-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RuEy7n0KYwOsD44ImeYR+qu+RXXJwPVjsTb+086dqIhae3wKEYh7LWR/d+udkws3 opdVGSC/3VGNa0OoKCwIoA== 0000894405-96-000010.txt : 19960816 0000894405-96-000010.hdr.sgml : 19960816 ACCESSION NUMBER: 0000894405-96-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960813 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ARKANSAS BEST CORP /DE/ CENTRAL INDEX KEY: 0000894405 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 710673405 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-19969 FILM NUMBER: 96611463 BUSINESS ADDRESS: STREET 1: 3801 OLD GREENWOOD RD CITY: FORT SMITH STATE: AR ZIP: 72903 BUSINESS PHONE: 5017856000 MAIL ADDRESS: STREET 1: P O BOX 48 CITY: FORT SMITH STATE: AR ZIP: 72902 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarter Ended June 30, 1996 ----------------- [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to ------------- ------------- Commission file number 0-19969 -------- ARKANSAS BEST CORPORATION - ----------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 6711 71-0673405 - ------------------------- ------------------------- ---------------------- (State or other (Primary Standard (I.R.S. Employer jurisdiction of Industrial Classification Identification No.) incorporation or Code No.) organization) 3801 Old Greenwood Road Fort Smith, Arkansas 72903 (501) 785-6000 - ----------------------------------------------------------------------------- (Address, including zip code, and telephone number, including area code, of the registrant's principal executive offices) Not Applicable - ----------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of The Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at August 1, 1996 --------------------------------- -------------------------------- Common Stock, $.01 par value 19,508,620 shares ARKANSAS BEST CORPORATION INDEX Page ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheets -- June 30, 1996 and December 31, 1995 3 Consolidated Statements of Operations -- For the Three and Six Months Ended June 30, 1996 and 1995 5 Consolidated Statements of Cash Flows -- For the Six Months Ended June 30, 1996 and 1995 7 Notes to Consolidated Financial Statements -- June 30, 1996 9 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 14 PART II. OTHER INFORMATION Item 1. Legal Proceedings 26 Item 2. Changes in Securities 26 Item 3. Defaults Upon Senior Securities 26 Item 4. Submission of Matters to a Vote of Security Holders 26 Item 5. Other Information 26 Item 6. Exhibits and Reports on Form 8-K 26 SIGNATURES 27 EXHIBITS 28 Exhibit 11. Statement Re: Computation of Earnings Per Share PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS ARKANSAS BEST CORPORATION CONSOLIDATED BALANCE SHEETS
June 30 December 31 1996 1995 (unaudited) (note) ($ thousands) ASSETS CURRENT ASSETS Cash and cash equivalents $ 596 $ 16,945 Trade receivables, less allowances for doubtful accounts (1996 -- $12,438,000; 1995 -- $19,403,000) 202,384 205,196 Inventories -- Note C 33,622 36,850 Prepaid expenses 16,383 13,927 Federal and state income taxes 11,454 17,489 Deferred federal income taxes 32,080 32,080 --------- --------- TOTAL CURRENT ASSETS 296,519 322,487 PROPERTY, PLANT AND EQUIPMENT Land and structures 235,071 228,706 Revenue equipment 280,497 285,045 Manufacturing equipment 13,939 8,289 Service, office and other equipment 66,133 65,474 Leasehold improvements 9,557 10,631 Construction in progress - 44 Non-operating property 15,641 15,869 --------- --------- 620,838 614,058 Less allowances for depreciation and amortization (212,762) (190,906) --------- --------- 408,076 423,152 OTHER ASSETS 56,926 54,783 NET ASSETS HELD FOR SALE 16,905 39,937 GOODWILL, less amortization (1996 -- $26,338,000; 1995 -- $24,027,000) 141,796 145,478 --------- --------- $ 920,222 $ 985,837 ========= ========= ARKANSAS BEST CORPORATION CONSOLIDATED BALANCE SHEETS June 30 December 31 1996 1995 (unaudited) (note) ($ thousands) LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Bank overdraft $ 4,274 $ - Bank drafts payable 5,931 12,999 Trade accounts payable 71,655 74,998 Accrued expenses 184,756 188,708 Current portion of long-term debt 37,742 26,634 --------- --------- TOTAL CURRENT LIABILITIES 304,358 303,339 LONG-TERM DEBT, less current portion 360,521 399,144 OTHER LIABILITIES 19,936 18,665 DEFERRED FEDERAL INCOME TAXES 43,460 48,560 MINORITY INTEREST 34,826 38,265 SHAREHOLDERS' EQUITY Preferred stock, $.01 par value, authorized 10,000,000 shares; issued 1,495,000 shares 15 15 Common stock, $.01 par value, authorized 70,000,000 shares; issued and outstanding 1996: 19,512,250 shares; 1995: 19,519,061 195 195 Additional paid-in capital 207,753 207,807 Predecessor basis adjustment (15,371) (15,371) Retained earnings (deficit) (35,471) (14,782) --------- --------- TOTAL SHAREHOLDERS' EQUITY 157,121 177,864 CONTINGENCIES -- Note F --------- --------- $ 920,222 $ 985,837 ========= ========= Note: The balance sheet at December 31, 1995 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. See notes to consolidated financial statements.
ARKANSAS BEST CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Six Months Ended June 30 June 30 1996 1995 1996 1995 (unaudited) ($ thousands, except per share data) OPERATING REVENUES LTL motor carrier operations $ 298,886 $ 240,042 $ 593,809 $ 484,519 Forwarding operations 45,001 29,658 86,767 58,426 Truckload motor carrier operations 18,917 - 36,755 - Logistics operations 14,245 4,293 27,475 8,238 Tire operations 35,505 37,414 67,118 70,628 Service and other 1,908 687 3,912 1,490 --------- --------- --------- --------- 414,462 312,094 815,836 623,301 --------- --------- --------- --------- OPERATING EXPENSES AND COSTS -Note E LTL motor carrier operations 305,787 235,109 609,539 468,232 Forwarding operations 43,416 28,827 84,107 56,970 Truckload motor carrier operations 17,465 - 33,877 - Logistics operations 14,511 4,701 28,298 9,033 Tire operations 36,827 35,519 70,065 67,016 Service and other 2,439 734 4,775 1,492 --------- --------- --------- --------- 420,445 304,890 830,661 602,743 --------- --------- --------- --------- OPERATING INCOME (LOSS) (5,983) 7,204 (14,825) 20,558 OTHER INCOME (EXPENSE) Gain on asset sales 857 1,512 3,295 1,825 Interest (7,603) (2,521) (15,404) (4,649) Minority interest in subsidiary 486 (585) 1,127 (1,074) Other, net (1,919) (1,325) (3,192) (2,617) --------- --------- --------- --------- (8,179) (2,919) (14,174) (6,515) --------- --------- --------- --------- INCOME (LOSS) BEFORE INCOME TAXES (14,162) 4,285 (28,999) 14,043 ARKANSAS BEST CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (Continued) Three Months Ended Six Months Ended June 30 June 30 1996 1995 1996 1995 (unaudited) ($ thousands, except per share data) FEDERAL AND STATE INCOME TAXES (CREDIT) -Note E Current (1,201) 2,642 (4,842) 10,142 Deferred (4,175) (40) (5,812) (2,924) --------- --------- --------- --------- (5,376) 2,602 (10,654) 7,218 --------- --------- --------- --------- NET INCOME (LOSS) $ (8,786) $ 1,683 $ (18,345) $ 6,825 ========= ========= ========= ========= NET INCOME (LOSS) PER SHARE $ (0.51) $ .03 $ (1.05) $ .24 ========= ========= ========= ========= AVERAGE COMMON SHARES OUTSTANDING: 19,512,367 19,515,132 19,514,453 19,540,768 ========== ========== ========== ========== CASH DIVIDENDS PAID PER COMMON SHARE $ - $ 0.01 $ 0.01 $ 0.02 ========== ========== ========== ========== See notes to consolidated financial statements.
ARKANSAS BEST CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30 1996 1995 (unaudited) ($ thousands) OPERATING ACTIVITIES Net income (loss) $ (18,345) $ 6,825 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 29,873 16,189 Amortization of intangibles 2,311 2,367 Other amortization 1,664 308 Provision for losses on accounts receivable 4,114 1,486 Provision for deferred income taxes (5,812) (2,924) Gain on asset sales (3,294) (1,825) Gain on issuance of subsidiary stock - (20) Minority interest in subsidiary (1,377) 1,074 Changes in operating assets and liabilities: Accounts receivable 89 2,162 Inventories and prepaid expenses 753 (2,269) Other assets (1,575) 738 Accounts payable, bank drafts payable, taxes payable, accrued expenses and other liabilities (7,165) 6,711 --------- --------- NET CASH PROVIDED BY OPERATING ACTIVITIES 1,236 30,822 INVESTING ACTIVITIES Purchases of property, plant and equipment, less capitalized leases (15,455) (25,459) Proceeds from asset sales 37,177 8,660 Adjustment to the acquisition of the Clipper Group - (84) --------- --------- NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES 21,722 (16,883) ARKANSAS BEST CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) Six Months Ended June 30 1996 1995 ($ thousands) FINANCING ACTIVITIES Deferred financing costs and expenses incurred in borrowing activities $ (3,512) $ - Borrowings under revolving credit facilities 98,660 17,000 Principal payments under term loan facilities (6,496) (1,000) Payments under revolving credit facilities (119,660) (6,000) Principal payments on other long-term debt (9,487) (13,235) Dividends paid to minority shareholders of subsidiary (254) (220) Dividends paid (2,344) (2,539) Retirement of subsidiary preferred stock (371) - Net increase (decrease) in cash overdrafts 4,157 (5,989) --------- --------- NET CASH USED BY FINANCING ACTIVITIES (39,307) (11,983) --------- --------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (16,349) 1,956 Cash and cash equivalents at beginning of period 16,945 3,458 --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 596 $ 5,414 ========= ========= See notes to consolidated financial statements.
ARKANSAS BEST CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) June 30, 1996 NOTE A - ORGANIZATION AND DESCRIPTION OF BUSINESS Arkansas Best Corporation (the "Company") is a diversified holding company engaged through its subsidiaries primarily in motor carrier and freight forwarding operations and truck tire retreading and sales. Principal subsidiaries are ABF Freight System, Inc., ("ABF"), Treadco, Inc. ("Treadco"), and Clipper Exxpress Company and related companies (the "Clipper Group") and, effective August 12, 1995, WorldWay Corporation ("WorldWay") (see Note C). The principal subsidiaries of WorldWay included Carolina Freight Carriers Corp. ("Carolina Freight") , Cardinal Freight Carriers, Inc. ("Cardinal"), G.I. Trucking Company ("G.I. Trucking"), CaroTrans International, Inc. ("CaroTrans"), The Complete Logistics Company ("Complete Logistics") and Innovative Logistics Incorporated ("Innovative Logistics"). Carolina Freight was merged into ABF on September 25, 1995. NOTE B - FINANCIAL STATEMENT PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 1996, are not necessarily indicative of the results that may be expected for the year ending December 31, 1996. For further information, refer to the Company's financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 1995. NOTE C - INVENTORIES
June 30 December 31 1996 1995 ($ thousands) Finished goods $ 23,460 $ 25,579 Materials 6,819 7,621 Repair parts, supplies and other 3,343 3,650 -------- -------- $ 33,622 $ 36,850 ======== ========
NOTE D - FEDERAL AND STATE INCOME TAXES
Three Months Ended Six Months Ended June 30 June 30 1996 1995 1996 1995 ($ thousands) Income tax (credit) at regular rates $(4,957) $ 1,500 $(10,150) $ 4,915 Percent (35.0)% 35.0% (35.0)% 35.0% State taxes less federal benefits (13) 446 (240) 1,130 Percent (0.1)% 10.4% (0.8)% 8.1% Amortization of nondeductible goodwill 223 266 503 532 Percent 1.6% 6.2% 1.7% 3.8% Minority interest (170) 205 (394) 376 Percent (1.2)% 4.8% (1.4)% 2.7% Other items (459) 185 (373) 265 Percent (3.3)% 4.3% (1.2)% 1.8% ------ ------ ------- ------ Income tax expense (benefit) $(5,376) $ 2,602 $(10,654) $ 7,218 Percent (38.0)% 60.7% (36.7)% 51.4% ====== ====== ======= ======
NOTE E - OPERATING EXPENSES AND COSTS
Three Months Ended Six Months Ended June 30 June 30 1996 1995 1996 1995 ($ thousands) LTL Motor Carrier Operations: Salaries and wages $209,000 $166,751 $418,297 $331,926 Supplies and expenses 33,673 25,892 65,222 52,264 Operating taxes and licenses 12,545 9,691 25,102 20,026 Insurance 6,625 5,596 13,151 10,081 Communications and utilities 7,406 5,798 15,241 11,600 Depreciation and amortization 10,704 6,810 22,760 13,203 Rents and purchased transportation 21,918 13,496 43,948 27,111 Other 3,916 1,075 5,818 2,021 -------- -------- -------- -------- 305,787 235,109 609,539 468,232 -------- -------- -------- -------- Forwarding Operations: Cost of services 35,148 25,099 67,391 49,587 Selling, administrative and general 8,268 3,728 16,716 7,383 -------- -------- -------- -------- 43,416 28,827 84,107 56,970 -------- -------- -------- -------- Truckload Motor Carrier Operations: Salaries and wages 6,890 - 12,988 - Supplies and expenses 3,175 - 6,233 - Operating taxes and licenses 1,797 - 3,570 - Insurance 673 - 1,318 - Communications and utilities 234 - 467 - Depreciation and amortization 895 - 1,761 - Rents and purchased transportation 3,713 - 7,351 - Other 88 - 189 - -------- -------- -------- -------- 17,465 - 33,877 - -------- -------- -------- -------- Logistics Operations: Cost of services 12,932 4,170 25,331 8,031 Selling, administrative and general 1,579 531 2,967 1,002 -------- -------- -------- -------- 14,511 4,701 28,298 9,033 -------- -------- -------- -------- Tire Operations: Cost of sales 27,699 27,765 52,614 52,546 Selling, administrative and general 9,128 7,754 17,451 14,470 -------- -------- -------- -------- 36,827 35,519 70,065 67,016 -------- -------- -------- -------- Service and Other 2,439 734 4,775 1,492 -------- -------- -------- -------- $420,445 $304,890 $830,661 $602,743 ======== ======== ======== ========
NOTE F - LEGAL PROCEEDINGS AND ENVIRONMENTAL MATTERS AND OTHER EVENTS In August 1990, a lawsuit was filed in the United States District Court for the Southern District of New York, by Riverside Holdings, Inc., Riverside Furniture Corporation ("Riverside") and MR Realty Associates, L.P. ("Plaintiffs") against the Company and a subsidiary. Plaintiffs asserted state law, Employee Retirement Income Security Act of 1974 and securities claims against the Company in connection with the Company's sale of Riverside in April 1989. Plaintiffs sought approximately $4 million in actual damages and $10 million in punitive damages. On April 15, 1996, the Court partially granted the Company's motion for Summary Judgment by dismissing Riverside's claims for punitive damages, ERISA violations and common law breach of contract and fraud claims. The Court did not dismiss Riverside's claim of violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 of that Act. The Company is vigorously contesting the lawsuit. After consultation with legal counsel, the Company has concluded that resolution of the foregoing lawsuit is not expected to have a material adverse effect on the Company's financial condition. In November, 1995 Daily Transport Canada, Inc. ("Daily"), a Toronto-based LTL carrier, and related companies served a Request for Arbitration against ABF, as successor to Carolina Freight Carriers Corporation ("CFCC"), for its lost profits claimed to be in the amount of $15,000,000 resulting from the alleged breach of a contract between CFCC and Daily. Based on information currently available, the Company does not believe that the outcome of this matter will have a material adverse effect on the Company's financial condition or results of operations. Various other legal actions, the majority of which arise in the normal course of business, are pending. None of these other legal actions is expected to have a material adverse effect on the Company's financial condition. The Company maintains liability insurance against risks arising out of the normal course of its business, subject to certain self-insured retention limits. The Company's subsidiaries store some fuel for its tractors and trucks in approximately 170 underground tanks located in 34 states. Maintenance of such tanks is regulated at the federal and, in some cases, state levels. The Company believes that it is in substantial compliance with all such regulations. The Company is not aware of any leaks from such tanks that could reasonably be expected to have a material adverse effect on the Company. Environmental regulations have been adopted by the United States Environmental Protection Agency ("EPA") that will require the Company to upgrade its underground tank systems by December 1998. The Company currently estimates that such upgrades, which are currently in process, will not have a material adverse effect on the Company. The Company has received notices from the EPA and others that it has been identified as a potentially responsible party ("PRP") under the Comprehensive Environmental Response Compensation and Liability Act or other federal or state environmental statutes at several hazardous waste sites. After investigating the Company's or its subsidiaries' involvement in waste disposal or waste generation at such sites, the Company has either agreed to de minimis settlements (aggregating approximately $250,000 over the last five years), or believes its obligations with respect to such sites would involve immaterial monetary liability, although there can be no assurances in this regard. As of June 30, 1996, the Company has accrued approximately $2 million to provide for environmental-related liabilities. The Company's environmental accrual is based on management's best estimate of the actual liability. The Company's estimate is founded on management's experience in dealing with similar environmental matters and on actual testing performed at some sites. Management believes that the accrual is adequate to cover environmental liabilities based on the present environmental regulations. On October 30, 1995, Treadco filed a lawsuit in Arkansas State Court alleging that Bandag Incorporated ("Bandag") and certain of its officers and employees have violated Arkansas statutory and common law in attempting to solicit Treadco's employees to work for Bandag or its competing franchisees and attempting to divert customers from Treadco. At Treadco's request, the Court entered a Temporary Restraining Order barring Bandag, Treadco's former officers J.J. Seiter, Ronald W. Toothaker, and Ronald W. Hawks and Bandag officers Martin G. Carver and William Sweatman from soliciting or hiring Treadco's employees to work for Bandag or any of its franchisees, from diverting or soliciting Treadco's customers to buy from Bandag franchisees other than Treadco, and from disclosing or using any of Treadco's confidential information. On November 8, 1995, Bandag and the other named defendants asked the State Court to stop its proceedings pending a decision by the United States District Court, Western District of Arkansas, on a Complaint to Compel Arbitration filed by Bandag in the Federal District Court on November 8, 1995. The Federal District Court has ruled that under terms of Treadco's franchise agreements with Bandag, all of the issues involved in Treadco's lawsuit against Bandag are to be decided by arbitration. Treadco and Bandag are conducting discovery in preparation for the arbitration hearing. A date for the arbitration hearing has not yet been set. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Arkansas Best Corporation (the "Company") is a diversified holding company engaged through its subsidiaries primarily in less-than-truckload ("LTL") and truckload motor carrier operations, logistics and freight forwarding operations and truck tire retreading and new tire sales. Principal subsidiaries owned are ABF Freight System, Inc. ("ABF"), Treadco, Inc. ("Treadco"), and Clipper Exxpress Company ("Clipper"). Effective August 12, 1995, pursuant to its acquisition of WorldWay Corporation ("WorldWay"), the Company acquired Cardinal Freight Carriers, Inc. ("Cardinal"), G.I. Trucking Company ("G.I. Trucking"), CaroTrans International, Inc. ("CaroTrans"), The Complete Logistics Company ("Complete Logistics") and Innovative Logistics Incorporated ("ILI"). The Company in 1991 reduced its ownership in Treadco, through an initial public offering of Treadco common stock, to approximately 46%, while retaining control of Treadco by reason of its stock ownership, board representation and provision of management services. As a result, Treadco is consolidated with the Company for financial reporting purposes, with the ownership interests of the other stockholders reflected as minority interest. Segment Data The following tables reflect information prepared on a business segment basis, which includes reclassification of certain expenses and costs between the Company and its subsidiaries and elimination of the effects of intercompany transactions. Operating profit on a business segment basis differs from operating income as reported in the Company's Consolidated Financial Statements. Other income and other expenses (which include amortization expense), except for interest expense and minority interest, which appear below the operating income line in the Company's Statement of Operations, have been allocated to individual segments for the purpose of calculating operating profit on a segment basis. The segment information for prior periods has been restated to reflect the Company's current reported business segments. In the current and future periods, information that was previously reported in the service and other business segment will be reported in the logistics operations segment.
Three Months Ended Six Months Ended June 30 June 30 1996 1995 1996 1995 ($ thousands) OPERATING REVENUES LTL motor carrier operations $298,886 $240,042 $593,809 $484,519 Forwarding operations 45,001 29,658 86,767 58,426 Truckload motor carrier operations 18,917 - 36,755 - Logistics operations 14,245 4,293 27,475 8,238 Tire operations 35,505 37,414 67,118 70,628 Other 1,908 687 3,912 1,490 -------- -------- -------- -------- $414,462 $312,094 $815,836 $623,301 ======== ======== ======== ======== OPERATING EXPENSE AND COSTS LTL MOTOR CARRIER OPERATIONS Salaries and wages $209,000 $166,751 $418,297 $331,926 Supplies and expenses 33,673 25,892 65,222 52,264 Operating taxes and licenses 12,545 9,691 25,102 20,026 Insurance 6,625 5,596 13,151 10,081 Communications and utilities 7,406 5,798 15,241 11,600 Depreciation and amortization 10,704 6,810 22,760 13,203 Rents and purchased transportation 21,918 13,496 43,948 27,111 Other 3,916 1,075 5,818 2,021 Other non-operating (net) 223 (679) 722 (360) -------- -------- -------- -------- 306,010 234,430 610,261 467,872 FORWARDING OPERATIONS Cost of services 35,148 25,099 67,391 49,587 Selling, administrative and general 8,268 3,728 16,716 7,383 Other non-operating (net) 410 434 804 860 -------- -------- -------- -------- 43,826 29,261 84,911 57,830 TRUCKLOAD MOTOR CARRIER OPERATIONS Salaries and wages 6,890 - 12,988 - Supplies and expenses 3,175 - 6,233 - Operating taxes and licenses 1,797 - 3,570 - Insurance 673 - 1,318 - Communications and utilities 234 - 467 - Depreciation and amortization 895 - 1,761 - Rents and purchased transportation 3,713 - 7,351 - Other 88 - 189 - Other non-operating (net) 1 - 2 - -------- -------- -------- -------- 17,466 - 33,879 - LOGISTICS OPERATIONS Cost of services 12,932 4,170 25,331 8,031 Selling, administrative and general 1,579 531 2,967 1,002 Other non-operating (net) (21) (14) (52) (23) -------- -------- -------- -------- 14,490 4,687 28,246 9,010 TIRE OPERATIONS Cost of sales 27,699 27,765 52,614 52,546 Selling, administrative and general 9,128 7,754 17,451 14,470 Other non-operating (net) 6 (5) 143 120 -------- -------- -------- -------- 36,833 35,514 70,208 67,136 SERVICE AND OTHER 2,882 811 3,053 1,687 -------- -------- -------- -------- $421,507 $304,703 $830,558 $603,535 ======== ======== ======== ======== OPERATING PROFIT (LOSS) LTL motor carrier operations $ (7,124) $ 5,612 $(16,452) $ 16,647 Forwarding operations 1,175 397 1,856 596 Truckload motor carrier operations 1,451 - 2,876 - Logistics operations (245) (394) (771) (772) Tire operations (1,328) 1,900 (3,090) 3,492 Other (974) (124) 859 (197) -------- -------- -------- -------- TOTAL OPERATING PROFIT (LOSS) (7,045) 7,391 (14,722) 19,766 MINORITY INTEREST (486) 585 (1,127) 1,074 INTEREST EXPENSE 7,603 2,521 15,404 4,649 -------- -------- -------- -------- INCOME (LOSS) BEFORE INCOME TAXES $(14,162) $ 4,285 $(28,999) $ 14,043 ======== ======== ======== ========
The following table sets forth for the periods indicated a summary of the Company's operations as a percentage of revenues presented on a business segment basis as shown in the table on the preceding page. The basis of presentation for business segment data differs from the basis of presentation for data the Company provides to the U.S. Department of Transportation.
Three Months Ended Six Months Ended June 30 June 30 1996 1995 1996 1995 LTL MOTOR CARRIER OPERATIONS Salaries and wages 69.9% 69.5% 70.4% 68.5% Supplies and expenses 11.3 10.8 11.0 10.8 Operating taxes and licenses 4.2 4.0 4.2 4.1 Insurance 2.2 2.3 2.2 2.1 Communications and utilities 2.5 2.4 2.6 2.4 Depreciation and amortization 3.6 2.8 3.8 2.7 Rents and purchased transportation 7.3 5.6 7.4 5.6 Other 1.3 0.4 1.0 0.4 Other non-operating (net) 0.1 (0.1) 0.2 - ----- ----- ----- ----- 102.4% 97.7% 102.8% 96.6% ===== ===== ===== ===== FORWARDING OPERATIONS Cost of services 78.1% 84.6% 77.7% 84.9% Selling, administrative and general 18.4 12.6 19.3 12.6 Other non-operating (net) 0.9 1.5 0.9 1.5 ----- ----- ----- ----- 97.4% 98.7% 97.9% 99.0% ===== ===== ===== ===== TRUCKLOAD MOTOR CARRIER OPERATIONS Salaries and wages 36.4% - 35.3% - Supplies and expenses 16.8 - 17.0 - Operating taxes and licenses 9.5 - 9.7 - Insurance 3.6 - 3.6 - Communications and utilities 1.2 - 1.3 - Depreciation and amortization 4.7 - 4.8 - Rents and purchased transportation 19.6 - 20.0 - Other 0.5 - 0.5 - Other non-operating (net) - - - - ----- ----- ----- ----- 92.3% - 92.2% - ===== ===== ===== ===== LOGISTICS OPERATIONS Cost of services 90.8% 97.1% 92.2% 97.5% Selling, administrative and general 11.1% 12.4% 10.8% 12.2% Other non-operating (net) (0.2) (0.3) (0.2) (0.3) ----- ----- ----- ----- 101.7% 109.2% 102.8% 109.4% ===== ===== ===== ===== TIRE OPERATIONS Cost of sales 78.0% 74.2% 78.4% 74.4% Selling, administrative and general 25.7 20.7 26.0 20.5 Other non-operating (net) - - 0.2 0.2 ----- ----- ----- ----- 103.7% 94.9% 104.6% 95.1% ===== ===== ===== =====
Results of Operations Three Months Ended June 30, 1996 as Compared to the Three Months Ended June 30, 1995 Consolidated revenues of the Company for the three months ended June 30, 1996 were $414 million compared to $312 million for the three months ended June 30, 1995. The Company had an operating loss of $7.0 million for the three months ended June 30, 1996 compared to an operating profit of $7.4 million for the three months ended June 30, 1995. For the three months ended June 30, 1996, the Company had a net loss of $8.8 million, or a loss of $.51 per common share, compared to net income of $1.7 million, or $.03 per common share for the three months ended June 30, 1995. Revenues for the first quarter of 1996 increased due to the acquisition of WorldWay. Earnings per common share for the three months ended June 30, 1996 and 1995 give consideration to preferred stock dividends of $1.1 million. Average common shares outstanding for both periods were 19.5 million. Outstanding shares for each period do not assume conversion of preferred stock to common shares, because conversion would be anti-dilutive for these periods. Less-Than-Truckload Motor Carrier Operations Segment. The Company's LTL motor carrier operations are conducted primarily through ABF and, effective August 12, 1995, through G.I. Trucking. Revenues from the LTL motor carrier operations segment for the three months ended June 30, 1996 were $299 million, with an operating loss of $7.1 million. For the three months ended June 30, 1996, ABF accounted for 92% of LTL segment revenues. So far, ABF has been more successful in retaining its January 1, 1996 freight rate increase of 5.8% than it has in previous years which is part of the reason revenue increased 16.6% on a tonnage increase of 11.2%. Following the acquisition of WorldWay, the operations of Carolina Freight Carriers ("Carolina Freight") and Red Arrow Freight Lines ("Red Arrow") were merged into ABF on September 24, 1995. Effective with the merger, ABF inherited Carolina Freight's regional distribution terminal operations, which reconfigured the way freight flowed through ABF's terminal system. This reconfiguration created many operating inefficiencies in ABF's system. Labor dollars as a percent of revenue increased, empty miles increased and weight per trailer decreased, which all had an adverse impact on expenses. During the quarter, ABF discontinued five of the inherited regional distribution terminal operations. These closings have completed ABF's network reconfiguration, returning ABF to its normal terminal system configuration. Salaries, wages and benefits increased 3.8% annually effective April 1, 1996, pursuant to ABF's collective bargaining agreement with its Teamsters employees compared to a 3.3% annual increase effective April 1, 1995. The total expenses as a percent of revenue were 102.4% for the second quarter, 1996 compared to 103.2% for the first quarter, 1996. Salaries and wages as a percent of revenue decreased primarily as a result of ABF's terminal reconfiguration and G.I. Trucking's improved labor costs as they continue to replace revenue lost during the merger of Carolina Freight into ABF. Forwarding Operations Segment. The Company's forwarding operations are conducted primarily through Clipper and, effective August 12, 1995, CaroTrans. Comparisons for the three months ended June 30, 1996 were affected by the acquisition of WorldWay in August 1995. Therefore, comparisons of the results of operations for the forwarding operations segment are not meaningful and are not presented. For the three months ended June 30, 1996, the forwarding operations segment had revenues of $45.0 million with an operating profit of $1.2 million. Forwarding operations were affected during the three months ended June 30, 1996 by soft economic conditions. The total expenses as a percent of revenue were 97.4% for the second quarter, 1996 compared to 98.4% for the first quarter, 1996. The decrease resulted primarily from the seasonal increase in revenue covering the fixed portion of expenses. Truckload Motor Carrier Operations Segment. Effective August 12, 1995, with the acquisition of WorldWay, the Company began reporting a new business segment, truckload motor carrier operations. The Company's truckload motor carrier operations are conducted through Cardinal. For the three months ended June 30, 1996, Cardinal had revenues of $18.9 million with an operating profit of $1.5 million. Cardinal's operations were affected during the three months ended June 30, 1996 by soft economic conditions. The total expenses as a percent of revenue were 92.3% for the second quarter, 1996 compared to 92.0% for the first quarter, 1996 resulting primarily from an increase in expenses relating to employee medical benefits. Logistics Operations Segment. Effective August 12, 1995, with the acquisition of WorldWay, the Company began reporting a new business segment, logistics operations. The Company's logistics operations are conducted through Integrated Distribution, Inc. and, effective August 12, 1995, through Complete Logistics and Innovative Logistics, Inc. For the three months ended June 30, 1996, the logistics operations segment had operating revenues of $14.2 million with an operating loss of $245,000. The total expenses as a percent of revenue were 101.7% for the second quarter, 1996 compared to 104.0% for the first quarter, 1996. The decrease resulted primarily from the seasonal increase in revenue covering the fixed portion of expenses. Tire Operations Segment. Treadco's revenues for the three months ended June 30, 1996 decreased 5.1% to $35.5 million from $37.4 million for the three months ended June 30, 1995. For the second quarter of 1996, "same store" sales decreased 9.2% which was offset in part by a 4.1% increase in "new store" sales. Same store sales include both production locations and sales locations that have been in existence for the entire periods presented. Treadco has seen increased competition as Bandag Incorporated ("Bandag") has granted additional franchises in some locations currently being served by Treadco. The new competition has led to increased pricing pressures in the marketplace. As anticipated, Bandag continues to target Treadco's accounts which has caused difficulty in retaining the national account business and in some cases the business retained is at lower profit margins. Revenues from retreading for three months ended June 30, 1996 decreased 10.1% to $17.7 million from $19.7 million for three months ended June 30, 1995. Revenues from new tire sales were $17.8 million for three months ended June 30, 1996 compared to $17.7 million for three months ended June 30, 1995. Tire operations segment operating expenses as a percent of revenues were 103.7% for three months ended June 30, 1996 compared to 94.9% for three months ended June 30, 1995. Cost of sales for the tire operations segment as a percent of revenues increased to 78.0% for three months ended June 30, 1996 from 74.2% for three months ended June 30, 1995. The increase resulted primarily from expenses incurred during the conversion and because tire margins are less as a result of increased pricing pressures. Selling, administrative and general expenses for the tire operations segment increased to 25.7% for three months ended June 30, 1996 from 20.7% for three months ended June 30, 1995. The increase resulted from several factors including costs associated with the conversion from Bandag, higher insurance costs, expenses associated with employee medical benefits and legal costs. Also, the coverage of fixed costs at six new locations hasn't reached levels comparable to Treadco's other locations. Treadco converted seven of its production facilities that were under Bandag retread franchises to Oliver Rubber Company ("Oliver") licensed facilities during the first quarter of 1996 and nine facilities in the second quarter. Treadco plans to complete the conversion of its remaining Bandag franchises to the Oliver process by the end of the third quarter. The conversion has resulted in up to two lost production days during each conversion, some short-term operational inefficiencies and time lost as production employees have familiarized themselves with the new equipment. Also, management has been required to spend time with the conversion at the expense of the normal daily operations. Service and Other Segment. The increased operating loss for the other operations segment resulted primarily from amortization of deferred financing costs related to the Company's Credit Agreement. Interest. Interest expense was $7.6 million for three months ended June 30, 1996 compared to $2.5 million for three months ended June 30, 1995 primarily due to a higher level of outstanding debt. The increase in long-term debt consisted primarily of debt incurred or assumed in the acquisition of WorldWay and debt incurred for working capital requirements. Income Taxes. The difference between the effective tax rate for 1996 and the federal statutory rate resulted primarily from state income taxes, amortization of goodwill, minority interest, and other nondeductible expenses (see Note E to the consolidated financial statements). Six Months Ended June 30, 1996 as Compared to the Six Months Ended June 30, 1995 Consolidated revenues of the Company for the six months ended June 30, 1996 were $816 million compared to $623 million for the six months ended June 30, 1995. The Company had an operating loss of $14.7 million for the six months ended June 30, 1996 compared to an operating profit of $19.8 million for the six months ended June 30, 1995. For the six months ended June 30, 1996, the Company had a net loss of $18.3 million, or a loss of $1.05 per common share, compared to net income of $6.8 million, or $.24 per common share for the six months ended June 30, 1995. Revenues for the six months ended June 30, 1996 increased due to the acquisition of WorldWay. Earnings per common share for the six months ended June 30, 1996 and 1995 give consideration to preferred stock dividends of $2.2 million. Average common shares outstanding for both periods were 19.5 million. Outstanding shares for each period do not assume conversion of preferred stock to common shares, because conversion would be anti-dilutive for these periods. Less-Than-Truckload Motor Carrier Operations Segment. The Company's LTL motor carrier operations are conducted primarily through ABF and, effective August 12, 1995, through G.I. Trucking. Revenues from the LTL motor carrier operations segment for the six months ended June 30, 1996 were $594 million, with an operating loss of $16.5 million. For the six months ended June 30, 1996, ABF accounted for 92% of LTL revenue. So far, ABF has been more successful in retaining its January 1, 1996 freight rate increase of 5.8% than it has in previous years which is part of the reason revenue increased 15.1% on a tonnage increase of 9.0%. Following the acquisition of WorldWay, the operations of Carolina Freight Carriers ("Carolina Freight") and Red Arrow Freight Lines ("Red Arrow") were merged into ABF on September 24, 1995. Effective with the merger, ABF inherited Carolina Freight's regional distribution terminal operations, which reconfigured the way freight flowed through ABF's terminal system. This reconfiguration created many operating inefficiencies in ABF's system. Labor dollars as a percent of revenue increased, empty miles increased and weight per trailer decreased, which all had an adverse impact on expenses. During 1996, ABF discontinued twelve of the inherited regional distribution terminal operations. These closings have completed ABF's network reconfiguration, returning ABF to its normal terminal system configuration. Salaries, wages and benefits increased 3.8% annually effective April 1, 1996, pursuant to ABF's collective bargaining agreement with its Teamsters employees. Forwarding Operations Segment. The Company's forwarding operations are conducted primarily through Clipper and effective August 12, 1995, CaroTrans. Comparisons for the six months ended June 30, 1996 were affected by the acquisition of WorldWay in August 1995. Therefore, comparisons of the results of operations for the forwarding operations segment are not meaningful and are not presented. For the six months ended June 30, 1996, the forwarding operations segment had revenues of $86.8 million with an operating profit of $1.9 million. Forwarding operations were affected during the six months ended June 30, 1996 by soft economic conditions. Truckload Motor Carrier Operations Segment. Effective August 12, 1995, with the acquisition of WorldWay, the Company began reporting a new business segment, truckload motor carrier operations. The Company's truckload motor carrier operations are conducted through Cardinal. For the six months ended June 30, 1996, Cardinal had revenues of $36.8 million with an operating profit of $2.9 million. Cardinal's operations were affected during the six months ended June 30, 1996 by soft economic conditions. Logistics Operations Segment. Effective August 12, 1995, with the acquisition of WorldWay, the Company began reporting a new business segment, logistics operations. The Company's logistics operations are conducted through Integrated Distribution, Inc. and effective August 12, 1995, through Complete Logistics and Innovative Logistics, Inc. For the six months ended June 30, 1996, the logistics operations segment had operating revenues of $27.5 million with an operating loss of $771,000. Tire Operations Segment. Treadco's revenues for the six months ended June 30, 1996 decreased 5% to $67.1 million from $70.6 million for the six months ended June 30, 1995. For the six months ended June 30, 1996, "same store" sales decreased 8.2% which was offset in part by a 3.1% increase in "new store" sales. Same store sales include both production locations and sales locations that have been in existence for the entire periods presented. Treadco has seen increased competition as Bandag Incorporated ("Bandag") has granted additional franchises in some locations currently being served by Treadco. The new competition has led to increased pricing pressures in the marketplace. As anticipated, Bandag continues to target Treadco's accounts which has caused difficulty in retaining the national account business and in some cases the business retained is at lower profit margins. Revenues from retreading for six months ended June 30, 1996 decreased 8.3% to $34.3 million from $37.4 million for six months ended June 30, 1995. Revenues from new tire sales decreased 1.2% to $32.8 million for six months ended June 30, 1996 compared to $33.2 million for six months ended June 30, 1995. Tire operations segment operating expenses as a percent of revenues were 104.6% for six months ended June 30, 1996 compared to 95.1% for six months ended June 30, 1995. Cost of sales for the tire operations segment as a percent of revenues increased to 78.4% for six months ended June 30, 1996 from 74.4% for six months ended June 30, 1995. The increase resulted primarily from expenses incurred during the conversion and because tire margins are less as a result of increased pricing pressures (see above). Selling, administrative and general expenses for the tire operations segment increased to 26.0% for six months ended June 30, 1996 from 20.5% for six months ended June 30, 1995. The increase resulted from several factors including costs associated with the conversion from Bandag, higher insurance costs, expenses associated with employee medical benefits and legal costs. Also, the coverage of fixed costs at six new locations hasn't reached levels comparable to Treadco's other locations. Treadco converted seven of its production facilities that were under Bandag retread franchises to Oliver licensed facilities during the first quarter of 1996 and nine facilities in the second quarter. Treadco plans to complete the conversion of its remaining Bandag franchises to the Oliver process by the end of the third quarter. The conversion has resulted in up to two lost production days during each conversion, some short-term operational inefficiencies and time lost as production employees have familiarized themselves with the new equipment. Also, management has been required to spend time with the conversion at the expense of the normal daily operations. Service and Other Segment. The difference in operating income for the other operations segment relates primarily to gains of $2.6 million on the sale of assets offset in part by $1.4 million of amortization of deferred financing costs. The gains principally are recognized on the sale of excess terminal properties which resulted from the ABF/Carolina Freight merger. Interest. Interest expense was $15.4 million for six months ended June 30, 1996 compared to $4.6 million for six months ended June 30, 1995 primarily due to a higher level of outstanding debt. The increase in long-term debt consisted primarily of debt incurred or assumed in the acquisition of WorldWay and debt incurred for working capital requirements. Income Taxes. The difference between the effective tax rate for 1996 and the federal statutory rate resulted primarily from state income taxes, amortization of goodwill, minority interest, and other nondeductible expenses (see Note E to the consolidated financial statements). Liquidity and Capital Resources The ratio of current assets to current liabilities was .97:1 at June 30, 1996 compared to 1.06:1 at December 31, 1995. Net cash provided by operating activities for the six months ended June 30, 1996 was $1.2 million compared to net cash provided of $30.8 million for the six months ended June 30, 1995. The decrease is due primarily to the net loss from operations and reductions in accounts payable and accrued expenses. The Company is in the process of selling excess real estate which resulted from the merger of Carolina Freight and Red Arrow into ABF. So far in 1996, the Company has received net proceeds from the sale of real estate of $26 million and has approximately $6 million in pending sales which are projected to close before the end of 1996. On August 10, 1995 the Company entered into a $350 million credit agreement (the "Credit Agreement") with Societe Generale, Southwest Agency as Managing and Administrative Agent and NationsBank of Texas, N.A., as Documentation Agent, and with 15 other participating banks. The Credit Agreement includes a $75 million term loan and provides for up to $275 million of revolving credit loans (including letters of credit). Term Loan and Revolving Credit advances bear interest at one of the following rates, at the Company's option: (a) Prime Rate advance or (b) Eurodollar Rate advance. A Prime Rate advance bears an interest rate equal to the lesser of (i) the Adjusted Prime Rate plus the Applicable Margin and (ii) the maximum nonusurious interest rate under applicable law. The Adjusted Prime Rate is equal to the greater of the prime rate offered by Societe Generale or the Federal Funds Rate plus 1/2%. The Applicable Margin is determined as a function of the ratio of the Company's consolidated indebtedness to its consolidated earnings before interest, taxes, depreciation and amortization. Eurodollar Rate advances shall bear an interest rate per annum equal to the lesser of (i) the Eurodollar Rate offered by Societe Generale plus the Applicable Margin and (ii) the maximum nonusurious interest rate under applicable law. The Company has paid and will continue to pay certain customary fees for such commitments and advances. At June 30, 1996, the average interest rate on the Credit Agreement was 8%. The Company pays a commitment fee at a rate per annum equal to the Applicable Margin on the unused amount of the Company's revolving credit commitment. There were $186 million of Revolver Advances, $69.5 million of Term Advances and approximately $69 million of letters of credit outstanding at June 30, 1996. Outstanding revolving credit advances may not exceed a borrowing base calculated using the Company's revenue equipment, real property and other equipment, the Treadco common stock owned by the Company and the Company's eligible receivables. The Term Advances are payable in varying installments commencing in November 1996. The Credit Agreement contains various covenants which limit, among other things, indebtedness, distributions, asset sales, restricted payments, investments, loans and advances, as well as requiring the Company to meet certain financial tests. As of June 30, 1996, these covenants have been met. On February 21, 1996, the Company obtained an amendment to the Credit Agreement which revised the agreement so that the Company was in compliance with all covenants. Under the amended Credit Agreement, the Company has pledged substantially all revenue equipment and real property not already pledged under other debt obligations or capital leases. The amendment also revised the maturity schedule of the term loan agreement to revise the loans to be paid off in graduated principal installments through August 1998. The amendment also requires that net proceeds received from certain asset sales be applied against the term loan balance. Also, on February 21, 1996, the Company obtained an additional credit agreement which provides for borrowings of up to $30 million. This agreement bears interest at either an adjusted prime rate plus 2% or a maximum rate as defined in the agreement in the case of prime rate advances, or the Eurodollar rate plus 3% or a maximum rate as defined in the agreement in the case of Eurodollar rate advances. The maturity date of this agreement is June 30, 1997. This agreement contains covenants that are substantially the same as the covenants contained in the primary credit agreement. The Company assumed the Subordinated Debentures of WorldWay which were issued in April 1986. The debentures bear interest at 6.25% per annum, payable semi- annually, on a par value of $50,000,000. The debentures are payable April 15, 2011. The Company may redeem the debentures at 100%. The Company is required to redeem through a mandatory sinking fund commencing before April 15, in each of the years from 1997 to 2010, an amount in cash sufficient to redeem $2,500,000 annually of the aggregate principal amount of the debentures issued. Treadco is a party to a revolving credit facility with Societe Generale (the "Treadco Credit Agreement") providing for borrowings of up to the lesser of $20 million or the applicable borrowing base. Borrowings under the Treadco Credit Agreement are collateralized by accounts receivable and inventory. Borrowings under the agreement bear interest, at Treadco's option, at 3/4% above the bank's LIBOR rate, or at the higher of the bank's prime rate or the "federal funds rate" plus 1/2%. At June 30, 1996, the weighted average interest rate was 6.2%. At June 30, 1996, Treadco had $6 million outstanding under the Treadco Credit Agreement. The Treadco Credit Agreement is payable in September 1998. Treadco pays a commitment fee of 3/8% on the unused amount under the Treadco Credit Agreement. The Treadco Credit Agreement contains various covenants which limit, among other things, dividends, disposition of receivables, indebtedness and investments, as well as requiring Treadco to meet certain financial tests which have been met. Management believes, based upon the Company's current levels of operations and anticipated growth, the Company's cash, capital resources, borrowings available under the Credit Agreement and the Treadco Credit Agreement and cash flow from operations will be sufficient to finance current and future operations and meet all present and future debt service requirements. Seasonality The LTL and truckload motor carrier segment is affected by seasonal fluctuations, which affect tonnage to be transported. Freight shipments, operating costs and earnings are also affected adversely by inclement weather conditions. The third calendar quarter of each year usually has the highest tonnage levels while the first quarter has the lowest. Forwarding operations are similar to the LTL and truckload segments with revenues being weaker in the first quarter and stronger during the months of September and October. Treadco's operations are somewhat seasonal with the last six months of the calendar year generally having the highest levels of sales. PART II. OTHER INFORMATION ARKANSAS BEST CORPORATION ITEM 1. LEGAL PROCEEDINGS. From time to time, the Company is named as a defendant in legal actions, the majority of which arise out of the normal course of its business. The Company is not a party to any pending legal proceeding which the Company's management believes to be material to the financial condition of the Company. The Company maintains liability insurance against risks in excess of retention levels arising out of the normal course of its business (see Note G to the Company's Unaudited Consolidated Financial Statements). ITEM 2. CHANGES IN SECURITIES. None. ITEM 3. DEFAULTS UPON SENIOR SECURITIES. None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. None. ITEM 5. OTHER INFORMATION. None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits. Exhibit 11 - Statement Re: Computation of Earnings Per Share. (b) Reports on Form 8-K. None SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ARKANSAS BEST CORPORATION (Registrant) Date: August 13, 1996 /s/Donald L. Neal ----------------- ------------------------------------ Donald L. Neal - Senior Vice President - Chief Financial Officer, and Principal Accounting Officer EXHIBIT INDEX ARKANSAS BEST CORPORATION The following exhibits are filed with this report. Exhibit No. 11 Statement Re: Computation of Earnings per Share EX-11 2 EXHIBIT 11 STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE ARKANSAS BEST CORPORATION
Three Months Ended Six Months Ended June 30 June 30 1996 1995 1996 1995 ($ thousands, except per share data) Primary: Average shares outstanding 19,512,367 19,513,708 19,514,453 19,513,708 Net effect of dilutive stock options -- Based on the treasury stock method using average market price - 1,424 - 27,060 --------- --------- --------- --------- Average common shares outstanding 19,512,367 19,515,132 19,514,453 19,540,768 ========== ========== ========== ========== Net income (loss) $ (8,786) $ 1,683 $ (18,345) $ 6,825 Less: Preferred stock dividend 1,075 1,075 2,149 2,149 --------- --------- --------- --------- Net income (loss) available for common $ (9,861) $ 608 $ (20,494) $ 4,676 ========== ========== ========== ========== Per common and common equivalent share: Net income (loss) per common share $ (0.51) $ 0.03 $ (1.05) $ 0.24 ========== ========== ========== ========== Fully diluted earnings per common share are not presented, as such calculations would be anti-dilutive.
EX-27 3
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ARKANSAS BEST CORPORATION QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000894405 ARKANSAS BEST CORPORATION 1,000 6-MOS DEC-31-1996 JUN-30-1996 596 0 202,384 12,438 33,622 296,519 620,838 212,762 920,222 304,358 360,521 0 15 195 156,911 920,222 67,118 815,836 52,614 830,661 0 4,114 15,404 (28,999) (10,654) (18,345) 0 0 0 (18,345) (1.05) (1.05)
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