-----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, FrCVHMJixDVgy1Y1JHtk51/OLRO2ktzxJlvAf9+pUkhbq3jvpPMC2YI7NHxTEhhM OHpOzlv+GJt9cS8S1wC9HA== 0000950134-00-004138.txt : 20000511 0000950134-00-004138.hdr.sgml : 20000511 ACCESSION NUMBER: 0000950134-00-004138 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000510 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: SEC FILE NUMBER: 000-19969 FILM NUMBER: 624697 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 FORM 10-Q FOR QUARTER ENDED MARCH 31, 2000 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 March 31, 2000 -------------------------- [ ] 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 jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code No.) Identification No.) 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 April 30, 2000 ----------------------------- ----------------------------- Common Stock, $.01 par value 19,781,133 shares 2 ARKANSAS BEST CORPORATION INDEX
PAGE ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheets - March 31, 2000 and December 31, 1999 ................................................... 3 Consolidated Statements of Operations - For the Three Months Ended March 31, 2000 and 1999...................................... 5 Consolidated Statements of Shareholders' Equity For the Three Months Ended March 31, 2000............................................... 7 Condensed Consolidated Statements of Cash Flows - For the Three Months Ended March 31, 2000 and 1999 ..................................... 8 Notes to Consolidated Financial Statements - March 31, 2000 .............................. 9 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations .................................................... 16 Item 2a. Quantitative and Qualitative Disclosures About Market Risk................................ 23 PART II. OTHER INFORMATION Item 1. Legal Proceedings ........................................................................ 24 Item 2. Changes in Securities .................................................................... 24 Item 3. Defaults Upon Senior Securities .......................................................... 24 Item 4. Submission of Matters to a Vote of Security Holders ...................................... 24 Item 5. Other Information ........................................................................ 24 Item 6. Exhibits and Reports on Form 8-K ......................................................... 24 SIGNATURES ..................................................................................... 25
3 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS ARKANSAS BEST CORPORATION CONSOLIDATED BALANCE SHEETS - -------------------------------------------------------------------------------
MARCH 31 DECEMBER 31 2000 1999 ----------- ----------- (UNAUDITED) NOTE ($ thousands) ASSETS CURRENT ASSETS Cash and cash equivalents ................................. $ 4,232 $ 4,319 Trade receivables, less allowances (2000 -- $5,293,000; 1999 -- $5,775,000) .................. 189,333 187,837 Inventories ............................................... 32,817 33,050 Prepaid expenses .......................................... 9,108 7,428 Deferred income taxes ..................................... 7,149 7,231 Other ..................................................... 3,213 3,234 ----------- ----------- TOTAL CURRENT ASSETS .................................. 245,852 243,099 PROPERTY, PLANT AND EQUIPMENT Land and structures ....................................... 223,863 222,421 Revenue equipment ......................................... 304,871 292,493 Manufacturing equipment ................................... 15,893 15,851 Service, office and other equipment ....................... 84,647 82,508 Leasehold improvements .................................... 11,088 10,520 ----------- ----------- 640,362 623,793 Less allowances for depreciation and amortization ......... 297,035 286,699 ----------- ----------- 343,327 337,094 OTHER ASSETS ................................................. 50,146 42,351 GOODWILL, less amortization (2000 -- $37,378,000; 1999 -- $36,365,000) .................................. 108,373 109,385 ----------- ----------- $ 747,698 $ 731,929 =========== ===========
3 4 ARKANSAS BEST CORPORATION CONSOLIDATED BALANCE SHEETS - CONTINUED - -------------------------------------------------------------------------------
MARCH 31 DECEMBER 31 2000 1999 ----------- ----------- (UNAUDITED) NOTE ($ thousands) LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Bank overdraft and drafts payable ......................... $ 19,522 $ 16,187 Trade accounts payable .................................... 79,225 76,597 Accrued expenses .......................................... 151,123 160,469 Federal and state income taxes ............................ 6,044 8,434 Current portion of long-term debt ......................... 23,204 20,452 ----------- ----------- TOTAL CURRENT LIABILITIES ............................. 279,118 282,139 LONG-TERM DEBT, less current portion ......................... 173,457 173,702 OTHER LIABILITIES ............................................ 35,128 29,845 DEFERRED INCOME TAXES ........................................ 26,735 25,191 SHAREHOLDERS' EQUITY Preferred stock, $.01 par value, authorized 10,000,000 shares; issued and outstanding 1,495,000 shares ................ 15 15 Common stock, $.01 par value, authorized 70,000,000 shares; issued and outstanding 2000: 19,769,333 shares; 1999: 19,752,333 shares ............................... 198 197 Additional paid-in capital ................................ 194,264 194,155 Retained earnings ......................................... 38,783 26,685 Accumulated other comprehensive income .................... - - ----------- ----------- TOTAL SHAREHOLDERS' EQUITY ............................ 233,260 221,052 COMMITMENTS AND CONTINGENCIES ----------- ----------- $ 747,698 $ 731,929 =========== ===========
Note: The balance sheet at December 31, 1999 has been derived from the audited financial statements at the date, but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The accompanying notes are an integral part of the consolidated financial statements. 4 5 ARKANSAS BEST CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS - -------------------------------------------------------------------------------
THREE MONTHS ENDED MARCH 31 2000 1999 ----------- ----------- (UNAUDITED) ($ thousands, except per share data) CONTINUING OPERATIONS: OPERATING REVENUES Transportation operations ..................................... $ 402,244 $ 353,914 Tire operations ............................................... 40,771 40,460 ----------- ----------- 443,015 394,374 ----------- ----------- OPERATING EXPENSES AND COSTS Transportation operations ..................................... 375,773 335,740 Tire operations ............................................... 40,961 40,927 ----------- ----------- 416,734 376,667 ----------- ----------- OPERATING INCOME ................................................. 26,281 17,707 OTHER INCOME (EXPENSE) Net gains on sales of property and non-revenue equipment ...... 1,317 496 Interest expense .............................................. (4,521) (4,543) Minority interest in Treadco, Inc. ............................ - 245 Other, net .................................................... (522) (1,019) ----------- ----------- (3,726) (4,821) ----------- ----------- INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES ......................................... 22,555 12,886 FEDERAL AND STATE INCOME TAXES (CREDIT) Current ....................................................... 7,757 6,688 Deferred ...................................................... 1,626 (1,280) ----------- ----------- 9,383 5,408 ----------- ----------- INCOME FROM CONTINUING OPERATIONS ................................ 13,172 7,478 DISCONTINUED OPERATIONS: Loss from discontinued operations (net of tax benefits of $394 for the three months ended March 31, 1999) .................. - (664) ----------- ----------- LOSS FROM DISCONTINUED OPERATIONS ................................ - (664) ----------- ----------- NET INCOME ....................................................... 13,172 6,814 Preferred stock dividends ..................................... (1,074) (1,075) ----------- ----------- NET INCOME FOR COMMON SHAREHOLDERS ............................... $ 12,098 $ 5,739 =========== ===========
5 6 ARKANSAS BEST CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED - -------------------------------------------------------------------------------
THREE MONTHS ENDED MARCH 31 2000 1999 ----------- ----------- (UNAUDITED) ($ thousands, except per share data) NET INCOME (LOSS) PER COMMON SHARE BASIC: Continuing operations(1) ......................................... $ 0.61 $ 0.32 Discontinued operations .......................................... - (0.03) ----------- ----------- NET INCOME PER SHARE(1) .......................................... $ 0.61 $ 0.29 ----------- ----------- AVERAGE COMMON SHARES OUTSTANDING (BASIC) .............................................. 19,763,133 19,613,653 =========== =========== DILUTED: Continuing operations(2) ......................................... $ 0.55 $ 0.32 Discontinued operations .......................................... - (0.03) ----------- ----------- NET INCOME PER SHARE(2) .......................................... $ 0.55 $ 0.29 ----------- ----------- AVERAGE COMMON SHARES OUTSTANDING (DILUTED) ............................................ 24,088,802 23,582,137 =========== =========== CASH DIVIDENDS PAID PER COMMON SHARE ............................. $ - $ - =========== ===========
(1) Gives consideration to preferred stock dividends of $1.1 million per quarter. (2) For the three months ended March 31, 2000 and 1999, conversion of preferred shares into common is assumed. 6 7 ARKANSAS BEST CORPORATION CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - -------------------------------------------------------------------------------
ACCUMULATED ADDITIONAL OTHER PREFERRED COMMON PAID-IN RETAINED COMPREHENSIVE TOTAL STOCK STOCK CAPITAL EARNINGS INCOME EQUITY ----------- ----------- ----------- ----------- ------------- ----------- (UNAUDITED) ($ thousands) BALANCES AT JANUARY 1, 2000 ......... $ 15 $ 197 $ 194,155 $ 26,685 $ - $ 221,052 Net income .......................... - - - 13,172 - 13,172 Issuance of common stock ............ - 1 109 - - 110 Dividends paid on preferred stock ... - - - (1,074) - (1,074) ----------- ----------- ----------- ----------- ----------- ----------- BALANCES AT MARCH 31, 2000 .......... $ 15 $ 198 $ 194,264 $ 38,783 $ - $ 233,260 =========== =========== =========== =========== =========== ===========
7 8 ARKANSAS BEST CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - -------------------------------------------------------------------------------
THREE MONTHS ENDED MARCH 31 2000 1999 ----------- ----------- (UNAUDITED) ($ thousands) OPERATING ACTIVITIES Net cash provided by operating activities ..................... $ 11,992 $ 22,548 INVESTING ACTIVITIES Purchases of property, plant and equipment, less capitalized leases ..................................... (19,846) (10,843) Proceeds from asset sales and other ........................... 2,909 3,399 ----------- ----------- NET CASH USED BY INVESTING ACTIVITIES ............................ (16,937) (7,444) ----------- ----------- FINANCING ACTIVITIES Deferred financing costs and expenses ......................... - (125) Borrowings under revolving credit facilities .................. 74,600 118,450 Payments under revolving credit facilities .................... (64,200) (122,000) Payments on long-term debt .................................... (3,143) (2,959) Dividends paid ................................................ (1,074) (1,075) Net increase (decrease) in bank overdraft ..................... 3,346 (7,674) Retirement of bonds ........................................... (4,781) - Other, net .................................................... 110 34 ----------- ----------- NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES ................. 4,858 (15,349) ----------- ----------- NET DECREASE IN CASH AND CASH EQUIVALENTS ........................ (87) (245) Cash and cash equivalents at beginning of period .............. 4,319 4,543 ----------- ----------- CASH AND CASH EQUIVALENTS AT END OF PERIOD ....................... $ 4,232 $ 4,298 =========== ===========
8 9 ARKANSAS BEST CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) MARCH 31, 2000 - ------------------------------------------------------------------------------- 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 transportation operations, intermodal transportation operations and truck tire retreading and new tire sales. Principal subsidiaries are ABF Freight System, Inc., ("ABF"); Treadco, Inc. ("Treadco"); Clipper Exxpress Company and related companies ("Clipper"); G.I. Trucking Company ("G.I. Trucking"); and FleetNet America, Inc. Approximately 79% of ABF's employees are covered under a five-year collective bargaining agreement, which began on April 1, 1998, with the International Brotherhood of Teamsters ("IBT"). NOTE B - FINANCIAL STATEMENT PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial statements 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 months ended March 31, 2000 are not necessarily indicative of the results that may be expected for the year ending December 31, 2000. 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, 1999. The difference between the effective tax rate for the three months ended March 31, 2000 and the federal statutory rate resulted from state income taxes, amortization of nondeductible goodwill and other nondeductible expenses. NOTE C - DISCONTINUED OPERATIONS At December 31, 1998, the Company was engaged in international ocean freight services through its subsidiary CaroTrans International, Inc. ("Clipper International"), a non-vessel operating common carrier (N.V.O.C.C.). On February 28, 1999, the Company completed a formal plan to exit its international ocean freight N.V.O.C.C. services by disposing of the business and assets of Clipper International. On April 17, 1999, the Company closed the sale of the business and certain assets of Clipper International, including the trade name "CaroTrans International, Inc." Remaining assets are being liquidated. The aggregate of the selling price of these assets and the estimated liquidation value of the retained Clipper International assets aggregated approximately $5.0 million which was approximately equal to the Company's net investment in the related assets. 9 10 ARKANSAS BEST CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - continued - ------------------------------------------------------------------------------- Results of operations of Clipper International have been reported as discontinued operations, and the statements of operations for all periods have been restated to remove revenue and expenses of this segment. Results of Clipper International included in discontinued operations are summarized as follows:
THREE MONTHS ENDED MARCH 31 MARCH 31 2000 1999 ----------- ------------ ($ thousands) Revenues ......................................................... $ - $ 6,777 Operating loss ................................................... - (1,114) Pre-tax loss ..................................................... - (1,058)
NOTE D - INVENTORIES
MARCH 31 DECEMBER 31 2000 1999 ----------- ----------- ($ thousands) Finished goods ................................................... $ 26,099 $ 26,253 Materials ........................................................ 3,800 4,042 Repair parts, supplies and other ................................. 2,918 2,755 ----------- ----------- $ 32,817 $ 33,050 =========== ===========
NOTE E - LEGAL PROCEEDINGS AND ENVIRONMENTAL MATTERS Various legal actions, the majority of which arise in the normal course of business, are pending. None of these legal actions are expected to have a material adverse effect on the Company's financial condition, cash flows or results of operations. 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 83 underground tanks located in 27 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. 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 $300,000 over the last ten 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 March 31, 2000, the Company has accrued approximately $2.7 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. Accruals for environmental liability are included in the balance sheet as accrued expenses. 10 11 ARKANSAS BEST CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - continued - ------------------------------------------------------------------------------- NOTE F - RECENT ACCOUNTING PRONOUNCEMENTS In June 1998, the FASB issued Statement No. 133, Accounting for Derivative Instruments and Hedging Activities. The Statement addresses the accounting for derivative instruments, including certain derivative instruments embedded in other contracts and hedging activities. The Statement will require the Company to recognize all derivatives on the balance sheet at fair value. Derivatives that are not hedges must be adjusted to fair value through income. If a derivative is a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will either be offset against the change in fair value of the hedged asset, liability, or firm commitment through earnings, or recognized in other comprehensive income until the hedged item is recognized in earnings. In June 1999, the FASB issued Statement No. 137, which deferred for one year the implementation date of FASB Statement No. 133. As a result, Statement No. 133 is effective for the Company in 2001. The Company is evaluating the impact the Statement will have on its financial statements and related disclosures. On December 3, 1999, the Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin ("SAB") No. 101, Revenue Recognition in Financial Statements, which among other guidance clarifies certain conditions to be met in order to recognize revenue. On March 24, 2000, the SEC issued SAB 101A, Amendment: Revenue Recognition in Financial Statements, which delayed the effective date of SAB 101 for registrants with fiscal years beginning between December 16, 1999 and March 15, 2000. SAB 101 is effective for the Company in the second quarter of 2000. The Company is evaluating SAB 101's impact on its financial statements and related disclosures. In March 2000, the Financial Accounting Standards Board ("FASB") issued FASB Interpretation No. 44 ("FIN 44"), Accounting of Certain Transactions involving Stock Compensation, an interpretation of Accounting Principles Board Opinion No. 25. FIN 44 clarifies the application of Opinion 25 for (a) the definition of an employee for purposes of applying Opinion 25, (b) the criteria for determining whether a plan qualifies as a noncompensatory plan, (c) the accounting consequence of various modifications to the terms of a previously fixed stock option or award, and (d) the accounting for an exchange of stock compensation awards in a business combination. FIN 44 is effective July 1, 2000, but certain conclusions cover specific events that occur after either December 15, 1998, or January 12, 2000. Management believes that FIN 44 will not have a material effect on the financial position or results of operations of the Company. 11 12 ARKANSAS BEST CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - continued - ------------------------------------------------------------------------------- NOTE G - EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share:
THREE MONTHS ENDED MARCH 31 2000 1999 ----------- ----------- ($ thousands, except per share data) NUMERATOR: Numerator for basic earnings per share -- Net income ................................................. $ 13,172 $ 6,814 Preferred stock dividends .................................. (1,074) (1,075) ----------- ----------- Numerator for basic earnings per share -- Net income available to common shareholders ........................................ 12,098 5,739 Effect of dilutive securities(1) ........................... 1,074 1,075 ----------- ----------- Numerator for diluted earnings per share -- Net income available to common shareholders ..................................... $ 13,172 $ 6,814 =========== =========== DENOMINATOR: Denominator for basic earnings per share -- weighted-average shares ....................... 19,763,133 19,613,653 Effect of dilutive securities: Conversion of preferred stock .............................. 3,796,852 3,796,852 Employee stock options ..................................... 528,817 171,632 ----------- ----------- Denominator for diluted earnings per share -- adjusted weighted-average shares and assumed conversion .............................. 24,088,802 23,582,137 =========== =========== NET INCOME (LOSS) PER COMMON SHARE BASIC: Continuing operations ......................................... $ 0.61 $ 0.32 Discontinued operations ....................................... - (0.03) ----------- ----------- NET INCOME PER SHARE ............................................. $ 0.61 $ 0.29 =========== =========== AVERAGE COMMON SHARES OUTSTANDING (BASIC): .......................................... 19,763,133 19,613,653 =========== =========== DILUTED: Continuing operations ......................................... $ 0.55 $ 0.32 Discontinued operations ....................................... - (0.03) ----------- ----------- NET INCOME PER SHARE ............................................. $ 0.55 $ 0.29 =========== =========== AVERAGE COMMON SHARES OUTSTANDING (DILUTED): ........................................ 24,088,802 23,582,137 =========== =========== CASH DIVIDENDS PAID PER COMMON SHARE .............................................. $ - $ - =========== ===========
(1) For the three months ended March 31, 2000 and 1999, conversion of preferred shares into common is assumed. 12 13 ARKANSAS BEST CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - continued - ------------------------------------------------------------------------------- NOTE H - OPERATING SEGMENT DATA The Company used the "management approach" to determine its reportable operating segments as well as to determine the basis of reporting the operating segment information. The management approach focuses on financial information that the Company's decision makers use to make decisions about operating matters. Management uses operating revenues, operating expense categories, operating ratios, operating income, and key operating statistics to evaluate performance and allocate resources to the Company's operating segments. During the periods being reported on, the Company operated in four defined reportable operating segments: 1) ABF; 2) G.I. Trucking; 3) Clipper; and 4) Treadco. Results of operations for Clipper International, previously reflected as a reportable segment, have been reported as discontinued operations for the three months ended March 31, 1999. The Company eliminates intercompany transactions in consolidation. However, the information used by the Company's management with respect to its reportable segments is before intersegment eliminations of revenues and expenses. Intersegment revenues and expenses are not significant. Further classifications of operations or revenues by geographic location beyond the descriptions provided above are impractical, and are, therefore, not provided. The Company's foreign operations are not significant. No material changes have occurred in the total assets for any reportable operating segment since December 31, 1999. 13 14 ARKANSAS BEST CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - continued - -------------------------------------------------------------------------------- The following tables reflect reportable operating segment information for the Company, as well as a reconciliation of reportable segment information to the Company's consolidated operating revenues, operating expenses and operating income.
THREE MONTHS ENDED MARCH 31 2000 1999 ----------- ----------- ($ thousands) OPERATING REVENUES ABF Freight System, Inc. .................................. $ 331,836 $ 295,452 G.I. Trucking Company ..................................... 37,701 31,534 Clipper ................................................... 29,631 24,465 Treadco, Inc. ............................................. 41,264 40,944 Other revenues and eliminations ........................... 2,583 1,979 ----------- ----------- Total consolidated operating revenues ................... $ 443,015 $ 394,374 =========== =========== OPERATING EXPENSES AND COSTS ABF FREIGHT SYSTEM, INC Salaries and wages ........................................ $ 208,992 $ 196,716 Supplies and expenses ..................................... 43,356 31,026 Operating taxes and licenses .............................. 10,266 9,607 Insurance ................................................. 4,870 5,017 Communications and utilities .............................. 4,021 3,661 Depreciation and amortization ............................. 8,235 6,988 Rents and purchased transportation ........................ 23,966 22,441 Other ..................................................... 940 1,362 (Gain) on sale of revenue equipment ....................... (51) (39) ----------- ----------- 304,595 276,779 ----------- ----------- G.I. TRUCKING COMPANY Salaries and wages ........................................ 18,191 14,784 Supplies and expenses ..................................... 3,499 2,544 Operating taxes and licenses .............................. 855 761 Insurance ................................................. 853 1,031 Communications and utilities .............................. 502 428 Depreciation and amortization ............................. 1,067 741 Rents and purchased transportation ........................ 11,786 9,790 Other ..................................................... 941 898 (Gain) on sale of revenue equipment ....................... (1) (7) ----------- ----------- 37,693 30,970 ----------- ----------- CLIPPER Cost of services .......................................... 25,808 21,491 Selling, administrative and general ....................... 3,796 3,332 (Gain) on sale of revenue equipment ....................... (3) (31) ----------- ----------- $ 29,601 $ 24,792 ----------- -----------
14 15 ARKANSAS BEST CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - continued - --------------------------------------------------------------------------------
THREE MONTHS ENDED MARCH 31 2000 1999 ----------- ----------- ($ thousands) TREADCO, INC. Cost of sales ............................................. $ 27,904 $ 28,908 Selling, administrative and general ....................... 13,357 12,291 ----------- ----------- 41,261 41,199 ----------- ----------- Other expenses and eliminations .............................. 3,584 2,927 ----------- ----------- Total consolidated operating expenses and costs ........... $ 416,734 $ 376,667 =========== =========== OPERATING INCOME (LOSS) ABF Freight System, Inc. ..................................... $ 27,241 $ 18,673 G.I. Trucking Company ........................................ 8 564 Clipper ...................................................... 30 (327) Treadco, Inc. ................................................ 3 (255) Other income (loss) and eliminations ......................... (1,001) (948) ----------- ----------- Total consolidated operating income ....................... $ 26,281 $ 17,707 =========== ===========
15 16 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED) - -------------------------------------------------------------------------------- OPERATING SEGMENT DATA The following table sets forth, for the periods indicated, a summary of the Company's operating expenses by segment as a percentage of revenue for the applicable segment.
THREE MONTHS ENDED MARCH 31 2000 1999 ----------- ----------- OPERATING EXPENSES AND COSTS ABF FREIGHT SYSTEM, INC. Salaries and wages ........................................ 63.0% 66.6% Supplies and expenses ..................................... 13.1 10.5 Operating taxes and licenses .............................. 3.1 3.3 Insurance ................................................. 1.5 1.7 Communications and utilities .............................. 1.2 1.2 Depreciation and amortization ............................. 2.5 2.4 Rents and purchased transportation ........................ 7.2 7.6 Other ..................................................... 0.2 0.4 ----------- ----------- 91.8% 93.7% ----------- ----------- G.I. TRUCKING COMPANY Salaries and wages ........................................ 48.3% 46.9% Supplies and expenses ..................................... 9.3 8.1 Operating taxes and licenses .............................. 2.3 2.4 Insurance ................................................. 2.3 3.3 Communications and utilities .............................. 1.3 1.4 Depreciation and amortization ............................. 2.8 2.3 Rents and purchased transportation ........................ 31.3 31.0 Other ..................................................... 2.4 2.8 ----------- ----------- 100.0% 98.2% ----------- ----------- CLIPPER Cost of services .......................................... 87.1% 87.8% Selling, administrative and general ....................... 12.8 13.6 (Gain) on sale of revenue equipment ....................... - (0.1) ----------- ----------- 99.9% 101.3% ----------- ----------- TREADCO, INC. Cost of sales ............................................. 67.6% 70.6% Selling, administrative and general ....................... 32.4 30.0 ----------- ----------- 100.0% 100.6% ----------- ----------- OPERATING INCOME ABF Freight System, Inc. ..................................... 8.2% 6.3 % G. I. Trucking Company ....................................... 0.0 1.8 Clipper ...................................................... 0.1 (1.3) Treadco, Inc. ................................................ 0.0 (0.6)
16 17 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Unaudited) - continued - -------------------------------------------------------------------------------- RESULTS OF OPERATIONS THREE MONTHS ENDED MARCH 31, 2000, COMPARED TO THREE MONTHS ENDED MARCH 31, 1999 Consolidated revenues from continuing operations of the Company for the three months ended March 31, 2000 were $443.0 million compared to $394.4 million for the first quarter 1999, representing an increase of 12.3% due primarily to increases in revenues for ABF, G.I. Trucking and Clipper. The Company's operating income from continuing operations increased 48.4% to $26.3 million for first quarter 2000 from $17.7 million for first quarter 1999. Increases in operating income from continuing operations are attributable to improved operations at ABF, Clipper and Treadco, offset in part by decreases in operating income from first quarter 1999 for G.I. Trucking. Income from continuing operations for the three months ended March 31, 2000 was $13.2 million, or $0.55 per common share (diluted), compared to $7.5 million, or $0.32 per common share (diluted), for first quarter 1999. The improvement in income from continuing operations for first quarter 2000, as compared to first quarter 1999, reflects primarily the improvements in operating income. ABF FREIGHT SYSTEM, INC. Effective January 1, 1999 and September 13, 1999, ABF implemented overall rate increases of 5.5% and 5.1%, respectively. ABF did not implement a rate increase on January 1, 2000. Revenues for the three months ended March 31, 2000 increased 12.3% to $331.8 million from $295.5 million in the first quarter of 1999. ABF generated operating income of $27.2 million during the first quarter of 2000, compared to $18.7 million during the same period in 1999. ABF's increase in revenue is due to an increase in LTL revenue per hundredweight and an increase in LTL tonnage. LTL revenue per hundredweight increased 5.3% to $20.20 for the three months ended March 31, 2000 compared to $19.18 in the first quarter of 1999, reflecting a continuing favorable pricing environment. ABF's LTL tonnage increased 6.8% for the three months ended March 31, 2000, compared to the same period in 1999. There were 65 workdays in the first quarter of 2000 and 63 workdays in the first quarter of 1999. ABF's LTL tonnage increased 3.5% on a per-day basis. ABF implemented a fuel surcharge on July 7, 1999, based on the increase in diesel fuel prices compared to an index price. The fuel surcharge in effect during the first quarter of 2000 ranged from 2.0% to 4.0% of revenue. There was no fuel surcharge in effect during the first quarter of 1999. ABF's operating ratio improved to 91.8% for the three months ended March 31, 2000 from 93.7% during the same period in 1999, as a result of the revenue yield improvements and increases in tonnage previously described and as a result of changes in certain operating expense categories as follows: Salaries and wages expense decreased as a percent of revenue by 3.6% for the three months ended March 31, 2000 compared to the same period in 1999. The decrease is due in part to lower linehaul and dock labor costs due to retirements and a lower effective wage rate associated with more new hires, offset in part by an increase in incentive pay amounts. Wage rates for new hires increase to full-scale levels over a two-year period. The improvement is also due, in part, to favorable claims experience for workers' compensation. Supplies and expenses increased 2.6% as a percent of revenue for the three months ended March 31, 2000, compared to the same period in 1999. This change is due primarily to higher diesel fuel prices, which increased 103.4% on an average price-per-gallon basis when first quarter 2000 is compared to first quarter 1999. The previously mentioned fuel surcharge on revenue is intended to offset the fuel cost increase. In addition, trailer repair costs were higher due to ongoing trailer refurbishing and the installation of conspicuity tape to road and 17 18 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Unaudited) - continued - -------------------------------------------------------------------------------- city trailers, in accordance with federal regulations. Such regulations require that the installation process be complete by June 1, 2001. As of March 31, 2000, the Company had completed the installation on approximately 91% of all road trailers and city trailers. Operating taxes and licenses decreased 0.2% as a percent of revenue for the three months ended March 31, 2000, compared to the same period in 1999 due in part to a fuel marker fee refund received in the first quarter of 2000 from the State of Alabama. Insurance expense decreased 0.2% as a percent of revenue for the three months ended March 31, 2000, compared to the same period in 1999. This improvement was due primarily to favorable cargo claims experience. Rents and purchased transportation expense decreased 0.4% as a percent of revenue for the three months ended March 31, 2000, compared to the same period in 1999, due primarily to the disposal of tractors under operating leases. Late in the first quarter 2000, ABF began purchasing replacement road tractors. In addition, total rail costs, as a percent of revenue, declined as a result of a decline in rail utilization for the three months ended March 31, 2000 to 16.2% of total miles from 16.5% during the same period in 1999. G.I. TRUCKING COMPANY Effective October 1, 1999, G.I. Trucking implemented a general rate increase of 5.5%. G.I. Trucking revenues increased 19.6% to $37.7 million for the three months ended March 31, 2000 from $31.5 million during the same period in 1999. The revenue increase resulted from an increase in G.I. Trucking's tonnage of 17.7% for the three months ended March 31, 2000, compared to the same period in 1999. There were 65 workdays in the first quarter of 2000 and 63 workdays in the first quarter of 1999. G.I. Trucking's LTL tonnage increased 14.1% on a per-day basis. In addition, revenue per hundredweight increased 1.6% to $10.89 in the first quarter of 2000 from $10.73 in the first quarter of 1999. During the early part of first quarter 2000, G.I. Trucking expanded its operational capabilities in the states of Texas, New Mexico, Oklahoma, Kansas and parts of Missouri, in preparation for adding new business from an existing carrier partner. This business began February 1 and steadily grew through March 2000. In addition, G.I. Trucking increased its sales management and sales staff throughout its system by nearly 50% over 1999 levels. G.I. Trucking implemented a fuel surcharge during the last week of August 1999, based upon a West Coast average fuel index. The fuel surcharge in effect during the first quarter of 2000 ranged from 2.6% to 4.6% of revenue. There was no fuel surcharge in effect during the first quarter of 1999. G.I. Trucking's operating ratio increased to 100.0% for the three months ended March 31, 2000 from 98.2% during the same period in 1999. G.I. Trucking's operating ratio was negatively impacted by start-up costs associated with the expansion described above. In addition, the increase in the operating ratio results from changes in certain operating expenses as follows: Salaries and wages expense increased 1.4% as a percent of revenue during the three months ended March 31, 2000, compared to the same period in 1999. The increase is due primarily to unfavorable claims experience for workers' compensation and increased salaries and benefits related to the addition of sales staff and the expansion described above, offset, in part, by lower pension costs. Supplies and expenses increased 1.2% as a percent of revenue for the three months ended March 31, 2000, compared to the same period in 1999. The increase is due primarily to higher fuel costs, which increased in total 18 19 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Unaudited) - continued - -------------------------------------------------------------------------------- dollars by 127.2% when the first quarter of 2000 is compared to the first quarter of 1999. G.I. Trucking's fuel surcharge on revenue is intended to offset the fuel cost increase. Insurance expense decreased 1.0% as a percent of revenue for the three months ended March 31, 2000, compared to the same period in 1999. This decrease is due to favorable claims experience for bodily injury and property damage and cargo claims during the first quarter of 2000, as compared to the first quarter 1999. Depreciation and amortization increased 0.5% as a percent of revenue for the three months ended March 31, 2000, compared to the same period in 1999, due primarily to G.I. Trucking's increase in fleet size when the first quarter of 2000 is compared to the first quarter of 1999. Rents and purchased transportation expenses increased 0.3% as a percent of revenue for the three months ended March 31, 2000 as compared to the same period in 1999. This increase is due primarily to an increase in purchased transportation costs resulting from higher fuel costs passed through from purchased transportation providers and additional linehaul miles run in order to meet customer service needs. The previously mentioned fuel surcharge is intended to offset the fuel increase included in purchased transportation costs. This increase is offset in part by a decline in terminal rent costs as a percent of revenue. This decline resulted from higher revenue levels and the fact that terminal rents are primarily fixed in nature. CLIPPER Revenues for Clipper were $29.6 million for the three months ended March 31, 2000, representing an increase of 21.1% from first quarter 1999 revenues of $24.5 million. Clipper continued its fourth quarter 1999 trend of revenue growth with LTL shipments increasing 5.1% for the first quarter of 2000, compared to the same period in 1999. LTL revenue per hundredweight increased 0.6% to $19.08 from $18.96 in the first quarter of 1999. Intermodal shipments increased 1.3% for the three months ended March 31, 2000 compared to the same period in 1999. Intermodal revenue per shipment for the first quarter 2000 increased 15.0% from the same period in 1999. Clipper's operating ratio improved to 99.9% for the three months ended March 31, 2000 from 101.3% during the same period in 1999, primarily as a result of volume and margin improvements on its intermodal and produce shipments. Clipper's margins improved, in part, as a result of a higher level of rail utilization for the first quarter of 2000. Clipper's rail utilization in the first quarter of 2000 was 63.5% of total miles versus 51.9% for the first quarter of 1999. Rail costs per mile for Clipper are less expensive than over-the-road costs per mile. In addition, selling, administrative and general costs declined 0.8% as a percent of revenue as a result of cost reductions implemented because of lower revenues in previous quarters. TREADCO, INC. Revenues for Treadco increased 0.8% to $41.3 million for the three months ended March 31, 2000, compared to $40.9 million for the same period in 1999. For the three months ended March 31, 2000, "same store" sales increased 0.3% compared to the three months ended March 31, 1999. "New store" sales accounted for 0.5% of the increase from the three months ended March 31, 1999. "Same store" sales include locations that have been in existence for the entire periods presented. "New store" sales resulted from the addition of a new sales-only location. Revenues from retreading for the three months ended March 31, 2000 were $15.9 million, representing a decrease of 1.4% from $16.1 million for the same period in 1999, due to a decrease in units sold of approximately 2.9% from the same period in 1999. This decrease was offset, in part, by an increase in the average sales price per unit of approximately 1.5% from the same period in 1999. Declines in retread units sold 19 20 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Unaudited) - continued - -------------------------------------------------------------------------------- resulted from less customer demand and a more competitive marketplace. Rising fuel costs have had a negative impact on customer demand during the quarter. Revenues from new tires decreased 0.5% to $20.1 million for the three months ended March 31, 2000 from $20.3 million during the same period in 1999, due primarily to a change in the mix of new tires sold. Units sold increased 2.0% from the three months ended March 31, 1999, due to an increase in new tires sold on national accounts which are sold on a commission basis. Commissions received from new tire manufacturers for new tires sold on national accounts were lower during the three months ended March 31, 2000 compared to the same period in 1999 resulting in a 2.5% decline in the sales price per new tire unit sold. Service revenues for the three months ended March 31, 2000 increased 14.4% to $5.2 million from $4.6 million for the three months ended March 31, 1999. Treadco continues to emphasize service by adding service equipment and personnel at its locations. Treadco's operating ratio improved to 100.0% during the three months ended March 31, 2000, from 100.6% during the same period in 1999. Improvements in Treadco's operating ratio resulted from improvements in retread, new tire and service margins which are reflected in cost of sales as a 3.0% of revenue improvement, offset by an increase in selling, administrative and general expenses of 2.4% of revenue. Selling, administrative and general expenses increased primarily as a result of higher salaries and wages due to increased salesmen's commissions and increased service and inventory control personnel. In addition, selling, administrative and general costs were adversely impacted by increased bad debt expense and higher fuel costs, which increased truck expense. INCOME TAXES The difference between the effective tax rate for the three months ended March 31, 2000 and the federal statutory rate resulted from state income taxes, amortization of nondeductible goodwill and other nondeductible expenses. OTHER ASSETS Other assets increased $7.8 million from December 31, 1999 to March 31, 2000, due primarily to incentive pay deferrals and matching contributions to the Company's Voluntary Savings Plan assets, which are held in a trust account. ACCRUED EXPENSES Accrued expenses decreased $9.3 million from December 31, 1999 to March 31, 2000, due primarily to the payment of accrued corporate and ABF incentive amounts in January 2000. OTHER LIABILITIES Other liabilities increased $5.3 million from December 31, 1999 to March 31, 2000, due primarily to $4.9 million in salary deferrals and matching contributions to the Company's Voluntary Savings Plan. 20 21 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Unaudited) - continued - -------------------------------------------------------------------------------- LIQUIDITY AND CAPITAL RESOURCES Net income plus depreciation and amortization was $26.6 million for the three months ended March 31, 2000 compared to $18.6 million for the same period in 1999. Working capital changes for the first quarter of 2000 resulted in a decrease in cash provided by operations of $14.6 million compared to an increase in cash provided by operations from working capital changes of $5.3 million in the first quarter of 1999. This decrease is due primarily to the payment of accrued corporate and ABF incentive amounts in January 2000. During the first quarter of 2000, cash provided by operations, proceeds from assets sales of $3.5 million and borrowings were used to purchase revenue equipment and other property and equipment in the amount of $19.8 million. During the first quarter of 1999, cash provided by operations and proceeds from the sale of assets of $3.8 million were used to purchase revenue equipment and other assets in the amount of $11.0 million and to pay down the Company's debt. The Company is party to a $250 million credit agreement (the "Credit Agreement") with Societe Generale as Administrative Agent and with Bank of America National Trust and Savings Association and Wells Fargo Bank (Texas), N.A., as Co-Documentation Agents. The Credit Agreement provides for up to $250 million of revolving credit loans (including letters of credit) and extends to June 2003. At March 31, 2000, there were $111.7 million of Revolver Advances and approximately $22.5 million of letters of credit outstanding. At March 31, 2000, the Company had approximately $115.8 million of borrowing availability under the Credit Agreement. The Credit Agreement contains various covenants, which limit, among other things, indebtedness, distributions, and disposition of assets, and require the Company to meet certain quarterly financial ratio tests. As of March 31, 2000, the Company was in compliance with the covenants. The Company is party to an interest rate swap on a notional amount of $110.0 million. The purpose of the swap is to limit the Company's exposure to increases in interest rates on $110.0 million of bank borrowings over the seven-year term of the swap. The interest rate under the swap is fixed at 5.845% plus the Credit Agreement margin, which at March 31, 2000 was 0.40%. During 1999, the Company entered into $26.1 million in capital lease obligations for the purchase of revenue equipment. The Company has not entered into any capital lease obligations in 2000. In 2000 the Company forecasts total spending of $85.0 to $95.0 million for capital expenditures net of proceeds from equipment sales. Of the $85.0 to $95.0 million, ABF is budgeted for $63.0 to $73.0 million to be used primarily for revenue equipment and facilities. Treadco is budgeted for approximately $4.0 million of expenditures to be used primarily for retreading and service equipment and facilities and G.I. Trucking is budgeted for approximately $10.0 million of expenditures to be used primarily for revenue equipment. Clipper is budgeted for approximately $4.0 million of expenditures to be used primarily for revenue equipment. For the year 2000 the Company forecasts total revenues of approximately $1.9 billion. Included in the $1.9 billion are forecasted revenues for ABF of approximately $1.4 billion, G.I. Trucking of approximately $160.0 million, Clipper of approximately $131.0 million and Treadco of approximately $195.0 million. Management believes, based upon the Company's current levels of operations, the Company's cash, capital resources, borrowings available under the 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. 21 22 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Unaudited) - continued - -------------------------------------------------------------------------------- SEASONALITY ABF and G.I. Trucking are 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. Clipper's operations are similar to motor carrier operations 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 nine months of the calendar year generally having the highest levels of sales. FORWARD-LOOKING STATEMENTS Statements contained in the Management's Discussion and Analysis section of this report that are not based on historical facts are "forward-looking statements." Terms such as "estimate," "expect," "predict," "plan," "anticipate," "believe," "intend," "should," "would," "scheduled," 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 union relations; availability and cost of capital; shifts in market demand; weather conditions; the performance and needs of industries served by Arkansas Best's subsidiaries; actual future costs of operating expenses such as fuel and related taxes; self-insurance claims and employee wages and benefits; actual costs of continuing investments in technology, the timing and amount of capital expenditures; competitive initiatives and pricing pressures; general economic conditions; and other financial, operational and legal risks and uncertainties detailed from time to time in the Company's SEC public filings. 22 23 ITEM 2a. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK - -------------------------------------------------------------------------------- INTEREST RATE INSTRUMENTS The Company is a party to an interest rate swap agreement which was effective April 1, 1998. The swap agreement is a contract to exchange floating interest rate payments for fixed rate payments over the life of the instrument. The notional amount is used to measure interest to be paid or received and does not represent the exposure to credit loss. The purpose of the swap is to limit the Company's exposure to increases in interest rates on the notional amount of bank borrowings over the term of the swap. The fixed interest rate under the swap is 5.845% plus the Credit Agreement margin (currently .40%). This instrument is not recorded on the balance sheet of the Company. Details regarding the swap, as of March 31, 2000, are as follows:
Notional Rate Rate Fair Amount Maturity Paid Received Value(2) ------- ------- ---- --------- ---------- $110.0 million April 1, 2005 5.845% Plus Credit Agreement LIBOR rate(1) $5.6 million Margin (currently .40%) Plus Credit Agreement Margin (currently .40%)
(1) LIBOR rate is determined two London Banking Days prior to the first day of every month and continues up to and including the maturity date. (2) The fair value is an amount estimated by Societe Generale ("process agent") that the Company would have received at March 31, 2000 to terminate the agreement. OTHER MARKET RISKS Since December 31, 1999, there have been no significant changes in the Company's other market risks, as reported in the Company's Form 10-K Annual Report. 23 24 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 in excess of self-retention levels of certain risks arising out of the normal course of its business (see Note E 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. Financial Data Schedule (b) REPORTS ON FORM 8-K. None. 24 25 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: May 9, 2000 /s/ David E. Loeffler ------------------------------------------------- David E. Loeffler Vice President-Treasurer, Chief Financial Officer and Principal Accounting Officer 25 26 INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION - -------- ----------- 27.1 Financial Data Schedule
EX-27.1 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ARKANSAS BEST CORPORATION QUARTERLY REPORT 10-Q FOR THE QUARTER ENDED MARCH 31, 2000, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS DEC-31-2000 MAR-31-2000 4,232 0 189,333 5,293 32,817 245,852 640,362 297,035 747,698 279,118 173,457 0 15 198 233,047 747,698 40,771 443,015 27,904 416,734 0 879 4,521 22,555 9,383 13,172 0 0 0 13,172 0.61 0.55 TRADE-NET GROSS L-T A/R
-----END PRIVACY-ENHANCED MESSAGE-----