Arkansas Best Corporation Posts Profit in Fourth Quarter 2011 and Full Year 2011

FORT SMITH, Ark., Jan. 27, 2012 /PRNewswire/ -- Arkansas Best Corporation (Nasdaq: ABFS) today announced fourth quarter 2011 earnings of $0.05 per share, compared to a fourth quarter 2010 loss of $0.12 per share.  For full year 2011, Arkansas Best's earnings were $0.23 per share versus a loss of $1.30 per share in 2010.  These quarterly results include charges for a supplemental pension settlement of $0.03 per share related to a previously disclosed ABF executive retirement effective at the end of 2011.

"Arkansas Best's profitable results for the fourth quarter and full year reflect an improving business environment as characterized by revenue growth in each of our operating segments.  ABF's full-year results represent an important step toward achieving our goal of returning to historical profitability levels.  For our non-asset-based businesses, 2011 was a year of management focus and investment that laid the foundation for more significant revenue and profit growth in the future," said Judy R. McReynolds, Arkansas Best President and Chief Executive Officer.  "Our employees are to be commended for their successful efforts to address customer needs in an ever-evolving marketplace.  They continue to deliver a unique combination of complementary service offerings and value."    

"Arkansas Best Corporation, through ABF and its non-asset-based operating subsidiaries, provides a comprehensive set of transportation and maintenance solutions to our customers," said Ms. McReynolds.  "The transportation industry is facing a number of challenges that will likely reduce the amount of capacity available to serve the marketplace.  Because of the stability of our workforce and the capabilities we offer, our companies are well positioned to serve our customers in 2012 and in future years."

Arkansas Best Corporation

Consolidated Results of Operations

Fourth Quarter 2011

  • Revenue of $463.2 million, a per day increase of 5.9% over the prior year quarter of $441.1 million
  • Net income, excluding pension settlement charges, of $2.1 million compared to a net loss of $3.1 million in the prior year quarter

Full Year 2011

  • Revenue of $1.91 billion, a per day increase of 15.1% over 2010 revenue of $1.66 billion
  • Net income, excluding pension settlement charges, of $6.8 million compared to a net loss of $32.6 million in 2010

New Segment Reporting

Beginning with the fourth quarter 2011 and full year 2011 financial reporting periods, Arkansas Best has expanded the financial details of its operating segments.  This decision is necessitated by accounting rules that require public disclosure of business lines meeting certain operating profit thresholds.  Details on the business activities represented by each segment are included in the footnote descriptions.  On a combined basis, the non-asset-based business segments grew revenues and profits by approximately thirty percent in 2011.  These emerging businesses represent tremendous growth opportunities for Arkansas Best Corporation.    

Freight Transportation(1)

Results of Operations

Fourth Quarter 2011

  • Revenue of $422.1 million compared to $405.8 million in fourth quarter 2010, a per day increase of 4.9%
  • Tonnage per day decrease of 7.6% versus fourth quarter 2010
  • Total billed revenue per hundredweight of $28.01 compared to $24.84 in fourth quarter 2010, an increase of 12.8%
  • Operating income, excluding pension settlement charges, of $2.5 million compared to an operating loss of $7.8 million in fourth quarter 2010
  • Operating ratio, excluding pension settlement charges, of 99.4% compared to an operating ratio of 101.9% in fourth quarter 2010

Full Year 2011

  • Revenue of $1.73 billion compared to $1.51 billion in 2010, a per-day increase of 14.3%
  • Tonnage per day increase of 4.0% versus 2010
  • Total billed revenue per hundredweight of $26.86 compared to $24.41 in 2010, an increase of 10.0%
  • Operating income, excluding pension settlement charges, of $4.7 million compared to a 2010 operating loss of $59.6 million
  • Operating ratio, excluding pension settlement charges, of 99.7% compared to an operating ratio of 103.9% in 2010

Truck Brokerage & Management(2)

Results of Operations

Full Year 2011

  • Revenue of $25.4 million compared to $19.2 million in 2010, a per day increase of 32.2%
  • An increase in total shipments of 17.1% compared to 2010
  • Operating income of $1.9 million compared to operating income of $1.4 million in 2010

Emergency and Preventative Maintenance(3)

Results of Operations

Full Year 2011

  • Revenue of $92.6 million compared to $74.9 million in 2010, a per day increase of 23.5%
  • An increase in customer emergency and maintenance service events of 15.2% compared to 2010
  • Operating income of $3.0 million compared to operating income of $2.7 million in 2010

Special Services Logistics(4)

Results of Operations

Full Year 2011

  • Revenue of $85.6 million compared to $63.7 million in 2010, a per day increase of 34.4%
  • An increase in total shipments of 57.1% compared to 2010
  • Operating income of $2.7 million compared to operating income of $1.7 million in 2010

Consolidated Capital Expenditures

  • Total net capital expenditures
    • 2011 – $77 million, including approximately $64 million of revenue equipment
    • 2012 – Estimated range of $80 million to $90 million.  This includes approximately $55 million of revenue equipment, most all of which will be replacements. The remainder of expected capital expenditures includes the costs of other equipment, real estate and technology.
  • Depreciation and amortization
    • 2011 – $74 million
    • 2012 – estimated range of $80 million to $85 million

Conference Call

Arkansas Best Corporation will host a conference call with company executives to discuss the 2011 fourth quarter and full year results.  The call will be today, Friday, January 27, at 9:30 a.m. ET (8:30 a.m. CT).  Interested parties are invited to listen by calling (800) 379-4140.  Following the call, a recorded playback will be available through the end of the day on February 29, 2012.  To listen to the playback, dial (800) 633-8284 or (402) 977-9140 (for international callers).  The conference call ID for the playback is 21573493.  The conference call and playback can also be accessed, through February 29, 2012, on Arkansas Best's Web site at arkbest.com.

Company Description

Arkansas Best Corporation, headquartered in Fort Smith, Arkansas, is a freight transportation services and solutions provider.  Through its various subsidiaries, Arkansas Best offers a wide variety of logistics services including: domestic and global transportation of less-than-truckload ("LTL") and full load shipments, expedited and time-definite delivery solutions, freight brokerage, and oversight of roadside assistance and equipment services for commercial vehicles.  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; availability of fuel; 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 risks and costs of cyber incidents; 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.

(1) This segment includes the results of operations of Arkansas Best's largest subsidiary, ABF Freight System, Inc.®  The financial results for Arkansas Best's freight brokerage services, which were included in ABF's reported results in prior periods, are now included in the "Truck Brokerage & Management" segment.

(2) This segment includes the results of operations of Arkansas Best's freight brokerage services operating as FreightValue®.  These results were included in the "ABF Freight System, Inc." reporting segment in prior periods.

(3) This segment includes the results of operations of Arkansas Best's subsidiary FleetNet America, Inc. which provides roadside assistance and equipment services for commercial vehicles.  These results were included in the "Other" reporting segment in prior periods.

(4) This segment includes the results of operations of Arkansas Best's subsidiaries Albert Companies, Inc. and Moving Solutions, Inc. which provide services to the consumer, corporate, and military household goods moving market.  These results were included in the "Other" reporting segment in prior periods.  Self-move services (U-Pack®) provided by ABF Freight System, Inc. will continue to be reported in the "Freight Transportation" segment.


ARKANSAS BEST CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS



Three Months Ended

December 31


Year Ended

December 31



2011


2010


2011


2010


(Unaudited)


($ thousands, except share and per share data)


OPERATING REVENUES

$

463,241


$

441,096


$

1,907,609


$

1,657,864













OPERATING EXPENSES AND COSTS


461,606



447,790



1,897,850



1,712,409













OPERATING INCOME (LOSS)


1,635



(6,694)



9,759



(54,545)













OTHER INCOME (EXPENSE)












Interest and dividend income


286



274



1,069



1,194

Interest expense and other related financing costs


(1,054)



(999)



(3,953)



(2,852)

Other, net


1,067



848



2,618



2,406



299



123



(266)



748













INCOME (LOSS) BEFORE INCOME TAXES


1,934



(6,571)



9,493



(53,797)













INCOME TAXES












Current provision (benefit)


(9,328)



1,281



104



(9,919)

Deferred provision (benefit)


9,858



(4,735)



3,056



(11,457)



530



(3,454)



3,160



(21,376)













NET INCOME (LOSS)


1,404



(3,117)



6,333



(32,421)













LESS:  NONCONTROLLING INTEREST IN NET INCOME (LOSS) OF SUBSIDIARY




(8)



174



272













NET INCOME (LOSS) ATTRIBUTABLE TO ARKANSAS BEST CORPORATION

$

1,404


$

(3,109)


$

6,159


$

(32,693)













EARNINGS (LOSS) PER COMMON SHARE(1)












Basic

$

0.05


$

(0.12)


$

0.23


$

(1.30)

Diluted


0.05



(0.12)



0.23



(1.30)













AVERAGE COMMON SHARES OUTSTANDING












Basic


25,421,887



25,223,986



25,403,073



25,187,723

Diluted


25,421,887



25,223,986



25,403,073



25,187,723













CASH DIVIDENDS DECLARED PER COMMON SHARE

$

0.03


$

0.03


$

0.12


$

0.12


(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

$

1,404


$

(3,109)


$

6,159


$

(32,693)













EFFECT OF UNVESTED RESTRICTED STOCK AWARDS(1)


(59)



(29)



(249)



(69)













ADJUSTED NET INCOME (LOSS) FOR CALCULATING EARNINGS PER COMMON SHARE

$

1,345


$

(3,138)


$

5,910


$

(32,762)






ARKANSAS BEST CORPORATION

CONSOLIDATED BALANCE SHEETS



December 31

2011


December 31

2010


(Unaudited)


Note


($ thousands, except share data)

ASSETS












CURRENT ASSETS






Cash and cash equivalents

$

141,295


$

102,578

Short-term investments


33,960



39,288

Restricted cash equivalents and short-term investments


52,693



51,661

Accounts receivable, less allowances (2011 – $5,957; 2010 – $3,944)


149,665



145,426

Other accounts receivable, less allowances (2011 – $1,226; 2010 – $1,254)


7,538



8,157

Prepaid expenses


11,363



10,258

Deferred income taxes


35,481



32,681

Prepaid and refundable income taxes


6,905



3,958

Other


6,186



5,677

       TOTAL CURRENT ASSETS


445,086



399,684







PROPERTY, PLANT AND EQUIPMENT






Land and structures


242,120



243,981

Revenue equipment


569,303



530,424

Service, office and other equipment


174,740



163,732

Leasehold improvements


21,426



21,890



1,007,589



960,027

Less allowances for depreciation and amortization


592,171



552,781



415,418



407,246

OTHER ASSETS


55,716



54,021








$

916,220


$

860,951







LIABILITIES AND STOCKHOLDERS' EQUITY












CURRENT LIABILITIES






Bank overdraft and drafts payable

$

20,836


$

13,023

Accounts payable


66,517



62,134

Income taxes payable


169



196

Accrued expenses


151,887



144,543

Current portion of long-term debt


24,262



14,001

TOTAL CURRENT LIABILITIES


263,671



233,897







LONG-TERM DEBT, less current portion


46,750



42,657







PENSION AND POSTRETIREMENT LIABILITIES


106,578



65,421







OTHER LIABILITIES


13,751



19,827







DEFERRED INCOME TAXES


19,855



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


286,408



281,169

Retained earnings


295,108



292,129

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


(57,770)



(57,770)

Accumulated other comprehensive loss


(58,402)



(36,053)

TOTAL STOCKHOLDERS' EQUITY


465,615



479,744








$

916,220


$

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



Year Ended

December 31


2011


2010


(Unaudited)


($ thousands)

OPERATING ACTIVITIES






Net income (loss)

$

6,333


$

(32,421)

Adjustments to reconcile net income (loss) to net cash

   provided by operating activities:






Depreciation and amortization


73,742



71,565

Other amortization


233



267

Pension settlement expense


1,125



178

Share-based compensation expense


6,450



5,690

Provision for losses on accounts receivable


2,394



868

Deferred income tax provision (benefit)


3,056



(11,457)

Gain on sales of property and equipment


(2,360)



(981)

Changes in operating assets and liabilities:






Receivables


(6,067)



(32,211)

Prepaid expenses


(1,105)



144

Other assets


(635)



(1,568)

Income taxes


(776)



21,016

Accounts payable, accrued expenses and other liabilities


18,462



5,197

NET CASH PROVIDED BY OPERATING ACTIVITIES


100,852



26,287







INVESTING ACTIVITIES






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


(53,227)



(11,422)

Proceeds from sales of property and equipment


7,062



5,879

Purchases of short-term investments


(59,718)



(65,171)

Proceeds from sales of short-term investments


64,995



119,744

Capitalization of internally developed software and other


(5,295)



(4,355)

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES


(46,183)



44,675







FINANCING ACTIVITIES






Payments on long-term debt


(16,056)



(8,077)

Proceeds from issuance of long-term debt




11,416

Acquisition of noncontrolling interest


(4,084)



Net change in bank overdraft and other


7,811



(8,918)

Change in restricted cash equivalents and short-term investments


(1,032)



(804)

Deferred financing costs


(174)



(35)

Payment of common stock dividends


(3,180)



(3,126)

Proceeds from the exercise of stock options


763



1,828

NET CASH USED IN FINANCING ACTIVITIES


(15,952)



(7,716)







NET INCREASE IN CASH AND CASH EQUIVALENTS     


38,717



63,246

Cash and cash equivalents at beginning of period


102,578



39,332

CASH AND CASH EQUIVALENTS AT END OF PERIOD

$

141,295


$

102,578







NONCASH INVESTING ACTIVITIES






Accruals for equipment received

$

338


$

Equipment financed under capital leases and notes payable

$

30,410


$

36,343





ARKANSAS BEST CORPORATION

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES



Three Months Ended

December 31


Year Ended

December 31



2011


2010


2011


2010


(Unaudited)


($ thousands, except per share data)


FREIGHT TRANSPORTATION

Operating Income (Loss)












Amounts on a GAAP basis

$

1,340


$

(7,750)


$

3,609


$

(59,740)

Pension settlement expense, pre-tax


1,125





1,125



178

Non-GAAP amounts

$

2,465


$

(7,750)


$

4,734


$

(59,562)













Operating Ratio












Amounts on a GAAP basis


99.7%



101.9%



99.8%



103.9%

Pension settlement expense, pre-tax


0.3





0.1



Non-GAAP amounts


99.4%



101.9%



99.7%



103.9%













ARKANSAS BEST CORPORATION – CONSOLIDATED

Operating Income (Loss)












Amounts on a GAAP basis

$

1,635


$

(6,694)


$

9,759


$

(54,545)

Pension settlement expense, pre-tax


1,125





1,125



178

Non-GAAP amounts

$

2,760


$

(6,694)


$

10,884


$

(54,367)













Net Income (Loss) Attributable to
Arkansas Best Corporation












Amounts on a GAAP basis

$

1,404


$

(3,109)


$

6,159


$

(32,693)

Pension settlement expense, after-tax


684





684



108

Non-GAAP amounts

$

2,088


$

(3,109)


$

6,843


$

(32,585)













Diluted Earnings (Loss) Per Share












Amounts on a GAAP basis

$

0.05


$

(0.12)


$

0.23


$

(1.30)

Pension settlement expense, after-tax


0.03





0.03



Non-GAAP amounts

$

0.08


$

(0.12)


$

0.26


$

(1.30)














Non-GAAP Financial Measures. The company reports its financial results in accordance with generally accepted accounting principles ("GAAP").  However, management believes that certain non-GAAP performance measures and ratios utilized for internal analysis provide financial statement users meaningful comparisons between current and prior period results, as well as important information regarding performance trends.  Certain information discussed in the scheduled conference call could be considered non-GAAP measures.  Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the company's reported results.





ARKANSAS BEST CORPORATION

FINANCIAL STATEMENT OPERATING SEGMENT DATA

AND OPERATING RATIOS



Three Months Ended

December 31



Year Ended

December 31







2011



2010



2011



2010



(Unaudited)

($ thousands)

OPERATING REVENUES
















Freight Transportation(1)

$

422,051



$

405,771



$

1,730,773



$

1,514,108


Truck Brokerage & Management(2)


6,942




5,178




25,429




19,241


Emergency and Preventative

  Maintenance(3)


22,136




19,666




92,554




74,927


Special Services Logistics(4)


16,732




13,873




85,611




63,733


Other revenues and eliminations


(4,620)




(3,392)




(26,758)




(14,145)


Total consolidated
  operating revenues

$

463,241



$

441,096



$

1,907,609



$

1,657,864


















OPERATING EXPENSES AND COSTS

Freight Transportation(1)
















Salaries, wages and benefits

$

254,073

60.2%


$

259,925

64.1%


$

1,061,213

61.3%


$

1,004,267

66.3%

Fuel, supplies and expenses


80,391

19.0



70,298

17.3



333,779

19.3



262,420

17.3

Operating taxes and licenses


11,133

2.6



11,101

2.7



45,469

2.6



43,539

2.9

Insurance


6,360

1.5



3,771

0.9



24,490

1.4



18,745

1.2

Communications and utilities


3,649

0.9



3,663

0.9



15,118

0.9



14,655

1.0

Depreciation and amortization


18,765

4.4



17,108

4.2



70,810

4.1



68,695

4.5

Rents and purchased transportation


43,816

10.4



45,008

11.1



169,212

9.8



154,119

10.2

Gain on sale of property

  and equipment


(426)

(0.1)



(840)

(0.2)



(2,370)

(0.1)



(1,338)

(0.1)

Pension settlement expense


1,125

0.3





1,125

0.1



178

Other


1,825

0.5



3,487

0.9



8,318

0.4



8,568

0.6



420,711

99.7%



413,521

101.9%



1,727,164

99.8%



1,573,848

103.9%

















Truck Brokerage & Management(2)


6,619




4,905




23,539




17,868


Emergency and Preventative

  Maintenance(3)


21,999




19,050




89,572




72,208


Special Services Logistics(4)


16,780




13,915




82,893




62,014


Other expenses and eliminations


(4,503)




(3,601)




(25,318)




(13,529)


Total consolidated operating

  expenses and costs

$

461,606



$

447,790



$

1,897,850



$

1,712,409


















OPERATING INCOME (LOSS)
















Freight Transportation(1)

$

1,340



$

(7,750)



$

3,609



$

(59,740)


Truck Brokerage & Management(2)


323




273




1,890




1,373


Emergency and Preventative

   Maintenance(3)


137




616




2,982




2,719


Special Services Logistics(4)


(48)




(42)




2,718




1,719


Other income (loss) and
  eliminations


(117)




209




(1,440)




(616)


Total consolidated operating
  income (loss)

$

1,635



$

(6,694)



$

9,759



$

(54,545)



(1) This segment includes the results of operations of Arkansas Best's largest subsidiary, ABF Freight System, Inc.®.

(2) This segment includes the results of operations of Arkansas Best's transportation brokerage services operating as FreightValue®.

(3) This segment includes the results of operations of Arkansas Best's roadside vehicle assistance and commercial equipment services subsidiary FleetNet America, Inc.

(4) This segment includes the results of operations of Arkansas Best's subsidiaries Albert Companies, Inc. and Moving Solutions, Inc. which provide services to the consumer, corporate, and military household goods moving market.





ARKANSAS BEST CORPORATION

OPERATING STATISTICS






Three Months Ended December 31


Year Ended December 31


2011

2010

% Change


2011

2010

% Change


(Unaudited)

Freight Transportation (1)









Workdays

61.0

61.5



252.0

252.0










Billed Revenue (2) / CWT

$

28.01

$

24.84

12.8%


$

26.86

$

24.41

10.0%













Billed Revenue (2) / Shipment

$

371.34

$

343.35

8.2%


$

362.11

$

332.66

8.9%













Shipments


1,101,893


1,152,854

(4.4)%



4,745,404


4,511,600

5.2%













Shipments / Day


18,064


18,746

(3.6)%



18,831


17,903

5.2%













Tonnage (tons)


730,426


796,922

(8.3)%



3,198,292


3,074,285

4.0%













Tons / Day


11,974


12,958

(7.6)%



12,692


12,200

4.0%


(1) Operating statistics for the Freight Transportation segment do not include the results from ABF's Global Supply Chain Services.

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




Truck Brokerage & Management


Shipments                 


3,206


2,704

18.6%



11,885


10,147

17.1%




Emergency and Preventative

   Maintenance

Events                    


60,041


61,983

(3.1)%



273,167


237,142

15.2%




Special Service Logistics


Shipments                 


4,111


3,333

23.3%



19,915


12,676

57.1%




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
http://www.abf.com

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.