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Frozen Food Express Industries, Inc. Announces Third Quarter 2010 Results

Although our 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 our management's control and that may cause actual results to differ materially from those projected in such forward-looking statements 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 and owner-operators, 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 our filings with the Securities and Exchange Commission. Given the volatility in fuel prices and the impact fuel surcharge revenues have on total operating revenues, we often make reference to total operating revenue excluding fuel surcharges to provide a more consistent basis for comparison of operating revenue without the impact of fluctuating fuel prices. Readers should review and consider these factors along with the various disclosures by the Company in its press releases, stockholder reports and filings with the Securities and Exchange Commission. The company does not assume, and specifically disclaims, any obligation to update or revise any forward-looking statements to reflect actual results or changes in the factors affecting the forward-looking information.

 
Frozen Food Express Industries, Inc. and Subsidiaries
Consolidated Condensed Balance Sheets
(Unaudited and in thousands, except per-share amounts)
 
Assets September 30, 2010 December 31, 2009
Current assets    
Cash and cash equivalents $2,158 $3,667
Accounts receivable, net 42,494 41,318
Tires on equipment in use, net 5,685 5,592
Deferred income taxes 2,169 1,532
Property held for sale 1,019 1,019
Other current assets 5,784 12,706
Total current assets 59,309 65,834
     
Property and equipment, net 72,627 74,845
Other assets 4,858 5,121
Total assets $136,794 $145,800
     
Liabilities and Shareholders' Equity    
Current liabilities    
Accounts payable $29,739 $23,773
Insurance and claims accruals 9,816 10,119
Accrued payroll and deferred compensation 5,685 3,837
Accrued liabilities 1,907 1,953
Total current liabilities 47,147 39,682
     
Deferred income taxes 4,027 9,009
Insurance and claims accruals 5,236 7,374
Total liabilities 56,410 56,065
     
Shareholders' equity    
Common stock, $1.50 par value per share; 75,000 shares authorized; 18,572 shares issued 27,858 27,858
Additional paid-in capital 1,412 2,923
Retained earnings 59,741 70,172
  89,011 100,953
Treasury stock (1,143 and 1,477 shares), at cost (8,627) (11,218)
Total shareholders' equity 80,384 89,735
Total liabilities and shareholders' equity $136,794 $145,800
 
Frozen Food Express Industries, Inc. and Subsidiaries
Consolidated Condensed Statements of Operations
(Unaudited and in thousands, except per-share amounts)
 
  Three Months Ended September 30, Nine Months Ended September 30,
  2010 2009 2010 2009
Total operating revenue $93,870 $94,500 $274,669 $281,602
Operating expenses        
Salaries, wages and related expenses 30,243 30,306 87,288 94,115
Purchased transportation 18,132 20,246 55,972 61,752
Fuel 18,469 17,132 51,782 46,251
Supplies and maintenance 13,447 11,486 36,010 35,874
Revenue equipment rent 9,353 9,431 27,116 29,386
Depreciation 4,216 4,303 12,114 13,296
Communications and utilities 1,287 1,323 3,658 3,898
Claims and insurance 3,486 3,215 10,764 10,934
Operating taxes and licenses 1,003 1,076 3,209 3,656
(Gain) loss on sale of property and equipment (12) 177 (592) (75)
Miscellaneous 1,109 638 3,101 2,367
 Total operating expenses 100,733 99,333 290,422 301,454
Loss from operations (6,863) (4,833) (15,753) (19,852)
Interest and other (income) expense        
Interest income (15) (1) (30) (5)
Interest expense 105 5 308 9
Equity in earnings of limited partnership (246) (313) (443) (472)
Life insurance and other (43) 106 84 591
 Total interest and other (income) expense (199) (203) (81) 123
Loss before income taxes (6,664) (4,630) (15,672) (19,975)
Income tax benefit (4,383) (2,070) (5,241) (6,126)
Net loss $(2,281) $(2,560) $(10,431) $(13,849)
         
Net loss per share of common stock        
Basic $(0.13) $(0.15) $(0.61) $(0.81)
Diluted $(0.13) $(0.15) $(0.61) $(0.81)
Weighted average shares outstanding        
Basic 17,384 17,149 17,223 17,069
Diluted 17,384 17,149 17,223 17,069
Dividends declared per common share $-- $-- $-- $0.03

The following table summarizes and compares the significant components of revenue and presents our operating ratio and revenue per truck per week for each of the three- and nine-month periods ended September 30:  

     
  Three Months Nine Months
Revenue from: (a) 2010 2009 2010 2009
Temperature-controlled fleet $29,776 $34,684 $85,935 $103,630
Dry-freight fleet 12,906 12,269 42,197 40,805
Total truckload linehaul services 42,682 46,953 128,132 144,435
Dedicated fleets 4,374 4,749 12,985 14,970
Total truckload 47,056 51,702 141,117 159,405
Less-than-truckload linehaul services 29,408 27,429 82,412 81,105
Fuel surcharges 14,382 12,492 41,886 32,065
Brokerage 1,623 1,657 5,388 5,415
Equipment rental  1,401 1,220 3,866 3,612
Total operating revenue 93,870 94,500 274,669 281,602
         
Operating expenses 100,733 99,333 290,422 301,454
Income (loss) from operations $(6,863) $(4,833) $(15,753) $(19,852)
Operating ratio (b) 107.3% 105.1% 105.7% 107.0%
         
Total truckload revenue $47,056 $51,702 $141,117 $159,405
Less-than-truckload revenue 29,408 27,429 82,412 81,105
Total linehaul and dedicated fleet revenue  $76,464 $79,131 $223,529 $240,510
         
Weekly average trucks 1,813 1,954 1,779 1,978
Revenue per truck per week (c) $3,209 $3,081 $3,222 $3,118
 
Computational notes:
(a)  Revenue and expense amounts are stated in thousands of dollars.
(b)  Operating expenses divided by total operating revenue.
(c)  Average daily revenue, times seven, divided by weekly average trucks.

The following table summarizes and compares selected statistical data relating to our freight operations for each of the three- and nine-month periods ended September 30:

     
  Three Months Nine Months
Truckload 2010 2009 2010 2009
 Total linehaul miles (a) 30,923 37,549 94,843 115,628
 Loaded miles (a) 27,294 33,352 83,805 104,040
 Empty mile ratio (b) 11.7% 11.2% 11.6% 10.0%
 Linehaul revenue per total mile (c) $1.38 $1.25 $1.35 $1.25
 Linehaul revenue per loaded mile (d) $1.56 $1.41 $1.53 $1.39
 Linehaul shipments (a) 31.0 39.8 93.5 117.4
 Loaded miles per shipment (e) 882 838 896 886
LTL        
 Hundredweight 2,126,278 1,890,510 5,990,371 5,630,191
 Shipments (a) 68.6 62.3 191.6 184.0
 Linehaul revenue per hundredweight (f) $13.83 $14.51 $13.76 $14.41
 Linehaul revenue per shipment (g) $429 $440 $430 $441
 Average weight per shipment (h) 3,098 3,035 3,126 3,060
 
Computational notes:
(a)  Amounts are stated in thousands.
(b)  Total truckload linehaul miles less truckload loaded miles, divided by total truckload linehaul miles.
(c)  Revenue from truckload linehaul services divided by total truckload linehaul miles.
(d)  Revenue from truckload linehaul services divided by truckload loaded miles.
(e)  Total truckload loaded miles divided by number of truckload linehaul shipments.
(f)  LTL revenue divided by LTL hundredweight.
(g)  LTL revenue divided by number of LTL shipments.
(h)  LTL hundredweight times one hundred divided by number of shipments. 

The following table summarizes and compares the makeup of our fleets between company-provided tractors and tractors provided by independent contractors as of September 30:

  2010 2009
Total company tractors available 1,507 1,591
Total independent contractor tractors available 312 409
Total tractors available 1,819 2,000
Total trailers available 3,600 3,780
CONTACT: Frozen Food Express Industries, Inc.
         Stoney M. "Mit" Stubbs, Jr., Chairman and CEO
         Russell Stubbs, President
         John Hickerson, Executive VP and COO
         John McManama, Senior VP and CFO
         (214) 630-8090
         ir@ffex.net

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