Arkansas Best CEO Says Agreement With Teamsters Will Help 'Restore Profitability'

by Chris Bahn  on Tuesday, May. 21, 2013 10:47 am  

Approval of a new five-year contract is in the hands of Arkansas Best Freight's 7,500 union employees. Ballots will be mailed to them on June 3 and a count is expected June 28.

Arkansas Best Corp. of Fort Smith has seen a 68 percent increase in its share price since reaching a tentative agreement with the Teamsters, President and CEO Judy R. McReynolds told shareholders Tuesday during the company's annual meeting.

Finalizing the five-year contract between Arkansas Best Freight, a subsidiary of Arkansas Best Corp. (Nasdaq: ABFS), and the union will be a key step in restoring "profitability of the company," McReynolds said during a presentation at the transportation firm's headquarters.

McReynolds said the Teamsters' "two-man committee" approved the operating agreement during a meeting Monday in Chicago.

Now approval is in the hands of ABF's 7,500 union employees. Ballots will be mailed to them on June 3 and a count is expected June 28.

The company's share price was at $9.83 on May 2, the day before a tentative agreement was reached. ABFS stock was valued at $17.74 on Monday and was at $18.87 by 10:30 a.m. Tuesday.

A slide during McReynold’s presentation described last year's unprofitability as "troubling and unacceptable." Arkansas Best reported a net loss of $7.7 million in 2012.

Arkansas Best expects the new contract to help contain operating expenses for the company, which had $2.2 billion in revenue for 2012. McReynolds outlined other areas for potential growth and highlighted an 82 percent growth for truck brokerage and management for the first quarter of 2013. McReynolds highlighted the new supply chain services that are being offered to customers as a result of last year's purchase of Panther Expedited Services Inc.

A freeze in the pension plan for non-union employees is also supposed to help the company's bottom line. Arkansas Best announced the elimination, which won’t impact vested pensions, on Monday.

"I just want to thank all of the employees at the company for their energy and effort," McReynolds said. "It’s been tough. It's been a tough few years for us. We know the direction we're headed. We know how to get there."

Also on Tuesday, shareholders approved the appointment of nine directors to the ABFS board. All nine were approved by the vote and shareholders also offered support, though non-binding, of the proposed executive compensation plan for 2013. 

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Editor's note: This is an updated and corrected version of a May 22 story that incorrectly said ABFS is considering new acquisitions. It is not.

 

 

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