DALLAS, Nov. 14, 2012 (GLOBE NEWSWIRE) -- Frozen Food Express Industries, Inc. (Nasdaq:FFEX) today announced its financial and operating results for the quarter ended September 30, 2012. A summary of third quarter of 2012 financial results include:
- Total operating revenue decreased 7.0% to $95.6 million versus the same period of 2011, primarily due to the expected decline in dry freight services revenue, related to our decision to exit dry van services in the third quarter of 2011.
- Continued improvement in operating ratio versus the same period of 2011 despite significant economic headwinds.
- Revenue per truck per week increased 8.4% to $3,499 compared to $3,229 in the same period of 2011.
- Improved operating loss of $5.3 million versus a loss of $13.5 million in the same period of 2011.
- Net loss per share of diluted common stock was ($0.32), compared to a net loss per diluted common share of ($0.77) in the same period of 2011.
"We are excited to show strong improvement over the third quarter of 2011, led by continued tonnage and yield growth in our LTL services," said Russell Stubbs, the Company's President and Chief Executive Officer. "Nevertheless, after the strong operating results of the second quarter, we expected a better third quarter. Our third quarter results were negatively impacted by increasing fuel prices, reduced truckload volumes caused by a weak economy, higher insurance and claims expenses, and a decline in oil drilling activity that cut our water transport revenue significantly versus the second quarter. As was the case with many of our competitors, the steadily increasing fuel prices in the third quarter didn't allow our fuel surcharge revenue to offset the increases, which had a negative impact of $1.9 million versus the second quarter of this year. Additionally, insurance and claims expenses increased $1.9 million versus the second quarter, but we are having an improved year in this area and we are pleased our insurance and claims expenses are trending better than we have experienced in the prior five years," Stubbs said.
Mr. Stubbs continued, stating, "I was disappointed with the decline in our water transport revenue, but it has proven to be somewhat volatile and difficult to track on a quarterly basis. However, drilling activity has picked up in the first few weeks of the fourth quarter, and on an annual basis we are satisfied with the return we are achieving from this investment. Truckload volume is also showing improvement which is a positive sign for the fourth quarter. We feel that our improvement plan for 2012 is proceeding despite the challenges we have outlined above. Our truckload fleet age has dropped from 2.7 years old to 1.8 years old over the last 12 months. We have decreased non-driver headcount by 12%, we continue to improve our yield and equipment productivity, and we are continuing to seek out and grow higher margin revenue accounts. As we continue on this path we should see improvement in the fourth quarter of this year."
Outlook
"As a result of multiple factors, our results for the third quarter and forecasted results for the remainder of 2012 are below the expectations we set earlier in the year. In the third quarter, we experienced an unexpected steep decline in activity in our water transport business and a sharp increase in fuel prices. Also, while we continue to experience a significant improvement in our LTL business, the truckload market has softened somewhat. While we are confident that the structural changes we have made will restore the Company to profitability and we continue to expect significant improvement in year-over-year results, near-term market pressures have slowed the pace of our recovery," 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 on a non-dedicated fleet basis. We also provide bulk tank water transportation, 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 continued growth of hydraulic fracturing techniques for oil and gas drilling in West Texas, 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 |
September 30, 2012 |
December 31, 2011 |
| Current assets | ||
| Cash and cash equivalents | $ 1,448 | $ 1,048 |
| Accounts receivable, net | 42,410 | 43,450 |
| Tires on equipment in use, net | 7,705 | 5,968 |
| Equipment held for sale | 1,898 | 3,437 |
| Other current assets | 7,970 | 7,868 |
| Total current assets | 61,431 | 61,771 |
| Property and equipment, net | 46,630 | 57,757 |
| Deferred income taxes | 1,009 | 1,009 |
| Other assets | 5,862 | 5,867 |
| Total assets | $ 114,932 | $ 126,404 |
| Liabilities and Shareholders' Equity | ||
| Current liabilities | ||
| Accounts payable | $ 27,898 | $ 30,339 |
| Insurance and claims accruals | 9,125 | 10,667 |
| Accrued payroll and deferred compensation | 4,711 | 4,047 |
| Accrued liabilities | 1,428 | 1,251 |
| Current maturities of notes payable and capital lease obligations | 2,060 | 1,936 |
| Deferred income taxes | 690 | 690 |
| Total current liabilities | 45,912 | 48,930 |
| Borrowings under credit facility | 23,899 | 19,888 |
| Long-term notes payable and capital lease obligations | 7,362 | 8,901 |
| Insurance and claims accruals | 4,848 | 5,783 |
| Total liabilities | 82,021 | 83,502 |
| 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 | 914 | 427 |
| Accumulated other comprehensive loss | (62) | (67) |
| Retained earnings | 11,331 | 21,572 |
| Total common shareholders' equity | 40,041 | 49,790 |
| Treasury stock (1,013 and 980 shares), at cost | (7,130) | (6,888) |
| Total shareholders' equity | 32,911 | 42,902 |
| Total liabilities and shareholders' equity | $ 114,932 | $ 126,404 |
| 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, |
|||
| 2012 | 2011 | 2012 | 2011 | |
| Total operating revenue | $ 95,624 | $ 102,834 | $ 279,264 | $ 296,270 |
| Operating expenses | ||||
| Salaries, wages and related expenses | 29,515 | 31,766 | 86,818 | 90,868 |
| Purchased transportation | 17,952 | 18,357 | 50,272 | 51,856 |
| Fuel | 21,247 | 25,854 | 60,016 | 73,654 |
| Supplies and maintenance | 14,340 | 15,710 | 39,106 | 42,561 |
| Revenue equipment rent | 10,691 | 9,200 | 31,205 | 26,553 |
| Depreciation | 2,701 | 4,827 | 8,668 | 13,875 |
| Communications and utilities | 1,123 | 1,171 | 3,299 | 3,518 |
| Claims and insurance | 3,734 | 7,476 | 7,503 | 13,204 |
| Operating taxes and licenses | 924 | 985 | 3,076 | 3,089 |
| Gain on sale of property and equipment | (2,402) | (661) | (4,939) | (1,234) |
| Miscellaneous | 1,095 | 1,626 | 3,192 | 4,352 |
| Total operating expenses | 100,920 | 116,311 | 288,216 | 322,296 |
| Loss from operations | (5,296) | (13,477) | (8,952) | (26,026) |
| Interest and other expense (income) | ||||
| Interest expense | 388 | 247 | 1,157 | 479 |
| Equity in earnings of limited partnership | (211) | (192) | (543) | (551) |
| Life insurance and other | 149 | 63 | 520 | 432 |
| Total interest and other expense (income) | 326 | 118 | 1,134 | 360 |
| Loss before income taxes | (5,622) | (13,595) | (10,086) | (26,386) |
| Income tax expense (benefit) | 41 | 73 | 155 | (1,476) |
| Net loss | $ (5,663) | $ (13,668) | $ (10,241) | $ (24,910) |
| Net loss per share of common stock | ||||
| Basic | $ (0.32) | $ (0.77) | $ (0.57) | $ (1.42) |
| Diluted | $ (0.32) | $ (0.77) | $ (0.57) | $ (1.42) |
| Weighted average shares outstanding | ||||
| Basic | 17,917 | 17,663 | 17,839 | 17,557 |
| Diluted | 17,917 | 17,663 | 17,839 | 17,557 |
| 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) | 2012 | 2011 | 2012 | 2011 |
| Temperature-controlled services | $ 25,999 | $ 29,875 | $ 77,821 | $ 90,231 |
| Dry-freight services | 5,569 | 10,444 | 16,631 | 33,567 |
| Total truckload linehaul services | 31,568 | 40,319 | 94,452 | 123,798 |
| Dedicated services | 4,610 | 4,140 | 14,165 | 13,051 |
| Total truckload | 36,178 | 44,459 | 108,617 | 136,849 |
| Less-than-truckload linehaul services | 34,463 | 30,740 | 93,917 | 85,908 |
| Fuel surcharges | 18,968 | 21,298 | 56,124 | 62,683 |
| Brokerage and logistics services | 4,874 | 5,585 | 17,578 | 8,269 |
| Equipment rental | 1,141 | 752 | 3,028 | 2,561 |
| Total operating revenue | 95,624 | 102,834 | 279,264 | 296,270 |
| Operating expenses | 100,920 | 116,311 | 288,216 | 322,296 |
| Loss from operations | $ (5,296) | $ (13,477) | $ (8,952) | $ (26,026) |
| Operating ratio (b) | 105.5% | 113.1% | 103.2% | 108.8% |
| Total truckload revenue | $ 36,178 | $ 44,459 | $ 108,617 | $ 136,849 |
| Less-than-truckload linehaul revenue | 34,463 | 30,740 | 93,917 | 85,908 |
| Total linehaul and dedicated services revenue | $ 70,641 | $ 75,199 | $ 202,534 | $ 222,757 |
| Weekly average trucks in service | 1,536 | 1,772 | 1,504 | 1,772 |
| Revenue per truck per week (c) | $ 3,499 | $ 3,229 | $ 3,440 | $ 3,223 |
| 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 nine month periods ended September 30: | ||||
| Three Months | Nine Months | |||
| Truckload | 2012 | 2011 | 2012 | 2011 |
| Total linehaul miles (a) | 21,219 | 27,994 | 63,561 | 87,748 |
| Loaded miles (a) | 18,549 | 24,809 | 55,890 | 77,889 |
| Empty mile ratio (b) | 12.6% | 11.4% | 12.1% | 11.2% |
| Linehaul revenue per total mile (c) | $ 1.49 | $ 1.44 | $ 1.49 | $ 1.41 |
| Linehaul revenue per loaded mile (d) | $ 1.70 | $ 1.63 | $ 1.69 | $ 1.59 |
| Linehaul shipments (a) | 20.3 | 27.8 | 60.9 | 86.4 |
| Loaded miles per shipment (e) | 914 | 891 | 918 | 902 |
| LTL | ||||
| Hundredweight | 2,341,662 | 2,128,575 | 6,525,164 | 6,194,980 |
| Shipments (a) | 78.1 | 70.3 | 216.9 | 198.3 |
| Linehaul revenue per hundredweight (f) | $ 14.72 | $ 14.44 | $ 14.39 | $ 13.87 |
| Linehaul revenue per shipment (g) | $ 441 | $ 437 | $ 433 | $ 433 |
| Average weight per shipment (h) | 2,998 | 3,026 | 3,008 | 3,124 |
| 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: | ||
| 2012 | 2011 | |
| Total company tractors available for freight operations | 1,360 | 1,613 |
| Total owner-operator tractors available for freight operations | 275 | 286 |
| Total tractors available for freight operations | 1,635 | 1,899 |
| Total trailers available for freight operations | 3,100 | 3,826 |