(FORT SMITH, Arkansas, July 18, 2003) -- Arkansas Best Corporation (Nasdaq: ABFS) today announced second quarter 2003 net income of $15.2 million, or $0.60 per diluted common share.  For the second quarter of 2002, net income was $6.5 million, or $0.26 per diluted common share.  This year’s second quarter net income includes a $12.1 million pre-tax gain ($8.4 million after-tax, or $0.33 per diluted common share) on the sale of its 19% interest in Wingfoot Commercial Tire Systems, LLC and a $1.2 million charge ($0.03 per diluted common share) related to the company’s interest rate swap. Arkansas Best’s revenue, during the second quarter of 2003, was $377.9 million.

ABF Freight System, Inc.^®

ABF Freight System, the company’s largest subsidiary, had second quarter 2003 revenues of $337.2 million, a per-day increase of 9.4% compared to second quarter 2002 revenue of $308.1 million. Billed LTL revenue per hundredweight, including fuel surcharge, was $23.49, an increase of 7.6% over last year’s second quarter figure of $21.83. Billed LTL revenue per hundredweight, excluding fuel surcharge, was $22.71, an increase of 6.1% over last year’s second quarter figure of $21.41. Approximately one-half of the yield increase, net of fuel surcharge, was a result of changes in the profile of additional freight hauled since September 2002. “Despite the lack of meaningful changes in the soft economy, we continue to be encouraged by the pricing environment,” said Robert A. Young III, Arkansas Best President and Chief Executive Officer. “ABF’s increases on contracts and deferred pricing agreements have been favorable by historical standards and the prospects for retention of the July 14 general rate increase are good.”

ABF’s second quarter LTL tonnage per day increased 2.0% compared to the same period last year. This increase is generally what we would expect, given normal, seasonal trends from the first quarter to the second quarter. “ABF remains focused on individual account profitability when evaluating new business opportunities and when reviewing freight being handled for existing customers,” said Mr. Young.

ABF’s second quarter 2003 operating ratio of 95.7% was adversely affected by increased non-union health, pension and other fringe costs. “ABF experienced increases in the severity of large, non-union medical claims compared to last year. Non-union pension costs increased due to lower interest rates and market losses occurring in previous years,” said Mr. Young. “The increase in these costs over the second quarter of 2002 added approximately one percentage point to ABF’s second quarter 2003 operating ratio.”   

“Productivity measures at ABF were very near levels for the same period last year despite additional shipment handling associated with ABF’s transit time improvements and premium services provided at pickup and delivery,” said Mr. Young. “These measures did show improvement over the first quarter of this year.”

“To grow, ABF will continue to emphasize expense control in order to hold down customer costs while providing shippers with value-added services. ABF will continue to develop niche markets that provide compensatory prices and reasonable profit margins,” said Mr. Young. “ABF will continue to improve shipment transit times within its traditional markets. For example, ABF has reduced shipment transit times on two-thirds of its lanes during the last few years and further improvements are underway. ABF is actively exploring opportunities to be more effective in shorter-haul lanes by utilizing provisions in the new labor contract for flexible, premium service employees.   

“Last week, Yellow Corporation announced that it had entered into a definitive agreement to acquire Roadway Corporation. This development will have a significant impact on the long-haul, LTL industry,” said Mr. Young. “The combining of these two competitors could, over time, result in opportunities for additional business for ABF and improved pricing due to eventual reductions in industry capacity.”      

Credit Ratings Improvement

On May 28, Standard & Poor’s upgraded Arkansas Best’s corporate credit rating to BBB+ from BBB. The upgrade represents a rise to a higher investment grade rating. In its press release announcing these changes, Standard & Poor’s stated that the rating upgrade was driven by “the company’s strong operating results and decreasing debt levels, which support solid credit measures, despite the continued weak economic environment.”

Russell 2000^® Index