(FORT SMITH, Arkansas, January 21, 2003) — Arkansas Best Corporation (Nasdaq: ABFS) today announced fourth quarter 2002 net income of $14.5 million, or $0.57 per diluted common share, compared to fourth quarter 2001 net income of $9.5 million, or $0.38 per diluted common share.  The fourth quarter figures for 2001 included a non-recurring tax benefit of approximately $1.9 million ($0.08 per diluted common share) resulting from the resolution of certain tax contingencies originating in prior years.  For the full year of 2002, the company reported income, before the cumulative effect of an accounting change, of $40.8 million, or $1.60 per diluted common share (net income of $16.8 million, or $0.66 per diluted common share after the accounting change) versus 2001 net income of $41.4 million, or $1.66 per diluted common share. 

“Arkansas Best’s solid performance during 2002 validated its position as the company with the strongest financial position in the long-haul, LTL industry,” said Robert A. Young, III, Arkansas Best President and Chief Executive Officer.  “ABF^Ò continued to produce good results with a fourth quarter operating ratio of 92.2%,” said Mr. Young.

ABF Freight System, Inc.^®

ABF’s fourth quarter 2002 revenue was $344.9 million compared to $302.0 million in the fourth quarter of 2001.  ABF’s operating income during the current quarter was $27.1 million compared to $16.5 million in the same period last year.

Fourth quarter-billed LTL revenue per hundredweight, excluding fuel surcharge, was $22.56, an increase of 5.9% over the fourth quarter 2001 figure of $21.30.  “The closure of CF has strengthened overall pricing stability in our industry,” said Mr. Young.  “ABF’s ability to secure customer rate increases has improved.  For example, in the fourth quarter of 2002, the average percent of rate increase obtained on deferred pricing agreements was better than that for any quarter since the third quarter of 2000 and was almost a full percentage point better than we saw in the fourth quarter of 2001.”   

“In an environment where a major competitor goes out of business, ABF’s profitability and strong financial position have been advantages in the marketplace,” said Mr. Young.  “We’ve seen that value is even more important to our customers, and they are displaying a greater appreciation of financial stability in their transportation partners.”

Fourth quarter 2002 LTL tonnage per day increased 6.5% when compared to the 2001 fourth quarter.  “During the first eight months of 2002, prior to the closure of CF, ABF’s LTL pounds per day was 7% below the same eight-month period in 2001.  During the four-month period from September through December of 2002, following CF’s closure, ABF’s LTL pounds per day was 6% above the same four-month period in 2001.  Comparing these two time periods results in an increase in tonnage trends of 13%,” said Mr. Young.

“It has been difficult to distinguish the exact amount of business ABF has obtained directly from the CF closure,” said Mr. Young.  “Additional factors, including the economic environment and the settlement of the longshoremen’s west coast labor dispute, also impacted ABF’s fourth quarter tonnage levels.  When business levels increase with customers ABF had prior to CF’s closure, it is impossible to know which factor caused the change.  Some of the additional freight that can be identified as coming from CF is not as profitable as ABF’s average business.  However, this business has contributed positively to ABF’s margins because of the operating leverage that was available throughout the ABF network.  As usual, pricing on accounts identified with less-than-acceptable margins is currently being addressed.  During the fourth quarter, ABF had better success in securing price increases and retaining this business.”

LTL shipments per day in two-day transit time lanes increased 6.7% compared to an increase of 12.3% in ABF’s longer haul business.  “The majority of freight that ABF received as a result of the CF closure was in the ‘three-day and beyond’ service lanes,” said Mr. Young.  As seen throughout 2002, fourth quarter productivity of ABF’s dock employees, city drivers and yard personnel improved over the same period in 2001.

For the full year of 2002, ABF’s revenue was $1.28 billion, essentially the same as in 2001.  ABF’s 2002 operating ratio was 94.6% versus a 93.8% in 2001.  ABF’s 2002 operating income was $68.8 million versus $79.4 million during 2001.  Total tonnage per day in 2002 decreased 4.2% compared to 2001.  LTL tonnage per day during 2002 decreased 2.8% from 2001 levels and truckload tonnage per day experienced a decline of 9.6% versus 2001.

“During 2002, ABF’s total insurance costs, including those for workers’ compensation and bodily injury/property damage (BI/PD), increased by over $13 million versus 2001.  This was related to various factors including the effects of the terrorist attacks on our nation, increased costs in the re-insurance market and continually rising healthcare costs,” said Mr. Young.  “These additional expenses added over one percentage point to ABF’s 2002 operating ratio.  Without this cost increase, ABF’s 2002 operating ratio would have been better than its operating ratio in 2001.”        

ABF’s 2003 costs for workers’ compensation and BI/PD premiums and claims should remain consistent with 2002, assuming similar claims experience and considering cost differences that occur because of changes in business levels. However, for 2003, Arkansas Best has increased its BI/PD self-insured retention layer from $500,000 to $1,000,000 per claim.

 “ABF continues to reduce its transit time standards in order to more effectively handle customer shipments in a timely manner,” said Mr. Young.  “Additional operational changes implemented in ABF’s network during December allowed transit times to decrease in over 15% of ABF’s service lanes.  Generally, ABF’s long-haul lanes were improved.  These most recent changes, combined with previously announced improvements in many of ABF’s short-haul lanes, resulted in service standard improvements in approximately 62% of ABF’s terminal-to-terminal lanes since April 1999.”           

 “In December, ABF was named by Selling Power magazine as one of the top three companies to sell for in the service sector of the United States economy.  ABF was also named in the top five of the best 50 companies to sell for overall.  Through training and the use of technology, including ABF’s award-winning Web tools, ABF’s sales force provides personal, direct attention to our customers’ individual needs,” said Mr. Young.  “The effectiveness of our sales force is a huge reason why many customers choose ABF.”

“As previously announced, on January 31 ABF will say goodbye to its President and Chief Executive Officer, David Stubblefield, after 43 years of service,” said Mr. Young.  “ABF is the company that it is today in large part because of Dave’s positive influence throughout these many years.  Dave, we thank you for what you have meant to ABF and Arkansas Best.  We wish you years of happiness and good health in the future!”               

Conference Call

Arkansas Best Corporation will host a conference call with company executives to discuss the company’s 2002 fourth quarter and full year results.  The call will be today, Tuesday, January 21, at 10:30 a.m. EST.  Interested parties are invited to listen by calling (800) 946-0786.  Following the call, a recorded playback will be available through the end of the month.  To listen to the playback, dial (888) 203-1112.  The passcode for the playback is 741850.  The live conference call and playback can also be accessed on Arkansas Best’s Internet Web site at www.arkbest.com through Friday, January 31.

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 “estimate,” “expect,” “predict,” “plan,” “anticipate,” “believe,” “intend,” “should,” “would,” “scheduled,” 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, union relations; availability and cost of capital; shifts in market demand; weather conditions; the performance and needs of industries served by Arkansas Best’s subsidiaries; actual future costs of operating expenses such as fuel and related taxes; self-insurance claims and employee wages and benefits; actual costs of continuing investments in technology; the timing and amount of capital expenditures; competitive initiatives and pricing pressures; general economic conditions; and other financial, operational and legal risks and uncertainties detailed from time to time in the Company’s SEC public filings.