EX-99.1 CHARTER 3 exh99_1.htm EXHIBIT 99.1-EARNING PRESS RELEASE exh99_1.htm
EXHIBIT 99.1
FOR IMMEDIATE RELEASE




Frozen Food Express Industries, Inc.
Announces Fourth Quarter and 2009 Year End Results


DALLAS, February 24, 2010 (GLOBE NEWSWIRE) – Frozen Food Express Industries, Inc. (Nasdaq:FFEX) today announced its financial and operating results for the quarter and year ended December 31, 2009.  Highlights for the year include:

·  
Total revenues of $373.1 million
·  
Operating expenses of $398.0 million, a reduction of $90.5 million from 2008 due to several cost reduction initiatives in response to an extremely challenging economic environment in 2009.
·  
Steady focus on cost control which resulted in an operating ratio improvement of 2.7% in the second half of the year versus the first half of the year; 105.3% versus 108.0%
·  
No debt outstanding and cash on hand of $3.7 million

For the year ended December 31, 2009, revenues declined $117.5 million or 24% from 2008.  Net of fuel surcharges, revenue decreased $53.2 million or 14% from $381.4 million last year to $328.2 million in 2009.  The net loss for the year was $16.4 million compared to a net income of $605,000 in 2008 as the Company battled a difficult operating environment due to the severe economic downturn in the United States.  On a per share basis, the loss equates to ($0.96) per diluted share in 2009 compared to a net income of $0.04 per diluted share in 2008.

For the fourth quarter, revenue excluding fuel surcharges decreased 15.7% to $78.6 million from $93.3 million in the fourth quarter of 2008. Total revenue for the quarter declined 18.6% to $91.4 million from $112.3 million in 2008.  The net loss increased by $2.4 million to $2.6 million or $0.15 per diluted share from a loss of $0.2 million or $0.01 per diluted share in the fourth quarter of the previous year.

Stoney M. (“Mit”) Stubbs, Chairman and Chief Executive Officer commented: “We are disappointed in the operating results for the year, but given the economic conditions of 2009, which impacted virtually every industry, we are proud that our employees maintained their focus in providing exemplary service to our customers.  Our management team succeeded, under difficult conditions, in adjusting our infrastructure to match the needs of shippers, while staying the course with initiatives that will improve our service product for years to come.  We aggressively managed our working capital which allowed us to generate a positive cash flow for the year and remain debt free.  The transportation industry is under extreme pricing pressure.  This pressure, and its impact on operating margins, was a key contributor to our operating losses.  In 2010, it is essential that we work with our customers to find an acceptable pricing level that will allow us an appropriate return on our service commitment to them.”
 
 
Reflective of the tough pricing environment, our truckload revenue per loaded mile dropped to $1.40 in 2009 compared to $1.45 per loaded mile in 2008.  Consistent with this decline, our LTL operation experienced a 2.1% decline in linehaul revenue per hundredweight to $14.31 in 2009 from $14.61 in 2008.

Total operating expenses for the year declined $90.5 million or 18.5% on a revenue decline of 24.0%, while operating expenses for the quarter dropped 13.9% on a revenue decrease of 18.6%.  To accomplish the reduction in operating expenses, the Company initiated a comprehensive cost cutting initiative that resulted in a reduction of non-driver headcount by 20.2%.  For the year, operating expenses decreased at a lower rate than revenue primarily due to higher claims and insurance costs, partially offset by decreases in fuel and purchased transportation.  Fuel decreased 41.8% to $62.7 million from $107.7 million in 2008 and decreased 13.5% to $16.4 million in the fourth quarter of 2009 from $19.0 million in the fourth quarter of 2008.  Purchased transportation decreased 30.9% to $81.4 million in 2009 from $117.8 million in the previous year and decreased 20.4% to $19.6 million in the fourth quarter of 2009 from $24.6 million in the fourth quarter of the prior year.

Notwithstanding the poor results and continuing economic and industry struggles, the Company continues to be in a strong cash position with no borrowings outstanding under its revolving credit agreement as of the end of year. For 2009, the Company generated cash flows from operations of $12.0 million. At December 31, 2009 the Company had $3.7 million in cash and cash equivalents, $89.7 million in shareholders' equity and no outstanding debt.

Mr. Stubbs concluded, "While the current business conditions are the worst we have seen, we are continuing our focus on providing an excellent service product and working with our customers to find a beneficial pricing structure.  We continue to be diligent in cost containment and maintaining efficient utilization of our assets. The management team is dedicated to managing our cash position closely and ensuring we have adequate liquidity to maintain our business.  I thank our entire team for doing an outstanding job in such challenging times and know we will be well positioned in the future based on our commitment to providing exceptional service and shipping capacity to our customers.”

 
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.ffeinc.com.  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.
 
 
 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
  
   
2009
    
2008
    
2009
    
2008
  
Revenue
  
$
91,449
    
$
112,330
    
$
373,051
    
$
490,536
  
Operating expenses
                                
Salaries, wages and related expenses
    
28,026
      
32,097
      
122,141
      
128,621
  
Purchased transportation
    
19,611
      
24,633
      
81,363
      
117,774
  
Fuel
    
16,404
      
18,960
      
62,655
      
107,654
  
Supplies and maintenance
    
11,473
      
13,667
      
47,347
      
53,531
  
Revenue equipment rent
    
9,335
      
9,722
      
38,721
      
35,456
  
Depreciation
    
4,254
      
4,668
      
17,550
      
18,851
  
Communications and utilities
    
1,247
      
1,262
      
5,145
      
4,898
  
Claims and insurance
    
4,371
      
4,674
      
15,305
      
13,675
  
Operating taxes and licenses
    
992
      
1,003
      
4,648
      
4,434
  
Gain on sale of property and equipment
    
(61
)
    
(257
)
    
(136
)
    
(1,353
)
Miscellaneous
    
858
      
1,707
      
3,225
      
4,941
  
                    Total operating expenses
    
96,510
      
112,136
      
397,964
      
488,482
  
Income (loss) from operations
    
(5,061
)
    
194
      
(24,913
)
    
2,054
  
                                 
Interest and other (income) expense
                                
Interest income
    
(1
)
    
(7
)
    
(6
)
    
(72
)
Interest expense
    
21
      
31
      
30
      
140
  
Equity in earnings of limited partnership
    
(267
)
    
(366
)
    
(739
)
    
(877
)
Life insurance and other
    
106
      
(276
) 
    
697
      
(384
)
                    Total interest and other income
    
(141
)
    
(618
)
    
(18
)
    
(1,193
)
Pre-tax income (loss)
    
(4,920
)
    
812
      
(24,895
)
    
3,247
  
Income tax (benefit) expense
    
(2,354
)
    
1,013
      
(8,480
)
    
2,642
  
Net income (loss)
  
$
(2,566
)
  
$
(201
)
  
$
(16,415
)
  
$
605
  
                                 
Net income (loss) per share of common stock
                                
Basic
  
$
(0.15
)
  
$
(0.01
)
  
$
(0.96
)
  
$
0.04
  
Diluted
  
$
(0.15
)
  
$
(0.01
)
  
$
(0.96
)
  
$
0.04
  
Weighted average shares outstanding
                                
Basic
    
17,114
      
16,761
      
17,080
      
16,715
  
Diluted
    
17,114
      
16,761
      
17,080
      
16,997
  
Dividends declared per common share
  
$
-
    
$
0.03
    
$
0.03
    
$
0.12
  
 
 

 
 
 

 
Operating Statistics
For the Three and Twelve Months Ended December 31,
  
   
Three Months
    
Twelve Months
  
Revenue from
  
2009
    
2008
    
2009
    
2008
  
Temperature-controlled fleet
  
$
32,797
    
$
36,643
    
$
136,427
    
$
145,497
  
Dry-freight fleet
    
10,002
      
15,745
      
50,807
      
68,851
  
            Total truckload linehaul services
    
42,799
      
52,387
      
187,234
      
214,348
  
Dedicated fleets
    
4,737
      
6,081
      
19,707
      
24,609
  
Total truckload
    
47,536
      
58,468
      
206,941
      
238,957
  
Less-than-truckload linehaul services
    
27,949
      
31,144
      
109,054
      
124,092
  
Fuel surcharges
    
12,811
      
19,020
      
44,876
      
109,144
  
Brokerage
    
1,851
      
2,512
      
7,266
      
13,142
  
Equipment rental  
    
1,302
      
1,186
      
4,914
      
5,202
  
Total revenue 
    
91,449
      
112,330
      
373,051
      
490,536
  
                                 
Operating expenses
    
96,510
      
112,136
      
397,964
      
488,482
  
Income (loss) from freight operations
  
$
(5,061
)
  
$
194
    
$
(24,913
) 
  
$
2,054
  
Operating ratio
    
105.5
%
    
99.8
%
    
106.7
%
    
99.6
%
                                 
Total truckload revenue
  
$
47,536
    
$
58,468
    
$
206,941
    
$
238,957
  
Less-than-truckload linehaul revenue
    
27,949
      
31,144
      
109,054
      
124,092
  
Total linehaul and dedicated fleet revenue 
  
$
75,485
    
$
89,612
    
$
315,995
    
$
363,049
  
                                 
Weekly average trucks in service
    
1,824
      
2,020
      
1,937
      
2,027
  
Revenue per truck per week
  
$
3,149
    
$
3,375
    
$
3,129
    
$
3,426
  
 
Statistical and revenue data : 
                                
Truckload
                                
    Total linehaul miles (a)
    
33,785
      
39,565
      
149,412
      
162,689
  
    Loaded miles (a)
    
29,916
      
36,036
      
133,956
      
148,025
  
    Empty mile ratio (b)
    
11.5
%
    
8.9
%
    
10.3
%
    
9.0
%
    Linehaul revenue per total mile (c)
  
$
1.27
    
$
1.32
    
$
1.25
    
$
1.32
  
    Linehaul revenue per loaded mile (d)
  
$
1.43
    
$
1.45
    
$
1.40
    
$
1.45
  
    Linehaul shipments (a)
    
36.8
      
37.6
      
154.3
      
152.7
  
    Loaded miles per shipment (e)
    
812
      
958
      
868
      
969
  
Less-than-truckload
                                
    Hundredweight (a)
    
1,988
      
2,095
      
7,619
      
8,492
  
    Shipments (a)
    
62.9
      
67.6
      
247
      
273.0
  
    Linehaul revenue per hundredweight (f)
  
$
14.06
    
$
14.87
    
$
14.31
    
$
14.61
  
    Linehaul revenue per shipment (g)
    
445
      
461
      
442
      
455
  
    Average weight per shipment (h)
    
3,163
      
3,099
      
3,086
      
3,111
  
                                 
Tractors in service as of December 31
                    
1,943
      
2,029
  
Trailers in service as of December 31
                    
3,786
      
4,182
  
Non-driver employees as of December 31
                    
682
      
855
  

Computational notes:
(a)
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 truckload total 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 LTL shipments. 


 
 

 
 
 




Frozen Food Express Industries, Inc. and Subsidiaries
Consolidated Balance Sheets
December 31,
(in thousands)
  
Assets
  
2009
    
2008
  
Current assets
            
Cash and cash equivalents
  
$
3,667
    
$
1,308
  
Accounts receivable, net
    
41,318
      
52,749
  
Tires on equipment in use, net
    
5,592
      
5,425
  
Deferred income taxes
    
1,532
      
2,666
  
Property held for sale
    
1,019
      
-
  
Other current assets
    
12,706
      
10,822
  
Total current assets
    
65,834
      
72,970
  
                 
Property and equipment, net
    
74,845
      
83,394
  
Other assets
    
5,121
      
5,822
  
                        Total assets
  
$
145,800
    
$
162,186
  
                 
Liabilities and Shareholders’ Equity
                
Current liabilities
                
Accounts payable
  
$
23,773
    
$
21,148
  
Insurance and claims accruals
    
10,119
      
7,736
  
Accrued payroll and deferred compensation
    
3,837
      
4,396
  
Accrued liabilities
    
1,953
      
1,760
  
                  Total current liabilities
    
39,682
      
35,040
  
                 
Deferred income taxes
    
9,009
      
14,235
  
Insurance and claims accruals
    
7,374
      
6,460
  
                        Total liabilities
    
56,065
      
55,735
  
                 
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
    
2,923
      
5,412
  
Retained earnings
    
70,172
      
87,103
  
     
100,953
      
120,373
  
Treasury stock (1,477 and 1,813 shares), at cost
    
(11,218
)
    
(13,922
)
                   Total shareholders’ equity
    
89,735
      
106,451
  
                        Total liabilities and shareholders’ equity
  
$
145,800
    
$
162,186
  



 
Contacts:
Frozen Food Express Industries, Inc.
      Stoney M. "Mit" Stubbs, Jr., Chairman and CEO
              Russell Stubbs, President
              John Hickerson, EVP and COO
              John McManama, VP and Interim CFO
              (214) 630-8090
              ir@ffex.net