Trucking giant Arkansas Best Corp. showed a $11.8 million second quarter profit in part thanks to an $8 million tax benefit that worked in the company's favor.
The Fort Smith-based less-than-truckload (LTL) carrier increased revenues during the quarter to $511 million.
One year ago, Arkansas Best recorded second quarter net income of $5.3 million on revenue of $499 million. The company had a first quarter 2012 loss of $18.2 million.
The second quarter 2012 results included a tax benefit of $8.0 million related to the reversal of previously established deferred tax asset valuation allowances. The results also included transaction costs of $2.1 million associated with its $180 million June acquisition of Panther Expedited Services, Inc., an Ohio-based logistics firm expected to help diversify Arkansas Best's revenue base.
Excluding both of these items, Arkansas Best had second quarter 2012 net income of $5.2 million.
“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 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&
#039;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.”
Arkansas Best will need an improved second half of 2012 if it is to build on recent financial improvements. The company posted 2011 net income of $6.159 million, a huge swing from the $32.693 million loss during 2010. The 2011 financials marked the end of two consecutive years of income losses.
“While we are encouraged by ABF's yield initiatives, we continue to focus on various paths to reduce ABF's overall cost structure,” McReynolds said in the statement. “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.”
Shares of Arkansas Best (NASDAQ: ABFS) were set to open Tuesday trading at $12.25. During the past 52 weeks the share price has ranged from a $25.27 high to a $10.38 low.
Michael Tilley with our content partner, The City Wire, contributed to this report.