FFE says that the sale is not expected to have a significant impact on 2001 operating results. The sales price approximated $15 million -- $6.8 million in cash, a $4.1 million subordinated note, a minority partnership interest in W&B Newco LP and the buyer's assumption of approximately $3 million of liabilities related to the business. The cash proceeds from the sale will be used to reduce long-term FFE debt, which was about $15 million on September 30, 2001.
Stoney M. Stubbs, Jr, chairman and CEO of FFE, said that the sale is part of an ongoing program to realign the company's operations to changes in the market for refrigerated trucking services. "For some time now we have been working to focus our operations more closely with changing demands of our marketplace. To accomplish this, we must direct our attention and our capital more closely to our core business, where we believe we can earn the greatest return on invested capital. The sale of W&B is an important part of that effort," Stubbs says.
John Chisolm says that "All of us at W&B are excited about the opportunity represented by our acquisition. We hope to continue as one of Frozen Food Express' good vendors while substantially expanding our market to many other trucking companies."
FFE will continue to operate the remainder of its non-freight business. Those activities include the operations of AirPro, which is involved in the sales and service of various climate control and refrigeration products. With the closing of the transaction, FFE will change the name of W&B Refrigeration Service Company to AirPro Holdings Inc and W&B Newco LP will change its name to W&B Service Company LP.
FFE also says that the sale will enable it to reduce the anticipated need for borrowed funds. "One of the reasons we had kept our credit facility at $50 million is to help us handle wide fluctuations in the need for working capital in our non-freight operations,” Stubbs says. “The cash from this divestiture and the related reduction in those seasonal demands permit us to reduce our credit facility to $33.3 million, and save the related commitment fees."
Frozen Food Express Industries is the largest publicly owned temperature-controlled carrier of perishables on the North American continent. Its services extend from Canada, throughout the 48 contiguous United States, into Mexico. It is the only refrigerated trucking company that provides truckload, less-than-truckload and distribution services for refrigerated and frozen products.
W&B Service Company LP offers a variety of products, including Wabash National trailers and Carrier Transicold truck and trailer refrigeration units. It is the largest Carrier Transicold dealer in the US with thirteen service facilities in three states.
