(Fort Smith, Arkansas, July 24, 2006) — Arkansas Best Corporation (Nasdaq: ABFS) today announced second quarter 2006 net income of $32.3 million, or $1.26 per diluted common share.  Income from continuing operations was $29.0 million, or $1.13 per diluted common share, compared to second quarter 2005 income from continuing operations of $22.6 million, or $0.88 per diluted common share.  Arkansas Best’s second quarter 2006 revenue was $479.3 million, an increase of 12.0% over second quarter 2005 revenue of $427.9 million.

As previously announced, in June 2006 Arkansas Best completed the sale of Clipper Exxpress, its former intermodal transportation subsidiary.  Arkansas Best’s discontinued operations include an after-tax gain on the sale of Clipper of $0.12 per common share, which is subject to adjustments based on the final closing balance sheet as of June 14, 2006.  In addition, discontinued operations include after-tax income of $0.01 per common share associated with Clipper’s second quarter operating results through the closing date.

ABF Freight System, Inc.^®

ABF Freight System, Inc. had second quarter 2006 revenue of $466.9 million, a per-day increase of 11.8% over second quarter 2005 revenue of $417.5 million.  Second quarter 2006 operating income at ABF was $46.4 million compared to $38.1 million during the second quarter of 2005.  ABF’s second quarter 2006 operating ratio was 90.1% versus an operating ratio of 90.9% in the second quarter of 2005.  “During a period of healthy revenue and tonnage growth, the employees of ABF enhanced customer satisfaction levels and cargo care, further improving the industry’s best loss and damage experience,” said Robert A. Davidson, Arkansas Best President and Chief Executive Officer.  “Our balance of growth and disciplined yield management resulted in an improvement in ABF’s operating profit and the best second quarter operating ratio in over twenty-eight years.”

ABF’s second quarter 2006 total weight per day increased by 6.4% compared to last year.  “ABF experienced solid tonnage increases throughout the quarter as the year-over-year increase in total tonnage grew during each successive month of the second quarter,” said Mr. Davidson.  “Second quarter tonnage comparisons were dampened slightly by the timing of the Easter holiday, just as they were helped in this year’s first quarter.  When adjusted for the Easter effect, ABF’s second quarter total tonnage per day increased about 7%.”

“Our year-over-year tonnage trends in July are running at or slightly behind those of the second quarter, although comparisons for this short period are complicated by calendar differences,” said Mr. Davidson.

Total billed revenue per hundredweight was $25.22, an increase of 5.5% over last year’s second quarter figure of $23.91.  Total billed revenue per hundredweight, excluding fuel surcharge, increased by 1.9%.  “The industry pricing environment is competitive but firm, consistent with recent quarters.  The retention of the April 3rd general rate increase is in line with our expectations, and price increases on contract renewals are acceptable,” said Mr. Davidson.  During the second quarter of 2006, ABF continued to experience significant and positive freight profile changes that reduced the reported revenue per hundredweight.  Compared to last year, ABF’s second quarter 2006 total weight per shipment increased by 4.7% while total length of haul declined by 1.6%.  The combination of higher weight per shipment and shorter length of haul reduce the reported revenue per hundredweight without a corresponding reduction in effective pricing or shipment profitability.

“Once again, ABF experienced higher growth rates in freight traveling 800 miles or less.  In this year’s second quarter, this freight increased by 10.4% compared to last year.  As in the past, most of these short-haul shipments are moving in existing network lanes,” said Mr. Davidson.  “In April of this year, ABF announced new operating procedures in 52 additional customer service facilities.  As a result, ABF’s more flexible regional capabilities are in place in nearly 25% of the locations in its network.  In addition, these new regional operating procedures have improved reliability in longer haul lanes.  ABF is beginning to market its new next-day and second-day services, branded as the Regional Performance Model or RPM, throughout the East Coast, from Maine to South Carolina.  Despite the initial success ABF has experienced with these operational changes, resulting freight is not expected to have a meaningful impact on ABF’s operating results until late this year or early 2007.”           

“ABF’s second quarter productivity, as measured by total weight per labor hour, improved by 1.8% compared to last year’s second quarter.  During the quarter, this productivity figure was at its highest level since the third quarter of last year.  “Freight-handling productivity continues to be positively impacted by increases in ABF’s total weight per shipment,” said Mr. Davidson.  “While freight-handling productivity has improved, ABF has continued to maintain one of the best cargo claims ratios in the LTL industry.  During the second quarter, ABF’s cargo claim ratio, a measure of net cash payouts to revenue, was 0.67%.  This compares to ABF’s cargo claims ratio of 0.78% for the combined years of 2004 and 2005.  Also, as we expected, ABF’s year-to-date workers’ compensation expenses as a percent of revenue returned to historical levels.”Freight System had first quarter 2006 revenue of $413.7 million, a per-day increase of 7.7% compared to first quarter 2005 revenue of $384.1 million.  First quarter 2006 operating income at ABF was $8.4 million compared to $17.2 million during the first quarter of 2005. Excluding the settlement accounting charge, ABF’s operating income was $16.8 million.  ABF’s first quarter 2006 operating ratio was 98.0% versus an operating ratio of 95.5% during the first quarter of 2005.  Excluding the settlement accounting charge, ABF's operating ratio was 95.9%.

ABF’s total weight per day increased by 4.4% during the first quarter of 2006 versus the first quarter of 2005.  “Although ABF’s tonnage increase in the first quarter was adequate, we are not satisfied with this result,” said Robert A. Davidson, Arkansas Best President and Chief Executive Officer.  “First quarter tonnage comparisons between this year and last year are improved by the fact that the Easter holiday occurred in the first quarter of 2005 and occurred in the second quarter of 2006.  When adjusted for the Easter effect, ABF’s total tonnage per day increased a little over 3%.”

Through the first twenty days of April, average daily tonnage figures in ABF’s total business are about 1.5% above last year.  “Adjusted for the Easter effect, April tonnage, to this point, is approximately 4% over the same period last year,” said Mr. Davidson.

Total billed revenue per hundredweight was $23.83, an increase of 4.1% over last year’s first quarter figure of $22.90.  Total billed revenue per hundredweight, excluding fuel surcharge, increased by 1.1%.  During the first quarter of 2006, ABF continued to experience significant and positive freight profile changes that dampened the nominal revenue per hundredweight.  For instance, ABF’s first quarter 2006 total weight per shipment increased by 3.4% versus the same period last year.  First quarter 2006 total length of haul declined by 1.8% compared to the first quarter of 2005.  Both higher weight per shipment and shorter length of haul reduce the revenue per hundredweight without a commensurate impact on effective pricing or shipment profitability.

“Consistent with a trend seen during the last few years, ABF experienced higher growth in the segment of shipments moving 800 miles or less.  This trend illustrates the significant opportunities for ABF as we refine our marketing and operations to further penetrate the faster-growing regional markets, which already account for over one-third of ABF’s tonnage,” said Mr. Davidson.  “Our limited trial of new operating procedures in 13 Northeastern facilities has been successful but these additional next-day and same-day regional shipments do not yet have a material impact on ABF’s system results.”           

In the first quarter of 2006, ABF’s costs were adversely impacted by additional expense recognition associated with workers’ compensation claims related to ABF’s annual review of the development factors it uses to project the expected future cost of existing claims.  Since 1999, ABF has used ten years of its claims history to calculate the appropriate claims development factors.  However, this year’s review indicated ABF was experiencing claim development beyond ten years and that this development should be considered in the factors.  As a result, Arkansas Best and its independent actuary concluded that thirteen years of claims history data was appropriate to use for calculating the claims development factors.  This change caused ABF’s first quarter 2006 workers’ compensation costs to increase by $2.5 million and added 0.6% to ABF’s operating ratio. 

“Productivity statistics, as measured by total weight per labor hour, increased by 2.4% during this year’s first quarter.  These productivity improvements were primarily the result of the increase in ABF’s total weight per shipment,” said Mr. Davidson.  “The larger shipments require more labor, but the weight per hour is greater.  As with ABF’s growing family of value-added specialty services that require more pickup, delivery and dock labor, the additional revenue results in improved profitability.”

Common Stock Purchase

During the second quarter of 2006, Arkansas Best purchased 200,000 shares of its common stock in the open market for an aggregate cost of $8.3 million.  These common shares were added to the company’s treasury stock.  Since January 2003, Arkansas Best has purchased 1,143,150 shares totaling $37.6 million.  Under a program announced in July 2005, Arkansas Best currently has authorization to purchase up to an additional $37.4 million of its common stock.  Arkansas Best plans to continue making open-market purchases of its stock on an opportunistic basis. 

Conference Call

Arkansas Best Corporation will host a conference call with company executives to discuss the 2006 second quarter results.  The call will be today, Monday, July 24, at 11:00 a.m. EDT (10:00 a.m. CDT).  Interested parties are invited to listen by calling (877) 275-1257.  Following the call, a recorded playback will be available through Thursday, August 24.  To listen to the playback, dial (800) 642-1687.  The conference call ID for the playback is 2284429.  The conference call and playback can also be accessed through Thursday, August 24, on Arkansas Best’s Internet Web site at www.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 provides transportation of less-than-truckload (“LTL”) general commodities throughout North America. More information is available at www.arkbest.com and www.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 “estimate,” “forecast,” “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; union and non-union 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 Arkansas Best’s Securities and Exchange Commission (“SEC”) public filings..

The following table shows financial data and operating statistics on ABF Freight System, Inc.

 

ABF FREIGHT SYSTEM, INC.
OPERATING STATISTICS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2006

	Three Months Ended June 30				Six Months Ended June 30
	2006	2005	% Change		2006	2005	% Change
Billed Revenue* / CWT	$    25.22	$   23.91	5.5%		$     24.54	$    23.41	4.8%
Billed Revenue* / CWT
(without fuel surcharge)	$   21.97	$   21.55	1.9%		$     21.55	$    21.22	1.6%
Billed Revenue* / Shipment	$ 326.99	$  296.14	10.4%		$   313.80	$  287.68	9.1%
Tonnage (tons)	936,942	880,439	6.4%		1,816,297	1,723,086	5.4%
Shipments	1,445,288	1,421,446	1.7%		2,841,367	2,804,590	1.3%
Workdays	64	64			128	128

*Billed revenue does not include revenue deferral required for financial statement purposes under the Company’s revenue recognition policy.  

Includes U.S., Canadian and Puerto Rican operations of ABF affiliates.

Contact:   Ms. Judy R. McReynolds, Vice President, Controller
              Telephone: (479) 785-6157

              Mr. David Humphrey, Director of Investor Relations
              Telephone: (479) 785-6200