FFE Transportation Services Expands Oil Field Water Transportation Services
November 09 2011 - 4:15PM
Frozen Food Express Industries, Inc. (Nasdaq:FFEX) announced today
growth plans for bulk tank transportation services for the oil
drilling industry. The Company, through its subsidiary, FFE
Transportation Services, Inc. ("FFE") recently began hauling fresh
water to drill sites for a major driller in West Texas. FFE is
expanding this service and has placed orders for 25 specialty tank
trailers to support this expansion. This will bring the total
number of tank trailers in service to 40 by the beginning of
January 2012.
"We've studied the frac water transportation market for some
time and believe new drilling technologies have created
opportunities for secular growth in bulk tank transportation
services. Due to the 24/7 nature of drilling operations, equipment
utilization rates are very high and present attractive return
characteristics," said Russell Stubbs, President and CEO of
FFE. "We estimate that these new services could add $30
million to $35 million in incremental annual gross revenue
providing a significant margin contribution."
Commenting on other recent strategic initiatives, Mr. Stubbs
said, "Since the beginning of October, we have announced several
strategic moves to reduce costs and exit less profitable lines of
business. From our earlier strategic actions, we expect to
reduce back-office costs by approximately $5.0 million and to
reduce the average age of our fleet from 2.8 years to 2.0 years by
the end of January 2012. With a younger fleet, we estimate a
reduction in tractor maintenance expense of 2 to 4 cents per mile
and overall improvement in fuel economy of approximately 5
percent. Combined with the contribution from frac water
transportation, we expect to see significant improvements in our
cash flows and enhanced liquidity. By January of 2012, we
expect our borrowings under our bank credit facility to be under
$15 million and to decline thereafter. We expect to be
cash-flow positive in the fourth quarter of 2011 and remain cash
positive throughout the balance of next year, depending upon
scheduling and financing of capital expenditures. We are
committed to enhancing shareholder value, returning to
profitability during 2012, and positioning the company to achieve
attractive returns for the long term."
About Frozen Food Express Industries, Inc.
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-freight truckload.
The Company also provides brokerage/logistics and dedicated
services to our customers.
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.
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.com
Frozen Food Express Industries, Inc. (MM) (NASDAQ:FFEX)
Historical Stock Chart
From Apr 2024 to May 2024
Frozen Food Express Industries, Inc. (MM) (NASDAQ:FFEX)
Historical Stock Chart
From May 2023 to May 2024