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ABF Announces Third Quarter 2011 Results

(Fort Smith, Arkansas, October 28, 2011) — Arkansas Best Corporation (Nasdaq: ABFS) today announced third quarter 2011 net income of $12.3 million, or $0.46 per share, compared to a net loss of $0.7 million, or $0.03 per share in the third quarter of 2010.  

Arkansas Best’s third quarter 2011 performance reflects strong improvement from its largest subsidiary, ABF Freight System, Inc.  ABF produced healthy revenue and profit growth that resulted from improved account pricing in the midst of moderating tonnage levels.  ABF improved its third quarter operating ratio by four and a half operating points versus the same period last year and by over two operating points versus this year’s second quarter. 

“We are pleased to report another quarter of profitability resulting from the value and superior service that ABF offers in the marketplace.  The ABF team is to be congratulated for producing better results in the face of an uncertain economic environment,” said Judy R. McReynolds, Arkansas Best President and Chief Executive Officer.  “In looking ahead, we are prepared to appropriately adjust resources to business levels while maintaining a high level of service for our customers.  Our blend of investments in people and technology as well as the unique logistics services provided to our customers put us in a good position as we cultivate opportunities for future growth and new offerings.” 

Arkansas Best Corporation

Third Quarter 2011

  • Revenue of $510.9 million, a per day increase of 14.7% from the prior year third quarter revenue of $445.5 million

  • Net income of $0.46 per share compared to a net loss of $0.03 per share in the prior year third quarter

  • Includes market losses on the cash surrender value of life insurance of $0.05 per share compared to gains of $0.06 per share in the prior year period

     

ABF Freight System, Inc.®

Third Quarter 2011

  • Revenue of $466.3 million compared to $409.9 million in third quarter 2010, a per-day increase of 13.8%

  • Tonnage per day decrease of 2.0% versus third quarter 2010

  • Total billed revenue per hundredweight of $27.10 compared to $23.38 in third quarter 2010, an increase of 15.9%, including increases in fuel surcharge

  • Operating income of $18.3 million compared to an operating loss of $2.6 million in third quarter 2010

  • Operating ratio of 96.1% compared to 100.6% in third quarter 2010

“Since March of this year, ABF’s year-over-year change in monthly tonnage has moderated, and beginning in August, tonnage has been below that of the same period last year.  So far in October, ABF’s tonnage is lower than last October by between six and seven percent, but because of greatly improved yields, ABF revenues continue to be ahead of the same period last year by approximately 5%.  We attribute the tonnage decline to weakening economic conditions, our efforts to improve account pricing and more difficult comparisons from last year,” said Ms. McReynolds.  “Despite the softening in ABF’s freight, our pricing levels have improved significantly from recent recessionary levels.  We constantly strive to grow ABF’s business with accounts that value our wide range of services.  As a result, ABF’s overall group of accounts offers a better mix of business with yields that have contributed to the improved profitability we’ve experienced during the last two quarters.”

“ABF continues to focus on making investments in resources and personnel that strengthen the positive experience of our customers while improving our operational efficiencies,” said Ms. McReynolds.  “In the third quarter, ABF and its exceptional employees were recognized and honored by three national publications, twice for excellence in information technology and once for ABF’s commitment to sustainability.  Two ABF drivers achieved recognition for superior driving achievements, one as a national driving champion.  Earlier this month, ABF earned the American Trucking Associations’ Excellence in Security Award for the sixth time of the 11 times it has been awarded,” said Ms. McReynolds.  “As we move forward, we will continue to build on the strong foundation provided by ABF’s nationwide network and the relationship-forming skills of its well-trained sales force to offer additional services and to take advantage of new growth opportunities.”

 

Conference Call

Arkansas Best Corporation will host a conference call with company executives to discuss the third quarter 2011 results.  The call will be today, Friday, October 28, at 9:30 a.m. ET (8:30 a.m. CT).  Interested parties are invited to listen by calling (800) 936-4761.  Following the call, a recorded playback will be available through the end of the day on November 30, 2011.  To listen to the playback, dial (800) 633-8284 or (402) 977-9140 (for international callers).  The conference call ID for the playback is 21541622.  The conference call and playback can also be accessed, through November 30, on Arkansas Best’s website at 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 has evolved from a local less-than-truckload (LTL) motor carrier into a global provider of customizable supply chain solutions. 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, 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 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 table shows financial data and operating statistics on ABF Freight System, Inc.

ABF FREIGHT SYSTEM, INC. OPERATING STATISTICS 

 

Three Months Ended Sept 30

 

Nine Months Ended Sept 30

 

2011

2010

%Chg

 

2011

2010

%Chg

     

 

   

Workdays

64

64

 

 

191.5

190.5

 

               

Billed Revenue* / CWT

$   27.10

$  23.38

15.9%

 

$    25.70

$  23.52

9.3%

 

 

 

 

 

 

 

 

Billed Revenue* / Shipment

$ 368.25

$ 340.54

13.4%

 

$  365.09

$ 334.56

9.1% 

 

 

 

 

 

 

 

 

Shipments     

1,203,970

1,201,683

0.2%

 

3,652,776

 3,366,599

8.5%

 

 

 

 

 

 

 

 

Shipments/Day

Tonnage (tons)           

Tons/Day

 

18,812 

858,048


13,497

18,776 

875,156


13,674

0.2%

(2.0%)


(2.0%)

 

19,075

2,594,053


13,546

17,672

2,394,510


12,570

7.9%

8.3%


7.8%

* 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.

Arkansas Best Corporation Financial Report

Contact:        Mr. David Humphrey,
                    Vice President Investor Relations and Corporate Communications

Telephone:     (479) 785-6200