Central Freight Lines, Inc. Announces - Third Quarter Expectations
September 23 2004 - 10:25PM
PR Newswire (US)
Central Freight Lines, Inc. Announces - Third Quarter Expectations
WACO, Texas, Sept. 23 /PRNewswire-FirstCall/ -- Central Freight
Lines, Inc. (NASDAQ:CENF) announced today that it expects third
quarter financial results to fall significantly short of
expectations. President and Chief Executive Officer, Bob Fasso,
stated: "The negative trends Central experienced during the second
quarter of 2004 continued longer than we had anticipated. During
the third quarter, we have taken, and are continuing to take,
strong corrective actions that are designed to return the Company
to profitability. We believe the results of our actions are
beginning to show, however, the improvements are coming too late in
the quarter to have a significant impact. As a result, we expect
Central's financial results for the third quarter to be
significantly below both our internal goal and the consensus of
published research analysts' estimates. For the third quarter, we
expect a loss of approximately $.40 to $.45 per share. Our
expectation is based on preliminary results for July and August as
well as operating trends through September 17 and our actual
results could be different. LTL revenue per hundredweight,
excluding fuel surcharges, is expected to improve approximately
3.0% as compared to the second quarter of 2004, in large part due
to changes in our yield management program, including a change in
leadership. Total tonnage, however, is expected to decline by
approximately 8.0% per day compared with the second quarter of
2004. This compares with a 5.4% decrease in the same periods of the
prior year. As a result, we expect revenue for the quarter to be
approximately $6 million lower than in the second quarter, on one
less working day. During late August, we consolidated ten terminals
and converted seven additional terminals into driver only locations
in our Midwest and Northwest operations. We concurrently reduced
our personnel by approximately 300, and we are presently
re-engineering our linehaul runs in a manner that is expected to
further reduce both Company and third party movements. As a result
of these initiatives, salary, wage, and purchased transportation
costs are expected to decrease considerably in the third quarter
compared with the second quarter. We expect these actions to have a
positive impact on our cost structure and to improve customer
service by reducing intermediate handling The cost improvements
described above are expected to be more than offset in the third
quarter by rising costs of claims relating to workers'
compensation, cargo, and accident liability, as well as an increase
in general expenses. Overall, expenses are expected to be
approximately the same as in the second quarter of 2004. Thus far
the third quarter has shown a continuing decline in performance
through August, however we see the initial stages of what we expect
to be a significant improvement in September. The third quarter is
expected to end with over $97 million in stockholders' equity and a
ratio of net debt to net book capitalization below 35%. We would
like to thank our loyal and hardworking employees who have been an
energizing and positive resource in addressing our improvement
initiatives." 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 we will not achieve
pricing increases or that pricing 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 our cost
control efforts are not successful; the risk that the corrective
actions we have taken in Q304 will not return the Company to
profitability either in the near or long-term; the risk that the
recent personnel reductions and re- engineering our linehaul runs
will not result in decreases in salary, wage, and purchased
transportation costs; the risk that the recent personnel reductions
and re-engineering our linehaul runs will not have a positive
impact on our cost structure or improve customer service; the risk
of delays in achieving improvements as our new management personnel
are integrated; 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; the risk that our results will have negative
consequences on our ability to finance new tractors in connection
with our planned fleet upgrade or that the lender under our
revolving credit agreement will declare a default or impose
conditions that would impact our liquidity; 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. For additional
information contact: Jeff Hale, Chief Financial Officer, at (480)
361-5295,
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 Web site:
http://www.centralfreight.com/
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