focus: carriers Frozen Food Express Acquires Nordic Assets

Frozen Food Express Industries Inc (FFEX) has acquired substantially all of the operating assets of Nordic Trucking Inc, a Kansas City MO-based regional

The Refrigerated Transporter Staff

Jan. 1, 2000

2 min read

Frozen Food Express Industries Inc (FFEX) has acquired substantially all of the operating assets of Nordic Trucking Inc, a Kansas City MO-based regional less-than-truckload refrigerated carrier primarily serving the Midwest and West Coast.

FFE Transportation Services Inc, the principal subsidiary of Dallas TX-based FFEX, purchased the privately owned trucking and cold-storage warehousing company for cash and deferred payments based on a percentage of revenue generated by Nordic over time. Nordic's current annual revenue is about $10 million. In 1998, FFE generated approximately $100 million from its coast-to-coast LTL operations.

Besides up to 25 tractors and drivers the company expects to add, FFEX also will acquire Nordic's cold-storage warehouse and customer base.

In a restructuring of its operations, FFEX will eliminate about 150 nondriver employee positions and return excess trailers to equipment lessors. After-tax restructuring costs of about $2.5 million are reflected in the company's Dec 31, 1999, financial statements, which will also be impacted by certain other fourth-quarter 1999 after-tax charges aggregating about $8.5 million.

Besides severance payments for employees whose positions will be eliminated, the restructuring charge includes estimated costs related to early termination of certain equipment leases. FFEX will reduce the size of its trailer fleet by more than 20 percent, and it expects the elimination of positions and termination of leases to be achieved during 2000.

The company said the other fourth-quarter 1999 charges include certain asset write-downs, increases in accounts receivable valuation allowances, and accruals for certain liabilities.

FFEX said that it and its banks have amended, until March 1, 2000, the terms of its credit facility to give effect to the restructuring and other fourth-quarter 1999 charges. The company also said that it expects, before March 1, 2000, to enter into a longer-term amendment to the credit agreement.