Wednesday, August 03, 2011

ABF Announces Second Quarter 2011 Results

Arkansas Best Corporation announced second quarter 2011 net income of $5.3 million, or $0.20 per share, compared to a net loss of $7.4 million, or $0.30 per share, in the second quarter of 2010.

Arkansas Best’s second quarter 2011 return to profitability was primarily a result of ABF’s healthy tonnage levels combined with an emphasis on increased account pricing. ABF improved its operating ratio by over five operating points versus the same period last year and nearly seven and a half operating points versus the previous quarter.

“We are pleased with the improvement in our company’s performance and the steps we have taken toward restoring Arkansas Best’s historical profit margins,” said Judy R. McReynolds, Arkansas Best President and Chief Executive Officer. “However, the progress made so far does not produce sufficient returns for our shareholders nor does it allow us to adequately recapitalize our business. Further profitability gains should result from improved pricing on ABF’s existing account base and from continuing efforts to achieve a more competitive cost structure. Our focus on growing business with customers who value ABF’s high level of service and wide range of logistics offerings should also positively impact our profitability.”

Arkansas Best Corporation

Second Quarter 2011

Revenue of $498.6 million, a per day increase of 21.2% from the prior year second quarter revenue of $411.3 million
Net income of $0.20 per share compared to a net loss of $0.30 per share in the prior year quarter

ABF Freight System, Inc.

Second Quarter 2011

Revenue of $458.5 million compared to $379.4 million in second quarter 2010, a per-day increase of 20.8%

Tonnage per-day increase of 9.9% versus second quarter 2010
Total billed revenue per hundredweight of $25.83 compared to $23.59 in second quarter 2010, an increase of 9.5%, including increases in fuel surcharge
Operating income of $8.2 million compared to an operating loss of $12.6 million in second quarter 2010

Operating ratio of 98.2% compared to 103.3% in second quarter 2010
“Last quarter I described various initiatives that were under way to address inadequate pricing and improve the profitability on a large number of accounts. Throughout the second quarter, ABF held firm on requests to better match individual customer revenues with the high level of service and superior value that ABF offers. Though these pricing actions have caused some business to go to other carriers, the success of our efforts is reflected in ABF’s return to profitability,” said Ms. McReynolds.

Legal Update

On July 6, 2011, the U.S. Court of Appeals for the Eighth Circuit reversed a lower court’s previous dismissal of a lawsuit ABF filed in November 2010 against the International Brotherhood of Teamsters and various other parties. The lawsuit was remanded back to the lower court. The lawsuit related to three modifications of the National Master Freight Agreement (“NMFA”) that were exclusively granted to the YRC subsidiaries in 2009 and 2010. Approximately 76% of ABF’s employees are covered under the NMFA. ABF believes it is an equal signatory to the NMFA which, as a national collective bargaining agreement, is designed to establish a single national standard for wages and other employment terms for all employer participants. The intent of ABF’s original lawsuit was to level the playing field relative to the cost structures of all parties to the NMFA. ABF is very pleased with the Eighth Circuit’s ruling and will work through the next steps of the legal process to validate its rights under the NMFA.

Final Remarks

“We are encouraged by the positive results of the second quarter and we are pleased with the progress ABF has made,” said Ms. McReynolds. “However, we know we have a lot of work left to do. Our employees continue to work efficiently and productively to overcome our higher cost structure and to deliver the superior customer service for which ABF is known. As we move through the remainder of the year, we expect to make further progress toward consistently achieving the historical returns of our company.”

No comments: