EXHIBIT 99.1
FOR: Frozen Food Express Industries, Inc. FROM: Mike Engleman
LISTED: Nasdaq (FFEX) Mike Engleman/Associates
COMPANY CONTACTS: 11308 Valleydale
Stoney M. (Mit) Stubbs, Jr. (CEO) Dallas, TX 75230
F. Dixon McElwee, Jr. (CFO) (214) 373-6464
(214) 630-8090
FOR IMMEDIATE RELEASE
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FROZEN FOOD EXPRESS INDUSTRIES REPORTS
NET INCOME UP 37% FOR SECOND QUARTER
Dallas, Texas, August 2, 2004--Frozen Food Express Industries, Inc.
(Nasdaq: FFEX) today reported second quarter 2004 net income of $3,492,000 (19
cents per share, diluted) a 37% increase over 2003's second quarter, coming on a
9.3% increase in revenue. For the second quarter of 2003, net income was
$2,547,000 (15 cents per share, diluted) and revenue was $103,731,000. Revenue
for 2004's second quarter was $113,335,000.
Operating profits improved from $2.5 million during the second quarter
of 2003 to $5.1 million for 2004's second quarter. During the second quarter of
2003, AirPro, the non-freight business of FFEX incurred an operating loss of
$381,000, compared to an operating profit of $556,000 during the 2004 second
quarter. For the six months ended June 30, AirPro reported an operating loss of
$976,000 for 2003 and operating income of $566,000 for the 2004 period.
Freight revenue improved from $97.7 million during the 2003 quarter to
$109.8 million during the second quarter of 2004. Higher fuel prices during the
three and six months ended 2004, as compared to the same periods of 2003
resulted in significant increases in fuel surcharge revenue. For the three
months ended June 30, 2003 and 2004, fuel surcharge revenue was $7.2 million and
$3.8 million, respectively.
For the six months ended June 30, 2004, revenue increased by $21.8
million (11.1%) as compared to the year-ago quarter. Net income for the six
months ended June 30, 2004 improved to $5,432,000 (30 cents per share, diluted)
from 2003's six-month net income of $1,879,000 (11 cents per share, diluted).
Stoney M. (Mit) Stubbs, Jr., chairman and CEO, said that, while he was
pleased with the 2004 quarter's results, "we expect things to get better."
"Our business should continue to improve because, after the last few
years of dealing with a softening demand for trucking transportation services
caused by a sloppy economy, this new too-much-freight-for-too-few-trucks supply
vs. demand environment should improve our ability to raise freight rates to pay
us back for the last five years of non-reimbursed increases in our operating
costs.
"We're slowly getting our freight rates to where they need to be to
compensate for years of rising expenses and declining operating profit margins.
But we're not there yet."
Mr. Stubbs pointed to this year's second quarter freight revenue gain
and contrasted it to the quarter's operating income increase. "Much of the
reason for our operating improvement this year has been caused by the
supply/demand imbalance enabling us to use our fleet more efficiently. I believe
that, for the second half of this year, net income gains in our industry will
come from carriers who are finally able to raise their freight rates after
wringing out every ounce of efficiency they can from their trucking operations."
FFEX recently purchased a liability insurance policy that lowered its
deductible from $5 million to $3 million. Mr. Stubbs commented, "We were able to
afford the improved insurance in no small part because of the performance of our
drivers.
"Our drivers earned first place in a national safe-driving competition
conducted by the trucking industry's primary national trade organization, the
American Trucking Associations. The first-place award was in the General
Commodities Truckload/Line-Haul Division for companies whose fleets log 100
million miles, or more, annually."
Those same drivers placed second among fleets traveling 100 million
miles, or more, a year in a safe-driving competition conducted by the Truckload
Carriers Association.
During 2003, FFEX trucks covered almost 250 million miles.
"Were it not for our drivers' skill and safe driving, we would not have
been able to afford our new reduced-retention liability coverage," said Mr.
Stubbs.
"One more thing I want to mention", said Mr. Stubbs. "Last month, we
renegotiated our deal with the bankers. Our line of credit is now $50 million,
compared to $40 million, our interest rate is down by a half percent and the
deal we signed lasts through May 2007.
"All in all, 2004 has been a pretty good year so far, and we have met
several of the challenges that we face as we move forward. We still have much to
do, and will continue to look for opportunities to improve."
CONFERENCE CALL AND WEB CAST
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As previously announced, FFEX will hold a telephonic conference call
tomorrow morning, August 3, 2004 at 10:00 am central time (11:00 am eastern
time) to discuss the three and six month 2004 operating results. Individuals
wishing to participate in the conference call may do so by dialing (800)
659-2056 or (617) 614-2714 and entering the pass code 14743494 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 at www.ffex.net. A replay
of the web cast will be available on the company's web site or by telephone at
(888) 286-8010 or (617) 801-6888 for 90 days following the live web cast. The
pass code for the replay will be 89524405.
SUPPLEMENTARY INFORMATION
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Information about FFEX's operating results during the three and six
month periods ended June 30, 2004 and 2003 is presented in the following table:
Three Months Six Months
2004 2003 2004 2003
---- ---- ---- ----
Full Truckload:
Revenue (A) (B) $70.8 $63.4 $138.0 $120.7
Total Miles (A) 55.6 48.2 110.2 97.5
Shipments (C) 51.3 52.1 104.9 99.1
Per-mile revenue (B) $1.27 $1.32 $1.25 $1.24
Per-shipment revenue (B) $1,380 $1,217 $1,315 $1,218
Miles per shipment 1,084 925 1,050 984
Empty mile ratio 8.3% 9.5% 8.6% 9.1%
Less-than-truckload:
Revenue (A) (B) $30.2 $29.3 $58.9 $56.3
Total Miles (A) 10.3 10.3 19.9 19.8
Shipments (C) 87.7 80.4 172.7 158.2
Per-mile revenue (B) $2.93 $2.84 $2.96 $2.84
Per-shipment revenue (B) $ 344 $364 $ 341 $ 356
Empty mile ratio 8.1% 6.9% 8.0% 7.2%
Other Information:
As of June 30,
Tractors in service 2,265 2,248 2,265 2,248
Trailers in service 3,861 3,670 3,861 3,670
(A) In millions
(B) Excludes surcharge revenue
(C) In thousands
ABOUT FFEX
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Frozen Food Express Industries, Inc. is the largest publicly-owned,
temperature-controlled carrier of perishable goods (primarily food products,
health care supplies and confectionery items) on the North American continent.
Its services extend from Canada, throughout the 48 contiguous United States,
into Mexico. The refrigerated trucking company is the only one serving this
market that is full-service--providing full-truckload, less-than-truckload and
distribution transportation of refrigerated and frozen products. Its
refrigerated less-than-truckload operation is also the largest on the North
American continent. The company also provides full-truckload transportation of
non-temperature-sensitive goods through its non-refrigerated arm, American Eagle
Lines.
FORWARD-LOOKING STATEMENTS
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This report contains information and forward-looking statements that
are based on management's current beliefs and expectations and assumptions which
are based upon information currently available. 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. These statements are based on
current expectations and are subject to uncertainty and change.
Although 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 management's control and that
may have a bearing on operating results 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, 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
the company's filings with the Securities and Exchange Commission.
FROZEN FOOD EXPRESS INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited and in thousands, except per-share amounts)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
---------------------- ---------------------
2004 2003 2004 2003
--------- --------- --------- ---------
Revenue
Freight revenue $ 109,819 $ 97,695 $ 212,235 $ 187,420
Non-freight revenue 3,516 6,036 5,988 8,969
--------- --------- --------- ---------
113,335 103,731 218,223 196,389
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Costs and expenses
Freight operating expenses
Salaries, wages and related expenses 26,744 26,787 52,293 50,565
Purchased transportation 27,354 23,673 53,693 45,407
Supplies and expenses 32,160 26,768 61,021 53,223
Revenue equipment rent 7,888 8,359 16,138 16,241
Depreciation 4,878 3,239 9,490 6,751
Communications and utilities 942 950 1,916 2,023
Claims and insurance 2,910 2,805 5,798 5,796
Operating taxes and licenses 1,163 817 2,291 1,891
Miscellaneous expense 1,193 1,439 1,698 2,576
--------- --------- --------- ---------
105,232 94,837 204,338 184,473
Non-freight costs and operating expenses 2,960 6,417 5,422 9,945
--------- --------- --------- ---------
108,192 101,254 209,760 194,418
--------- --------- --------- ---------
Income from operations 5,143 2,477 8,463 1,971
Interest and other (225) (1,124) 1 (761)
--------- --------- --------- ---------
Income before income tax 5,368 3,601 8,462 2,732
Provision for income tax 1,876 1,054 3,030 853
--------- --------- --------- ---------
Net income $ 3,492 $ 2,547 $ 5,432 $ 1,879
========= ========= ========= =========
Net income per share of common stock
Basic $ .20 $ .15 $ .32 $ .11
========= ========= ========= =========
Diluted $ .19 $ .15 $ .30 $ .11
========= ========= ========= =========
Weighted average shares outstanding
Basic 17,209 16,762 17,174 16,736
========= ========= ========= =========
Diluted 17,937 16,999 17,894 16,951
========= ========= ========= =========
FROZEN FOOD EXPRESS INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited and in thousands)
June 30, Dec. 31,
2004 2003
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Assets
Current assets
Cash and cash equivalents $ 2,852 $ 1,396
Accounts receivable, net 55,159 55,094
Inventories 3,222 4,054
Tires on equipment in use 4,819 5,657
Deferred income taxes 1,267 2,657
Other current assets 6,096 7,843
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Total current assets 73,415 76,701
Property and equipment, net 64,279 66,551
Other assets 13,231 12,358
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$150,925 $155,610
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Liabilities and Shareholders' Equity
Current liabilities
Accounts payable $ 24,758 $ 25,045
Accrued claims 7,213 7,195
Accrued payroll 6,675 3,813
Accrued liabilities 2,301 2,907
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Total current liabilities 40,947 38,960
Long-term debt 1,000 14,000
Deferred income taxes 4,246 2,878
Accrued claims and liabilities 14,642 15,718
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60,835 71,556
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Shareholders' equity
Par value of common stock (17,379 and 17,281
shares issued) 26,069 25,921
Capital in excess of par value 1,192 1,097
Retained earnings 63,281 57,849
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90,542 84,867
Less - Treasury stock (128 and 195 shares), at cost 452 813
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Total shareholders' equity 90,090 84,054
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$150,925 $155,610
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