Published: January 27, 2012
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 Year Ended
------------------ ----------
December 31 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 $(32,762)
===================== ====== ======= ====== ========
ARKANSAS BEST CORPORATION
CONSOLIDATED BALANCE SHEETS
December
31 December 31
2011 2010
(Unaudited) Note
($ 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; 271 269
issued 2011: 27,099,819 shares; 2010:
26,934,847 shares
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 $860,951
======== ========
Note: The balance sheet at December 31, 2010 has been derived from
the audited financial statements at that date but does not include
all of the information and footnotes required by generally accepted
accounting principles for complete financial statements.
ARKANSAS BEST CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES
Three Months Ended Year Ended
------------------ ----------
December 31 December 31
----------- -----------
2011 2010 2011 2010
---- ---- ---- ----
(Unaudited)
($ 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 $(1.30)
======== ===== ====== ===== ======
Non-GAAP Financial Measures. The company reports its financial
results in accordance with generally accepted accounting principles
("GAAP"). However, management believes that certain non-GAAP
performance measures and ratios utilized for internal analysis
provide financial statement users meaningful comparisons between
current and prior period results, as well as important information
regarding performance trends. Certain information discussed in the
scheduled conference call could be considered non-GAAP measures.
Non-GAAP financial measures should be viewed in addition to, and
not as an alternative for, the company's reported results.
ARKANSAS BEST CORPORATION
FINANCIAL STATEMENT OPERATING SEGMENT DATA
AND OPERATING RATIOS
Three Months Ended Year Ended
December 31 December 31
2011 2010 2011 2010
---- ---- ---- ----
(Unaudited)
($ 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 22,136 19,666 92,554 74,927
Maintenance(3)
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 $463,241 $441,096 $1,907,609 $1,657,864
operating
revenues ======== ======== ========== ==========
==========
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 (426) (0.1) (840) (0.2) (2,370) (0.1) (1,338) (0.1)
and
equipment
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 21,999 19,050 89,572 72,208
Maintenance(3)
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 $461,606 $447,790 $1,897,850 $1,712,409
============= ======== ======== ========== ==========
expenses
and
costs
========
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 137 616 2,982 2,719
Maintenance(3)
Special
Services
Logistics(4) (48) (42) 2,718 1,719
Other
income
(loss)
and (117) 209 (1,440) (616)
eliminations ---- --- ------ ----
------------
Total
consolidated
operating $1,635 $(6,694) $9,759 $(54,545)
income
(loss)
(1) This segment includes the results of operations of Arkansas
Best's largest subsidiary, ABF Freight System, Inc.(R).
(2) This segment includes the results of operations of Arkansas
Best's transportation brokerage services operating as FreightValue(R).
(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%
Mr. David Humphrey, Vice President, Investor Relations and
Contact: Corporate Communications
Telephone: (479) 785-6200
SOURCE Arkansas Best Corporation
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