Central Freight Lines, Inc. Reports Second Quarter Financial Results

Central Freight Lines, Inc. Reports Second Quarter Financial
Results 


WACO, Texas, July 29  /PRNewswire-FirstCall/ -- Central Freight Lines, Inc.
(NASDAQ:CENF) announced today its financial results for the quarter and six
months ended July 3, 2004.

For the second quarter of 2004, operating revenue was $105.5 million on 64
working days, compared to operating revenue of $100.2 million on 63 working
days for the second quarter of 2003.  Revenue per working day increased 3.7%
and total tons hauled per working day increased 2.2%, for the second quarter of
2004 compared to the same period last year.

Consistent with the Company's previous guidance a net loss of $2.5 million, or
$0.14 per diluted share was realized in the second quarter of 2004. The $2.5
million net loss included a $1.8 million, or $0.10 per diluted share, tax
benefit from the reversal of a previously existing tax liability as a result of
an IRS review. Pro forma net loss for the second quarter of 2003 was $831,000,
or $0.08 per diluted share, using a pro forma tax rate of 39%. Prior to
November 1, 2003, the Company was an S corporation and federal income tax
attributes flowed directly to stockholders.

For the six months ended July 3, 2004, operating revenue amounted to $202.6
million a 1.8% increase over the $199.0 million reported for the same period in
2003.  A $3.7 million net loss (equivalent to $0.21 loss per diluted share) was
reported for the six months ended July 3, 2004, compared to pro forma net
income of $1.1 million (equivalent to $0.09 pro forma earnings per diluted
share) for the same period in 2003.

Central's President and Chief Executive Officer, Bob Fasso, commented on the
Company's results, "Our current focus is on yield, labor and purchased
transportation, which were significant contributors to the second quarter loss.
LTL revenue per hundredweight, excluding fuel surcharges, remained essentially
constant compared with the second quarter of 2003, while our average length of
haul increased by approximately 11%. LTL revenue per hundredweight, excluding
fuel surcharge, declined over 3% from the first quarter of 2004 despite an
increase in average length of haul of approximately 3%. Productivity, measured
by bills handled per hour, declined approximately 4% in the second quarter of
2004 compared to the same quarter last year. In addition, our current freight
imbalance is continuing to cause a high usage of expensive one-way purchased
transportation to balance freight lanes. With the extensive experience within
our team, we believe we have identified the steps and are taking the actions
necessary to reverse these negative trends."

Mr. Fasso continued, "In addition, I am excited to announce that Walt Ainsworth
joined us last week as Executive Vice President. Walt brings to Central more
than 30 years experience in the trucking industry, most recently as the
President of USF Corporation's Eastern Carrier Group. He has also served as the
President and CEO of USF Dugan and Vice President of Operations for USF
Reddaway. As Executive Vice President he will be involved in all aspects of the
Company."

As of July 3, 2004, Central's balance sheet reflected $13.0 million in cash,
$44.3 million in long-term debt and capital lease obligations, including
current portion, a $2 million current note payable for the balance due on the
purchase of Eastern Oregon Fast Freight's (EOFF) assets and $106.5 million in
stockholders' equity. The company had net capital expenditures, primarily for a
terminal and revenue equipment, of $11.0 million during the second quarter and
$13.3 million during the six months ended July 3, 2004, plus an additional $8.1
million dollars relating to the purchase of certain assets of EOFF in March
2004.  The Company expects net capital expenditures of approximately $15
million for the second half of 2004, excluding the additional $2.0 million that
may become due for the EOFF purchase.  On July 28, 2004, the Company increased
its revolving line of credit to $30 million, extended the maturity date of the
facility to April 30, 2006, and implemented cost savings in connection with
issuing letters of credit.  As of July 3, 2004, the Company was in compliance
with the terms of its revolving line of credit and its $40 million accounts
receivable securitization facility.

A conference call will be held 11:00am (EDT) on Friday, July 30 for the
investment community. Persons who wish to access and listen to the call may do
so by dialing 1-888-275-4480 and referencing the leader's name (Bob Fasso) and
the Company's name (Central Freight Lines). Please dial in 5 to 10 minutes
prior to the start of the call. A live webcast is also available at
http://www.centralfreight.com/ and http://www.streetevents.com/.  For more
information on how to access the webcast, and for statistical and financial
information regarding the Company that is expected to be discussed during the
conference call, please visit our website at http://www.centralfreight.com/.

A telephone replay will be available after 3:30pm (EDT) on July 30. To access
the replay, dial 1-800-642-1687, reference ID # 8917639. A replay of the call
will also be available on demand at both web sites.

Central Freight Lines, Inc. is a non-union less-than-truckload carrier
specializing in regional overnight and second day markets. One of the 10
largest regional LTL carriers in the nation, Central provides regional,
interregional, and expedited services, as well as value-added supply chain
management, throughout the Midwest, Southwest, West Coast and Pacific
Northwest. Utilizing marketing alliances, Central provides service solutions to
the Great Lakes, Northeast, Southeast, Mexico and Canada.

This press release contains forward-looking statements that involve risk,
assumptions, and uncertainties that are difficult to predict.  Statements that
constitute forward-looking statements are usually identified by words such as
"anticipates," "believes," "estimates," "projects," "expects," "plans,"
"intends," or similar expressions.  These statements are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
 Such statements are based upon the current beliefs and expectations of our
management and are subject to significant risks and uncertainties.  Actual
results may differ from those set forth in the forward-looking statements. The
following factors, among others, could cause actual results to differ
materially from those in the forward-looking statements:  the risk that revenue
growth may be delayed or not occur at all; the risk that rate decreases will be
required to generate additional business; the risk that efficiency and
productivity measures, including dynamic resource planning programs, will be
further delayed or will not be successfully implemented throughout our
operations; the risk that significant geographic expansion has produced or may
produce freight imbalances, customer service issues, operational issues, or
other consequences that we cannot manage successfully on a timely basis or at
all; the  risk that our insurance and claims costs will continue to exceed our
expectations; and the risks detailed from time to time in reports filed by the
Company with the Securities and Exchange Commission, including forms 8-K, 10-Q,
10-K, and our registration statement on Form S-1.

   Corporate Contact:
   Jeff Hale, Chief Financial Officer
   [phone]
   


               CENTRAL FREIGHT LINES, INC AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF OPERATIONS
         (Unaudited, dollars in thousands, except per share data)

                               Quarters ended         Six months ended
                          --------------------      -------------------
                          July 3,      July 5,      July 3,      July 5,
                            2004         2003         2004         2003
                       ---------    ---------    ---------    ----------
  Working Days                64           63          130          130
                       ---------    ---------    ---------    ----------

  Operating revenues   $ 105,513    $ 100,150    $ 202,551    $ 198,952
                       ---------    ---------    ---------    ----------
  Operating expenses:
   Salaries, wages and
    benefits *            60,084       55,651      115,740      108,470
   Purchased
    transportation        11,387        9,679       22,692       17,504
   Purchased
    transportation -
    related parties        5,965        6,003        8,242       12,209
   Operating and general
    supplies and expenses 21,045       16,639       39,625       34,166
   Operating and general
    supplies and expenses -
    related parties           39          (15)         134           20
   Insurance and claims    6,657        5,507       10,401        8,386
   Building and equipment
    rentals                1,044          805        1,973        1,633
   Building and equipment
    rentals -
    related parties          376          350          896          772
   Deprecation and
    amortization           3,951        4,286        7,870        8,558
                       ---------    ---------    ---------    ----------

     Total operating
      expenses           110,548       98,905      207,573      191,718
                       ---------    ---------    ---------    ----------

   (Loss) income from
    operations            (5,035)       1,245       (5,022)       7,234

  Other expense:
   Interest expense         (368)      (1,024)        (573)      (2,001)
   Interest expense -
    related parties       (1,537)      (1,583)      (3,142)      (3,095)
                       ---------    ---------    ---------    ----------

   (Loss) income from
    before income taxes   (6,940)      (1,362)      (8,737)       2,138

  Income tax:
   Income tax benefit
   (expense)               4,397           57        5,065         (129)
                       ---------    ---------    ---------    ----------

     Net (loss) income $  (2,543)   $  (1,305)   $  (3,672)   $   2,009
                       =========   ==========    =========    ==========

  Pro forma C
   Corporation data
   (unaudited):
    Historical (loss)
     income before
     income taxes      $      --    $  (1,362)   $      --    $    2,138
    Pro forma income
     tax benefit
     (expense)                --          531           --        (1,029)
                       ---------    ---------    ---------    ----------

    Pro forma net (loss)
     income            $      --    $    (831)   $      --    $    1,109

                       =========   ==========    =========    ==========

  (Loss) income per share:
   Basic:                  (0.14)       (0.08)**     (0.21)         0.10**
   Diluted:                (0.14)       (0.08)**     (0.21)         0.09**
  Weighted average
   outstanding shares
   (in thousands):
   Basic                  17,842       10,868       17,777        10,868
   Diluted                17,842       10,868       17,777        12,077

   * YTD 2003 includes a $3,003 gain resulting from amendments to a benefit
     plan.
  ** Calculation based on pro forma net (loss) income.


               CENTRAL FREIGHT LINES, INC AND SUBSIDIARIES
                       CONSOLIDATED BALANCE SHEETS
                    July 3, 2004 and December 31, 2003
         (Unaudited, dollars in thousands, except per share data)

                           Assets                    2004           2003
                                               -----------    -----------
  Cash                                         $    12,992    $    41,493
  Accounts receivable                               57,536         51,864
  Other current assets                               9,935          8,298
  Deferred income taxes                              9,721          4,588
                                               -----------    -----------
     Total current assets                           90,184        106,243

  Property and equipment, net                      126,289        114,693
  Goodwill                                           4,324          4,324
  Other assets                                       5,689          2,113
                                               -----------    -----------
     Total assets                              $   226,486    $   227,373
                                               ===========    ===========

          Liabilities and stockholders' equity
  Current maturities of long term-debt         $     7,187    $     6,375
  Notes payable                                      2,024             --
  Trade accounts payable                            22,454         18,136
  Payables for related party
   transportation services                           3,380          1,020
  Accrued expenses                                  25,854         27,207
                                               -----------    -----------
     Total current liabilities                      60,899         52,738

  Long-term debt, excluding current maturities      14,206         19,988
  Related party financing                           22,920         23,154
  Other liabilities                                 21,990         23,055
                                               -----------    -----------
     Total liabilities                             120,015        118,935
                                               -----------    -----------


  Total stockholders' equity                       106,471        108,438
                                               -----------    -----------

  Total liabilities and stockholders' equity   $   226,486    $   227,373
                                               ===========    ===========


               CENTRAL FREIGHT LINES, INC AND SUBSIDIARIES
                           OPERATING STATISTICS
            (Amounts in thousands except where indicated by *)

                           Quarters ended              Six months ended
                     ------------------------    --------------------------
                     July 3,  July 5,            July 3,    July 5,
                      2004     2003   % Change    2004       2003   % Change
                    -------   ------  --------  -------     ------- --------

  Operating Ratio    104.8%    98.8%             102.5%      96.4%

  Working days          64       63    1.6%        130        130    0.0%

  LTL bills         971.93   987.32   -1.6%   1,884.18   1,966.48   -4.2%
  Total bills       982.78   996.94   -1.4%   1,903.76   1,985.97   -4.1%
  LTL tons          438.45   428.63    2.3%     840.42     848.60   -1.0%
  Total tons        536.18   516.20    3.9%   1,018.42   1,032.11   -1.3%
  LTL revenue per
   hundredweight*  $ 11.31  $ 11.08    2.1%    $ 11.37    $ 11.09    2.5%
  LTL weight
   per bill
   (in pounds)*        902      868    3.9%        892        863    3.4%
  Average length
   of haul
   (in miles)*         479      432   10.9%        473        426   11.0%
  Fuel surcharge
   as a % of
   total revenue*      4.7%     2.5%               3.9%       2.8%


http://www.newscom.com/cgi-bin/prnh/20040205/DACENTRALLOGO

http://photoarchive.ap.org/

DATASOURCE: Central Freight Lines, Inc.



CONTACT:  Jeff Hale, Chief Financial Officer of Central Freight Lines,

Inc., [phone], or  



Web site:  http://www.centralfreight.com/ 

Copyright