DALLAS, Nov. 5, 2009 (GLOBE NEWSWIRE) -- Frozen Food Express Industries, Inc. (Nasdaq:FFEX) today announced its financial and operating results for the quarter ended September 30, 2009. Highlights from the third quarter include:
- Total revenues of $94.5 million
- A pre-tax loss of $4.6 million, an improvement of $1.9 million over the second quarter of 2009
- Operating expenses of $99.3 million, a reduction of $29.6 million from the third quarter of last year
- Operating ratio of 105.1% versus 106.8% for the second quarter and 109.2% for the first quarter
- No debt outstanding and cash on hand of $2.7 million
For the current quarter, revenue excluding fuel surcharges decreased 16.8% to $82.0 million from $98.6 million in the third quarter of 2008. Total revenue for the quarter declined 28.7% to $94.5 million from $132.5 million in 2008. For the nine month period ended September 30, 2009, revenue excluding fuel surcharges decreased 13.4% to $249.5 million from $288.1 million in 2008, while total year to date revenue declined 25.5% to $281.6 million from $378.2 million in 2008.
For the quarter, the Company incurred an after tax loss of $2.6 million, or $0.15 per diluted share compared to net income of $1.4 million, or $0.08 per diluted share in the third quarter of 2008. The loss was primarily driven by the current economic slump which is driving lower demand for transportation services and creating excess capacity, which in turn is placing continued downward pressure on pricing. For the nine month period ended September 30, 2009, the Company reported an after tax loss of $13.8 million, or $0.81 per diluted share versus net income of $806,000, or $0.05 per diluted share in 2008.
Despite the economic challenges and rapidly declining demand for transportation services in 2009, the Company is continuing to focus on reducing operating expenses wherever possible and maintaining tight control over its cash position. Stoney M. ("Mit") Stubbs, President and CEO commented, "2009 has undoubtedly been the toughest operating conditions our industry has seen in quite some time. We continue to experience significant revenue and profit challenges that we believe are the result of the weak economy, increased unemployment and changes in consumer buying habits. While our results reflect the negative impact of the current economic recession, we continue to place an emphasis on cost controls while focusing on customer initiatives to incrementally increase revenue and profits which has allowed our results to improve every quarter during 2009."
The Company recently entered into a two year credit agreement with Comerica Bank. Mit Stubbs continued, "This agreement allows us to partner with an institution that truly understands our business needs. And, we ended the third quarter with no amounts drawn on the facility evidencing our strong management over our balance sheet and cash flows."
The Company continues to execute on its comprehensive cost reduction initiative to reduce many of its non-variable costs. To date, the Company's non-driver headcount has been reduced approximately 190 positions or 22 percent since January 1st. Since the beginning of the year, the Company has taken additional significant action to reduce many of its operating costs including, but not limited to, suspension of its 401(k) match, reduction of standard work week hours, decrease of its recruiting efforts, early termination of equipment leases, reduction of travel expenses and streamlining existing processes.
For the quarter, asset productivity (measured by revenue per truck per week) declined 15.3% to $3,024 from $3,569 during the third quarter of 2008 primarily due to a decrease in freight rates per loaded mile for truckload services to $1.41 from $1.48, an increase in the Company's empty mile ratio, a 13.7% decline in less-than-truckload hundredweight and a decrease in less-than-truckload revenue per hundredweight from $15.04 to $14.51. Although revenue per mile and less-than-truckload revenue per hundredweight decreased from a year ago, they increased 4 cents and 30 cents, respectively, over the second quarter as we refine our pricing within our network.
Operating expenses as a percentage of operating revenue ("operating ratio") were 105.1% for the third quarter of 2009 compared with 97.3% in 2008 and 106.8% for the second quarter of 2009. Operating expenses decreased at a lower rate than revenue primarily due to higher claims and insurance costs and increased equipment rent, partially offset by decreases in fuel and purchased transportation. Fuel decreased 46.7% to $17.1 million in the third quarter of 2009 from $32.1 million in the third quarter of 2008 and decreased 47.9% to $46.3 million in the 2009 nine month period from $88.7 million in the 2008 nine month period. This improvement was primarily due to significantly lower fuel prices and fewer miles driven in the 2009 periods and our focus to reduce fuel cost through improved miles-per-gallon initiatives.
Purchased transportation decreased 31.4% to $20.2 million in the third quarter of 2009 from $29.5 million in the third quarter of 2008 and decreased 33.7% to $61.8 million in the 2009 nine month period from $93.1 million in the 2008 nine month period primarily as a result of a decrease in miles driven by, and lower fuel surcharges paid to, our independent contractors. Revenue equipment rent increased 4.7% to $9.4 million in the third quarter of 2009 from $9.0 million in the third quarter of 2008 and increased 14.2% to $29.4 million for the 2009 nine month period primarily due to an increase in the number of leased tractors as the Company increased its mix of leased versus owned equipment.
Despite the third quarter operating loss, the Company continues to be in a strong cash position with no borrowings outstanding under its revolving credit agreement as of the end of the quarter. For the nine months ending September 30, 2009, the Company generated cash flows from operations of $6.5 million and maintains a strong working capital position. At September 30, 2009 the Company had $2.7 million in cash and cash equivalents, $92.3 million in shareholders' equity and no outstanding debt.
Mr. Stubbs concluded, "We are taking every conceivable action to control costs and implement sales initiatives to drive incremental revenue during this severe economic recession, while at the same time managing our cash position to ensure liquidity. We are taking a very aggressive approach in managing our balance sheet and working capital. We have ended each quarter this year with no amounts due on our revolver and we believe we will be well positioned in the future when the overall economy and the transportation industry rebounds."
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 services, as well as dedicated fleets to our customers. Additional information about Frozen Food Express Industries, Inc. can be found at the http://www.ffex.net. To join our email alert list, please click on the following link: http://financials.ffex.net/alerts.cfm. FFE'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 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. 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)
Sept. 30, Dec. 31,
Assets 2009 2008
--------- ---------
Current assets
Cash and cash equivalents $ 2,670 $ 1,308
Accounts receivable, net 43,622 52,749
Tires on equipment in use, net 5,632 5,425
Deferred income taxes 1,491 2,666
Property and equipment held for sale 1,019 --
Other current assets 9,075 10,822
--------- ---------
Total current assets 63,509 72,970
Property and equipment, net 74,555 83,394
Other assets 5,058 5,822
--------- ---------
Total assets $ 143,122 $ 162,186
========= =========
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable $ 20,379 $ 21,148
Insurance and claims accruals 9,628 7,736
Accrued payroll and deferred compensation 5,367 4,396
Accrued liabilities 1,716 1,760
--------- ---------
Total current liabilities 37,090 35,040
Long-term debt -- --
Deferred income taxes 6,585 14,235
Insurance and claims accruals 7,176 6,460
--------- ---------
Total liabilities 50,851 55,735
--------- ---------
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 2,625 5,412
Retained earnings 72,739 87,103
--------- ---------
103,222 120,373
Treasury stock (1,441 and 1,813 shares), at
cost (10,951) (13,922)
--------- ---------
Total shareholders' equity 92,271 106,451
--------- ---------
Total liabilities and shareholders' equity $ 143,122 $ 162,186
========= =========
Frozen Food Express Industries, Inc. and Subsidiaries
Consolidated Condensed Statements of Operations
(Unaudited and in thousands, except per-share amounts)
Three Months Nine Months
Ended September 30, Ended September 30,
-------------------- --------------------
2009 2008 2009 2008
--------- --------- --------- ---------
Revenue $ 94,500 $ 132,451 $ 281,602 $ 378,206
--------- --------- --------- ---------
Operating expenses
Salaries, wages and
related expenses 30,306 33,693 94,115 96,524
Purchased transportation 20,246 29,517 61,752 93,141
Fuel 17,132 32,130 46,251 88,694
Supplies and maintenance 11,486 14,047 35,874 39,864
Revenue equipment rent 9,431 9,005 29,386 25,734
Depreciation 4,303 4,684 13,296 14,183
Claims and insurance 3,215 2,733 10,934 9,001
Communications and
utilities 1,323 1,410 3,898 3,636
Operating taxes and
licenses 1,076 1,163 3,656 3,431
Loss (gain) on sale of
property and equipment 177 (491) (75) (1,096)
Miscellaneous 638 1,000 2,367 3,234
--------- --------- --------- ---------
Total operating
expenses 99,333 128,891 301,454 376,346
--------- --------- --------- ---------
Income (loss) from
operations (4,833) 3,560 (19,852) 1,860
--------- --------- --------- ---------
Interest and other
(income) expense
Interest income (1) (12) (5) (66)
Interest expense 5 74 9 110
Equity in earnings of
limited partnership (313) (200) (472) (511)
Other 106 200 591 (108)
--------- --------- --------- ---------
Total interest and
other (income) expense (203) 62 123 (575)
--------- --------- --------- ---------
Pre-tax income (loss) (4,630) 3,498 (19,975) 2,435
Income tax (benefit)
expense (2,070) 2,141 (6,126) 1,629
--------- --------- --------- ---------
Net income (loss) $ (2,560) $ 1,357 $ (13,849) $ 806
========= ========= ========= =========
Net income (loss) per
share of common stock
Basic $ (0.15) $ 0.08 $ (0.81) $ 0.05
========= ========= ========= =========
Diluted $ (0.15) $ 0.08 $ (0.81) $ 0.05
========= ========= ========= =========
Weighted average shares
outstanding
Basic 17,149 16,737 17,069 16,699
========= ========= ========= =========
Diluted 17,149 17,027 17,069 16,998
========= ========= ========= =========
Dividends declared per
common share $ -- $ 0.03 $ 0.03 $ 0.09
========= ========= ========= =========
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) 2009 2008 2009 2008
--------- --------- --------- ---------
Temperature-controlled
fleet $ 34,684 $ 37,626 $ 103,630 $ 108,854
Dry-freight fleet 12,269 16,921 40,805 53,107
--------- --------- --------- ---------
Total truckload
linehaul services 46,953 54,547 144,435 161,961
Dedicated fleets 4,749 6,859 14,970 18,528
--------- --------- --------- ---------
Total truckload 51,702 61,406 159,405 180,489
Less-than-truckload
linehaul services 27,429 32,922 81,105 92,947
Fuel surcharges 12,492 33,864 32,065 90,124
Brokerage 1,657 3,128 5,415 10,629
Equipment rental 1,220 1,131 3,612 4,017
--------- --------- --------- ---------
Total revenue 94,500 132,451 281,602 378,206
--------- --------- --------- ---------
Operating expenses 99,333 128,891 301,454 376,346
--------- --------- --------- ---------
Income (loss) from
freight operations $ (4,833) $ 3,560 $ (19,852) $ 1,860
========= ========= ========= =========
Operating ratio (b) 105.1% 97.3% 107.0% 99.5%
========= ========= ========= =========
Total truckload revenue $ 51,702 $ 61,406 $ 159,405 $ 180,489
Less-than-truckload
revenue 27,429 32,922 81,105 92,947
--------- --------- --------- ---------
Total linehaul and
dedicated fleet
revenue $ 79,131 $ 94,328 $ 240,510 $ 273,436
========= ========= ========= =========
Weekly average total
trucks 1,991 2,011 2,024 2,029
========= ========= ========= =========
Revenue per truck per
week (c) $ 3,024 $ 3,569 $ 3,047 $ 3,443
========= ========= ========= =========
Computational notes:
(a) Revenue and expense amounts are stated in thousands of dollars.
(b) Operating expenses divided by total 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 2009 2008 2009 2008
---------- ---------- ---------- ----------
Total linehaul miles (a) 37,549 40,736 115,628 123,124
Loaded miles (a) 33,352 36,926 104,040 111,989
Empty mile ratio (b) 11.2% 9.4% 10.0% 9.0%
Linehaul revenue per
total mile (c) $ 1.25 $ 1.34 $ 1.25 $ 1.32
Linehaul revenue per
loaded mile (d) $ 1.41 $ 1.48 $ 1.39 $ 1.45
Linehaul shipments (a) 39.8 39.0 117.4 115.1
Loaded miles per
shipment (e) 838 946 886 973
LTL
Hundredweight 1,890,510 2,189,626 5,630,191 6,397,453
Shipments (a) 62.3 71.9 184.0 205.4
Linehaul revenue per
hundredweight (f) $ 14.51 $ 15.04 14.41 14.53
Linehaul revenue per
shipment (g) $ 440 $ 458 $ 441 $ 453
Average weight per
shipment (h) 3,035 3,046 3,060 3,115
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:
2009 2008
------------------------ -------------------------- -------------
Total company-provided 1,591 1,614
Total owner-operator 409 402
------------- -------------
Total tractors 2,000 2,016
============= =============
Total trailers 3,780 4,364
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