Arkansas Best Corporation Announces First Quarter 2013 Results

FORT SMITH, Ark., April 30, 2013 /PRNewswire/ -- Arkansas Best Corporation (Nasdaq: ABFS) today reported a first quarter 2013 net loss despite continued encouraging trends in its emerging businesses.  Year-over-year revenue and tonnage growth at LTL carrier ABF Freight System, Inc., were offset by higher wage and benefit costs for employees represented by the International Brotherhood of Teamsters.

Arkansas Best's first quarter 2013 revenue was $520.7 million compared to revenue of $440.9 million in the first quarter of 2012. The first quarter net loss was $13.4 million, or $0.52 per share, compared to a first quarter 2012 net loss of $18.2 million, or $0.71 per share.  Last year's first quarter results included the effects of an unusually low corporate tax benefit rate and unusually high workers' compensation claims costs.  Combined, these items increased last year's first quarter net loss by $0.31 per share.    

Arkansas Best's emerging, non-asset-based businesses continue to display strength in their revenue growth and cash flow generation.  Freight brokerage and vehicle roadside and preventive maintenance grew first-quarter revenue 82% and 45%, respectively, and improved operating income. Operating results at Panther Expedited Services, Inc., were impacted by reduced demand for expedited services and investments made in sales and service locations for future growth.  On a combined basis, Panther and all of the other non-asset-based businesses generated first quarter 2013 earnings before interest, taxes, depreciation and amortization ("EBITDA") of $3.4 million, versus slightly negative EBITDA in the first quarter of 2012.  "First quarter revenue and operating income at our emerging businesses reflected growth and improvement as we invested heavily in these businesses during 2012.  They represent a critical piece of Arkansas Best's strategy to achieve sustained profitability," said Arkansas Best President and Chief Executive Officer Judy R. McReynolds.  "The investments made so far have improved the financial performance of these subsidiaries and strengthened their service offerings and their ability, both individually and through significant cross-selling opportunities, to better serve customers with full supply-chain solutions."

ABF Freight's first-quarter operating loss deepened despite revenue growth and improving business levels. McReynolds noted that the company's high-cost structure continues to weigh on results, underscoring the need for a more rational labor agreement that reflects the increasingly competitive LTL industry. "After months of hard work and a second extension of contract talks through May 31, the negotiating teams continue to make progress on developing a contract agreement for our Teamster-represented employees that is expected to provide ABF greater operational flexibility and lower costs in order to effectively compete in the future."

Closing Comments
"Despite losses in the seasonally weak first quarter, Arkansas Best is well-positioned for growth in new and existing markets.  We continue to develop a comprehensive array of services designed to meet the ever-changing needs of our customers and generate financial returns for our company and our shareholders," said McReynolds.  "Current negotiations on a new labor agreement provide an opportunity to preserve good-paying jobs and protect the retirement benefits of our union employees through a lower cost structure and improved operational flexibility.  A new labor contract, with lower more competitive costs, is a critical element in allowing ABF to effectively compete in a drastically different LTL marketplace." 

Conference Call
Arkansas Best Corporation will host a conference call with company executives to discuss the 2013 first quarter results.  The call will be today, Tuesday, April 30, at 9:30 a.m. ET (8:30 a.m. CT).  Interested parties are invited to listen by calling (800) 659-2165.  Following the call, a recorded playback will be available through the end of the day on May 31, 2013.  To listen to the playback, dial (800) 633-8284 or (402) 977-9140 (for international callers).  The conference call ID for the playback is 21653957.  The conference call and playback can also be accessed, through May 31, on Arkansas Best's website 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 solutions including: domestic and global transportation of less-than-truckload ("LTL") and full load shipments, expedited ground and time-definite delivery solutions, freight forwarding services, freight brokerage, oversight of roadside assistance and equipment services for commercial vehicles, and household goods moving market services for consumers, corporations, and the military. More information is available at arkbest.com, abf.com and pantherexpedite.com.

Forward-Looking Statements
The following is a "safe harbor" statement under the Private Securities Litigation Reform Act of 1995:  Statements contained in this report that are not based on historical facts are "forward-looking statements." Terms such as "anticipate," "believe," "could," "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, a workforce stoppage by our employees covered under our collective bargaining agreement or unfavorable terms of future collective bargaining agreements; relationships with employees, including unions; general economic conditions and related shifts in market demand that impact the performance and needs of industries served by Arkansas Best Corporation's subsidiaries and/or limit our customers' access to adequate financial resources; union and nonunion employee wages and benefits, including changes in required contributions to multiemployer pension plans; competitive initiatives, pricing pressures and the effect of volatility in fuel prices and the associated changes in fuel surcharges on securing increases in base freight rates and the inability to collect fuel surcharges; availability of fuel; default on covenants of financing arrangements and the availability and terms of future financing arrangements; availability and cost of reliable third-party services; disruptions or failures of services essential to the use of information technology platforms in our business; availability, timing, and amount of capital expenditures; future costs of operating expenses such as fuel and related taxes; self-insurance claims and insurance premium costs; governmental regulations and policies; future climate change legislation; potential impairment of goodwill and intangible assets; the impact of our brand and corporate reputation; the cost, timing, and performance of growth initiatives; the cost, integration, and performance of any future acquisitions; the costs of continuing investments in technology, a failure of our information systems, and the impact of cyber incidents; weather conditions; and other financial, operational, and legal risks and uncertainties detailed from time to time in Arkansas Best Corporation's Securities and Exchange Commission public filings.

The following tables show financial data and operating statistics on Arkansas Best Corporation and its subsidiary companies.

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. Management believes EBITDA to be relevant and useful information as EBITDA is a standard measure commonly reported and widely used by analysts, investors and others to measure financial performance and ability to service debt obligations. However, these financial measures should not be construed as better measurements than operating income, operating cash flow, net income or earnings per share, as defined by generally accepted accounting principles. Other companies may calculate EBITDA differently, and therefore the Company's EBITDA may not be comparable to similarly titled measures of other companies.

Description of Segments:

• Freight Transportation includes the results of operations of Arkansas Best's largest subsidiary, ABF Freight System, Inc.^®.
• Panther Expedited Services, Inc., which was acquired on June 15, 2012, is reported as Premium Logistics & Expedited Freight Services.
• Truck Brokerage and Management includes the transportation brokerage services operating as FreightValue^®.
• Emergency and Preventative Maintenance includes the roadside vehicle assistance and commercial equipment services subsidiary FleetNet America, Inc.
• Household Goods Moving Services includes Albert Companies, Inc. and Moving Solutions, Inc. which provide services to the consumer, corporate, and military household goods moving market.

Certain reclassifications have been made to the prior year's operating segment data to conform to the current year presentation. The operating results of Global Supply Chain Services and Supply Chain Services, businesses which provide ocean container transport and warehousing services, have been reclassified from the Freight Transportation segment to "Other and Eliminations." There was no impact on consolidated amounts as a result of these reclassifications.

SOURCE Arkansas Best Corporation