Dallas, TX-based refrigerated carrier Frozen Food Express Industries (FFE) said its profits and revenues rose for the fourth quarter of 2004 and for the year, even as it set aside more funds to cover accident and workman’s compensation claims.
For the fourth quarter of 2004, FFE’s net income rose to $1.8 million on 14% higher revenues of $124.2 million compared to the same period in 2003. Fuel surcharge revenue rose to $11.5 million, with dedicated services, freight brokerage services and equipment rental adding $14.8 million in revenue.
FFE also said it set aside $3.1 million in the fourth quarter due to increased reserves associated with the results of an actuarial study regarding over-the-road accidents and work related injuries, plus an increase in deferred compensation liabilities.
For 2004, FFE said net income more than doubled to $10.8 million on 12.4% higher revenues of $474.4 million, including fuel surcharge revenue of $31.7 million and $51.1 million generated from dedicated services, freight brokerage services and equipment rental.
“[Last year] was a very good year for FFE. In terms of net income, it was one of the most profitable years in our 59-year history,” said Stoney ‘Mit’ Stubbs, Jr., chairman, president & CEO. “Over the years we have learned, although it is important to grow top-line performance, it is more important to grow margin-enhancing revenues and cash flow if we plan on improving long-term growth. We were successful on those counts -- revenue growth and margin expansion in 2004-- as we move on to what should be another good year in 2005.”
He added that a major contributor to FFE’s success in 2004 was its ability to increase average linehaul revenue per total mile. “We saw much better yields during 2004, as freight demand ran high while overall industry supply of capacity ran low, resulting in favorable pricing conditions,” Stubbs said.
“We enjoyed rate increases throughout the year and we may be able to increase rates again in 2005,” he continued. “Excluding fuel-surcharge revenue, full-truckload linehaul revenue per total mile for 2004 increased 4.6% to $1.37 from $1.31 for 2003. Fourth-quarter 2004 full-truckload revenue was $1.45 per total mile, up 9% from $1.33 for the same quarter in 2003. This gives further evidence of the pricing trends in today's marketplace.”