UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Act of 1934
July 29, 2004
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Date of Report (Date of earliest event reported)
Central Freight Lines, Inc.
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(Exact name of registrant as specified in its charter)
Nevada 00050485 74-2914331
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(State or other (Commission (IRS Employer
jurisdiction File number) Identification
of incorporation or Number)
organization)
5601 West Waco Drive, Waco, TX, 76710
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(Address of principal executive offices)
(Zip code)
Registrant's telephone number,including area code:
(254) 772-2120
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired.
Not applicable
(b) Pro forma financial information.
Not applicable
(c) Exhibits.
99.1 Press Release dated July 29, 2004.
ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On July 29, 2004, Central Freight Lines, Inc. announced its results of
operations for the quarter ended July 3, 2004. The public announcement was made
by means of a press release attached, the text of which is being furnished to
the U. S. Securities and Exchange Commission in Exhibit 99.1 hereto.
The information contained in this report and the exhibit hereto shall not be
deemed "filed" for purposes of Section 18 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), or incorporated by reference in any
filing under the Securities Act of 1933, as amended, or the Exchange Act, except
as shall be expressly set forth by specific reference in such a filing.
The information in this report and the exhibit hereto may contain
"forward-looking statements" that are made pursuant to the safe-harbor
provisions of the Private Securities Litigation Reform Act of 1995 and otherwise
may be protected. Such statements are made based on the current beliefs and
expectations of the Company's management and are subject to significant risks
and uncertainties that could cause actual results to differ materially. Please
refer to the Company's prospectus filed on December 12, 2003, and the Company's
other filings with the Securities and Exchange Commission for information
concerning risks, uncertainties, and other factors that may affect future
results.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CENTRAL FREIGHT LINES, INC.
Date: July 29, 2004 By: /s/ Jeffrey A. Hale
------------------------
Name: Jeffrey A. Hale
Title: Senior Vice President and
Chief Financial Officer
2
INDEX TO EXHIBITS
Exhibit No. Description
99.1 Press Release dated July 29, 2004.
3
CENTRAL FREIGHT LINES, INC. REPORTS
SECOND QUARTER FINANCIAL RESULTS
Waco, TX (PR Newswire)--July 29, 2004--Central Freight Lines, Inc. (Nasdaq/NMS:
CENF) announced today its financial results for the quarter and six months ended
July 3, 2004.
For the second quarter of 2004, operating revenue was $105.5 million on 64
working days, compared to operating revenue of $100.2 million on 63 working days
for the second quarter of 2003. Revenue per working day increased 3.7% and total
tons hauled per working day increased 2.2%, for the second quarter of 2004
compared to the same period last year.
Consistent with the Company's previous guidance a net loss of $2.5 million, or
$0.14 per diluted share was realized in the second quarter of 2004. The $2.5
million net loss included a $1.8 million, or $0.10 per diluted share, tax
benefit from the reversal of a previously existing tax liability as a result of
an IRS review. Pro forma net loss for the second quarter of 2003 was $831,000,
or $0.08 per diluted share, using a pro forma tax rate of 39%. Prior to November
1, 2003, the Company was an S corporation and federal income tax attributes
flowed directly to stockholders.
For the six months ended July 3, 2004, operating revenue amounted to $202.6
million a 1.8% increase over the $199.0 million reported for the same period in
2003. A $3.7 million net loss (equivalent to $0.21 loss per diluted share) was
reported for the six months ended July 3, 2004, compared to pro forma net income
of $1.1 million (equivalent to $0.09 pro forma earnings per diluted share) for
the same period in 2003.
Central's President and Chief Executive Officer, Bob Fasso, commented on the
Company's results, "Our current focus is on yield, labor and purchased
transportation, which were significant contributors to the second quarter loss.
LTL revenue per hundredweight, excluding fuel surcharges, remained essentially
constant compared with the second quarter of 2003, while our average length of
haul increased by approximately 11%. LTL revenue per hundredweight, excluding
fuel surcharge, declined over 3% from the first quarter of 2004 despite an
increase in average length of haul of approximately 3%. Productivity, measured
by bills handled per hour, declined approximately 4% in the second quarter of
2004 compared to the same quarter last year. In addition, our current freight
imbalance is continuing to cause a high usage of expensive one-way purchased
transportation to balance freight lanes. With the extensive experience within
our team, we believe we have identified the steps and are taking the actions
necessary to reverse these negative trends."
Mr. Fasso continued, "In addition, I am excited to announce that Walt Ainsworth
joined us last week as Executive Vice President. Walt brings to Central more
than 30 years experience in the trucking industry, most recently as the
President of USF Corporation's Eastern Carrier Group. He has also served as the
President and CEO of USF Dugan and Vice President of Operations for USF
Reddaway. As Executive Vice President he will be involved in all aspects of the
Company."
4
As of July 3, 2004, Central's balance sheet reflected $13.0 million in cash,
$44.3 million in long-term debt and capital lease obligations, including current
portion, a $2 million current note payable for the balance due on the purchase
of Eastern Oregon Fast Freight's (EOFF) assets and $106.5 million in
stockholders' equity. The company had net capital expenditures, primarily for a
terminal and revenue equipment, of $11.0 million during the second quarter and
$13.3 million during the six months ended July 3, 2004, plus an additional $8.1
million dollars relating to the purchase of certain assets of EOFF in March
2004. The Company expects net capital expenditures of approximately $15 million
for the second half of 2004, excluding the additional $2.0 million that may
become due for the EOFF purchase. On July 28, 2004, the Company increased its
revolving line of credit to $30 million, extended the maturity date of the
facility to April 30, 2006, and implemented cost savings in connection with
issuing letters of credit. As of July 3, 2004, the Company was in compliance
with the terms of its revolving line of credit and its $40 million accounts
receivable securitization facility.
A conference call will be held 11:00am (EDT) on Friday, July 30 for the
investment community. Persons who wish to access and listen to the call may do
so by dialing 1-888-275-4480 and referencing the leader's name (Bob Fasso) and
the Company's name (Central Freight Lines). Please dial in 5 to 10 minutes prior
to the start of the call. A live webcast is also available at
www.centralfreight.com and www.streetevents.com. For more information on how to
access the webcast, and for statistical and financial information regarding the
Company that is expected to be discussed during the conference call, please
visit our website at www.centralfreight.com.
A telephone replay will be available after 3:30pm (EDT) on July 30. To access
the replay, dial 1-800-642-1687, reference ID # 8917639. A replay of the call
will also be available on demand at both web sites.
Central Freight Lines, Inc. is a non-union less-than-truckload carrier
specializing in regional overnight and second day markets. One of the 10 largest
regional LTL carriers in the nation, Central provides regional, interregional,
and expedited services, as well as value-added supply chain management,
throughout the Midwest, Southwest, West Coast and Pacific Northwest. Utilizing
marketing alliances, Central provides service solutions to the Great Lakes,
Northeast, Southeast, Mexico and Canada.
This press release contains forward-looking statements that involve risk,
assumptions, and uncertainties that are difficult to predict. Statements that
constitute forward-looking statements are usually identified by words such as
"anticipates," "believes," "estimates," "projects," "expects," "plans,"
"intends," or similar expressions. These statements are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Such statements are based upon the current beliefs and expectations of our
management and are subject to significant risks and uncertainties. Actual
results may differ from those set forth in the forward-looking statements. The
following factors, among others, could cause actual results to differ materially
from those in the forward-looking statements: the risk that revenue growth may
be delayed or not occur at all; the risk that rate decreases will be required to
generate additional business; the risk that efficiency and productivity
measures, including dynamic resource planning programs, will be further delayed
or will not be successfully implemented throughout our operations; the risk that
significant geographic expansion has produced or may produce freight imbalances,
customer service issues, operational issues, or other consequences that we
cannot manage successfully on a timely basis or at all; the risk that our
insurance and claims costs will continue to exceed our expectations; and the
risks detailed from time to time in reports filed by the Company with the
Securities and Exchange Commission, including forms 8-K, 10-Q, 10-K, and our
registration statement on Form S-1.
Corporate Contact:
Jeff Hale, Chief Financial Officer
(480) 361-5295
jhale@centralfreight.com
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CENTRAL FREIGHT LINES, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, dollars in thousands, except per share data)
Quarters ended Six months ended
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July 3, 2004 July 5, 2003 July 3, 2004 July 5, 2003
------------ ------------ ------------ ------------
Working Days
64 63 130 130
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Operating revenues $105,513 $100,150 $202,551 $198,952
------- ------- ------- -------
Operating expenses:
Salaries, wages and benefits * 60,084 55,651 115,740 108,470
Purchased transportation 11,387 9,679 22,692 17,504
Purchased transportation-related parties 5,965 6,003 8,242 12,209
Operating and general supplies and expenses 21,045 16,639 39,625 34,166
Operating and general supplies and expenses-related parties 39 (15) 134 20
Insurance and claims 6,657 5,507 10,401 8,386
Building and equipment rentals 1,044 805 1,973 1,633
Building and equipment rentals - related parties 376 350 896 772
Deprecation and amortization 3,951 4,286 7,870 8,558
------- ------- ------- -------
Total operating expenses 110,548 98,905 207,573 191,718
------- ------- ------- -------
(Loss) income from operations (5,035) 1,245 (5,022) 7,234
Other expense:
Interest expense (368) (1,024) (573) (2,001)
Interest expense - related parties (1,537) (1,583) (3,142) (3,095)
------- ------- ------- -------
(Loss) income from before income taxes (6,940) (1,362) (8,737) 2,138
Income tax:
Income tax benefit (expense) 4,397 57 5,065 (129)
------- ------- ------- -------
Net (loss) income $ (2,543) $ (1,305) $ (3,672) $ 2,009
======= ======= ======= =======
Pro forma C Corporation data (unaudited):
Historical (loss) income before income taxes $ - $ (1,362) $ - $ 2,138
Pro forma income tax benefit (expense) - 531 - (1,029)
------- ------- ------- -------
Pro forma net (loss) income $ - $ (831) $ - $ 1,109
======= ======= ======= =======
(Loss) income per share:
Basic: (0.14) (0.08)** (0.21) 0.10**
Diluted: (0.14) (0.08)** (0.21) 0.09**
Weighted average outstanding shares (in thousands):
Basic 17,842 10,868 17,777 10,868
Diluted 17,842 10,868 17,777 12,077
<FN>
* YTD 2003 includes a $3,003 gain resulting from amendments to a benefit plan.
** Calculation based on pro forma net (loss) income.
</FN>
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CENTRAL FREIGHT LINES, INC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
July 3, 2004 and December 31, 2003
(Unaudited, dollars in thousands, except per share data)
Assets 2004 2003
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Cash $ 12,992 $ 41,493
Accounts receivable 57,536 51,864
Other current assets 9,935 8,298
Deferred income taxes 9,721 4,588
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Total current assets 90,184 106,243
Property and equipment, net 126,289 114,693
Goodwill 4,324 4,324
Other assets 5,689 2,113
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Total assets $ 226,486 $ 227,373
================== ==================
Liabilities and stockholders' equity
Current maturities of long term-debt $ 7,187 $ 6,375
Notes payable 2,024 -
Trade accounts payable 22,454 18,136
Payables for related party transportation services 3,380 1,020
Accrued expenses 25,854 27,207
------------------ ------------------
Total current liabilities 60,899 52,738
Long-term debt, excluding current maturities 14,206 19,988
Related party financing 22,920 23,154
Other liabilities 21,990 23,055
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Total liabilities 120,015 118,935
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Total stockholders' equity 106,471 108,438
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Total liabilities and stockholders' equity $ 226,486 $ 227,373
================== ==================
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CENTRAL FREIGHT LINES, INC AND SUBSIDIARIES
OPERATING STATISTICS
(Amounts in thousands except where indicated by *)
Quarters ended Six months ended
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July 3, July 5, July 3, July 5,
2004 2003 % Change 2004 2003 % Change
------- ------ -------- ------ ------- --------
Operating Ratio 104.8% 98.8% 102.5% 96.4%
Working days 64 63 1.6% 130 130 0.0%
LTL bills 971.93 987.32 -1.6% 1,884.18 1,966.48 -4.2%
Total bills 982.78 996.94 -1.4% 1,903.76 1,985.97 -4.1%
LTL tons 438.45 428.63 2.3% 840.42 848.60 -1.0%
Total tons 536.18 516.20 3.9% 1,018.42 1,032.11 -1.3%
LTL revenue per hundredweight* $ 11.31 $ 11.08 2.1% $ 11.37 $ 11.09 2.5%
LTL weight per bill (in pounds)* 902 868 3.9% 892 863 3.4%
Average length of haul (in miles)* 479 432 10.9% 473 426 11.0%
Fuel surcharge as a % of total revenue* 4.7% 2.5% 3.9% 2.8%
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