2014

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

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



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