UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Quarter Ended September 30, 1994
--------------------
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
------------- -------------
Commission file number 0-19969
--------
ARKANSAS BEST CORPORATION
- -----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 6711 71-0673405
- ------------------------- ------------------------- ----------------------
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Classification Identification No.)
incorporation or Code No.)
organization)
1000 South 21st Street
Fort Smith, Arkansas 72901
(501) 785-6000
- -----------------------------------------------------------------------------
(Address, including zip code, and telephone number, including area code, of
the registrant's principal executive offices)
Not Applicable
- -----------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report.)
Indicate by check mark whether the registrants (1) have filed all reports
required to be filed by Section 13 or 15(d) of The Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days. Yes [ X ] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at October 31, 1994
--------------------------------- --------------------------------
Common Stock, $.01 par value 19,203,517 shares
<PAGE>
ARKANSAS BEST CORPORATION
INDEX
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets -- September 30, 1994
and December 31, 1993 3
Consolidated Statements of Operations -- For the
Three and Nine Months Ended
September 30, 1994 and 1993 5
Consolidated Statements of Cash Flows --
For the Nine Months Ended
September 30, 1994 and 1993 7
Notes to Consolidated Financial Statements --
September 30, 1994 9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 23
Item 2. Changes in Securities 23
Item 3. Defaults Upon Senior Securities 23
Item 4. Submission of Matters to a Vote of Security Holders 23
Item 5. Other Information 23
Item 6. Exhibits and Reports on Form 8-K 23
SIGNATURES 25
<PAGE>
PART I.
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
ARKANSAS BEST CORPORATION
CONSOLIDATED BALANCE SHEETS
<CAPTION>
September 30 December 31
1994 1993
(unaudited) (note)
($ thousands)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 20,528 $ 6,962
Trade receivables, less allowances for
doubtful accounts (1994 -- $2,635,000;
1993 -- $2,220,000) 138,741 104,598
Inventories -- Note C 29,179 29,086
Prepaid expenses 10,955 9,916
--------- ---------
TOTAL CURRENT ASSETS 199,403 150,562
PROPERTY, PLANT AND EQUIPMENT
Land and structures 109,477 108,422
Revenue equipment 196,721 169,573
Manufacturing equipment 6,874 5,997
Service, office and other equipment 37,426 33,913
Leasehold improvements 8,852 8,096
Construction in progress 8,751 -
--------- ---------
368,101 326,001
Less allowances for depreciation
and amortization (157,327) (147,799)
--------- ---------
210,774 178,202
OTHER ASSETS 14,619 12,839
GOODWILL, less amortization (1994 --
$18,604,000; 1993 -- $16,267,000) -- Note H 153,108 106,130
--------- ---------
$ 577,904 $ 447,733
========= =========
</TABLE>
<PAGE>
<TABLE>
ARKANSAS BEST CORPORATION
CONSOLIDATED BALANCE SHEETS
<CAPTION>
September 30 December 31
1994 1993
(unaudited) (note)
($ thousands)
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Bank drafts payable $ 10,491 $ 7,661
Trade accounts payable 50,680 36,143
Accrued expenses 86,082 71,278
Federal and state income taxes 10,707 6,398
Deferred federal income taxes 3,503 3,503
Current portion of long-term debt -- Note H 79,238 15,239
--------- ---------
TOTAL CURRENT LIABILITIES 240,701 140,222
LONG-TERM DEBT, less current portion 61,978 43,731
OTHER LIABILITIES 5,615 3,933
DEFERRED FEDERAL INCOME TAXES 26,205 26,158
MINORITY INTEREST 33,811 31,699
SHAREHOLDERS' EQUITY
Preferred stock, $.01 par value,
authorized 10,000,000 shares; issued
1,495,000 shares 15 15
Common stock, $.01 par value, authorized
70,000,000 shares; issued and outstanding
1994: 19,203,517 shares; 1993:
19,185,325 shares 192 192
Additional paid-in capital 206,698 206,457
Stock payable to employee benefit plans - 205
Predecessor basis adjustment (15,371) (15,371)
Retained earnings 18,060 10,492
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 209,594 201,990
CONTINGENCIES -- Note F
--------- ---------
$ 577,904 $ 447,733
========= =========
<FN>
<F1>
Note: The balance sheet at December 31, 1993 has been derived from the
audited financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements.
<F2>
See notes to consolidated financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
ARKANSAS BEST CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
1994 1993 1994 1993
(unaudited)
($ thousands, except per share data)
<S> <C> <C> <C> <C>
OPERATING REVENUES
Carrier operations $ 254,019 $ 233,222 $ 662,150 $ 657,487
Tire operations 39,149 32,663 104,163 79,808
Service and other 1,083 1,221 3,679 3,643
--------- --------- --------- ---------
294,251 267,106 769,992 740,938
OPERATING EXPENSES AND
COSTS -Note E
Carrier operations 237,509 216,760 638,783 626,356
Tire operations 35,740 29,608 96,017 72,946
Service and other 1,504 1,350 4,647 4,074
--------- --------- --------- ---------
274,753 247,718 739,447 703,376
--------- --------- --------- ---------
OPERATING INCOME 19,498 19,388 30,545 37,562
OTHER INCOME
Gain on asset sales 787 959 1,955 2,338
Other 191 135 719 378
--------- --------- --------- ---------
978 1,094 2,674 2,716
OTHER EXPENSES
Interest 1,592 1,732 4,721 5,783
Other 1,074 933 3,099 2,737
Minority interest in
subsidiary 1,079 933 2,486 2,103
--------- --------- --------- ---------
3,745 3,598 10,306 10,623
--------- --------- --------- ---------
INCOME BEFORE INCOME TAXES
AND EXTRAORDINARY ITEM 16,731 16,884 22,913 29,655
FEDERAL AND STATE INCOME
TAXES (CREDIT) - Note D
Current 6,123 6,431 11,498 14,667
Deferred 1,407 1,699 47 (359)
--------- --------- --------- ---------
7,530 8,130 11,545 14,308
--------- --------- --------- ---------
<PAGE>
ARKANSAS BEST CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
1994 1993 1994 1993
(unaudited)
($ thousands, except per share data)
<S> <C> <C> <C> <C>
INCOME BEFORE
EXTRAORDINARY ITEM $ 9,201 $ 8,754 $ 11,368 $ 15,347
EXTRAORDINARY ITEM:
Loss on extinguishments
of debt - - - (329)
--------- --------- --------- ---------
NET INCOME $ 9,201 $ 8,754 $ 11,368 $ 15,018
========= ========= ========= =========
EARNINGS PER
COMMON SHARE:
PRIMARY:
INCOME BEFORE
EXTRAORDINARY ITEM $ 0.42 $ 0.40 $ 0.42 $ 0.65
EXTRAORDINARY ITEM:
Loss on extinguishments
of debt - - - (0.01)
--------- --------- --------- ---------
NET INCOME $ 0.42 $ 0.40 $ 0.42 $ 0.64
========= ========= ========= =========
FULLY DILUTED:
INCOME BEFORE
EXTRAORDINARY ITEM $ 0.40 $ 0.38 $ 0.42 $ 0.65
EXTRAORDINARY ITEM
Loss on extinguishments
of debt - - - (0.01)
--------- --------- --------- ---------
NET INCOME $ 0.40 $ 0.38 $ 0.42 $ 0.64
========= ========= ========= =========
AVERAGE COMMON
SHARES OUTSTANDING:
Primary 19,306 19,164 19,305 19,162
========= ========= ========= =========
Fully Diluted 23,138 22,972 19,305 19,162
========= ========= ========= =========
CASH DIVIDENDS PAID
PER COMMON SHARE $ 0.01 $ 0.01 $ 0.03 $ 0.03
========= ========= ========= =========
<FN>
See notes to consolidated financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
ARKANSAS BEST CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
Nine Months Ended
September 30
1994 1993
(unaudited)
($ thousands)
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 11,368 $ 15,018
Adjustments to reconcile net income
to net cash provided (used)
by operating activities:
Loss on extinguishments of debt - 329
Depreciation and amortization 20,332 21,590
Amortization of intangibles 2,337 2,288
Amortization of other expenses 341 203
Contribution of common stock to
employee benefit plans - 394
Provision for losses on
accounts receivable 2,636 1,625
Provision for deferred
income taxes 47 (359)
Gain on asset sales (1,955) (2,338)
Write-off of intrastate
operating rights 42 -
Gain on issuance of
subsidiary stock (45) (37)
Minority interest in
subsidiary 2,486 2,103
Changes in operating
assets and liabilities:
Accounts receivable (20,762) (19,890)
Inventories and
prepaid expenses (601) (2,849)
Other assets (562) 1,382
Accounts payable, bank
drafts payable, taxes
payable, accrued expenses
and other liabilities 25,554 6,332
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 41,218 25,791
INVESTING ACTIVITIES
Purchases of property,
plant and equipment,
less capitalized leases (38,899) (9,487)
Proceeds from asset sales 7,578 10,216
Acquisition of the
Clipper Group (net of
cash acquired) (49,514) -
Acquisition of Trans-World
Tire Corp. - (2,500)
--------- ---------
NET CASH USED BY INVESTING ACTIVITIES (80,835) (1,771)
ARKANSAS BEST CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
<CAPTION>
Nine Months Ended
September 30
1994 1993
(unaudited)
($ thousands)
<S> <C> <C>
FINANCING ACTIVITIES
Deferred financing costs
and expenses incurred in
borrowing activities $ (147) $ (47)
Net proceeds from the
issuance of preferred stock - 71,893
Proceeds from issuance of
common stock 37 -
Proceeds from term loan facility 20,000 -
Proceeds from commercial paper
agreement 56,000 -
Borrowings under revolving
credit facilities 30,000 32,000
Principal payments under
term loan facility - (50,000)
Payments under revolving
credit facilities (34,000) (47,000)
Principal payments on
other long-term debt (14,578) (21,476)
Payments to retire 14% senior
subordinated notes - (2,175)
Dividends paid to minority
shareholders of subsidiary (329) (323)
Dividends paid (3,800) (573)
--------- ---------
NET CASH USED BY
FINANCING ACTIVITIES 53,183 (17,701)
--------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS 13,566 6,319
Cash and cash equivalents
at beginning of period 6,962 5,644
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 20,528 $ 11,963
========= =========
<FN>
See notes to consolidated financial statements.
</FN>
</TABLE>
<PAGE>
ARKANSAS BEST CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1994
NOTE A -- ORGANIZATION
Arkansas Best Corporation (the "Company") is a diversified holding company
engaged through its subsidiaries primarily in motor carrier operations and
truck tire retreading and sales. Principal subsidiaries owned are ABF
Freight System, Inc., ("ABF"), Treadco, Inc. ("TREADCO"), Clipper Exxpress
Company ("Clipper") which was acquired on September 30, 1994 (see Note H),
and ABC Treadco, Inc. ("ABC Treadco").
NOTE B -- FINANCIAL STATEMENT PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for
the three and nine months ended September 30, 1994, are not necessarily
indicative of the results that may be expected for the year ending
December 31, 1994. For further information, refer to the Company's financial
statements and footnotes thereto included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1993.
NOTE C -- INVENTORIES
<TABLE>
<CAPTION>
September 30 December 31
1994 1993
($ thousands)
<S> <C> <C>
Finished goods $ 21,166 $ 20,240
Materials 6,234 6,784
Repair parts, supplies and other 1,779 2,062
-------- --------
$ 29,179 $ 29,086
======== ========
</TABLE>
<PAGE>
NOTE D -- FEDERAL AND STATE INCOME TAXES
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
1994 1993 1994 1993
($ thousands)
<S> <C> <C> <C> <C>
Income tax at regular rates $ 5,856 $ 5,909 $ 8,020 $10,379
Percent 35.0% 35.0% 35.0% 35.0%
State taxes less federal benefits 555 702 1,097 1,331
Percent 3.3% 4.2% 4.8% 4.5%
Amortization of goodwill 246 251 777 754
Percent 1.5% 1.5% 3.4% 2.5%
Minority interest 367 317 846 715
Percent 2.2% 1.9% 3.7% 2.4%
Adjustment of deferred taxes
for rate increase - 677 - 677
Percent - 4.0% - 2.3%
Retroactive effective of tax
rate increase on 1993 taxes - 151 - -
Percent - 0.9% - -
Other items 506 123 805 452
Percent 3.0% 0.7% 3.5% 1.5%
------- ------- ------- -------
Income tax expense $ 7,530 $ 8,130 $11,545 $14,308
Percent 45.0% 48.2% 50.4% 48.2%
======= ======= ======= =======
</TABLE>
<PAGE>
NOTE E -- OPERATING EXPENSES AND COSTS
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
1994 1993 1994 1993
(unaudited)
($ thousands)
<S> <C> <C> <C> <C>
Carrier Operations:
Salaries and wages $166,829 $152,640 $444,722 $440,424
Supplies and expenses 25,888 23,909 68,081 72,258
Operating taxes and licenses 9,059 8,827 26,017 25,378
Insurance 5,233 4,435 13,199 12,652
Communications and utilities 5,679 5,747 16,617 17,857
Depreciation and
amortization 6,364 6,156 17,913 19,779
Rents 17,554 13,851 48,895 35,033
Other 903 1,195 3,339 2,975
-------- -------- -------- --------
237,509 216,760 638,783 626,356
Tire Operations:
Cost of sales 28,816 23,799 76,509 57,652
Selling, administrative and
general 6,924 5,809 19,508 15,294
-------- -------- -------- --------
35,740 29,608 96,017 72,946
Service and Other 1,504 1,350 4,647 4,074
-------- -------- -------- --------
$274,753 $247,718 $739,447 $703,376
======== ======== ======== ========
</TABLE>
NOTE F -- LEGAL PROCEEDINGS AND ENVIRONMENTAL MATTERS
Various legal actions, the majority of which arise in the normal course of
business, are pending. None of these other legal actions is expected to have
a material adverse effect on the Company's financial condition. The Company
generally maintains liability insurance against risks arising out of the
normal course of its business.
ABF stores some fuel for its tractors and trucks in 100 underground tanks
located in 27 states. Maintenance of such tanks is regulated at the federal
and, in some cases, state levels. ABF believes that it is in substantial
compliance with all such regulations. ABF is not aware of any leaks from such
tanks that could reasonably be expected to have a material adverse effect on
the Company. Environmental regulations have been adopted by the United States
Environmental Protection Agency ("EPA") that will require ABF to upgrade its
underground tank systems by December 1998. ABF currently estimates that such
upgrades, which are currently in process, will not have a material adverse
effect on the Company.
<PAGE>
The Company has received notices from the EPA and others that it has been
identified as a potentially responsible party under the Comprehensive
Environmental Response Compensation and Liability Act or other federal or
state environmental statutes at several hazardous waste sites. After
investigating the Company's or its subsidiaries' involvement in waste
disposal or waste generation at such sites, the Company has either agreed to
de minimis settlements (aggregating approximately $223,000 since 1989), or
believes its obligations with respect to such sites would involve immaterial
monetary liability, although there can be no assurances in this regard.
NOTE G -- LONG-TERM DEBT
The Company entered into a $20 million term credit agreement, dated as of
April 25, 1994, with NationsBank of Texas, N.A., as agent, and Societe
Generale Southwest Agency. The proceeds from the agreement will be used in
financing the construction of the Company's corporate office which is
expected to be completed by January 1995. Amounts advanced and unpaid shall
bear interest of 8.07% per annum. The Company shall repay the outstanding
principal amount in 40 equal installments, each in the amount of $500,000,
due and payable on the fifteenth day of each January, April, July, and
October hereafter, commencing on July 15, 1994. At September 30, 1994, there
was $19.5 million outstanding.
On March 2, 1994, ABF, Renaissance Asset Funding Corp. ("Renaissance") and
Societe Generale entered into a receivables purchase agreement. The
agreement allows ABF to sell to Renaissance an interest in up to $55 million
in a pool of receivables. At September 30, 1994, ABF had $55 million
financed through this facility. The Company used funds provided by the
facility to finance the acquisition of Clipper Exxpress Company and two
affiliated companies. (See Note H.)
On July 1, 1994, the Company amended its Credit Agreement with Societe
Generale, as Agent, and NationsBank of Texas as Co-Agent. Among other
things, the amendment extended the maturity date of the revolving credit
facility to September 30, 1997 and changed one of the Company's interest rate
options from LIBOR plus 1 1/2% to LIBOR plus 3/4%.
NOTE H -- ACQUISITIONS
On September 30, 1994 Arkansas Best Corporation consummated the purchase of
all outstanding stock of Clipper Exxpress Company ("Clipper"), Agricultural
Express of America, Inc. ("AXXA") and Agile Freight System, Inc. ("Agile")
(collectively the "Clipper Group") pursuant to a stock purchase agreement
entered into on August 18, 1994. The Company's total purchase price is $60
million in cash, subject to certain closing audit adjustments. The Company
paid an initial payment of $54 million to the Clipper Group shareholders from
cash on hand and funds provided under its receivables purchase agreement.
The final payment which is due on May 15, 1995 will be funded from cash on
hand and/or funds available under its existing credit facilities.
<PAGE>
On October 12, 1994, the Company announced that its wholly owned subsidiary,
Integrated Distribution Systems, Inc., had entered into agreements to acquire
all the stock of Traveller Enterprises ("Traveller") and Commercial Warehouse
Company ("CWC") (collectively the "Traveller Group"). Integrated Distribution
Systems, Inc. exchanged 310,191 shares of the Company's Common Stock, $.01
par value, for the stock of Traveller and CWC. The Traveller Group has
combined annual revenues of approximately $17.5 million.
<TABLE>
Pro forma information (as if the Clipper Group and Traveller Group
acquisitions were completed at the beginning of the respective periods) for
the nine months ended September 30, 1994 and 1993 is as follows:
<CAPTION>
Nine Months Ended
September 30
1994 1993
($ thousands)
<S> <C> <C>
Operating revenues $ 880,625 $ 845,030
Operating expenses 841,999 803,999
--------- ---------
38,626 41,031
Interest expense, net 7,451 8,288
Minority interest in subsidiary 2,486 2,103
Other income, net 1,508 1,188
Provision for income taxes 13,205 14,229
--------- ---------
Income before extraordinary item $ 13,976 $ 15,223
========= =========
Earnings per common share before
extraordinary item $ 0.55 $ 0.64
========= =========
Average common shares outstanding 19,615 19,472
========= =========
</TABLE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Arkansas Best Corporation (the "Company") is primarily engaged, through its
motor carrier subsidiaries, in less-than-truckload ("LTL") shipments of
general commodities. The Company is also engaged through its approximately
46%-owned consolidated subsidiary, Treadco, Inc. ("TREADCO"), in truck tire
retreading and new tire sales.
The Company in 1991 reduced its ownership in TREADCO, through an initial
public offering of TREADCO common stock, to approximately 46%, while
retaining control of TREADCO by reason of its stock ownership, board
representation and agreement to provide management services. As a result,
TREADCO is consolidated with the Company for financial reporting purposes,
with the ownership interests of the other stockholders reflected as minority
interest.
On September 30, 1994, the Company consummated the purchase of all
outstanding stock of Clipper Exxpress Company ("Clipper"), Agricultural
Express of America, Inc. ("AXXA") and Agile Freight System, Inc. ("Agile")
(collectively the "Clipper Group") pursuant to a stock purchase agreement
entered into on August 18, 1994. The Company's total purchase price is $60
million in cash, subject to certain closing audit adjustments. The Company
paid an initial payment of $54 million to the Clipper Group shareholders from
cash on hand and funds provided under its receivables purchase agreement. The
final payment which is due on May 15, 1995 will be funded from cash on hand
and/or funds available under its existing credit facilities.
On October 12, 1994, the Company announced that its wholly owned subsidiary,
Integrated Distribution Systems, Inc., had entered into agreements to acquire
all the stock of Traveller Enterprises ("Traveller") and Commercial Warehouse
Company ("CWC") (collectively the "Traveller Group"). Integrated Distribution
Systems, Inc. exchanged 310,191 shares of the Company's Common Stock, $.01
par value, for the stock of Traveller and CWC. The Traveller Group has
combined annual revenues of approximately $17.5 million.
Segment Data
The following tables reflect information prepared on a business segment
basis, which includes reclassification of certain expenses and costs between
the Company and its subsidiaries and elimination of the effects of
intercompany transactions. Operating profit on a business segment basis
differs from operating income as reported in the Company's Consolidated
Financial Statements. Other income and other expenses (which include
amortization expense), except for interest expense and minority interest in
subsidiary, which appears below the operating income line in the Company's
Statement of Operations, have been allocated to individual segments for the
purpose of calculating operating profit on a segment basis.
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
1994 1993 1994 1993
($ thousands)
<S> <C> <C> <C> <C>
OPERATING REVENUES
Carrier operations $254,019 $233,222 $662,150 $657,487
Tire operations 39,149 32,663 104,163 79,808
Other 1,083 1,221 3,679 3,643
-------- -------- -------- --------
$294,251 $267,106 $769,992 $740,938
======== ======== ======== ========
OPERATING EXPENSES AND COSTS
CARRIER OPERATIONS
Salaries and wages $166,829 $152,640 $444,722 $440,424
Supplies and expenses 25,888 23,909 68,081 72,258
Operating taxes and licenses 9,059 8,827 26,017 25,378
Insurance 5,233 4,435 13,199 12,652
Communications and utilities 5,679 5,747 16,617 17,857
Depreciation and amortization 6,364 6,156 17,913 19,779
Rents 17,554 13,851 48,895 35,033
Other 903 1,195 3,339 2,975
Other non-operating (net) 81 (293) 264 (334)
-------- -------- -------- --------
237,590 216,467 639,047 626,022
TIRE OPERATIONS
Cost of sales 28,816 23,799 76,509 57,652
Selling, administrative
and general 6,924 5,809 19,508 15,294
Other non-operating (net) 80 14 334 17
-------- -------- -------- --------
35,820 29,622 96,351 72,963
SERVICE AND OTHER 1,439 1,468 4,474 4,412
-------- -------- -------- --------
$274,849 $247,557 $739,872 $703,397
======== ======== ======== ========
OPERATING PROFIT (LOSS)
Carrier operations $ 16,429 $ 16,755 $ 23,103 $ 31,465
Tire operations 3,329 3,041 7,812 6,845
Other (356) (247) (795) (769)
-------- -------- -------- --------
TOTAL OPERATING PROFIT 19,402 19,549 30,120 37,541
MINORITY INTEREST 1,079 933 2,486 2,103
INTEREST EXPENSE 1,592 1,732 4,721 5,783
-------- -------- -------- --------
INCOME BEFORE INCOME
TAXES AND EXTRAORDINARY ITEM $ 16,731 $ 16,884 $ 22,913 $ 29,655
======== ======== ======== ========
</TABLE>
<PAGE>
The following table sets forth for the periods indicated a summary of the
Company's operations as a percentage of revenues presented on a business
segment basis as shown in the table on the preceding page. The basis of
presentation for business segment data differs from the basis of presentation
for data the Company provides to the ICC.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
1994 1993 1994 1993
<S> <C> <C> <C> <C>
CARRIER OPERATIONS
Salaries and wages 65.7% 65.4% 67.2% 67.0%
Supplies and expenses 10.2 10.3 10.3 11.0
Operating taxes and licenses 3.6 3.8 3.9 3.9
Insurance 2.1 1.9 2.0 1.9
Communications and utilities 2.2 2.5 2.5 2.7
Depreciation and amortization 2.5 2.6 2.7 3.0
Rents 6.9 5.9 7.4 5.3
Other 0.3 0.5 0.5 0.5
Other non-operating (net) 0.0 (0.1) 0.0 (0.1)
----- ---- ---- ----
Total Carrier Operations 93.5% 92.8% 96.5% 95.2%
===== ==== ==== ====
TIRE OPERATIONS
Cost of sales 73.6% 72.9% 73.5% 72.2%
Selling, administrative
and general 17.7 17.8 18.7 19.2
Other non-operating (net) 0.2 0.0 0.3 0.0
----- ----- ----- -----
Total Tire Operations 91.5% 90.7% 92.5% 91.4%
===== ===== ===== =====
</TABLE>
<PAGE>
Results of Operations
Three Months Ended September 30, 1994 As Compared With Three Months Ended
September 30, 1993
Consolidated revenues of the Company for the three months ended
September 30, 1994 were $294.3 million compared to $267.1 million for the
three months ended September 30, 1993. The Company had operating profit of
$19.4 million for the three months ended September 30, 1994 compared to
operating profit of $19.5 million for the three months ended
September 30, 1993. Net income for the three months ended September 30, 1994
was $9.2 million, or $.40 per common share, compared to net income of $8.8
million, or $.38 per common share for the three months ended
September 30, 1993. Net income for the three months ended September 30, 1993
was reduced by $828,000, or $.04 per common share (assuming full dilution),
to reflect the retroactive increase in the corporate federal tax rate under
the Revenue Reconciliation Act of 1993.
Earnings per common share for the three months ended September 30, 1994 and
1993 give consideration to preferred stock dividends of $1.1 million.
Average common shares outstanding for the three months ended
September 30, 1994 were 23.1 million shares compared to 23.0 million shares
for the three months ended September 30, 1993. Per share earnings reflect
full dilution and assume conversion of preferred shares to common.
Motor Carrier Operations Segment. Revenues from the motor carrier operations
segment increased 8.9% to $254.0 million for the three months ended
September 30, 1994 from $233.2 million for the three months ended
September 30, 1993. The increase resulted primarily from a 7.4% increase in
total tonnage and a 1.7% increase in revenue per hundredweight. The increase
in total tonnage consisted of an 8.3% increase in less-than-truckload ("LTL")
tonnage and a 4.6% increase in truckload tonnage compared to the three months
ended September 30, 1993. The increase is due primarily to a favorable
economy, a stable pricing environment and consistent performance by ABF in
responding to customer needs.
Motor carrier segment operating expenses as a percent of revenues increased
to 93.5% for the three months ended September 30, 1994 from 92.8% for the
three months ended September 30, 1993. Salaries and wages expense as a
percent of revenues increased to 65.7% for the three months ended
September 30, 1994 compared to 65.4% for the three months ended
September 30, 1993, resulting primarily from contractual wage increases which
went into effect in April 1994 under the new collective bargaining agreement.
Insurance expense as a percent of revenues increased to 2.1% for the three
months ended September 30, 1994 from 1.9% for the three months ended
September 30, 1993, resulting primarily from an increase to the loss and
damage claims reserve. Communications and utilities expenses as a percent of
revenues decreased to 2.2% for the three months ended September 30, 1994 from
2.5% for the three months ended September 30, 1993. The decrease resulted
primarily from the increase in sales and the fact that a portion of
communications and utilities expenses are relatively fixed costs.
<PAGE>
Rent expense as a percent of revenues increased to 6.9% for the three months
ended September 30, 1994 from 5.9% for the three months ended
September 30, 1993. The increase in rent expense resulted primarily from the
utilization of alternate modes of outside transportation during periods of
peak activity and the use of operating leases. During the previous three
years, ABF has financed its road tractor replacement program with operating
leases instead of capital leases, which decreased both interest and
depreciation expense and increased rent expense. In 1994, ABF utilizing
borrowings under its Credit Agreement, purchased road tractors under its
replacement program, which will increase depreciation and interest expense
and decrease rent expense.
Tire Operations Segment. Treadco's revenues for the three months ended
September 30, 1994 increased 19.9% to $39.1 million from $32.7 million for
the three months ended September 30, 1993. For the three months ended
September 30, 1994, "same store" sales increased 7.0% and "new store" sales
accounted for 13.0% of the total increase from the three months ended
September 30, 1993. "Same store" sales include both production locations and
satellite sales locations that have been in existence for the entire three-
month periods of 1994 and 1993. "Same store" sales increased primarily as a
result of a higher demand for both new replacement and retreaded truck tires
during the period and an increase in market share in the areas served. "New
store" sales resulted primarily from the August 1993 acquisition of Trans-
World Tire Corporation ("Trans-World") in Florida. Revenues from retreading
for the three months ended September 30, 1994 increased 17.2% to $20.7
million from $17.6 million for the three months ended September 30, 1993.
Revenues from new tire sales increased 22.9% to $18.4 million for the three
months ended September 30, 1994 from $15.1 million for the three months ended
September 30, 1993.
Tire operations segment operating expenses as a percent of revenues were
91.5% for the three months ended September 30, 1994 compared to 90.7% for the
three months ended September 30, 1993. Cost of sales for the tire operations
segment as a percent of revenues increased to 73.6% for the three months
ended September 30, 1994 from 72.9% for the three months ended
September 30, 1993 resulting primarily from integrating the August 1993
acquisition of five Florida facilities into TREADCO. Although the
integration is progressing as planned, the costs of sales as a percent of
revenues are higher at the Florida locations. Effective October 1, 1994,
Bandag Incorporated ("Bandag") announced a 4% price increase. Bandag
provides the Company with its raw materials for the retreading process.
Management believes it will be difficult to recoup the price increase during
the fourth quarter. The Company's new tire manufacturers are implementing a
price increase effective November 1, 1994 of 2%. Management believes it will
be easier to pass on the new tire price increase to TREADCO's customers,
because of the shortage in availability of new tires. Selling,
administrative and general expenses for the tire operations segment decreased
to 17.7% for the three months ended September 30, 1994 from 17.8% for the
three months ended September 30, 1993.
Interest. Interest expense was $1.6 million for the three months ended
September 30, 1994 compared to $1.7 million during the three months ended
September 30, 1993. Lower average interest rates under the Company's
borrowing arrangements and the utilization of operating leases mainly offset
by an increase in the average long-term debt outstanding resulted in the
decrease in interest expense. The increase in average long-term debt
outstanding consisted primarily of drawing funds on a term loan under the
existing Credit Agreement.
Income Taxes. The difference between the effective tax rate for the three
months ended September 30, 1994 and the federal statutory rate resulted
primarily from state income taxes, amortization of goodwill, minority
interest, undistributed earnings of TREADCO and other nondeductible expenses
(see Note D to the consolidated financial statements).
<PAGE>
Nine Months Ended September 30, 1994 As Compared With Nine Months Ended
September 30, 1993
Consolidated revenues of the Company for the nine months ended
September 30, 1994 were $770.0 million compared to $740.9 million for the
nine months ended September 30, 1993. The Company had operating profit of
$30.1 million for the nine months ended September 30, 1994 compared to
operating profit of $37.5 million for the nine months ended
September 30, 1993. Net income for the nine months ended September 30, 1994
was $11.4 million, or $.42 per common share (after giving consideration to
preferred stock dividends of $2.1 million), compared to net income of $15.0
million, or $.64 per common share for the nine months ended
September 30, 1993. The net income of $11.4 million, or $.42 per common
share, also compares to income before extraordinary item of $15.3 million, or
$.65 per common share for the nine months ended September 30, 1993. During
the nine months ended September 30, 1993, the Company recorded an
extraordinary loss of $329,000 (net of income tax benefit of $201,000), or
$.01 per common share for the net loss on extinguishment of debt. Earnings
per common share for the nine months ended September 30, 1994 and
September 30, 1993 give consideration to preferred stock dividends of $3.2
million and $2.8 million, respectively. Net income for the three months
ended September 30, 1993 was reduced by $828,000, or $.04 per common share
(assuming full dilution), to reflect the retroactive increase in the
corporate federal tax rate under the Revenue Reconciliation Act of 1993.
Average common shares outstanding for the nine months ended
September 30, 1994 were 19.3 million shares compared to 19.2 million shares
for the nine months ended September 30, 1993. Outstanding shares for the
nine months do not assume conversion of preferred stock to common shares,
because conversion would be anti-dilutive for these periods.
Consolidated revenues and income for the nine months ended September 30, 1994
were adversely affected by the 24-day labor strike by the Teamsters' union
employees of ABF in April. As a result of the strike, the Company incurred a
$.68 loss per common share during the month of April.
Motor Carrier Operations Segment. ABF's labor agreement with the
International Brotherhood of Teamsters ("IBT") expired on March 31, 1994. On
April 6, 1994, when the terms of a new agreement had not been agreed to
between the industry's bargaining group, Trucking Management, Inc. ("TMI"),
and the IBT, the Teamsters' employees of ABF and 20 other carriers went on
strike. On April 29, 1994, TMI and the IBT reached a tentative agreement on
a new four-year contract. ABF Teamsters employees began returning to work at
12:01 a.m. on April 30, 1994. The contract has since been voted on and
ratified by the IBT membership. During the strike, the non-union employees
of the Company were given an across-the-board pay reduction instead of having
lay-offs. The 40% reduction in pay for the non-union employees during the
strike amounted to approximately $3.3 million.
Revenue and income comparisons for the nine months have been negatively
affected by the strike. Under the new labor contract which was effective
retroactive to April 6, 1994, salaries, wages and benefits for full-time
employees will increase 2.7% annually during the first year of the contract.
The increase will be offset in part by the option to use casual workers on
the dock after 40 hours of work is provided to all regular employees, a
freeze on some casual workers' pay for the life of the contract and a
reduction in new hire step rates. The new contract allows ABF to use
intermodal or rail service for up to 28% of the line-haul operations. An
increased use of rail will result in higher rent expense and may reduce over-
the-road and labor costs.
<PAGE>
During the previous three years, ABF has financed its road tractor
replacement program with operating leases instead of capital leases, which
decreased both interest and depreciation expense and increased rent expense.
In 1994, ABF utilizing borrowings under its Credit Agreement, purchased road
tractors under its replacement program, which will increase depreciation and
interest expense and decrease rent expense.
Tire Operations Segment Treadco's revenues for the nine months ended
September 30, 1994 increased 30.5% to $104.2 million from $79.8 million for
the nine months ended September 30, 1993. For the nine months ended
September 30, 1994, "same store" sales increased 10.6% and "new store" sales
accounted for 19.6% of the total increase from the nine months ended
September 30, 1993. "Same store" sales include both production locations and
satellite sales locations that have been in existence for the entire nine-
month periods of 1994 and 1993. "Same store" sales increased primarily as a
result of a higher demand for both new replacement and retreaded truck tires
during the period and an increase in market share in the areas served. "New
store" sales resulted primarily from the August 1993 acquisition of Trans-
World. Revenues from retreading for the nine months ended September 30, 1994
increased 27.4% to $56.7 million from $44.5 million for the nine months ended
September 30, 1993. Revenues from new tire sales increased 34.5% to $47.5
million for the nine months ended September 30, 1994 from $35.3 million for
the nine months ended September 30, 1993.
Tire operations segment operating expenses as a percent of revenues were
92.5% for the nine months ended September 30, 1994 compared to 91.4% for the
nine months ended September 30, 1993. Cost of sales for the tire operations
segment as a percent of revenues increased to 73.5% for the nine months ended
September 30, 1994 from 72.2% for the nine months ended September 30, 1993
resulting primarily from integrating the August 1993 acquisition of five
Florida facilities into TREADCO. Although the integration is progressing as
planned, the costs of sales as a percent of revenues are higher at the
Florida locations. Suppliers have announced a price increase on raw
materials and new tires in the fourth quarter of 1994 (see discussion in the
comparisons of three months results of operations). Selling, administrative
and general expenses for the tire operations segment decreased to 18.7% for
the nine months ended September 30, 1994 from 19.2% for the nine months ended
September 30, 1993. The decrease resulted primarily from the increase in
sales and the fact that a portion of selling, administrative and general
expenses are fixed costs.
Interest. Interest expense was $4.7 million for the nine months ended
September 30, 1994 compared to $5.8 million during the nine months ended
September 30, 1993. A decrease in long-term debt outstanding, lower average
interest rates under the Company's borrowing arrangements and the utilization
of operating leases resulted in the decrease in interest expense. The
decrease in long-term debt consisted primarily of retiring $50 million in
principal of a term loan under its existing Credit Agreement and financing a
portion of its revenue equipment with operating leases.
Income Taxes. The difference between the effective tax rate for the nine
months ended September 30, 1994 and the federal statutory rate resulted
primarily from state income taxes, amortization of goodwill, minority
interest, and other nondeductible expenses (see Note D to the consolidated
financial statements).
<PAGE>
Liquidity and Capital Resources
The ratio of current assets to current liabilities was .83:1 at September 30,
1994 compared to 1.07:1 at December 31, 1993. The decrease in the current
ratio resulted primarily from the acquisition of the Clipper Group. Net cash
provided by operating activities for the nine months ended September 30, 1994
was $41.2 million compared to $25.8 million for the nine months ended
September 30, 1993. The increase is due primarily to an increase in accounts
payable and accrued expenses offset in part by a reduction in net income.
The Company and certain banks are parties to a Credit Agreement with Societe
Generale, as Agent and NationsBank of Texas a Co-Agent (the "Credit
Agreement") which provides funds available under a three-year Revolving
Credit Facility of $100 million, including $40 million for letters of credit.
There are no borrowings outstanding under the Revolving Credit Facility and
approximately $38.2 million of letters of credit outstanding at September 30,
1994. The Revolving Credit Facility is payable on September 30, 1997.
Outstanding revolving credit advances may not exceed a borrowing base
calculated using the Company's revenue equipment, real property and the
TREADCO common stock owned by the Company. At September 30, 1994, the
borrowing base was $108.5 million. The Company has paid and will continue to
pay certain customary fees for such commitments and loans. Amounts advanced
under the revolving credit facility bear interest, at the Company's option,
at a rate per annum of either: (i) the greater of (a) the agent bank's prime
rate and (b) the Federal Funds Rate plus 1/2%; or (ii) LIBOR plus 3/4%.
The Credit Agreement contains various covenants which limit, among other
things, dividends, indebtedness, capital expenditures, loans and investments,
as well as requiring the Company to meet certain financial covenants. As of
September 30, 1994, these covenants have been met. If there is an event of
default which is not remedied or waived within 10 days, the Credit Agreement
will become secured to the extent of amounts then outstanding of all of the
Company's revenue equipment, real property and common stock included in the
borrowing base (subject to certain exceptions).
The Company entered into a $20 million term credit agreement, dated as of
April 25, 1994, with NationsBank of Texas, N.A., as agent, and Societe
Generale Southwest Agency. The proceeds from the agreement will be used in
financing the construction of the Company's corporate office which is
expected to be completed by January 1995. Amounts advanced and unpaid shall
bear interest of 8.07% per annum. The Company shall repay the outstanding
principal amount in 40 equal installments, each in the amount of $500,000,
due and payable on the fifteenth day of each January, April, July, and
October hereafter commencing on July 15, 1994. At September 30, 1994, there
was $19.5 million outstanding.
On March 2, 1994, ABF, Renaissance Asset Funding Corp. ("Renaissance") and
Societe Generale entered into a receivables purchase agreement. The
agreement allows ABF to sell to Renaissance an interest in up to $55 million
in a pool of receivables. At September 30, 1994, ABF had $55 million of
receivables financed through this facility. ABF financed $52.5 million of
receivables to provide funds to the Company for the acquisition of the
Clipper Group.
On September 30, 1994, the Company paid an initial payment of $54 million to
the Clipper Group shareholders from cash on hand and funds provided under its
existing lines of credit. The final $6 million payment (subject to certain
closing audit and other contractual adjustments) which is due May 15, 1995
will be funded from cash and/or funds provided under its existing lines of
credit.
<PAGE>
Management believes, based upon the Company's current levels of operations
and anticipated growth, the Company's cash, capital resources, borrowings
available under its existing credit facilities and cash flow from operations
will be sufficient to finance current and future operations and meet all
present and future debt service requirements.
Seasonality
The motor carrier segment is affected by seasonal fluctuations, which affect
tonnage to be transported. Freight shipments, operating costs and earnings
are also affected adversely by inclement weather conditions. The third
calendar quarter of each year usually has the highest tonnage levels while
the first quarter has the lowest. TREADCO's operations are somewhat seasonal
with the last nine months of the calendar year generally having the highest
levels of sales.
<PAGE>
PART II.
OTHER INFORMATION
ARKANSAS BEST CORPORATION
ITEM 1. LEGAL PROCEEDINGS.
From time to time, the Company is named as a defendant in legal actions,
the majority of which arise out of the normal course of its business. The
Company is not a party to any pending legal proceeding which the Company's
management believes to be material to the financial condition of the Company.
The Company generally maintains liability insurance against risks arising out
of the normal course of its business (see Note F to the Company's Unaudited
Consolidated Financial Statements).
ITEM 2. CHANGES IN SECURITIES.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
Exhibit 11 - Statement Re: Computation of Earnings Per Share.
(b) Reports on Form 8-K.
Form 8-K dated August 18, 1994
Item 5. Other Events -- Announcement of agreement to
purchase all the stock of Clipper Exxpress Company and two
affiliated transportation companies.
Form 8-K dated September 30, 1994
Item 2. Acquisition or Disposition of Assets -- Acquisition
of Clipper Exxpress Company, Agricultural Express of
America, Inc. and Agile Freight System, Inc.
Item 7. Financial Statements and Exhibits -- Financial
statements of Clipper Exxpress, Agricultural Express of
America, Inc. and Agile Freight System, Inc. and pro forma
financial information to be filed under cover of Form 8-K/A
as soon as practible. Stock Purchase Agreement dated
August 18, 1994 by and among Arkansas Best Corporation and
the Shareholders of Clipper Exxpress Company, Agile Freight
System, Inc. and Agricultural Express of America, Inc.
<PAGE>
Form 8-K/A No. 1 dated September 30, 1994
Item 7. Financial Statements and Exhibits -- Audited
financial statements of Clipper Exxpress Company,
Agricultural Express of America, Inc. and Agile Freight
System, Inc. for the years ended December 31, 1993 and
1992. Unaudited financial statements of Clipper Exxpress
Company, Agricultural Express of America, Inc. and Agile
Freight System, Inc. for the six months ended June 30,
1994 and 1993. Pro forma condensed consolidated
statements of income for the year ended December 31, 1993
and the six months ended June 30, 1994 and the pro forma
condensed consolidated balance sheet as of June 30, 1994.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
ARKANSAS BEST CORPORATION
(Registrant)
Date: November 11, 1994 s/Donald L. Neal
----------------- ------------------------------------
Donald L. Neal - Senior Vice
President - Chief Financial Officer,
and Principal Accounting Officer
<TABLE>
EXHIBIT 11
STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
ARKANSAS BEST CORPORATION
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
1994 1993 1994 1993
(Thousands, except per share data)
<S> <C> <C> <C> <C>
PRIMARY:
Average shares
outstanding 19,201 19,164 19,199 19,116
Net effect of dilutive
stock options --
Based on the treasury
stock method using
average market price 105 - 106 46
---------- ---------- ---------- ----------
Average common shares
outstanding 19,306 19,164 19,305 19,162
========== ========== ========== ==========
Income before extra-
ordinary item $ 9,201 $ 8,754 $ 11,368 $ 15,347
Less: Preferred stock
dividend 1,075 1,075 3,224 2,830
---------- ---------- ---------- ----------
8,126 7,679 8,144 12,517
Extraordinary item:
Loss on extinguishment
of debt - - - (329)
---------- ---------- ---------- ----------
Net income (loss)
available for common $ 8,126 $ 7,679 $ 8,144 $ 12,188
========== ========== ========== ==========
Per common and common
equivalent share:
Income (loss) before
extraordinary item $ 0.42 $ 0.40 $ 0.42 $ 0.65
Extraordinary item:
Loss on extinguish-
ment of debt - - - (0.01)
---------- ---------- ---------- ----------
Net income (loss)
per common share $ 0.42 $ 0.40 $ 0.42 $ 0.64
========== ========== ========== ==========
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
1994 1993 1994 1993
(Thousands, except per share data)
<S> <C> <C> <C> <C>
FULLY-DILUTED:
Average shares
outstanding 19,201 19,164 19,199 19,116
Net effect of dilutive
stock options --
Based on the treasury
stock method using
ending market price 140 18 106 46
Assumed conversion of
preferred stock 3,797 3,797 - -
---------- ---------- ---------- ----------
Average common shares
outstanding 23,138 22,972 19,305 19,162
========== ========== ========== ==========
Income before extra-
ordinary item $ 9,201 $ 8,754 $ 11,368 $ 15,347
Less: Preferred stock
dividend - - 3,224 2,830
---------- ---------- ---------- ----------
9,201 8,754 8,144 12,517
Extraordinary item:
Loss on extinguishment
of debt - - - (329)
---------- ---------- ---------- ----------
Net income (loss)
available for common $ 9,201 $ 8,754 $ 8,144 $ 12,188
========== ========== ========== ==========
Per common and common
equivalent share:
Income (loss) before
extraordinary item $ 0.40 $ 0.38 $ 0.42 $ 0.65
Extraordinary item:
Loss on extinguish-
ment of debt - - - (0.01)
---------- ---------- ---------- ----------
Net income (loss)
per common share $ 0.40 $ 0.38 $ 0.42 $ 0.64
========== ========== ========== ==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from the Arkansas
Best Corporation Form 10-Q for the Quarter ended September 30, 1994 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000894405
<NAME> ARKANSAS BEST CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<CASH> 20,528
<SECURITIES> 0
<RECEIVABLES> 141,376
<ALLOWANCES> (2,635)
<INVENTORY> 29,179
<CURRENT-ASSETS> 199,403
<PP&E> 368,101
<DEPRECIATION> (157,327)
<TOTAL-ASSETS> 577,904
<CURRENT-LIABILITIES> 240,701
<BONDS> 61,978
<COMMON> 192
0
15
<OTHER-SE> 209,387
<TOTAL-LIABILITY-AND-EQUITY> 577,904
<SALES> 104,163
<TOTAL-REVENUES> 769,992
<CGS> 76,509
<TOTAL-COSTS> 739,447
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 2,636
<INTEREST-EXPENSE> 4,721
<INCOME-PRETAX> 22,913
<INCOME-TAX> 11,545
<INCOME-CONTINUING> 11,368
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,368
<EPS-PRIMARY> .42
<EPS-DILUTED> .42
</TABLE>
