Arkansas Best Corporation Announces Third Quarter 2011 Net Income of $0.46/Share

Oct 28, 2011, 03:00 ET from Arkansas Best Corporation

FORT SMITH, Ark., Oct. 28, 2011 /PRNewswire/ -- Arkansas Best Corporation (Nasdaq: ABFS) today announced third quarter 2011 net income of $12.3 million, or $0.46 per share, compared to a net loss of $0.7 million, or $0.03 per share in the third quarter of 2010.  

Arkansas Best's third quarter 2011 performance reflects strong improvement from its largest subsidiary, ABF Freight System, Inc.  ABF produced healthy revenue and profit growth that resulted from improved account pricing in the midst of moderating tonnage levels.  ABF improved its third quarter operating ratio by four and a half operating points versus the same period last year and by over two operating points versus this year's second quarter.  

"We are pleased to report another quarter of profitability resulting from the value and superior service that ABF offers in the marketplace.  The ABF team is to be congratulated for producing better results in the face of an uncertain economic environment," said Judy R. McReynolds, Arkansas Best President and Chief Executive Officer.  "In looking ahead, we are prepared to appropriately adjust resources to business levels while maintaining a high level of service for our customers.  Our blend of investments in people and technology as well as the unique logistics services provided to our customers put us in a good position as we cultivate opportunities for future growth and new offerings."  

Arkansas Best Corporation

Third Quarter 2011

  • Revenue of $510.9 million, a per day increase of 14.7% from the prior year third quarter revenue of $445.5 million
  • Net income of $0.46 per share compared to a net loss of $0.03 per share in the prior year third quarter
  • Includes market losses on the cash surrender value of life insurance of $0.05 per share compared to gains of $0.06 per share in the prior year period

ABF Freight System, Inc.®

Third Quarter 2011

  • Revenue of $466.3 million compared to $409.9 million in third quarter 2010, a per-day increase of 13.8%
  • Tonnage per day decrease of 2.0% versus third quarter 2010
  • Total billed revenue per hundredweight of $27.10 compared to $23.38 in third quarter 2010, an increase of 15.9%, including increases in fuel surcharge
  • Operating income of $18.3 million compared to an operating loss of $2.6 million in third quarter 2010
  • Operating ratio of 96.1% compared to 100.6% in third quarter 2010

"Since March of this year, ABF's year-over-year change in monthly tonnage has moderated, and beginning in August, tonnage has been below that of the same period last year.  So far in October, ABF's tonnage is lower than last October by between six and seven percent, but because of greatly improved yields, ABF revenues continue to be ahead of the same period last year by approximately 5%.  We attribute the tonnage decline to weakening economic conditions, our efforts to improve account pricing and more difficult comparisons from last year," said Ms. McReynolds.  "Despite the softening in ABF's freight, our pricing levels have improved significantly from recent recessionary levels.  We constantly strive to grow ABF's business with accounts that value our wide range of services.  As a result, ABF's overall group of accounts offers a better mix of business with yields that have contributed to the improved profitability we've experienced during the last two quarters."

"ABF continues to focus on making investments in resources and personnel that strengthen the positive experience of our customers while improving our operational efficiencies," said Ms. McReynolds.  "In the third quarter, ABF and its exceptional employees were recognized and honored by three national publications, twice for excellence in information technology and once for ABF's commitment to sustainability.  Two ABF drivers achieved recognition for superior driving achievements, one as a national driving champion.  Earlier this month, ABF earned the American Trucking Associations' Excellence in Security Award for the sixth time of the 11 times it has been awarded," said Ms. McReynolds.  "As we move forward, we will continue to build on the strong foundation provided by ABF's nationwide network and the relationship-forming skills of its well-trained sales force to offer additional services and to take advantage of new growth opportunities."

Conference Call

Arkansas Best Corporation will host a conference call with company executives to discuss the third quarter 2011 results.  The call will be today, Friday, October 28, at 9:30 a.m. ET (8:30 a.m. CT).  Interested parties are invited to listen by calling (800) 936-4761.  Following the call, a recorded playback will be available through the end of the day on November 30, 2011.  To listen to the playback, dial (800) 633-8284 or (402) 977-9140 (for international callers).  The conference call ID for the playback is 21541622.  The conference call and playback can also be accessed, through November 30, on Arkansas Best's website at arkbest.com.

Company Description

Arkansas Best Corporation, headquartered in Fort Smith, Arkansas, is a transportation holding company.  ABF Freight System, Inc., Arkansas Best's largest subsidiary, has been in continuous service since 1923.  ABF has evolved from a local less-than-truckload (LTL) motor carrier into a global provider of customizable supply chain solutions.  More information is available at arkbest.com and abf.com.

Forward-Looking Statements

The following is a "safe harbor" statement under the Private Securities Litigation Reform Act of 1995:  Statements contained in this press release that are not based on historical facts are "forward-looking statements."  Terms such as "anticipate," "believe," "estimate," "expect," "forecast," "intend," "plan," "predict," "prospects," "scheduled," "should," "would," and similar expressions and the negatives of such terms are intended to identify forward-looking statements.  Such statements are by their nature subject to uncertainties and risk including, but not limited to, recessionary economic conditions; competitive initiatives, pricing pressures and effect of volatility in fuel prices and the associated changes in fuel surcharges on securing increases in base freight rates; the impact of any limitations on our customers' access to adequate financial resources; availability and cost of capital; shifts in market demand; weather conditions; the performance and needs of industries served by Arkansas Best Corporation's subsidiaries; future costs of operating expenses such as fuel and related taxes; self-insurance claims and insurance premium costs; relationships with employees, including unions; union and non-union employee wages and benefits, including changes in required contributions to multiemployer pension plans; governmental regulations and policies; future climate change legislation; costs of continuing investments in technology; the timing and amount of capital expenditures; the cost, integration and performance of any future acquisitions; and other financial, operational and legal risks and uncertainties detailed from time to time in Arkansas Best Corporation's Securities and Exchange Commission ("SEC") public filings.

The following tables show financial data and operating statistics on Arkansas Best Corporation and its subsidiary companies.

ARKANSAS BEST CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended

September 30

Nine Months Ended

September 30

2011

2010

2011

2010

(Unaudited)

($ thousands, except share and per share data)

OPERATING REVENUES

$

510,887

$

445,531

$

1,444,369

$

1,216,768

OPERATING EXPENSES AND COSTS

489,769

447,307

1,436,245

1,264,619

OPERATING INCOME (LOSS)

21,118

(1,776)

8,124

(47,851)

OTHER INCOME (EXPENSE)

Interest and dividend income

273

313

790

920

Interest expense and other related financing costs

(973)

(853)

(2,899)

(1,853)

Other, net

(1,345)

1,346

1,544

1,558

(2,045)

806

(565)

625

INCOME (LOSS) BEFORE INCOME TAXES

19,073

(970)

7,559

(47,226)

INCOME TAXES

Current provision (benefit)

7,041

(1,864)

9,432

(11,199)

Deferred provision (benefit)

(233)

1,479

(6,802)

(6,722)

6,808

(385)

2,630

(17,921)

NET INCOME (LOSS)

12,265

(585)

4,929

(29,305)

LESS: NONCONTROLLING INTEREST IN

     NET INCOME OF SUBSIDIARY

164

174

280

NET INCOME (LOSS) ATTRIBUTABLE TO ARKANSAS BEST CORPORATION

$

12,265

$

(749)

$

4,755

$

(29,585)

EARNINGS PER COMMON SHARE(1)

Basic

$

0.46

$

(0.03)

$

0.18

$

(1.18)

Diluted

0.46

(0.03)

0.18

(1.18)

AVERAGE COMMON SHARES OUTSTANDING

Basic

25,421,887

25,199,123

25,388,174

25,166,678

Diluted

25,421,887

25,199,123

25,388,174

25,166,678

CASH DIVIDENDS DECLARED PER COMMON SHARE

$

0.03

$

0.03

$

0.09

$

0.09

(1) The Company uses the two-class method for calculating earnings per share. This method, as calculated below, requires an allocation of dividends paid and a portion of undistributed net income (but not losses) to unvested restricted stock for calculating per share amounts.

NET INCOME (LOSS) ATTRIBUTABLE TO ARKANSAS BEST CORPORATION

$

12,265

$

(749)

$

4,755

$

(29,585)

EFFECT OF UNVESTED RESTRICTED STOCK AWARDS(1)

(532)

(21)

(191)

(38)

ADJUSTED NET INCOME (LOSS) FOR

  CALCULATING EARNINGS PER

  COMMON SHARE

$

11,733

$

(770)

$

4,564

$

(29,623)

ARKANSAS BEST CORPORATION

CONSOLIDATED BALANCE SHEETS

September 30

2011

December 31

2010

(Unaudited)

Note

($ thousands, except share data)

ASSETS

CURRENT ASSETS

Cash and cash equivalents

$

137,099

$

102,578

Short-term investments

30,992

39,288

Restricted cash equivalents and short-term investments

52,323

51,661

Accounts receivable, less allowances (2011 – $6,265; 2010 – $3,944)

165,259

145,426

Other accounts receivable, less allowances (2011 – $1,206; 2010 – $1,254)

6,226

8,157

Prepaid expenses

9,114

10,258

Deferred income taxes

37,031

32,681

Prepaid and refundable income taxes

2,106

3,958

Other

5,251

5,677

TOTAL CURRENT ASSETS

445,401

399,684

PROPERTY, PLANT AND EQUIPMENT

Land and structures

241,310

243,981

Revenue equipment

568,639

530,424

Service, office and other equipment

169,743

163,732

Leasehold improvements

21,258

21,890

1,000,950

960,027

Less allowances for depreciation and amortization

590,418

552,781

410,532

407,246

OTHER ASSETS

52,439

54,021

$

908,372

$

860,951

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

Bank overdraft and drafts payable

$

14,631

$

13,023

Accounts payable

74,656

62,134

Income taxes payable

5,787

196

Accrued expenses

156,537

144,543

Current portion of long-term debt

21,179

14,001

TOTAL CURRENT LIABILITIES

272,790

233,897

LONG-TERM DEBT, less current portion

45,900

42,657

PENSION AND POSTRETIREMENT LIABILITIES

66,907

65,421

OTHER LIABILITIES

13,933

19,827

DEFERRED INCOME TAXES

20,045

19,405

STOCKHOLDERS' EQUITY

Common stock, $0.01 par value, authorized 70,000,000 shares;

   issued 2011: 27,099,819 shares; 2010: 26,934,847 shares

271

269

Additional paid-in capital

284,991

281,169

Retained earnings

294,501

292,129

Treasury stock, at cost, 1,677,932 shares

(57,770)

(57,770)

Accumulated other comprehensive loss

(33,196)

(36,053)

TOTAL STOCKHOLDERS' EQUITY

488,797

479,744

$

908,372

$

860,951

Note: The balance sheet at December 31, 2010 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

ARKANSAS BEST CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended

September 30

2011

2010

(Unaudited)

($ thousands)

OPERATING ACTIVITIES

Net income (loss)

$

4,929

$

(29,305)

Adjustments to reconcile net income (loss)

 to net cash provided by operating activities:

Depreciation and amortization

54,201

53,771

Other amortization

177

200

Pension settlement expense

178

Share-based compensation expense

5,116

4,191

Provision for losses on accounts receivable

2,105

453

Deferred income tax benefit

(6,802)

(6,722)

Gain on sale of property and equipment

(1,934)

(142)

Changes in operating assets and liabilities:

Receivables

(20,244)

(31,595)

Prepaid expenses

1,144

1,724

Other assets

2,293

659

Income taxes

8,457

18,145

Accounts payable, accrued expenses and other liabilities

22,836

10,316

NET CASH PROVIDED BY OPERATING ACTIVITIES

72,278

21,873

INVESTING ACTIVITIES

Purchases of property, plant and equipment, net of capital leases and notes payable

(32,127)

(4,322)

Proceeds from sales of property and equipment

5,678

3,393

Purchases of short-term investments

(27,930)

(51,065)

Proceeds from sales of short-term investments

36,175

99,175

Capitalization of internally developed software and other

(3,735)

(3,265)

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

(21,939)

43,916

FINANCING ACTIVITIES

Payments on long-term debt

(10,886)

(5,167)

Proceeds from issuance of long-term debt

11,416

Acquisition of noncontrolling interest

(4,084)

Net change in bank overdraft and other

1,608

(10,057)

Change in restricted cash equivalents and short-term investments

(662)

103

Deferred financing costs

(174)

(35)

Payment of common stock dividends

(2,383)

(2,340)

Proceeds from the exercise of stock options

763

465

NET CASH USED IN FINANCING ACTIVITIES

(15,818)

(5,615)

NET INCREASE IN CASH AND CASH EQUIVALENTS

34,521

60,174

Cash and cash equivalents at beginning of period

102,578

39,332

CASH AND CASH EQUIVALENTS AT END OF PERIOD

$

137,099

$

99,506

NONCASH INVESTING ACTIVITIES

Accruals for equipment received

$

5,177

$

5,896

Equipment financed under capital leases and notes payable

$

21,307

$

21,421

ARKANSAS BEST CORPORATION

FINANCIAL STATEMENT OPERATING SEGMENT DATA

AND OPERATING RATIOS

Three Months Ended

September 30

Nine Months Ended

September 30

2011

2010

2011

2010

(Unaudited)

($ thousands)

ABF Freight System, Inc.(1)

$

466,287

$

409,916

$

1,327,168

$

1,122,384

Other revenues and eliminations

44,600

35,615

117,201

94,384

Total consolidated operating revenues

$

510,887

$

445,531

$

1,444,369

$

1,216,768

OPERATING EXPENSES AND COSTS

ABF Freight System, Inc.(1)

Salaries, wages and benefits

$

272,038

58.3%

$

259,613

63.3%

$

807,792

60.9%

$

745,037

66.4%

Fuel, supplies and expenses

86,570

18.6

67,045

16.4

254,292

19.2

192,686

17.2

Operating taxes and licenses

11,343

2.4

11,229

2.7

34,336

2.6

32,438

2.9

Insurance

5,139

1.1

4,870

1.2

18,132

1.4

14,981

1.3

Communications and utilities

3,779

0.8

3,830

0.9

11,490

0.9

11,008

1.0

Depreciation and amortization

17,540

3.8

16,992

4.2

52,160

3.9

51,698

4.6

Rents and purchased transportation

49,598

10.6

46,830

11.4

140,455

10.6

120,771

10.7

Gain on sale of property and equipment

(1,060)

(0.2)

(74)

(1,944)

(0.1)

(498)

Other

2,997

0.7

2,141

0.5

6,547

0.3

5,101

0.4

447,944

96.1%

412,476

100.6%

1,323,260

99.7%

1,173,222

104.5%

Other expenses and eliminations

41,825

34,831

112,985

91,397

Total consolidated operating expenses and costs

$

489,769

$

447,307

$

1,436,245

$

1,264,619

OPERATING INCOME (LOSS)

ABF Freight System, Inc.(1)

$

18,343

$

(2,560)

$

3,908

$

(50,838)

Other income (loss) and eliminations

2,775

784

4,216

2,987

Total consolidated operating income (loss)

$

21,118

$

(1,776)

$

8,124

$

(47,851)

(1)  Includes U.S., Canadian and Puerto Rican operations of ABF affiliates.

ABF FREIGHT SYSTEM, INC.

OPERATING STATISTICS

Three Months Ended September 30

Nine Months Ended September 30

2011

2010

% Change

2011

2010

% Change

(Unaudited)

Workdays

64

64

191.5

190.5

Billed Revenue (1) / CWT     

$

27.10

$

23.38

15.9%

$

25.70

$

23.52

9.3%

Billed Revenue (1) / Shipment  

$

386.25

$

340.54

13.4%

$

365.09

$

334.56

9.1%

Shipments                 

1,203,970

1,201,683

0.2%

3,652,776

3,366,599

8.5%

Shipments / Day

18,812

18,776

0.2%

19,075

17,672

7.9%

Tonnage (tons)             

858,048

875,156

(2.0)%

2,594,053

2,394,510

8.3%

Tons / Day

13,407

13,674

(2.0)%

13,546

12,570

7.8%

(1)  Billed Revenue does not include revenue deferral required for financial statement purposes under the company's revenue recognition policy.

Includes U.S., Canadian and Puerto Rican operations of ABF affiliates.

Contact:   

Mr. David Humphrey, Vice President, Investor Relations and Corporate Communications

Telephone: (479) 785-6200

SOURCE Arkansas Best Corporation



RELATED LINKS

http://www.arkbest.com