701
  Decrease in bank overdraft                                                           (1,418)                    (971)
                                                                         ---------------------    ---------------------
              Net cash provided by financing activities                                 3,718                    2,234
                                                                         ---------------------    ---------------------

(Decrease) increase in cash                                                            (1,000)                   2,079
Cash, beginning of period                                                               2,020                      790
                                                                         ---------------------    ---------------------
Cash, end of period                                                      $              1,020     $              2,869
                                                                         =====================    =====================

Supplemental cash flow data
   Cash paid for interest                                                $              1,836     $              1,683
                                                                         =====================    =====================

Business combinations
  Fair value of assets acquired                                          $             42,139     $             46,544
  Fair value of liabilities assumed                                                   (30,707)                 (30,744)
  Common stock issued                                                                  (8,286)                 (11,197)
                                                                         ---------------------    ---------------------
              Net cash payments                                          $              3,146     $              4,603
                                                                         =====================    =====================
</TABLE>
                   See accompanying notes to consolidated financial statements.
<PAGE>

                               TRANSIT GROUP, INC.
                   Notes to Consolidated Financial Statements


The information  presented herein as of June 30, 1999, and for the three and six
month periods ended June 30, 1999 and 1998 are unaudited.  The December 31, 1998
balance  sheet was  derived  from  audited  financial  statements,  but does not
include all disclosures required by generally accepted accounting principles.

1.  Basis of Presentation
The consolidated  balance sheet of Transit Group,  Inc.  ("Transit Group" or the
"Company") as of June 30, 1999, it's  consolidated  statements of income for the
three and six month periods ended June 30, 1999 and 1998,  and its  consolidated
statements  of cash flows for the six month periods ended June 30, 1999 and 1998
include  the  consolidated  balance  sheets  of the  Company  and it's  fourteen
acquired  subsidiaries,  and the  results of  operations  and cash flows for the
periods since acquisition. The Company has made the following acquisitions:

Company                                           Date Acquired

Carolina Pacific Distributors, Inc.                  07/11/97
Service Express, Inc.                                08/16/97
Transit Leasing, Inc.                                08/16/97
Carroll Fulmer Group, Inc.                           08/30/97
Rainbow Trucking, Inc.                               12/30/97
Transportation Resources and Management, Inc.        01/31/98
Certified Transport, Inc.                            05/05/98
KJ Transportation, Inc.                              06/17/98
Network Transportation, Inc.                         07/13/98
Diversified Trucking, Inc.                           08/05/98
Northstar Transportation, Inc.                       08/11/98
Priority Transportation, Inc.                        01/19/99
Massengill Trucking Service, Inc.                    03/03/99
KAT, Inc.                                            03/22/99

Certain  prior year balances  have been  reclassified  to conform to the current
year financial statement presentation.

2.  Summary of Significant Accounting Policies

Management's Representation

The accompanying interim consolidated financial statements have been prepared by
the Company in accordance and consistent with the accounting  policies stated in
the  Company's  1998  Annual  Report  on  Form  10-KSB  and  should  be  read in
conjunction with the consolidated financial statements appearing therein. In the
opinion of management, all adjustments necessary for a fair presentation of such
consolidated   financial   statements  are  reflected  in  the  interim  periods
presented.  Additionally,  all  adjustments  are of a normal  recurring  nature.
Interim results are not necessarily indicative of results for a full year.

The  consolidated  financial  statements and notes are presented as permitted by
Form  10-Q  and  do not  contain  certain  information  included  in the  annual
consolidated financial statements and notes of Transit Group.

3.  Business Combinations

From July 1997 through December 1998 the Company acquired 11 truckload carriers.
In January 1999, the Company  acquired  Priority  Transportation,  Inc. an Olive
Branch,  Mississippi based truckload carrier. Total consideration for all of the
outstanding  shares of  Priority  was funded by the  issuance  of  approximately
890,000  shares of Transit Group common stock,  the payment of $1,000,000  cash,
and a $495,000 payment on a promissory note.

The Company acquired Massengill Trucking Service, Inc. in March 1999. Massengill
was a privately held truckload carrier based in Hickory Flat,  Mississippi.  The
acquisition  was funded by the  issuance of  approximately  1,070,000  shares of
Transit  Group common  stock,  a cash  payment of $1.3  million at closing,  and
approximately $850,000 over a five year period.

Also in March 1999, the Company acquired Chesterton, Indiana based KAT, Inc. for
consideration  comprised of approximately 812,000 shares of Transit Group common
stock and $725,000 in cash.

In the second quarter of 1999, the Company  executed Letters of Intent regarding
the acquisition of 5 truckload carriers.  The status of those transactions is as
follows:
<PAGE>
On July 19, the Company  completed the  acquisition  of R&M  Transportation  for
consideration  of 1.2  million  shares of common  stock and the  payment of $1.4
million in cash.

On July  30,  the  Company  completed  the  acquisition  of  Bestway  ,  Inc.  a
Jeffersonville,  Indiana  based dry van carrier and MDR, Inc.  headquartered  in
Jonesboro,  Arkansas. In connection with the acquisition of Bestway, the Company
issued 1.5 million of its common  shares and paid $6.8 million in cash.  MDR was
purchased  for $1.8  million  in cash and the  issuance  of 2.5  million  of the
Company's common shares.

The acquisition of Fox Midwest and its affiliate SDS Distributors is anticipated
to close in the third quarter of 1999.

The fifth Letter of Intent dealt with the proposed  acquisition  of Little Rock,
Arkansas based Pro  Transportation.  On August 2, the Company announced that the
parties mutually agreed to terminate negotiations.

The  business  combinations  described  above  will be  accounted  for under the
purchase  method  of  accounting.  Accordingly,  the  operating  results  of the
acquired  companies have been included in the Company's  consolidated  financial
statements  since their  respective  dates of  acquisition.  Assets acquired and
liabilities assumed were recorded at fair market value.

The unaudited pro forma financial  information  reflects the operations of the 5
companies acquired in 1997, the 6 companies acquired in 1998 and the 6 companies
acquired  in 1999 as if they all had been  acquired  on  January  1,  1998.  The
following  adjustments  were  made to the  historical  financial  statements  of
acquired companies prior to their acquisition by the Company:

      - Reduced depreciation  expense due to changes in depreciation  policies
         and estimated lives;
      - Amortization of goodwill recorded in connection with the acquisitions;
      - Additional  interest  costs  for the cash portion of the acquisition
         costs;
      - Interest  costs of the acquired  companies  have been adjusted to
         reflect the  Company's  financing  costs;  and
      - Provision  for income taxes at the Company's estimated annual tax rate.

No  projected  provision  for  cost  reductions  (such as  insurance,  overhead,
purchasing, and fuel) have been reflected in the historical financial statements
of the subsidiaries from January 1, 1998 through the date of acquisition.

               Unaudited Pro Forma Combined Results of Operations
                        (In thousands except share data)
<TABLE>
<CAPTION>
                                                Three months ended June 30,            Six months ended June 30,
                                                  1999               1998               1999               1998
                                                  ----               ----               ----               ----
     <S>                                      <C>                <C>               <C>                <C>
     Revenues                                 $     101,690      $      92,867     $      196,674     $       186,278
                                              ==============     ==============    ===============    ================

     Net income                               $       2,174      $       1,093     $        4,102     $         2,822
                                              ==============     ==============    ===============    ================

     Income per basic common share            $         .07      $         .03     $          .13     $           .09
                                              ==============     ==============    ===============    ================

     Income per diluted common share          $         .07      $         .03     $          .13     $           .09
                                              ==============     ==============    ===============    ================

     Weighted average number of basic
     common shares outstanding                   31,246,132         31,568,681         31,242,118          31,578,812
                                              ==============     ==============    ===============    ================

     Weighted average number of diluted
     common shares outstanding
                                                 32,290,994         33,109,060         32,152,324          32,968,300
                                              ==============     ==============    ===============    ================
</TABLE>
<PAGE>
4.    Income Taxes

At December 31,  1998,  the Company had $27.4  million of federal net  operating
loss carryforwards  potentially  available to offset taxable income which expire
during the years 2007 to 2012. The Company  recognized  $7.5 million in benefits
for these net  operating  losses in the December 31, 1998  financial  statements
because management believed it is more likely than not that the benefits will be
realized.  The Company will be limited in the amount of net operating loss which
can be offset  against  taxable  income in any given year because of significant
changes in ownership.  Certain pre-acquisition losses of acquired companies will
be  unusable  because  of the change of  ownership  provisions  and a  valuation
allowance remains for those losses. To the extent these losses are utilized, any
benefit will be used to reduce  goodwill as the losses were incurred by acquired
subsidiaries.  At  June  30,  1999  the net  operating  loss  carryforwards  are
approximately $25.0 million.

The company  determines  its provisions for income taxes using its best estimate
of the effective  tax rate  expected to be applicable  for the full fiscal year.
The difference  between the provision for income taxes and the amount that would
be  expected  using the Federal  statutory  income tax rate of 34% is related to
nondeductible  goodwill amortization expense, and the meal component of per diem
expenses paid to drivers and certain other nondeductible expenses.

5.  Redeemable and Non Redeemable Preferred Stock

On May 13, 1999 the Company's shareholders retired the existing 5 million shares
of authorized  preferred stock and authorized 20 million new shares of preferred
stock.  The rights and privileges of the new preferred shares will be determined
upon issuance.  The Company  issued 5 million  shares of preferred  stock in the
transaction described in the following paragraph.

On May 14, 1999 the Company  consummated an equity  financing  transaction  with
General  Electric  Capital  Corporation  ("GECC").  GECC invested $25 million in
exchange for 5 million  shares of 9%  cumulative,  redeemable  preferred  stock,
which are  convertible  to common shares at any time.  The proceeds will be used
primarily to finance  future  acquisitions  although  initially the Company paid
down  certain   borrowings   under  its  revolving  credit  facility  and  other
borrowings.

On the third  anniversary  of the issue date,  GECC has the right to require the
Company to redeem up to one third of the outstanding preferred shares at a price
equal to $5.00 per share plus all  accrued and unpaid  dividends.  On the fourth
anniversary  GE may  require  the  Company  to  redeem  up to two  thirds  (on a
cumulative  basis) of the  outstanding  preferred  shares  plus all  accrued and
unpaid  dividends.  GECC  can  require  the  Company  to  redeem  all  remaining
outstanding  preferred  shares plus  accrued and unpaid  dividends  on the fifth
anniversary of the issue date. After the fifth  anniversary of the issue date of
the preferred shares,  GECC shall have no further rights to cause the Company to
redeem any shares, which may be then outstanding.

6.  Common Stock

On May 13,  1999 the  Company's  shareholders  voted to  increase  the number of
authorized common shares from 30 million to 100 million.

7.  Stock Options

The  Company has granted  options  and  warrants to acquire its common  stock at
various times under various plans,  contracts,  and employment  agreements  that
approximated or exceeded fair market at the date of issue.  Options and warrants
which vest over various  periods may be exercised over periods ranging up to ten
years and generally expire in five to ten years.

A summary of outstanding options and warrants is as follows:
<TABLE>
<CAPTION>
                                                                           Six Months ended June 30,
                                                                           1999                1998
                                                                           ----                ----
<S>                                                                          <C>                <C>
Outstanding beginning of                                                     3,413,058          2,754,158
period
Granted during period                                                          738,700            509,000
Exercised/redeemed                                                           (657,933)              -----
Forfeited or expired                                                           (5,500)           (21,200)
                                                                     ==================  =================
Outstanding at end of period                                                 3,488,325          3,241,958
                                                                     ==================  =================
</TABLE>
<PAGE>
                      TRANSIT GROUP, INC. AND SUBSIDIARIES
                 Item 2. Management's Discussion and Analysis of
                  Financial Condition and Results of Operations

This Quarterly Report contains certain forward-looking statements, as defined in
the Private  Securities  Litigation Reform act of 1995,  including or related to
the Company's future results including certain projections and business trends.

These and other statements, which are not historical facts, are based largely on
current  expectations  and assumptions of management and are subject to a number
of risks and uncertainties  that could cause actual results to differ materially
from those  contemplated  by such  forward-looking  statements.  Assumptions and
risks  related to  forward-looking  statements  include  that the  Company has a
history of  operating  losses and is pursuing a growth  strategy  that relies in
part on the completion of  acquisitions  of companies in the trucking  industry;
that it will  continue  to price and market  its  services  competitively;  that
competitive  conditions  within the Company's markets will not change materially
or adversely; that the demand for the Company's services will remain strong; and
that the Company will retain key managers, drivers and other personnel.

Assumptions  relating to  forward-looking  statements  involve  judgements  with
respect  to , among  other  things,  future  economic,  competitive  and  market
conditions  and  future  business  decisions,  all of  which  are  difficult  or
impossible  to  predict  accurately  and many  which are  beyond  the  Company's
control.  When used in this Quarterly Report,  the words "estimate",  "project",
"intend",  and  "expect"  and  similar  expressions  are  intended  to  identify
forward-looking  statements.  Although  the Company  believes  that  assumptions
underlying the forward-looking statements are reasonable, any of the assumptions
could  prove  inaccurate  and,  therefore,  there can be no  assurance  that the
results contemplated in the forward-looking information will be realized.

Management  decisions  are  subjective  in  many  respects  and  susceptible  to
interpretations  and periodic  revisions based on actual experience and business
developments,  the impact of which may cause the  Company to alter its  business
strategy,  which may in turn,  affect the Company's  results of  operations.  In
light  of  the  significant   uncertainties   inherent  in  the  forward-looking
information  included herein,  the inclusion of such  information  should not be
regarded as our representation that any strategy, objectives or other plans will
be achieved.  The forward-looking  statements contained in this Quarterly Report
speak only as of the date of this  Quarterly  Report,  and the Company  does not
have any  obligation to publicly  update or revise any of these  forward-looking
statements.

Liquidity and Capital Resources

In November  1998,  the Company  increased the capacity of its revolving line of
credit with  AmSouth  Bank from $20 million to $30  million.  At June 30,  1999,
approximately  $18 million was available under the credit  facility.  Concurrent
with expanding its credit  facility,  the Company  converted $5 million of debt,
which was due in 1999, to a term facility  which  amortizes over seven years and
has a final maturity in January 2002.

Also  in  November  1998,  the  Company  entered  into a $50  million  equipment
operating lease facility with a commercial  lender. The facility is available to
restructure  the  financing of certain  existing  equipment and the remainder to
support future equipment leases. At June 30, 1999  approximately $12 million was
available under this facility.

The Company's  acquisition  strategy and  requirements for replacing its revenue
equipment require significant  capital resources.  For the six months ended June
30, 1999,  cash flow from  operating  activities  was negative  $0.8 million and
capital expenditures were $3.8 million for new trucks and trailers.  The deficit
in cash flow from  operations  is related  primarily to the increase in accounts
receivable  related to the higher sales levels  achieved in the last half of the
second quarter of 1999.  There can be no assurance that the Company can continue
to finance its fleet through operations, leases or commercial lenders.

On May 14, 1999 the Company  consummated an equity  financing  transaction  with
General  Electric  Capital  Corporation  ("GECC").  GECC invested $25 million in
exchange  for 5  million  shares of 9%  cumulative  preferred  stock,  which are
convertible to common shares at any time. The proceeds will be used primarily to
finance  future  acquisitions  although  initially the Company paid down certain
borrowings under its revolving credit facility, and other borrowings.

The Company believes that the amounts available from operating cash flows, funds
available under its current  facilities and its equipment lease facility will be
sufficient to meet the Company's  expected  operating  needs and planned capital
expenditures for the foreseeable future.
<PAGE>
Redemption Rights for Selling Shareholders in Acquisitions

In connection with the acquisitions of Capitol Warehouse,  Service Express,  and
Carroll  Fulmer,  the  Company  granted the  selling  shareholders  the right to
require  the  Company to redeem a portion of the shares  which they  received in
exchange for selling their businesses to the Company. The dollar amount of stock
subject to mandatory  redemption by the Company  aggregated  approximately  $8.1
million upon acquisition of those companies.

At June 30, 1999,  holders of redemption  rights with respect to $3.7 million of
stock may require either the Company to redeem the stock or a major  shareholder
of the Company to acquire the stock at a price of $3.60 per share. To the extent
such redemption  rights are exercised,  the Company will be required to fund the
cash required to meet its obligations  under the redemption rights by drawing on
bank lines which may be available to its  subsidiaries,  or to call upon a major
shareholder  to purchase  the stock  under such  shareholder's  obligations  and
guarantees associated with the acquisition contracts.

Results of  Operations - Three and six month  periods  ended June 30, 1999
compared  with the three and six month periods ended June 30, 1998
-------------------------------------------------------------------------------

The following table sets forth items in the Consolidated Statement of Income for
the three and six month  periods ended June 30, 1999 and 1998 as a percentage of
operating revenues.
<TABLE>
<CAPTION>
                                                                 Percentage of Operating Revenue
                                                        Three months ended           Six months ended
                                                             June 30,                    June 30,
                                                             --------                    --------
                                                       1999          1998          1999           1998
                                                    ------------  ------------  ------------  -------------
      <S>                                              <C>          <C>            <C>          <C>
      Operating revenues                               100.0%       100.0%         100.0%       100.0%
                                                    ------------  ------------  ------------  -------------

      Purchased transportation                          35.8         42.6           37.4         43.5
      Salaries, wages and benefits                      25.4         21.6           24.8         22.3
      Fuel                                               8.5          7.1            8.0          7.3
      Operating supplies and expenses                   10.1         13.1           10.3          9.5
      Lease expense - revenue equipment                  6.0          1.1            6.2          1.8
      Insurance                                          1.3          1.3            1.3          1.8
      Depreciation and amortization expense              3.8          4.7            3.7          4.8
      General and administrative expense                 2.9          2.5            2.8          2.7
                                                    ------------  ------------  ------------  -------------
      Total expenses                                    93.8         94.0           94.5         93.7
                                                    ------------  ------------  ------------  -------------
        Operating income                                 6.2          6.0            5.5          6.3
      Interest expense                                   2.0          2.4            1.8          2.7
                                                    ------------  ------------  ------------  -------------
        Income before income taxes                       4.2          3.6            3.7          3.6

      Income taxes                                       2.1           .3            1.9           .3
                                                    ------------  ------------  ------------  -------------

      Net income                                         2.1%         3.3%           1.8%         3.3%
                                                    ============  ============  ============  =============
</TABLE>
Results of Operations - Three months ended June 30, 1999 vs. three months ended
June 30, 1998
-------------------------------------------------------------------------------

Operating  revenues  increased from $35.4 million in 1998 to $75.2  million,  or
112.3%,  for 1999.  The increase is due  primarily to the  acquisition  of eight
companies from April 1998 through June 1999.

Purchased  transportation increased from $15.1 million in 1998 to $26.9 million,
or  78.4%.  Purchased  transportation  as a  percentage  of  operating  revenues
decreased  from  42.6% in 1998 to 35.8% in 1999.  Changes  in the fleet mix from
brokerage  and  owner-operators  to  company  owned  trucks  as a result  of the
acquisitions resulted in the decline in purchase  transportation as a percentage
of sales.
<PAGE>
Salaries,  wages  and  benefits  increased  from $7.7  million  in 1998 to $19.1
million,  or 149.6%,  in 1999.  Salaries,  wages and benefits as a percentage of
operating  revenues  increased from 21.6% in 1998 to 25.4% in 1999. The increase
as a percentage of operating revenues is attributed to the change in revenue mix
discussed in the  preceding  paragraph  as well as continued  pressure on driver
wages. Should driver wages continue to increase as a result of the industry-wide
driver shortage,  there can be no assurance that these costs can be passed along
through increased freight rates.

Fuel  increased from $2.5 million in 1998 to $6.3 million,  or 152.3%,  in 1998.
Fuel as a percentage of operating  revenues  increased from 7.1% in 1998 to 8.5%
in 1999. Fuel costs as a percentage of operating  revenues increased as a result
of changes in the Company's revenue mix. In the first half quarter of 1999, fuel
costs  began to  increase  over the amount  paid in the fourth  quarter of 1998.
Should fuel costs  continue to increase,  there can be no  assurance  that these
costs can be passed along to our customers.

Operating  supplies  and  expenses  increased  from $4.6 million in 1998 to $7.6
million,  or 63.9%, in 1999.  Operating supplies and expenses as a percentage of
operating  revenues  decreased from 13.1% in 1998 to 10.1% in 1999. The decrease
as a percentage  of operating  revenues is attributed to the change in the fleet
and revenue mix discussed above.

Lease  expense - revenue  equipment  increased  from $.4 million in 1998 to $4.5
million, or 1087.0% in 1999. Expressed as a percent of operating revenues, lease
expense - revenue  equipment  increased from 1.1% in 1998 to 6.0% in 1999.  This
increase is related to the  utilization  of the Company's $50 million  equipment
operating lease facility.

Insurance expense increased from $.5 million in 1998 to $1.0 million, or 115.7%,
in 1999.  Insurance  expense as a percentage of operating  revenues was 1.3% for
both periods.

Depreciation  and  amortization  expense  increased from $1.7 million in 1998 to
$2.8 million,  or 70.6%, in 1999.  Depreciation  and  amortization  expense as a
percentage of operating  revenues  decreased  from 4.7% in 1998 to 3.8% in 1999.
The decrease as a percentage  of operating  revenues is due to the increased use
of leased equipment.

General and  administrative  expense  increased from $.9 million in 1998 to $2.2
million, or 152.1%, in 1999. General and administrative  expense as a percentage
of operating revenues increased from 2.5% in 1998 to 2.9% in 1999.

Operating income increased from $2.1 million in 1998 to $4.7 million, or 120.0%,
in 1999.  Operating income as a percentage of operating  revenues increased from
6.0% in 1998 to 6.2% in 1999 as a result of the factors discussed above.

Interest expense  increased from $.9 million in 1998 to $1.5 million,  or 76.0%,
in 1999 as a result of increased  borrowings to fund acquisitions offset by more
favorable interest rates and the increased use of leased equipment.

Income taxes  increased  from $.1 million in 1998 to $1.6 million in 1999 as the
Company  recognized the future value of net operating loss  carryforwards in the
fourth quarter of 1998.  Previously these benefits were recognized when realized
which lowered the effective tax rates in prior periods.  The difference  between
the  provision  for  income  taxes  that  would be  expected  using the  Federal
statutory  rate and the Company's  actual rate is  attributed to  non-deductible
goodwill and the limitations  imposed on the deductibility of the meal component
of per diem payments paid to the Company's drivers.

Income per basic and diluted common share was $.05 in both periods presented.

Results of Operations - Six months ended June 30, 1999 vs. six months ended
June 30, 1998
-------------------------------------------------------------------------------

Operating  revenues  increased from $61.7 million in 1998 to $140.0 million,  or
126.7%,  for 1999.  The  increase is due  primarily to the  acquisition  of nine
companies from January 1998 through June 1999.

Purchased  transportation increased from $26.8 million in 1998 to $52.4 million,
or  95.3%.  Purchased  transportation  as a  percentage  of  operating  revenues
decreased  from  43.5% in 1998 to 37.4% in 1999.  Changes  in the fleet mix from
brokerage  and  owner-operators  to  company  owned  trucks  as a result  of the
acquisitions resulted in the decline in purchased transportation as a percentage
of sales.
<PAGE>
Salaries,  wages and  benefits  increased  from  $13.8  million in 1998 to $34.8
million,  or 152.8%,  in 1999.  Salaries,  wages and benefits as a percentage of
operating  revenues  increased from 22.3% in 1998 to 24.8% in 1999. The increase
as a percentage of operating revenues is attributed to the change in revenue mix
discussed in the  preceding  paragraph  as well as continued  pressure on driver
wages. Should driver wages continue to increase as a result of the industry-wide
driver shortage,  there can be no assurance that these costs can be passed along
through increased freight rates.

Fuel increased from $4.5 million in 1998 to $11.1 million,  or 146.9%,  in 1998.
Fuel as a percentage of operating  revenues  increased from 7.3% in 1998 to 8.0%
in 1999. Fuel costs as a percentage of operating  revenues increased as a result
of fuel costs and the change in  revenue  mix.  Should  fuel costs  continue  to
increase,  there can be no assurance that these costs can be passed along to our
customers.

Operating  supplies  and expenses  increased  from $5.9 million in 1998 to $14.5
million, or 146.1%, in 1999.  Operating supplies and expenses as a percentage of
operating revenues increased from 9.5% in 1998 to 10.3% in 1999. The increase as
a percentage of operating  revenues is attributed to the change in the fleet and
revenue mix discussed above.

Lease expense - revenue  equipment  increased  from $1.1 million in 1998 to $8.6
million, or 681.4% in 1999. Expressed as a percent of operating revenues,  lease
expense - revenue  equipment  increased from 1.8% in 1998 to 6.2% in 1999.  This
increase is related to the  utilization  of the Company's $50 million  equipment
operating lease facility.

Insurance expense increased from $1.1 million in 1998 to $1.8 million, or 61.1%,
in 1999.  Insurance expense as a percentage of operating revenues decreased from
1.8% in 1998 to 1.3% in 1999. The decrease as a percentage of operating revenues
is due to the Company's  ability to negotiate  more  favorable  insurance  rates
because of its larger, more diverse insurance base.

Depreciation  and  amortization  expense  increased from $3.0 million in 1998 to
$5.1 million,  or 72.0%, in 1999.  Depreciation  and  amortization  expense as a
percentage of operating  revenues  decreased  from 4.8% in 1998 to 3.7% in 1999.
The decrease as a percentage  of operating  revenues is due to the increased use
of leased equipment.

General and  administrative  expense increased from $1.7 million in 1998 to $4.0
million, or 135.1%, in 1999. General and administrative  expense as a percentage
of operating revenues remained relatively flat.

Operating income increased from $3.9 million in 1998 to $7.7 million,  or 98.6%,
in 1999.  Operating income as a percentage of operating  revenues decreased from
6.3% in 1998 to 5.5% in 1999 as a result of the factors discussed above.

Interest expense increased from $1.6 million in 1998 to $2.5 million,  or 53.5%,
in 1999 as a result of increased  borrowings to fund acquisitions offset by more
favorable interest rates and the increased use of leased equipment.

Income taxes  increased  from $.2 million in 1998 to $2.6 million in 1999 as the
Company  recognized the future value of net operating loss  carryforwards in the
fourth quarter of 1998.  Previously these benefits were recognized when realized
which lowered the effective tax rates in prior periods.  The difference  between
the  provision  for  income  taxes  that  would be  expected  using the  federal
statutory  rate and the Company's  actual rate is  attributed to  non-deductible
goodwill and the limitations  imposed on the deductibility of the meal component
of per diem payments made to the Company's drivers.

Income per basic and diluted common share was $.09 in both periods presented.

Results of  Operations - Unaudited  Pro Forma results three and six months ended
June 30, 1999 compared with the three and six months ended June 30, 1998

Since July 1997, the Company has acquired 17 truckload  carriers.  Transit Group
has enabled these companies to reduce certain costs particularly in the areas of
insurance,  interest  and leasing  costs,  fuel,  and  redundant  overhead.  The
Company's  strategy is to allow the acquired  companies  to focus on  marketing,
customer service,  and operations while  administrative  and financial costs are
centralized in the Corporate Services Division of Transit Group  Transportation,
LLC.
<PAGE>
The unaudited pro forma financial  information reflects the operations of the 17
acquired  companies  as if they all had been  acquired  on January 1, 1998.  The
following  adjustments  were  made to the  historical  financial  statements  of
acquired companies prior to their acquisition by the Company:

      - Reduced depreciation  expense due to changes in depreciation  policies
         and estimated lives;
      - Amortization of goodwill recorded in connection with the acquisitions;
      - Additional  interest  costs for the cash portion of the acquisition
         costs;
      - Interest  costs of the acquired  companies  have been adjusted to
         reflect the  Company's  financing  costs;  and
      - Provision  for income taxes at the Company's estimated annual tax rate.

No  projected  provision  for  cost  reductions  (such as  insurance,  overhead,
purchasing, and fuel) have been reflected in the historical financial statements
of the subsidiaries from January 1, 1998 through the date of acquisition.

Unaudited Results of Operations - Three months ended June 30, 1999 vs. three
months ended June 30, 1998
-------------------------------------------------------------------------------

               Unaudited Pro Forma Combined Results of Operations
                        (In thousands except share data)
<TABLE>
<CAPTION>
                                                                          Three months ended
                                                 ---------------------------------------------------------------------
                                                          June 30, 1999                       June 30, 1998
                                                 --------------------------------    ---------------------------------
                                                        $                 %                 $                  %
                                                 ----------------    ------------    -----------------    ------------
<S>                                              <C>                   <C>           <C>                   <C>
Operating revenues                               $                     100.0%        $                     100.0%
                                                         101,690                              92,867
                                                 ----------------    ------------    -----------------    ------------

Operating expenses                                        86,341        84.9                  80,038        86.2
Depreciation and amortization                              5,071         5.1                   5,494         5.9
General and administrative expenses                        2,880         2.8                   2,398         2.6
                                                 ----------------    ------------    -----------------    ------------

Total operating expenses                                  94,292        92.8                  87,930        94.7
                                                 ----------------    ------------    -----------------    ------------
   Operating income                                        7,398         7.2                   4,937         5.3

Interest expense                                           3,080         3.0                   2,769         3.0
                                                 ----------------    ------------    -----------------    ------------
   Income before income taxes                              4,318         4.2                   2,168         2.3

Income taxes                                               2,144         2.1                   1,075         1.2
                                                 ----------------    ------------    -----------------    ------------

   Net income                                    $         2,174         2.1         $         1,093         1.1
                                                 ================    ============    =================    ============

Income per basic common share                    $           .07                     $           .03
                                                 ================                    =================

Income per diluted common share                  $           .07                     $           .03
                                                 ================                    =================

Weighted average number of basic common
shares outstanding                                    31,246,132                           31,568,681
                                                 ================                    =================

Weighted average number of diluted
common shares outstanding                             32,290,994                           33,109,060
                                                 ================                    =================
</TABLE>
Comparable  revenues  increased  by 9.5% in the three months ended June 30, 1999
vs. the same period a year ago. The Company  believes  that these  increases are
related to the continued  strength in the US economy as well as  improvements in
load sharing arrangements among the Company's operating divisions.

Operating  expenses  as a percent of revenue  declined  from 86.2% for the three
months ended June 30, 1998 to 84.9% in the current three month period. The fixed
component of operating  supplies and expense  represented a lower  percentage of
revenue due to the increase in comparable revenues.
<PAGE>
Depreciation  expense  declined by 7.7% in the three  months ended June 30, 1999
compared to the three  months ended June 30,  1998.  As a percentage  of revenue
depreciation and amortization  declined from 5.9% of revenue in the three months
ended June 30, 1998 to 5.1% in the current  three month period due to the higher
sales levels.

General and administrative  expenses increased as the Company continues to build
its information technology and corporate services  infrastructure.  As a percent
of revenue,  general and administrative expense increased from 2.6% in the three
month  period  ended June 30, 1998 to 2.8% in the three month  period ended June
30, 1999.

Because of the items discussed above, the Company's  operating ratio improved to
92.8% in the current three month period (from 94.7%) in the prior year. Interest
expense  remained  constant at three  percent of revenue and the pre-tax  margin
improved to 4.2% in the current three month period  compared to 2.3% in the same
period a year ago.

The  Company's  tax rate  exceeds the Federal  statutory  rate of 34%  primarily
because  of  non-deductible  goodwill  and limits on the  deductibility  of meal
reimbursements  paid to  drivers.  As a result,  income  taxes as a  percent  of
revenues increased to 2.1% in the current three month period compared to 1.2% in
the same period a year ago.

Unaudited Results of Operations - Six months ended June 30, 1999 vs. six months
ended June 30, 1998
-------------------------------------------------------------------------------
               Unaudited Pro Forma Combined Results of Operations
                        (In thousands except share data)
<TABLE>
<CAPTION>
                                                                           Six months ended
                                                 ---------------------------------------------------------------------
                                                          June 30, 1999                       June 30, 1998
                                                 --------------------------------    ---------------------------------
                                                        $                 %                 $                  %
                                                 ----------------    ------------    -----------------    ------------
<S>                                              <C>                   <C>           <C>                   <C>
Operating revenues                               $       196,674       100.0%        $       186,277      100.0%
                                                 ----------------    ------------    -----------------    ------------

Operating expenses                                       167,500        85.1                 159,733        85.8
Depreciation and amortization                              9,839         5.0                   9,897         5.3
General and administrative expenses                        5,638         2.9                   5,265         2.8
                                                 ----------------    ------------    -----------------    ------------

Total operating expenses                                 182,977        93.0                 174,895        93.9
                                                 ----------------    ------------    -----------------    ------------
   Operating income                                       13,697         7.0                  11,382         6.1

Interest expense                                           5,432         2.8                   5,533         3.0
                                                 ----------------    ------------    -----------------    ------------
   Income before income taxes                              8,265         4.2                   5,849         3.1

Income taxes                                               4,163         2.1                   3,027         1.6
                                                 ----------------    ------------    -----------------    ------------

   Net income                                    $         4,102         2.1         $          2,822        1.5
                                                 ================    ============    =================    ============

Income per basic common share                    $           .13                     $            .09
                                                 ================                    =================

Income per diluted common share                  $           .13                     $            .09
                                                 ================                    =================

Weighted average number of basic common
shares outstanding                                    31,242,118                           31,578,812
                                                 ================                    =================

Weighted average number of diluted
common shares outstanding                             32,152,324                           32,968,300
                                                 ================                    =================
</TABLE>
Pro forma revenues  increased  $10.4 million (5.6%) in the six months ended June
30, 1999  compared  to the same  period in the prior year due to  improved  load
sharing arrangements among the operating divisions.

Operating expense and depreciation and amortization expense declined slightly in
the  current  six month  period as a  percentage  of revenues as a result of the
increase in comparable revenues.
<PAGE>
General and  administrative  expenses  increased  $373,000  (7.1%) due to higher
initial costs  associated with  centralizing the data processing and transaction
processing  functions  into a  corporate  services  group.  As a  percentage  of
revenues general and  administrative  expenses  increased to 2.9% in the current
six month period compared with 2.8% in the same period a year ago.

Because of the above factors,  the Company's  operating ratio improved to 93.0 %
in the six  months  ended  June 30,  1999  compared  with 93.9% in the six month
period ended June 30, 1998.

The improved  operating  ratio combined with  relatively  flat interest  expense
caused the pre-tax  margin to increase  from 3.1% for the six months  ended June
30, 1998 to 4.2% in the six months ended June 30, 1999.

The  Company's  tax rate  exceeds the federal  statutory  rate of 34%  primarily
because  of  non-deductible  goodwill  and limits on the  deductibility  of meal
reimbursements  paid to  drivers.  As a result,  income  taxes as a  percent  of
revenues  increased to 2.1% in the current six month period  compared to 1.6% in
the same period a year ago.

Year 2000

The Company is aware of the  seriousness  associated  with the issues related to
the Year 2000 and its potential impact. In response to this unprecedented event,
management believes that it has identified,  outlined and set forth actions that
will upgrade all information  technology and non-information  technology systems
that are not Year 2000 compliant  with year 2000  compliant  systems by no later
than September  1999.  Currently,  management  estimates that the Company is 90%
complete in its efforts to be Year 2000 compliant.

Due to the contractual relationships with current software and hardware vendors,
the majority of the costs associated with Year 2000 compliance have been covered
under the annual  maintenance  fees that the Company  normally  pays.  Since the
majority  of  expenses  are  spread  throughout  the  year,  management  has not
specifically  itemized expenses related to the Year 2000.  Management  estimates
that  the  Company  has  spent  approximately  $225,000  to date  on  Year  2000
compliance  and  estimates  spending an  additional  $75,000  towards  Year 2000
compliance during the remainder of 1999.

During  its  review of the  Company's  Year  2000  compliance  plan,  management
realized  that as important as internal  systems are to its mission of Year 2000
compliance,   customers,  vendors  and  community  resources  (utilities,  local
telephone  company,  etc),  represent  a  significant  portion  of the  business
processes as well.  To that end, the Company is asking its critical  partners to
provide to the Company in writing,  their own Year 2000 progress plans. Although
management  cannot  guarantee  the  Company's  compliance,  it will  continue to
monitor  its  progress  during  the  remainder  of 1999  and  refine  plans,  as
information becomes available.

The  Company  has  identified  its  billing,  dispatch,  settlement,  and  fleet
monitoring  system  as its  mission  critical  internal  systems  that  could be
affected by the Year 2000.  The Company  began  testing the Year 2000  compliant
version of this software in the third quarter of 1999.

The Company has  developed a  contingency  plan that  includes  external  vendor
readiness as well as the possibility of an internal system failure.  If external
vendors are not Year 2000  compliant  by September  1999,  the Company will find
alternate  sources to supply it with  needed  products  and  services  if at all
possible.  If internal  systems  were to fail,  the  Company  will have a manual
system in place to provide the  necessary  business  activities to its customers
until the Company can correct any such failure.

Although the  possibility of failure exists,  management  believes that its Year
2000  efforts  will  be  completed,  and  its  systems  tested  in a  production
environment in accordance with its plan by September 1999.
<PAGE>
                      TRANSIT GROUP, INC. AND SUBSIDIARIES

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable
                      TRANSIT GROUP, INC. AND SUBSIDIARIES
                           Part II - Other Information

Item 4 - Submission Matters to a Vote of Security Holders

         The following proposals were submitted to the Company's shareholders at
its annual shareholders meeting on May 13, 1999:

1.       The proposal to elect T. Wayne Davis, Philip A. Belyew, Derek E. Dewan,
         Carroll L.  Fulmer,  Robert R.  Hermann,  Jr.,  and Ford G.  Pearson as
         Directors to serve until the 2000 annual shareholders'  meeting. For T.
         Wayne Davis, Philip A. Belyew,  Derek E. Dewan, Robert R. Hermann,  and
         Ford G. Pearson this  proposal was approved with  21,148,666  shares or
         81% voting for the proposal, and 8,391 shares or .03% withholding.  For
         Carroll L. Fulmer this proposal was approved with 20,603,273  shares or
         79% voting for the proposal, and 553,784 shares or 2.14% withholding.

2.       The  proposal  to  approve  the   Restated  and  Amended   Articles  of
         Incorporation. This proposal was approved with 20,992,162 shares or 81%
         voting for the proposal,  and 164,644 shares or .64% voting against the
         proposal and 251 shares or 0% abstaining from the proposal.

3.       The proposal to ratify the selection of  PriceWaterhouseCoopers  LLP as
         our  independent  public  accountants  for the year ending December 31,
         1999. This proposal was approved with  21,155,706  shares or 81% voting
         for the proposal,  100 shares or 0% voting  against the  proposal,  and
         1,251shares or 0% abstaining from the proposal.

4.       The  proposal to ratify  certain past actions of the Board of Directors
         and the  Officers of the  Company.  This  proposal  was  approved  with
         20,957,329 shares or 80% voting for the proposal, and 164,862 shares or
         .64% voting  against the proposal and 34,866 shares or .13%  abstaining
         from the proposal.

Item 6 - Exhibits and Reports on Form 8-K

   (a)   Exhibits

         11.1     Statement regarding computation of earnings per share.

         27.1     Financial Data Schedule.

  (b)    The  Company  filed a Current  Report  on Form 8-K on June 10,  1999 to
         report  the  sale  of  5,000,000  shares  of  the  Company's  Series  A
         convertible preferred stock to GE Capital Equity Investments, Inc.

Signature

Pursuant  to the  requirements  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.

                                          Transit Group, Inc.
Date: August 16, 1999                     By:  /s/Wayne N. Nellums
                                               --------------------
                                               Wayne N. Nellums
                                               Senior Vice President,
                                               Chief Financial Officer
                                                and Secretary