ARKANSAS BEST CORPORATION ANNOUNCES THIRD QUARTER 1995 OPERATING RESULTS
(ARKANSAS BEST CORPORATION - NASDAQ/NMS: "ABFS")
(Fort Smith, Arkansas, November 1, 1995) - Arkansas Best Corporation (the "Company") had consolidated revenues of $398.6 million for the quarter ended September 30, 1995, compared to $294.3 million for the quarter ended September 30, 1994. During the third quarter of 1995, the Company had a net loss of $(13.l) million, or $(.73) per common share compared to net income of $9.2 million, or $.40 per common share for the quarter ended September 30, 1994. Revenue for the quarter increased due to the acquisition of WorldWay Corporation ("WorldWay") on August 12, 1995, and the acquisition adversely impacted operating results for the same period. For the period from August 12 to September 30, 1995, WorldWay incurred a consolidated after?tax net loss of $(13.6) million and a pre-tax loss from operations of $(20.4) million. The WorldWay loss is attributable to Carolina Freight Carriers Corp. ("Carolina Freight") and Red Arrow Freight Lines ("Red Arrow") which ceased to exist as of September 24, 1995, when they were merged into ABF Freight System, Inc. ("ABF"). Earnings per common share for each of the quarters ended September 30, 1995 and 1994 give consideration to preferred stock dividends of $1.1 million. Average common shares outstanding for the quarter ended September 30, 1995, were 19.5 million compared to 19.3 million and 23.1 million on a fully?diluted basis for the quarter ended September 30, 1994. Per share earnings reflect full dilution, including conversion of preferred shares to common, if dilutive.
Revenues from the LTL carrier operations segment for the quarter ended September 30, 1995, were $299.3 million, compared to $254.0 million for the quarter ended September 30, 1994. The LTL carrier operations segment had an operating loss for the quarter ended September 30, 1995, of $(l8.4) million compared to operating profit of $16.4 million for the quarter ended September 30, 1994. LTL carrier operations include the losses of Carolina Freight and Red Arrow for the period from August 12, 1995, to their merger into ABF on September 25, 1995. All carrier operations segment comparisons are impacted by the acquisition of WorldWay Corporation. The following operating statistics for ABF, the Company's largest subsidiary, does not include the operations of Carolina Freight or Red Arrow prior to their merger into ABF on September 25, 1995. ABF had an ICC operating ratio of 98.1% for the quarter ended September 30, 1995, compared to 93.8% for the quarter ended September 30, 1994. For the quarter ended September 30, 1995, ABF's total tonnage decreased 8.2%, consisting of a 7.9% decrease in LTL tonnage and a 9.1% decrease in truckload tonnage compared to 1994.
Effective August 12, 1995, forwarding operations includes the results of CaroTrans International, Inc., a subsidiary of WorldWay. The Company previously entered the freight forwarding market on September 30, 1994, with the acquisition of Clipper Exxpress Company ("Clipper"), a non-asset based intermodal marketing and freight logistics company, and two affiliated transportation companies. For the quarter ended September 30, 1995, the Company's forwarding operations reported revenues of $38.2 million with segment operating profit of $1.4 million.
On August 12, 1995, the Company entered the truckload motor carrier business with the acquisition of Cardinal Freight Carriers, Inc. ("Cardinal"), a WorldWay subsidiary. For the period from August 12, 1995, to September 30, 1995, Cardinal had revenues of $10.2 million and segment operating profit of $1.2 million.
With the acquisition of two WorldWay logistics subsidiaries, Complete Logistics Company and Innovative Logistics Incorporated, the Company began reporting the results of its logistics subsidiaries in a separate business segment. For the quarter ended September 30, 1995, the logistics segment had revenues of $9.9 million with a segment operating loss of $435,000.
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 the quarter ended September 30, 1995, the Company reported revenues from tire operations of $40.1 million, compared to $39.1 million for the quarter ended September 30, 1994. Operating profit from the tire operations segment was $1.5 million for the quarter ended September 30, 1995, compared to $3.3 million for the quarter ended September 30, 1994.
The Company had consolidated revenues of $1.0 billion for the nine months ended September 30, 1995 compared to $770.0 million for the nine months ended September 30, 1994. During the nine months ended September 30, 1995, the Company had a net loss of $(6.3) million, or $(.49) per common share compared to net income of $11.4 million, or $.42 per common share for the nine months ended September 30, 1994. Earnings per common share for each of the nine months ended September 30, 1995 and 1994 give consideration to preferred stock dividends of $2.1 million. Average common shares outstanding for the nine months ended September 30, 1995, were 19.5 million compared to 19.3 million for the nine months ended September 30, 1994. Outstanding shares for the nine months do not assume conversion of preferred stock to common shares because conversion would be anti-dilutive for these periods.
Revenues from the LTL carrier operations segment for the nine months ended September 30, 1995 were $783.8 million compared to $662.2 million for the nine months ended September 30, 1994. The LTL carrier operations segment had an operating loss for the nine months ended September 30, 1995 of $(l.7) million compared to operating income of $23.1 million for the nine months ended September 30, 1994. All carrier operations segment comparisons are impacted by the August, 1995, acquisition of WorldWay. ABF's ICC operating ratio was 97.2% for the nine months ended September 30, 1995, compared to 96.7% for the nine months ended September 30, 1994. For the nine months ended September 30, 1995, ABF's total tonnage increased 6.1%, consisting of a 6.8% increase in LTL tonnage and a 4.0% increase in truckload tonnage compared to 1994.
For the nine months ended September 30, 1995, the Company reported revenues from forwarding operations of $96.6 million with segment operating profit of $2.0 million.
For the nine months ended September 30, 1995, the Company reported revenues from tire operations of $1 10.7 million, compared to $104.2 million for the nine months ended September 30, 1994. Operating profit from the tire operations segment was $5.0 million for the nine months ended September 30, 1995, compared to $7.8 million for the nine months ended September 30, 1994.
The following table compares financial data by business segment:
ARKANSAS BEST CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Nine Months Ended
September 30 September 30
1995 1994 1995 1994
($ thousands, except per share data)
OPERATING REVENUES
LTL operations $ 299,317 $ 254,019 $ 783,836 $ 662,150
Forwarding operations 38,189 - 96,615 -
Truckload operations 10,162 - 10,162 -
Logistics operations 9,866 548 18,105 2,117
Tire operations 40,065 39,149 110,693 104,163
Other 952 535 2,441 1,562
398,551 294,251 1,021,852 769,992
OPERATING PROFIT (LOSS)
LTL operations (18,360) 16,429 (1,713) 23,103
Forwarding operations 1,429 - 2,025 -
Truckload operations 1,194 - 1,194 -
Logistics operations (435) (549) (1,206) (1,139)
Tire operations 1,470 3,329 4,962 7,812
Other (51) 193 (250) 344
TOTAL OPERATING PROFIT (LOSS) (14,753) 19,402 5,012 30,120
INTEREST EXPENSE 5,569 1,592 10,218 4,721
MINORITY INTEREST 449 1,079 1,523 2,486
INCOME (LOSS) BEFORE INCOME
TAXES (20,771) 16,731 (6,729) 22,913
PROVISION FOR INCOME TAXES
(CREDIT) (7,643) 7,530 (425) 11,545
NET INCOME (LOSS) $ (13,128) $ 9,201 $ (6,304) $ 11,368
EARNINGS PER COMMON SHARE:
Primary $ (.73) $ .42 $ (.49) $ 0.42
Fully diluted (.73) .40 (.49) 0.42
AVERAGE COMMON SHARES
OUTSTANDING:
Primary 19,549 19,306 19,544 19,305
Fully diluted 19,549 23,138 19,544 19,305
Contact: Mr. Randall M. Loyd, Director - Financial Reporting
Telephone: (501) 785-6200