Arkansas Best Corporation today announced second quarter 2012 net income of $11.8 million, or $0.44 per share, on revenue of $511 million, compared with net income of $5.3 million, or $0.20 per share, and revenue of $499 million in the second quarter of 2011.
The second quarter 2012 results included a tax benefit of $8.0 million, or $0.31 per share, related to the reversal of previously established deferred tax asset valuation allowances, and transaction costs of $2.1 million ($1.3 million, after tax), or $0.05 per share, associated with the June 15, 2012 acquisition of Panther Expedited Services, Inc. (“Panther”). Excluding both of these items, Arkansas Best had second quarter 2012 net income of $5.2 million, or $0.18 per share.
“A number of significant developments occurred during the second quarter, including closing the acquisition of Panther, our premium logistics provider,” said Arkansas Best President and CEO Judy R. McReynolds. “This transaction represents a major step in our long-term strategy to grow our non-asset-based businesses. If Panther had been included, total 2011 revenues for Arkansas Best’s non-asset businesses would have exceeded $400 million. The addition of Panther and the services provided by our other non-asset-based subsidiaries complement our offerings at ABF and allow us to strengthen customer relationships.”
ABF implemented a 6.9% increase in its general rates and charges on June 25, 2012 that was in effect during the last week of the second quarter. Second quarter price increases on ABF accounts under contract and deferred pricing agreements remained at favorable levels. In the second quarter of 2011, ABF began an aggressive initiative to address inadequate pricing and improve the profitability of many accounts across its network. This effort continues in 2012. As a result, the incremental profitability of ABF’s account base has improved.
“While we are encouraged by ABF’s yield initiatives, we continue to focus on various paths to reduce ABF’s overall cost structure,” said Ms. McReynolds. “On-going efforts that offer opportunities to reduce ABF’s cost structure include ABF’s labor contract lawsuit, collaborative work to develop a permanent solution to correct our payment of non-ABF multiemployer pension benefits and preparations for negotiation of a new April 2013 labor contract.”
ABF’s second quarter 2012 daily tonnage levels continued to be below those of the same period last year as the U.S. economy remained inconsistent. However, in each month of this year’s second quarter, the level of tonnage decrease improved versus 2011. During the second half of 2012, monthly tonnage levels will be compared back to the second half of 2011, when ABF experienced declining tonnage versus 2010.