Arkansas Best Corporation announced a 78% increase in first quarter 2008 net income of $8.5 million, or $0.34 per diluted common share, compared to $4.8 million, or $0.19 per diluted common share, in the first quarter of 2007. Arkansas Best’s 2008 first quarter revenue grew to $447.5 million from $427.8 million in the first quarter of last year.
ABF Freight System, Inc., the company’s largest subsidiary, had first quarter 2008 revenue of $427.7 million, a per-day increase of 4.5% compared to first quarter 2007 revenue of $412.6 million. Operating income in this year’s first quarter was $12.9 million compared to $5.8 million during the first quarter of 2007. ABF’s first quarter 2008 operating ratio improved to 97.0% from 98.6% during the first quarter of 2007. “During the first three months of this year, ABF displayed solid execution and provided excellent service to our customers in the midst of what continues to be a difficult freight environment,” said Robert A. Davidson, Arkansas Best President and Chief Executive Officer.
ABF’s first quarter 2008 total weight per day was flat compared to the first quarter of 2007. “Though business levels remain depressed, quarterly year-over-year tonnage trends have continued to improve since the third quarter of 2007,” said Mr. Davidson. “ABF continues to benefit from additional shipments moving in regional freight lanes.”
“Focus on cost control, while matching labor expense with available business levels, helped ABF’s performance in the first quarter,” said Mr. Davidson. “I am pleased to note that the ABF team improved shipment and weight per hour productivity measures while also increasing the level of service and cargo care to our customers.”
Total billed revenue per hundredweight in this year’s first quarter was $26.32, an increase of 4.8% over last year’s first quarter figure of $25.11. “As was the case in the fourth quarter, the overall increase in revenue yield was affected by higher fuel surcharge resulting from considerably higher fuel-related costs and by profile shifts in our freight mix,” said Mr. Davidson. “Because of the weak freight environment, pricing in our industry remains very competitive. However, our account profitability continues to be supported by the high level of value-added service that we provide.”
“In 2007, ABF reduced transit times, creating thousands of new next-day lanes, and that investment is beginning to bear fruit. Throughout this year, further operational changes facilitated by ABF’s new labor contract should result in additional transit-time reductions in thousands of new regional freight lanes and in some of ABF’s traditional longer markets,” said Mr. Davidson. “ABF also expects to offer enhanced regional service throughout the western one-third of the United States by the end of the year.”
“During a period of economic decline and business slowdown, shippers tend to seek out competent, stable motor carriers who offer consistent, damage-free transit and reliable customer service. ABF has been benefiting from this ‘flight to quality’ industry trend,” said Mr. Davidson.
“During challenging economic times, these are a few of the characteristics that distinguish ABF as a stable and reliable choice in the LTL marketplace,” said Mr. Davidson. “In addition, our financial strength offers a foundation for managing through the current environment and for considering future opportunities to serve customers that provide acceptable returns. We are evaluating opportunities inside and outside of ABF to use our considerable resources to increase shareholder value.”