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

27 Jan, 2012, 03:00 ET from Arkansas Best Corporation

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