-----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, Hv+1NsPYFf0l+lYNo05Hs4Kv+LIhH6RB1Bhz90jxnYLo1sM40x8mbJQL2HEyafCo FNGuU65q/TKbCe/0Co0+3g== 0000950123-09-024147.txt : 20090722 0000950123-09-024147.hdr.sgml : 20090722 20090722090328 ACCESSION NUMBER: 0000950123-09-024147 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20090722 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20090722 DATE AS OF CHANGE: 20090722 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: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-19969 FILM NUMBER: 09956161 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 8-K 1 d68453e8vk.htm FORM 8-K e8vk
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 22, 2009 (July 22, 2009)
ARKANSAS BEST CORPORATION
(Exact name of registrant as specified in its charter)
         
Delaware   0-19969   71-0673405
         
(State or other jurisdiction of
incorporation or organization
  (Commission
File Number)
  (IRS Employer
Identification No.)
3801 Old Greenwood Road
Fort Smith, Arkansas 72903
(479) 785-6000
 
(Address, including zip code, and telephone number, including area code, of the registrant’s principal executive offices)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions.
o      Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 


TABLE OF CONTENTS

ITEM 2.02 — RESULTS OF OPERATIONS AND FINANCIAL CONDITION
ITEM 9.01 — FINANCIAL STATEMENTS AND EXHIBITS
SIGNATURES
EX-99.1


Table of Contents

ITEM 2.02 — RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On July 22, 2009, Arkansas Best Corporation issued a press release announcing its second quarter results. A copy of the press release is furnished as an exhibit to this Report on Form 8-K.
ITEM 9.01 — FINANCIAL STATEMENTS AND EXHIBITS
99.1   Press release of Arkansas Best Corporation dated July 22, 2009.

 


Table of Contents

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: July 22, 2009  /s/ Judy R. McReynolds    
  Judy R. McReynolds,   
  Senior Vice President, Chief Financial Officer and Treasurer   

 

EX-99.1 2 d68453exv99w1.htm EX-99.1 exv99w1
         
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
ARKANSAS BEST CORPORATION
ANNOUNCES SECOND QUARTER 2009 RESULTS
          (Fort Smith, Arkansas, July 22, 2009) — Arkansas Best Corporation (Nasdaq: ABFS) today announced a second quarter 2009 net loss of $15.4 million, or $0.62 per diluted share, compared to net income of $16.2 million, or $0.63 per diluted share, in the second quarter of 2008.
          “The effects of lower freight levels and a competitive pricing environment that has intensified since the first quarter were the main challenges faced by our company in the second quarter. In addition, our results were affected by unusual increases in nonunion healthcare and pension, workers’ compensation and third-party casualty insurance claims costs versus last year,” said Robert A. Davidson, Arkansas Best President and Chief Executive Officer. “However, despite the continuation of the severe economic recession that is unlike any we have seen before, we remain focused on cost control, managing yields in a difficult environment and maintaining the high level of overall customer service that will ensure our long-term success.”
Arkansas Best Corporation
Second Quarter 2009
    Revenue of $362.6 million, a per day decrease of 26.7% from prior year quarter of $498.5 million
 
    Net loss of $0.62 per diluted share compared to net income of $0.63 per diluted share in the prior year period.
 
    Includes $0.12 per share of additional costs associated with nonunion healthcare and pension, workers’ compensation and third-party casualty insurance claims compared to prior year quarter.

 


 

ABF Freight System, Inc.®
Second Quarter 2009
    Revenue of $343.8 million compared to $479.5 million in 2008, a per-day decrease of 27.7%
 
    Tonnage per day decrease of 17.0% versus 2008
 
    Total billed revenue per hundredweight of $23.81 compared to $27.40, a decrease of 13.1%, that is mainly attributable to the steep decline in fuel surcharge compared to the second quarter of 2008
 
    Operating loss of $26.8 million compared to operating income of $25.5 million in 2008
 
    Operating ratio of 107.8% compared to 94.7% in 2008
 
    Nonunion healthcare and pension, workers’ compensation and third-party casualty insurance claims added 3.0 points to the operating ratio compared to the prior year period
          “ABF continues to manage its network resources, especially labor and equipment, to the level of freight moving throughout its network. As needed, additional reductions in system resources and costs have been made in the last few months,” said Mr. Davidson. “Though success in our business requires us to efficiently manage costs, we do so carefully in order to preserve our ability to meet specific customer requirements and to offer unique value in the marketplace. Our solid financial position provides the necessary flexibility to take a long-term approach to customer relationships, even in the midst of the current, challenging environment.”
          The recessionary economy and lower freight levels have resulted in increased pressure on industry pricing during the second quarter. In every pricing decision, ABF seeks to be reasonably compensated for the high level of service and safe, dependable cargo care it offers. The current economic environment makes that challenging. As it has always done, ABF continues to make pricing decisions on the basis of individual account profitability.
     “We are fortunate to have a solid financial position during this prolonged recessionary period. Our on-going financial strength gives us the foundation to navigate through this difficult time while offering the opportunity to achieve our long-term goals when things finally improve,” said Mr. Davidson. “In the meantime, we will strive to weather this storm while serving our customers with a high level of service that distinguishes us throughout the LTL industry.”

 


 

Conference Call
          Arkansas Best Corporation will host a conference call with company executives to discuss the 2009 second quarter results. The call will be today, Wednesday, July 22, at 11:00 a.m. ET (10:00 a.m. CT). Interested parties are invited to listen by calling (877) 275-1257 or (706) 634-6529 (for international callers). Following the call, a recorded playback will be available through the end of the day on Friday, August 14, 2009. To listen to the playback, dial (800) 642-1687 or (706) 645-9291 (for international callers). The conference call ID for the playback is 18323953. The conference call and playback can also be accessed, through Friday, August 14, 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, current adverse economic conditions; 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 nonunion employee wages and benefits, including changes in required contributions to multiemployer pension plans; governmental regulations and policies; costs of continuing investments in technology; the timing and amount of capital expenditures; the cost, integration and performance of any future acquisitions; competitive initiatives, pricing pressures

 


 

and the effect of volatility in fuel prices and the associated changes in fuel surcharges on securing increases in base freight rates; and 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   Six Months Ended
    June 30   June 30
    2009   2008   2009   2008
            (Unaudited)        
    ($ thousands, except share and per share data)
 
                               
OPERATING REVENUES
  $ 362,635     $ 498,514     $ 702,312     $ 946,025  
 
                               
OPERATING EXPENSES AND COSTS
    389,932       472,832       758,211       907,191  
 
 
                               
OPERATING INCOME (LOSS)
    (27,297 )     25,682       (55,899 )     38,834  
 
                               
OTHER INCOME (EXPENSE)
                               
Interest and dividend income
    803       1,448       1,733       3,267  
Interest expense and other related financing costs
    (344 )     (336 )     (685 )     (675 )
Other, net
    1,313       18       232       (493 )
 
 
    1,772       1,130       1,280       2,099  
 
 
                               
INCOME (LOSS) BEFORE INCOME TAXES
    (25,525 )     26,812       (54,619 )     40,933  
 
                               
FEDERAL AND STATE INCOME TAXES
                               
Current (benefit) provision
    (2,805 )     15,040       (22,213 )     20,241  
Deferred (benefit) provision
    (7,277 )     (4,383 )     1,194       (4,007 )
 
 
    (10,082 )     10,657       (21,019 )     16,234  
 
 
                               
NET INCOME (LOSS)
  $ (15,443 )   $ 16,155     $ (33,600 )   $ 24,699  
 
 
                               
EARNINGS (LOSS) PER SHARE(1)
                               
Basic
  $ (0.62 )   $ 0.63     $ (1.35 )   $ 0.97  
Diluted
    (0.62 )     0.63       (1.35 )     0.96  
 
 
                               
AVERAGE COMMON SHARES OUTSTANDING
                               
Basic
    25,043,815       24,968,217       25,042,874       24,923,105  
Diluted
    25,043,815       25,146,822       25,042,874       25,070,722  
 
 
                               
CASH DIVIDENDS DECLARED AND PAID PER COMMON SHARE
  $ 0.15     $ 0.15     $ 0.30     $ 0.30  
 
(1)   Effective January 1, 2009, the Company adopted FASB Staff Position No. EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities, which required retrospective adjustment of earnings per share for prior periods.

 


 

ARKANSAS BEST CORPORATION
CONSOLIDATED BALANCE SHEETS
 
                 
    June 30   December 31
    2009   2008
    (Unaudited)   Note
    ($ thousands, except share data)
 
               
ASSETS
               
 
               
CURRENT ASSETS
               
Cash and cash equivalents
  $ 62,318     $ 100,880  
Short-term investment securities
    129,049       117,855  
Accounts receivable, less allowances (2009 — $3,676; 2008 — $3,513)
    120,226       111,452  
Other accounts receivable, less allowances (2009 — $978; 2008 — $1,001)
    6,006       6,611  
Prepaid expenses
    9,907       10,670  
Deferred income taxes
    36,967       36,079  
Prepaid and refundable income taxes
    24,214       17,661  
Other
    6,610       6,982  
 
TOTAL CURRENT ASSETS
    395,297       408,190  
 
               
PROPERTY, PLANT AND EQUIPMENT
               
Land and structures
    239,849       235,861  
Revenue equipment
    504,357       514,503  
Service, office and other equipment
    154,412       150,524  
Leasehold improvements
    21,625       21,697  
 
 
    920,243       922,585  
Less allowances for depreciation and amortization
    486,484       473,010  
 
 
    433,759       449,575  
 
               
OTHER ASSETS
    52,843       50,636  
 
               
GOODWILL
    66,530       63,897  
 
 
               
 
  $ 948,429     $ 972,298  
 
 
Note: The balance sheet at December 31, 2008 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
 
                 
    June 30   December 31
    2009   2008
    (Unaudited)   Note
    ($ thousands, except share data)
 
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
 
               
CURRENT LIABILITIES
               
Bank overdraft and drafts payable
  $ 11,953     $ 15,189  
Accounts payable
    63,991       51,646  
Income taxes payable
    164       758  
Accrued expenses
    155,183       147,540  
Current portion of long-term debt
    139       159  
 
TOTAL CURRENT LIABILITIES
    231,430       215,292  
 
               
LONG-TERM DEBT, less current portion
    1,657       1,457  
 
               
PENSION AND POSTRETIREMENT LIABILITIES
    77,966       89,472  
 
               
OTHER LIABILITIES
    18,773       17,314  
 
               
DEFERRED INCOME TAXES
    28,338       24,017  
 
               
STOCKHOLDERS’ EQUITY
               
Common stock, $.01 par value, authorized 70,000,000 shares; issued 2009: 26,722,086 shares; 2008: 26,702,222 shares
    267       267  
Additional paid-in capital
    271,454       268,396  
Retained earnings
    430,020       471,360  
Treasury stock, at cost, 1,677,932 shares
    (57,770 )     (57,770 )
Accumulated other comprehensive loss
    (53,706 )     (57,507 )
 
TOTAL STOCKHOLDERS’ EQUITY
    590,265       624,746  
 
 
               
 
  $ 948,429     $ 972,298  
 
 
Note: The balance sheet at December 31, 2008 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
 
                 
    Six Months Ended
    June 30
    2009   2008
    (Unaudited)
    ($ thousands)
OPERATING ACTIVITIES
               
Net income (loss)
  $ (33,600 )   $ 24,699  
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
               
Depreciation and amortization
    37,916       38,462  
Other amortization
    147       147  
Pension settlement expense
    158       1,093  
Share-based compensation expense
    3,173       3,006  
Provision for losses on accounts receivable
    1,911       656  
Deferred income tax (benefit) provision
    1,194       (4,007 )
Gain on sales of assets
    (961 )     (2,323 )
Excess tax benefits from share-based compensation
          (657 )
Changes in operating assets and liabilities:
               
Receivables
    (7,620 )     (14,726 )
Prepaid expenses
    926       1,236  
Other assets
    534       4,947  
Accounts payable, taxes payable, accrued expenses and other liabilities (1)
    (1,661 )     6,412  
 
NET CASH PROVIDED BY OPERATING ACTIVITIES
    2,117       58,945  
 
 
               
INVESTING ACTIVITIES
               
Purchases of property, plant and equipment, net of capital leases (1)
    (12,730 )     (16,067 )
Proceeds from asset sales
    2,922       12,758  
Purchases of short-term investment securities
    (75,288 )     (19,225 )
Proceeds from sales of short-term investment securities
    64,095       78,604  
Business acquisition, net of cash acquired
    (4,873 )      
Capitalization of internally developed software and other
    (2,621 )     (2,547 )
 
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES
    (28,495 )     53,523  
 
 
               
FINANCING ACTIVITIES
               
Payments on long-term debt
    (1,360 )     (143 )
Net change in bank overdraft
    (3,236 )     3,892  
Payment of common stock dividends
    (7,740 )     (7,649 )
Excess tax benefits from share-based compensation
          657  
Proceeds from the exercise of stock options and other
    152       2,870  
 
NET CASH USED BY FINANCING ACTIVITIES
    (12,184 )     (373 )
 
 
               
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    (38,562 )     112,095  
Cash and cash equivalents at beginning of period
    100,880       93,805  
 
CASH AND CASH EQUIVALENTS AT END OF PERIOD
  $ 62,318     $ 205,900  
 
(1)   Does not include $5.4 million and $7.9 million of equipment which was received but not yet paid for at June 30, 2009 and 2008, respectively.

 


 

ARKANSAS BEST CORPORATION
FINANCIAL STATEMENT OPERATING SEGMENT DATA,
OPERATING RATIOS
 
                                                                 
    Three Months Ended           Six Months Ended        
            June 30                           June 30            
    2009           2008           2009           2008        
    (Unaudited)        
    ($ thousands)        
OPERATING REVENUES
                                                           
ABF Freight System, Inc.(1)
  $ 343,805             $ 479,522             $ 666,918             $ 907,269          
Other revenues and eliminations
    18,830               18,992               35,394               38,756          
 
Total consolidated operating revenues
  $ 362,635             $ 498,514             $ 702,312             $ 946,025          
 
 
                                                               
OPERATING EXPENSES AND COSTS
                                                       
 
                                                               
ABF Freight System, Inc.(1)
                                                               
Salaries, wages and benefits
  $ 245,226       71.3 %   $ 273,792       57.1 %   $ 478,723       71.8 %   $ 531,515       58.6 %
Fuel, supplies and expenses
    52,733       15.3       97,030       20.2       103,261       15.5       178,888       19.7  
Operating taxes and licenses
    10,553       3.1       11,959       2.5       21,067       3.2       23,898       2.6  
Insurance
    6,417       1.9       5,415       1.1       9,920       1.5       10,247       1.1  
Communications and utilities
    3,563       1.0       3,682       0.8       7,534       1.1       7,692       0.8  
Depreciation and amortization
    17,861       5.2       18,461       3.8       36,471       5.5       37,017       4.1  
Rents and purchased transportation
    32,357       9.4       42,448       8.9       60,243       9.0       78,469       8.6  
Gain on sale of property and equipment
    (244 )     (0.1 )     (451 )     (0.1 )     (961 )     (0.1 )     (2,326 )     (0.3 )
Other
    2,161       0.7       1,655       0.4       4,325       0.5       3,458       0.6  
 
 
    370,627       107.8 %     453,991       94.7 %     720,583       108.0 %     868,858       95.8 %
 
 
                                                               
Other expenses and eliminations
    19,305               18,841               37,628               38,333          
 
 
                                                               
Total consolidated operating expenses and costs
  $ 389,932             $ 472,832             $ 758,211             $ 907,191          
 
 
                                                               
OPERATING INCOME (LOSS)
                                                       
ABF Freight System, Inc.(1)
  $ (26,822 )           $ 25,531             $ (53,665 )           $ 38,411          
Other income (loss) and eliminations
    (475 )             151               (2,234 )             423          
 
Total consolidated operating income (loss)
  $ (27,297 )           $ 25,682             $ (55,899 )           $ 38,834          
 
(1)   Includes U.S., Canadian, and Puerto Rican operations of ABF affiliates.

 


 

ABF FREIGHT SYSTEM, INC.
OPERATING STATISTICS
 
                                                 
    Three Months Ended June 30   Six Months Ended June 30
    2009   2008   % Change   2009   2008   % Change
 
                                               
Workdays
    63.5       64.0               126.0       127.5          
 
                                               
Billed Revenue (1) / CWT
  $ 23.81     $ 27.40       (13.1 )%   $ 23.83     $ 26.88       (11.3 )%
 
                                               
Billed Revenue (1) / Shipment
  $ 310.19     $ 367.98       (15.7 )%   $ 307.23     $ 351.30       (12.5 )%
 
                                               
Shipments
    1,114,148       1,311,907       (15.1 )%     2,178,473       2,600,198       (16.2 )%
 
                                               
Tonnage (tons)
    725,835       880,865       (17.6 )%     1,404,532       1,698,996       (17.3 )%
 
                                               
Tons/Day
    11,430       13,764       (17.0 )%     11,147       13,325       (16.4 )%
(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:
  Ms. Judy R. McReynolds, Senior Vice President, Chief Financial Officer and Treasurer
Telephone: (479) 785-6281
 
   
 
  Mr. David Humphrey, Director of Investor Relations
Telephone: (479) 785-6200
END OF RELEASE

 

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