DALLAS, Oct. 28, 2011 (GLOBE NEWSWIRE) -- Frozen Food Express Industries, Inc. (Nasdaq:FFEX) today announced its financial and operating results for the quarter ended September 30, 2011. Highlights for the quarter include:
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Total operating revenue increased $8.9 million to $102.8 million in the third quarter of 2011 compared to $93.9 million in the same period of 2010.
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Total operating revenue, net of fuel surcharges, increased 2.6% to $81.5 million, compared to $79.5 million in the third quarter of 2010.
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Net loss increased to $13.7 million in the third quarter of 2011, compared to a $2.3 million loss in the same period of 2010.
- Net loss per share of diluted common stock was ($0.77) in the third quarter of 2011 compared to ($0.13) in the same period of 2010.
For the three months ended September 30, 2011, total operating revenue increased $8.9 million to $102.8 million compared to $93.9 million in the same period of 2010. Total operating revenue, net of fuel surcharges, increased to $81.5 million, compared to $79.5 million in the same period of 2010. The net loss for the three months ended September 30, 2011 was $13.7 million, or ($0.77) per diluted share, compared to $2.3 million, or ($0.13) per diluted share in the same period of 2010.
| Revenue (in $ millions) from: | Q3-11 | Q3-10 | % Change | |
| Total Truckload | 44.5 | 47.1 | (5.5%) | |
| Less-than-truckload | 30.7 | 29.4 | 4.5% | |
| Brokerage, Logistics and Equipment Rental | 6.3 | 3.0 | 109.6% | |
| Operating Revenue (Excluding Fuel Surcharges) | 81.5 | 79.5 | 2.6% | |
| Fuel Surcharges | 21.3 | 14.4 | 48.1% | |
| Total Operating Revenue | 102.8 | 93.9 | 9.5% |
For the nine months ended September 30, 2011, total operating revenue increased 7.9%, or $21.6 million, to $296.3 million compared to $274.7 million in the same period of 2010. Total operating revenue, excluding fuel surcharges, increased 0.3% to $233.6 million from $232.8 million in the same period of 2010. Net loss for the nine months ended September 30, 2011 was $24.9 million, compared to a net loss of $10.4 million in the same period of 2010. In the nine months ended September 30, 2011, on a per share basis, the net loss equated to ($1.42) per diluted share in 2011 compared to ($0.61) per diluted share in the same period of 2010.
"While truckload pricing increased 4.5% during the third quarter, our planned reduction of dry freight services and a continued shortage of drivers resulted in fewer weekly average trucks in service and a 5.5% decline in truckload revenue," said Russell Stubbs, the Company's President and Chief Executive Officer. "Both pricing and demand for our less-than-truckload services continued to improve during the third quarter. As a result, our LTL revenue increased 4.5% during the quarter, which marks the fifth consecutive quarter of year-over-year improvement."
In the third quarter of 2011, total operating expenses increased $15.6 million, or 15.5% to $116.3 million compared to $100.7 million in the same period of 2010. The Company was able to offset the impact of increased fuel prices through a reduction in overall miles driven, combined with fuel efficiency programs and fuel surcharges. Excluding the effects of fuel, the increase in operating costs were primarily driven by increased supplies and maintenance costs related to an increase in the average age of the fleet, increasing tire costs, and costs related to the new driver academy. In addition and as previously reported, the company recorded incremental expense related to an unfavorable settlement of a claim that occurred during 2005, which was significantly higher than the reserve, and as a result, claims and insurance costs increased by $4.0 million to $7.5 million during the third quarter of 2011.
"As previously announced, we have taken steps to streamline our operations by limiting our dry-freight services to refrigerated equipment in limited lanes, and place greater management focus on continued improvement in our refrigerated truckload and LTL services. Focus in these areas, and growth in our logistics offerings, will be a key to restoring our company to meaningful profitability. At the same time, we expect our streamlining efforts to significantly reduce the average age of our fleet, which should directly address increasing maintenance costs, as well as improve fuel efficiency," concluded Mr. Stubbs.
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.
The Frozen Food Express Industries, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3209
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) | ||
| Assets |
September 30, 2011 |
December 31, 2010 |
| Current assets | ||
| Cash and cash equivalents | $ 2,148 | $ 1,203 |
| Accounts receivable, net | 46,695 | 41,921 |
| Tires on equipment in use, net | 6,999 | 5,982 |
| Deferred income taxes | 1,150 | 1,150 |
| Other current assets | 8,307 | 6,575 |
| Assets held for sale, net of accumulated depreciation | 10,818 | -- |
| Total current assets | 76,117 | 56,831 |
| Property and equipment, net | 63,507 | 72,993 |
| Other assets | 6,185 | 5,081 |
| Total assets | $ 145,809 | $ 134,905 |
| Liabilities and Shareholders' Equity | ||
| Current liabilities | ||
| Accounts payable | $ 26,986 | $ 27,443 |
| Insurance and claims accruals | 11,160 | 8,697 |
| Accrued payroll and deferred compensation | 4,959 | 5,032 |
| Accrued liabilities | 1,196 | 709 |
| Current maturities of notes payable and capital lease obligations | 1,407 | -- |
| Total current liabilities | 45,708 | 41,881 |
| Long-term debt | 28,352 | 5,689 |
| Long-term notes payable and capital lease obligations | 8,146 | -- |
| Deferred income taxes | 1,506 | 3,153 |
| Insurance and claims accruals | 7,541 | 5,373 |
| Total liabilities | 91,253 | 56,096 |
| Shareholders' equity | ||
| Common stock, $1.50 par value per share; 75,000 shares authorized; 18,572 shares issued | 27,858 | 27,858 |
| Additional paid-in capital | 188 | 1,353 |
| Accumulated other comprehensive loss | (69) | -- |
| Retained earnings | 33,332 | 58,242 |
| Total common shareholders' equity | 61,309 | 87,453 |
| Treasury stock (960 and 1,146 shares), at cost | (6,753) | (8,644) |
| Total shareholders' equity | 54,556 | 78,809 |
| Total liabilities and shareholders' equity | $ 145,809 | $ 134,905 |
| Frozen Food Express Industries, Inc. and Subsidiaries | ||||
| Consolidated Condensed Statements of Operations | ||||
| (Unaudited and in thousands, except per-share amounts) | ||||
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||
| 2011 | 2010 | 2011 | 2010 | |
| Total operating revenue | $ 102,834 | $ 93,870 | $ 296,270 | $ 274,669 |
| Operating expenses | ||||
| Salaries, wages and related expenses | 31,766 | 30,243 | 90,868 | 87,288 |
| Purchased transportation | 18,357 | 18,132 | 51,856 | 55,972 |
| Fuel | 25,854 | 18,469 | 73,654 | 51,782 |
| Supplies and maintenance | 15,710 | 13,447 | 42,561 | 36,010 |
| Revenue equipment rent | 9,200 | 9,353 | 26,553 | 27,116 |
| Depreciation | 4,827 | 4,216 | 13,875 | 12,114 |
| Communications and utilities | 1,171 | 1,287 | 3,518 | 3,658 |
| Claims and insurance | 7,476 | 3,486 | 13,204 | 10,764 |
| Operating taxes and licenses | 985 | 1,003 | 3,089 | 3,209 |
| Gain on sale of property and equipment | (661) | (12) | (1,234) | (592) |
| Miscellaneous | 1,626 | 1,109 | 4,352 | 3,101 |
| Total operating expenses | 116,311 | 100,733 | 322,296 | 290,422 |
| Loss from operations | (13,477) | (6,863) | (26,026) | (15,753) |
| Interest and other expense (income) | ||||
| Interest income | -- | (15) | (30) | |
| Interest expense | 247 | 105 | 479 | 308 |
| Equity in earnings of limited partnership | (192) | (246) | (551) | (443) |
| Life insurance and other | 63 | (43) | 432 | 84 |
| Total interest and other expense (income) | 118 | (199) | 360 | (81) |
| Loss before income taxes | (13,595) | (6,664) | (26,386) | (15,672) |
| Income tax expense (benefit) | 73 | (4,383) | (1,476) | (5,241) |
| Net loss | $ (13,668) | $ (2,281) | $ (24,910) | $ (10,431) |
| Net loss per share of common stock | ||||
| Basic | $ (0.77) | $ (0.13) | $ (1.42) | $ (0.61) |
| Diluted | $ (0.77) | $ (0.13) | $ (1.42) | $ (0.61) |
| Weighted average shares outstanding | ||||
| Basic | 17,663 | 17,384 | 17,557 | 17,223 |
| Diluted | 17,663 | 17,384 | 17,557 | 17,223 |
| 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 | Nine Months | |||||||
| Revenue from: (a) | 2011 | 2010 | 2011 | 2010 | ||||
| Temperature-controlled fleet | $ 29,875 | $ 29,776 | $ 90,231 | $ 85,935 | ||||
| Dry-freight fleet | 10,444 | 12,906 | 33,567 | 42,197 | ||||
| Total truckload linehaul services | 40,319 | 42,682 | 123,798 | 128,132 | ||||
| Dedicated fleets | 4,140 | 4,374 | 13,051 | 12,985 | ||||
| Total truckload | 44,459 | 47,056 | 136,849 | 141,117 | ||||
| Less-than-truckload linehaul services | 30,740 | 29,408 | 85,908 | 82,412 | ||||
| Fuel surcharges | 21,298 | 14,382 | 62,683 | 41,886 | ||||
| Brokerage and logistics services | 5,585 | 1,623 | 8,269 | 5,388 | ||||
| Equipment rental | 752 | 1,401 | 2,561 | 3,866 | ||||
| Total operating revenue | 102,834 | 93,870 | 296,270 | 274,669 | ||||
| Operating expenses | 116,311 | 100,733 | 322,296 | 290,422 | ||||
| Loss from operations | $ (13,477) | $ (6,863) | $ (26,026) | $ (15,753) | ||||
| Operating ratio (b) | 113.1 % | 107.3 % | 108.8 % | 105.7 % | ||||
| Total truckload revenue | $ 44,459 | $ 47,056 | $ 136,849 | $ 141,117 | ||||
| Less-than-truckload revenue | 30,740 | 29,408 | 85,908 | 82,412 | ||||
| Total linehaul and dedicated fleet revenue | $ 75,199 | $ 76,464 | $ 222,757 | $ 223,529 | ||||
| Weekly average trucks | 1,772 | 1,813 | 1,772 | 1,779 | ||||
| Revenue per truck per week (c) | $ 3,229 | $ 3,209 | $ 3,223 | $ 3,222 | ||||
| Computational notes: | ||||||||
| (a) 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. | ||||||||
| 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 | 2011 | 2010 | 2011 | 2010 | ||||
| Total linehaul miles (a) | 27,994 | 30,923 | 87,748 | 94,843 | ||||
| Loaded miles (a) | 24,809 | 27,294 | 77,889 | 83,805 | ||||
| Empty mile ratio (b) | 11.4 % | 11.7 % | 11.2 % | 11.6 % | ||||
| Linehaul revenue per total mile (c) | $ 1.44 | $ 1.38 | $ 1.41 | $ 1.35 | ||||
| Linehaul revenue per loaded mile (d) | $ 1.63 | $ 1.56 | $ 1.59 | $ 1.53 | ||||
| Linehaul shipments (a) | 27.8 | 31.0 | 86.4 | 93.5 | ||||
| Loaded miles per shipment (e) | 891 | 882 | 902 | 896 | ||||
| LTL | ||||||||
| Hundredweight | 2,128,575 | 2,126,278 | 6,194,980 | 5,990,371 | ||||
| Shipments (a) | 70.3 | 68.6 | 198.3 | 191.6 | ||||
| Linehaul revenue per hundredweight (f) | $ 14.44 | $ 13.83 | $ 13.87 | $ 13.76 | ||||
| Linehaul revenue per shipment (g) | $ 437 | $ 429 | $ 433 | $ 430 | ||||
| Average weight per shipment (h) | 3,026 | 3,098 | 3,124 | 3,126 | ||||
| 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 owner operators as of September 30: | ||||
| 2011 | 2010 | |||
| Total company tractors available | 1,613 | 1,507 | ||
| Total independent contractor tractors available | 286 | 312 | ||
| Total tractors available | 1,899 | 1,819 | ||
| Total trailers available | 3,826 | 3,600 | ||