Frozen Food Express Industries, Inc. Announces Fourth Quarter and Year End Results; Pre-Tax Earnings Improve $13.2 Million Over 2007
- Press Release
- Source: Frozen Food Express Industries, Inc.
- On 6:00 pm EST, Wednesday March 4, 2009
-- Full Year 2008 Pre-tax income of $3.2 million fueled by an
8.5% revenue increase
-- Operating Ratio Improves 270 basis points
-- Full Year 2008 EPS of $.04 representing a $.49 turnaround
from 2007
-- Company is debt-free with $106.5 million of equity
Related Quotes
| Symbol | Price | Change |
|---|---|---|
| FFEX | 2.85 | -0.10 |
DALLAS, March 4, 2009 (GLOBE NEWSWIRE) -- Frozen Food Express Industries, Inc. (Nasdaq:FFEX - News) today announced its financial and operating results for the quarter and year ended December 31, 2008.
For 2008, revenue increased by 8.5% to $490.5 million from $452.2 million in 2007. Net of fuel surcharges, revenue was $381.4 million for 2008 compared to $378.8 million during 2007. Net income for the year was $605,000, or $.04 per diluted share, compared to a net loss of $7.7 million, or $.45 per diluted share in 2007. Operating ratio for the 2008 year was 99.6% compared with 102.3% in 2007.
For the quarter, income from operations improved $5.6 million over 2007. Revenue decreased by 4.7% to $112.3 million from $117.9 million during the same quarter of 2007. Net of fuel surcharges, revenue was $93.3 million in the fourth quarter of 2008, compared to $96.1 million in the 2007 quarter. For the fourth quarter, the Company realized pre-tax income from operations of $812,000; however, on an after tax basis incurred a net loss of $201,000, or $.01 per diluted share compared to a net loss of $3.5 million, or $.21 per diluted share in the fourth quarter of 2007. Operating ratio for the 2008 quarter was 99.8% compared with 104.6% for the fourth quarter of 2007.
President and Chief Executive Officer, Stoney M. ("Mit") Stubbs, Jr. commented: "Despite the economic downturn and challenging freight industry in 2008, I am proud of the management team and its effort to sustain positive operating results by posting a third consecutive quarter of income from operations. While our results for the fourth quarter were not as strong as the two previous quarters which is not uncommon in a cyclical business such as ours, we did accomplish many things that we set out to achieve at the onset of the year. Going into 2008, the direct focus of the management team was to execute to an aggressive turnaround plan aimed at restoring our business to profitability and the team delivered on that goal.
"One such strategy was to increase sales in our specialized freight services and our non-asset based intermodal business. For the full year of 2008, intermodal revenue increased 157.6% while dedicated services revenue increased by 37.8%. While revenue from our freight brokerage services fell short of 2007 levels we continue to make progress on developing carrier relationships and attracting new customers. We remain optimistic that we will achieve an increase in the mix of non-asset based revenue in 2009 allowing us to leverage our asset-based business driving more revenue over less equipment.
"Asset productivity measured by revenue per truck per week increased 2.0% during the fourth quarter of 2008 compared to the year-ago quarter and was up 6.0% on a year-over-year basis. A contributing factor to this improvement is our continued focus and discipline to drive volumes over our preferred freight network which drove our empty mile ratio down to 9.0% from 9.7% in 2007. Pricing levels for truckload services remained relatively flat for both the fourth quarter and full year. Freight rates for our less-than-truckload services increased 2.1% during the fourth quarter of 2008; however, decreased 1.6% as pricing pressures mounted due to excess capacity in the industry throughout 2008. Our total trucks in service at the end of the year was 2,029 compared with 2,075 at the end of 2007.
"Total operating expenses decreased 9.1% for the quarter on a revenue decline of 4.7%. Company driver salary expenses were up 11.9% during the fourth quarter of 2008 compared to the year-ago quarter while purchase transportation expenses decreased by 20.3% over the 2007 quarter. Partially offsetting the decrease in purchased transportation expense is the growth in intermodal as more freight was transported via the rail. Central to the strategy of growing our intermodal business was the installation and management of an internal drayage fleet which was fully implemented in the middle part of 2008. We believe that by closely managing the day-to-day operations and utilizing our internal drayage fleet as opposed to relying on outside cartage services that often times prove costly, the net result will be improved services to our customers and increased operating margins.
"Regarding cost saving initiatives that we planned for going into 2008, we saw marked improvement in both non-driver headcount-related expenses as well as reductions in other fixed costs. Our average trucks in service for the year decreased 4.5% to 2,027 from 2,122 during 2007. Non-driver personnel decreased by five percent throughout 2008.
"The improvement in fuel and fuel taxes was primarily due to a decrease in the average cost of fuel compared with the fourth quarter of 2007. We continue to implement fuel cost control measures throughout 2008 including utilization of our volume purchase arrangements with diesel suppliers and optimizing driver purchases at national fuel centers. In addition, we realized improvements this year in fuel programs implemented to track and measure fuel consumption, idle time, and stop locations using opti-idle technology. Diesel fuel expenses for the quarter decreased 17.1% over the 2007 quarter.
"Claims and insurance expenses decreased 45.6% in the quarter and 34.3% for the year. The decrease in expense is being driven by fewer claims as well as a significant non-recurring claim that occurred during the fourth quarter of 2007. The Company continues to enhance safety awareness including an in-house program, safety incentive programs for the drivers, and computer-based and audio training. As a direct result of these initiatives, our total accidents for 2008 decreased nearly 9% from a year ago.
"The market for used equipment remained soft during the fourth quarter of 2008 which attributed to the decrease of $556,000 in gain on sale of equipment in the quarter. However, some equipment was re-deployed in the operations in support of the newly created drayage fleet as replacement cycles were altered. Net capital expenditures for property and equipment this year was approximately $9.7 million. Our balance sheet remains debt-free and healthy providing us with liquidity necessary to weather the economic down-turn in 2009."
Mr. Stubbs concluded, "We accomplished many things in 2008 and our management team continues to build from momentum gained. While many trucking analysts forecast one of the toughest freight economies in our recent history, we believe that we are well positioned for recovery when it turns. In the meantime, we will continue to deliver on our value proposition of exceptional service, excellent customer follow-up, and delivery on capacity commitments. I thank the entire FFE team for delivering positive results in a very difficult environment."
Conference Call and Web Cast
FFEX will hold a telephonic conference call on March 5, 2009 at 10:00 am Central Time (11:00 am Eastern Time) to discuss the quarter and year end results. Individuals wishing to participate in the conference call may do so by dialing (888) 241-0558 for domestic (647) 427-3417 for international calls and entering the pass code 86303244 prior to the beginning of the call. There will also be a live web cast of the conference call that can be accessed by clicking on the web cast icon http://www.ffex.net. A replay of the web cast will be available on the company's website for 30 days following the live web cast.
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 company's web site, http://www.ffex.net. To join our email alert list, please click on the following link: http://www.ffex.net/irpass.asp?BzID=1065&to=ea&s=0. 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 Statements of Operations
For the Three and Twelve Months Ended December 31,
(in thousands, except per-share amounts)
Three Months Twelve Months
------------------------ ------------------------
2008 2007 2008
(Unaudited) (Unaudited) (Unaudited) 2007
----------- ----------- ----------- -----------
Revenue $ 112,330 $ 117,926 $ 490,536 $ 452,214
----------- ----------- ----------- -----------
Costs and
expenses
Salaries, wages
and related
expenses 32,097 31,794 128,621 128,895
Purchased
transportation 24,633 30,922 117,774 114,138
Fuel 18,960 22,884 107,654 84,319
Supplies and
maintenance 13,667 13,590 53,531 54,516
Revenue equipment
rent 9,722 8,198 35,456 31,083
Depreciation 4,668 4,749 18,851 19,446
Communications and
utilities 1,262 993 4,898 4,206
Claims and
insurance 4,674 8,589 13,675 20,801
Operating taxes
and licenses 1,003 1,190 4,434 4,740
Gains on
disposition of
equipment (257) (813) (1,353) (3,144)
Miscellaneous 1,707 1,242 4,941 3,743
----------- ----------- ----------- -----------
Total operating
expenses 112,136 123,338 488,482 462,743
----------- ----------- ----------- -----------
Income (loss) from
operations 194 (5,412) 2,054 (10,529)
Interest (income)
and other expense
Interest income (7) (69) (72) (640)
Interest expense 31 50 140 50
Equity in earnings
of limited
partnership (366) (363) (877) (781)
Life insurance and
other (276) 253 (384) 776
----------- ----------- ----------- -----------
(618) (129) (1,193) (595)
Pre-tax income
(loss) from
continuing
operations 812 (5,283) 3,247 (9,934)
Income tax expense
(benefit) 1,013 (1,742) 2,642 (2,264)
----------- ----------- ----------- -----------
Net income (loss) $ (201) $ (3,541) $ 605 $ (7,670)
=========== =========== =========== ===========
Net income (loss)
per share of
common stock
Basic $ (0.01) $ (0.21) $ 0.04 $ (0.45)
Diluted $ (0.01) $ (0.21) $ 0.04 $ (0.45)
=========== =========== =========== ===========
Weighted average
shares outstanding
Basic 16,761 16,748 16,715 17,187
Diluted 16,761 16,748 16,997 17,187
=========== =========== =========== ===========
FROZEN FOOD EXPRESS INDUSTRIES, INC. AND SUBSIDIARIES
Operating Statistics
For the Three and Twelve Months Ended December 31,
(Unaudited, except twelve months 2007 revenue)
Three Months Twelve Months
------------------------ ------------------------
Revenue from (a): 2008 2007 2008 2007
------------------------------ ----------- ----------- -----------
Truckload linehaul
services $ 52,387 $ 53,387 $ 214,348 $ 212,416
Dedicated fleets 6,081 5,808 24,609 17,861
----------- ----------- ----------- -----------
Total truckload 58,468 59,195 238,957 230,277
Less-than-truckload
("LTL") services 31,143 31,210 124,091 127,438
Fuel surcharges 19,020 21,868 109,144 73,391
Freight brokerage 2,513 4,120 13,142 15,586
Equipment rental 1,186 1,533 5,202 5,522
----------- ----------- ----------- -----------
Total revenue 112,330 117,926 490,536 452,214
Operating expenses 112,136 123,338 488,482 462,743
----------- ----------- ----------- -----------
Income (loss) from
operations $ 194 $ (5,412) $ 2,054 $ (10,529)
=========== =========== =========== ===========
Operating ratio (b) 99.8% 104.6% 99.6% 102.3%
Total truckload
revenue $ 58,468 $ 59,195 $ 238,957 $ 230,277
LTL revenue 31,143 31,210 124,091 127,438
----------- ----------- ----------- -----------
Total linehaul
and dedicated
fleet revenue $ 89,611 $ 90,405 $ 363,048 $ 357,715
=========== =========== =========== ===========
Weekly average
trucks in service 2,020 2,079 2,027 2,122
Revenue per truck
per week (c) $ 3,375 $ 3,309 $ 3,426 $ 3,233
Statistical and
revenue data:
-------------------
Truckload:
Truckload total
linehaul
miles (e) 39,565 40,477 162,689 162,672
Truckload loaded
miles (e) 36,036 36,690 148,025 146,815
Truckload empty
mile ratio (d) 8.9% 9.4% 9.0% 9.7%
Truckload
linehaul revenue
per total mile $ 1.32 $ 1.32 $ 1.32 $ 1.31
Truckload
linehaul revenue
per loaded mile $ 1.45 $ 1.46 $ 1.45 $ 1.45
Truckload
linehaul
shipments (e) 37.6 35.5 152.7 151.5
Truckload loaded
miles per
shipment 958 1,034 969 969
Less-than-truckload:
LTL Hundred-
weight (e) 2,095 2,144 8,492 8,582
Shipments (e) 67.6 69.0 273.0 277.2
LTL Linehaul
revenue per
hundredweight $ 14.87 $ 14.56 $ 14.61 $ 14.85
Linehaul Revenue
per shipment 461 452 455 460
Average weight
per shipment 3,099 3,107 3,111 3,096
Tractors in service
as of December 31 2,029 2,075
Trailers in service
as of December 31 4,182 4,046
Non-driver
employees as of
December 31 855 900
Notes :
-----
a) Revenue is stated in thousands of dollars.
b) Operating expenses divided by revenue.
c) Total linehaul and dedicated fleet revenue divided by number
of weeks in period divided by weekly average trucks in service.
d) One minus the quotient of truckload loaded linehaul miles
divided by truckload total linehaul miles.
e) In thousands.
FROZEN FOOD EXPRESS INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
As of December 31,
(in thousands)
2008
(Unaudited) 2007
--------- ---------
Assets
Current assets
Cash and cash equivalents $ 1,308 $ 2,473
Accounts receivable, net 52,749 52,682
Tires on equipment in use, net 5,425 5,120
Deferred income taxes 2,666 2,978
Other current assets 10,822 14,607
--------- ---------
Total current assets 72,970 77,860
Property and equipment, net 83,394 90,309
Other assets 5,822 5,500
--------- ---------
Total assets $ 162,186 $ 173,669
========= =========
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable $ 21,148 $ 25,301
Insurance and claims accruals 7,736 12,342
Accrued payroll and deferred compensation 4,396 5,998
Accrued liabilities 1,760 1,964
--------- ---------
Total current liabilities 35,040 45,605
Long-term debt -- --
Deferred income taxes 14,235 11,488
Insurance and claims accruals 6,460 9,317
--------- ---------
Total liabilities 55,735 66,410
--------- ---------
Shareholders' equity
Common stock, $1.50 par value per share;
75,000 shares authorized; 18,572 shares
issued and outstanding 27,858 27,858
Additional paid-in capital 5,412 5,682
Retained earnings 87,103 88,515
--------- ---------
120,373 122,055
Treasury stock (1,813 and 1,921 shares),
at cost (13,922) (14,796)
--------- ---------
Total shareholders' equity 106,451 107,259
--------- ---------
Total liabilities and shareholders'
equity $ 162,186 $ 173,669
========= =========
Contact:
Frozen Food Express Industries, Inc.
Stoney M. "Mit" Stubbs, Jr., Chairman and CEO
Ronald Knutson, SVP and CFO
(214) 630-8090
ir@ffex.net
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