-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, oSA4mO91AK8fP+iDVLLpmcgTuVLXuBWMZwOIXOIdCnxUq6xevJtnr/Dq9ZwwUwxT lBoj62aZrTmKNZefviU+uw== 0000930661-95-000127.txt : 19950517 0000930661-95-000127.hdr.sgml : 19950516 ACCESSION NUMBER: 0000930661-95-000127 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950512 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: FROZEN FOOD EXPRESS INDUSTRIES INC CENTRAL INDEX KEY: 0000039273 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 751301831 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10006 FILM NUMBER: 95538014 BUSINESS ADDRESS: STREET 1: 1145 EMPIRE CENTRAL PLACE CITY: DALLAS STATE: TX ZIP: 75247 BUSINESS PHONE: 2146308090 10-Q 1 FORM 10-Q (QE 3-31-95) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the period ended March 31, 1995 ------------------------------------------------ or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to ----------------- ------------------- Commission file Number 0-6200 Frozen Food Express Industries, Inc. - -------------------------------------------------------------------------------- (Exact name of registrant as specified on its charter) Texas 75-1301831 - -------------------------------------------------------------------------------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 1145 Empire Central Place Dallas, Texas 75247 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (2l4) 630-8090 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) None - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (l) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to filing requirements for the past 90 days. [X] Yes [ ] No As of May 3, 1995, 16,062,453 shares of the Registrant's Common Stock, $l.50 par value, were outstanding. INDEX Page No. PART I - FINANCIAL INFORMATION Item l. Financial Statements Consolidated Condensed Balance Sheets - March 31, 1995, and December 31, 1994 2 Consolidated Statements of Income - Three months ended March 31, 1995 and 1994 3 Consolidated Condensed Statements of Cash Flows - Three months ended March 31, 1995 and 1994 4 Notes to Consolidated Condensed Financial Statements 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 6 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 9 Financial Data Schedule 10 -1- FROZEN FOOD EXPRESS INDUSTRIES, INC. AND SUBSIDIARIES Consolidated Condensed Balance Sheets (In thousands) (Unaudited)
March 31, Dec. 31, 1995 1994 --------- --------- Assets Current assets Cash and cash equivalents $ 2,686 $ 4,381 Accounts receivable, net 34,187 36,643 Inventories 7,483 8,006 Tires 4,485 4,334 Other 5,636 3,692 --------- --------- Total current assets 54,477 57,056 --------- --------- Property and equipment Revenue equipment 65,590 64,401 Other 32,948 32,439 --------- --------- 98,538 96,840 Less depreciation 43,054 42,679 --------- --------- Net property and equipment 55,484 54,161 --------- --------- Other assets 5,928 5,619 --------- --------- $ 115,889 $ 116,836 ========= ========= Liabilities and Stockholders' Equity Current liabilities Trade accounts payable $ 11,506 $ 12,580 Accrued claims liabilities 7,526 7,712 Accrued payroll 3,684 5,006 Federal income tax payable 765 - Other 7,116 6,135 --------- --------- Total current liabilities 30,597 31,433 Long-term debt 7,000 9,000 Other and deferred credits 11,976 12,115 --------- --------- Total liabilities and deferred credits 49,573 52,548 --------- --------- Stockholders' equity Common stock 25,921 25,921 Paid-in capital 316 - Retained earnings 44,820 43,513 --------- --------- 71,057 69,434 Less - Treasury stock and receivable from ESOP 4,741 5,146 --------- --------- Total stockholders' equity 66,316 64,288 --------- --------- $ 115,889 $ 116,836 ========= =========
See accompanying notes. -2- FROZEN FOOD EXPRESS INDUSTRIES, INC. AND SUBSIDIARIES Consolidated Statements of Income (In thousands, except per-share amounts) (Unaudited)
For the Three Months Ended March 31, ---------------------- 1995 1994 -------- -------- Revenue Freight revenue $ 62,042 $ 56,552 Non-freight revenue 4,936 3,749 -------- -------- 66,978 60,301 -------- -------- Operating Expenses Freight operating expenses Salaries, wages and related expenses 16,358 14,203 Purchased transportation 12,950 12,452 Supplies and expenses 17,250 15,542 Revenue equipment rent 4,253 3,411 Communications and utilities 897 757 Insurance and claims 3,262 3,095 Depreciation 2,692 2,478 Operating taxes and licenses 1,233 1,150 Gain on sale of equipment (163) (141) Miscellaneous expense 617 586 -------- -------- 59,349 53,533 Non-freight costs and operating expenses 4,656 3,834 -------- -------- 64,005 57,367 -------- -------- Income from operations 2,973 2,934 Interest and other expense (380) (249) -------- -------- Income before income tax 2,593 2,685 Provision for income tax 807 940 -------- -------- Net income $ 1,786 $ 1,745 ======== ======== Net income per share of common stock Primary and fully diluted $ .11 $ .10 ======== ======== Weighted average fully diluted shares 16,625 16,635 ======== ========
See accompanying notes. -3- FROZEN FOOD EXPRESS INDUSTRIES, INC. AND SUBSIDIARIES Consolidated Condensed Statements of Cash Flows (In thousands) (Unaudited)
For the Three Months Ended March 31, --------------------- 1995 1994 -------- -------- Net cash provided by (used in) operating activities $ 2,564 $ (1,611) -------- -------- Cash flows from investing activities Business dispositions 1,925 - Expenditures for property and equipment (4,673) (2,087) Proceeds from sale of property and equipment 822 3,580 Other (45) 97 -------- -------- Net cash (used in) provided by investing activities (1,971) 1,590 -------- -------- Cash flows from financing activities Borrowings under revolving credit agreement 12,000 7,000 Payments against revolving credit agreement (14,000) (2,000) Dividends paid (479) (378) Net Treasury stock proceeds 191 270 -------- -------- Net cash (used in) provided by financing activities (2,288) 4,892 -------- -------- Net (decrease) increase in cash and cash equivalents (1,695) 4,871 Cash and cash equivalents at beginning of year 4,381 3,834 -------- -------- Cash and cash equivalents at end of quarter $ 2,686 $ 8,705 ======== ========
See accompanying notes. -4- FROZEN FOOD EXPRESS INDUSTRIES, INC. AND SUBSIDIARIES Notes to Consolidated Condensed Financial Statements March 31, 1995 and 1994 (Unaudited) 1. BASIS OF PRESENTATION --------------------- The consolidated condensed financial statements include Frozen Food Express Industries, Inc. (FFEX) and its subsidiary companies (the Company), all of which are wholly-owned. All significant intercompany accounts and transactions have been eliminated in consolidation. The condensed financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) and have not been audited or reviewed by independent public accountants. In the opinion of management, all adjustments (which consisted only of normal recurring accruals) necessary to present fairly the financial position and results of operations have been made. Pursuant to SEC rules and regulations, certain information and disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted from these statements unless significant changes have taken place since the end of the most recent fiscal year. FFEX believes that the disclosures contained herein, when read in conjunction with the financial statements and notes included, or incorporated by reference, in FFEX's Form 10-K filed with the SEC on March 29, 1995, are adequate to make the information presented not misleading. It is suggested, therefore, that these statements be read in conjunction with the statements and notes (included, or incorporated by reference), in the aforementioned report on Form 10-K. 2. FINANCING AND INVESTING ACTIVITIES NOT AFFECTING CASH ----------------------------------------------------- During the three months ended March 31, 1995 and 1994, the Company funded contributions to its Employee Savings Plan by transferring 16,360 and 29,465 shares, respectively, of treasury stock to the Plan trustee. The fair market value of the transferred shares was approximately $204,000 for 1995 and approximately $393,000 for 1994. 3. STOCKHOLDERS' EQUITY -------------------- As of March 31, 1995 and 1994, respectively, there were 16,045,000 and 12,617,000 shares of stock outstanding. 4. COMMITMENTS AND CONTINGENCIES ----------------------------- The Company has accrued for costs related to public liability and work-related injury claims, some of which involve litigation. The aggregate amount of these claims is significant. In the opinion of management, these actions can be successfully defended or resolved, and any additional costs incurred over amounts accrued will not have a material adverse effect on the Company's financial position or results of operations. -5- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS - --------------------- The table below sets forth, as a percentage of freight revenue, certain major operating expenses for the three-month periods ended March 31, 1995 and 1994.
Three Months Ended March 31, --------------- 1995 1994 ---- ---- Salaries, wages and related expenses 26.4% 25.1% Purchased transportation 20.9 22.0 Supplies and expenses 27.8 27.5 Revenue equipment rent 6.9 6.0 Insurance and claims 5.3 5.5 Depreciation 4.3 4.4 Other 4.1 4.2 ---- ---- Total freight operating expenses 95.7% 94.7% ==== ====
During the first quarter of 1995, revenue increased by 11% to $66,978,000 with freight revenue up $5.5 million or 9.7% and non-freight revenue up $1.2 million or about 31.7%. Less-than-truckload (LTL) revenue was 4.3% higher while full- truckload revenue increased by 12.6% as compared to the same period of 1994. Full-truckload activities accounted for 67% and 65%, respectively, of consolidated freight revenue during the first quarters of 1995 and 1994. The increase in LTL revenue resulted primarily from increases in the average revenue per hundredweight, resulting primarily from freight rate increases implemented during 1994, and the average weight of these shipments. These increases were partially offset by a 3% decline in the number of LTL shipments handled. The increase in full-truckload revenue resulted primarily from a 10% increase in the number of shipments transported. The number of tractors in the fleet of company-operated, full-truckload equipment rose from approximately 1,000 at the beginning of 1995 to about 1,040 by the end of the quarter, while the number of full-truckload tractors provided by owner-operators increased by about 50 units. Full-truckload activities, which contributed 67% and 65% of freight revenue during the first quarters of 1995 and 1994, respectively, are conducted primarily with company-operated equipment, while LTL activities are conducted -6- primarily with equipment provided by owner-operators. This increase in the percentage of freight revenue derived from full-truckload shipments impacted the percent of freight revenue absorbed by the various categories of operating expenses between the two quarters. For the first quarter of 1994, salaries, wages and related expenses absorbed 25.1% of freight revenue versus 26.4% for the same period of 1995. Supplies and expenses, which includes fuel purchased for company-operated equipment, absorbed 27.5% of freight revenue in the first three months of 1994 versus 27.8% for the same period of 1995. These increases are primarily related to the increase in the percent of total freight revenue provided by full-truckload, company- operated equipment. Conversely, purchased transportation, which consists primarily of payments to owner-operators, decreased from 22.0% of freight revenue for the first quarter of 1994 to 20.9% for 1995. Revenue equipment rent, which is primarily related to the company-operated, full-truckload fleet, rose from 6.0% to 6.9% of freight revenue while depreciation expense declined from 4.4% to 4.3% of freight revenue. These changes resulted primarily from the addition of new leased tractors and from the replacement of owned equipment with new leased tractors after the first quarter of 1994. Operating income increased from $2,934,000 to $2,973,000 between the two quarters. Interest and other expense rose from $249,000 to $380,000 between the two quarters. Due to substantially lower borrowings under the company's line of credit, interest expense associated with bank debt was significantly less during the 1995 quarter. This reduction was more than offset by net expenses associated with the implementation during the 1994 second quarter of a company- owned life insurance ("COLI") program. The provision for income tax was 31% of pre-tax income for the first quarter of 1995, as compared to 35% for 1994. This reduced effective income tax rate is primarily attributable to permanent tax savings resulting from the COLI program. The amount of the tax reduction exceeds the aforementioned net COLI expenses included in interest and other expenses. LIQUIDITY AND CAPITAL RESOURCES The company continues to maintain a strong financial structure with a good working capital position and strong capital resources. At March 31, 1995, working capital was $23.9 million as compared to $25.6 million at December 31, 1994. During the first quarter of 1995, net cash provided by operating activities was $2,564,000, as compared to cash used in operating activities of $1,611,000 in the same period of 1994. The increased generation of cash was related primarily to improved collections of accounts receivable and decreased federal income tax payments. -7- As of March 31, 1995, the unused portion of the company's $50,000,000 revolving credit facility totaled approximately $34,000,000. This availability was approximately $32,000,000 at December 31, 1994. -8- PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 27.1 Financial Data Schedule (b) No reports on Form 8-K were filed during the quarter ended March 31, 1995. -9- SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of l934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. FROZEN FOOD EXPRESS INDUSTRIES, INC. ------------------------------------ (Registrant) May 11, 1995 By: /s/ Stoney M. Stubbs, Jr. ------------------------- Stoney M. Stubbs, Jr. Chairman of the Board May 11, 1995 By: /s/ Burl G. Cott ------------------------- Burl G. Cott Senior Vice President Principal Financial and Accounting Officer -10- EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEETS OF FROZEN FOOD EXPRESS INDUSTRIES, INC. AND SUBSIDIARIES AS OF MARCH 31, 1995, AND THE CONSOLIDATED STATEMENTS OF INCOME, CASH FLOW AND STOCKHOLDERS' EQUITY FOR THE THREE MONTHS ENDED MARCH 31, 1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS DEC-31-1995 JAN-01-1995 MAR-31-1995 2,686 0 35,348 1,161 7,483 54,477 98,538 43,054 115,889 30,597 7,000 25,921 0 0 40,395 115,889 4,936 66,978 0 64,005 380 1,233 0 2,593 807 1,786 0 0 0 1,786 .11 .11
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