Arkansas Best Corporation Announces First Quarter 2011 Results

FORT SMITH, Ark., April 25, 2011 /PRNewswire/ -- Arkansas Best Corporation (Nasdaq: ABFS) today announced a first quarter 2011 net loss of $12.8 million, or $0.51 per share, compared to a net loss of $21.4 million, or $0.85 per share in the first quarter of 2010.

Arkansas Best's first quarter 2011 results reflect continued improvements in broader economic and LTL market conditions that provided ABF the opportunity for growth in its daily tonnage levels. While ABF was successful in adding business and improving its operating results in the first quarter, the improvements were not enough to return ABF to profitability. ABF's results for the first quarter were impacted by the lingering effects of a weaker, recessionary pricing environment. ABF's first quarter was also impacted by severe weather effects in January and early February as well as a significant increase in fuel costs that predominantly occurred during the last six weeks of the quarter. Fuel surcharge caps and non-standard fuel surcharge programs played a greater role in ABF's quarterly results than in past periods of significant fuel price increases. During March, and into the month of April, ABF has taken additional actions to increase pricing on underperforming accounts and to correct inadequate fuel surcharge programs.

"With the upturn in the economy and significantly less capacity serving the industry, the opportunities for ABF to grow profitably this year are favorable," said Judy R. McReynolds, Arkansas Best President and Chief Executive Officer. "Shippers are becoming more concerned about having transportation capacity to deliver their products. In this environment, shippers look to carriers like ABF who offer reliability, safety and a high level of customer service. ABF's reputation for dependability and consistency is valued in the transportation marketplace and is an advantage in seeking to gain additional, profitable business during this period of economic improvement."

Arkansas Best Corporation

First Quarter 2011

• Revenue of $434.9 million, a per day increase of 19.0% from the prior year first quarter revenue of $359.9 million
• Net loss of $0.51 per share compared to a net loss of $0.85 per share in the prior year quarter

ABF Freight System, Inc.®

First Quarter 2011

• Revenue of $402.4 million compared to $333.0 million in first quarter 2010, a per-day increase of 18.9%
• Tonnage per day increase of 17.4% versus first quarter 2010
• Total billed revenue per hundredweight of $24.16 compared to $23.61 in first quarter 2010, an increase of 2.3%, including increases in fuel surcharge
• Operating loss of $22.6 million compared to an operating loss of $35.7 million in first quarter 2010
• Operating ratio of 105.6% compared to 110.7% in first quarter 2010

"ABF continues to retain the general rate increase that was implemented in October. The level of recently negotiated price increases on contracts and deferred pricing agreements has also improved. Though some progress in returning to adequate pricing has resulted from these actions, more work is needed to align our pricing levels with the value we provide," said Ms. McReynolds. "As a result, ABF is taking aggressive actions to improve pricing and profitability on the broad base of accounts that it serves. There are currently several internal initiatives directed at highlighting underperforming segments of business, including revisiting substandard and capped fuel surcharge programs. I am pleased to report that the positive effects of these efforts can be seen in April yield improvements."

"As the economic environment has improved, ABF's tonnage levels have continued to grow. During each month of the first quarter our rate of positive year-over-year tonnage increased," said Ms. McReynolds. "As in the past, there is an opportunity for ABF to benefit from operating leverage in its business."

In early March, ABF expanded its RPM® regional service to the western one-third of the United States, thereby offering its Dual-System Network of regional and long-haul service coast-to-coast. ABF continues to listen to the needs of its customers and respond with unique supply chain solutions. As previously announced, for the second year in a row, ABF was named the National LTL Carrier of the Year by the National Shippers Strategic Transportation Council ("NASSTRAC"), validating ABF's market excellence.

Legal and Legislative Update

On April 12, the U.S. Court of Appeals for the Eighth Circuit heard oral arguments on ABF's appeal of the dismissal of a lawsuit ABF filed in November 2010 against the International Brotherhood of Teamsters ("IBT") and various other parties. The lawsuit related to three modifications of the National Master Freight Agreement ("NMFA") that were exclusively granted to the YRC subsidiaries in 2009 and 2010. Approximately 76% of ABF's employees are covered under the NMFA. ABF believes it is an equal signatory to the NMFA which, as a national collective bargaining agreement, is designed to establish a single national standard for wages and other employment terms for all employer participants. At the conclusion of the April 12 hearing, the court stated that it expected to reach a decision by July.

ABF makes contributions to multiemployer pension plans on behalf of its union employees. Approximately half of ABF's union pension payments go toward the benefits of employees who never worked for the company. Company executives are actively participating with a broad coalition of stakeholders committed to correcting this inequity. Progress is being made in identifying legislators in Washington who are willing to work toward solving it. Though no formal proposal has been offered, ABF will continue to work diligently in pursuit of a fair resolution of this situation.

Conference Call

Arkansas Best Corporation will host a conference call with company executives to discuss the 2011 first quarter results. The call will be today, Monday, April 25, at 11:00 a.m. ET (10:00 a.m. CT). Interested parties are invited to listen by calling (800) 772-0358. Following the call, a recorded playback will be available through the end of the day on May 25, 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 21518748. The conference call and playback can also be accessed, through May 25, 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.

SOURCE Arkansas Best Corporation

WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?

440k+
Newsrooms &
Influencers

9k+
Digital Media
Outlets

270k+
Journalists
Opted In

GET STARTED