Frozen Food Express Industries, Inc. (Nasdaq:FFEX) today announced
its financial and operating results for the quarter ended March 31,
2011. Highlights for the quarter include:
- Total operating revenue increased $6.3 million to $92.1 million
in the first quarter of 2011 compared to $85.8 million in the same
period of 2010.
- Total operating revenue, net of fuel surcharges, increased
slightly to $73.4 million, compared to $73.3 million during the
first quarter of 2010.
- Favorable pricing and improving demand were offset by unusually
severe weather and increased fuel costs, resulting in a $7.9
million loss during the first quarter of 2011, compared to a $3.7
million loss in the same period of 2010.
- Net loss per share of diluted common stock was ($0.45) in the
first quarter of 2011 compared to ($0.22) in the same period of
2010.
- New four year, $50 million credit facility increases liquidity
and long-term financial flexibility.
For the first quarter ended March 31, 2011, total operating
revenue increased $6.3 million to $92.1 million compared to $85.8
million in the same period of last year. Total operating revenue,
net of fuel surcharges, increased slightly to $73.4 million,
compared to $73.3 million in the same period of 2010. The net loss
for the first quarter ended March 31, 2011 was $7.9 million, or
($0.45) per diluted share, compared to $3.7 million, or ($0.22) per
diluted share in the same quarter a year ago.
Total Operating Revenue (in
$000s) from: |
1Q11 |
1Q10 |
% Change |
Total Truckload |
45,141 |
44,916 |
0.5% |
Less-than-truckload |
26,201 |
25,267 |
3.7% |
Brokerage and
Equipment Rental |
2,082 |
3,125 |
(33.4%) |
Total Operating Revenue (Excluding
Fuel Surcharges) |
73,424 |
73,308 |
0.4% |
|
|
|
|
Fuel
Surcharges |
18,683 |
12,534 |
49.1% |
Total Operating
Revenue |
92,107 |
85,842 |
7.3% |
"Despite severe weather that curtailed many customer operations
in January and February, truckload revenue during the first quarter
of 2011 was relatively flat in comparison with the same period a
year ago. Continued capacity constraint in the truckload
sector provided pricing strength in this segment that was able to
offset the 5.7% decline in loaded miles that was influenced by the
bad weather," said Russell Stubbs, the Company's President and
Chief Executive Officer. "Demand for our less-than-truckload
services continued to improve during the first quarter with a 6.3%
increase in tonnage. This more than offset competitive pricing
pressures that this segment continues to face, and resulted in a
3.7% increase in sales from this segment. This growth, year
over year, was remarkable considering our major less-than-truckload
markets of Dallas-Fort Worth, Atlanta, Chicago and the Northeast,
served by our Burlington, New Jersey facility, lost numerous
revenue days in January and February due to heavy winter
storms."
During the first quarter of 2011, total operating expenses
increased $9.5 million, or 10.4% to $100.9 million compared to
$91.4 million during the first quarter of 2010. "U.S. diesel fuel
prices increased approximately 34% compared to last year's first
quarter and 30% since the beginning of 2011. Our fuel
surcharge program is typically able to recapture most of the
increasing costs of fuel prices, but we shoulder more of the burden
in an environment with rapidly rising fuel prices, as was the case
during first quarter of 2011. Our fuel costs increased by $6.6
million versus a $6.1 million increase in fuel
surcharges. Operating costs were also negatively affected by
approximately $800,000 of increased maintenance and repair costs
attributable to inclement weather," continued Mr.
Stubbs. "Excluding the effects of fuel, increased maintenance
and additional expenses resulting from inclement weather, the
change in our other operating costs were in line with the change in
revenue, which is indicative of our cost control measures and
efficiency programs."
"A shortage of qualified drivers in the market continues to
challenge the industry. We opened the FFE Driver Academy during the
first quarter, which has been a cost effective way to attract and
retain qualified drivers. Pricing strength in our truckload
segment, improving demand, and fuel surcharges were not enough to
offset the significant increase in diesel fuel costs and the severe
weather conditions, which resulted in disappointing results for the
first quarter of 2011. However, we experienced improvement in
financial performance during March, as weather patterns normalized
and demand and yield continued to improve. We are encouraged by the
response to our new driving academy as this will help address the
driver shortage, which is one of our most significant
challenges. Combined with our continued emphasis on a strong
service offering, strength in pricing in the truckload market and
solid LTL growth, we believe we will see improved results in the
coming quarters, "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 |
March 31, 2011 |
December 31,
2010 |
Current assets |
|
|
Cash and cash equivalents |
$ 2,090 |
$ 1,203 |
Accounts receivable, net |
43,614 |
41,921 |
Tires on equipment in use, net |
5,858 |
5,982 |
Deferred income taxes |
1,150 |
1,150 |
Other current assets |
4,764 |
6,575 |
Total current assets |
57,476 |
56,831 |
|
|
|
Property and equipment, net |
70,146 |
72,993 |
Other assets |
4,550 |
5,081 |
Total assets |
$ 132,172 |
$ 134,905 |
|
|
|
Liabilities and Shareholders'
Equity |
|
|
Current liabilities |
|
|
Accounts payable |
$ 25,722 |
$ 27,443 |
Insurance and claims accruals |
8,850 |
8,697 |
Accrued payroll and deferred
compensation |
4,248 |
5,032 |
Accrued liabilities |
813 |
709 |
Total current liabilities |
39,633 |
41,881 |
|
|
|
Long-term debt |
13,668 |
5,689 |
Deferred income taxes |
2,180 |
3,153 |
Insurance and claims accruals |
5,511 |
5,373 |
Total liabilities |
60,992 |
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 |
1,145 |
1,353 |
Retained earnings |
50,305 |
58,242 |
|
79,308 |
87,453 |
Treasury stock (1,081 and 1,146
shares), at cost |
(8,128) |
(8,644) |
Total shareholders' equity |
71,180 |
78,809 |
Total liabilities and shareholders'
equity |
$ 132,172 |
$ 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 March 31, |
|
2011 |
2010 |
Total operating revenue |
$ 92,107 |
$ 85,842 |
Operating expenses |
|
|
Salaries, wages and related expenses |
29,460 |
28,109 |
Purchased transportation |
16,216 |
18,117 |
Fuel |
22,467 |
15,844 |
Supplies and maintenance |
12,622 |
10,613 |
Revenue equipment rent |
8,604 |
8,781 |
Depreciation |
4,496 |
3,987 |
Communications and utilities |
1,299 |
1,174 |
Claims and insurance |
3,309 |
2,834 |
Operating taxes and licenses |
1,035 |
1,097 |
Loss (gain) on sale of property and
equipment |
1 |
(331) |
Miscellaneous |
1,380 |
1,179 |
Total operating expenses |
100,889 |
91,404 |
Loss from operations |
(8,782) |
(5,562) |
Interest and other (income) expense |
|
|
Interest income |
(2) |
(11) |
Interest expense |
96 |
42 |
Equity in earnings of limited
partnership |
(99) |
(40) |
Life insurance and other |
100 |
146 |
Total interest and other
expense |
95 |
137 |
Loss before income taxes |
(8,877) |
(5,699) |
Income tax benefit |
(940) |
(1,976) |
Net loss |
$ (7,937) |
$ (3,723) |
|
|
|
Net loss per share of common stock |
|
|
Basic |
$ (0.45) |
$ (0.22) |
Diluted |
$ (0.45) |
$ (0.22) |
Weighted average shares outstanding |
|
|
Basic |
17,446 |
17,092 |
Diluted |
17,446 |
17,092 |
Dividends declared per common share |
$ -- |
$ -- |
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-month periods ended March
31:
Revenue from: (a) |
2011 |
2010 |
Temperature-controlled services |
$ 29,416 |
$ 25,423 |
Dry-freight services |
11,420 |
15,268 |
Total truckload linehaul services |
40,836 |
40,691 |
Dedicated fleets |
4,305 |
4,225 |
Total truckload |
45,141 |
44,916 |
Less-than-truckload linehaul services |
26,201 |
25,267 |
Fuel surcharges |
18,683 |
12,534 |
Brokerage |
1,138 |
2,011 |
Equipment rental |
944 |
1,114 |
Total operating revenue |
92,107 |
85,842 |
|
|
|
Operating expenses |
100,889 |
91,404 |
Loss from freight operations |
$(8,782) |
$(5,562) |
Operating ratio (b) |
109.5% |
106.5% |
|
|
|
Total truckload revenue |
$ 45,141 |
$ 44,916 |
Less-than-truckload revenue |
26,201 |
25,267 |
Total linehaul and dedicated services
revenue |
$ 71,342 |
$ 70,183 |
|
|
|
Weekly average trucks in service |
1,774 |
1,751 |
Revenue per truck per week (c) |
$ 3,128 |
$ 3,118 |
|
|
|
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 in service. |
The following table summarizes and compares selected statistical
data relating to our freight operations for each of the three-month
periods ended March 31:
Truckload |
2011 |
2010 |
Total linehaul miles (a) |
29,891 |
31,630 |
|
Loaded miles (a) |
26,636 |
28,238 |
|
Empty mile ratio (b) |
10.9% |
10.7% |
|
Linehaul revenue per total mile
(c) |
$ 1.37 |
$ 1.29 |
|
Linehaul revenue per loaded mile
(d) |
$ 1.53 |
$ 1.44 |
|
Linehaul shipments (a) |
29.2 |
30.7 |
|
Loaded miles per shipment (e) |
912 |
921 |
|
LTL |
|
|
|
Hundredweight |
1,934 |
1,820 |
|
Shipments (a) |
61.0 |
59.1 |
|
Linehaul revenue per hundredweight
(f) |
$ 13.55 |
$ 13.89 |
|
Linehaul revenue per shipment
(g) |
$ 430 |
$ 427 |
|
Average weight per shipment
(h) |
3,172 |
3,079 |
|
|
|
|
|
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
fleet between company-provided tractors and tractors provided by
independent contractors as of March 31:
|
2011 |
2010 |
Total company tractors available |
1,529 |
1,461 |
Total owner-operator tractors available |
294 |
393 |
Total tractors available |
1,823 |
1,854 |
Total trailers available |
3,367 |
3,493 |
CONTACT: Frozen Food Express Industries, Inc.
Russell Stubbs, President and CEO
John Hickerson, EVP and COO
John McManama, Senior VP and CFO
(214) 630-8090
ir@ffex.net
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