Arkansas Best Corp., the parent company of LTL carrier ABF Freight System, had $1.5-million worth of net income wiped out in the first quarter by a $23.9-million charge as it adopted new goodwill accounting standards.
The charge reflected the elimination of a $37.5-million goodwill deduction from Arkansas Best's Clipper subsidiary taken last year. For the quarter, Fort Smith, AR-based Arkansas Best recorded a $22.5-million loss, compared to net income of $9 million for the same period last year.
During the first quarter of 2002, ABF's revenue was $288.6 million, a decline of $9.9 million from the same quarter in 2001. First quarter operating income at ABF was $5.5 million versus $21 million in the same period last year. During the first three months of 2002, LTL tonnage per day decreased 8.4% versus the same period last year. Compared to the first quarter of 2001, LTL shipments per day moving in two-day transit time lanes decreased 5.1% versus a 7.5% shipment decrease in ABF's longer-haul business, the carrier said.
Arkansas Best's Clipper LTL subsidiary had first quarter revenue of $25.9 million versus $30.8 million in the same quarter last year. However, the subsidiary lost money this quarter as a result of the poor economy, from lower rail incentive payments, and the bankruptcy of one of its biggest customers.
"Low business levels had a significant impact on our company's operations and results," said president & CEO Robert Young. "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."