ARKANSAS BEST CORPORATION ANNOUNCES 1994 OPERATING RESULTS
(NASDAQ/NMS: "ABFS")
(Fort Smith, Arkansas, January 24, 1995) - Arkansas Best Corporation (the "Company") had consolidated revenues of $1.1 billion for the year ended December 31, 1994 compared to $1.0 billion for the year ended December 31, 1993. During 1994, the Company had net income of $18.7 million, or $.74 per common share (after giving consideration to preferred stock dividends of $4.3 million), compared to net income of $20.3 million, or $.85 per common share (after giving consideration to preferred stock dividends of $3.9 million), for 1993. Revenue and income for 1994 were adversely affected by the 24-day labor strike by the Teamsters' union employees of ABF Freight System, Inc. ("ABF") in April. As a result of the strike, the Company incurred a net loss of $12.7 million during the month of April 1994, which had the effect of reducing earnings per common share by $.62 for the year. The net income for 1994 of $18.7 million, or $.74 per common share, compares to income before extraordinary item of $21.0 million, or $.89 per common share for 1993. During 1993, the Company recorded an extraordinary loss of $661,000 (net of income tax benefit of $413,000), or $.04 per common share, for the loss on extinguishments of debt. Average common shares outstanding for 1994 were 19.4 million compared to 19.2 million for 1993. Outstanding shares for the year do not assume conversion of preferred stock to common shares, because conversion would be anti-dilutive for these periods.
Revenues for 1994 from the carrier operations segment were $919 million, compared to $894 million for 1993. The carrier operations segment had operating profit for 1994 of $35.6 million compared to $41.6 million for 1993. ABF, the Company's largest subsidiary, accounted for 98% of the carrier operations segment revenues. ABF's ICC operating ratio was 96.4% for 1994 compared to 95.8% for 1993. For 1994, ABF's total tonnage increased 1.7%, consisting of a 2.2% increase in LTL tonnage and a 0.2% increase in truckload tonnage compared to 1993. As discussed above, carrier segment operations for 1994 were adversely affected by the labor strike.
On September 30, 1994, the Company entered the freight forwarding market with the acquisition of Clipper Exxpress Company ("Clipper"), a knowledge-based intermodal marketing and freight logistics company, and two affiliated transportation companies. For the three months ended December 31, 1994, the Company reported revenues from forwarding operations of $31 million with segment operating profit of $695,000. Clipper accounted for 91% of the forwarding operations segment revenues.
The Company is engaged through its approximately 46%-owned consolidated subsidiary, Treadco, Inc. (NASDAQ/NMS: "TRED"), in truck tire retreading and new tire sales. For 1994, the Company reported revenues from tire operations of $139 million, compared to $112 million for 1993. Operating profit from the tire operations segment was $11.1 million for 1994, compared to $10.2 million for 1993.
The Company had consolidated revenues of $328 million for the fourth quarter of 1994 compared to $269 million for the fourth quarter of 1993. During the quarter, the Company had net income of $7.3 million, or $.32 per common share, compared to net income of $5.3 million, or $.22 per common share, for the fourth quarter of 1993. The net income of $7.3 million, or $.32 per common share, compares to income before extraordinary item of $5.6 million, or $.24 per common share for the fourth quarter of 1993. During the fourth quarter of 1993, the Company recorded an extraordinary loss of $332,000 (net of income tax benefit of $211,000), or $.02 per common share, for the loss on extinguishments of debt. Earnings per common share gives consideration to preferred stock dividends of $1.1 million for each of the fourth quarters of 1994 and 1993. Average common shares outstanding for the fourth quarter of 1994 were 19.5 million compared to 19.3 million for the fourth quarter of 1993. Outstanding shares do not assume conversion of preferred stock to common shares, because conversion would be anti?dilutive for these periods.
Fourth quarter 1994 revenues from the carrier operations segment were $257 million, compared to $236 million for the fourth quarter of 1993. The carrier operations segment had operating profit for the fourth quarter of 1994 of $12.5 million compared to operating profit of $10.2 million for the fourth quarter of 1993. ABF's ICC operating ratio was 95.6% for the fourth quarter of 1994 compared to 96.0% for the fourth quarter of 1993. For the fourth quarter of 1994, ABF's total tonnage increased 6.9%, consisting of a 7.8% increase in LTL tonnage and a 3.8% increase in truckload tonnage compared to the fourth quarter of 1993.
For the fourth quarter of 1994, the Company reported revenues from forwarding operations of $31 million with operating profit of $695,000.
For the fourth quarter of 1994, the Company reported revenues from tire operations of $35 million, compared to $32 million for the fourth quarter of 1993. Operating profit from the tire operations segment was $3.3 million for each of the fourth quarters of 1994 and 1993.
The following table compares financial data by business segment:
ARKANSAS BEST CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Year Ended
December 31 December 31
1994 1993 1994 1993
($ thousands, except per share data)
OPERATING REVENUES
Carrier operations $ 265,513 $ 236,017 $ 918,663 $ 893,504
Forwarding operations 31,468 - 31,468 -
Tire operations 34,503 31,777 138,666 111,585
Other 5,946 1,186 9,625 4,829
328,430 268,980 1,098,422 1,009,918
OPERATING PROFIT (LOSS)
Carrier operations 12.519 10,180 35,622 41,645
Forwarding operations 695 - 695 -
Tire operations 3,268 3,341 11,080 10,186
Other 545 (424) (250) (1,193)
TOTAL OPERATING PROFIT 17,027 13,087 47,147 50,638
INTEREST EXPENSE 2,264 1,465 6,985 7,248
MINORITY INTEREST 1,037 1,037 3,523 3,140
INCOME BEFORE INCOME TAXES
AND EXTRAORDINARY ITEM 13,726 10,595 36,639 40,250
PROVISION FOR INCOME TAXES 6,387 4,970 17,932 19,278
INCOME BEFORE
EXTRAORDINARY ITEM 7,339 5,625 18,707 20,972
EXTRAORDINARY ITEM:
Net loss on extinguishments of debt - (332) - (661)
NET INCOME $ 7,339 $ 5,293 $ 18,707 $ 20,311
EARNINGS PER COMMON SHARE:
INCOME BEFORE
EXTRAORDINARY ITEM $ 0.32 $ 0.24 $ 0.74 $ 0.89
EXTRAORDINARY ITEM:
Net loss on extinguishments of debt - (0.02) - (0.04)
NET INCOME $ 0.32 $ 0.22 $ 0.74 $ 0.85
AVERAGE COMMON SHARES
OUTSTANDING 19,491,560 19,288,988 19,351,796 19,193,582
Contact: Mr. Randall M. Loyd, Director - Financial Reporting
Telephone: (501) 785-6200