ArcBest Corp (ARCB) 2002 Q1 法說會逐字稿

Please stand by. Good day and welcome to this Arkansas Best Corporation first quarter 2002 earnings conference call. Today's conference is being recorded. At this time, for opening remarks and introduction I would like to turn the call over to the Director of Investor Relations, Mr. David Humphrey. Please go ahead sir.

Welcome to the Arkansas Best Corporation first quarter 2002 earnings conference call. After a short discussion on the first quarter results, we will open up our question and answer period.

Our presentation this morning will be done by Mr. Robert A. Young III, President and Chief Executive Officer of Arkansas Best Corporation and Mr. David E. Loeffler, Vice President, Chief Financial Officer and Treasurer of Arkansas Best Corporation. I thank you for joining us today. In order to help you better understand Arkansas Best Corporation financial results. Some forward-looking statements could be made during this call.

As we all know, forward looking statements, by the very nature are subject to uncertainties and risks. For a more complete discussion of factors that could affect the company's true results, please refer to the forward looking statements in the company's earnings press release, and the company's most recent SEC filed. We'll now begin with Mr. Loeffler.

Thanks, David. Overall, we are not happy with the results for the first quarter. However, given our tonnage levels, we're not particularly surprised with those results seen. results for the first quarter, our revenues were 320 million compared to slightly over 400 million for the first quarter a year ago.

When you exclude the revenues from the first quarter of last year, our revenues are down 9.6 percent. Our operating income is $4.8 million, compared to $28.1 million in the first quarter a year ago. Our earnings per share on a deluded the change in accounting relating to the good will right now for Clipper, were 6 cents a share versus 37 cents a year ago.

After the change in accounting, goodwill of Clipper, our earnings per share was at negative 89 cents compared to 37 cents a year ago. Looking at the revenue for the first quarter of this year, the last year, ABFs revenues were down 9.9 percent on a per day basis, and Clipper's revenues were down 14.8 percent on per day basis.

Looking at the cash flows for the first three months of this year, our net income before depreciation and the non-cash accounting change was $13.8 million. We had a negative increase in working capital as result of increase in accounts receivable, resulting from higher business levels at the end of the first quarter, a little over $8 million. We had purchases of property and equipment a little over $10 million.

Capitalization of software a little over million dollars. We had positive changes in bank flow, it was about $3 million and we had a net increase in debt before investments of about $2.5 million. The status of our outstanding debt including our release, our debt temporary investments at the end of last year was $119 million, and the end of the first quarter this year was a $113 million.

Our debt equity ratio was at 0.38:1 at the end of last year, that increased slightly to 0.41:1 in March and that increase was function of the negative impact of the accounting change. Our weighted average interest cost including the fixed at the end of the first quarter was 6.25 percent. In looking at our internal financial , our after tax return on shareholders' equity for the 12 months ended March 31 of this year was 10.9 percent.

As I mentioned, the debt equity ratio was 0.41:1, and our after tax return on capital employed was nine percent compared to acceptable level of ten percent. We still expect our net capital expenditures this year to be in the area of $45 million, and we also continue to forecast appreciation of amortization this year to be a little under $50 million.

As we previously announced that in our press release, we recognize a non cash loss of $23.9 million after tax on goodwill associated with Clipper. This eliminates all of $37.5 million of Clipper goodwill that was on our balance sheet. The remaining $63.8 million of goodwill associated with ABF has no implication . We also, in the first quarter completed the of worldwide vendors on February 25th for $5 million. And on that we recognized $200,000 loss in the first quarter. I'll now turn it over to Robert, to talk about the operating comments.

about ABFs details for the first quarter. Revenue at ABF was 188.6 million and that compares with the 325.5 million last year, almost a 10 percent decline in revenue for ABF.

The operating income was 5.5 million compared to 21 million last year. And the operating ratio was up from 93.6 last year to a 98.1 this year. The LTL tonnage was below the first quarter 2001 by 8.4 percent on a work day basis. And the truck load tonnage was down 19 percent on work day basis. The tonnage decline was trending in the right direction each month, the first quarter.

In January LTL tonnage was down 8.71 percent from the prior year, February 8.48 percent and March 7.85 percent. So the trend at least was in the right direction although the numbers were still negative.

Looking at our revenue hundredweight, which is a fairly good indicator of price which has not much change in our profile, the revenue per hundredweight last year in the first quarter was $20.67 cents and that's without fuel surcharge, and revenue per hundredweight in the quarter of this year was $21.9 cents. The first quarter LTL revenue per hundredweight and excluding fuel surcharge was up two percent. That's an indicator of a gain of price if you consider that our profile stayed pretty much the same, and our average length haul went down slightly from 1,249 miles to 1,238 miles. And our average declined from - actually went up from 73 to 74, and the LTL weight per shipment declined slightly from 1,019 pounds to 1,003 pounds.

So there was not a lot of change in the profile. Something that I'm pleased with is our productivity at ABF for the quarter was up, and that's up in the face of declining tonnage which is difficult too. The shipments per were up 1.5 percent from the first quarter last year. That went from 0.525 to 0.533. The LTL bills per dock hour increased from 4.06 last year to 4.20. That's actually a 13 week average each year, and that's about a 3.45 percent increase in bills per dock hour.

The LTL bills street hour improved from 2.31 last year to 2.35 this year, a 1.73 percent increase, and our trailers per yard hour improved from 4.2 to 4.5 which is above a seven percent increase over the prior year. So we are pretty pleased with this. Some of this come from our NetLink system utilizing microbrowsers at some of our terminals now. Currently there are 64 terminals using our .

City drivers with microbrowsers where they can send in , number of pieces and destinations as they on their routes, it allows some planning that we can then do to become much more efficient in the terminal. There's going to be 95 or perhaps as many as a 100 terminals utilizing this planning by the year end. So we go from 64 to 100 roughly in about a year and we'll some more benefit from that. And by the year end total income was up 70 percent for our city drivers .

By the end of next year, we look to have about a 100 terminals utilizing our mobile dispatch system, and right now all nine of our distributing centers terminals apparently using the dock and yard system, and we expect over 20 in line terminals to be using this by year end. Again, this is in part responsible for our improvement in productivity.

One thing that hurt our profitability in the quarter was our load factor declined by 2.7 percent. Reasons for those declines are two fold, we just had 9.9 percent less tonnage to work with, and that were going to each terminal at least one schedule per day. There were just fewer on those schedules. And then we have five periods - I'm sorry, five week ends, five whole weekends in the month and that throws our off a bit over the prior year. So those two things impacted our loaded average.

However, the usage for the first quarter was 13.1 percent of total miles and that compares to 13.4 percent of total miles. We're purposely holding down our usage of - in order to use our drivers, in retaining our drivers going forward and the real was up some this year by 1.7 percent. That's to some degree, because we use more of our own trailers on rail , than rail vans which are longer.

Insurance has been issue this year and will continue to be an issue this year as rates have gone up considerably. Worker's Comp right now is - for the first quarter was up $582,000 for last year, 0.2 of an operating point. Bodily injury and property damage was up 2.3 million over the prior year. That's .8 of an operating point. Biggest piece of that is premium increase of 1.6 million on that segment of our insurance.

On the good news side, our cargo loss and damage claims were down 428,000, a 0.2 of an operating point. And we're pleased with our ability to handle the with a fewer claims. And this has been a trend at ABF now for some time. We hope we can keep that up.

Total Worker's Comp cost equaled about 2.1 percent of our revenue in the first quarter of last year, and the net was up to 2.9 percent of revenue this year. (Inaudible), I'm sorry, it's Worker's Comp and . And another bit of bad news, because it's based on return on capital employed, is our bonus advance in the first quarter was down by $3,345,000 over the same period last year.

We continue to hear a lot about the used equipment market. Out there this has certainly been a sellers market for used equipment. But our used equipment sales in the first quarter for ABF resulted in an overall $130,000 gain. We currently have another 124 city tractors, and with a book value of 372,000 that are being held for sale right now. Half of these are already committed to outside buyers, and we don't expect any losses on the sale of these units. Used equip market activity seems to be increasing, but the pricing pressure it is still there.

While we certainly are saving fuel cost, turning in a higher direction, right now the fuel cost for the first quarter was down at 39.36 percent from last year. Price per gallon was down about 31 percent, although that seems to be going in a different direction now. The fuel surcharge this year was less, it was 0.87 percent of revenue of last year in the first quarter - I'm sorry, this year in the first quarter and 3.3 percent in the first quarter of last year.

Effective April 1st, we had a weight increase of 1.8 percent on our employees, the pension increase there went up 4.9 percent, and then later in the year in August we'll have a Health & Welfare increase amount which is yet to be determined.

Moving on briefly to Clipper, our revenues there were down substantially from 30.8 million last year to 25.9 million in this year, almost a 50 percent decline. In revenues, the operating loss was $700,000 when compared to 400,000 last year and the operating ratio 102.9 compared to 101.1.

The first quarter for Clipper is always a very slow quarter, but this year it was excruciatingly slow, our businesses continued to be there. I don't think we're going to see much improvement there until we get some rebound, and our revenue totals get the top line , so that Clipper can begin to put some of that revenue to the bottom line.

Like I said, their problems are largely volume related, there was some reduction in . That's tricky with Clipper because of their size, they can take on one account that will reflect a lower yield but might profitable account depending on the density of the freight and the length haul . And I wouldn't put too much stock in that.

A big impact from Clipper, when the revenue declines they get a certain amount of their bottom line from rail rebates and those decline with volume. So, the rail rebate considerably there, and then they had one large bad debt expense in the quarter that impacted them with a customer, a large customer that went into chapter 11.

All we have seen, owing largely to now, what we've seen in the quarter is - as the quarter has progressed, we've seen in our business, our trends start to improve. We're not in a positive yet, but the negative's smaller and we're seeing that continue and it's progressing. And ironically at the same time, as the quarter progressed, we began to see more and more price competition.

It's strange to me that it appears that we're starting to see a stronger manufacturing economy and therefore a stronger business for us that simultaneously as we're starting to become more . If you want to get an idea of who's been , just look at for the first quarter and you'll see where it is. It's disappointing to me, but hopefully it will be because of the fact that it does appear that the economy is starting to turn-at least the trends indicate that. And with that we'll open it up for questions.

Thank you. The question and answer session will be conducted electronically. If you would like to ask a question, please press the star key followed by the digit one on your touch tone telephone. We will proceed in the order that you , and take as many questions as time permits. Once again, please press star one to ask a question, and we'll pause for just a moment. And our first question comes from Ken Hexter from Merrill Lynch.

Right. Thank you. Good morning. Just a couple of questions. One, you provided trends on tonnage from March, can you provide any insight into how April is looking so far. Secondly, just an update on progress of the renewal of the bank facility, and then can you give us a percent of your customers that using Web site?

This is David Loeffler. Let's see your first question and talk about the business levels in April. We're continuing to see pretty much the same trends that we saw in March, you know our year over year percentage declines are getting smaller. But - you know, we can't we're seeing significant upturn on business levels at this point.

people are saying that the economy is kind of slowing down again. You're not - you're saying it will improve it a bit?

Yes, we're not seeing it get any worse.

OK.

As it relates to our bank facility, we are in process of renewing our agreement we anticipate having that completed some time next month. We're looking at a $225 million . That's really about all that I'd like to say about it till we - till we actually get - get done. We do have the entire . At this point though, I wouldn't mention that.

And in that last question, dealt with the Web site, I can't give you the percentage. What I can tell you is that we're averaging about 8,000 users as such in a week. That's continuing to increase and these are - you know, some people talk about hit on the Web site. But these aren't hits, these are - and I can't - I don't remember the exact amount of time that , but these are situations where customers or potential customers are coming in and actually using one of the aspects of our Web site. The number of sessions on a weekly basis is growing fairly dramatically every month.

Great David, and if I can one other - one other question. I don't know if you talked in this level of detail, but the average utilization or capacity of your trucks, and I guess and I saw on results your tonnage was down, I guess more than your shipments. So is there a way we can that in - in kind of utilization on a per truck or kind of on a - you know, daily basis?

Yeah, we do - we do have information. Let me see if I've got it. Got it right here. Our miles per tractor per calendar for the first quarter of this year were 441, for the first quarter of last year of 482.

Great. Thanks a lot.

OK.

Moving on, we'll hear from with Deutsche Bank.

Hi, Good afternoon guys.

Good afternoon.

I'm sorry. Let's see. Looking at the insurance, accounted for, you know, a portion of the higher operating . Is there anything else you can point to and say, "Hey, we got clipped on one item. We think we can rectify going forward or was this a fact of sharply, you just couldn't react fast enough?

John, this is Robert Young. The - no, there is no one thing you can point to. Essentially, what I see in the first quarter is spreading our costs over fewer shipments revenue. Our - our big cost to some degree, we can't do too much on a short-term basis. The operating leverage that is involved in that work is going down.

But as revenues recover, then that operating leverage is going to work for us. We have 311 terminals. We're roughly the same number as our competition - nationwide competition. And we've got about half the revenue to operate those 311 terminals. That works against us in revenue probably harder than it does it against them and on the flip side when business starts to come back, it works in our favor. So, essentially it worked against us in this quarter, but I'm looking forward to the economy and that's going in the opposite direction, a good direction.

OK. Earlier, a couple of weeks ago, one of your competitors they felt a of the slowdown very early in the quarter and during that period, they were unable to adjust their cost. Did you see any kind of this in trend or - or again, were you seeing it spread out to January, February and March , you know a two or three felt the of impact?

I gave you earlier some numbers on tonnage's during the first three months of the year and the clients declined in each of those months fairly steadily and it's continuing in April along the same lines. Therefore, it's more pronounced in the first month quarter and their recovery was then stronger, because they were behind in the third of the quarter. We're seeing a steady improvement so far this year.

OK. And one last question and I'll turn it over. Clipper continues to be a little bit of a - you know, a little bit of a drag, I know you've been working with the company trying to improve it's profitability. Where did you stand in of that business and are you getting to the point where again identifying under performing assets that your organization, you know, you might be willing to - to pull the switch, and just focus on ABF Freight system.

Well, Clipper certainly it is a so far this year. I think that you'll see some improvement there as the economy improves, assuming it does. They had a significant decline in tonnage, it was almost 15 percent. I guess, the good news is that's only about eight percent of business in terms of revenue. So, it's not a big factor for us. It certainly is going to have to improve dramatically or you know, we wouldn't want to continue for a very long with numbers like that. That's not in our best interest, nor - or of the share-holders. So, you know, that's something we'll be watching closely is that to improve dramatically in the near future.

OK. Thanks for your time.

Moving on, we'll hear from of .

Yeah, hi guys. Two questions. One, when you sort of look at the run rate of volume trends that you're seeing in March and let's say that are getting slightly better, I guess the implication is we should start to see the effects of the cost control that you did, sort of sequentially show a better margin under that scenario. That's the question one.

And sort of a bit longer term, as we think the second half and perhaps in a sudden pickup in the economy. Do you need to see based on what you've done to your internal cost structure, the same level of volume or tonnage growth at ABF as you know, you saw in the second and third quarter of last year, you get back to sort of that mid single digit type of margin level or do you not need to have that same level because of the cost cutting that you might have done to get back to those levels. I know that's a sort of confusing question, but that's what I'm asking?

, this is Dave, and I'm not real sure how to - how to answer that question. Obviously, you know, that the business levels in relation to our cost structure and our network were in the first quarter. Traditionally, and we're seeing it this year, you know, we anticipate business levels that they're going to be stronger in the second quarter than they are in the first quarter.

It did have some positive impacts on our margin that referred, and I'm not going in to any more specific than that you know. First of all, we don't give guidance and secondly, you know, we - you know, we're just two or three weeks of the second quarter. So, we haven't seen very much.

, Robert again. . We have reduced the . We have reduced supervisory personnel under the CEO. So, and might other - what I'd call, basically reductions. So I think that we don't have to return to previous levels of revenue to get significant improvement in the operating . But we do have a short decline before we start but I don't know if I can equate that right now to .

elicker That's fair enough, but I appreciate the thought. Thanks.

And our next question comes from of Incorporated.

Good morning, .

I have a couple of questions here. Just to refresh our memory and I think you made mention of that earlier, Robert increase that fact that I hear you're right at 1.8 percent, just to clarify ?

That's correct.

And there's some benefits, I guess later in August or ...

Yeah, for earnings, percent on the benefits, that's Pension and Health & Welfare we'll be looking at in August.

OK. Thanks. Could you give us a sense of where headcount stands today versus a year ago? immediately ?

?

Yeah.

On employee equivalent level we're down six percent.

Any sense of how that, how that compared to the fourth quarter of last year David?

No, we just - we looked at it - compared to the first quarter last year.

OK.

We're looking at a total headcount and we remember this year's headcount, not equivalent, but we're looking at 12,168 in the first quarter last year and 11,407 in the first quarter of this year.

And again that was primarily supervisory and maybe some administrative ...

Well no. There's a lot of those . Our that are laid off ...

OK.

But we do have supervisory lay-offs which I consider more fixed cost and we've now reduced our .

Just out of curiosity, Robert. How much - can you refresh our memories, how much more flexibility is there in reducing headcount to the extent that it becomes necessary?

Oh. We can continue to downsize if we need to. You get into some muscle at some point in time which means that then when the economy turns, you scramble and to get hold of the kind of people you need to - job that is required by our customers. But they're certainly .

OK. And truck load tonnage was down a lot in the quarter. I was wondering if you could - as was in the fourth quarter, I was just wondering if you could just - kind of give us a sense for ?

Well, it's become more competitive out there for the truck load tonnage. I think that we were the first to recognize that we did pull some of that business in, price wise were about hurting our core business, the LTL business.

Uh-huh.

Unless you measuring around . Our competition observed that and decided to do the same thing. So, it got more competitive, and there seemed to be less - or at least a decrease in the shipments of that we're moving in volume pricing during the quarter ...

Uh-huh.

But maybe that was not last, maybe it just we didn't give many of them.

Uh-huh.

But it's become more competitive and so we had the where they know what they add to the bottom line.

Fair enough. One other - probably two other questions here, one of that relates to service, clearly the weaker tonnage becomes year over year and granted they are cleared with some improvements, it sounds like as you move through the course of the quarter. But your service I guess becomes somewhat of an issue. Can you talk to us just real quick about our service levels, how you feel about service moving forward?

Well, our service right now is hitting an all time high. And that's not something that we're going to sacrifice in order to drive bucks. You've got to give service, that's what the customer's paying you for. So that is not something that we are anticipating that we would change.

Sure. And I guess last, not the least question for either you or David, as it relates to your equity interest in Wingfoot, can you give us - is there any update or can you just remind us the terms of that and what you're wanting to do with any proceeds from that equity interest should you exercise your option?

, this is David. We have a good year for our , but for $73.5 million beginning in April 30th of next year. And if we choose to put that, the proceeds will be used to pay down that. And I also added that tax basis, and that is very close to $73.5 million so the high majority recognize was cash .

OK. And last question here, I promise. Debt moving forward, what should we anticipate for debt levels as we move through the course of the year, David?

Well, you know, traditionally, we're - the heaviest part of our capital expenditures will occur in the second or third quarter and then in the fourth quarter they tend to trail off. We still intend to have cash flow this year and to reduce our debt .

All right guys. Thank you.

Once again, if you'd like to ask a question please press star one on your touch tone telephone. And next we'll go to Incorporated.

I believe that had asked the questions from my line. Thank you.

Moving on, we'll go to Jim Valentine of Morgan Stanley. . valentine: Hi guys, I have some understand in terms of the costs and in margins for the quarter. And if we look at it in your fourth quarter, sequentially to your first quarter, that just ended, you only have about, well you have a $13 million drop in revenue which was obviously just not positive some sort on that. But we only saw a $2 million drop in costs and Robert, I think you might obviously there's some figures that .

I am trying to go about a little bit deeper and understand the flexibility you have in the sense that can you give a - lets just say that National and LTL volume is not going come back in a big way and let's say the economy comes back and you simply just go back to the 5 to 12, maybe a little bit of positive growth. It can be really hard to get back to those low 90 operating ratio levels or, I mean, is there any bright sides to that or do you need and most of the people in place and that is going to be tough if business doesn't grow at - you know, 15 to 20 percent over the next year to - for you to get back to the margin you might have seen two years ago?

Well, let me just , it's always hard to get to the low 90's operating ratios. That's never very easy even in good times.

OK.

But we certainly have expectations of trying to get back there. It's going to take some improvement in business levels. We're still serving the same territory that we were two years ago with roughly, what maybe 15 percent less business total and in that style.

I mean we have to serve those terminals everyday and in some cases there's just one schedule in that terminal everyday and if there is 10 or 15 percent less freight on there then that works pretty hard against us from an operating leverage stand point. I don't have any doubt that eventually the economy will recover, I don't know when that will happen. I can't pin that down. But we're seeing the trend is in the right direction for now and I'm pretty optimistic about that trend continuing. I think we'll just have to wait and see.

OK. And says you are reviewing some of your national are seeing a lot bigger drop than the regionals and they're seeing a bigger drop than some of the carriers and in truck load carriers. What I am trying to understand is how much of the eight-nine-ten percent volume drop do you think is due to the sector you're serving in the more industrial and possibly retail versus that there's more of shifting on to other customers, whether it be just simply on a regional ?

I think there's probably something shift going on, not . The regionals have been more aggressive on the price. You look at their yields in first quarter, I think they're much more aggressive on price. And we have chosen in some cases not to chase those. Particularly if they are big losers. And it's been less though in the long haul sector. So I think, you probably need some of that two way business that we've been taking away from them for the last couple of years, are going back to them as they become very aggressive on price. I'm mystified that they would do that at a time when business looks like it's starting to turn. But they have.

OK. And the last question, forgive me if someone asked this at a conference in the second quarter. On the new Regs, there is more truck load this year in terms of new engine Regs for private trucks, what you do to the youngest fleet, can that you help you out, so you tend to be - keep your fleet newer, try to understand how the new Regs might or may not buying habits?

Well, fortunately, we've got about a year to look at that. We've got coming in this summer, which will before the new engines are required. Which will then give us really another year to look at new engines so one of the issues with new engines is no one really knows much about them yet. On how that are being tested.

Yes, the good news is, and I've been saying this for some time that, having a new fleet gives you a lots of options. Those new engines are causing a lot of problems on the front end, I don't doubt that the manufacturer will fix them in the long run, but if they're giving a lot of problems on the front end, with a new fleet we can afford greater , if we wanted to up our average age in a year or two, we'd still have about the youngest LTL fleet around. So that's a good option for us.

We don't know yet, we'll sit and watch, and see how those engines do. But we certainly have good options there with the fleet that we've got, an average age of about 18 months on a road . We keep them three years which gives you about an 18 average a day on , we're in good shape, they're probably better than some others.

Great. OK. Well thanks for the update.

And moving on, we'll hear from from Morgan Stanley.

Hi Robert and David.

?

Yeah. Following my colleague, I am trying to understand these pricing pressure within the long haul LTL segment. Is it that we had a lot of annual contracts, negotiations enterprising systems or is it that there is desperation pricing by one or just, where is this pressure coming from, within the long haul segment? And finally what is your percentage under national?

Let's say contract, in terms of revenue and tariff accounts. (Inaudible) different value, lower than national accounts.

Yeah, we tend to have less of the national account business than our competition, mainly because its generally not . We roughly have about a third of our business on contract. What we're seeing right now is on our contract renewals, we're seeing excellent results there in terms of getting an increase to cover our costs, as we've ever seen, frankly in the last thirty days or so. And that does not seem to have been a problem. That's why the administrative guys need the people and take market share.

That's kind of - maybe it's a delight in my opinion. But it's certainly going on, it's in long haul sectors a couple of carriers including us who are continuing to be - are conservative on rates couple who are not. And all you got to do is look at their yields, look at their revenue per hundredweight changes and you'll know who they are. And it's, again it's mystifying to me that that would start basically at the same time business looks to be turning in the right direction. We've made it through the worst part of the down turn without having to get in to that. So disappointment.

So it is for me too. Thank you very much.

As a final reminder, please press star, one if you would like to ask a question. And next we'll go to .

Hello Robert, hi Dave, hi Dave.

Hi .

A couple of questions in the light of the general, I would say, declines that we've seen throughout the national LTL industry, did you thank the attitude will be changed at all with respect to the negotiations that will ultimately lead to the contract renewal next year. You know, it seems to me that - you know, if we go with a standard type of agreement like we have seen in the past that's just going continue to put pressure on the carriers. Is there any hope of perhaps a slightly less agreement than we've seen in the past?

Well, in my experience with - like the agreements that while we usually end up with, it's something that is not exactly what we wanted but not exactly what they wanted. They . Initially it has been constantly, for the last four years, meeting with the union to talk about issues. They are, I think, inclined to try to get an early disposition of the agreement for obvious reasons. We did the last time and we were successful in doing that.

We can set our own arbitrary deadline that's well before the contractual deadline and that is what we'll attempt to do with them again this year. And I think they are probably amenable to that. But believe me, we're not going all over and play dead, they've got their issues, and their members have their issues that they want the union to address and they're certainly going do that. But again, it's been my experience that when you are successful in these things you give it a little less than what you wanted at the end of the day. Or maybe a little more than what you wanted . In any event, I think that we'll probably, unless we run into something that we don't know about now, I think we'll probably put together and agree with it successfully.

Let me also - one other question regarding the constitutive framework of section of the industry. It seems, based on some anecdotal feedback that we're getting that one of the low priced players that you alluded to earlier, perhaps maybe some service problems. And I guess, surprising to me, such a large percentage of the customer base dwindling, perhaps to put up with that kind of deterioration in service in exchange for lower price, I would have expected with all focus on the logistics and inventory management and so forth that perhaps you would captured more of that service sensitive freight. What on there?

Well I think that it's not noticeable on a day to day basis but over time, I think we'll be able to look back and if there is deteriorating out there that it's not providing a service that they pulled out. That business will migrate and its doesn't happen in all in one day or month. Its going to take a period of time for that to happen. We've seen some business moving to us from other carriers over the last six months for those kind of reasons, and - but it's not been significant as you can tell from our . The more than that. But it's not going be - there's not going to be a eureka point where you saying it all happened on April 15th, when paying our taxes, this didn't happen that way. Bit slowly.

OK. And then one final question, you know, historically most people have viewed all trucking stocks as early cycle stocks and it seems that the national LTL industry in particular may actually be a coincident or perhaps even a lagging industry with respect to the economic rebound because most of what your haul tends to be semi-finished or finished products. Is that a proper characterization? Would you expect it to perhaps see your business rebound subsequent to the rebound in say the truck load carriers or some of the international freight carriers?

, I've heard some commentary along those lines that truck may be recover first and then LTL. I'm not sure what that's based on. I've got to tell you that this downturn's is stranger than any I've experienced and I'm almost four years in the business. In the past, we - the economy was more oriented towards manufacturing. So that the numbers kind of - our numbers sort of went with the general economic numbers you were hearing and this year - in this last 18 months or so, the manufacturing economy seemed to have been way behind the general economy, or the total economy. And I'm sure how to read all that, it's a new experience for me.

OK. Tell us when you intend to the making sure we understand fully Dave Loeffler's comments, virtually no guidance whatsoever with respect to revenue growth, margin assumptions or anything of that type going forward?

Yes. That's correct.

OK. Thank you very much.

And Mr. Humphrey, it appears there are no further questions at this time. I'll turn the conference back over to you.

Thank you . We thank you for joining us this morning. We appreciate your interest in Arkansas Best Corporation.

That concludes today's conference. We thank you for your participation.