CENF Central Freight Lines

Central Freight Lines, Inc. Files Form 10-K Annual Report; Announces Adjustments to Previously Reported Results WACO, Texas, March 31 /PRNewswire-FirstCall/ -- Central Freight Lines, Inc. (NASDAQ:CENF) announced today that it has filed its annual report on Form 10-K for the year ended December 31, 2004, within the timeframe allowed under Rule 12b-25. As previously announced, an extension of the filing date was requested under Rule 12b-25 to allow Central and its outside auditors to complete the evaluation and assessment of internal controls over financial reporting as required by Section 404 of the Sarbanes-Oxley Act. That evaluation and assessment was completed, and one additional material weakness in internal control was identified, relating to the calculation of the valuation allowance for deferred tax assets. As described below, the valuation of the deferred tax asset was corrected by Central prior to filing its annual report. The annual report filed by Central today included adjustments to Central's insurance and claims expense, income tax benefit (expense), and net loss, as well as balance sheet adjustments, which were made after Central's press release on March 16, 2005. The adjustments to previously announced results that were included in the annual report are as follows: * For the 2004 fourth quarter, Central recorded a non-cash charge of $4.9 million, or $0.27 per diluted share, related to a valuation allowance for deferred tax assets. Previously, Central reported that this non-cash charge would be $2.9 million, or $0.16 per diluted share. The previously announced amount had been established in consultation with an independent Big Four accounting firm. However, despite this measure, an error was discovered. * For the 2004 fourth quarter, Central recorded additional insurance and claims expense of $690,000, or $0.04 per diluted share, based on a jury verdict after the March 16 press release relating to a lawsuit originally filed in 2003. Central intends to appeal the verdict but has increased its claims accrual to reflect the award. The tax benefit from this additional expense of $269,000 was offset by a deferred tax valuation allowance of $269,000 which is included in the $4.9 million valuation allowance mentioned above. After giving effect to these adjustments, Central reported a net loss of $11.3 million, or $0.62 per diluted share, for the fourth quarter, and a net loss of $22.8 million, or $1.27 per diluted share for 2004 as a whole. After giving effect to the write-off of the deferred tax asset, stockholders' equity was $87.6 million as of December 31, 2004. 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 forward-looking statements: the risk that revenue growth may be delayed or not occur at all; 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 recent 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 we will be unable to obtain the financing we are seeking or that it will not be available on acceptable terms; the risk that operating losses and negative cash flows will continue and will have a material and adverse result; 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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