Frozen Food Express Industries announced its financial and operating results for the quarter ended June 30. For the current quarter, total revenue for the quarter declined 26.5 percent to $94.9 million from $129.0 million in 2008. For the six-month period, total year-to-date revenue declined 23.9 percent to $187.1 million from $245.8 million in 2008.
For the quarter, the company incurred an after-tax loss of $5.2 million compared to net income of $274,000 in the second quarter of 2008. The company said the loss was driven primarily by lower volumes and continued downward pricing pressure as the transportation industry continues to be impacted negatively by the current economic recession. For the six-month period, the company reported an after-tax loss of $11.3 million versus a loss of $551,000 in 2008.
“The U.S. economy remains in a severe recession, and we continue to face adverse economic pressures,” said Stoney M. “Mit” Stubbs, president and chief executive officer of Frozen Food Express, based in Dallas. “We continue to experience significant revenue and profit challenges in the current environment. While our results reflect these revenue and profit challenges, we continue to take steps to reduce our cost structure while focusing on initiatives to incrementally increase volume and margins.”
The company said it continues to execute on its comprehensive cost-reduction initiative to reduce many of its nonvariable costs. To date, the company’s nondriver headcount has been reduced about 200 positions or 23 percent since Jan. 1, including about 50 positions that recently were eliminated in July. The company said that since the beginning of the year, it has taken additional significant action to reduce many of its operating costs, including, but not limited to, suspension of its 401(k) match, reduction of standard work week hours, decrease of its recruiting efforts, early termination of equipment leases, reduction of travel expenses and streamlining existing processes.
The company said it continues to be in a strong cash position with no debt outstanding under its revolving credit agreement as of the end of the quarter. For the six months ending June 30, the company said it generated cash flows from operations of $8.5 million and maintains a strong working capital position. At June 30, the company said it had $5.9 million in cash and cash equivalents, $94.8 million in shareholders’ equity and no outstanding debt.
“While we cannot control the volatile trends and uncertain economic conditions, we intend to navigate through the present downturn by remaining focused on improving areas within our control and on achieving progress on three primary goals — maintaining a strong balance sheet, identifying revenue opportunities and cost reductions, and positioning our business to capitalize on an economic recovery when it occurs,” Stubbs said.