The fourth-quarter loss compares to net income of $13.5 million in the fourth quarter of 2007.
"We are now over twenty-seven months into a freight recession that is the worst I have seen during my 37 years in this industry," said Robert A. Davidson, Arkansas Best president and CEO. "Fourth quarter freight declines of this magnitude, in addition to those ABF has experienced during the previous two years, have made it more and more difficult to adequately reduce network costs in step with business declines without impacting the service to our customers."
Saying the financial results are "obviously unacceptable," Davidson noted that the company is taking the following steps to reduce ABF's network capacity and cost structure:
* An 18 percent reduction of ABF employees (including approximately 1,100 that occurred in the fourth quarter of 2008), with another 350 cuts this month.
* A 14 percent decrease in road tractors and a 9 percent decrease in road trailers, with more tractor and trailer reductions planned later in 2009.
* Closure of facilities and consolidation of various service areas throughout the ABF network in order to improve efficiencies and lower costs.
* Realignment of the structure of ABF's field management organization, to 10 nationwide regions from 12 regions.
* Reductions of employee positions in the corporate office.
* Institution of health insurance premiums and increases in deductibles for nonunion employees.
* Elimination of 2009 cost-of-living and merit pay increases for nonunion employees.
* Elimination of pay increases and annual incentive payments to company executives.
* Company-wide travel limitations.
During the fourth quarter of 2008, Arkansas Best Corp. reported revenue of $391.2 million, a per-day decrease of 14.1 percent from 2007's fourth quarter of $459.3 million. For the full year 2008, the company reported revenue of $1.83 billion, a slight per-day decrease from 2007 revenue of $1.84 billion, and net income of $1.15 per diluted common share compared to income of $2.26 per diluted common share in 2007.
ABF Freight System reported revenue of $375.2 million for the fourth quarter compared to $441.3 million in 2007, a per-day decrease of 14.3 percent. The company experienced a tonnage per-day decrease of 11.5 percent versus 2007, and an operating loss of $15.2 million compared to operating income of $19.8 million in 2007. ABF had an operating ratio of 104 percent compared to 95.5 percent in 2007.
For the full year 2008, ABF reported Revenue of $1.76 billion compared to $1.77 billion in 2007, a per-day decrease of 0.9 percent, and a tonnage per-day decrease of 4.2 percent versus 2007. Operating income of $48.4 million compared to $84.5 million in 2007, and an operating ratio of 97.2% compared to 95.2% in 2007.