Frozen Food Express Industries, Inc. Announces Second Quarter 2011 Financial Results


DALLAS, July 28, 2011 (GLOBE NEWSWIRE) -- Frozen Food Express Industries, Inc. (Nasdaq:FFEX) today announced its financial and operating results for the quarter ended June 30, 2011. Highlights for the quarter include:

  • Total operating revenue increased $6.4 million to $101.3 million in the second quarter of 2011 compared to $95.0 million in the same period of 2010.
  • Total operating revenue, net of fuel surcharges, decreased slightly to $78.6 million, compared to $80.0 million during the second quarter of 2010.
  • Net loss decreased to $3.3 million loss during the second quarter of 2011, compared to a $4.4 million loss in the same period of 2010.
  • Net loss per share of diluted common stock was ($0.19) in the second quarter of 2011 compared to ($0.26) in the same period of 2010.

For the second quarter ended June 30, 2011, total operating revenue increased $6.4 million to $101.3 million compared to $95.0 million in the same period of last year. Total operating revenue, net of fuel surcharges, decreased slightly to $78.6 million, compared to $80.0 million in the same period of 2010. The net loss for the second quarter ended June 30, 2011 was $3.3 million, or ($0.19) per diluted share, compared to $4.4 million, or ($0.26) per diluted share in the same quarter a year ago.

Total Operating Revenue (in $000s) from: Q211 Q210 % Change
Total Truckload 47,249 49,145 (3.9%)
Less-than-truckload 28,967 27,737 4.4%
Brokerage and Equipment Rental 2,411 3,105 (22.4%)
Total Operating Revenue (Excluding Fuel Surcharges) 78,627 79,987 (1.7%)
       
 Fuel Surcharges 22,702 14,970 51.6%
Total Operating Revenue 101,329 94,957 6.7%

For the six months ended June 30, 2011, total operating revenue increased 7.0%, or $12.6 million, to $193.4 million compared to $180.8 million in the same period of 2010. Total operating revenue, excluding fuel surcharges, decreased 0.8% to $152.1 million from $153.3 million during the same period a year ago. Net loss for the six months ended June 30, 2011 was $11.2 million, compared to a net loss of $8.2 million in the same period of 2010. In the first half of 2011, on a per share basis, the net loss equated to ($0.64) per diluted share in 2011 compared to ($0.48) per diluted share in the same period 2010.

"Truckload revenue during the second quarter of 2011 declined 3.9%, as a 1.9% increase in price was not sufficient to offset a 6.5% decline in loaded miles. We continue to be challenged by the driver shortage which is reflected in our decline in loaded miles as we averaged fifteen less trucks in service during the quarter. We have continued to divert drivers from our dry fleet to support our temperature controlled fleet which is the backbone of our services," said Russell Stubbs, the Company's President and Chief Executive Officer. "Pricing for our less-than-truckload services stabilized during the second quarter and demand continues to improve. As a result, our LTL revenue increased 4.4% during the quarter, which marks the fourth consecutive quarter of year-over-year improvement."

During the second quarter of 2011, total operating expenses increased $6.8 million, or 6.9% to $105.1 million compared to $98.3 million during the second quarter of 2010. "Despite a 32% year-over-year increase in average U.S. diesel fuel prices, we were able to offset all but $132,000 of increased fuel costs with greater efficiencies and fuel surcharges," continued Mr. Stubbs. "Excluding the effects of fuel, operating costs were negatively affected by approximately $2.3 million of increased supplies and maintenance costs related to an increase in the average age of the fleet, increasing tire costs, and costs related to our new driving academy."

"Demand and pricing for our refrigerated truckload and LTL services continues to improve. However, like others in our industry, our growth in TL services remains constrained by an industry-wide shortage of qualified drivers. Like many in the trucking industry, we are impacted by the continued exodus of owner operators from the industry. This has hit FFE, and the industry, harder than expected. On the positive side, our newly-opened FFE Driver Academy continued to gain enrollment during the second quarter and helped to partially offset the pace of decline in owner operator trucks. We expect the Driver Academy to continue to provide new, highly motivated and skilled drivers to supplement our driving force which will allow us to provide additional capacity and grow our revenue base. We continue to be concerned about fuel costs and the rising costs of equipment and equipment related repairs and supplies. We are taking steps to control these costs and feel certain that through these efforts and the revenue gains that will come from a growing driver force, we will return to profitability," 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, except per-share amounts)
     
Assets June 30,
2011
December 31,
2010
Current assets    
Cash and cash equivalents  $ 632  $ 1,203
Accounts receivable, net 44,756 41,921
Tires on equipment in use, net 6,704 5,982
Deferred income taxes 1,150 1,150
Other current assets 4,582 6,575
Total current assets 57,824 56,831
     
Property and equipment, net 69,221 72,993
Other assets 4,990 5,081
Total assets $132,035  $ 134,905
     
Liabilities and Shareholders' Equity    
Current liabilities    
Accounts payable  $ 28,290  $ 27,443
Insurance and claims accruals 8,733 8,697
Accrued payroll and deferred compensation 4,286 5,032
Accrued liabilities 780 709
Total current liabilities 42,089 41,881
     
Long-term debt  15,021 5,689
Deferred income taxes 1,491 3,153
Insurance and claims accruals 5,375 5,373
Total liabilities 63,976 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 143 1,353
Accumulated other comprehensive loss (69) --
Retained earnings 47,000 58,242
Total common shareholders' equity 74,932 87,453
Treasury stock (974 and 1,146 shares), at cost (6,873) (8,644)
Total shareholders' equity 68,059 78,809
Total liabilities and shareholders' equity  $ 132,035  $ 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 June 30,
Six Months
Ended June 30,
  2011 2010 2011 2010
Total operating revenue  $ 101,329  $ 94,957  $ 193,436  $ 180,799
Operating expenses        
Salaries, wages and related expenses 29,642 28,936 59,102 57,045
Purchased transportation 17,283 19,723 33,499 37,840
Fuel 25,333 17,469 47,800 33,313
Supplies and maintenance 14,229 11,950 26,851 22,563
Revenue equipment rent 8,749 8,982 17,353 17,763
Depreciation 4,552 3,911 9,048 7,898
Communications and utilities 1,048 1,197 2,347 2,371
Claims and insurance 2,419 4,444 5,728 7,278
Operating taxes and licenses 1,069 1,109 2,104 2,206
Gain on sale of property and equipment (574) (249) (573) (580)
Miscellaneous  1,346 813 2,726 1,992
 Total operating expenses 105,096 98,285 205,985 189,689
Loss from operations (3,767) (3,328) (12,549) (8,890)
Interest and other expense (income)        
Interest income 2 (4) -- (15)
Interest expense 136 161 233 203
Equity in earnings of limited partnership (260) (157) (359) (197)
Life insurance and other 269 (19) 368 127
 Total interest and other expense (income) 147 (19) 242 118
Loss before income taxes (3,914) (3,309) (12,791) (9,008)
Income tax (benefit) expense  (609) 1,118 (1,549) (858)
Net loss  $ (3,305)  $ (4,427)  $ (11,242)  $ (8,150)
         
Net loss per share of common stock        
Basic  $ (0.19)  $ (0.26)  $ (0.64)  $ (0.48)
Diluted  $ (0.19)  $ (0.26)  $ (0.64)  $ (0.48)
Weighted average shares outstanding        
Basic 17,534 17,190 17,490 17,141
Diluted 17,534 17,190 17,490 17,141
         
 
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) 2011 2010 2011 2010
Temperature-controlled services  $ 30,940  $ 30,736  $ 60,356  $ 56,159
Dry-freight services 11,703 14,023 23,123 29,291
Total truckload linehaul services 42,643 44,759 83,479 85,450
Dedicated fleets 4,606 4,386 8,911 8,611
Total truckload 47,249 49,145 92,390 94,061
Less-than-truckload linehaul services 28,967 27,737 55,168 53,004
Fuel surcharges 22,702 14,970 41,385 27,504
Brokerage 1,546 1,754 2,684 3,765
Equipment rental  865 1,351 1,809 2,465
Total operating revenue 101,329 94,957 193,436 180,799
         
Operating expenses  105,096 98,285 205,985 189,689
Loss from freight operations  $ (3,767)  $ (3,328)  $ (12,549)  $ (8,890)
Operating ratio (b) 103.7% 103.5% 106.5% 104.9%
         
Total truckload revenue  $ 47,249  $ 49,145  $ 92,390  $ 94,061
Less-than-truckload revenue 28,967 27,737 55,168 53,004
Total linehaul and dedicated fleet revenue   $ 76,216  $ 76,882  $ 147,558  $ 147,065
         
Weekly average trucks in service 1,758 1,773 1,765 1,762
Revenue per truck per week (c)  $ 3,335  $ 3,336  $ 3,233  $ 3,228
         
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 2011 2010 2011 2010
 Total linehaul miles (a) 29,863 32,290 59,754 63,920
 Loaded miles (a) 26,444 28,273 53,080 56,511
 Empty mile ratio (b) 11.4% 12.4% 11.2% 11.6%
 Linehaul revenue per total mile (c)  $ 1.43  $ 1.39  $ 1.40  $ 1.34
 Linehaul revenue per loaded mile (d)  $ 1.61  $ 1.58  $ 1.57  $ 1.51
 Linehaul shipments (a) 29.3 31.9 58.5 62.6
 Loaded miles per shipment (e) 902 886 907 903
LTL          
 Hundredweight  2,132,554 2,044,415 4,066,405 3,864,093
 Shipments (a) 67.0 63.9 128.0 123.0
 Linehaul revenue-per-hundredweight (f)  $ 13.58  $ 13.57  $ 13.57  $ 13.72
 Linehaul revenue per shipment (g)  $ 432  $ 434  $ 431  $ 431
 Average weight per shipment (h) 3,182 3,201 3,177 3,142
         
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:
     
  2011 2010
Total company tractors available 1,576 1,527
Total owner-operator tractors available 264 362
Total Tractors available 1,840 1,889
Total Trailers available 3,516 3,511


            

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