Frozen Food Express
weathers first quarter,
regains some momentum
May 6, 2010 10:14 AM
Frozen Food Express Industries Inc announced its financial and operating results for the first quarter ended March 31, 2010.
For the first quarter, operating revenue excluding fuel surcharges decreased 11.7% to $73.3 million from $83.0 million in the first quarter of 2009. Total revenue for the quarter fell 6.9% to $85.8 million from $92.2 million in 2009.
The Dallas TX-based temperature-controlled carrier incurred an after-tax loss of $3.7 million compared with a net loss of $6.1 million in the first quarter of 2009. Although an improvement over 2009, the first quarter loss was primarily a function of the continuing weakness in the economy as well as extremely poor weather conditions in January and February.
Despite the fourth quarter of 2009 showing some signs of economic improvement, Stoney M “Mit” Stubbs, the company’s chairman and chief executive officer, said, “The first quarter of 2010 started off with the potential to be a repeat of 2009. A combination of anemic freight activity and severe storms in January and February stemmed our momentum coming out of the fourth quarter of 2009. Fortunately, March rebounded with strengthening freight activity despite continued poor weather. Increased shipper demand, shrinking capacity, and improving freight yield allowed us to regain our momentum and improve our operating results by $3.1 million compared to the first quarter of 2009.”
During the quarter, asset productivity (measured by revenue per truck per week) increased 0.8% to $3,118 from $3,094 primarily due to a 12.3% decrease in the average weekly trucks in service and an improvement in truckload revenue per mile to $1.44 from $1.39 in 2009, partially offset by an increase in the company’s empty mile ratio to 10.7% from 9.6%.
Operating expenses declined $9.3 million, or 9.3%, on a revenue decline of 6.9%, “evidencing the company’s ongoing commitment to maintaining an appropriate cost structure to cope with current industry conditions,” said Russell Stubbs, Frozen Food Express president. Operating expenses as a percentage of operating revenue (operating ratio) were 106.5% versus 109.2% in the first quarter of 2009.
Despite the operating loss for the quarter, the company remains in a strong cash position with no borrowings outstanding under its revolving credit agreement. Frozen Food Express generated cash flows of $5.6 million from operations and investing activities and had a $9.3 million balance in cash and cash equivalents, $86.4 million in shareholders’ equity, and no outstanding debt.
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