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News and Information Article
DALLAS, Feb. 17 /-FirstCall/ -- Frozen Food Express Industries,
Inc. (Nasdaq: FFEX) today announced preliminary financial and operating
results for the fourth quarter and year ended December 31, 2005.
Fourth quarter 2005 revenue is expected to be approximately $142 million.
Earnings per diluted share are expected to be in the range of $0.32 to $0.35
per diluted share for the fourth quarter of 2005, ahead of expectations.
Freight revenue for the three months ended December 31, 2005 is expected to
approximate $140 million, a 14% increase over the fourth quarter of 2004.
Fourth quarter 2005 freight revenue, excluding fuel surcharges, is expected to
approximate $120 million, as compared to $111.4 million during the comparable
period of 2004.
For the twelve months ended December 31, 2005, freight revenue is expected
to approximate $514 million. Full year 2005 freight revenue, excluding fuel
surcharges is expected to approximate $450 million, or about 4% more than
2004. Full-year diluted earnings per share are expected to be in the range of
$1.07 to $1.10, as compared to 59 cents during 2004. Full-year 2005 net
income includes $3.8 million from the sale of a life insurance investment
during the second quarter of 2005.
The Company also announced that Thomas G. Yetter, who has been with FFEX
for twenty years and has served as the Companys Treasurer since 1988, has
been appointed Interim Chief Financial Officer to replace Gary M. Pruden who
has resigned his positions as an officer and director of the Company. In
connection with his departure, Mr. Pruden met with the Audit Committee of the
Companys Board of Directors to discuss unsubstantiated allegations reported
to him relating to questionable billing practices and certain other
operational matters. The Audit Committee is in the process of selecting
independent counsel to assist the committee in its investigation of these
matters.
Stoney M. Stubbs, Jr., Chairman and CEO, commented, "We capped off a
strong year with record performance in the fourth quarter. We continued to
benefit from healthy demand for our truckload and less-than-truckload services
characterized by increased freight rates, higher utilization, and improved
density levels within our defined network. We also generated approximately
$6.5 million in revenue during the fourth quarter from services provided in
the aftermath of Hurricane Katrina, including revenue from dedicated fleet
activity and trailer rentals.
"In connection with the investigation, the Company is taking all necessary
actions to assist the committee. At this time, while we cannot comment in
further detail, we believe that there will be no material impact on the
Companys operating results."
The Company is finalizing the classification of certain balance sheet
amounts involving lease arrangements with a related party. In accordance with
the Financial Accounting Standards Boards Financial Interpretation No. 46,
"Consolidation of Variable Interest Entities" ("FIN No. 46(R)"), due to
certain terms and conditions present in one such arrangement between FFEX and
a family partnership controlled by an executive officer of FFEX, the Company
has determined that the family partnership is a variable interest entity that
is required to be consolidated into the financial statements of FFEX. The
Company will restate its prior-period balance sheets beginning with the first
quarter of 2004 to reflect the inclusion of the family partnerships net book
value of the leased assets and related short-term debt. The consolidation of
the family partnership will not impact revenue, pre-tax income or net income
or net income per share previously reported by FFEX. The impact to the
December 31, 2004 consolidated balance sheet will increase the net book value
of property and equipment and short-term debt by approximately $4.5 million.
As of December 31, 2005, such values had (through amortization) declined to
approximately $3.5 million.
About FFEX
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,
and into Mexico. The refrigerated trucking company is the only one serving
this market that is full-service -- providing full-truckload, less-than-
truckload and dedicated fleet 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
trucking fleet, American Eagle Lines. Additional information about Frozen Food
Express Industries, Inc. can be found at the companys web site,
http://www.ffex.net .
Forward-Looking Statements
This report contains information and forward-looking statements that are
based on managements 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 managements control and that
may have a bearing on operating results are demand for the companys 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 companys filings with the Securities and Exchange
Commission.
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