Arkansas Best 1Q Drops

Arkansas Best Corp. of Fort Smith on April 19 reported first-quarter income that was $7.6 million less than income from the first quarter of 2001, citing a change in accounting methods and “low business levels.”

The trucking company said that before the cumulative effect of the accounting change, the company had a first-quarter net income of $1.5 million, or 6 cents per diluted common share. In the first quarter of 2001, the company had a net income of net income of $9.1 million, or 37 cents per diluted common share.

The company also said it saw a noncash impairment loss of $23.9 million, or 95 cents per diluted common share, net of taxes, on goodwill associated with its Clipper subsidiary.

The company said the loss was a result of Financial Accounting Standards Board’s new goodwill accounting rules, effective for Arkansas Best on Jan. 1. That caused $37.5 million from Clipper goodwill to be eliminated from Arkansas Best’s balance sheet.

“Overall, we’re not happy with the results of the first quarter,” said David Loeffler, vice president, CFO and treasurer.

Loeffler noted that revenue was down for its ABF Freight and Clipper subsidiaries. For ABF, revenue was $228.6 million for the quarter, down 10 percent from last year’s first quarter. Clipper revenue was $25.9 million, down about 15 percent.

During the conference call, Robert A. Young III, president and CEO, noted that even while tonnage had declined, productivity had increased. He also said the load factor decline of 2.7 percent hurt profitability.

“Every day I hear that the recession is over and economic expansion has begun. So far, this has not been reflected in the amount of freight that is moving on our trucks,” Young said.