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CAROLINA FREIGHT ANNOUNCES RESULTS

 CAROLINA FREIGHT ANNOUNCES RESULTS
 CHERRYVILLE, N.C., Jan. 31 /PRNewswire/ -- The following is a letter


to shareholders from Kenneth E. Mayhew, Jr., President and Chief Executive Officer of Carolina Freight Corporation (NYSE: CAO):
 January 31, 1992


Letter to Shareholders
 Record revenue was attained in 1991 for the sixteenth consecutive year. Revenue increased 4.1 percent to $769,150,000 compared with $738,876,000 in 1990. Net earnings were $1,575,000, or $.23 per share, compared with $2,379,000, or $.35 per share, in 1990.
 Revenue for the sixteen weeks ended December 31, 1991 was $246,644,000, an increase of 2.9 percent over 1990. A net loss of $505,000 was incurred for the fourth quarter compared with net income of $701,000 in the fourth quarter of 1990. The fiscal year of the Company consists of three twelve-week quarters and a sixteen-week fourth quarter.
 The results for 1991 were negatively impacted by continued low freight rates and essentially flat traffic volumes. Our three carriers that specialize in the transportation of less-than-truckload (LTL) freight -- Carolina Freight Carriers, G.I. Trucking Company and Red Arrow Freight Lines -- accounted for 94.7 percent of consolidated revenue in 1991. Tonnage in our LTL subsidiaries increased .2 percent consisting of a 1.8 percent increase in LTL freight and a 5.9 percent decrease in truckload tonnage for the year. These low freight volumes limited productivity improvements generated by our new hub-and-spoke operations. In addition, higher employee benefit costs negatively affected operating results. Because of a 7 percent increase in average length of haul, ton-miles were 7 percent higher than in 1990.
 The Company made progress in controlling costs in several areas during 1991. Bad debt expense, cargo claims costs, workers' compensation claims costs, and tire and repair parts costs were all lower than in 1990.
 A general rate increase of approximately 5 percent was instituted by the LTL subsidiaries effective January 2, 1992. This increase was applicable to the 64 percent of the revenue of the LTL subsidiaries that is not covered by contracts. In addition, we are negotiating with customers to increase prices as contracts expire.
 On January 1, 1992 Carolina Freight Carriers Corporation opened an office in Rotterdam, the Netherlands. The office will serve as headquarters for the Company's transportation activities in Europe. Carolina has provided transportation services from the United States to Europe since 1982 in conjunction with European-based motor carriers. By having our own employees and office located in Rotterdam, the Company is able to react more quickly to customers shipping to European markets.
 Carolina Freight Corporation will open a new subsidiary, Innovative Logistics, Inc, in April. ILI will serve as a national/international third party logistics business specializing in the outsourcing of transportation and logistics management services.
 The regular dividend on common stock of $.15 per share is payable on February 7, 1992 to stockholders of record on January 24, 1992.
 Your management team is determined to improve results despite the current economic conditions. We are providing service that meets our customers' requirements, aggressively seeking new business, and minimizing costs that do not impair service to our customers.
 We are projecting revenue of $820 million for 1992 with a significant improvement in net earnings.
 Kenneth E. Mayhew, Jr.
 President and Chief Executive Officer
 CAROLINA FREIGHT CORPORATION
 CONSOLIDATED STATEMENTS OF EARNINGS
 (Dollars in thousands except per share amounts)
 Sixteen Weeks Fifty-two Weeks
 Ended Ended
 Dec. 31, Dec. 31, Dec.31, Dec. 31,
 1991 1990 1991 1990
 Operating
 revenue $ 246,644 $ 239,714 $ 769,150 $ 738,876
 Operating
 expenses:
 Employee
 compensation 157,216 144,710 486,750 460,494
 Purchased
 transportation 26,505 23,376 76,051 66,321
 Fuel and fuel
 taxes 13,314 16,002 41,794 42,020
 Tires, repair
 parts and other
 operating
 expenses 10,752 11,348 34,500 35,878
 Depreciation and
 amortization 12,044 11,708 38,526 37,251
 Insurance premiums
 and claims 6,083 10,098 20,044 25,648
 Communications and
 utilities 3,422 3,294 10,934 10,232
 Operating taxes
 and licenses 3,524 2,942 10,661 9,565
 Equipment and
 building rents 2,128 1,746 6,057 5,364
 Loss on disposition
 of operating
 assets 195 120 544 257
 General supplies 9,525 10,152 30,592 32,215
 Total operating
 expenses 244,708 235,496 756,453 725,245
 Earnings from
 operations 1,936 4,218 12,697 13,631
 Interest and other
 expense, net 2,739 3,450 10,162 10,166
 Earnings (Loss)
 before income
 taxes (803) 768 2,535 3,465
 Income tax provision
 (benefit) (298) 67 960 1,086
 Net earnings
 (loss) $ (505) $ 701 $ 1,575 $ 2,379
 Earnings (loss)
 per share:
 Primary $ (.08) $ .10 $ .23 $ .35
 Fully diluted (.08) .10 .23 .35
 Average common stock
 and common stock
 equivalent shares
 outstanding:
 Primary 6,564,759 6,560,351 6,560,788 6,560,580
 Fully diluted 7,623,532 7,612,974 7,624,363 7,613,212
 Operating ratio 99.2pct 98.2pct 98.3pct 98.2pct
 CONSOLIDATED BALANCE SHEETS
 (Dollars in thousands)
 Dec. 31, Dec. 31,
 Assets 1991 1990
 Current assets $ 102,811 $ 101,727
 Operating property 266,793 258,595
 Other assets 5,917 5,998
 $ 375,521 $ 366,320
 Liabilities and Dec. 31, Dec. 31,
 Stockholders' Equity 1991 1990
 Current liabilities $ 92,303 $ 91,013
 Long-term debt 96,711 88,952
 Reserves and deferred credits 59,617 57,053
 Stockholders' equity 126,890 129,302
 $ 375,521 $ 366,320
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Dollars in thousands)
 52 Weeks ended Dec. 31
 1991 1990
 Cash flows from operating activities
 Net earnings $ 1,575 $ 2,379
 Noncash items included in income:
 Depreciation and amortization 38,526 37,251
 Deferred income taxes (1,288) (2,267)
 Amortized investment tax credit (627) (868)
 Sale of customer and interline receivables --- 7,058
 Increase in customer and interline
 receivables (3,001) (6,898)
 Increase (decrease) in accounts payable 259 (797)
 Net decrease in other working capital
 items (1,549) (795)
 Other, net 5,630 4,753
 Net cash provided by operating
 activities 39,525 39,816
 Cash flows from investing activities:
 Acquisition of plant and equipment:
 Revenue and service equipment (29,789) (27,357)
 Land and structures (7,626) (13,101)
 Other equipment and leasehold
 improvements (3,589) (6,387)
 Proceeds from disposal of plant and
 equipment 2,595 1,163
 Net cash used for investing activities (38,409) (45,682)
 Cash flows from financing activities:
 Proceeds from issuance of long-term debt 216 177
 Repayment of long-term debt (3,005) (3,142)
 Net proceeds from revolving credit
 agreements 3,500 15,000
 Common stock issued 37 65
 Dividends on common and preferred stock (4,025) (4,021)
 Net cash (used for) provided by financing
 activities (3,277) 8,079
 Net (decrease) increase in cash and
 temporary investments (2,161) 2,213
 Cash and temporary investments at
 beginning of year 18,602 16,389
 Cash and temporary investments at end
 of year $ 16,441 $ 18,602
 -0- 1/31/92
 /CONTACT: Shawn Poole, Carolina Freight Corporation, 704-435-6811/
 (CAO) CO: Carolina Freight Corporation ST: North Carolina IN: TRN SU: ERN


CM-JM -- CH001 -- 5523 01/31/92 10:09 EST
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