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.