-----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, CDCKHRg+pr/rruGb9kph8G9bsCQGPdVPI5z4Z1Jr0SCHWhUA6K/POLUNV8Shb+dm OdVsQAXrfjWSh+tS1m1ZSQ== 0000950134-08-001098.txt : 20080125 0000950134-08-001098.hdr.sgml : 20080125 20080125080848 ACCESSION NUMBER: 0000950134-08-001098 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20080125 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20080125 DATE AS OF CHANGE: 20080125 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: 08549250 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 d53318e8vk.htm FORM 8-K e8vk
 

 
 
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): January 25, 2008 (January 25, 2008)
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))
 
 

 


 

ITEM 2.02 — RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On January 25, 2008, Arkansas Best Corporation issued a press release announcing its fourth quarter and full year 2007 results. The press release contains reconciliations of GAAP earnings and earnings per share to non-GAAP financial measures. Management believes the non-GAAP financial measures are useful to investors in understanding the Company’s results of operations because they provide meaningful comparisons between current and prior 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 January 25, 2008.

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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: January 25, 2008  /s/ Judy R. McReynolds    
  Judy R. McReynolds,   
  Senior Vice President, Chief Financial Officer and Treasurer   
 

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EX-99.1 2 d53318exv99w1.htm PRESS RELEASE exv99w1
 

Exhibit 99.1
FOR IMMEDIATE RELEASE
ARKANSAS BEST CORPORATION ANNOUNCES
4th QUARTER AND FULL YEAR 2007 RESULTS
     (Fort Smith, Arkansas, January 25, 2008) — Arkansas Best Corporation (Nasdaq: ABFS) today announced fourth quarter 2007 net income of $13.5 million, or $0.54 per diluted common share, compared to $14.2 million, or $0.56 per diluted common share, in the fourth quarter of 2006. Arkansas Best’s revenue during the fourth quarter of 2007 was $459.3 million compared to $454.3 million in the fourth quarter of 2006.
     “During a year when ABF operated through a challenging freight environment, Arkansas Best maintained its strong financial position and generated a full year 2007 After-Tax Return on Capital Employed of 9.5%,” said Robert A. Davidson, Arkansas Best President and Chief Executive Officer.
     For the full year of 2007, Arkansas Best reported income of $2.26 per diluted common share compared to income from continuing operations of $3.16 per diluted common share in 2006. Arkansas Best’s 2007 full year revenue was $1.84 billion compared to 2006 full year revenue of $1.88 billion.
ABF Freight System, Inc.®
     ABF Freight System, Inc., the company’s largest subsidiary, had fourth quarter 2007 revenue of $441.3 million, consistent with fourth quarter 2006 revenue of $441.4 million. ABF’s operating income during the 2007 fourth quarter was $19.8 million compared to $20.8 million in the same period last year. ABF’s fourth quarter 2007 operating ratio was 95.5% compared to its fourth quarter 2006 operating ratio of 95.3%.
     “During the fourth quarter of 2006, we first experienced significant declines in year-over-year tonnage. In the fourth quarter of 2007, ABF’s total weight per day decreased by another 1.5% compared to that period,” said Mr. Davidson. “However, since October, our year-over-year tonnage trends have improved each month, with slight increases in December and January.”

 


 

     Total billed revenue per hundredweight was $26.02, an increase of 2.5% over last year’s fourth quarter figure of $25.38. “Although industry pricing remained very competitive, ABF achieved reasonable price increases,” said Mr. Davidson. “Fuel prices in this year’s fourth quarter were significantly higher than the same period last year, and the higher fuel surcharge increased revenue yields. This nominal yield increase was partially offset by continuing shipment profile and freight mix changes. ABF handled a higher-than-normal percentage of spot-priced truckload shipments in order to improve utilization of system capacity. In addition, success in ABF’s regional freight initiative continued to reduce the average length of haul and the nominal yield,” said Mr. Davidson.
     For the full year of 2007, ABF’s revenue was $1.77 billion, a per-day decrease of 3.3% compared to 2006 revenue. After adjusting for pension settlement expense, ABF’s 2007 operating ratio was 95.1% versus an operating ratio of 92.6% in 2006, and ABF’s 2007 operating income was $86.2 million versus $135.3 million during 2006. “The reduction in operating income was primarily associated with the effects of lower tonnage levels throughout the year and the additional costs related to the implementation of ABF’s regional model,” said Mr. Davidson. Total tonnage per day in 2007 decreased by 5.1% compared to 2006. Total billed revenue per hundredweight in 2007 was $25.81, an increase of 1.9% over last year’s figure of $25.32.
     “Though the overall freight environment was weak, ABF continued to gain market traction with its Regional Performance Model (“RPM”). In the fourth quarter, ABF’s investment in RPM stabilized and the impact on year-over-year operating results was minimal,” said Mr. Davidson. “The rate of revenue growth in regional lanes is substantially outpacing that of ABF’s traditional business. We are encouraged by the success we are having, especially in our next-day markets. ABF’s initial success confirms the validity of our low-risk strategy of organic expansion in the growing regional market.”
     “As I have mentioned before, the core principles of ABF’s Quality Process have guided our company since we first incorporated them twenty-five years ago. Over and over again, employees have enthusiastically embraced the supply-chain needs of our customers and have committed to meeting agreed-upon customer requirements correctly the first time. As a direct result, ABF’s distinguished customer service, innovative solutions and attention to detail provide the best value in the LTL industry,” said Mr. Davidson. ABF’s high standards of performance are illustrated by achievements in the recent fourth quarter and throughout 2007:
    ABF’s fourth quarter 2007 cargo claim ratio, a measure of net cash payouts to revenue, was below the fourth quarter of 2006, improving operating income by nearly $1 million. The full year 2007 cargo claim ratio of 0.72% was the lowest ABF has experienced in over twenty-five years.

2


 

    ABF’s fourth quarter 2007 Department of Transportation (“DOT”) recordable accidents per million road and city miles decreased by 2% versus the same period last year despite more adverse weather conditions.
 
    As a percent of revenue, ABF’s combined costs associated with workers’ compensation and third-party casualty claims in the fourth quarter and full year of 2007 were below the most recent five-year average.
 
    Even in a weak business environment, ABF’s fourth quarter 2007 receivables collection results were better than those of the same period last year. In addition, the number of freight bill exceptions was 20% below that of the fourth quarter of 2006.
     “Industry statistics and positive customer feedback show that ABF leads the industry in cargo care, highway safety and billing accuracy, and those best-in-class results continue to improve,” said Mr. Davidson.
Labor Contract Negotiations
     ABF’s existing labor contract with its unionized employees will expire on March 31, 2008. ABF is currently engaged in negotiations with the International Brotherhood of Teamsters regarding a new contract. ABF expects to reach a timely resolution on an agreement. It is ABF’s objective that a new labor agreement will provide business and job growth through additional services to customers.
Capital Expenditures
     Arkansas Best estimates 2008 net capital expenditures will be approximately $60 million to $70 million including road and city equipment replacements totaling approximately $40 million. Total net capital expenditures in 2007 were $85 million. “This year’s range of expected capital expenditures is below those of last year,” said Mr. Davidson. “However, the agreements we have with our equipment suppliers provide the flexibility of purchasing additional equipment later this year if economic conditions improve.“
     Arkansas Best’s depreciation and amortization for 2008 is estimated to be approximately $75 million to $80 million.
Conference Call
     Arkansas Best Corporation will host a conference call with company executives to discuss the 2007 fourth quarter results. The call will be today, Friday, January 25, 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

3


 

available through the end of the day on Friday, February 15, 2008. To listen to the playback, dial (800) 642-1687 or (706) 645-9291 (for international callers). The conference call ID for the playback is 29050304. The conference call and playback can also be accessed through Friday, February 15 on Arkansas Best’s Web site 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, 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; union and nonunion 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 Arkansas Best’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.

4


 

ARKANSAS BEST CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
                                 
    Three Months Ended   Year Ended
    December 31   December 31
    2007   2006   2007   2006
    (Unaudited)
    ($thousands, except share and per share data)
OPERATING REVENUES
  $ 459,323     $ 454,251     $ 1,836,878     $ 1,881,500  
 
                               
OPERATING EXPENSES AND COSTS
    439,758       433,666       1,752,034       1,756,821  
 
 
                               
OPERATING INCOME
    19,565       20,585       84,844       124,679  
 
                               
OTHER INCOME (EXPENSE)
                               
Short-term investment income
    1,648       1,449       5,671       4,996  
Interest expense and other related financing costs
    (304 )     (287 )     (1,189 )     (1,119 )
Other, net
    (112 )     1,182       1,465       2,963  
 
 
    1,232       2,344       5,947       6,840  
 
 
                               
INCOME FROM CONTINUING OPERATIONS, BEFORE INCOME TAXES
    20,797       22,929       90,791       131,519  
 
                               
FEDERAL AND STATE INCOME TAXES
                               
Current
    1,315       3,858       27,806       50,667  
Deferred
    5,993       4,904       6,160       351  
 
 
    7,308       8,762       33,966       51,018  
 
 
                               
INCOME FROM CONTINUING OPERATIONS
    13,489       14,167       56,825       80,501  
 
 
                               
DISCONTINUED OPERATIONS, NET OF TAX
                               
Income from operations
                      530  
Gain from disposal
                      3,063  
 
 
                      3,593  
 
 
                               
NET INCOME
  $ 13,489     $ 14,167     $ 56,825     $ 84,094  
 
 
                               
BASIC EARNINGS PER SHARE:
                               
Income from continuing operations
  $ 0.54     $ 0.57     $ 2.29     $ 3.21  
Income from discontinued operations
                      0.14  
 
 
                               
NET INCOME
  $ 0.54     $ 0.57     $ 2.29     $ 3.35  
 
 
                               
AVERAGE COMMON SHARES OUTSTANDING (BASIC)
    24,870,847       24,938,196       24,822,673       25,134,308  
 
 
                               
DILUTED EARNINGS PER SHARE:
                               
Income from continuing operations
  $ 0.54     $ 0.56     $ 2.26     $ 3.16  
Income from discontinued operations
                      0.14  
 
 
                               
NET INCOME
  $ 0.54     $ 0.56     $ 2.26     $ 3.30  
 
 
                               
AVERAGE COMMON SHARES OUTSTANDING (DILUTED)
    25,055,495       25,297,848       25,117,597       25,503,799  
 
 
                               
CASH DIVIDENDS DECLARED AND PAID PER COMMON SHARE
  $ 0.15     $ 0.15     $ 0.60     $ 0.60  
 
Note: Reported revenues include the effect of a reclassification associated with certain shipments involving third-party interline carriers and certain brokerage transactions where ABF retains the primary obligation to provide services to the customer. This revenue will now be recorded on a gross basis, with expenses paid to the third-party carrier recorded in the “purchased transportation” category. Previously, this revenue was reported on a net basis whereby the expense of the third-party carrier was netted against revenue.  This reclassification increases ABF’s fourth quarter and full year 2006 revenues by $5.3 million and $21.0 million, respectively, or approximately 1%, over previously reported levels. The comparable amounts for 2007 were $6.1 million in the fourth quarter and $23.0 million for the full year. These changes had no impact on ABF’s operating income and a minimal impact on ABF’s operating ratio.

5


 

ARKANSAS BEST CORPORATION
CONSOLIDATED BALANCE SHEETS
                 
    December 31     December 31  
    2007     2006  
    (Unaudited)     Note  
    ($thousands, except share data)  
ASSETS
               
 
               
CURRENT ASSETS
               
Cash and cash equivalents
  $ 93,805     $ 5,009  
Short-term investment securities
    79,373       135,317  
Accounts receivable, less allowances (2007 – $3,942; 2006 – $4,476)
    141,565       143,216  
Other accounts receivable, less allowances (2007 – $774; 2006 – $1,272)
    8,963       8,912  
Prepaid expenses
    11,243       11,735  
Deferred income taxes
    36,585       36,532  
Prepaid income taxes
    3,699       3,024  
Other
    7,184       7,212  
 
TOTAL CURRENT ASSETS
    382,417       350,957  
 
               
PROPERTY, PLANT AND EQUIPMENT
               
Land and structures
    231,169       228,375  
Revenue equipment
    509,627       498,844  
Service, office and other equipment
    142,635       140,516  
Leasehold improvements
    19,794       17,735  
 
 
    903,225       885,470  
Less allowances for depreciation and amortization
    437,087       423,587  
 
 
    466,138       461,883  
 
               
OTHER ASSETS
    70,803       61,959  
 
               
GOODWILL
    63,991       63,917  
 
 
               
 
  $ 983,349     $ 938,716  
 
Note: The balance sheet at December 31, 2006 was 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.

6


 

ARKANSAS BEST CORPORATION
CONSOLIDATED BALANCE SHEETS – continued
                 
    December 31     December 31  
    2007     2006  
    (Unaudited)     Note  
    ($thousands, except share data)  
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
 
               
CURRENT LIABILITIES
               
 
               
Bank overdraft and drafts payable
  $ 15,248     $ 17,423  
Accounts payable
    60,341       63,477  
Income taxes payable
    2,414       5,833  
Accrued expenses
    166,631       171,432  
Current portion of long-term debt
    171       249  
 
TOTAL CURRENT LIABILITIES
    244,805       258,414  
 
               
LONG-TERM DEBT, less current portion
    1,400       1,184  
 
               
PENSION AND POSTRETIREMENT LIABILITIES
    48,859       54,616  
 
               
OTHER LIABILITIES
    25,093       25,655  
 
               
DEFERRED INCOME TAXES
    30,806       19,452  
 
               
STOCKHOLDERS’ EQUITY
               
Common stock, $.01 par value, authorized 70,000,000 shares; issued 2007: 26,549,038 shares; 2006: 26,407,472 shares
    265       264  
Additional paid-in capital
    258,878       250,469  
Retained earnings
    457,536       415,876  
Treasury stock, at cost, 2007: 1,677,932 shares; 2006: 1,552,932 shares
    (57,770 )     (52,825 )
Accumulated other comprehensive loss
    (26,523 )     (34,389 )
 
TOTAL STOCKHOLDERS’ EQUITY
    632,386       579,395  
 
 
               
 
  $ 983,349     $ 938,716  
 
Note:   The balance sheet at December 31, 2006 was 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.

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ARKANSAS BEST CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
                 
    Year Ended  
    December 31  
    2007     2006  
    (Unaudited)  
    ($ thousands)  
OPERATING ACTIVITIES
               
Net income
  $ 56,825     $ 84,094  
Adjustments to reconcile net income to net cash provided by operating activities:
               
Depreciation and amortization
    77,318       67,727  
Other amortization
    261       211  
Pension settlement expense
    1,665       10,192  
Share-based compensation expense
    4,911       4,708  
Provision for losses on accounts receivable
    1,056       1,023  
Deferred income tax provision
    6,160       351  
Gain on disposal of discontinued operations, net of taxes
          (3,063 )
Gain on sales of assets and other
    (4,351 )     (3,547 )
Excess tax benefits from share-based compensation
    (683 )     (1,710 )
Changes in operating assets and liabilities:
               
Receivables
    533       6,108  
Prepaid expenses
    491       2,058  
Other assets
    (676 )     18,631  
Accounts payable, taxes payable, accrued expenses and other liabilities(1,2)
    (377 )     (18,327 )
 
NET CASH PROVIDED BY OPERATING ACTIVITIES
    143,133       168,456  
 
 
               
INVESTING ACTIVITIES
               
Purchases of property, plant and equipment, net of capital leases(2)
    (96,670 )     (147,463 )
Proceeds from asset sales
    12,067       11,913  
Proceeds from disposal of discontinued operations
          21,450  
Purchases of short-term investment securities
    (292,064 )     (386,358 )
Proceeds from sales of short-term investment securities
    348,008       372,280  
Capitalization of internally developed software and other
    (4,599 )     (4,117 )
 
NET CASH USED BY INVESTING ACTIVITIES
    (33,258 )     (132,295 )
 
 
               
FINANCING ACTIVITIES
               
Payments on long-term debt
    (1,360 )     (317 )
Net change in bank overdraft
    (2,175 )     (2,050 )
Payment of common stock dividends
    (15,165 )     (15,269 )
Purchases of treasury stock
    (4,945 )     (26,870 )
Excess tax benefits from share-based compensation
    683       1,710  
Deferred financing costs
    (800 )      
Proceeds from the exercise of stock options and other
    2,683       5,877  
 
NET CASH USED BY FINANCING ACTIVITIES
    (21,079 )     (36,919 )
 
 
               
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    88,796       (758 )
Cash and cash equivalents at beginning of period
    5,009       5,767  
 
CASH AND CASH EQUIVALENTS AT END OF PERIOD
  $ 93,805     $ 5,009  
 
(1)   Includes payments to retiring officers under the company’s unfunded Supplemental Benefit Plan of $5.3 million in 2007 and $26.5 million in 2006.
 
(2)   Does not include $0.7 million and $6.5 million of equipment which was received but not yet paid for at December 31, 2007 and 2006, respectively.

8


 

ARKANSAS BEST CORPORATION
FINANCIAL STATEMENT OPERATING SEGMENT DATA,
OPERATING RATIOS AND FINANCIAL STATISTICS
                                                                 
    Three Months Ended           Year Ended        
    December 31           December 31        
    2007           2006           2007           2006        
    (Unaudited)
    ($ thousands)
OPERATING REVENUES
                                                               
ABF Freight System,
Inc.(1)(2)
  $ 441,326             $ 441,369             $ 1,770,749             $ 1,831,351          
Other revenues and eliminations
    17,997               12,882               66,129               50,149          
 
Total consolidated operating revenues
  $ 459,323             $ 454,251             $ 1,836,878             $ 1,881,500          
 
 
                                                               
OPERATING EXPENSES AND COSTS
                                                               
ABF Freight System,
Inc.
(1)
                                                               
Salaries, wages and benefits
  $ 262,841       59.6 %   $ 263,216       59.6 %   $ 1,070,708       60.5 %   $ 1,067,174       58.3 %
Supplies and expenses
    77,101       17.5       72,472       16.4       293,056       16.5       293,203       16.0  
Operating taxes and licenses
    11,635       2.6       12,645       2.9       47,682       2.7       48,116       2.6  
Insurance
    5,819       1.3       6,792       1.5       22,230       1.3       28,584       1.6  
Communications and utilities
    3,760       0.9       3,728       0.8       15,334       0.9       15,269       0.8  
Depreciation and amortization
    18,802       4.3       16,916       3.8       74,231       4.2       63,519       3.5  
Rents and purchased transportation(2)
    41,495       9.4       43,941       10.0       160,062       9.0       179,587       9.8  
Other
    1,373       0.2       1,280       0.3       5,607       0.2       4,007       0.2  
Pension settlement expense
    329       0.1       88             1,665       0.1       10,192       0.6  
Gain on sale of property and equipment
    (1,607 )     (0.4 )     (541 )           (4,347 )     (0.2 )     (3,416 )     (0.2 )
 
 
    421,548       95.5 %     420,537       95.3 %     1,686,228       95.2 %     1,706,235       93.2 %
 
 
                                                               
Other expenses and eliminations
    18,210               13,129               65,806               50,586          
 
 
                                                               
Total consolidated operating expenses and costs
  $ 439,758             $ 433,666             $ 1,752,034             $ 1,756,821          
 
 
                                                               
OPERATING INCOME (LOSS)
                                                               
ABF Freight System,
Inc.(1)
  $ 19,778             $ 20,832             $ 84,521             $ 125,116          
Other income and eliminations
    (213 )             (247 )             323               (437 )        
 
Total consolidated operating income
  $ 19,565             $ 20,585             $ 84,844             $ 124,679          
 
     
(1)   Includes U.S., Canadian, and Puerto Rican operations of ABF affiliates.
 
(2)   See note to Consolidated Statements of Income on page 5.
         
    Rolling Twelve Months
    Ended
    December 31, 2007
FINANCIAL STATISTICS
       
 
After-Tax Return on Capital Employed (3)
    9.5 %
 
(3)   (net income + interest after tax) / (average total debt + average equity)

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ARKANSAS BEST CORPORATION
RECONCILIATIONS OF GAAP EARNINGS AND EARNINGS PER SHARE
                                 
    Three Months Ended   Year Ended
    December 31   December 31
    2007   2006   2007   2006
    (Unaudited)
    ($ thousands, except per share data)
ABF Freight System, Inc.
                               
 
                               
Operating Income
                               
Amounts from continuing operations, on a GAAP basis
  $ 19,778     $ 20,832     $ 84,521     $ 125,116  
Pension settlement expense, pre-tax
    329       88       1,665       10,192  
 
Non-GAAP amounts
  $ 20,107     $ 20,920     $ 86,186     $ 135,308  
 
 
                               
Operating Ratio*
                               
Amounts from continuing operations, on a GAAP basis
    95.5 %     95.3 %     95.2 %     93.2 %
Pension settlement expense, pre-tax
    (0.1 )           (0.1 )     (0.6 )
 
Non-GAAP amounts
    95.4 %     95.3 %     95.1 %     92.6 %
 
 
                               
Arkansas Best Corporation — Consolidated
                               
 
                               
Operating Income
                               
Amounts from continuing operations, on a GAAP basis
  $ 19,565     $ 20,585     $ 84,844     $ 124,679  
Pension settlement expense, pre-tax
    329       88       1,665       10,192  
 
Non-GAAP amounts
  $ 19,894     $ 20,673     $ 86,509     $ 134,871  
 
 
                               
Income from Continuing Operations
                               
Amounts from continuing operations, on a GAAP basis
  $ 13,489     $ 14,167     $ 56,825     $ 80,501  
Pension settlement expense, after-tax
    200       53       1,012       6,194  
 
Non-GAAP amounts
  $ 13,689     $ 14,220     $ 57,837     $ 86,695  
 
 
                               
Diluted Earnings Per Share
                               
Amounts from continuing operations, on a GAAP basis
  $ 0.54     $ 0.56     $ 2.26     $ 3.16  
Pension settlement expense, after-tax
    0.01             0.04       0.24  
 
Non-GAAP amounts
  $ 0.55     $ 0.56     $ 2.30     $ 3.40  
 
Non-GAAP Financial Measures. The company reports its financial results in accordance with generally accepted accounting principles (“GAAP”). However, management believes that certain non-GAAP performance measures and ratios utilized for internal analysis provide financial statement users meaningful comparisons between current and prior period results, as well as important information regarding performance trends. Certain information discussed in the scheduled conference call could be considered non-GAAP measures. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the company’s reported results.
* See note to Consolidated Statements of Income on page 5.

10


 

ABF FREIGHT SYSTEM, INC.
OPERATING STATISTICS
                                                 
    Three Months Ended December 31   Year Ended December 31
    2007   2006   % Change   2007   2006   % Change
Workdays
    61       61               252       252          
Billed Revenue(1)(2) / CWT
  $ 26.02     $ 25.38       2.5 %   $ 25.81     $ 25.32       1.9 %
Billed Revenue(1)(2) / Shipment
  $ 331.08     $ 317.71       4.2 %   $ 328.24     $ 321.42       2.1 %
Shipments
    1,326,268       1,368,842       (3.1 )%     5,393,689       5,692,275       (5.2 )%
Tonnage (tons)
    843,811       856,816       (1.5 )%     3,430,363       3,613,471       (5.1 )%
 
(1)   Billed Revenue does not include revenue deferral required for financial statement purposes under the company’s revenue recognition policy.
 
(2)   See note to Consolidated Statements of Income on page 5.
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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