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CAROLINA FREIGHT CORPORATION ANNOUNCES EARNINGS

 /FOLLOWING IS REPEAT OF RELEASE THAT MOVED YESTERDAY/
 CHERRYVILLE, N.C., July 7 /PRNewswire/ -- The following is a letter


to shareholders of Carolina Freight Corporation (NYSE: CAO) from company Chief Executive Officer Lary R. Scott and President Palmer E. Huffstetler:
 Letter to Shareholders:
 Revenue for the twelve weeks ended June 19, 1993 increased 7 percent over the second quarter of 1992 to $196,773,000. The company incurred a net loss of $548,000, or $.09 per share compared with net earnings of $290,000 or $.04 per share in 1992.
 Revenue for the twenty-four weeks ended June 19, 1993 was $384,104,000, an increase of 7.9 percent over the comparable period of 1992. The company incurred a net loss of $938,000 compared with net earnings (after accounting changes) of $9,526,000 in the first half of 1992. Our fiscal year consists of three 12-week quarters and a final 16-week quarter.
 During the second quarter our less-than-truckload (LTL) companies -- Carolina Freight Carriers, G.I. Trucking Company, and Red Arrow Freight Lines -- experienced tonnage and shipment growth of approximately 8 percent over the second quarter of 1992. While the growth in volume generated some improved productivity, savings were more than offset by higher employee wages and benefits and by lower prices paid by our customers for transportation services.
 On April 1, employee compensation costs for bargaining unit employees at Carolina Freight Carriers and Red Arrow Freight Lines increased approximately 3.3 percent under applicable labor agreements. In addition, employee benefit costs continued to escalate at a rate greater than general inflation.
 Freight rates of our LTL carriers substantially declined during the second quarter of 1993 from the levels of the first quarter of 1992. In fact, freight rates in the second quarter of 1993 were 1.6 percent below the second quarter of 1992.
 At this time, there appears to be a move among some of the larger LTL carriers to increase prices through a general reduction in the amount of discounts currently applicable to freight rates charged to their customers. Should that action materialize, we anticipate a similar adjustment of rates among our LTL companies, which would have a favorable impact on our operating margins.
 On June 17, 1993, we announced a realignment in management of our largest subsidiary, Carolina Freight Carriers. James D. Carlton, formerly executive vice president-operations, was named president. In conjunction with this change, Carolina Freight Carriers effectively reduced its number of operating divisions from six to four and streamlined the reporting process from the level of terminal manager to the president.
 Carolina Freight Carriers won the industry's top award for outstanding claims prevention in 1992. For the third year out of the last four, the American Trucking Association Cargo Claims Prevention and Management Committee presented Carolina this prestigious recognition.
 The board of directors has declared a dividend of $.05 a share payable Aug. 6, 1993 to shareholders of record on July 23, 1993.
 Our actions of management realignment, improvement in market share, and adoption of greater cost controls, along with the prospect of increased prices, makes us optimistic that operating results will improve during the second half of 1993.
 Lary R. Scott Palmer E. Huffstetler
 Chief Executive Officer President
 CAROLINA FREIGHT CORPORATION
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
 (Dollars in thousands)
 Twenty-four Weeks Ended
 June 19, June 13,
 1993 1992
 CASH FLOWS FROM OPERATING ACTIVITIES
 Net earnings (loss) ($938) $9,526
 Noncash items included in income:
 Depreciation and amortization 16,149 18,020
 Deferred income taxes (1,292) (900)
 Cumulative effect of accounting
 principle change on deferred tax
 accounts -- (12,203)
 Increase in customer and interline
 receivables (13,201) (7,839)
 Increase (Decrease) in accounts
 payable (483) 9,779
 Increase in claims payable and
 insurance accruals 72 732
 Net increase in other working capital
 items 1,799 837
 Other, net (980) 2,306
 Net cash provided by operating
 activities 1,126 20,258
 CASH FLOWS FROM INVESTING ACTIVITIES:
 Acquisitions of plant and equipment:
 Revenue and service equipment (11,257) (12,010)
 Land and structures (2,513) (6,351)
 Other equipment and leasehold
 improvements (1,622) (1,997)
 Proceeds from disposal of plant and
 equipment 5,818 611
 Net cash used for investing
 activities (9,574) (19,747)
 CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds from issuance of long-term
 debt 65 70
 Repayment of long-term debt (2,512) (1,584)
 Net proceeds from revolving credit
 agreements 10,500 5,000
 Common stock issued -- --
 Dividends on common and preferred
 stock (700) (2,013)
 Net cash provided by financing
 activities 7,353 1,473
 NET INCREASE (DECREASE) IN CASH AND
 TEMPORARY INVESTMENTS (1,095) 1,984
 CASH AND TEMPORARY INVESTMENTS AT
 BEGINNING OF YEAR 17,696 16,441
 CASH AND TEMPORARY INVESTMENTS AT
 END OF QUARTER $16,601 $18,425
 CAROLINA FREIGHT CORPORATION
 CONSOLIDATED STATEMENTS OF EARNINGS
 (Unaudited)
 (Dollars in thousands except per share amounts)
 Twelve Weeks Twenty-four Weeks
 Ended Ended
 June 19, June 13, June 19, June 13,
 1993 1992 1993 1992
 Operating revenue $196,773 $183,898 $384,104 $356,015
 Operating expenses:
 Employee compensation 125,780 115,686 244,963 224,253
 Purchased transportation 23,357 19,071 43,787 36,390
 Fuel and fuel taxes 10,122 8,930 19,879 17,970
 Tires, repair parts and
 other operating expenses 9,033 8,216 17,707 16,056
 Depreciation and amortization 7,801 9,083 16,149 18,020
 Insurance premiums and claims 5,157 6,287 10,968 11,847
 Communications and utilities 2,484 2,683 5,120 5,557
 Operating taxes and licenses 2,836 2,816 5,544 5,590
 Equipment and building rents 1,187 1,190 2,327 2,368
 (Gain) Loss on disposition
 of operating assets (432) 119 (451) 256
 General supplies and expenses 8,045 7,336 15,351 14,264
 Total operating expenses 195,370 181,417 381,344 352,571
 Earnings from operations 1,403 2,481 2,760 3,444
 Interest and other expense, net 2,274 2,165 4,287 4,265
 Earnings (Loss) before income
 taxes (871) 316 (1,527) (821)
 Income tax provision (benefit) (323) 26 (589) (511)
 Net earnings (loss) before
 cumulative effect of change
 in accounting principle ($548) $290 ($938) ($310)
 Cumulative effect of changes
 in accounting principles --- --- --- 9,836
 Net earnings (loss) ($548) $290 ($938) $9,526
 Earnings (Loss) per share
 before cumulative effect
 of changes in accounting
 principles $(.09) $.04 $(.15) $(.06)
 Cumulative effect of changes
 in accounting principles --- --- --- $1.50
 Earnings (Loss) per share $(.09) $.04 $(.15) $1.44
 Average common stock and
 common stock equivalent
 shares outstanding 6,561,672 6,562,322 6,561,672 6,562,739
 CONSOLIDATED BALANCE SHEETS
 (Unaudited)
 (Dollars in thousands)
 June 19, June 13,
 1993 1992
 Assets
 Current assets $130,573 $114,948
 Operating property 256,255 271,475
 Other assets 6,029 5,437
 $392,857 $391,860
 Liabilities and Stockholders' Equity
 Current liabilities $116,967 $114,263
 Long-term debt 103,035 102,762
 Reserves and deferred credits 47,296 40,432
 Stockholders' equity 125,559 134,403
 $392,857 $391,860
 -0- 7/7/93 R
 /CONTACT: Shawn W. Poole, Carolina Freight Corporation, 704-435-6811/
 (CAO)


CO: Carolina Freight Corporation ST: North Carolina IN: TRN SU: ERN DIV

SB-CM -- CH007 -- 9367 07/08/93 09:11 EDT
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