Arkansas Best Corporation today announced unaudited results for the fourth quarter and full year 2012. Arkansas Best had a fourth quarter 2012 net loss, as generally flat, year-over-year revenue, tonnage and pricing at ABF Freight System, Inc. were offset by higher costs. For the same period, Arkansas Best's emerging, non-asset-based businesses were profitable and posted higher revenues. Arkansas Best's fourth quarter 2012 revenue was $537.0 million compared to revenue of $463.2 million in the fourth quarter of 2011.
Following the acquisition of Panther Expedited Services, Inc. in June 2012, Arkansas Best saw yearly revenue top $2 billion for the first time in its history. In addition to Panther, Arkansas Best's emerging, non-asset-based businesses that contributed to 2012's revenue growth are in freight brokerage, and vehicle roadside and preventative maintenance.
Arkansas Best's fourth quarter 2012 net loss was $7.9 million, or $0.31 per share, compared to fourth quarter 2011 net income of $1.4 million, or $0.05 per share. This quarter's results include an after-tax charge of $2.4 million, or $0.09 per share, related to an actuarial adjustment to ABF's workers' compensation expense. The liabilities associated with Arkansas Best's self-insured portion of these costs are estimates based on a number of variables and assumptions. During the fourth quarter, information indicating that many of these claims had a longer duration and higher payments than initially projected resulted in a thorough actuarial review and in this adjustment.
For full year 2012, Arkansas Best had a net loss of $7.7 million, or $0.31 per share, including the previously discussed workers' compensation expense increase. This compares to net income of $6.2 million, or $0.23 per share, in 2011. Arkansas Best's full year 2012 revenue was $2.1 billion compared to revenue of $1.9 billion in 2011.
"We are pleased with revenue growth and improving profitability at our emerging businesses as they added up to more than 20 percent of our total company fourth quarter revenue," said Arkansas Best President and Chief Executive Officer Judy R. McReynolds. "Expanding our portfolio of expedited and premium logistics services was a major initiative in 2012 as our customers' supply chains grow ever more complex. We are encouraged by the trends we have seen in these businesses. Among other things, we added key sales and customer service personnel and invested in service-enhancing technologies, all of which were well-received in the marketplace."
McReynolds added that the full-year loss at ABF resulting in a 2012 operating ratio above 100, following a slightly profitable 2011, was troubling as total revenues remained about even with annual yield improvement offset by lower business levels. "We are focused on a return to profitability at ABF by substantially lowering our costs in the next labor contract through negotiations that are now underway. ABF's management team is hopeful it will reach an agreement with the Teamsters that allows us to preserve good-paying jobs and protect our employees' retirements through a lower cost structure that truly reflects the competitive nature of today's LTL marketplace."
In late December, ABF exchanged initial contract proposals with the Teamsters National Freight Industry Negotiating Committee. ABF seeks a national contract that eliminates the use of supplements and provides uniform terms for all of its local operations throughout the country. While previous versions of the National Master Freight Agreement ("NMFA") once covered more than 500,000 Teamsters, today, ABF is negotiating for its own contract that will cover 7,500 union employees. ABF is the only remaining union LTL carrier still paying full NMFA rates. Without significant reduction to this burdensome cost structure, ABF has informed Teamster leadership that extensive network changes will result, including closure of terminals and distribution centers. Full Report.........
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