Central Freight Lines, Inc. Reports Second Quarter Financial
Results WACO, Texas, July 29 /PRNewswire-FirstCall/ -- Central
Freight Lines, Inc. (NASDAQ: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." 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
http://www.centralfreight.com/ and http://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 http://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 CENTRAL FREIGHT LINES, INC
AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited,
dollars in thousands, except per share data) Quarters ended Six
months ended -------------------- ------------------- July 3, July
5, July 3, July 5, 2004 2003 2004 2003 --------- ---------
--------- ---------- Working Days 64 63 130 130 --------- ---------
--------- ---------- 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 * YTD 2003
includes a $3,003 gain resulting from amendments to a benefit plan.
** Calculation based on pro forma net (loss) income. 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 -----------
----------- 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 ----------- ----------- 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 ----------- ----------- 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 ----------- ----------- Total
liabilities 120,015 118,935 ----------- ----------- Total
stockholders' equity 106,471 108,438 ----------- ----------- Total
liabilities and stockholders' equity $ 226,486 $ 227,373
=========== =========== CENTRAL FREIGHT LINES, INC AND SUBSIDIARIES
OPERATING STATISTICS (Amounts in thousands except where indicated
by *) Quarters ended Six months ended ------------------------
-------------------------- 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%
http://www.newscom.com/cgi-bin/prnh/20040205/DACENTRALLOGO
http://photoarchive.ap.org/ DATASOURCE: Central Freight Lines, Inc.
CONTACT: Jeff Hale, Chief Financial Officer of Central Freight
Lines, Inc., +1-480-361-5295, or Web site:
http://www.centralfreight.com/
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