Central Freight Lines, Inc. Announces Proposal for Transaction at $2.25 Per Share; Announces Bank Amendment; Reports Filing of T
11 November 2005 - 9:22AM
PR Newswire (US)
WACO, Texas, Nov. 10 /PRNewswire-FirstCall/ -- Central Freight
Lines, Inc. (NASDAQ:CENF) announced today that it has received a
proposal from a company controlled by Jerry Moyes to acquire
Central in a transaction in which all Central stockholders, other
than Mr. Moyes and certain Moyes family trusts, would receive cash
in an amount equal to $2.25 per share. Mr. Moyes and certain Moyes
family trusts own approximately 31.5% of Central's common stock.
Central also announced today that it has executed an amendment to
its primary credit facility that increased its borrowing capacity
by $5.0 million. Finally, the Company reported that it has filed
its third quarter 2005 Form 10-Q with the Securities and Exchange
Commission. The proposal announced today will be reviewed by a
special committee of Central's Board of Directors (the "Committee")
comprised of Cam Carruth and Porter Hall, each of whom is
independent. The Committee has engaged independent legal counsel
and has retained Morgan Keegan & Company, Inc. as its financial
advisor in connection with this proposal. Cam Carruth commented on
the proposed transaction: "The Committee, with the assistance of
management, will review this proposal with the interests of
Central's stockholders, employees, customers and suppliers in
mind." Central's Chief Executive Officer and President, Bob Fasso,
commented on the matters announced: "We believe the transaction
proposal announced today demonstrates Jerry Moyes' continuing
support for Central, as well as his confidence in Central's future.
In addition, we appreciate the willingness of our lenders to grant
us access to an additional $5.0 million to support our turnaround
plans." The transaction proposal is subject to reaching a
definitive agreement along with customary conditions, including,
without limitation, financial and legal due diligence, financing,
approval of Central's Board of Directors and stockholders, and the
absence of any material adverse change to the condition (financial
or otherwise) of Central and its subsidiaries. There can be no
assurance that a definitive agreement will be entered into or that
any transaction will be consummated. 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
Section 21E of the Securities Exchange Act of 1934, as amended, and
Section 27A of the Securities Act of 1933, as amended. 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. We undertake no obligation to
update any of these forward-looking statements. With respect to
statements regarding the proposal, the following factors, among
others, could cause actual results to differ materially from those
in forward-looking statements: the risk that we will be unable to
negotiate and execute a satisfactory definitive acquisition
agreement; the risk that either party will be unwilling to
consummate the transaction on the terms proposed (including price)
or at all; the risk that our business will suffer due to
uncertainties caused by the announcement of the proposed
transaction; the risk that we may not be able to obtain third party
and stockholder approvals necessary to consummate the proposed
transaction; and the risk that the transaction will not close for
other reasons even if we are able to negotiate and execute a
definitive acquisition agreement. With respect to the Company's
business generally, the following factors, among others, could
cause actual results to differ materially from those in
forward-looking statements and could negatively impact the
Company's ability to consummate a transaction of the type reflected
in the proposal: the risk that improvements in revenue yield and
tonnage growth may be delayed or not occur at all; the risk that
service, safety, and productivity measures will be further delayed
or will not be successfully implemented throughout our operations;
the risk that our cost-cutting measures may have unintended and
unforeseen consequences that adversely affect our business; the
risk that 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 will not return to
acceptable levels on a timely basis or at all; the risk that
operating losses and negative cash flows will continue and will
have a material and adverse result including but not limited to the
withdrawal of the proposal or the termination of our line of
credit; the risk that we may not be able to maintain adequate
liquidity or successfully dispose of assets held for sale; the risk
that we may suffer material management, employee relations,
customer or other disruptions during our consideration of strategic
alternatives; 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
(480) 361-5295
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., +1-480-361-5295, or Web site:
http://www.centralfreight.com/
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