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| 8-K - FROZEN FOOD EXPRESS INDUSTRIES, INC. ANNOUNCES THIRD QUARTER 2010 RESULTS - FROZEN FOOD EXPRESS INDUSTRIES INC | form8k.htm |
Exhibit 99.1
Frozen Food Express Industries, Inc.
Announces Third Quarter 2010 Results
DALLAS, October 27, 2010 (GLOBE NEWSWIRE) – Frozen Food Express Industries, Inc. (Nasdaq: FFEX) announced its financial and operating results for the third quarter ended September 30, 2010. Highlights for the quarter include:
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· Total operating revenue was $93.9 million versus $94.5 million during the third quarter 2009
|
|
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· Net loss improved to $2.3 million versus $2.6 million during the third quarter 2009
|
|
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· Less than truckload (“LTL”) tonnage increased 12.5% on a 10.1% increase in shipment count versus the third quarter 2009
|
|
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· 10.6% improvement in truckload revenue per laden mile versus the third quarter 2009
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· 4.1% improvement in revenue per truck per week versus the third quarter 2009
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· No long-term debt outstanding and cash on hand of $2.2 million as of September 30, 2010
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For the third quarter ended September 30, 2010, total operating revenue decreased 0.7%, or $0.6 million, to $93.9 million from $94.5 million in the third quarter of 2009. For the third quarter of 2010, total operating revenue, excluding fuel surcharges, decreased 3.1% to $79.5 million from $82.0 million during the third quarter of 2009, and remained relatively unchanged compared to $80.0 million in the second quarter of 2010. After recognition of a $4.4 million tax benefit for the third quarter 2010 versus a tax benefit of $2.1 million for the third quarter 2009, the net loss for the third quarter was ($2.3 million), or ($0.13) per diluted share. This compares with a net loss of ($2.6 million), or ($0.15) per share for the third quarter of 2009
Stoney M. (“Mit”) Stubbs, the Company’s Chairman and Chief Executive Officer commented, “Our LTL services showed nice year over year and sequential increases of 12.5% and 4%, respectively. Likewise, LTL revenue increased 7.2% year over year and 6% sequentially. It is encouraging to see our continued focus on delivering high quality services and focused sales approach are putting our LTL services back on solid ground. Our truckload services continue to achieve improved pricing yield with a 10.6% improvement, year over year, in revenue per loaded mile.”
For the nine months ended September 30, 2010, total operating revenue decreased 2.5%, or $6.9 million, to $274.7 million from $281.6 million during the same period in 2009, while total operating revenue, excluding fuel surcharges, decreased 6.7% to $232.8 million from $249.5 million during the same period in 2009. The net loss for the nine months ended September 30, 2010 was ($10.4 million), an improvement of $3.4 million, or 24.7%, compared to the net loss of ($13.8 million) during the same period in 2009. On a per share basis, the loss equated to ($0.61) per diluted share in 2010 compared to ($0.81) per diluted share in 2009.
Asset productivity (measured by revenue per truck per week) increased during the third quarter of 2010 by 4.1% to $3,209 from $3,081 in the same period of the last year, primarily due to an improvement in truckload revenue per loaded mile to $1.56 from $1.41 last year, partially offset by a 7.2% decrease in the average weekly trucks in service, or 141 trucks, and an increase in the Company’s empty mile ratio to 11.7% from 11.2%. At our revenue per truck per week of $3,209 attained in the third quarter, an additional 141 trucks would have allowed us to attain approximately $5.9 million in additional truckload revenue, net of fuel surcharge, which would have enabled us to surpass our third quarter 2009 revenue, net of fuel surcharge, by approximately $3.4 million.
“We saw pricing improve in the second quarter and this trend continued in the third quarter,” commented Russell Stubbs, the Company’s President. “However, demand was not as robust in the third quarter as we experienced in the second quarter. Capacity continues to be a challenge due to a driver shortage, but it appears the rebound in the economy that drove demand in the second quarter, moderated in the third quarter. This, coupled with extreme weather delays created as the remnants of hurricane Alex moved through Texas and the Midwest, presented a challenging quarter. We are certainly not satisfied with the results of the third quarter and have taken additional strides to reduce our annualized operating costs by approximately $6 million, which includes the reduction of annualized salaried payroll by approximately $1 million. We expect to see results of these actions in the near future.”
Mit Stubbs concluded, "Driver recruitment and quality service continue to be our highest priorities as we prepare for the future. The third quarter proved the economy has not totally rebounded, especially in the temperature controlled trucking sector, but we believe we are making progress. Although third quarter financial improvements were inconsistent with the trends we experienced earlier in the year, we are encouraged by the improvements we’ve made in the last month of the quarter. By maintaining improved asset utilization and continued growth in our LTL services, we expect to be rewarded with improved operating results in the coming quarters.”
About FFEX
Frozen Food Express Industries, Inc. is one of the leading temperature-controlled truckload and less-than-truckload carriers in the United States with core operations in the transport of temperature-controlled products and perishable goods including food, health care and confectionery products. Service is offered in over-the-road and intermodal modes for temperature-controlled truckload and less-than-truckload, as well as dry truckload. We also provide brokerage/logistics and dedicated services to our customers. Additional information about Frozen Food Express Industries, Inc. can be found at http://www.ffeinc.com. To join our email alert list, please click on the following link: http://financials.ffex.net/alerts.cfm. The Company’s common stock is traded on the Nasdaq Global Select market under the symbol FFEX.
Forward-Looking Statements
This press release contains certain statements that may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements relating to plans, strategies, objectives, expectations, intentions, and adequacy of resources, and may be identified by words such as "will", "could", "should", "believe", "expect", "intend", "plan", "schedule", "estimate", "project", and similar expressions. Those statements are based on current expectations and are subject to uncertainty and change.
Although our management believes that the expectations reflected in such forward-looking statements are reasonable, there can be no assurance that such expectations will be realized. Should one or more of the risks or uncertainties underlying such expectations not materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expected.
Among the key factors that are not within our management's control and that may cause actual results to differ materially from those projected in such forward-looking statements are demand for the company's services and products, and its ability to meet that demand, which may be affected by, among other things, competition, weather conditions and the general economy, the availability and cost of labor and owner-operators, the ability to negotiate favorably with lenders and lessors, the effects of terrorism and war, the availability and cost of equipment, fuel and supplies, the market for previously-owned equipment, the impact of changes in the tax and regulatory environment in which the company operates, operational risks and insurance, risks associated with the technologies and systems used and the other risks and uncertainties described in our filings with the Securities and Exchange Commission. Given the volatility in fuel prices and the impact fuel surcharge revenues have on total operating revenues, we often make reference to total operating revenue excluding fuel surcharges to provide a more consistent basis for comparison of operating revenue without the impact of fluctuating fuel prices. Readers should review and consider these factors along with the various disclosures by the Company in its press releases, stockholder reports and filings with the Securities and Exchange Commission. The company does not assume, and specifically disclaims, any obligation to update or revise any forward-looking statements to reflect actual results or changes in the factors affecting the forward-looking information.
Frozen Food Express Industries, Inc. and Subsidiaries
Consolidated Condensed Balance Sheets
(Unaudited and in thousands, except per-share amounts)
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Assets
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September 30, 2010
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December 31, 2009
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||||||
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Current assets
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||||||||
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Cash and cash equivalents
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$
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2,158
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$
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3,667
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||||
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Accounts receivable, net
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42,494
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41,318
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||||||
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Tires on equipment in use, net
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5,685
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5,592
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||||||
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Deferred income taxes
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2,169
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1,532
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||||||
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Property held for sale
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1,019
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1,019
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||||||
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Other current assets
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5,784
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12,706
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||||||
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Total current assets
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59,309
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65,834
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||||||
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Property and equipment, net
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72,627
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74,845
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||||||
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Other assets
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4,858
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5,121
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||||||
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Total assets
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$
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136,794
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$
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145,800
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||||
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Liabilities and Shareholders' Equity
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||||||||
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Current liabilities
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||||||||
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Accounts payable
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$
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29,739
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$
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23,773
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||||
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Insurance and claims accruals
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9,816
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10,119
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||||||
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Accrued payroll and deferred compensation
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5,685
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3,837
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||||||
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Accrued liabilities
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1,907
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1,953
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||||||
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Total current liabilities
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47,147
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39,682
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||||||
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Deferred income taxes
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4,027
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9,009
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||||||
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Insurance and claims accruals
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5,236
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7,374
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||||||
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Total liabilities
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56,410
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56,065
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||||||
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Shareholders’ equity
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||||||||
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Common stock, $1.50 par value per share; 75,000 shares authorized;
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||||||||
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18,572 shares issued
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27,858
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27,858
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||||||
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Additional paid-in capital
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1,412
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2,923
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|||||
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Retained earnings
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59,741
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70,172
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||||||
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89,011
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100,953
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|||||||
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Treasury stock (1,143 and 1,477 shares), at cost
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(8,627
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)
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(11,218
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)
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||||
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Total shareholders’ equity
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80,384
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89,735
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||||||
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Total liabilities and shareholders’ equity
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$
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136,794
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$
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145,800
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||||
Frozen Food Express Industries, Inc. and Subsidiaries
Consolidated Condensed Statements of Operations
(Unaudited and in thousands, except per-share amounts)
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Three Months
Ended September 30,
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Nine Months
Ended September 30,
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|||||||||||||||
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2010
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2009
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2010
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2009
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|||||||||||||
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Total operating revenue
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$
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93,870
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$
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94,500
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$
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274,669
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$
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281,602
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||||||||
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Operating expenses
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||||||||||||||||
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Salaries, wages and related expenses
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30,243
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30,306
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87,288
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94,115
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||||||||||||
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Purchased transportation
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18,132
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20,246
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55,972
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61,752
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||||||||||||
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Fuel
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18,469
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17,132
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51,782
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46,251
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||||||||||||
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Supplies and maintenance
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13,447
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11,486
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36,010
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35,874
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||||||||||||
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Revenue equipment rent
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9,353
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9,431
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27,116
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29,386
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||||||||||||
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Depreciation
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4,216
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4,303
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12,114
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13,296
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||||||||||||
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Communications and utilities
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1,287
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1,323
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3,658
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3,898
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||||||||||||
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Claims and insurance
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3,486
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3,215
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10,764
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10,934
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||||||||||||
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Operating taxes and licenses
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1,003
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1,076
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3,209
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3,656
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||||||||||||
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(Gain) loss on sale of property and equipment
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(12
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)
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177
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(592
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)
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(75
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)
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|||||||||
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Miscellaneous
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1,109
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638
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3,101
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2,367
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||||||||||||
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Total operating expenses
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100,733
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99,333
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290,422
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301,454
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||||||||||||
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Loss from operations
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(6,863
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)
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(4,833
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)
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(15,753
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)
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(19,852
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)
|
||||||||
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Interest and other (income) expense
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||||||||||||||||
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Interest income
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(15
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)
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(1
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)
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(30
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)
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(5
|
)
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||||||||
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Interest expense
|
105
|
5
|
308
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9
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||||||||||||
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Equity in earnings of limited partnership
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(246
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)
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(313
|
)
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(443
|
)
|
(472
|
)
|
||||||||
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Life insurance and other
|
(43
|
)
|
106
|
84
|
591
|
|||||||||||
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Total interest and other (income) expense
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(199
|
)
|
(203
|
)
|
(81
|
)
|
123
|
|||||||||
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Loss before income taxes
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(6,664
|
)
|
(4,630
|
)
|
(15,672
|
)
|
(19,975
|
)
|
||||||||
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Income tax benefit
|
(4,383
|
)
|
(2,070
|
)
|
(5,241
|
)
|
(6,126
|
)
|
||||||||
|
Net loss
|
$
|
(2,281
|
)
|
$
|
(2,560
|
)
|
$
|
(10,431
|
)
|
$
|
(13,849
|
)
|
||||
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Net loss per share of common stock
|
||||||||||||||||
|
Basic
|
$
|
(0.13
|
)
|
$
|
(0.15
|
)
|
$
|
(0.61
|
)
|
$
|
(0.81
|
)
|
||||
|
Diluted
|
$
|
(0.13
|
)
|
$
|
(0.15
|
)
|
$
|
(0.61
|
)
|
$
|
(0.81
|
)
|
||||
|
Weighted average shares outstanding
|
||||||||||||||||
|
Basic
|
17,384
|
17,149
|
17,223
|
17,069
|
||||||||||||
|
Diluted
|
17,384
|
17,149
|
17,223
|
17,069
|
||||||||||||
|
Dividends declared per common share
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
0.03
|
||||||||
The following table summarizes and compares the significant components of revenue and presents our operating ratio and revenue per truck per week for each of the three- and nine-month periods ended September 30:
|
Three Months
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Nine Months
|
|||||||||||||||
|
Revenue from: (a)
|
2010
|
2009
|
2010
|
2009
|
||||||||||||
|
Temperature-controlled fleet
|
$
|
29,776
|
$
|
34,684
|
$
|
85,935
|
$
|
103,630
|
||||||||
|
Dry-freight fleet
|
12,906
|
12,269
|
42,197
|
40,805
|
||||||||||||
|
Total truckload linehaul services
|
42,682
|
46,953
|
128,132
|
144,435
|
||||||||||||
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Dedicated fleets
|
4,374
|
4,749
|
12,985
|
14,970
|
||||||||||||
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Total truckload
|
47,056
|
51,702
|
141,117
|
159,405
|
||||||||||||
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Less-than-truckload linehaul services
|
29,408
|
27,429
|
82,412
|
81,105
|
||||||||||||
|
Fuel surcharges
|
14,382
|
12,492
|
41,886
|
32,065
|
||||||||||||
|
Brokerage
|
1,623
|
1,657
|
5,388
|
5,415
|
||||||||||||
|
Equipment rental
|
1,401
|
1,220
|
3,866
|
3,612
|
||||||||||||
|
Total operating revenue
|
93,870
|
94,500
|
274,669
|
281,602
|
||||||||||||
|
Operating expenses
|
100,733
|
99,333
|
290,422
|
301,454
|
||||||||||||
|
Income (loss) from operations
|
$
|
(6,863
|
)
|
$
|
(4,833
|
)
|
$
|
(15,753
|
)
|
$
|
(19,852
|
)
|
||||
|
Operating ratio (b)
|
107.3
|
%
|
105.1
|
%
|
105.7
|
%
|
107.0
|
%
|
||||||||
|
Total truckload revenue
|
$
|
47,056
|
$
|
51,702
|
$
|
141,117
|
$
|
159,405
|
||||||||
|
Less-than-truckload revenue
|
29,408
|
27,429
|
82,412
|
81,105
|
||||||||||||
|
Total linehaul and dedicated fleet revenue
|
$
|
76,464
|
$
|
79,131
|
$
|
223,529
|
$
|
240,510
|
||||||||
|
Weekly average trucks
|
1,813
|
1,954
|
1,779
|
1,978
|
||||||||||||
|
Revenue per truck per week (c)
|
$
|
3,209
|
$
|
3,081
|
$
|
3,222
|
$
|
3,118
|
||||||||
|
Computational notes:
|
|
|
Revenue and expense amounts are stated in thousands of dollars.
|
|
|
(b)
|
Operating expenses divided by total operating revenue.
|
|
(c)
|
Average daily revenue, times seven, divided by weekly average trucks.
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The following table summarizes and compares selected statistical data relating to our freight operations for each of the three- and nine-month periods ended September 30:
|
Three Months
|
Nine Months
|
|||||||||||||||
|
Truckload
|
2010
|
2009
|
2010
|
2009
|
||||||||||||
|
Total linehaul miles (a)
|
30,923
|
37,549
|
94,843
|
115,628
|
||||||||||||
|
Loaded miles (a)
|
27,294
|
33,352
|
83,805
|
104,040
|
||||||||||||
|
Empty mile ratio (b)
|
11.7
|
%
|
11.2
|
%
|
11.6
|
%
|
10.0
|
%
|
||||||||
|
Linehaul revenue per total mile (c)
|
$
|
1.38
|
$
|
1.25
|
$
|
1.35
|
$
|
1.25
|
||||||||
|
Linehaul revenue per loaded mile (d)
|
$
|
1.56
|
$
|
1.41
|
$
|
1.53
|
$
|
1.39
|
||||||||
|
Linehaul shipments (a)
|
31.0
|
39.8
|
93.5
|
117.4
|
||||||||||||
|
Loaded miles per shipment (e)
|
882
|
838
|
896
|
886
|
||||||||||||
|
LTL
|
||||||||||||||||
|
Hundredweight
|
2,126,278
|
1,890,510
|
5,990,371
|
5,630,191
|
||||||||||||
|
Shipments (a)
|
68.6
|
62.3
|
191.6
|
184.0
|
||||||||||||
|
Linehaul revenue per hundredweight (f)
|
$
|
13.83
|
$
|
14.51
|
$
|
13.76
|
$
|
14.41
|
||||||||
|
Linehaul revenue per shipment (g)
|
$
|
429
|
$
|
440
|
$
|
430
|
$
|
441
|
||||||||
|
Average weight per shipment (h)
|
3,098
|
3,035
|
3,126
|
3,060
|
||||||||||||
|
Computational notes:
|
|
|
(a)
|
Amounts are stated in thousands.
|
|
(b)
|
Total truckload linehaul miles less truckload loaded miles, divided by total truckload linehaul miles.
|
|
(c)
|
Revenue from truckload linehaul services divided by total truckload linehaul miles.
|
|
(d)
|
Revenue from truckload linehaul services divided by truckload loaded miles.
|
|
(e)
|
Total truckload loaded miles divided by number of truckload linehaul shipments.
|
|
(f)
|
LTL revenue divided by LTL hundredweight.
|
|
(g)
|
LTL revenue divided by number of LTL shipments.
|
|
(h)
|
LTL hundredweight times one hundred divided by number of shipments.
|
The following table summarizes and compares the makeup of our fleets between company-provided tractors and tractors provided by independent contractors as of September 30:
|
2010
|
2009
|
|||||||
|
Total company tractors available
|
1,507 | 1,591 | ||||||
|
Total independent contractor tractors available
|
312 | 409 | ||||||
|
Total tractors available
|
1,819 | 2,000 | ||||||
|
Total trailers available
|
3,600 | 3,780 | ||||||
CONTACT:
Frozen Food Express Industries, Inc.
Stoney M. "Mit" Stubbs, Jr., Chairman and CEO
Russell Stubbs, President
John Hickerson, Executive VP and COO
John McManama, Senior VP and CFO
(214) 630-8090
ir@ffex.net