DALLAS, Aug. 3, 2010 (GLOBE NEWSWIRE) -- Frozen Food Express Industries, Inc. (Nasdaq:FFEX) announced its financial and operating results for the quarter ended June 30, 2010. Highlights for the quarter include:
- Total operating revenue of $95.0 million
- 49.7% improvement in pre-tax results with a loss of $3.3 million compared to a $6.6 million loss in second quarter 2009
- 3.1% reduction in total operating expenses to $98.3 million, representing a reduction of $3.1 million from the second quarter of 2009
- Operating ratio improvement of 3.1% compared to the second quarter of 2009
- 15.3% improvement in truckload revenue per laden mile
- No debt outstanding and cash on hand of $6.6 million
Stoney M. ("Mit") Stubbs, the Company's Chairman and Chief Executive Officer commented, "Through the latter portion of 2009 and into 2010, we placed a priority on service excellence, targeted pricing programs and asset utilization. We continue this approach, as it has shown results in improved pricing yield in our truckload service and increased shipment count and tonnage in our 'LTL' (less-than-truckload) service. As carriers continued to exit the marketplace in late 2009 and early 2010, a marginal uptick in demand has put pressure on overall capacity, especially in the truckload sector, and this has had a pronounced impact on pricing. Increased shipper demand, shrinking capacity and improving freight yield allowed us to regain our momentum and improve our pre-tax results by $2.4 million, or 41.9%, compared to the first quarter of 2010."
For the second quarter of 2010, total operating revenue, excluding fuel surcharges, increased 9.1% to $80.0 million compared to $73.3 million in the first quarter of 2010. This was a decrease of 5.3% compared to $84.5 million in the second quarter of 2009. The pre-tax loss for the current quarter was $3.3 million, an improvement of 49.7% compared with 2009. The net loss for the current quarter was $4.4 million, an improvement of 14.3% compared to 2009. On a per share basis, the loss equated to ($0.26) per diluted share compared to ($0.30) per diluted share in 2009.
For the six months ended June 30, 2010, total operating revenue decreased 3.4%, or $6.3 million, to $180.8 million from $187.1 million in 2009, while total operating revenue, excluding fuel surcharges, decreased 8.5% to $153.3 million from $167.5 million. The pre-tax loss for the six months ended June 30, 2010 was $9.0 million, an improvement of $6.3 million, or 41.3%, compared to $15.3 million in 2009. On a per share basis, the loss equated to ($0.48) per diluted share in 2010 compared to ($0.66) per diluted share in 2009.
Asset productivity (measured by revenue per truck per week) increased during the second quarter of 2010 by 4.6% to $3,336 from $3,190 in the same period of the last year, primarily due to an improvement in truckload revenue per loaded mile to $1.58 from $1.37 last year, partially offset by a 10.3% decrease in the average weekly trucks in service and an increase in the Company's empty mile ratio to 12.4% from 9.3%. Russell Stubbs, the Company's President, commented, "We made the decision in 2009 to park a portion of our existing tractor fleet, and the current environment has allowed us to begin putting this equipment back in service as we have seen a willingness from shippers to allow pricing adjustments in order to ensure available capacity improves in the second half of 2010. As drivers return to the work force, we will be able to profitably increase our fleet to traditional levels and supply the service our customers require."
Total operating expenses for the quarter declined $3.1 million, or 3.1%, while total operating revenue grew 0.1%. Although revenue was up slightly, total operating expenses decreased primarily due to lower salaries, wages and related expenses, purchased transportation and revenue equipment rent, partially offset by higher fuel costs and insurance costs and claims. Continuing to benefit from the impact of cost cutting initiatives begun in 2009, salaries, wages and related expenses decreased 9.7% to $28.9 million from $32.0 million in 2009, while purchased transportation costs decreased 5.8% to $19.7 million from $20.9 million in 2009. Revenue equipment rent decreased 11.7% to $9.0 million from $10.2 million in 2009, mainly due to a decrease in the average number of tractors under lease for the three months ended June 30, 2010. Fuel costs increased 13.8% primarily due to rising prices to $17.5 million from $15.4 million in 2009.
For the six month period ending June 30, 2010, salaries, wages and related expenses decreased 10.6% to $57.0 million from $63.8 million in 2009, while purchased transportation costs decreased 8.8% to $37.8 million from $41.5 million in 2009. Revenue equipment rent decreased 11.0% to $17.8 million from $20.0 million in 2009, mainly due to a decrease in the average number of tractors under lease for the six months ended June 30, 2010. Fuel costs increased 14.4%, primarily due to rising prices to $33.3 million from $29.1 million in 2009.
Current quarter operating expenses as a percentage of total operating revenue ("operating ratio") were 103.5% compared with 106.8% in 2009. For the six month period, the operating ratio was 104.9% compared with 108.0% for 2009, an improvement of 2.9%. Russell Stubbs continues, "Our cost savings initiatives implemented in 2009 and 2010 continue to provide positive impact and while we are pleased to see a more favorable pricing environment and some improvement in demand, we will continue our focus on managing cost inefficiencies out of the organization." Mr. Stubbs added, "Our employees' ongoing commitment to service excellence provides the foundation for the improved pricing while the entire organization continues to strive for efficiency in all phases of the business."
The Company remains in a strong cash position with no borrowings outstanding under its revolving credit agreement. For the six months ended June 30, 2010, the Company generated net cash flows of $2.3 million from operations and investing activities. At June 30, 2010, the Company had a $6.6 million balance in cash and cash equivalents, $82.6 million in shareholders' equity and no outstanding debt.
Mit Stubbs concluded, "We're pleased the increased demand we experienced in the latter part of the first quarter continued into the second quarter. Although we are experiencing increased demand and improved pricing for our services, we will continue to manage carefully and not take our eye off improving asset utilization and cost control. While we have a ways to go, continued momentum in these areas should combine to provide improved results."
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.
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Frozen Food Express Industries, Inc. and Subsidiaries Consolidated Condensed Balance Sheets (Unaudited and in thousands, except per-share amounts) |
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| Assets |
June 30, 2010 |
December 31, 2009 |
||
| Current assets | ||||
| Cash and cash equivalents | $ 6,555 | $ 3,667 | ||
| Accounts receivable, net | 41,624 | 41,318 | ||
| Tires on equipment in use, net | 5,309 | 5,592 | ||
| Deferred income taxes | 2,169 | 1,532 | ||
| Property held for sale | 1,019 | 1,019 | ||
| Other current assets | 7,953 | 12,706 | ||
| Total current assets | 64,629 | 65,834 | ||
| Property and equipment, net | 67,776 | 74,845 | ||
| Other assets | 4,498 | 5,121 | ||
| Total assets | $ 136,903 | $ 145,800 | ||
| Liabilities and Shareholders' Equity | ||||
| Current liabilities | ||||
| Accounts payable | $ 22,694 | $ 23,773 | ||
| Insurance and claims accruals | 9,480 | 10,119 | ||
| Accrued payroll and deferred compensation | 6,144 | 3,837 | ||
| Accrued liabilities | 1,646 | 1,953 | ||
| Total current liabilities | 39,964 | 39,682 | ||
| Deferred income taxes | 8,439 | 9,009 | ||
| Insurance and claims accruals | 5,867 | 7,374 | ||
| Total liabilities | 54,270 | 56,065 | ||
| 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 | 2,064 | 2,923 | ||
| Retained earnings | 62,022 | 70,172 | ||
| 91,944 | 100,953 | |||
| Treasury stock (1,233 and 1,477 shares), at cost | (9,311) | (11,218) | ||
| Total shareholders' equity | 82,633 | 89,735 | ||
| Total liabilities and shareholders' equity | $ 136,903 | $ 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 | Six Months | |||
| Ended June 30, | Ended June 30, | |||
| 2010 | 2009 | 2010 | 2009 | |
| Total operating revenue | $ 94,957 | $ 94,895 | $ 180,799 | $ 187,102 |
| Operating expenses | ||||
| Salaries, wages and related expenses | 28,936 | 32,046 | 57,045 | 63,809 |
| Purchased transportation | 19,723 | 20,938 | 37,840 | 41,506 |
| Fuel | 17,469 | 15,350 | 33,313 | 29,119 |
| Supplies and maintenance | 11,950 | 12,135 | 22,563 | 24,388 |
| Revenue equipment rent | 8,982 | 10,172 | 17,763 | 19,955 |
| Depreciation | 3,911 | 4,403 | 7,898 | 8,993 |
| Communications and utilities | 1,197 | 1,307 | 2,371 | 2,575 |
| Claims and insurance | 4,444 | 3,230 | 7,278 | 7,719 |
| Operating taxes and licenses | 1,109 | 1,290 | 2,206 | 2,580 |
| Gain on sale of property and equipment | (249) | (118) | (580) | (252) |
| Miscellaneous | 813 | 640 | 1,992 | 1,729 |
| Total operating expenses | 98,285 | 101,393 | 189,689 | 202,121 |
| Loss from operations | (3,328) | (6,498) | (8,890) | (15,019) |
| Interest and other (income) expense | ||||
| Interest income | (4) | -- | (15) | (4) |
| Interest expense | 161 | -- | 203 | 4 |
| Equity in earnings of limited partnership | (157) | (103) | (197) | (159) |
| Life insurance and other | (19) | 177 | 127 | 485 |
| Total interest and other (income) expense | (19) | 74 | 118 | 326 |
| Loss before income taxes | (3,309) | (6,572) | (9,008) | (15,345) |
| Income tax expense (benefit) | 1,118 | (1,404) | (858) | (4,056) |
| Net loss | $ (4,427) | $ (5,168) | $ (8,150) | $ (11,289) |
| Net loss per share of common stock | ||||
| Basic | $ (0.26) | $ (0.30) | $ (0.48) | $ (0.66) |
| Diluted | $ (0.26) | $ (0.30) | $ (0.48) | $ (0.66) |
| Weighted average shares outstanding | ||||
| Basic | 17,190 | 17,146 | 17,141 | 17,028 |
| Diluted | 17,190 | 17,146 | 17,141 | 17,028 |
| 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 six month periods ended June 30:
| Three Months | Six Months | |||
| Revenue from (a) | 2010 | 2009 | 2010 | 2009 |
| Temperature-controlled services | $ 30,736 | $ 36,360 | $ 56,159 | $ 68,946 |
| Dry-freight services | 14,023 | 14,002 | 29,291 | 28,536 |
| Total truckload linehaul services | 44,759 | 50,362 | 85,450 | 97,482 |
| Dedicated fleets | 4,386 | 4,935 | 8,611 | 10,221 |
| Total truckload | 49,145 | 55,297 | 94,061 | 107,703 |
| Less-than-truckload linehaul services | 27,737 | 26,643 | 53,004 | 53,676 |
| Fuel surcharges | 14,970 | 10,416 | 27,504 | 19,573 |
| Brokerage | 1,754 | 1,317 | 3,765 | 3,758 |
| Equipment rental | 1,351 | 1,222 | 2,465 | 2,392 |
| Total operating revenue | 94,957 | 94,895 | 180,799 | 187,102 |
| Operating expenses | 98,285 | 101,393 | 189,689 | 202,121 |
| Loss from freight operations | $ (3,328) | $ (6,498) | $ (8,890) | $ (15,019) |
| Operating ratio (b) | 103.5% | 106.8% | 104.9% | 108.0% |
| Total truckload revenue | $ 49,145 | $ 55,297 | $ 94,061 | $ 107,703 |
| Less-than-truckload revenue | 27,737 | 26,643 | 53,004 | 53,676 |
| Total linehaul and dedicated fleet revenue | $ 76,882 | $ 81,940 | $ 147,065 | $ 161,379 |
| Weekly average trucks in service | 1,773 | 1,976 | 1,762 | 1,987 |
| Revenue per truck per week (c) | $ 3,336 | $ 3,190 | $ 3,228 | $ 3,141 |
| 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 in service. | ||||
The following table summarizes and compares selected statistical data relating to our freight operations for each of the three and six month periods ended June 30:
| Three Months | Six Months | |||
| Truckload | 2010 | 2009 | 2010 | 2009 |
| Total linehaul miles (a) | 32,290 | 40,623 | 63,920 | 78,078 |
| Loaded miles (a) | 28,273 | 36,833 | 56,511 | 70,688 |
| Empty mile ratio (b) | 12.4% | 9.3% | 11.6% | 9.5% |
| Linehaul revenue per total mile (c) | $ 1.39 | $ 1.24 | $ 1.34 | $ 1.25 |
| Linehaul revenue per loaded mile (d) | $ 1.58 | $ 1.37 | $ 1.51 | $ 1.38 |
| Linehaul shipments (a) | 31.9 | 41.0 | 62.6 | 77.6 |
| Loaded miles per shipment (e) | 886 | 898 | 903 | 911 |
| LTL | ||||
| Hundredweight | 2,044,415 | 1,875,428 | 3,864,093 | 3,739,681 |
| Shipments (a) | 63.9 | 60.1 | 123.0 | 121.7 |
| Linehaul revenue per hundredweight (f) | $ 13.57 | $ 14.21 | $ 13.72 | $ 14.35 |
| Linehaul revenue per shipment (g) | $ 434 | $ 443 | $ 431 | $ 441 |
| Average weight per shipment (h) | 3,201 | 3,119 | 3,142 | 3,073 |
| 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 June 30:
| 2010 | 2009 | |
| Total company tractors available | 1,527 | 1,551 |
| Total owner-operator tractors available | 362 | 443 |
| Total Tractors available | 1,889 | 1,994 |
| Total Trailers available | 3,511 | 3,932 |