Arkansas Best Corporation Announces First Quarter 2013 Results

        Arkansas Best Corporation Announces First Quarter 2013 Results  - Revenue rises to $520.7 million from $440.9 million  - First quarter 2013 net loss of $13.4 million, or $0.52 per share  - Emerging, non-asset-based businesses continue growth trends and cash generation  - ABF labor contract negotiations continue and remain important to lowering ABF's cost structure  PR Newswire  FORT SMITH, Ark., April 30, 2013  FORT SMITH, Ark., April 30, 2013 /PRNewswire/ -- Arkansas Best Corporation (Nasdaq: ABFS) today reported a first quarter 2013 net loss despite continued encouraging trends in its emerging businesses. Year-over-year revenue and tonnage growth at LTL carrier ABF Freight System, Inc., were offset by higher wage and benefit costs for employees represented by the International Brotherhood of Teamsters.  Arkansas Best's first quarter 2013 revenue was $520.7 million compared to revenue of $440.9 million in the first quarter of 2012. The first quarter net loss was $13.4 million, or $0.52 per share, compared to a first quarter 2012 net loss of $18.2 million, or $0.71 per share. Last year's first quarter results included the effects of an unusually low corporate tax benefit rate and unusually high workers' compensation claims costs. Combined, these items increased last year's first quarter net loss by $0.31 per share.  Arkansas Best's emerging, non-asset-based businesses continue to display strength in their revenue growth and cash flow generation. Freight brokerage and vehicle roadside and preventive maintenance grew first-quarter revenue 82% and 45%, respectively, and improved operating income. Operating results at Panther Expedited Services, Inc., were impacted by reduced demand for expedited services and investments made in sales and service locations for future growth. On a combined basis, Panther and all of the other non-asset-based businesses generated first quarter 2013 earnings before interest, taxes, depreciation and amortization ("EBITDA") of $3.4 million, versus slightly negative EBITDA in the first quarter of 2012. "First quarter revenue and operating income at our emerging businesses reflected growth and improvement as we invested heavily in these businesses during 2012. They represent a critical piece of Arkansas Best's strategy to achieve sustained profitability," said Arkansas Best President and Chief Executive Officer Judy R. McReynolds. "The investments made so far have improved the financial performance of these subsidiaries and strengthened their service offerings and their ability, both individually and through significant cross-selling opportunities, to better serve customers with full supply-chain solutions."  ABF Freight's first-quarter operating loss deepened despite revenue growth and improving business levels. McReynolds noted that the company's high-cost structure continues to weigh on results, underscoring the need for a more rational labor agreement that reflects the increasingly competitive LTL industry. "After months of hard work and a second extension of contract talks through May 31, the negotiating teams continue to make progress on developing a contract agreement for our Teamster-represented employees that is expected to provide ABF greater operational flexibility and lower costs in order to effectively compete in the future."  Closing Comments "Despite losses in the seasonally weak first quarter, Arkansas Best is well-positioned for growth in new and existing markets. We continue to develop a comprehensive array of services designed to meet the ever-changing needs of our customers and generate financial returns for our company and our shareholders," said McReynolds. "Current negotiations on a new labor agreement provide an opportunity to preserve good-paying jobs and protect the retirement benefits of our union employees through a lower cost structure and improved operational flexibility. A new labor contract, with lower more competitive costs, is a critical element in allowing ABF to effectively compete in a drastically different LTL marketplace."  Conference Call Arkansas Best Corporation will host a conference call with company executives to discuss the 2013 first quarter results. The call will be today, Tuesday, April 30, at 9:30a.m. ET (8:30 a.m. CT). Interested parties are invited to listen by calling (800) 659-2165. Following the call, a recorded playback will be available through the end of the day on May 31, 2013. To listen to the playback, dial (800) 633-8284 or (402) 977-9140 (for international callers). The conference call ID for the playback is 21653957. The conference call and playback can also be accessed, through May 31, on Arkansas Best's website at  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 solutions including: domestic and global transportation of less-than-truckload ("LTL") and full load shipments, expedited ground and time-definite delivery solutions, freight forwarding services, freight brokerage, oversight of roadside assistance and equipment services for commercial vehicles, and household goods moving market services for consumers, corporations, and the military. More information is available at, and  Forward-Looking Statements The following is a "safe harbor" statement under the Private Securities Litigation Reform Act of 1995: Statements contained in this report that are not based on historical facts are "forward-looking statements." Terms such as "anticipate," "believe," "could," "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, a workforce stoppage by our employees covered under our collective bargaining agreement or unfavorable terms of future collective bargaining agreements; relationships with employees, including unions; general economic conditions and related shifts in market demand that impact the performance and needs of industries served by Arkansas Best Corporation's subsidiaries and/or limit our customers' access to adequate financial resources; union and nonunion employee wages and benefits, including changes in required contributions to multiemployer pension plans; competitive initiatives, pricing pressures and the effect of volatility in fuel prices and the associated changes in fuel surcharges on securing increases in base freight rates and the inability to collect fuel surcharges; availability of fuel; default on covenants of financing arrangements and the availability and terms of future financing arrangements; availability and cost of reliable third-party services; disruptions or failures of services essential to the use of information technology platforms in our business; availability, timing, and amount of capital expenditures; future costs of operating expenses such as fuel and related taxes; self-insurance claims and insurance premium costs; governmental regulations and policies; future climate change legislation; potential impairment of goodwill and intangible assets; the impact of our brand and corporate reputation; the cost, timing, and performance of growth initiatives; the cost, integration, and performance of any future acquisitions; the costs of continuing investments in technology, a failure of our information systems, and the impact of cyber incidents; weather conditions; and other financial, operational, and legal risks and uncertainties detailed from time to time in Arkansas Best Corporation's Securities and Exchange Commission public filings.  The following tables show financial data and operating statistics on Arkansas Best Corporation and its subsidiary companies.    ARKANSAS BEST CORPORATION  CONSOLIDATED STATEMENTS OF OPERATIONS                            Three Months Ended                             March 31                            2013                        2012                            (Unaudited)                            ($ thousands, except share and per share data) OPERATING REVENUES         $      520,687              $     440,867 OPERATING EXPENSES AND            544,037                    463,854 COSTS OPERATING LOSS                    (23,350)                   (22,987) OTHER INCOME (EXPENSE) Interest and dividend             171                        253 income Interest expense and other        (1,207)                    (1,142) related financing costs Other, net                        1,083                      1,340                                   47                         451 LOSS BEFORE INCOME TAXES          (23,303)                   (22,536) INCOME TAX BENEFITS               (9,908)                    (4,374) NET LOSS                   $      (13,395)             $     (18,162) LOSS PER COMMON SHARE^(1) Basic                      $      (0.52)               $     (0.71) Diluted                    $      (0.52)               $     (0.71) AVERAGE COMMON SHARES OUTSTANDING Basic                             25,638,333                 25,455,607 Diluted                           25,638,333                 25,455,607 CASH DIVIDENDS DECLARED    $      0.03                 $     0.03 PER COMMON SHARE (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 LOSS                   $      (13,395)             $     (18,162) EFFECT OF UNVESTED RESTRICTED STOCK                  (38)                       (34) AWARDS^(1) ADJUSTED NET LOSS FOR CALCULATING                            $      (13,433)             $     (18,196)  EARNINGS PER COMMON SHARE  ARKANSAS BEST CORPORATION  CONSOLIDATED BALANCE SHEETS                                                                                                                   March 31                                                                    December 31                                               2013                                                                    2012                                               (Unaudited)          Note                                               ($ thousands, except share data) ASSETS CURRENT ASSETS Cash and cash equivalents                     $   75,071        $  90,702 Short-term investments                            29,891           29,054 Restricted cash, cash equivalents, and            5,904            9,658 short-term investments Accounts receivable, less allowances (2013 –      190,036          180,631 $5,360; 2012 – $5,249) Other accounts receivable, less allowances        6,011            6,539 (2013 – $1,376; 2012 – $1,334) Prepaid expenses                                  19,397           17,355 Deferred income taxes                             37,302           39,245 Prepaid and refundable income taxes               7,851            5,681 Other                                             7,288            7,185  TOTAL CURRENT ASSETS                         378,751          386,050 PROPERTY, PLANT AND EQUIPMENT Land and structures                               243,990          243,699 Revenue equipment                                 588,809          589,729 Service, office, and other equipment              119,642          119,456 Software                                          105,164          103,164 Leasehold improvements                            23,357           23,272                                                   1,080,962        1,079,320 Less allowances for depreciation and              653,862          635,292 amortization                                                   427,100          444,028 GOODWILL                                          75,032           73,189 INTANGIBLE ASSETS, NET                            78,518           79,561 OTHER ASSETS                                      51,994           51,634                                               $   1,011,395     $  1,034,462 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Bank overdraft and drafts payable             $   11,737        $  13,645 Accounts payable                                  84,966           84,292 Income taxes payable                              75               59 Accrued expenses                                  167,848          158,668 Current portion of long-term debt                 39,861           43,044 TOTAL CURRENT LIABILITIES                         304,487          299,708 LONG-TERM DEBT, less current portion              105,169          112,941 PENSION AND POSTRETIREMENT LIABILITIES            105,922          104,673 OTHER LIABILITIES                                 12,366           12,832 DEFERRED INCOME TAXES                             35,858           45,309 STOCKHOLDERS' EQUITY Common stock, $0.01 par value, authorized 70,000,000 shares; issued 2013: 27,307,505        273              273 shares; 2012: 27,296,285 shares Additional paid-in-capital                        290,776          289,711 Retained earnings                                 269,955          284,157 Treasury stock, at cost, 1,677,932 shares         (57,770)         (57,770) Accumulated other comprehensive loss              (55,641)         (57,372) TOTAL STOCKHOLDERS' EQUITY                        447,593          458,999                                               $   1,011,395     $  1,034,462  Note: The balance sheet at December 31, 2012 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  CONSOLIDATED STATEMENTS OF CASH FLOWS                                                       Three Months Ended                                                        March 31                                                       2013        2012                                                       (Unaudited)                                                       ($ thousands) OPERATING ACTIVITIES Net loss                                              $ (13,395)  $  (18,162) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization                           22,150       19,320 Amortization of intangibles                             1,043        – Share-based compensation expense                        1,303        1,442 Provision for losses on accounts receivable             969          275 Deferred income tax benefit                             (8,756)      (4,301) Gain on sale of property and equipment                  (212)        (285) Changes in operating assets and liabilities: Receivables                                             (9,886)      (859) Prepaid expenses                                        (2,042)      (1,621) Other assets                                            (964)        (96) Income taxes                                            (1,548)      1,793 Accounts payable, accrued expenses, and other           11,124       7,371 liabilities NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES     (214)        4,877 INVESTING ACTIVITIES Purchases of property, plant and equipment              (3,440)      (2,388) Proceeds from sales of property and equipment           842          1,315 Purchases of short-term investments                     (3,752)      (14,335) Proceeds from sales of short-term investments           2,940        3,185 Capitalization of internally developed software and     (2,090)      (1,618) other NET CASH USED IN INVESTING ACTIVITIES                   (5,500)      (13,841) FINANCING ACTIVITIES Repayments on long-term debt                            (10,955)     (6,075) Net change in bank overdraft and other                  (1,909)      (10,056) Change in restricted cash, cash equivalents, and        3,754        23,149 short-term investments Deferred financing costs                                –            (36) Payment of common stock dividends                       (807)        (797) NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES     (9,917)      6,185 NET DECREASE IN CASH AND CASH EQUIVALENTS               (15,631)     (2,779) Cash and cash equivalents at beginning of period        90,702       141,295 CASH AND CASH EQUIVALENTS AT END OF PERIOD            $ 75,071    $  138,516 NONCASH INVESTING ACTIVITIES Accruals for equipment received                       $ 173       $  2,060  ARKANSAS BEST CORPORATION  RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES                                                         Three Months Ended                                                          March 31                                                         2013        2012                                                         (Unaudited)                                                         ($ thousands) Arkansas Best Corporation – Consolidated Earnings Before Interest, Taxes, Depreciation, and Amortization Net loss                                                $ (13,395)  $ (18,162) Interest expense                                          1,207       1,142 Income tax benefits                                       (9,908)     (4,374) Depreciation and amortization                             23,193      19,320 Amortization of share-based compensation                  1,303       1,442 Amortization of actuarial losses                          2,912       2,847 EBITDA                                                  $ 5,312     $ 2,215                  Three Months Ended              Three Months Ended                  March 31                        March 31                  2013                            2012                 Operating                           Depreciation          Operating Depreciation                 Income    and          EBITDA   Income    and          EBITDA                           Amortization          (Loss)    Amortization                 (Loss) Non-Asset Based Segments Premium Logistics & Expedited       $  (864)  $    2,550   $ 1,686  $  –      $   –        $ – Freight Services^(1) Truck Brokerage    767         92        859       394        65         459 and Management Emergency and Preventative       711         132       843       (137)      118        (19) Maintenance Household Goods    (231)       241       10        (792)      179        (613) Moving Services Total non-asset $  383    $    3,015   $ 3,398  $  (535)  $   362      $ (173) based segments        Depreciation and amortization consists primarily of amortization of (1) intangibles, including customer relationships and software, which were     acquired in conjunction with the purchase of Panther Expedited Services,     Inc. on June 15, 2012.  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. Management believes EBITDA to be relevant and useful information as EBITDA is a standard measure commonly reported and widely used by analysts, investors and others to measure financial performance and ability to service debt obligations. However, these financial measures should not be construed as better measurements than operating income, operating cash flow, net income or earnings per share, as defined by generally accepted accounting principles. Other companies may calculate EBITDA differently, and therefore the Company's EBITDA may not be comparable to similarly titled measures of other companies.    ARKANSAS BEST CORPORATION  FINANCIAL STATEMENT OPERATING SEGMENT DATA AND OPERATING RATIOS                                             Three Months Ended                                              March 31                                             2013              2012                                             (Unaudited)                                             ($ thousands) OPERATING REVENUES Freight Transportation                      $ 407,281         $ 396,513 Premium Logistics & Expedited Freight         53,252            – Services Truck Brokerage and Management                14,604            8,039 Emergency and Preventative Maintenance        32,522            22,378 Household Goods Moving Services               13,576            15,052 Total non-asset based segments                113,954           45,469 Other revenues and eliminations               (548)             (1,115) Total consolidated operating revenues       $ 520,687         $ 440,867 OPERATING EXPENSES AND COSTS Freight Transportation Salaries, wages, and benefits               $ 267,178 65.6%   $ 265,061 66.8% Fuel, supplies, and expenses                  83,332  20.5      80,640  20.3 Operating taxes and licenses                  10,990  2.7       10,801  2.7 Insurance                                     4,484   1.1       4,881   1.2 Communications and utilities                  3,933   1.0       3,799   1.0 Depreciation and amortization                 19,574  4.8       18,573  4.7 Rents and purchased transportation            38,469  9.4       33,216  8.4 Gain on sale of property and equipment        (212)   (0.1)     (282)   (0.1) Other                                         2,082   0.5       1,682   0.5                                               429,830 105.5%    418,371 105.5% Premium Logistics & Expedited Freight Services Purchased transportation                    $ 41,036  77.1%   $ –       – Depreciation and amortization^(1)             2,550   4.8       –       – Salaries, benefits, insurance, and other      10,530  19.7      –       –                                               54,116  101.6%    –       – Truck Brokerage and Management                13,837            7,645 Emergency and Preventative Maintenance        31,811            22,515 Household Goods Moving Services               13,807            15,844 Total non-asset based segments                113,571           46,004 Other expenses and eliminations               636               (521) Total consolidated operating expenses and   $ 544,037         $ 463,854 costs           Depreciation and amortization consists primarily of amortization of (1)      intangibles, including customer relationships and software, which          were acquired in conjunction with the purchase of Panther Expedited          Services, Inc. on June 15, 2012. Note: See the following page for description of segments.  ARKANSAS BEST CORPORATION  FINANCIAL STATEMENT OPERATING SEGMENT DATA AND OPERATING RATIOS – Continued                                                 Three Months Ended                                                  March 31                                                 2013            2012                                                 (Unaudited)                                                 ($ thousands) OPERATING INCOME (LOSS) Freight Transportation                          $  (22,549)     $ (21,858) Premium Logistics & Expedited Freight Services     (864)          – Truck Brokerage and Management                     767            394 Emergency and Preventative Maintenance             711            (137) Household Goods Moving Services                    (231)          (792) Total non-asset based segments                     383            (535) Other loss and eliminations                        (1,184)        (594) Total consolidated operating loss               $  (23,350)     $ (22,987)  Description of Segments:    oFreight Transportation includes the results of operations of Arkansas     Best's largest subsidiary, ABF Freight System, Inc.^®.   oPanther Expedited Services, Inc., which was acquired on June 15, 2012, is     reported as Premium Logistics & Expedited Freight Services.   oTruck Brokerage and Management includes the transportation brokerage     services operating as FreightValue^®.   oEmergency and Preventative Maintenance includes the roadside vehicle     assistance and commercial equipment services subsidiary FleetNet America,     Inc.   oHousehold Goods Moving Services includes Albert Companies, Inc. and Moving     Solutions, Inc. which provide services to the consumer, corporate, and     military household goods moving market.  Certain reclassifications have been made to the prior year's operating segment data to conform to the current year presentation. The operating results of Global Supply Chain Services and Supply Chain Services, businesses which provide ocean container transport and warehousing services, have been reclassified from the Freight Transportation segment to "Other and Eliminations." There was no impact on consolidated amounts as a result of these reclassifications.    ARKANSAS BEST CORPORATION  OPERATING STATISTICS                                           Three Months Ended                                           March 31                                           2013         2012        % Change                                           (Unaudited) Freight Transportation^(1) Workdays                                    62.5         64.0 Billed Revenue^(2) / CWT           $ 26.88      $ 27.52     (2.3)% Billed Revenue^(2) / Shipment             $ 372.36     $ 366.15    1.7% Shipments   1,095,678    1,095,019 0.1% Shipments / Day                             17,531       17,110    2.5% Tonnage (tons)      758,889      728,465   4.2% Tons / Day                                  12,142       11,382    6.7%        Based on the previously described reclassifications that have been made to     the prior year's operating segment data and statistics to conform to the (1) current year presentation, operations of Global Supply Chain Services and     Supply Chain Services are excluded from key operating statistics for the     Freight Transportation Segment. (2) Billed Revenue does not include revenue deferral required for financial     statement purposes under the company's revenue recognition policy.    Contact: Mr. David Humphrey, Vice President, Investor Relations          Telephone: (479) 785-6200          Media: Ms. Kathy Fieweger, Vice President, Marketing and Corporate          Communications          Telephone: (847) 903-8806  SOURCE Arkansas Best Corporation  Website:  
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