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): November 12, 2013 (November 11, 2013)
ARKANSAS BEST CORPORATION
(Exact name of registrant as specified in its charter)
Delaware |
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0-19969 |
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71-0673405 |
(State or other |
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(Commission |
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(IRS Employer |
jurisdiction of |
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File Number) |
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Identification No.) |
incorporation or |
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organization) |
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3801 Old Greenwood Road
Fort Smith, Arkansas 72903
(479) 785-6000
(Address, including zip code, and telephone number, including area code, of
the registrants 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 November 11, 2013, Arkansas Best Corporation (Nasdaq: ABFS) issued a press release announcing its unaudited third quarter 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 Companys results of operations because they provide meaningful comparisons between current and prior results. The press release also contains calculations of earnings before interest, taxes, depreciation and amortization (EBITDA). Management believes EBITDA to be relevant and useful information as it is a standard measure commonly reported and widely used by analysts, investors and others to measure financial performance and ability to service debt obligations. 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 November 11, 2013.
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 | |||
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(Registrant) | |||
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Date: |
November 12, 2013 |
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/s/ Michael R. Johns |
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Michael R. Johns |
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Vice President General Counsel and Corporate Secretary |
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
ARKANSAS BEST CORPORATION ANNOUNCES
THIRD QUARTER 2013 RESULTS
· Third quarter 2013 revenue increases 7.9% to $623.4 million from $577.5 million
· Third quarter 2013 net income of $14.0 million, or $0.52 per share, on better business levels
· Panther produces significant improvement in third quarter operating income and EBITDA
· All emerging, non-asset-based businesses generated third quarter operating income on revenue growth
· ABF Freights new five-year labor agreement was implemented on November 3
· Year-to-date ABF Freight results just above breakeven levels
(Fort Smith, Arkansas, November 11, 2013) Arkansas Best Corporation (Nasdaq: ABFS) today reported higher third quarter 2013 net income in the seasonally strong business environment for ABF Freight System, Inc., while Arkansas Bests emerging businesses continued to experience revenue growth and positive margins.
Arkansas Bests third quarter 2013 revenue was $623.4 million compared to revenue of $577.5 million in the third quarter of 2012. Third quarter 2013 net income was $14.0 million, or $0.52 per share, compared to third quarter 2012 net income of $6.5 million, or $0.24 per share. The third quarter 2013 results included pension settlement charges of $0.04 per share related to Arkansas Bests nonunion defined benefit pension plan which, as previously announced, was amended to freeze the accrual of future benefits of nonunion employees beginning July 1, 2013. In addition, third quarter 2013 results included a tax benefit of $0.02 per share related to the reversal of previously established deferred tax asset valuation allowances. Excluding both of these items, Arkansas Best had third quarter 2013 net income of $14.5 million, or $0.54 per share.
This was our strongest quarter of the year thanks to the solid performances of our emerging businesses and a tonnage uptick for ABF Freight, said Arkansas Best President and Chief Executive Officer Judy R. McReynolds. In particular, Panther Expedited Services, which we acquired in June 2012, showed improved demand in several of the industries it serves.
ABF Freights revenue increased during the traditionally strong third quarter. However, union salary wage and benefit costs remained unacceptably high as the previous national labor agreement remained in place. This was the result of operating under several extensions of the previous labor agreement pending final resolution of all regional supplemental agreements to the new ABF National Master Freight Agreement (ABF NMFA), which was implemented on November 3.
ABFs third quarter 2013 total billed revenue per hundredweight was $28.67 compared to $28.46 in the same period last year. Without the impact of year-over-year changes in third quarter freight profile and account mix, which was similar to what ABF has experienced in the last several quarters, the level of ABFs yield improvement was even greater.
For the first nine months of 2013, ABF Freights operating income was just above break-even, reflecting the high cost structure associated with the previous labor agreement. In addition, year-to-date capital expenditures for ABF Freight were minimal while the contract resolution process continued, resulting in lower than normal depreciation expense for an asset-intensive LTL business. ABF Freight also benefitted from lower retirement plan costs for nonunion employees as a result of the previously described pension amendment.
Consistent with trends throughout this year, Arkansas Bests emerging, non-asset-based businesses continued to experience growing revenue, operating margins, and cash flow generation. During the third quarter, these expanding businesses equaled 26% of total consolidated revenue, reflecting an increase in this measure during each quarter of this year. On a combined basis, Panther and all other non-asset-based businesses generated third quarter 2013 earnings before interest, taxes, depreciation and amortization (EBITDA) of $9.7 million, a 45% increase over EBITDA generated in the third quarter of 2012. We are pleased that our strategy of utilizing the strengths of our companies to offer end-to-end logistics solutions is benefitting our customers and positively contributing to our financial results, said McReynolds.
ABF Labor Contract
As reported on October 30, the new ABF NMFA for employees represented by the International Brotherhood of Teamsters (IBT) was implemented on November 3, 2013, and runs through March 31, 2018. Full ratification of the new contract represents a major milestone for ABF. While this is a significant step toward increasing ABFs profitability, there are other
initiatives underway intended to improve operational efficiency, McReynolds noted. As previously announced, the level of cost savings achieved from the labor contract impacts the depth and analysis of future network improvements. Because there are additional opportunities to more cost effectively serve ABFs customers and further savings are needed in order to return to historic profitability, ABF currently has an active network analysis underway, the results of which are expected to be announced in the first half of 2014.
During the third quarter, the United States Court of Appeals for the Eighth Circuit affirmed the lower courts decision to dismiss ABFs complaint against the IBT and various YRC subsidiaries. ABF decided not to seek further review of the lawsuit, and as a result the legal process has now ended.
Closing Comments
While our third quarter results improved on prior quarter trends and reflected strides in our emerging businesses, we remain focused on returning ABF Freight to its historic profitability, said McReynolds. After a long and complex labor negotiation process at ABF Freight, we are pleased to have an implemented contract that allows us to lower costs while still providing the best-paying jobs in the industry. Going forward, we will continue with initiatives at ABF and all of our operating companies that will enable us to better serve our customers in the rapidly evolving transportation and logistics marketplace.
Conference Call
Arkansas Best Corporation will host a conference call with company executives to discuss the 2013 third quarter results. The call will be today, Monday November 11, at 9:30 a.m. ET (8:30 a.m. CT). Interested parties are invited to listen by calling (800) 768-3350. Following the call, a recorded playback will be available through the end of the day on December 11, 2013. To listen to the playback, dial (800) 633-8284 or (402) 977-9140 (for international callers). The conference call ID for the playback is 21675784. The conference call and playback can also be accessed, through December 11, on Arkansas Bests website at arkbest.com.
Company Description
Arkansas Best Corporation, headquartered in Fort Smith, Arkansas, is a freight transportation services and solutions provider. Through its various subsidiaries, Arkansas Best
offers a wide variety of logistics solutions including: domestic and global transportation of less-than-truckload (LTL) and full load shipments, expedited ground and time-definite delivery solutions, freight forwarding services, freight brokerage, oversight of roadside assistance and equipment services for commercial vehicles, and household goods moving market services for consumers, corporations, and the military. More information is available at arkbest.com, abf.com and pantherexpedite.com.
Forward-Looking Statements
The following is a safe harbor statement under the Private Securities Litigation Reform Act of 1995: Statements contained in this report that are not based on historical facts are forward-looking statements. Terms such as anticipate, believe, could, estimate, expect, forecast, intend, may, plan, predict, project, 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, a workforce stoppage by our employees covered under ABFs collective bargaining agreement or unfavorable terms of future collective bargaining agreements; relationships with employees, including unions; general economic conditions and related shifts in market demand that impact the performance and needs of industries served by Arkansas Best Corporations subsidiaries and/or limit our customers access to adequate financial resources; union and nonunion employee wages and benefits, including changes in required contributions to multiemployer pension plans; 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 the inability to collect fuel surcharges; availability of fuel; default on covenants of financing arrangements and the availability and terms of future financing arrangements; availability and cost of reliable third-party services; disruptions or failures of services essential to the use of information technology platforms in our business; availability, timing, and amount of capital expenditures; future costs of operating expenses such as fuel and related taxes; self-insurance claims and insurance premium costs; governmental regulations and policies; future climate change legislation; potential impairment of goodwill and intangible assets; the impact of our brand and corporate reputation; the cost, timing, and performance of growth initiatives; the cost, integration, and performance of any future acquisitions; the costs of continuing investments in technology, a failure of our information
systems, and the impact of cyber incidents; weather conditions; and other financial, operational, and legal risks and uncertainties detailed from time to time in Arkansas Best Corporations Securities and Exchange Commission 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
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Three Months Ended |
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Nine Months Ended |
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2013 |
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2012 |
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2013 |
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2012 |
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(Unaudited) |
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($ thousands, except share and per share data) |
| ||||||||||
OPERATING REVENUES |
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$ |
623,414 |
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$ |
577,546 |
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$ |
1,720,999 |
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$ |
1,528,956 |
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OPERATING EXPENSES AND COSTS |
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602,912 |
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565,313 |
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1,715,431 |
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1,532,509 |
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OPERATING INCOME (LOSS) |
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20,502 |
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12,233 |
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5,568 |
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(3,553 |
) | ||||
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OTHER INCOME (EXPENSE) |
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Interest and dividend income |
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167 |
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155 |
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499 |
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623 |
| ||||
Interest expense and other related financing costs |
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(993 |
) |
(1,609 |
) |
(3,279 |
) |
(3,863 |
) | ||||
Other, net |
|
1,328 |
|
997 |
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2,778 |
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2,117 |
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502 |
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(457 |
) |
(2 |
) |
(1,123 |
) | ||||
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INCOME (LOSS) BEFORE INCOME TAXES |
|
21,004 |
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11,776 |
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5,566 |
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(4,676 |
) | ||||
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INCOME TAX PROVISION (BENEFIT) |
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7,022 |
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5,258 |
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101 |
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(4,873 |
) | ||||
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NET INCOME |
|
$ |
13,982 |
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$ |
6,518 |
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$ |
5,465 |
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$ |
197 |
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EARNINGS PER COMMON SHARE(1) |
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Basic |
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$ |
0.52 |
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$ |
0.24 |
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$ |
0.20 |
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$ |
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Diluted |
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$ |
0.52 |
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$ |
0.24 |
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$ |
0.20 |
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$ |
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AVERAGE COMMON SHARES OUTSTANDING |
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Basic |
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25,736,810 |
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25,613,315 |
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25,690,184 |
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25,535,969 |
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Diluted |
|
25,736,810 |
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25,613,315 |
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25,690,184 |
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25,535,969 |
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CASH DIVIDENDS DECLARED PER COMMON SHARE |
|
$ |
0.03 |
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$ |
0.03 |
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$ |
0.09 |
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$ |
0.09 |
|
(1) The Company uses the two-class method for calculating earnings per share. This method, as calculated below, requires an allocation of dividends paid and a portion of undistributed net income (but not losses) to unvested restricted stock for calculating per share amounts.
NET INCOME |
|
$ |
13,982 |
|
$ |
6,518 |
|
$ |
5,465 |
|
$ |
197 |
|
|
|
|
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|
|
|
|
| ||||
EFFECT OF UNVESTED RESTRICTED STOCK AWARDS(1) |
|
(585 |
) |
(309 |
) |
(243 |
) |
(113 |
) | ||||
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ADJUSTED NET INCOME FOR CALCULATING EARNINGS PER COMMON SHARE |
|
$ |
13,397 |
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$ |
6,209 |
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$ |
5,222 |
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$ |
84 |
|
ARKANSAS BEST CORPORATION
CONSOLIDATED BALANCE SHEETS
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September 30 |
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December 31 |
| ||
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(Unaudited) |
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Note |
| ||
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($ thousands, except share data) |
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ASSETS |
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CURRENT ASSETS |
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|
|
|
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Cash and cash equivalents |
|
$ |
107,611 |
|
$ |
90,702 |
|
Short-term investments |
|
28,573 |
|
29,054 |
| ||
Restricted cash, cash equivalents, and short-term investments |
|
1,902 |
|
9,658 |
| ||
Accounts receivable, less allowances (2013 $4,645; 2012 $5,249) |
|
212,946 |
|
180,631 |
| ||
Other accounts receivable, less allowances (2013 $1,402; 2012 $1,334) |
|
9,532 |
|
6,539 |
| ||
Prepaid expenses |
|
15,980 |
|
17,355 |
| ||
Deferred income taxes |
|
47,038 |
|
39,245 |
| ||
Prepaid and refundable income taxes |
|
2,186 |
|
5,681 |
| ||
Other |
|
8,882 |
|
7,185 |
| ||
TOTAL CURRENT ASSETS |
|
434,650 |
|
386,050 |
| ||
|
|
|
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|
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PROPERTY, PLANT AND EQUIPMENT |
|
|
|
|
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Land and structures |
|
245,207 |
|
243,699 |
| ||
Revenue equipment |
|
591,367 |
|
589,729 |
| ||
Service, office, and other equipment |
|
122,057 |
|
119,456 |
| ||
Software |
|
109,111 |
|
103,164 |
| ||
Leasehold improvements |
|
23,524 |
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23,272 |
| ||
|
|
1,091,266 |
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1,079,320 |
| ||
Less allowances for depreciation and amortization |
|
691,730 |
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635,292 |
| ||
|
|
399,536 |
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444,028 |
| ||
GOODWILL |
|
76,448 |
|
73,189 |
| ||
INTANGIBLE ASSETS, NET |
|
76,431 |
|
79,561 |
| ||
OTHER ASSETS |
|
51,058 |
|
51,634 |
| ||
|
|
|
|
|
| ||
|
|
$ |
1,038,123 |
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$ |
1,034,462 |
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|
|
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|
| ||
LIABILITIES AND STOCKHOLDERS EQUITY |
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|
|
|
| ||
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|
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|
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CURRENT LIABILITIES |
|
|
|
|
| ||
Bank overdraft and drafts payable |
|
$ |
11,645 |
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$ |
13,645 |
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Accounts payable |
|
95,609 |
|
84,292 |
| ||
Income taxes payable |
|
2,868 |
|
59 |
| ||
Accrued expenses |
|
181,197 |
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158,668 |
| ||
Current portion of long-term debt |
|
35,353 |
|
43,044 |
| ||
TOTAL CURRENT LIABILITIES |
|
326,672 |
|
299,708 |
| ||
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|
|
|
|
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LONG-TERM DEBT, less current portion |
|
88,893 |
|
112,941 |
| ||
PENSION AND POSTRETIREMENT LIABILITIES |
|
38,040 |
|
104,673 |
| ||
OTHER LIABILITIES |
|
13,560 |
|
12,832 |
| ||
DEFERRED INCOME TAXES |
|
71,275 |
|
45,309 |
| ||
|
|
|
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|
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STOCKHOLDERS EQUITY |
|
|
|
|
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Common stock, $0.01 par value, authorized 70,000,000 shares; issued 2013: 27,408,046 shares; 2012: 27,296,285 shares |
|
274 |
|
273 |
| ||
Additional paid-in-capital |
|
291,445 |
|
289,711 |
| ||
Retained earnings |
|
287,204 |
|
284,157 |
| ||
Treasury stock, at cost, 1,677,932 shares |
|
(57,770 |
) |
(57,770 |
) | ||
Accumulated other comprehensive loss |
|
(21,470 |
) |
(57,372 |
) | ||
TOTAL STOCKHOLDERS EQUITY |
|
499,683 |
|
458,999 |
| ||
|
|
|
|
|
| ||
|
|
$ |
1,038,123 |
|
$ |
1,034,462 |
|
Note: The balance sheet at December 31, 2012 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
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Nine Months Ended |
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|
|
2013 |
|
2012 |
| ||
|
|
(Unaudited) |
| ||||
|
|
($ thousands) |
| ||||
OPERATING ACTIVITIES |
|
|
|
|
| ||
Net income |
|
$ |
5,465 |
|
$ |
197 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
| ||
Depreciation and amortization |
|
64,439 |
|
62,772 |
| ||
Amortization of intangibles |
|
3,130 |
|
1,218 |
| ||
Pension settlement expense |
|
1,834 |
|
|
| ||
Share-based compensation expense |
|
3,579 |
|
4,711 |
| ||
Provision for losses on accounts receivable |
|
1,658 |
|
1,314 |
| ||
Deferred income tax benefit |
|
(5,770 |
) |
(3,795 |
) | ||
Gain on sale of property and equipment |
|
(486 |
) |
(582 |
) | ||
Changes in operating assets and liabilities: |
|
|
|
|
| ||
Receivables |
|
(36,513 |
) |
(28,956 |
) | ||
Prepaid expenses |
|
1,768 |
|
2,940 |
| ||
Other assets |
|
(1,557 |
) |
(591 |
) | ||
Income taxes |
|
6,868 |
|
938 |
| ||
Accounts payable, accrued expenses, and other liabilities(1) |
|
21,836 |
|
7,942 |
| ||
NET CASH PROVIDED BY OPERATING ACTIVITIES |
|
66,251 |
|
48,108 |
| ||
|
|
|
|
|
| ||
INVESTING ACTIVITIES |
|
|
|
|
| ||
Purchases of property, plant, and equipment, net of financings |
|
(13,078 |
) |
(31,923 |
) | ||
Proceeds from sale of property and equipment |
|
1,857 |
|
5,126 |
| ||
Purchases of short-term investments |
|
(21,230 |
) |
(38,708 |
) | ||
Proceeds from sale of short-term investments |
|
21,713 |
|
25,018 |
| ||
Business acquisition, net of cash acquired(2) |
|
(4,146 |
) |
(180,793 |
) | ||
Capitalization of internally developed software and other |
|
(5,959 |
) |
(5,379 |
) | ||
NET CASH USED IN INVESTING ACTIVITIES |
|
(20,843 |
) |
(226,659 |
) | ||
|
|
|
|
|
| ||
FINANCING ACTIVITIES |
|
|
|
|
| ||
Borrowing under credit facilities |
|
|
|
100,000 |
| ||
Repayments on long-term debt |
|
(31,775 |
) |
(22,606 |
) | ||
Net change in bank overdraft and other |
|
(2,002 |
) |
(7,808 |
) | ||
Change in restricted cash, cash equivalents, and short-term investments |
|
7,757 |
|
42,895 |
| ||
Deferred financing costs |
|
(61 |
) |
(1,472 |
) | ||
Payment of common stock dividends |
|
(2,418 |
) |
(2,412 |
) | ||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES |
|
(28,499 |
) |
108,597 |
| ||
|
|
|
|
|
| ||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
|
16,909 |
|
(69,954 |
) | ||
Cash and cash equivalents at beginning of period |
|
90,702 |
|
141,295 |
| ||
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
|
$ |
107,611 |
|
$ |
71,341 |
|
|
|
|
|
|
| ||
NONCASH INVESTING ACTIVITIES |
|
|
|
|
| ||
Accruals for equipment received |
|
$ |
264 |
|
$ |
34 |
|
Equipment financed |
|
$ |
36 |
|
$ |
37,973 |
|
(1) 2013 and 2012 were impacted by $17.8 million and $18.0 million, respectively, in contributions made to the Companys nonunion defined benefit pension plan.
(2) During second quarter 2013, the Company acquired a privately-held logistics business that has been reported within the Household Goods Moving Services segment.
ARKANSAS BEST CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES
|
|
Three Months Ended |
|
Nine Months Ended |
| ||||||||
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
| ||||
|
|
(Unaudited) |
| ||||||||||
|
|
($ thousands, except per share data) |
| ||||||||||
ARKANSAS BEST CORPORATION CONSOLIDATED |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net Income (Loss) |
|
|
|
|
|
|
|
|
| ||||
Amounts on a GAAP basis |
|
$ |
13,982 |
|
$ |
6,518 |
|
$ |
5,465 |
|
$ |
197 |
|
Tax benefits(1) |
|
(550 |
) |
(396 |
) |
(766 |
) |
(3,729 |
) | ||||
Transaction costs, after-tax(2) |
|
|
|
|
|
|
|
1,294 |
| ||||
Pension settlement expense, after-tax(3) |
|
1,115 |
|
|
|
1,115 |
|
|
| ||||
Non-GAAP amounts |
|
$ |
14,547 |
|
$ |
6,122 |
|
$ |
5,814 |
|
$ |
(2,238 |
) |
|
|
|
|
|
|
|
|
|
| ||||
Diluted Earnings (Loss) Per Share |
|
|
|
|
|
|
|
|
| ||||
Amounts on a GAAP basis |
|
$ |
0.52 |
|
$ |
0.24 |
|
$ |
0.20 |
|
$ |
|
|
Tax benefits(1) |
|
(0.02 |
) |
(0.02 |
) |
(0.03 |
) |
(0.15 |
) | ||||
Transaction costs, after-tax(2) |
|
|
|
|
|
|
|
0.05 |
| ||||
Pension settlement expense, after-tax(3) |
|
0.04 |
|
|
|
0.04 |
|
|
| ||||
Non-GAAP amounts |
|
$ |
0.54 |
|
$ |
0.22 |
|
$ |
0.21 |
|
$ |
(0.10 |
) |
|
|
|
|
|
|
|
|
|
| ||||
ARKANSAS BEST CORPORATION CONSOLIDATED |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Earnings Before Interest, Taxes, Depreciation and Amortization |
|
|
|
|
|
|
|
|
| ||||
Net income |
|
$ |
13,982 |
|
$ |
6,518 |
|
$ |
5,465 |
|
$ |
197 |
|
Interest expense |
|
993 |
|
1,609 |
|
3,279 |
|
3,863 |
| ||||
Income tax provision (benefit) |
|
7,022 |
|
5,258 |
|
101 |
|
(4,873 |
) | ||||
Depreciation and amortization |
|
21,569 |
|
23,820 |
|
67,569 |
|
63,990 |
| ||||
Amortization of share-based compensation |
|
1,095 |
|
1,369 |
|
3,579 |
|
4,711 |
| ||||
Amortization of actuarial losses and pension settlement expense |
|
2,994 |
|
2,846 |
|
8,818 |
|
8,539 |
| ||||
EBITDA |
|
47,655 |
|
41,420 |
|
88,811 |
|
76,427 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Transaction costs, pre-tax(2) |
|
|
|
|
|
|
|
2,129 |
| ||||
Adjusted EBITDA |
|
$ |
47,655 |
|
$ |
41,420 |
|
$ |
88,811 |
|
$ |
78,556 |
|
(1) Tax benefit adjustments related to deferred tax asset valuation allowances.
(2) Transaction costs associated with the June 15, 2012 acquisition of Panther Expedited Services, Inc.
(3) Settlement expense related to the Companys nonunion defined benefit pension plan which was frozen effective July 1, 2013.
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 companys reported results. Management believes EBITDA to be relevant and useful information as EBITDA is a standard measure commonly reported and widely used by analysts, investors and others to measure financial performance and ability to service debt obligations. However, these financial measures should not be construed as better measurements than operating income, operating cash flow, net income or earnings per share, as defined by generally accepted accounting principles. Other companies may calculate EBITDA differently, and therefore the Companys EBITDA may not be comparable to similarly titled measures of other companies.
ARKANSAS BEST CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES
|
|
Three Months Ended |
|
Three Months Ended |
| ||||||||||||||
|
|
Operating |
|
Depreciation |
|
EBITDA |
|
Operating |
|
Depreciation |
|
EBITDA |
| ||||||
Premium Logistics & Expedited Freight Services(1) |
|
$ |
3,102 |
|
$ |
2,665 |
|
$ |
5,767 |
|
$ |
804 |
|
$ |
2,491 |
|
$ |
3,295 |
|
Domestic & Global Transportation Management |
|
541 |
|
171 |
|
712 |
|
671 |
|
91 |
|
762 |
| ||||||
Emergency & Preventative Maintenance |
|
845 |
|
138 |
|
983 |
|
872 |
|
124 |
|
996 |
| ||||||
Household Goods Moving Services |
|
1,835 |
|
354 |
|
2,189 |
|
1,425 |
|
169 |
|
1,594 |
| ||||||
Total non-asset-based segments |
|
$ |
6,323 |
|
$ |
3,328 |
|
$ |
9,651 |
|
$ |
3,772 |
|
$ |
2,875 |
|
$ |
6,647 |
|
|
|
Nine Months Ended |
|
Nine Months Ended |
| ||||||||||||||
|
|
Operating |
|
Depreciation |
|
EBITDA |
|
Operating |
|
Depreciation |
|
EBITDA |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Premium Logistics & Expedited Freight Services(1) |
|
$ |
3,745 |
|
$ |
7,809 |
|
$ |
11,554 |
|
$ |
1,284 |
|
$ |
2,965 |
|
$ |
4,249 |
|
Domestic & Global Transportation Management |
|
1,564 |
|
449 |
|
2,013 |
|
1,657 |
|
245 |
|
1,902 |
| ||||||
Emergency & Preventative Maintenance |
|
2,367 |
|
400 |
|
2,767 |
|
1,430 |
|
373 |
|
1,803 |
| ||||||
Household Goods Moving Services |
|
2,552 |
|
880 |
|
3,432 |
|
798 |
|
527 |
|
1,325 |
| ||||||
Total non-asset-based segments |
|
$ |
10,228 |
|
$ |
9,538 |
|
$ |
19,766 |
|
$ |
5,169 |
|
$ |
4,110 |
|
$ |
9,279 |
|
(1) Depreciation and amortization consists primarily of amortization of intangibles, including customer relationships and software, which were acquired in conjunction with the purchase of Panther Expedited Services, Inc. on June 15, 2012. Amounts for the nine months ended September 30, 2012 reflect the period from the date of acquisition, June 15, to September 30.
ARKANSAS BEST CORPORATION
FINANCIAL STATEMENT OPERATING SEGMENT DATA AND OPERATING RATIOS
|
|
Three Months Ended |
|
Nine Months Ended |
| ||||||||||||||||
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
| ||||||||||||
|
|
(Unaudited) |
| ||||||||||||||||||
OPERATING REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Freight Transportation |
|
$ |
471,031 |
|
|
|
$ |
450,156 |
|
|
|
$ |
1,325,062 |
|
|
|
$ |
1,287,020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Premium Logistics & Expedited Freight Services(1) |
|
65,851 |
|
|
|
60,445 |
|
|
|
179,533 |
|
|
|
71,280 |
|
|
| ||||
Domestic & Global Transportation Management |
|
28,669 |
|
|
|
17,342 |
|
|
|
74,554 |
|
|
|
44,954 |
|
|
| ||||
Emergency & Preventative Maintenance |
|
37,047 |
|
|
|
32,785 |
|
|
|
102,504 |
|
|
|
85,264 |
|
|
| ||||
Household Goods Moving Services |
|
30,530 |
|
|
|
25,702 |
|
|
|
65,358 |
|
|
|
61,233 |
|
|
| ||||
Total non-asset-based segments |
|
162,097 |
|
|
|
136,274 |
|
|
|
421,949 |
|
|
|
262,731 |
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Other revenues and eliminations |
|
(9,714 |
) |
|
|
(8,884 |
) |
|
|
(26,012 |
) |
|
|
(20,795 |
) |
|
| ||||
Total consolidated operating revenues |
|
$ |
623,414 |
|
|
|
$ |
577,546 |
|
|
|
$ |
1,720,999 |
|
|
|
$ |
1,528,956 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
OPERATING EXPENSES AND COSTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Freight Transportation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Salaries, wages, and benefits |
|
$ |
276,683 |
|
58.7 |
% |
$ |
272,102 |
|
60.4 |
% |
$ |
816,502 |
|
61.6 |
% |
$ |
806,158 |
|
62.6 |
% |
Fuel, supplies, and expenses |
|
84,714 |
|
18.0 |
|
83,777 |
|
18.6 |
|
250,486 |
|
18.9 |
|
247,113 |
|
19.2 |
| ||||
Operating taxes and licenses |
|
10,864 |
|
2.3 |
|
10,890 |
|
2.4 |
|
32,793 |
|
2.5 |
|
32,514 |
|
2.5 |
| ||||
Insurance |
|
6,858 |
|
1.5 |
|
4,942 |
|
1.1 |
|
17,410 |
|
1.3 |
|
15,408 |
|
1.2 |
| ||||
Communications and utilities |
|
3,724 |
|
0.8 |
|
3,811 |
|
0.8 |
|
11,535 |
|
0.9 |
|
11,069 |
|
0.9 |
| ||||
Depreciation and amortization |
|
17,621 |
|
3.7 |
|
20,366 |
|
4.5 |
|
56,162 |
|
4.2 |
|
58,403 |
|
4.5 |
| ||||
Rents and purchased transportation |
|
50,507 |
|
10.7 |
|
44,015 |
|
9.8 |
|
133,236 |
|
10.1 |
|
116,912 |
|
9.1 |
| ||||
Gain on sale of property and equipment |
|
(93 |
) |
|
|
(65 |
) |
|
|
(487 |
) |
|
|
(578 |
) |
|
| ||||
Pension settlement expense |
|
1,612 |
|
0.3 |
|
|
|
|
|
1,612 |
|
0.1 |
|
|
|
|
| ||||
Other |
|
1,325 |
|
0.3 |
|
1,841 |
|
0.5 |
|
5,649 |
|
0.4 |
|
5,781 |
|
0.4 |
| ||||
|
|
453,815 |
|
96.3 |
% |
441,679 |
|
98.1 |
% |
1,324,898 |
|
100.0 |
% |
1,292,780 |
|
100.4 |
% | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Premium Logistics & Expedited Freight Services(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Purchased transportation |
|
$ |
50,220 |
|
76.3 |
% |
$ |
46,260 |
|
76.5 |
% |
$ |
137,489 |
|
76.6 |
% |
$ |
54,507 |
|
76.5 |
% |
Depreciation and amortization(1) |
|
2,665 |
|
4.0 |
|
2,491 |
|
4.1 |
|
7,809 |
|
4.3 |
|
2,965 |
|
4.2 |
| ||||
Salaries, benefits, insurance, and other |
|
9,864 |
|
15.0 |
|
10,890 |
|
18.1 |
|
30,490 |
|
17.0 |
|
12,524 |
|
17.5 |
| ||||
|
|
62,749 |
|
95.3 |
% |
59,641 |
|
98.7 |
% |
175,788 |
|
97.9 |
% |
69,996 |
|
98.2 |
% | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Domestic & Global Transportation Management |
|
28,128 |
|
|
|
16,671 |
|
|
|
72,990 |
|
|
|
43,297 |
|
|
| ||||
Emergency & Preventative Maintenance |
|
36,202 |
|
|
|
31,913 |
|
|
|
100,137 |
|
|
|
83,834 |
|
|
| ||||
Household Goods Moving Services |
|
28,695 |
|
|
|
24,277 |
|
|
|
62,806 |
|
|
|
60,435 |
|
|
| ||||
Total non-asset-based segments |
|
155,774 |
|
|
|
132,502 |
|
|
|
411,721 |
|
|
|
257,562 |
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Other expenses and eliminations |
|
(6,677 |
) |
|
|
(8,868 |
) |
|
|
(21,188 |
) |
|
|
(17,833 |
) |
|
| ||||
Total consolidated operating expenses and costs |
|
$ |
602,912 |
|
|
|
$ |
565,313 |
|
|
|
$ |
1,715,431 |
|
|
|
$ |
1,532,509 |
|
|
|
(1) Depreciation and amortization consists primarily of amortization of intangibles, including customer relationships and software, which were acquired in conjunction with the purchase of Panther Expedited Services, Inc. on June 15, 2012. Amounts for the nine months ended September 30, 2012 reflect the period from the date of acquisition, June 15, to September 30.
Note: See the following page for description of segments.
ARKANSAS BEST CORPORATION
FINANCIAL STATEMENT OPERATING SEGMENT DATA AND OPERATING RATIOS Continued
|
|
Three Months Ended |
|
Nine Months Ended |
| ||||||||
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
| ||||
|
|
(Unaudited) |
| ||||||||||
OPERATING INCOME (LOSS) |
|
|
|
|
|
|
|
|
| ||||
Freight Transportation |
|
$ |
17,216 |
|
$ |
8,477 |
|
$ |
164 |
|
$ |
(5,760 |
) |
|
|
|
|
|
|
|
|
|
| ||||
Premium Logistics & Expedited Freight Services |
|
3,102 |
|
804 |
|
3,745 |
|
1,284 |
| ||||
Domestic & Global Transportation Management |
|
541 |
|
671 |
|
1,564 |
|
1,657 |
| ||||
Emergency & Preventative Maintenance |
|
845 |
|
872 |
|
2,367 |
|
1,430 |
| ||||
Household Goods Moving Services |
|
1,835 |
|
1,425 |
|
2,552 |
|
798 |
| ||||
Total non-asset-based segments |
|
6,323 |
|
3,772 |
|
10,228 |
|
5,169 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Other income (loss) and eliminations(1) |
|
(3,037 |
) |
(16 |
) |
(4,824 |
) |
(2,962 |
) | ||||
Total consolidated operating income (loss) |
|
$ |
20,502 |
|
$ |
12,233 |
|
$ |
5,568 |
|
$ |
(3,553 |
) |
(1) Other income (loss) and eliminations for 2013 includes a $1.4 million reserve adjustment related to workers compensations claims associated with an insolvent insurance carrier.
Description of Segments:
· Freight Transportation includes the results of operations of Arkansas Bests largest subsidiary, ABF Freight System, Inc.®.
· Panther Expedited Services, Inc., which was acquired on June 15, 2012, is reported as Premium Logistics & Expedited Freight Services.
· Domestic & Global Transportation Management includes the companys transportation brokerage services, ocean container transport, and warehousing services operating as ABF Logistics.
· Emergency & Preventative Maintenance includes the roadside vehicle assistance and commercial equipment services subsidiary FleetNet America, Inc.
· Household Goods Moving Services includes Albert Companies, Inc. and Moving Solutions, Inc. which provide services to the consumer, corporate, and military household goods moving market.
Certain reclassifications have been made to the prior years operating segment data to conform to the current year presentation. The operating results of Global Supply Chain Services and Supply Chain Services, businesses which provide ocean container transport and warehousing services, have been reclassified from the Freight Transportation segment to the Domestic & Global Transportation Management segment. There was no impact on consolidated amounts as a result of these reclassifications.
ARKANSAS BEST CORPORATION
OPERATING STATISTICS
|
|
Three Months Ended |
|
Nine Months Ended |
| ||||||||||||
|
|
September 30 |
|
September 30 |
| ||||||||||||
|
|
2013 |
|
2012 |
|
% Change |
|
2013 |
|
2012 |
|
% Change |
| ||||
|
|
(Unaudited) |
| ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Freight Transportation (1) |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Workdays |
|
63.5 |
|
63.0 |
|
|
|
190.0 |
|
190.5 |
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Billed Revenue (2) / CWT |
|
$ |
28.67 |
|
$ |
28.46 |
|
0.7% |
|
$ |
27.78 |
|
$ |
27.92 |
|
(0.5)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Billed Revenue (2) / Shipment |
|
$ |
390.44 |
|
$ |
391.47 |
|
(0.3)% |
|
$ |
381.11 |
|
$ |
378.21 |
|
0.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Shipments |
|
1,201,981 |
|
1,141,168 |
|
5.3% |
|
3,488,337 |
|
3,410,012 |
|
2.3% |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Shipments / Day |
|
18,929 |
|
18,114 |
|
4.5% |
|
18,360 |
|
17,900 |
|
2.6% |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Tonnage (tons) |
|
818,471 |
|
784,713 |
|
4.3% |
|
2,393,055 |
|
2,309,390 |
|
3.6% |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Tons / Day |
|
12,889 |
|
12,456 |
|
3.5% |
|
12,595 |
|
12,123 |
|
3.9% |
|
(1) Based on the previously described reclassifications that have been made to the prior years operating segment data and statistics to conform to the current year presentation, operations of Global Supply Chain Services and Supply Chain Services are excluded from key operating statistics for the Freight Transportation Segment.
(2) Billed Revenue does not include revenue deferral required for financial statement purposes under the companys revenue recognition policy.
Contact: |
Investors: Mr. David Humphrey, Vice President, Investor Relations |
|
Telephone: (479) 785-6200 |
|
|
|
Media: Ms. Kathy Fieweger, Vice President, Marketing and Corporate Communications |
|
Telephone: (479) 719-4358 |
END OF RELEASE