Arkansas Best Corporation Announces Improved Third Quarter 2010 Results

FORT SMITH, Ark., Nov. 3, 2010 /PRNewswire-FirstCall/ -- Arkansas Best Corporation (Nasdaq:ABFS - News) today announced a third quarter 2010 net loss of $0.7 million, or $0.03 per share compared to a net loss of $5.6 million, or $0.23 per share in the third quarter of 2009.

"Continuing improvements in ABF's year-over-year and sequential tonnage trends contributed to better operating results and a reduction in our third quarter loss versus last year and last quarter," said Judy R. McReynolds, Arkansas Best President and Chief Executive Officer. "Throughout the third quarter, the monthly rate of increase in ABF's year-over-year tonnage improved. In addition, sequential monthly tonnage trends during the quarter were strong compared to recent history. Going forward, ABF must maintain freight growth combined with continued improvements in pricing in order to achieve acceptable levels of profitability."

Arkansas Best Corporation

Third Quarter 2010

Revenue of $445.5 million, a per day increase of 11.7% from prior year quarter of $399.0 million


Net loss of $0.03 per share compared to a net loss of $0.23 per share in the prior year period


ABF Freight System, Inc.®

Third Quarter 2010

Revenue of $409.9 million compared to $369.8 million in third quarter of 2009, a per-day increase of 10.9%


Total tonnage per day increase of 13.9% versus third quarter 2009 and a sequential increase of 6.9% versus second quarter 2010


Total billed revenue per hundredweight of $23.38 compared to $23.98 in third quarter 2009, a decrease of 2.5%


Operating loss of $2.6 million compared to an operating loss of $14.0 million in third quarter 2009


Operating ratio of 100.6% compared to 103.8% in third quarter 2009


"The recent additions in shipments and tonnage that resulted in profitability improvements reflect the benefits of ABF's consultative approach with customers, leveraging the wide range of services we offer in the marketplace. ABF's experienced employees understand our customers' supply chains and respond by applying customized solutions to meet specific needs," said Ms. McReynolds. "In addition, consistent with the past, ABF's customers are benefiting from exceptional cargo care. ABF's third quarter cargo claim costs, as a percent of revenue, improved versus last year, and they are on pace to be below 2009's record-setting level. Customers value our careful handling of their shipments, making it an important element of developing long-term relationships."

"As market conditions have improved, the commentary on LTL pricing is more positive. ABF is focused on increasing yields by capitalizing on opportunities to improve individual account pricing," said Ms. McReynolds. "It is important to remember that industry pricing is at a historically low point and a return to consistent, adequate levels will take time. Recently, ABF implemented a general rate increase and others in our industry have also announced price increases. Though ABF's rate increase only began a little over one month ago, so far we are pleased with its level of customer acceptance. We believe that ABF's commitment to providing high quality logistics services will result in sustained pricing improvements and the opportunity to return to consistent profitability."

Late-2009 changes made to various nonunion fringe benefit costs had a positive impact on third quarter 2010 results. Arkansas Best continues to be on track to experience annual savings at the high end of the previously disclosed $15 - $18 million range. "Again, I want to express my appreciation to our nonunion employees who have made the necessary financial sacrifices during these challenging times," said Ms. McReynolds.

Recently Announced Litigation

This past Monday, ABF filed a lawsuit against the International Brotherhood of Teamsters ("IBT") and YRC Inc., New Penn Motor Express, Inc. and USF Holland, Inc. ("YRCW subsidiaries") seeking to declare the recently-announced ratification of modifications to the National Master Freight Agreement ("NMFA") null and void. In addition, ABF is seeking payment for damages associated with this recent NMFA modification and two other modifications that were granted to the YRC subsidiaries in 2009. Approximately 75% of ABF's employees are covered under the NMFA. ABF is an equal signatory to the NMFA which, as a national collective bargaining agreement, is designed to establish a single national standard for wages and other employment terms for all employers who are parties to the agreement.

"The purpose of Monday's lawsuit is to enforce the terms of the NMFA to ensure changes in wages, employment terms and conditions are not made for the exclusive benefit of one signatory party. ABF must have an equitable cost structure and a fair opportunity to compete effectively in the LTL marketplace. The terms of the recently approved side deal between the YRC subsidiaries and the IBT violate the provisions of the NMFA and they do not represent changes to the NMFA that are acceptable to ABF," said Ms. McReynolds.

Conference Call

Arkansas Best Corporation will host a conference call with company executives to discuss the 2010 third quarter results. The call will be today, Wednesday, November 3, at 11:00 a.m. ET (10:00 a.m. CT). Interested parties are invited to listen by calling (888) 221-6234. Following the call, a recorded playback will be available through the end of the day on November 17, 2010. To listen to the playback, dial (800) 633-8284 or (402) 977-9140 (for international callers). The conference call ID for the playback is 21484807. The conference call and playback can also be accessed, through December 3, 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 provides transportation of less-than-truckload ("LTL") general commodities throughout North America. 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 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          Nine Months Ended
                             September 30                September 30
                           2010          2009          2010          2009
                                           (Unaudited)
                          ($ thousands, except share and per share data)

    OPERATING
     REVENUES            $445,531      $398,957      $1,216,768    $1,101,269

    OPERATING
     EXPENSES AND
     COSTS                447,307       411,194       1,264,619     1,169,405
 

    OPERATING
     LOSS                  (1,776)      (12,237)        (47,851)      (68,136)


    OTHER INCOME
     (EXPENSE)
      Interest and
       dividend
       income                 313           666             920         2,399
      Interest
       expense and
       other
       related
       financing
       costs                 (853)         (357)         (1,853)       (1,041)
      Other, net            1,346         2,035           1,558         2,345
                              806         2,344             625         3,703

    LOSS BEFORE
     INCOME TAXES            (970)       (9,893)        (47,226)      (64,433)

    FEDERAL AND
     STATE INCOME
     TAXES
      Current
       benefit             (1,864)       (3,302)        (11,199)      (25,515)
      Deferred
       (benefit)
       provision            1,479        (1,263)         (6,722)          (69)
                             (385)       (4,565)        (17,921)      (25,584)

    NET LOSS                 (585)       (5,328)        (29,305)      (38,849)

    LESS:
     NONCONTROLLING
     INTEREST IN
         NET INCOME OF
          SUBSIDIARY          164           245             280           324

    NET LOSS
     ATTRIBUTABLE
     TO
    ARKANSAS BEST
     CORPORATION            $(749)      $(5,573)       $(29,585)     $(39,173)

    LOSS PER
     SHARE
      Basic                $(0.30)       $(0.23)         $(1.18)       $(1.58)
      Diluted               (0.30)        (0.23)          (1.18)        (1.58)

    AVERAGE
     COMMON
     SHARES
     OUTSTANDING
      Basic            25,199,123    25,047,975      25,166,678    25,047,270
      Diluted          25,199,123    25,047,975      25,166,678    25,047,270

    CASH
     DIVIDENDS
     DECLARED PER
     COMMON SHARE           $0.03         $0.15           $0.09         $0.45






    ARKANSAS BEST CORPORATION
    CONSOLIDATED BALANCE SHEETS






                                                September 30  December 31
                                                        2010         2009
                                                  (Unaudited)      Note
                                                  ($ thousands, except
                                                       share data)

    ASSETS

    CURRENT ASSETS
      Cash and cash equivalents                      $99,506      $39,332
      Short-term investment securities                45,751       93,861
      Restricted cash equivalents and short-term
       investments                                    50,755       50,857
      Accounts receivable, less allowances (2010
       - $3,378; 2009 - $3,470)                      145,812      115,459
      Other accounts receivable, less allowances
       (2010 - $1,286; 2009 - $1,149)                  7,542        6,749
      Prepaid expenses                                 8,678       10,390
      Deferred income taxes                           32,817       39,035
      Prepaid and refundable income taxes              6,994       24,726
      Other                                            4,532        4,333
        TOTAL CURRENT ASSETS                         402,387      384,742

    PROPERTY, PLANT AND EQUIPMENT
      Land and structures                            239,616      240,185
      Revenue equipment                              529,488      514,481
      Service, office and other equipment            159,929      157,885
      Leasehold improvements                          22,144       21,839
                                                     951,177      934,390
      Less allowances for depreciation and
       amortization                                  542,258      505,538
                                                     408,919      428,852

    OTHER ASSETS                                      53,733       55,952


                                                    $865,039     $869,546







    Note: The balance sheet at December 31, 2009 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 BALANCE SHEETS - continued






                                                September 30   December 31
                                                        2010          2009
                                                 (Unaudited)      Note
                                                   ($ thousands, except
                                                        share data)

    LIABILITIES AND STOCKHOLDERS' EQUITY

    CURRENT LIABILITIES
       Bank overdraft and drafts payable             $11,801       $21,941
       Accounts payable                               72,652        59,386
       Income taxes payable                              409           826
       Accrued expenses                              149,193       150,799
       Current portion of long-term debt              10,844         3,603
         TOTAL CURRENT LIABILITIES                   244,899       236,555

    LONG-TERM DEBT, less current portion              33,802        13,373

    PENSION AND POSTRETIREMENT LIABILITIES            68,807        67,445

    OTHER LIABILITIES                                 19,987        20,254

    DEFERRED INCOME TAXES                             21,295        31,023

    STOCKHOLDERS' EQUITY
       Common stock, $0.01 par value, authorized
        70,000,000 shares;
        issued 2010: 26,879,458 shares; 2009:
         26,749,265 shares                               269           267
       Additional paid-in capital                    278,379       274,663
       Retained earnings                             296,023       327,948
       Treasury stock, at cost, 1,677,932 shares     (57,770)      (57,770)
       Accumulated other comprehensive loss          (40,652)      (44,212)
         TOTAL STOCKHOLDERS' EQUITY                  476,249       500,896

                                                    $865,039      $869,546







    Note: The balance sheet at December 31, 2009 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






                                                           Nine Months Ended
                                                              September 30
                                                            2010         2009
                                                             (Unaudited)
                                                            ($ thousands)
    OPERATING ACTIVITIES
      Net loss                                          $(29,305)    $(38,849)
      Adjustments to reconcile net loss to
       net cash
       provided by operating activities:
         Depreciation and amortization                    53,771       56,348
         Other amortization                                  200          220
         Pension settlement expense                          178          158
         Share-based compensation expense                  4,191        4,777
         Provision for losses on accounts
          receivable                                         453        2,432
         Deferred income tax provision
          (benefit)                                       (6,722)         (69)
         Gain on sales of assets                            (142)      (1,214)
         Excess tax benefits from share-based
          compensation                                       (83)           -
         Changes in operating assets and
          liabilities:
           Receivables                                   (31,595)     (13,587)
           Prepaid expenses                                1,724        2,321
           Other assets                                      659          316
           Income taxes(1)                                18,145          542
           Accounts payable, taxes payable,
                accrued expenses and other
                 liabilities                              10,399       10,469

    NET CASH PROVIDED BY OPERATING
     ACTIVITIES                                           21,873       23,864

    INVESTING ACTIVITIES
      Purchases of property, plant and
       equipment, net of capital leases(2)                (4,322)     (32,914)
      Proceeds from asset sales                            3,393        3,714
      Purchases of short-term investment
       securities                                        (51,065)    (110,198)
      Proceeds from sales of short-term
       investment securities                              99,175       96,689
      Business acquisition, net of cash
       acquired                                                -       (4,873)
      Capitalization of internally developed
       software and other                                 (3,265)      (3,962)
    NET CASH PROVIDED BY (USED IN)
     INVESTING ACTIVITIES                                 43,916      (51,544)

    FINANCING ACTIVITIES
      Payments on long-term debt                          (5,167)      (1,401)
      Proceeds from issuance of long-term
       debt                                               11,416            -
      Net change in bank overdraft                       (10,140)      (1,220)
      Change in restricted cash equivalents
       and short-term investments                            103           -
      Deferred financing costs                               (35)        (300)
      Payment of common stock dividends                   (2,340)     (11,632)
      Excess tax benefits from share-based
       compensation                                           83            -
      Proceeds from the exercise of stock
       options and other                                     465          240
    NET CASH USED IN FINANCING ACTIVITIES                 (5,615)     (14,313)

    NET INCREASE (DECREASE) IN CASH AND
     CASH EQUIVALENTS                                     60,174      (41,993)
      Cash and cash equivalents at beginning
       of period                                          39,332      100,880
    CASH AND CASH EQUIVALENTS AT END OF
     PERIOD                                              $99,506      $58,887







    (1)  2010 includes $29.3 million in net federal and state income tax refunds.
    (2)   Capital lease financing of revenue equipment (primarily road tractors 
    and trailers used in ABF's operations) totaled $21.4 million for the nine 
    months ended September 30, 2010.






    ARKANSAS BEST CORPORATION
    FINANCIAL STATEMENT OPERATING SEGMENT DATA
    AND OPERATING RATIOS






                              Three Months Ended
                                 September 30
                             2010                2009
                                 (Unaudited)
                                ($ thousands)
    OPERATING
     REVENUES
    ABF Freight
     System, Inc.(1)     $409,916            $369,763
    Other revenues
     and
     eliminations          35,615              29,194
    Total
     consolidated
     operating
      revenues           $445,531            $398,957

    OPERATING
     EXPENSES AND
     COSTS
    ABF Freight
     System, Inc.(1)
      Salaries, wages
       and
        benefits         $259,613     63.3%  $248,093       67.1%
      Fuel, supplies
       and expenses        67,045     16.4     58,758       15.9
      Operating taxes
       and
        licenses           11,229      2.7     10,590        2.9
      Insurance             4,870      1.2      6,129        1.7
      Communications
       and
        utilities           3,830      0.9      3,455        0.9
      Depreciation and
        amortization       16,992      4.2     17,638        4.8
      Rents and
       purchased
        transportation     46,830     11.4     37,576       10.2
      Gain on sale of
       property
        and equipment         (74)       -       (254)      (0.1)
      Other                 2,141      0.5      1,768        0.4
                          412,476    100.6%   383,753      103.8%

    Other expenses
     and
      eliminations         34,831              27,441

    Total
     consolidated
     operating
      expenses and
       costs             $447,307            $411,194

    OPERATING INCOME
     (LOSS)
    ABF Freight
     System, Inc.(1)      $(2,560)            $(13,990)
    Other income
     (loss) and
      eliminations            784                1,753
    Total
     consolidated
      operating loss      $(1,776)            $(12,237)








                               Nine Months Ended
                                  September 30
                             2010                2009
                                 (Unaudited)
                                ($ thousands)
    OPERATING
     REVENUES
    ABF Freight
     System, Inc.(1)   $1,122,384          $1,036,681
    Other revenues
     and
     eliminations          94,384              64,588
    Total
     consolidated
     operating
      revenues         $1,216,768           $1,101,269

    OPERATING
     EXPENSES AND
     COSTS
    ABF Freight
     System, Inc.(1)
      Salaries, wages
       and
        benefits         $745,037     66.4%  $726,817      70.1%
      Fuel, supplies
       and expenses       192,686     17.2    162,019      15.6
      Operating taxes
       and
        licenses           32,438      2.9     31,657       3.1
      Insurance            14,981      1.3     16,049       1.5
      Communications
       and
        utilities          11,008      1.0     10,989       1.1
      Depreciation and
        amortization       51,698      4.6     54,109       5.2
      Rents and
       purchased
        transportation    120,771     10.7     97,819       9.4
      Gain on sale of
       property
        and equipment        (498)      -      (1,215)     (0.1)
      Other                 5,101      0.4      6,092       0.6
                        1,173,222    104.5% 1,104,336     106.5%

    Other expenses
     and
      eliminations         91,397              65,069

    Total
     consolidated
     operating
      expenses and
       costs           $1,264,619          $1,169,405

    OPERATING INCOME
     (LOSS)
    ABF Freight
     System, Inc.(1)     $(50,838)           $(67,655)
    Other income
     (loss) and
      eliminations          2,987                (481)
    Total
     consolidated
      operating loss     $(47,851)           $(68,136)







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





    ABF FREIGHT SYSTEM, INC.
    OPERATING STATISTICS





                 Three Months Ended September 30  Nine Months Ended September 30
                    2010      2009 % Change        2010      2009 % Change

    Workdays          64        64                190.5     190.0

    Billed
     Revenue
     (1) /
     CWT          $23.38    $23.98     (2.5)%    $23.52    $23.88     (1.5)%

    Billed
     Revenue
     (1) /
     Shipment    $340.54   $322.00       5.8%   $334.56   $312.32       7.1%
 
    Shipments  1,201,683 1,144,026       5.0% 3,366,599 3,322,499     (1.3)%

     Shipments
     /Day         18,776    17,875       5.0%    17,672    17,487     (1.1)%

    Tonnage
     (tons)      875,156   768,022      13.9% 2,394,510 2,172,555      10.2%

    Tons/Day      13,674    12,000      13.9%    12,570    11,434       9.9%







    (1)  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: Mr. David Humphrey, Vice President Investor Relations and Corporate Communications
              Telephone (479) 785-6200