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 30, 2014 (January 30, 2014)
ARKANSAS BEST CORPORATION
(Exact name of registrant as specified in its charter)
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Delaware |
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0-19969 |
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71-0673405 |
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(State or other |
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(Commission |
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(IRS Employer |
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jurisdiction of |
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File Number) |
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Identification No.) |
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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 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 30, 2014, Arkansas Best Corporation (Nasdaq: ABFS) issued a press release announcing its unaudited fourth 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 Company’s 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 January 30, 2014.
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.
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ARKANSAS BEST CORPORATION | |||
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(Registrant) | |||
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Date: |
January 30, 2014 |
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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
FOURTH QUARTER 2013 RESULTS AND FULL YEAR 2013 RESULTS
· Fourth quarter 2013 net income of $10.3 million, or $0.38 per share
· ABF Freight fourth quarter profit generated by business and pricing increases and improved cost structure following implementation of its new labor agreement
· Panther’s operating income nearly tripled in fourth quarter
· Emerging, non-asset-based businesses represent 25% of total 2013 consolidated revenue
(Fort Smith, Arkansas, January 30, 2014) — Arkansas Best Corporation (Nasdaq: ABFS) today reported results for the fourth quarter and full year 2013 that reflected solidly improved profitability at ABF Freight System, Inc., Panther Expedited Services and revenue growth at Arkansas Best’s other emerging, non-asset based businesses.
Arkansas Best’s 2013 revenue was $2.3 billion, an increase of 11% compared to $2.1 billion in 2012. Arkansas Best had 2013 net income of $15.8 million, or $0.59 per share, compared to a net loss of $7.7 million, or $0.31 per share, in 2012.
Arkansas Best’s fourth quarter 2013 net income was $10.3 million, or $0.38 per share, compared to a fourth quarter 2012 net loss of $7.9 million, or $0.31 per share. Excluding adjustments for non-operational items that are identified in the attached reconciliation table, Arkansas Best had fourth quarter 2013 net income of $8.4 million, or $0.31 per share. Arkansas Best’s fourth quarter 2013 revenue was $578.5 million compared to revenue of $537.0 million in the fourth quarter of 2012.
“After a very challenging year in which we negotiated and implemented a new five-year labor agreement with the International Brotherhood of Teamsters, I am very pleased to report that ABF Freight ended the year with solid profitability, substantially reversing the unacceptable trend of losses in 2012,” said Arkansas Best President and Chief Executive Officer Judy R. McReynolds. “While that lengthy process was ongoing, we continued to make important strategic
investments in our emerging businesses, all of which reported increased revenues and are well positioned for additional growth in 2014.”
McReynolds added that the company as a whole now has greater stability and resources with which to continue providing the holistic transportation and logistics solutions sought by customers. “Everyone at Arkansas Best and our operating companies is energized by the opportunities in front of us. We are working hard to offer a more easily accessible range of services along with the traditional high level of personal commitment to a job well done that our customers have come to expect.”
ABF Freight System, Inc.
Increased business levels and improved account pricing were the primary factors that contributed to fourth quarter 2013 profitability at ABF Freight. A better customer shipping environment and a more stable economy provided additional shipments in the ABF Freight network. This resulted in greater capacity utilization that contributed to improved fourth quarter results. In addition, cost savings related to the early November implementation of ABF Freight’s new labor agreement positively impacted the quarter.
Increased fourth quarter pricing at ABF Freight was the result of continued focus on individual account profitability and a stable yield environment throughout the LTL industry. The company believes the clarity that resulted from the resolution of ABF’s labor agreement was another positive factor contributing to higher average rates on fourth quarter ABF shipments.
Emerging, Non-Asset-Based Businesses
Panther Expedited Services, Inc. experienced significant improvement in fourth quarter profitability as operating income nearly tripled on higher quarterly revenue. Increased demand for the premium services offered by Panther occurred in the majority of customer industries it serves, thus allowing for solid pricing and margin expansion throughout the fourth quarter.
All of the remaining non-asset-based businesses experienced growth in fourth quarter revenue, highlighted by the Domestic & Global Transportation Management segment that increased quarterly revenue by 43% and generated a slight increase in operating income. Strategic investments in additional personnel, information technology and other resources impacted the level of profitability in this segment and contributed to a decline in fourth quarter profitability at the Household Goods Moving Services segment. However these investments, that are important
for future growth and improved customer service, are expected to positively impact the long-term results of these businesses. Additional revenue of 14% at the Emergency & Preventative Maintenance segment resulted in an operating income increase of 80% related to improved pricing and cost controls, as well as labor efficiencies associated with increased maintenance-event volume.
For full year 2013 together, Arkansas Best’s emerging non-asset-based businesses demonstrated strong, positive increases in revenue and operating margins and produced positive cash flow. Because of continued growth throughout the year, these businesses now represent 25% of total consolidated revenue and contributed significantly to Arkansas Best’s operating results. On a combined basis throughout 2013, the non-asset-based businesses generated earnings before interest, taxes, depreciation and amortization (“EBITDA”) of $28.0 million.
Capital Expenditures
In 2013, total net capital expenditures amounted to $24 million, including approximately $3 million of revenue equipment for ABF Freight. ABF Freight 2013 revenue equipment purchases were significantly below normal due to the delayed implementation of the labor contract, as described above. Depreciation and amortization costs on fixed assets equaled $84 million.
For 2014, total net capital expenditures are estimated to be in the range of $90 million to $100 million. This includes approximately $60 million of revenue equipment for ABF Freight, all of which will be replacements. The remainder of expected capital expenditures includes the costs of additional equipment for ABF Freight and the other subsidiaries; real estate improvements; and technology. Depreciation and amortization costs on fixed assets in 2014 are estimated to be in a range of $85 million to $90 million.
Closing Comments
“As I look ahead to 2014, I am encouraged that we have growth opportunities in many industries and markets we serve, despite my expectations for a slow growing economy overall,” said McReynolds. “Last year we achieved many significant milestones that give us a much stronger ability to compete in an ever-changing marketplace. We are positioned to effectively respond to our customers who increasingly look to us for ways to help them manage their complex transportation, supply chain and logistics needs.”
Conference Call
Arkansas Best Corporation will host a conference call with company executives to discuss the 2013 fourth quarter and full year results. The call will be today, Thursday, January 30, at 9:30 a.m. ET (8:30 a.m. CT). Interested parties are invited to listen by calling (800) 709-0218. Following the call, a recorded playback will be available through the end of the day on March 1, 2014. To listen to the playback, dial (800) 633-8284 or (402) 977-9140 (for international callers). The conference call ID for the playback is 21703284. The conference call and playback can also be accessed, through March 1, on Arkansas Best’s 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 ABF’s 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 Corporation’s 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 Corporation’s 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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Year 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) |
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OPERATING REVENUES |
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$ |
578,549 |
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$ |
537,042 |
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$ |
2,299,549 |
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$ |
2,065,999 |
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OPERATING EXPENSES AND COSTS |
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565,047 |
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548,058 |
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2,280,479 |
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2,080,567 |
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OPERATING INCOME (LOSS) |
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13,502 |
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(11,016 |
) |
19,070 |
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(14,568 |
) | ||||
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OTHER INCOME (EXPENSE) |
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Interest and dividend income |
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182 |
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185 |
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681 |
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808 |
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Interest expense and other related financing costs |
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(903 |
) |
(1,409 |
) |
(4,183 |
) |
(5,273 |
) | ||||
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Other, net |
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1,114 |
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(76 |
) |
3,893 |
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2,041 |
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393 |
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(1,300 |
) |
391 |
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(2,424 |
) | ||||
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INCOME (LOSS) BEFORE INCOME TAXES |
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13,895 |
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(12,316 |
) |
19,461 |
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(16,992 |
) | ||||
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INCOME TAX PROVISION (BENEFIT) |
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3,549 |
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(4,387 |
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3,650 |
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(9,260 |
) | ||||
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NET INCOME (LOSS) |
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$ |
10,346 |
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$ |
(7,929 |
) |
$ |
15,811 |
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$ |
(7,732 |
) |
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EARNINGS (LOSS) PER COMMON SHARE(1) |
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Basic |
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$ |
0.38 |
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$ |
(0.31 |
) |
$ |
0.59 |
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$ |
(0.31 |
) |
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Diluted |
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$ |
0.38 |
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$ |
(0.31 |
) |
$ |
0.59 |
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$ |
(0.31 |
) |
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AVERAGE COMMON SHARES OUTSTANDING |
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Basic |
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25,785,485 |
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25,629,309 |
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25,714,205 |
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25,564,752 |
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Diluted |
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25,793,366 |
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25,629,309 |
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25,714,205 |
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25,564,752 |
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CASH DIVIDENDS DECLARED PER COMMON SHARE |
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$ |
0.03 |
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$ |
0.03 |
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$ |
0.12 |
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$ |
0.12 |
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(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.
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NET INCOME (LOSS) |
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$ |
10,346 |
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$ |
(7,929 |
) |
$ |
15,811 |
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$ |
(7,732 |
) |
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EFFECT OF UNVESTED RESTRICTED STOCK AWARDS(1) |
|
(505 |
) |
(38 |
) |
(720 |
) |
(149 |
) | ||||
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ADJUSTED NET INCOME (LOSS) FOR CALCULATING EARNINGS (LOSS) PER COMMON SHARE |
|
$ |
9,841 |
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$ |
(7,967 |
) |
$ |
15,091 |
|
$ |
(7,881 |
) |
ARKANSAS BEST CORPORATION
CONSOLIDATED BALANCE SHEETS
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December 31 |
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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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Cash and cash equivalents |
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$ |
105,354 |
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$ |
90,702 |
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Short-term investments |
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35,906 |
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29,054 |
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Restricted cash, cash equivalents, and short-term investments |
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1,902 |
|
9,658 |
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Accounts receivable, less allowances (2013 — $4,533; 2012 — $5,249) |
|
202,540 |
|
180,631 |
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Other accounts receivable, less allowances (2013 — $1,422; 2012 — $1,334) |
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7,272 |
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6,539 |
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Prepaid expenses |
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19,016 |
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17,355 |
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Deferred income taxes |
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37,482 |
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39,245 |
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Prepaid and refundable income taxes |
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2,061 |
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5,681 |
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Other |
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6,952 |
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7,185 |
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TOTAL CURRENT ASSETS |
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418,485 |
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386,050 |
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PROPERTY, PLANT AND EQUIPMENT |
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Land and structures |
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245,805 |
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243,699 |
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Revenue equipment |
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589,902 |
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589,729 |
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Service, office, and other equipment |
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124,303 |
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119,456 |
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Software |
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110,998 |
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103,164 |
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Leasehold improvements |
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23,582 |
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23,272 |
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1,094,590 |
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1,079,320 |
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Less allowances for depreciation and amortization |
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700,193 |
|
635,292 |
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|
|
|
394,397 |
|
444,028 |
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GOODWILL |
|
76,448 |
|
73,189 |
| ||
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INTANGIBLE ASSETS, NET |
|
75,387 |
|
79,561 |
| ||
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OTHER ASSETS |
|
52,609 |
|
51,634 |
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|
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$ |
1,017,326 |
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$ |
1,034,462 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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CURRENT LIABILITIES |
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|
|
|
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Bank overdraft and drafts payable |
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$ |
13,609 |
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$ |
13,645 |
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|
Accounts payable |
|
89,091 |
|
84,292 |
| ||
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Income taxes payable |
|
1,782 |
|
59 |
| ||
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Accrued expenses |
|
173,622 |
|
158,668 |
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Current portion of long-term debt |
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31,513 |
|
43,044 |
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TOTAL CURRENT LIABILITIES |
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309,617 |
|
299,708 |
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|
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|
| ||
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LONG-TERM DEBT, less current portion |
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81,332 |
|
112,941 |
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PENSION AND POSTRETIREMENT LIABILITIES |
|
26,847 |
|
104,673 |
| ||
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OTHER LIABILITIES |
|
15,041 |
|
12,832 |
| ||
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DEFERRED INCOME TAXES |
|
64,028 |
|
45,309 |
| ||
|
|
|
|
|
|
| ||
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STOCKHOLDERS’ EQUITY |
|
|
|
|
| ||
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Common stock, $0.01 par value, authorized 70,000,000 shares; issued 2013: 27,507,241 shares; 2012: 27,296,285 shares |
|
275 |
|
273 |
| ||
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Additional paid-in-capital |
|
296,133 |
|
289,711 |
| ||
|
Retained earnings |
|
296,735 |
|
284,157 |
| ||
|
Treasury stock, at cost, 1,677,932 shares |
|
(57,770 |
) |
(57,770 |
) | ||
|
Accumulated other comprehensive loss |
|
(14,912 |
) |
(57,372 |
) | ||
|
TOTAL STOCKHOLDERS’ EQUITY |
|
520,461 |
|
458,999 |
| ||
|
|
|
|
|
|
| ||
|
|
|
$ |
1,017,326 |
|
$ |
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
|
|
|
Year Ended Ended |
| ||||
|
|
|
2013 |
|
2012 |
| ||
|
|
|
(Unaudited) |
| ||||
|
|
|
($ thousands) |
| ||||
|
OPERATING ACTIVITIES |
|
|
|
|
| ||
|
Net income (loss) |
|
$ |
15,811 |
|
$ |
(7,732 |
) |
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
| ||
|
Depreciation and amortization |
|
84,215 |
|
85,493 |
| ||
|
Amortization of intangibles |
|
4,174 |
|
2,261 |
| ||
|
Pension settlement expense |
|
2,111 |
|
— |
| ||
|
Share-based compensation expense |
|
5,494 |
|
6,068 |
| ||
|
Provision for losses on accounts receivable |
|
2,065 |
|
1,524 |
| ||
|
Deferred income tax benefit |
|
(10,367 |
) |
(10,359 |
) | ||
|
Gain on sale of property and equipment |
|
(153 |
) |
(735 |
) | ||
|
Changes in operating assets and liabilities: |
|
|
|
|
| ||
|
Receivables |
|
(24,200 |
) |
508 |
| ||
|
Prepaid expenses |
|
(1,670 |
) |
305 |
| ||
|
Other assets |
|
(1,015 |
) |
961 |
| ||
|
Income taxes |
|
8,468 |
|
2,630 |
| ||
|
Accounts payable, accrued expenses, and other liabilities |
|
8,571 |
|
3,610 |
| ||
|
NET CASH PROVIDED BY OPERATING ACTIVITIES |
|
93,504 |
|
84,534 |
| ||
|
|
|
|
|
|
| ||
|
INVESTING ACTIVITIES |
|
|
|
|
| ||
|
Purchases of property, plant and equipment, net of financings |
|
(26,369 |
) |
(37,278 |
) | ||
|
Proceeds from sale of property and equipment |
|
2,194 |
|
6,397 |
| ||
|
Purchases of short-term investments |
|
(39,605 |
) |
(55,858 |
) | ||
|
Proceeds from sale of short-term investments |
|
32,718 |
|
60,730 |
| ||
|
Business acquisition, net of cash acquired(1) |
|
(4,146 |
) |
(180,039 |
) | ||
|
Capitalization of internally developed software and other |
|
(7,668 |
) |
(7,218 |
) | ||
|
NET CASH USED IN INVESTING ACTIVITIES |
|
(42,876 |
) |
(213,266 |
) | ||
|
|
|
|
|
|
| ||
|
FINANCING ACTIVITIES |
|
|
|
|
| ||
|
Borrowing under credit facilities |
|
— |
|
100,000 |
| ||
|
Payments on long-term debt |
|
(43,176 |
) |
(53,000 |
) | ||
|
Net change in bank overdraft and other |
|
(37 |
) |
(7,190 |
) | ||
|
Net change in restricted cash, cash equivalents, and short-term investments |
|
7,756 |
|
43,035 |
| ||
|
Deferred financing costs |
|
(71 |
) |
(1,487 |
) | ||
|
Payment of common stock dividends |
|
(3,233 |
) |
(3,219 |
) | ||
|
Proceeds from the exercise of stock options |
|
2,785 |
|
— |
| ||
|
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES |
|
(35,976 |
) |
78,139 |
| ||
|
|
|
|
|
|
| ||
|
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
|
14,652 |
|
(50,593 |
) | ||
|
Cash and cash equivalents at beginning of period |
|
90,702 |
|
141,295 |
| ||
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
|
$ |
105,354 |
|
$ |
90,702 |
|
|
|
|
|
|
|
| ||
|
NONCASH INVESTING ACTIVITIES |
|
|
|
|
| ||
|
Accruals for equipment received |
|
$ |
324 |
|
$ |
301 |
|
|
Equipment financed |
|
$ |
36 |
|
$ |
37,973 |
|
(1) 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 |
|
Year Ended |
| ||||||||
|
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
| ||||
|
|
|
(Unaudited) |
| ||||||||||
|
|
|
($ thousands, except per share data) |
| ||||||||||
|
ARKANSAS BEST CORPORATION — CONSOLIDATED |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net Income (Loss) |
|
|
|
|
|
|
|
|
| ||||
|
Amounts on a GAAP basis |
|
$ |
10,346 |
|
$ |
(7,929 |
) |
$ |
15,811 |
|
$ |
(7,732 |
) |
|
Collective bargaining agreement adjustments, after tax(1) |
|
(1,435 |
) |
— |
|
— |
|
— |
| ||||
|
Tax benefits(2) |
|
(670 |
) |
529 |
|
(1,436 |
) |
(3,180 |
) | ||||
|
Transaction costs, after-tax(3) |
|
— |
|
— |
|
— |
|
1,294 |
| ||||
|
Pension settlement expense, after-tax(4) |
|
169 |
|
— |
|
1,290 |
|
— |
| ||||
|
Non-GAAP amounts |
|
$ |
8,410 |
|
$ |
(7,400 |
) |
$ |
15,665 |
|
$ |
(9,618 |
) |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Diluted Earnings (Loss) Per Share |
|
|
|
|
|
|
|
|
| ||||
|
Amounts on a GAAP basis |
|
$ |
0.38 |
|
$ |
(0.31 |
) |
$ |
0.59 |
|
$ |
(0.31 |
) |
|
Collective bargaining agreement adjustments, after tax(1) |
|
(0.06 |
) |
— |
|
— |
|
— |
| ||||
|
Tax benefits(2) |
|
(0.02 |
) |
0.02 |
|
(0.06 |
) |
(0.12 |
) | ||||
|
Transaction costs, after-tax(3) |
|
— |
|
— |
|
— |
|
0.05 |
| ||||
|
Pension settlement expense, after-tax(4) |
|
0.01 |
|
— |
|
0.05 |
|
— |
| ||||
|
Non-GAAP amounts |
|
$ |
0.31 |
|
$ |
(0.29 |
) |
$ |
0.58 |
|
$ |
(0.38 |
) |
|
|
|
|
|
|
|
|
|
|
| ||||
|
ARKANSAS BEST CORPORATION — CONSOLIDATED |
|
|
|
|
|
|
|
|
| ||||
|
Earnings Before Interest, Taxes, Depreciation and Amortization |
|
|
|
|
|
|
|
|
| ||||
|
Net income (loss) |
|
$ |
10,346 |
|
$ |
(7,929 |
) |
$ |
15,811 |
|
$ |
(7,732 |
) |
|
Interest expense |
|
903 |
|
1,409 |
|
4,183 |
|
5,273 |
| ||||
|
Income tax provision (benefit) |
|
3,549 |
|
(4,387 |
) |
3,650 |
|
(9,260 |
) | ||||
|
Depreciation and amortization |
|
20,819 |
|
23,764 |
|
88,388 |
|
87,754 |
| ||||
|
Amortization of share-based compensation |
|
1,915 |
|
1,357 |
|
5,494 |
|
6,068 |
| ||||
|
Amortization of actuarial losses and pension settlement expense |
|
1,228 |
|
2,846 |
|
10,046 |
|
11,385 |
| ||||
|
EBITDA |
|
38,760 |
|
17,060 |
|
127,572 |
|
93,488 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Transaction costs, pre-tax(3) |
|
— |
|
— |
|
— |
|
2,129 |
| ||||
|
Adjusted EBITDA |
|
$ |
38,760 |
|
$ |
17,060 |
|
$ |
127,572 |
|
$ |
95,617 |
|
(1) The ABF collective bargaining agreement, which was implemented November 3, 2013, provided for certain reductions in annual compensated vacation that impacted amounts expensed but not paid in periods prior to fourth quarter 2013.
(2) Tax benefit adjustments related to deferred tax asset valuation allowances.
(3) Transaction costs associated with the June 15, 2012 acquisition of Panther Expedited Services, Inc.
(4) Settlement expense related to the company’s 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 company’s 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 company’s 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 |
| ||||||||||||||
|
|
|
|
|
Depreciation |
|
|
|
|
|
Depreciation |
|
|
| ||||||
|
|
|
Operating |
|
and |
|
|
|
Operating |
|
and |
|
|
| ||||||
|
|
|
Income |
|
Amortization |
|
EBITDA |
|
Income |
|
Amortization |
|
EBITDA |
| ||||||
|
Premium Logistics & Expedited Freight Services(1) |
|
$ |
3,211 |
|
$ |
2,707 |
|
$ |
5,918 |
|
$ |
1,118 |
|
$ |
2,473 |
|
$ |
3,591 |
|
|
Domestic & Global Transportation Management |
|
1,409 |
|
191 |
|
1,600 |
|
1,357 |
|
119 |
|
1,476 |
| ||||||
|
Emergency & Preventative Maintenance |
|
907 |
|
141 |
|
1,048 |
|
505 |
|
125 |
|
630 |
| ||||||
|
Household Goods Moving Services |
|
(702 |
) |
367 |
|
(335 |
) |
(107 |
) |
242 |
|
135 |
| ||||||
|
Total non-asset-based segments |
|
$ |
4,825 |
|
$ |
3,406 |
|
$ |
8,231 |
|
$ |
2,873 |
|
$ |
2,959 |
|
$ |
5,832 |
|
|
|
|
Year Ended |
|
Year Ended |
| ||||||||||||||
|
|
|
|
|
Depreciation |
|
|
|
|
|
Depreciation |
|
|
| ||||||
|
|
|
Operating |
|
and |
|
|
|
Operating |
|
and |
|
|
| ||||||
|
|
|
Income |
|
Amortization |
|
EBITDA |
|
Income |
|
Amortization |
|
EBITDA |
| ||||||
|
Premium Logistics & Expedited Freight Services(1) |
|
$ |
6,956 |
|
$ |
10,516 |
|
$ |
17,472 |
|
$ |
2,402 |
|
$ |
5,438 |
|
$ |
7,840 |
|
|
Domestic & Global Transportation Management |
|
2,973 |
|
640 |
|
3,613 |
|
3,013 |
|
364 |
|
3,377 |
| ||||||
|
Emergency & Preventative Maintenance |
|
3,274 |
|
540 |
|
3,814 |
|
1,935 |
|
497 |
|
2,432 |
| ||||||
|
Household Goods Moving Services |
|
1,850 |
|
1,247 |
|
3,097 |
|
692 |
|
769 |
|
1,461 |
| ||||||
|
Total non-asset-based segments |
|
$ |
15,053 |
|
$ |
12,943 |
|
$ |
27,996 |
|
$ |
8,042 |
|
$ |
7,068 |
|
$ |
15,110 |
|
(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 year ended December 31, 2012 reflect the period from the date of acquisition, June 15, to December 31.
ARKANSAS BEST CORPORATION
FINANCIAL STATEMENT OPERATING SEGMENT DATA AND OPERATING RATIOS
|
|
|
Three Months Ended |
|
|
|
Year Ended |
|
|
| ||||||||||||
|
|
|
2013 |
|
|
|
2012 |
|
|
|
2013 |
|
|
|
2012 |
|
|
| ||||
|
|
|
(Unaudited) |
| ||||||||||||||||||
|
|
|
($ thousands) |
| ||||||||||||||||||
|
OPERATING REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Freight Transportation |
|
$ |
436,654 |
|
|
|
$ |
414,475 |
|
|
|
$ |
1,761,716 |
|
|
|
$ |
1,701,495 |
|
|
|
|
Premium Logistics & Expedited Freight Services(1) |
|
67,316 |
|
|
|
61,046 |
|
|
|
246,849 |
|
|
|
132,326 |
|
|
| ||||
|
Domestic & Global Transportation Management |
|
30,668 |
|
|
|
21,477 |
|
|
|
105,223 |
|
|
|
66,431 |
|
|
| ||||
|
Emergency & Preventative Maintenance |
|
35,042 |
|
|
|
30,704 |
|
|
|
137,546 |
|
|
|
115,968 |
|
|
| ||||
|
Household Goods Moving Services |
|
16,811 |
|
|
|
16,377 |
|
|
|
82,169 |
|
|
|
77,619 |
|
|
| ||||
|
Total non-asset-based segments |
|
149,837 |
|
|
|
129,604 |
|
|
|
571,787 |
|
|
|
392,344 |
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Other revenues and eliminations |
|
(7,942 |
) |
|
|
(7,037 |
) |
|
|
(33,954 |
) |
|
|
(27,840 |
) |
|
| ||||
|
Total consolidated operating revenues |
|
$ |
578,549 |
|
|
|
$ |
537,042 |
|
|
|
$ |
2,299,549 |
|
|
|
$ |
2,065,999 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
OPERATING EXPENSES AND COSTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Freight Transportation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Salaries, wages, and benefits |
|
$ |
258,757 |
|
59.3 |
% |
$ |
264,926 |
|
63.9 |
% |
$ |
1,075,259 |
|
61.0 |
% |
$ |
1,071,084 |
|
62.9 |
% |
|
Fuel, supplies, and expenses |
|
81,946 |
|
18.8 |
|
82,171 |
|
19.8 |
|
332,433 |
|
18.9 |
|
329,284 |
|
19.4 |
| ||||
|
Operating taxes and licenses |
|
11,072 |
|
2.5 |
|
10,823 |
|
2.6 |
|
43,865 |
|
2.5 |
|
43,336 |
|
2.5 |
| ||||
|
Insurance |
|
4,413 |
|
1.0 |
|
5,334 |
|
1.3 |
|
21,823 |
|
1.2 |
|
20,742 |
|
1.2 |
| ||||
|
Communications and utilities |
|
3,492 |
|
0.8 |
|
3,644 |
|
0.9 |
|
15,027 |
|
0.9 |
|
14,713 |
|
0.9 |
| ||||
|
Depreciation and amortization |
|
16,810 |
|
3.8 |
|
20,269 |
|
4.9 |
|
72,971 |
|
4.1 |
|
78,672 |
|
4.6 |
| ||||
|
Rents and purchased transportation |
|
47,453 |
|
10.9 |
|
39,897 |
|
9.6 |
|
180,689 |
|
10.3 |
|
156,810 |
|
9.2 |
| ||||
|
Gain on sale of property and equipment |
|
(90 |
) |
— |
|
(132 |
) |
— |
|
(576 |
) |
— |
|
(711 |
) |
— |
| ||||
|
Pension settlement expense |
|
219 |
|
0.1 |
|
— |
|
— |
|
1,831 |
|
0.1 |
|
— |
|
— |
| ||||
|
Other |
|
2,713 |
|
0.5 |
|
1,583 |
|
0.4 |
|
8,361 |
|
0.4 |
|
7,365 |
|
0.5 |
| ||||
|
|
|
426,785 |
|
97.7 |
% |
428,515 |
|
103.4 |
% |
1,751,683 |
|
99.4 |
% |
1,721,295 |
|
101.2 |
% | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Premium Logistics & Expedited Freight Services(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Purchased transportation |
|
$ |
51,072 |
|
75.9 |
% |
$ |
47,052 |
|
77.1 |
% |
$ |
188,561 |
|
76.4 |
% |
$ |
101,559 |
|
76.7 |
% |
|
Depreciation and amortization(1) |
|
2,707 |
|
4.0 |
|
2,473 |
|
4.1 |
|
10,516 |
|
4.3 |
|
5,438 |
|
4.1 |
| ||||
|
Salaries, benefits, insurance, and other |
|
10,326 |
|
15.3 |
|
10,403 |
|
17.0 |
|
40,816 |
|
16.5 |
|
22,927 |
|
17.4 |
| ||||
|
|
|
64,105 |
|
95.2 |
% |
59,928 |
|
98.2 |
% |
239,893 |
|
97.2 |
% |
129,924 |
|
98.2 |
% | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Domestic & Global Transportation Management |
|
29,259 |
|
|
|
20,120 |
|
|
|
102,250 |
|
|
|
63,418 |
|
|
| ||||
|
Emergency & Preventative Maintenance |
|
34,135 |
|
|
|
30,199 |
|
|
|
134,272 |
|
|
|
114,033 |
|
|
| ||||
|
Household Goods Moving Services |
|
17,513 |
|
|
|
16,484 |
|
|
|
80,319 |
|
|
|
76,927 |
|
|
| ||||
|
Total non-asset-based segments |
|
145,012 |
|
|
|
126,731 |
|
|
|
556,734 |
|
|
|
384,302 |
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Other expenses and eliminations |
|
(6,750 |
) |
|
|
(7,188 |
) |
|
|
(27,938 |
) |
|
|
(25,030 |
) |
|
| ||||
|
Total consolidated operating expenses and costs |
|
$ |
565,047 |
|
|
|
$ |
548,058 |
|
|
|
$ |
2,280,479 |
|
|
|
$ |
2,080,567 |
|
|
|
(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 year ended December 31, 2012 reflect the period from the date of acquisition, June 15, to December 31.
Note: See the following page for description of segments.
ARKANSAS BEST CORPORATION
FINANCIAL STATEMENT OPERATING SEGMENT DATA AND OPERATING RATIOS — Continued
|
|
|
Three Months Ended |
|
Year Ended |
| ||||||||
|
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
| ||||
|
|
|
(Unaudited) |
| ||||||||||
|
OPERATING INCOME (LOSS) |
|
|
|
|
|
|
|
|
| ||||
|
Freight Transportation |
|
$ |
9,869 |
|
$ |
(14,040 |
) |
$ |
10,033 |
|
$ |
(19,800 |
) |
|
Premium Logistics & Expedited Freight Services |
|
3,211 |
|
1,118 |
|
6,956 |
|
2,402 |
| ||||
|
Domestic & Global Transportation Management |
|
1,409 |
|
1,357 |
|
2,973 |
|
3,013 |
| ||||
|
Emergency & Preventative Maintenance |
|
907 |
|
505 |
|
3,274 |
|
1,935 |
| ||||
|
Household Goods Moving Services |
|
(702 |
) |
(107 |
) |
1,850 |
|
692 |
| ||||
|
Total non-asset-based segments |
|
4,825 |
|
2,873 |
|
15,053 |
|
8,042 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Other income (loss) and eliminations(1) |
|
(1,192 |
) |
151 |
|
(6,016 |
) |
(2,810 |
) | ||||
|
Total consolidated operating income (loss) |
|
$ |
13,502 |
|
$ |
(11,016 |
) |
$ |
19,070 |
|
$ |
(14,568 |
) |
Description of Segments:
· Freight Transportation includes the results of operations of Arkansas Best’s 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 company’s 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 year’s 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.
(1) Other income (loss) and eliminations for 2013 includes $1 million of expense for workers’ compensation reserves associated with an insolvent insurance carrier. 2013 also reflects costs of long-term incentive plans that are driven by the company’s total shareholder return relative to its peer group.
ARKANSAS BEST CORPORATION
OPERATING STATISTICS
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Three Months Ended |
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Year Ended |
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December 31 |
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December 31 |
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2013 |
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2012 |
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% Change |
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2013 |
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2012 |
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% Change |
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(Unaudited) |
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Freight Transportation (1) |
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Workdays |
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61.5 |
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61.5 |
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251.5 |
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252.0 |
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Billed Revenue (2) / CWT |
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$ |
28.46 |
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$ |
27.83 |
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2.3% |
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$ |
27.94 |
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$ |
27.90 |
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0.1% |
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Billed Revenue (2) / Shipment |
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$ |
377.65 |
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$ |
379.63 |
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(0.5)% |
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$ |
380.25 |
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$ |
378.55 |
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0.4% |
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Shipments |
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1,143,813 |
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1,083,479 |
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5.6% |
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4,632,150 |
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4,493,491 |
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3.1% |
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Shipments / Day |
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18,599 |
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17,618 |
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5.6% |
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18,418 |
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17,831 |
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3.3% |
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Tonnage (tons) |
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758,987 |
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738,947 |
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2.7% |
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3,152,042 |
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3,048,336 |
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3.4% |
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Tons / Day |
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12,341 |
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12,015 |
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2.7% |
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12,533 |
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12,097 |
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3.6% |
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(1) Based on the previously described reclassifications that have been made to the prior year’s 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 company’s revenue recognition policy.
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Contact: |
Investors: Mr. David Humphrey, Vice President, Investor Relations |
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Telephone: (479) 785-6200 |
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Media: Ms. Kathy Fieweger, Vice President, Marketing and Corporate Communications |
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Telephone: (479) 719-4358 |
END OF RELEASE