Arkansas Best Corp. had a first-quarter 2003 net loss of $734,000, or $0.03 per common share, which included a $9.0 million pre-tax charge related to an interest rate swap on $110.0 million of the company's borrowings.

At the end of this month, a significant amount of that debt will be paid off using proceeds from the sale of the firm's interest in Wingfoot Commercial Tire Systems to Goodyear Tire.
ABF Freight System, the company's largest subsidiary, had a first quarter 2003 operating ratio of 96.6, which was 1.5 percentage points better than in the first quarter of 2002. First quarter 2003 operating income at ABF was $11.1 million compared to $5.5 million during the first quarter of 2002.
"While ABF's first-quarter profits doubled in a sluggish economy, their results could have been even better had they not experienced unusually severe weather and incurred higher workers' compensation costs," said Robert A. Young III, Arkansas Best president and chief executive officer.
During the year's first quarter, ABF was adversely affected by unusually bad weather. The impact on operating income of lost revenue and increased costs at ABF related to the first quarter bad weather was about $2.0 million.
During the first quarter of 2003, workers' compensation costs were $2.5 million greater than in the first quarter of 2002 due primarily to deterioration in claims experience resulting from more increases on existing claims and greater severity of new claims. The increase in new claim severity was related to two large ABF workers' compensation claims whose costs totaled $1.1 million.
"In addition to the impact of adverse weather on ABF's business, it appears that the economy has experienced some deterioration in the last few months," said Young. "Since last September, it has been difficult for ABF to differentiate the impact of additional Consolidated Freight business and the changes in the economy. However, it does appear that the economy has moderately declined during the last few months," said Young.
"ABF will continue to maintain its emphasis on individual account profitability when reviewing existing business and when considering potential new business. As a result, ABF will be well positioned when economic factors do improve."