Exhibit 13.1
============
THIS FORM 10-K INCORPORATES CERTAIN SECTIONS OF THE REGISTRANT'S 2000
ANNUAL REPORT TO SHAREHOLDERS. ACCORDINGLY, ONLY THE PORTIONS OF
REGISTRANT'S 2000 ANNUAL REPORT TO SHAREHOLDERS WHICH ARE INCORPORATED BY
REFERENCE INTO THIS FORM 10-K ARE FILED AS THIS EXHIBIT 13.1.
Management's Discussion and Analysis
of Financial Condition and Results of Operations
-------------------------------------------------
Results Of Operations
Revenue (including revenue from non-freight activities) increased by
5.4% in 2000 to $392.4 million. For 1999, revenue totaled $372.1 million
and was 6.3% above 1998 revenue. Freight revenue rose by 4.1% during
2000 and 1.5% in 1999.
For our full-truckload operations, fuel adjustment charges as a
percent of revenue were 0%, 0.1% and 3.3% during 1998, 1999 and 2000,
respectively. Excluding the impact of these charges, full-truckload
revenue rose by 1.5% in each of 1999 and 2000. These increases
principally resulted from increased shipment volumes and weights, which
were partially offset by a shorter length of haul.
As a percent of total less-than-truckload ("LTL") revenue, fuel
adjustment charges were 0.1%, 0.4% and 3.5% for 1998, 1999 and 2000,
respectively. Excluding the impact of these charges, LTL revenue
declined by 1% during 1999 and another 0.6% during 2000. These declines
primarily resulted from a reduced number of LTL shipments since 1998,
partially offset by increased average shipment size.
At the end of 2000, our full-truckload fleet numbered approximately
1,725 trucks, as compared to about 1,620 at the end of 1999. Primarily
due to the increased number of trucks, the number of full-truckload
shipments rose by 5.4% during 2000 as compared to a 0.6% decrease during
1999.
Independent contractor equipment generated 23.9%, 25.3% and 27.7% of
full-truckload revenue during 1998, 1999 and 2000, respectively. This
resulted from a continuing emphasis on the utilization of independent
contractors to transport full-truckload freight. Independent contractors
typically provide a tractor that they own to transport freight on our
behalf. Contractors pay for the cost of operating their tractors,
including but not limited to the expense of fuel, labor, taxes and
maintenance. We pay these independent contractor owner-operators amounts
determined by reference to the revenue associated with their activities.
As of December 31, 1998, there were approximately 430 such tractors in
the full-truckload fleet. By December 31, 2000, there were approximately
535 such tractors.
We plan to add up to 50 trucks to our company-operated, full-
truckload fleet during 2001. The number of trucks in this fleet declined
by almost 90 during 1999 and rose by 40 to approximately 1,190 during
2000. Continued emphasis will be placed on improving the efficiency and
the utilization of this fleet through enhanced driver training and
retention, by reducing the percentage of non-revenue-producing miles, by
extending the average loaded miles per shipment and through expansion of
dedicated fleet operations. During 2000, we retired and did not replace
about 180 trailers. We intend to further reduce the number of trailers
in the fleet.
Before 1998, we had limited dedicated fleet operations. In such an
arrangement, we provide service involving the assignment of specific
trucks to handle the transportation needs of a customer. Frequently we, and
the customer, expect dedicated fleet logistics services to lower the
customer's transportation costs and improve the quality of the service.
In late 1998, we improved our capability to provide and expanded our
efforts to market dedicated fleet services. During 2000, about 10% of
our company-operated, full-truckload fleet was engaged in dedicated fleet
operations.
The operation of our full-truckload fleet is facilitated by satellite
technology to enhance efficiency and customer service. Location updates
of each tractor are provided by the system and we exchange dispatch, fuel
and other information with the driver by way of satellite.
We have difficulty attracting qualified employee-drivers for our
full-truckload operations. It is not unusual for as many as 100 company-
operated trucks to occasionally be idle due to a shortage of drivers. The
shortage was a prime factor in reducing the size of the company-operated
fleet during 1999. This situation is typical in the industry. It
increases costs of employee-driver compensation, training and recruiting.
Significant resources are continually devoted to recruiting and retaining
qualified employee-drivers and to improving their job satisfaction.
As a part of our recruiting and training program, we partner with
driver training schools. Candidates are pre-qualified and we help fund
their training, contingent upon successful and continuing employment as a
driver for the company. Employee-drivers, as well as all other qualified
employees, participate in 401(k), group health and other benefit
programs. We continually seek to reduce employee-driver turnover and
attract more qualified driver personnel. In mid-2000, we increased the
per-mile rate at which full-truckload employee-drivers are compensated.
Shippers had occasionally expressed dissatisfaction with our inability to
provide service when needed. Shippers also had signaled a willingness to
accept freight rate increases in exchange for better service expected to
result from improved driver availability. It was in light of these factors
that we implemented the employee-driver pay increase.
In mid-2000, energy prices began to rise at an alarming rate.
Pursuant to the contracts and tariffs by which our freight rates are
determined, those rates automatically fluctuate as diesel fuel prices
rise and fall. Accordingly, during the summer of 2000, we began to
simultaneously incur escalating costs for fuel and labor. Most of the
fuel cost increase was passed on to the shippers.
Also during the summer of 2000, we began to ask shippers to accept
increases in basic freight rates to compensate us for the increased
employee-driver payroll costs. Many shippers were unwilling to accept
those increases. The shippers felt rates had already increased as much as
they were willing to pay because of the impact of energy prices.
Therefore, for most of 2000, we were forced to incur the increased
employee-driver payroll costs with little of the expected offsetting
revenue. Future recovery of such cost increases will depend largely on
competitive freight market conditions.
Changes in the percent of freight revenue generated from full-
truckload versus LTL shipments, as well as in the mix of company-provided
versus owner-operator-provided equipment and in the mix of leased versus
owned equipment, contribute to variations among related operating and
interest expenses.
Salaries, wages and related expenses, as a percent of freight
revenue, were 27.3%, 28.7% and 26.9% for 2000, 1999 and 1998,
respectively. The majority of the 1999 increase resulted from increased
work-related injury claims. During 2000, such expenses fell by $1.2
million as compared to 1999. Other fringe benefits, primarily health
insurance costs declined by $1.5 million during 2000 from 1999 levels.
Increased driver payroll expenses associated with the new driver
compensation program essentially offset those improvements.
We have traditionally relied on owner-operator provided equipment to
transport much of our customers' freight. As demand for employee-drivers
has increased, our competitors initiated or expanded owner-operator
fleets. The number of full-truckload and LTL trucks provided to us by
owner-operators rose by about 60 during 2000.
As a result of fluctuations in the quantity and revenue contribution
of such equipment, and as a result of the impact of fuel adjustment
charges, which are passed through to independent contractors involved in
the transportation of shipments billed with such charges, the percent of
freight revenue absorbed by purchased transportation rose from 21.9% in
1998 to 22.6% in 1999 and 24.1% in 2000. We plan to further expand our
fleet of owner-operator trucks during 2001.
Supplies and expenses rose by $5.5 million in 1999 and $5.9 million
in 2000. For 1999 and 2000, 35% and 44%, respectively, of these costs
were related to fuel for the company-operated fleet of tractors and
refrigerated trailers. The average cost per gallon of the fuel we used
increased by nearly 35% during 2000. Absent the 2000 increase in fuel
expenses, the other components of supplies and expenses (principally
repairs, tires and freight handling expenses) rose by $2.3 million in
1999 but fell by $4.1 million in 2000. The improvement during 2000
resulted from more effective management of our maintenance functions.
Sudden and dramatic fuel price volatility impacts our profitability.
We have in place a number of strategies designed to address such
volatility. Owner-operators are responsible for all costs associated
with their equipment, including fuel. Therefore, the cost of such fuel is
not a direct expense of the company. For company-operated equipment, we
attempt to mitigate the impact of fluctuating fuel costs by purchasing
more fuel-efficient tractors and aggressively managing our fuel
purchasing. The rates we charge for our services are usually adjustable
by reference to fuel prices. Relatively high or low fuel prices can
result in upward or downward adjustment of freight rates, further
mitigating the impact of such volatility on our profits. Such
fluctuations result from many external market factors that we cannot
influence or predict. In addition, each year several states increase fuel
taxes. Recovery of future increases or realization of future decreases in
fuel prices and fuel taxes, if any, will continue to depend upon
competitive freight-market conditions.
During 2000, we installed a computer software product designed to
optimize our routing and fuel purchasing. The product enables us to
select the most efficient route for a trip. It also assists us in
deciding how much fuel to buy at a particular fueling station. The
product helps us to optimize our fuel purchasing by, among other things,
analyzing the prices at various retail locations as compared to prices at
other retailers along a planned route of travel. Successful use of this
software product could reduce our fuel expenses by at least 1%.
The total of revenue equipment rent and depreciation expense was
11.4% of freight revenue in 2000, 12.4% in 1999 and 11.4% for 1998.
These fluctuations were due in part to the increased use of leasing to
finance our fleet. Equipment rental includes a component of interest-
related expense that is classified as non-operating expense when we incur
debt to acquire equipment. Equipment rent and depreciation also are
affected by the replacement of less expensive (three year old) company-
operated tractors and (seven year old) trailers with more expensive new
equipment. Depreciation expense associated with our new information
system was also a component of the 1999 increase. During 2000, some of
our buildings became fully depreciated, contributing to reduced
depreciation expenses.
Claims and insurance expense, as a percent of freight revenue, was
5.6% in 2000, 6.0% in 1999 and 4.0% in 1998. Highway accidents are the
primary cause of claims and insurance expense. These expenses tend to
vary with miles traveled and with changes in the mix of full-truckload
versus LTL operations. Insurance premiums do not significantly contribute
to costs, partially because the company carries large deductibles under
its policies of liability insurance. Claims and insurance costs on a per-
mile basis rose by 49% during 1999 but fell by 4.5% during 2000. The
higher 1999 and 2000 claims and insurance expense was due primarily to
adverse claims experience.
In December 2000, we renewed our liability insurance coverage. For
several years prior to 2000, we had benefited from unusually low
insurance premiums and a comparatively low deductible for accident
claims. During 1999 and 2000, however, insurance companies generally
began to increase premiums by as much as 40 to 50 percent. At the same
time, our overall accident frequency (measured as incidents per million
miles) improved, but accidents involving personal injury became more
frequent. Because of these factors, we selected a liability insurance
product that features a higher deductible and a higher premium. We will
continue to emphasize operational safety in an effort to more than offset
these cost increases. Such expenses vary significantly from year to
year. The amount of open claims is significant. We believe that these
claims will be settled or litigated without a material adverse effect on
our financial position or our results of operations.
Gains on the disposition of equipment fell from $840,000 in 1998 to
$594,000 in 1999 and increased to $1.6 million in 2000. The amount of
such gains depends primarily upon conditions in the market for
previously-owned equipment and on the quantity of retired equipment sold.
We usually pre-arrange the retirement sales value before we accept delivery
of a new tractor. Before 2000, the market for used trucking equipment
was quite strong. The pre-arranged retirement value for tractors
delivered in 1997-2000 was, accordingly, high. During 2000, the market
value of previously-owned trucking equipment fell dramatically. That
situation does not impact the pre-arranged retirement value of tractors
presently in our fleets, but softness in the market for used equipment
could diminish future pre-arranged retirement values. That may require us
to increase the amount of depreciation and rental expense we incur in
2001 and beyond. Because we do not intend to acquire significant
quantities of trailers during 2001 or 2002, we do not expect diminished used
equipment market prices to alter our current depreciation or rental
expense related to trailers, but diminished market values could reduce
the amount of gains on sale of trailers in future periods.
Miscellaneous expenses rose by $3.5 million during 1999, almost 90%
of which was due to increased provisions for uncollectible accounts
receivable. During 2000, these expenses fell to a more normal level.
Accounts receivable, net of allowances for doubtful accounts increased by
49% between 1997 and 1999, as compared to an 18% increase in revenue.
Before offset of allowances for doubtful accounts, the 1997 through 1999
increase was 60%. Much of the increase occurred during the last six
months of 1999. This was partially a result of temporary delays in our
collection cycle. During 1999, we completed a major computer systems
conversion. Following this conversion, we had problems regarding the
presentation of invoices to some of our customers, contributing to
increased past-due receivables. During 1999, an analysis resulted in an
increased estimate of such receivables that might not be collected.
During 2000, accounts receivable, net, fell by 9% reflecting improvements
in our accounts receivable collection cycle.
During the fourth quarter of 1999 we announced a plan to restructure
certain of our operations. The plan involved closing terminals,
eliminating certain non-driver employee positions and the early
disposition of certain trailers scheduled for retirement in 2001 and
2002. In 1999's fourth quarter we recorded estimated restructuring
expenses of $3.7 million which included $0.9 million for severance
payments and $2.8 million for expenses associated with the early
termination of trailer leases and the abandonment of a leased facility.
The $3.7 million appears as restructuring expense on the 1999
Consolidated Statement of Income. During the fourth quarter of 1999, we
also recorded certain expenses associated with impairment of long-lived
assets.
We reduced our fleet by 183 trailers in 2000. However, attempts to
negotiate some of the anticipated early lease terminations were not
successful. Because of softness in the late 2000 market for previously-
owned trucking assets we were unable to negotiate early lease termination
arrangements. During the fourth quarter of 2000, we concluded that we
would return the trailers to the leasing companies as originally
specified in the lease agreements. Therefore, $1.8 million of the 1999
restructuring charge was reversed to income in the fourth quarter 2000.
We also have a business engaged in the sale and service of
refrigeration equipment and of trailers used in freight transportation.
Products we market include trailers manufactured by Wabash and mobile
trailer refrigeration machinery manufactured by Carrier Transicold. Our
dealerships are located in major markets, primarily in Texas and
Arkansas. As a percent of non-freight revenue, the operating margin for
these activities improved slightly during 2000, but has not yet returned
to 1998 levels. During 1999 the non-freight segment incurred significant
costs associated with the establishment of new locations and rapidly
increasing working capital. In 2000 such costs decreased, but margins
remained under significant pressure from general softness in the market
for new and previously-owned transportation equipment. Revenue from this
segment was $68.8 million in 2000, $61.2 million in 1999 and $43.8
million during 1998. Operating profits from this segment of $2.6 million,
$1.0 million and $1.9 million were posted for 2000, 1999 and 1998,
respectively.
For 2000 and 1998 we realized profits from all of our operations of
$1.7 million and $16.7 million, respectively, as compared to a loss from
operations of $15.2 million for 1999. For 2000, 1999 and 1998, interest
and other expense was $3.6 million, $4.0 million and $1.0 million,
respectively. Increased interest costs associated with borrowed funds
during 1999 and 2000 and reduced interest income contributed to this
increase.
Our 2000 loss before benefit from income taxes was $1.9 million. In
1999, our pre-tax loss was $19.3 million. For 1998, our pre-tax income
was $15.7 million. The effective income tax rate was 35.2% of pre-tax
income for 2000, as compared to 37.0% for 1999 and 36.5% for 1998.
During 2000, we incurred a net loss of $1.2 million as compared to a
net loss of $12.1 million during 1999. For 1998, net income was $10.0
million.
Liquidity and Capital Resources
During 2000, cash provided by operating activities was $12.7 million
as compared to cash used in operations of $2.6 million in 1999. For
1998, our operating activities provided cashflows of $13.9 million. These
fluctuations have resulted from volatility in profitability coupled with
fluctuating working capital.
Expenditures for property and equipment totaled $7.7 million in 2000,
$28.3 million during 1999 and $27.7 million during 1998. In addition, we
financed, through operating leases, the acquisition of revenue equipment
valued at approximately $36 million in 2000, $40 million during 1999 and
$28 million during 1998.
During 2000, we entered into a new $50 million credit agreement with
a group of three banks. The new credit agreement is for a period of two
years, but we may elect to convert the outstanding balance into a term
loan with quarterly amortization over 4 years following the date of such
an election. Debt is secured by our accounts receivable and inventories.
The banks may elect to perfect liens against revenue equipment owned (but
not leased) by the company. The banks have told us of their intent to do
so. The new credit agreement amended and replaced an agreement that had
been in place since 1992. Due to changes in the capital marketplace and
other factors, the new credit agreement also imposes interest rates and
commitment fees that are higher than those we had enjoyed since 1992.
Our primary needs for capital resources are to finance working
capital, capital expenditures and, from time to time, acquisitions. The
credit agreement requires the banks' approval prior to an acquisition.
Working capital investment typically increases during periods of sales
expansion when higher levels of receivables and, with regard to non-
freight operations, inventory are present.
We had long-term debt of $14 million as of December 31, 2000. Also,
we had issued $3.5 million letters of credit in connection with our
risk management programs. Therefore, the unused portion of the credit
facility was approximately $32.5 million.
We plan to add up to 50 tractors to our company-operated fleet
during 2001. Approximately 350 three-year old tractors, presently
scheduled for retirement during 2001, are expected to be replaced. These
expenditures will be financed with internally generated funds, borrowings
under available credit agreements and leasing. We expect these sources
of capital to be sufficient to finance the company's operations.
Recent Accounting Pronouncements
The Financial Accounting Standards Board has issued and subsequently
amended Statement of Financial Accounting Standards No. 133, "Accounting
for Derivative Instruments and for Hedging Activities", which requires
recognition of all derivatives on the financial statements measured at
fair value. Gains and losses from changes in such fair values could
impact operating results. We do not currently have any derivative
financial instruments and will not be impacted by this standard unless we
engage in such transactions in the future.
Ten-Year Statistics and Financial Data
- --------------------------------------
(unaudited and in thousands, except 2000 1999 1998 1997
ratio, rate, equipment and ---- ---- ---- ----
per-share amounts)
Summary of Operations
Revenue 392,393 372,149 349,932 316,568
Operating expenses 390,664 387,384 333,179 301,508
Net (loss) income (1,212) (12,130) 9,979 9,664
Pre-tax margin (0.5)% (5.2)% 4.5% 4.4%
After-tax return on equity (1.5)% (13.4)% 10.4% 10.9%
Net (loss) income per common share,
diluted (.07) (.74) .59 .57
Financial Data
Working capital 37,016 12,054 39,353 44,979
Current ratio 1.9 1.2 2.2 2.4
Cash provided by (used in)
operations 12,739 (2,559) 13,877 28,460
Capital expenditures, net 129 23,917 22,236 7,955
Debt 14,000 26,500 - -
Shareholders' equity 82,017 83,121 98,277 93,077
Debt-to-equity ratio .2 .3 - -
Common Stock
Average shares outstanding,
diluted 16,318 16,352 17,039 17,056
Book value per share 5.03 5.09 5.96 5.53
Market value per share
High 4.875 8.500 10.500 10.250
Low 1.234 3.250 5.688 8.375
Cash dividends per share - .09 .12 .12
Revenue
Full-truckload 221,623 211,545 206,098 190,576
Less-than-truckload 101,932 99,357 100,015 95,522
TL/LTL % revenue contribution 57/26 57/27 59/29 60/30
Equipment in Service at Yearend
Tractors
Company operated 1,265 1,240 1,328 1,220
Provided by owner-operators 753 690 672 628
Total 2,018 1,930 2,000 1,848
Trailers
Company operated 3,150 3,335 2,940 2,784
Provided by owner-operators 25 23 22 23
Total 3,175 3,358 2,962 2,807
Full-Truckload
Revenue 221,623 211,545 206,098 190,576
Loaded miles 158,041 157,248 155,045 143,902
Shipments 173.9 165.0 166.0 156.9
Revenue per shipment 1,274 1,282 1,242 1,215
Loaded miles per shipment 909 953 934 917
Revenue per loaded mile 1.40 1.35 1.33 1.32
Shipments per business day 690 655 659 623
Revenue per business day 879 839 817 756
Less-than-Truckload
Revenue 101,932 99,357 100,015 95,522
Hundredweight 8,290 8,075 8,502 8,537
Shipments 284.4 277.9 293.1 293.1
Revenue per hundredweight 12.29 12.30 11.76 11.19
Revenue per shipment 358 358 341 326
Revenue per business day 404 394 397 379
Pounds per shipment 2,915 2,906 2,901 2,913
1996 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ----
311,428 292,345 274,620 227,389 194,888 176,995
296,283 276,961 255,484 211,999 183,179 167,033
8,533 9,253 11,874 9,441 7,144 5,202
3.8% 4.5% 6.5% 6.3% 5.8% 4.8%
10.7% 13.3% 20.4% 20.1% 18.6% 16.0%
.51 .56 .72 .58 .45 .34
34,162 25,024 25,623 20,823 16,949 15,612
2.1 1.7 1.8 1.8 1.8 2.1
10,800 24,180 20,025 17,482 16,395 14,968
7,191 8,383 8,160 18,453 18,375 (2,423)
- - 9,000 17,000 12,000 5,000
83,953 75,021 64,288 51,983 41,799 35,059
- - .1 .3 .3 .1
16,838 16,519 16,451 16,276 15,910 15,249
5.04 4.59 4.03 3.31 2.72 2.42
13.875 13.900 15.000 15.000 11.475 4.088
7.875 8.500 11.000 7.275 3.938 1.800
.12 .12 .096 .096 .079 .06
195,458 180,598 163,988 129,549 109,178 103,582
92,496 87,783 88,328 80,965 72,864 65,068
63/30 62/30 60/32 57/36 56/37 59/37
1,202 1,149 1,099 945 800 737
703 667 505 457 432 421
1,905 1,816 1,604 1,402 1,232 1,158
2,998 2,770 2,406 2,027 1,609 1,475
20 27 21 32 24 28
3,018 2,797 2,427 2,059 1,633 1,503
195,458 180,598 163,988 129,549 109,178 103,582
145,785 135,469 121,106 97,753 83,247 80,663
158.1 142.9 128.1 106.6 92.9 85.5
1,236 1,264 1,280 1,215 1,175 1,211
922 948 945 917 896 943
1.34 1.33 1.35 1.33 1.31 1.28
627 567 508 423 367 339
776 717 651 514 431 411
92,496 87,783 88,328 80,965 72,864 65,068
8,652 8,296 8,670 8,116 6,848 6,211
304.6 292.1 305.2 292.0 253.3 231.3
10.69 10.58 10.19 9.98 10.64 10.48
304 301 289 277 288 281
367 348 351 321 288 258
2,840 2,840 2,841 2,779 2,704 2,685
Consolidated Statements of Income
Frozen Food Express Industries, Inc. and Subsidiaries
Years ended December 31,
(in thousands, except per share amounts)
2000 1999 1998
---- ---- ----
Revenue
Freight revenue $323,555 $310,902 $306,113
Non-freight revenue 68,838 61,247 43,819
------- ------- -------
392,393 372,149 349,932
------- ------- -------
Costs and expenses
Freight operating expenses
Salaries, wages and related
expenses 88,411 89,174 82,479
Purchased transportation 77,833 70,353 67,124
Supplies and expenses 94,292 88,430 82,892
Revenue equipment rent 25,144 26,949 25,578
Depreciation 11,582 11,752 9,381
Communications and utilities 4,325 3,949 4,321
Claims and insurance 18,040 18,577 12,207
Operating taxes and licenses 4,239 5,488 4,908
Gain on disposition of
equipment (1,604) (594) (840)
Miscellaneous expense 3,969 6,674 3,172
Impairment of long-lived assets - 2,656 -
Restructuring (1,821) 3,721 -
------- ------- -------
324,410 327,129 291,222
Non-freight costs and operating
expenses 66,254 60,255 41,957
------- ------- -------
390,664 387,384 333,179
------- ------- -------
Income (loss) from operations 1,729 (15,235) 16,753
Interest and other expense 3,599 4,019 1,038
------- ------- -------
(Loss) income before income tax (1,870) (19,254) 15,715
Income tax (benefit) provision (658) (7,124) 5,736
------- ------- -------
Net (loss) income $ (1,212) $(12,130) $ 9,979
======= ======= =======
Net (loss) income per share of common stock
Basic $ (.07) $ (.74) $ .59
Diluted $ (.07) $ (.74) $ .59
======= ======= =======
See accompanying notes.
Consolidated Balance Sheets
Frozen Food Express Industries, Inc. and Subsidiaries
As of December 31,
(in thousands) 2000 1999
---- ----
Assets
Current assets
Cash and cash equivalents $ 1,222 $ 1,613
Accounts receivable, net 47,652 52,312
Inventories 17,208 17,719
Tires on equipment in use 4,424 5,036
Deferred federal income tax - 289
Other current assets 7,546 3,978
------- -------
Total current assets 78,052 80,947
Property and equipment, net 61,899 73,640
Other assets 14,778 15,496
------- -------
$154,729 $170,083
======= =======
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable $ 22,209 $ 24,797
Accrued claims 8,101 6,631
Accrued payroll 5,834 5,890
Short-term debt - 26,500
Deferred federal income tax 416 -
Accrued liabilities 4,476 5,075
------- -------
Total current liabilities 41,036 68,893
Long-term debt 14,000 -
Deferred federal income tax 1,551 2,795
Accrued claims and liabilities 16,125 15,274
Commitments and contingencies - -
------- -------
Total liabilities and
deferred credits 72,712 86,962
------- -------
Shareholders' equity
Common stock (17,281 shares issued) 25,921 25,921
Additional paid-in capital 4,655 5,056
Retained earnings 58,187 59,399
------- -------
88,763 90,376
Less: Treasury stock
(965 and 960 shares), at cost 6,746 7,255
------- -------
Total shareholders' equity 82,017 83,121
------- -------
$154,729 $170,083
======= =======
See accompanying notes.
Consolidated Statements of Cash Flows
Frozen Food Express Industries, Inc. and Subsidiaries
Years ended December 31,
(in thousands) 2000 1999 1998
---- ---- ----
Cash flows from operating activities
Net (loss) income $ (1,212) $(12,130) $ 9,979
Non-cash items involved in income
Depreciation and amortization 15,988 13,564 10,854
Provision for losses on
accounts receivable 3,122 5,296 2,285
Deferred federal income tax (539) (6,124) 997
Gain on disposition of equipment (1,604) (594) (840)
Impairment of long-lived assets - 2,656 -
Restructuring expense (1,821) 3,721 -
Non-cash contribution to
employee benefit plans - - 1,370
Change in assets and liabilities
Accounts receivable 922 (13,359) (10,817)
Inventories 511 (5,144) (1,967)
Tires on equipment in use (1,410) 240 (501)
Other current assets (3,659) (719) (85)
Accounts payable (1,399) 6,505 4,553
Accrued claims and liabilities 3,896 5,377 (2,773)
Accrued payroll (56) (744) 517
Federal income tax payable - (1,104) 305
------ ------- ------
Net cash provided by (used in)
operating activities 12,739 (2,559) 13,877
------ ------- ------
Cash flows from investing activities
Expenditures for equipment (7,711) (28,294) (27,722)
Proceeds from sale of equipment 7,582 4,377 5,486
Other (609) (1,408) (2,787)
------ ------- ------
Net cash used in investing activities (738) (25,325) (25,023)
------ ------- ------
Cash flows from financing activities
Borrowings under revolving
credit agreement 19,000 72,500 2,000
Payments against revolving
credit agreement (31,500) (46,000) (2,000)
Dividends paid - (1,472) (2,016)
Proceeds from sale of treasury stock 257 198 1,546
Purchases of treasury stock (149) (1,752) (5,679)
------ ------- ------
Net cash (used in) provided by
financing activities (12,392) 23,474 (6,149)
------ ------- ------
Net decrease in cash and cash equivalents (391) (4,410) (17,295)
Cash and cash equivalents at
beginning of year 1,613 6,023 23,318
------ ------- ------
Cash and cash equivalents at end of year $ 1,222 $ 1,613 $ 6,023
====== ======= ======
See accompanying notes.
Consolidated Statements of Shareholders' Equity
Frozen Food Express Industries, Inc. and Subsidiaries
December 31, 2000
(in thousands)
Shares of
Common Par Value Additional Shares of Cost of Total
Stock of Common Paid-In Retained Treasury Treasury Shareholders'
Issued Stock Capital Earnings Stock Stock Equity
-------- --------- ---------- -------- -------- -------- -----------
At December 31, 1997 17,281 $25,921 $4,779 $65,038 445 $2,661 $93,077
Net income - - - 9,979 - - 9,979
Cash dividends paid - - - (2,016) - - (2,016)
Treasury stock reacquired - - - - 694 5,679 (5,679)
Treasury stock reissued - - 673 - (250) (1,645) 2,318
Exercise of stock options - - (129) - (107) (727) 598
-------------------------------------------------------------------------
At December 31, 1998 17,281 25,921 5,323 73,001 782 5,968 98,277
Net loss - - - (12,130) - - (12,130)
Cash dividends paid - - - (1,472) - - (1,472)
Treasury stock reacquired - - - - 239 1,752 (1,752)
Exercise of stock options - - (267) - (61) (465) 198
-------------------------------------------------------------------------
At December 31, 1999 17,281 25,921 5,056 59,399 960 7,255 83,121
Net loss - - - (1,212) - - (1,212)
Treasury stock reacquired - - - - 115 318 (318)
Treasury stock reissued - - (305) - (94) (706) 401
Exercise of stock options - - (96) - (16) (121) 25
--------------------------------------------------------------------------
At December 31, 2000 17,281 $25,921 $4,655 $58,187 965 $6,746 $82,017
==========================================================================
Notes to Consolidated Financial Statements
- ------------------------------------------
1. Summary of Significant Accounting Policies
Principles of Consolidation - These consolidated financial statements
include Frozen Food Express Industries, Inc., a Texas corporation, and
its subsidiaries, all of which are wholly-owned (collectively, "FFEX"),
and who are primarily engaged in motor carrier transportation of
perishable commodities, providing service for full-truckload and less-
than-truckload throughout North America. All significant intercompany
balances and transactions have been eliminated in consolidation.
Accounting Estimates - The preparation of financial statements
requires estimates and assumptions that affect the value of assets,
liabilities, revenue and expenses. Estimates and assumptions also
influence the disclosure of contingent assets and liabilities. Actual
outcomes may vary from these estimates and assumptions.
Cash Equivalents - FFEX considers all highly liquid investments with
a maturity of three months or less at the time of purchase to be cash
equivalents.
Accounts Receivable - FFEX extends trade credit to customers
primarily located in the united States. Accounts receivable from
customers are stated net of allowances for doubtful accounts of
$7,350,000 and $8,392,000 as of December 31, 2000 and 1999, respectively.
Inventories - Inventories are valued at the lower of cost
(principally weighted average cost or specific identification method) or
market.
Tires - FFEX records the cost of all tires purchased with vehicles
and all replacement tires as a current asset. Tires are then recorded to
expense on a per-mile basis.
Freight Revenue and Expense Recognition - Freight revenue and
associated direct operating expenses are recognized on the date the
freight is picked up from the shipper. The Securities and Exchange
Commission has issued a Staff Accounting Bulletin ("SAB") providing
guidance on revenue recognition issues in financial statements. The
company has completed a thorough review of its revenue recognition
policies and determined that the company is in compliance with the SAB.
Income Taxes - Deferred income taxes are provided for temporary
differences between the tax basis of assets and liabilities and their
financial reporting amounts. Deferred taxes are recorded based upon
statutory tax rates anticipated to be in effect when temporary
differences are expected to reverse.
Long-Lived Assets - FFEX periodically evaluates whether the remaining
useful life of long-lived assets may require revision or whether the
remaining unamortized balance is recoverable. When factors indicate that
an asset should be evaluated for possible impairment, FFEX uses an
estimate of the asset's discounted cash flow in evaluating its
recoverable value. Included in other non-current assets are costs
associated with life insurance policies and related investments owned by
FFEX.
Prior Period Amounts - In order to maintain comparability in
classification, certain amounts reported in prior periods have been
reclassified to conform with the current year presentation.
2. Property and Equipment
Depreciation expense is recorded by the straight-line method.
Repairs and maintenance are charged to expense as incurred. Property and
equipment is carried at historical cost and consists of the following (in
thousands):
Estimated
December 31, Useful Life
2000 1999 (Years)
---- ---- -----------
Land $ 4,845 $ 4,845 -
Buildings and improvements 16,421 15,599 20 - 30
Revenue equipment 53,098 64,046 3 - 7
Service equipment 17,233 16,642 2 - 20
Computer, software and
related equipment 20,235 18,292 3 - 12
------- -------
111,832 119,424
Less accumulated depreciation 49,933 45,784
------- -------
$ 61,899 $ 73,640
======= =======
3. Debt
As of December 31, 2000, FFEX had a $50 million secured line of
credit pursuant to a revolving credit agreement with three commercial
banks. The agreement is terminable by any party upon sixty days' notice,
with repayment due ratably over 4 years commencing upon termination.
Interest is due quarterly. FFEX may elect to borrow at a daily interest
rate based on the bank's prime rate or for specified periods of time at
fixed interest rates which are based on the London Interbank Offered Rate
in effect at the time of a fixed rate borrowing. At December 31, 2000,
$14 million was borrowed against this facility.
The facility is secured by liens against FFEX's inventory and trade
accounts receivable. The banks have the ability to request liens on the
over-the-road trucking equipment of FFEX. The agreement also contains a
pricing "grid" where increased levels of profitability and cash flows or
reduced levels of indebtedness can reduce the rates of interest expense
incurred by FFEX. The agreement restricts, among other things, payments
of cash dividends, repurchase of FFEX stock and the amount of capital
expenditures. The amount FFEX may borrow under the facility may not
exceed the lesser of $50 million, as adjusted for letters of credit and
other debt as defined in the agreement, or a multiple of a measure of
cashflow as described in the agreement. The amended and restated credit
agreement expires on June 1, 2002. Upon expiration of the agreement, FFEX is
required to repay the amount then borrowed in 48 consecutive monthly
installments.
Letters of credit issued against the credit facility in connection
with the company's risk management program totaling approximately $3.5
million were in effect as of December 31, 2000. Accordingly,
approximately $32.5 million was available under the agreement. Total
interest payments under the credit line during 2000, 1999 and 1998 were
$2,155,000, $1,341,000 and $5,000, respectively. The weighted average
interest rate incurred by the company during 2000 was 8.6%.
4. Commitments and Contingencies
FFEX leases real estate and equipment. The aggregate future minimum
rentals under non-cancelable operating leases at December 31, 2000 were
(in thousands):
Third Related
Parties Parties Total
------- ------- -----
2001 $22,762 $ 1,672 $24,434
2002 17,075 1,123 18,198
2003 10,303 454 10,757
2004 5,838 - 5,838
2005 3,841 - 3,841
After 2005 2,949 - 2,949
------ ------ ------
Total $62,768 $ 3,249 $66,017
====== ====== ======
Related parties involve tractors leased from officers of
FFEX under non-cancelable operating leases. For 2000, 1999 and 1998,
payments to officers under these leases were $1,755,000, $1,414,000 and
$1,389,000, respectively. Rentals for equipment leased from related parties
are determined by reference to similar amounts paid by FFEX to unrelated
third party lessors.
At December 31, 2000, FFEX had purchase commitments of approximately
$30 million for the purchase of revenue equipment during 2001.
FFEX has accrued for costs related to public liability, cargo and
work-related injury claims. When an incident occurs FFEX records a
reserve for the incident's estimated outcome. As additional information
becomes available, adjustments are made. Accrued claims liabilities
include all such reserves and FFEX's estimate for incidents which may
have been incurred but not reported. In the opinion of management, any
additional costs incurred over amounts previously accrued to resolve these
claims will not materially deviate from the aggregate amounts accrued. At
December 31, 2000, FFEX had established $3.5 million of irrevocable
letters of credit in favor of insurance companies and pursuant to certain
insurance agreements. The letters of credit may be drawn upon in the
event of default for failure to pay claims.
5. Financing and Investing Activities Not Affecting Cash
During 2000, FFEX funded contributions to a Supplemental Executive
Retirement Plan (a "SERP") by transferring 79,346 shares of treasury
stock to a Rabbi Trust in which SERP assets are invested. During 1998,
FFEX funded contributions to its Employee Savings Plan and one of its
Employee Stock Ownership Plans and Trusts (ESOPs) by transferring 140,194
shares of treasury stock to the plans' trustees. No shares were
contributed to the ESOPs in 2000 or 1999. FFEX recorded expense for the
fair market value of the shares, which at the time of the contributions,
was approximately $169,000 for 2000 and $1,370,000 for 1998.
As of December 31, 2000 and 1999, accounts receivable included
$735,000 and $118,000, respectively, from the sale of equipment retired
and sold during 2000 and 1999.
6. Savings Plan
FFEX sponsors a 401(k) Savings Plan for its employees. Contributions
by FFEX to the 401(k) are determined by reference to voluntary
contributions made by each employee. Additional contributions are made at
the discretion of the Board of Directors. FFEX contributions are made in
cash. For 2000, 1999 and 1998, total company contributions to the plan
were approximately $1,370,000, $1,481,000 and $1,653,000, respectively.
7. Net Loss or Income Per Share of Common Stock
Basic Earnings Per Share ("EPS") is computed by dividing net loss or
income by the weighted average number of shares of common stock
outstanding during the year. Diluted EPS is determined by dividing net
income by the weighted average shares outstanding assuming the exercise
of all dilutive items (using the treasury stock method). The table below
sets forth information regarding weighted average basic and diluted
shares (in thousands):
2000 1999 1998
---- ---- ----
Basic shares 16,318 16,352 16,789
Common stock equivalents - - 250
------ ------ ------
Diluted shares 16,318 16,352 17,039
====== ====== ======
All common stock equivalents result from dilutive stock options. For
1998, the percentage of stock options excluded from common stock
equivalents due to exercise prices in excess of average market prices was
52%. For 2000 and 1999, approximately 18,000 and 81,000, respectively,
of common stock equivalent shares were excluded because their impact
would have been anti-dilutive.
8. Income Taxes
Total federal income taxes paid by FFEX were $5,150,000 for 1998.
No such taxes were paid during 2000 or 1999. Net operating loss carry-
forwards will begin to expire in 2020. Changes in the primary components
of the net deferred tax liability were (in thousands):
Deferred
December 31, (Provision) December 31,
1999 Benefit 2000
----------- ---------- -----------
Deferred Tax Assets:
Accrued claims $ 5,779 $ 1,436 $ 7,215
Net operating loss 5,934 (4,969) 965
Allowance for bad debts 1,745 909 2,654
------ ------ -------
13,458 (2,624) 10,834
------ ------ ------
Deferred Tax Liabilities:
Prepaid expense (2,901) 126 (2,775)
Property and equipment (10,987) 3,329 (7,658)
Other (2,076) (292) (2,368)
------ ----- ------
(15,964) 3,163 (12,801)
------ ----- ------
$ (2,506) $ 539 $ (1,967)
====== ===== ======
The (benefit from) provision for income tax consists of the
following (in thousands):
2000 1999 1998
---- ---- ----
Taxes currently payable:
Federal $(114) $(1,104) $4,264
State (5) 104 475
Deferred federal taxes (539) (6,124) 997
---- ------ -----
$(658) $(7,124) $5,736
==== ====== =====
Differences between the statutory federal income tax rate and
FFEX's effective income tax rate are as follows:
2000 1999 1998
---- ---- ----
Statutory federal income tax rate 34.0% 35.0% 34.5%
State income taxes and other 1.2 2.0 2.0
---- ---- ----
35.2% 37.0% 36.5%
==== ==== ====
9. Shareholders' Equity
As of December 31, 2000, 1999 and 1998, there were authorized 40
million shares of FFEX's $1.50 par value common stock.
Stock option plans were adopted in 1996, 1994, 1993, 1987 and 1982
and options may be granted to officers and employees of FFEX at the fair
market value on the date of grant and to non-employee directors of FFEX
at the greater of $1.00 or 50% of the market value at date of grant.
Expense for grants to non-employee directors was $29,000, $35,000 and
$56,000 for 2000, 1999 and 1998, respectively. Options may be granted
for 10 years following plan adoption and expire 10 years after a grant.
The following table summarizes information regarding stock options
(in thousands, except per-share amounts):
2000 1999 1998
---- ---- ----
Options outstanding at beginning of year 3,182 3,217 2,329
Cancelled (323) (566) (705)
Granted 711 592 1,700
Exercised (16) (61) (107)
----- ----- -----
Options outstanding at year end 3,554 3,182 3,217
===== ===== =====
Exercisable options 1,363 1,402 1,045
Options available for future grants 1,642 2,045 1,761
Weighted average price of options
Cancelled during year $8.36 $8.66 $8.66
Granted during year $2.77 $7.70 $8.48
Exercised during year $2.36 $3.13 $5.20
Outstanding at year end $7.44 $8.55 $8.03
The range of unexercised option prices at December 31, 2000 was as
follows:
Quantity of Options
(in thousands) Priced Between
----------------- --------------
840 $1.00 - $ 5.00
490 $5.01 - $ 8.00
2,224 $8.01 - $12.40
FFEX applies APB Opinion 25 and related interpretations in accounting
for its stock options. Accordingly, no expense has been recognized for
stock option grants to employees. Had FFEX elected to apply Financial
Accounting Standards Board ("FASB") Statement of Financial Accounting
Standards ("SFAS") No. 123 to account for stock options, FFEX's net loss
would have increased to $2.2 and $13.3 million ($0.13 and $0.81 per
share) for 2000 and 1999, respectively. FFEX's net income would have
been reduced to $9.2 million ($0.54 per share) for 1998. For purposes of
pro forma disclosures, the estimated fair value of the options is
recognized over the options' vesting period.
The fair value for these options was estimated at the date of grant
using a Black-Scholes option valuation model with the following weighted
average assumptions:
2000 1999 1998
---- ---- ----
Risk-free interest rate 6.00% 4.71% 5.27%
Dividend yield - 1.50% 1.46%
Volatility factor .467 .700 .365
Expected life (years) 6.0 6.2 5.8
The Black-Scholes model uses highly subjective assumptions and was
developed for use in estimating the value of options that have no
restrictions on vesting or transfer. FFEX's stock options have such
restrictions. Therefore, in management's opinion, the existing models do
not necessarily provide a reliable single measure of the fair value of
its stock options.
The company sponsors a SERP for the benefit of certain "highly
compensated" personnel (as determined in accordance with the Employee
Retirement Income Security Act of 1974). The SERP's investment income,
assets and liabilities which are contained in a Rabbi Trust, are included
in the company's financial statements. Upon the formation of the Rabbi
Trust during 2000, 79,346 shares of FFEX stock were issued by the company
into the Rabbi Trust. As of December 31, 2000, all of those shares
remained in the trust.
Consistent with the FASB's Emerging Issues Task Force ("EITF")
Issue 97-14, the shares of company common stock held in a Rabbi Trust are
accounted for as Treasury Stock until SERP participants elect to
liquidate the stock.
During 2000, the Board of Directors approved a Rights Agreement
that authorized a distribution of a dividend of one Common Stock Purchase
Right for each outstanding share of its Common Stock. The Rights become
exercisable upon the occurrence of certain events generally relating to a
change of control. Rights initially have an exercise price of $11. Upon
the occurrence of such events, the Rights will be exercisable for a
number of shares having a market value equal to two times the exercise
price of the Rights. The Company may redeem the Rights for $.001 each.
The Rights will expire in 2010, but the Rights Agreement is subject to
review every three years by an independent committee of the Board of
Directors, which may recommend its modification or termination. Until
the Rights become exercisable upon certain triggering events, the Rights
trade as a unit with the Common Stock.
10. Fair Value of Financial Instruments
As of December 31, 2000, debt was $14 million, which approximated
fair market value.
In October 2000 and January 2001, FFEX contributed approximately
160,000 shares of its common stock into a Rabbi Trust for benefit of
participants in a SERP. The EITF has stated that the assets, liabilities
and income (realized and unrealized) of such trusts must be reflected in
the financial statements of the company. To the extent that trust assets
are invested in equities of the SERP's sponsor, the impact of EITF issue
97-14 is that future pre-tax income will reflect changes in the market
valuation of the company's stock. Future net income will be increased
or decreased to reflect decreases or increases, respectively, in the value
of FFEX shares held by the Rabbi Trust.
Except as described in the preceding paragraph, FFEX held no material
market-risk-sensitive instruments (for trading or non-trading purposes)
which would involve significant foreign currency exchange rate risk,
commodity price risk or other relevant market risks, such as equity price
risk. Accordingly, except for the impact of EITF Issue 97-14, the
potential loss to FFEX in future earnings, fair values or cash flows of
market-risk-sensitive investments resulting from changes in interest
rates, foreign currency exchange rates, commodity prices and other
relevant market rates or prices is not significant.
11. Restructuring Expense
During the fourth quarter of 1999, FFEX announced a restructuring
plan. The plan called for the closure of certain terminals, elimination
of approximately 150 non-driver employee positions and early disposition
of some trailers previously scheduled for retirement in 2001 and 2002.
In connection with the plan, during 1999's fourth quarter, FFEX recorded
estimated restructuring expenses, including severance payments, estimated
costs for early termination of trailer leases and the cost of a facility
abandonment.
During 2000, FFEX approached lessors regarding their willingness to
terminate some trailer leases. The lessors generally responded that they
would not terminate the leases under terms acceptable to FFEX. During
the fourth quarter of 2000, management concluded that FFEX would continue
the leases on the majority of the involved trailers. Accordingly, during
the fourth quarter of 2000, $1.8 million of the original restructuring
estimate was reversed to income. A summary of the 1999 restructuring
charge and its application during 2000 is as follows (in millions):
Amount Amount Amount Amount Expected
of Used in Reversed To Be used
Amounts Associated With Charge 2000 In 2000 In 2001
- ------------------------ ------- ------- -------- ----------
Severance payments and facility closures $0.9 $(0.7) $ - $0.2
Early trailer retirement and rehabilitation 2.8 (0.3) (1.8) 0.7
--- --- --- ---
Total $3.7 $(1.0) $(1.8) $0.9
=== === === ===
12. Impairment of Long-Lived Assets
During the first half of 1999, FFEX converted to a management
information system that had been in development for several years.
Consistent with American Institute of Certified Public Accountants
("AICPA") Statement of Position No. 98-1, FFEX capitalized as a long-
lived asset the direct costs associated with the development effort.
During the fourth quarter 1999, FFEX determined that certain components
of the system were impaired. In accordance with SFAS No. 121 "Accounting
for the Impairment of Long-Lived Assets" associated costs of $2.7 million
were charged to expense during the fourth quarter of 1999.
13. Operating Segments
The operations of FFEX consist of two reportable segments as defined
by SFAS No. 131 "Disclosures About Segments of an Enterprise and Related
Information". The larger segment consists of FFEX's motor carrier
operations. Such operations are conducted in a number of divisions and
subsidiaries and are similar in nature. FFEX has elected to report all
motor carrier operations as one reportable segment. The smaller segment
consists of FFEX's non-freight operations that are engaged primarily in
the sale and service of refrigeration equipment and of trailers used in
freight transportation.
Financial information for each reportable segment is as follows (in
millions):
2000 1999 1998
---- ---- ----
Freight Operations
Total revenue $323.6 $310.9 $306.1
Restructuring expense (1.8) 3.7 -
Operating (loss) income (0.9) (16.2) 14.9
Total assets 147.9 156.5 140.3
Non-Freight operations
Total revenue $ 72.6 $ 74.7 $ 56.6
Operating income 2.6 1.0 1.9
Total assets 31.5 33.2 23.0
Intercompany eliminations
Revenue $ 3.8 $ 13.5 $ 12.8
Total assets 24.7 19.6 13.6
Consolidated
Revenue $392.4 $372.1 $349.9
Restructuring expense (1.8) 3.7 -
Operating (loss) income 1.7 (15.2) 16.8
Total assets 154.7 170.1 149.7
Intercompany eliminations relate to non-freight revenue from
transfers at cost of inventory such as trailers and refrigeration units
from the non-freight segment for use by the freight segment.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Frozen Food Express Industries, Inc.:
We have audited the accompanying consolidated balance sheets of
Frozen Food Express Industries, Inc. and subsidiaries as of December 31,
2000 and 1999, and the related consolidated statements of income,
shareholders' equity, and cash flows for each of the three years in the
period ended December 31, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards
generally accepted in the United States. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Frozen Food
Express Industries, Inc. and subsidiaries as of December 31, 2000 and
1999, and the results of their operations and their cash flows for each
of the three years in the period ended December 31, 2000, in conformity
with accounting principles generally accepted in the United States.
Dallas, Texas /s/ ARTHUR ANDERSEN LLP
February 16, 2001
Unaudited Quarterly Financial, Stock and Dividend Information
=============================================================
(in thousands, except per-share amounts) First Second Third Fourth
- ---------------------------------------- Quarter Quarter Quarter Quarter Year
------- ------- ------- ------- ----
2000
Revenue $92,416 $99,999 $101,402 $98,576 $392,393
Income (loss) from operations 258 1,904 (1,371) 938 1,729
Net (loss) income (563) 753 (1,469) 67 (1,212)
Net (loss) income per share of common stock
Basic (.03) .05 (.09) - (.07)
Diluted (.03) .05 (.09) - (.07)
Common stock price per share
High 4.875 3.688 3.063 2.469 4.875
Low 2.906 2.250 2.281 1.234 1.234
Common stock trading volume 1,423 2,026 1,078 3,624 8,151
1999
Revenue $88,257 $96,818 $97,171 $89,903 $372,149
Income (loss) from operations 2,435 2,576 (830) (19,416) (15,235)
Net income (loss) 1,263 1,317 (1,166) (13,544) (12,130)
Net income (loss) per share of common stock
Basic .08 .08 (.07) (.83) (.74)
Diluted .08 .08 (.07) (.83) (.74)
Cash dividends per share .03 .03 .03 - .09
Common stock price per share
High 8.500 7.625 7.625 6.250 8.500
Low 6.000 5.813 4.875 3.250 3.250
Common stock trading volume 1,250 1,560 1,733 2,045 6,588
As of March 2, 2001, FFEX had approximately 5,000 beneficial
shareholders, including participants in savings and retirement plans