ArcBest Corp (ARCB) 2006 Q2 法說會逐字稿

Good morning. My name is Lawana and I will be your conference operator today. At this time I would like to welcome everyone to the Arkansas Best Corporation second-quarter 2006 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (OPERATOR INSTRUCTIONS) At this time, I would like to turn the conference over to David Humphrey, Director of Investor Relations. Please go ahead, sir.

Welcome to the Arkansas Best Corporation's second-quarter 2006 earnings conference call. We will have a short discussion of the second-quarter results and then we will open up for a question-and-answer period. Our presentation this morning will be done by Mr. Robert A. Davidson, President and Chief Executive Officer of Arkansas Best Corporation; Ms. Judy R. McReynolds, Senior Vice President and Chief Financial Officer and Treasurer of Arkansas Best Corporation.

We thank you for joining us today. In order to help you better understand Arkansas Best Corporation and its results, some forward-looking statements could be made during this call. As we all know, forward-looking statements by their very nature are subject to uncertainties and risks. For a more complete discussion of factors that could affect the Company's future results, please refer to the forward-looking statement section of the Company's earnings press release and the Company's most recent SEC public filings. We will now begin with Ms. McReynolds.

Thank you, David, and good morning. I'm pleased to report our Company's results for the second quarter. Our second-quarter revenues were $479.3 million, up 12% per day from the same period last year. Our second-quarter operating income increased to $46.5 million from $37.5 million in the same period last year. Our income from continuing operations for this year's second quarter was $29 million compared to $22.6 million in last year's second quarter. Our earnings per share for the quarter from continuing operations were $1.13, compared to $0.88 in last year's second quarter.

During the quarter we completed the sale of Clipper Exxpress, our former intermodal transportation subsidiary. We closed the sale on June 15. The sale price was $21 million. Discontinued operations for the second quarter include an after-tax gain on the sale of $0.12 a share. This gain is subject to adjustments based on the closing balance sheet. Our discontinued operations also include $0.01 a share associated with Clipper's second-quarter operating results through the closing date.

We closed the second quarter with a strong financial position. Our after-tax return on capital employed for the 12 months ended June 30 was 19.4%. I would like to highlight for you some of the more significant cash flow items we have experienced so far this year.

Our operating cash flow through June 30 were $74.4 million. Our net purchases of property and equipment were $52.3 million. We purchased treasury stock for $12.6 million and we paid dividends on common stock of $7.6 million. Our balance of cash and short-term investments was nearly $158 million at the end of the quarter. This balance has increased about $31 million since the end of 2005.

I would like to provide you with a capital expenditure update. We continue to expect our 2006 net capital expenditures to be within our original range of $125 million to $145 million. We do expect to be closer to the high end of this range due to some capital expenditure needs than have arisen because of our regional growth initiatives in the East. I will provide another update on our 2006 capital expenditures in October during our third-quarter earnings conference call.

Now I will turn it over to Bob.

Thank you, Judy. I congratulate the ABS team on a great second-quarter performance. Healthy revenue and tonnage increases boosted operating income and during the quarter ABF customers benefited from further improvement in cargo care, which was already best in the industry.

In the second quarter, revenue for ABF was $467 million. That is up 11.8% in total and is up 8% before fuel surcharge. Our operating income was $46.4 million compared to $38.1 million in the same quarter last year. The operating ratio was 90.1. That's almost a full point better than the 90.9 in the second quarter of '05. In fact, it was the best second-quarter operating ratio in the last 28 years.

In the second quarter, total weight was up 6.4%. Second-quarter tonnage comparisons were dampened slightly by the timing of the Easter holiday, just as they were helped in this year's first quarter. When you adjust for the Easter effect, ABF's second-quarter tonnage to date increased about 7%. Remember that we count a full 64 working days in both second quarter of '06 and second quarter of '05.

Although calendar effects muddy the tonnage trends, it is clear that tonnage growth accelerated each month in the quarter. So far in July our tonnage trends are running slightly behind those of the second quarter, although it is certainly still early in the quarter and comparisons are complicated by calendar differences.

Total billed revenue per hundredweight in the second quarter was up 5.5% with fuel surcharge and 1.9% without fuel surcharge. During the second quarter, ABF continued to see some significant positive freight profile changes that reduced reported revenue per hundredweight. First, ABF's length of haul in the second quarter decreased 1.6% and that reflects continued growth in shorter lanes. For example, tonnage moving 800 miles or less increased by more than 10% compared with 6.4% overall tonnage increase. In the second quarter freight less than 800 miles grew to about 37% of our total tonnage.

Second, ABF's total weight per shipment in the second quarter increased 4.7% over the second quarter of last year. These profile changes reduced reported revenue per hundredweight but they represent neutral or even positive changes in the quality of freight and profitability. And I've said before, while the review of revenue per hundredweight is reasonable and it is the only yield that's available to an outsider, the ultimate comparative metric is profitability. We are satisfied with the retention of the April 3 general rate increase and with the pricing increases on contracts and deferred pricing agreements.

Productivity as measured by total weight per labor hour was also favorable, increasing by 1.8% during the quarter. The increase and shipment size obviously helped. While freight handling productivity has increased, ABF also improved the level of cargo carry it provides to its customers. During the second quarter, ABS cargo/claims ratio, which is the measure of net cash payouts to revenue, was 0.67%. This ratio improved from 0.78% that we've seen for the combined years of '04 and '05. Available industry information indicates that most of our LTL competitors have cargo/claims ratios much higher than this and in some cases at least twice this amount. Our ratio is even more remarkable since our excellent claims record attracts a lot of sensitive cargo like furniture and electronics. Safe and secure handling of customer cargo is just one example of how ABF continues to provide value in the marketplace.

As we expected, ABF's year-to-date workers' compensation expense as a percent of revenue have returned to historical levels. It has been 1.9% of revenue so far this year compared to an average of 1.87% over the last five years. In April of this year, ABF announced new operating procedures in 52 additional customer service facilities. As a result more flexible and reasonable capabilities are in place at nearly one-quarter of our locations. These operational changes will also improve transit time reliability in ABF's longer haul lanes. ABF is beginning to market its new next-day and second-day services. These are branded as regional performance models or RPM and in areas throughout the East Coast from Maine to South Carolina. ABF is in the planning phase of expanding this concept to other parts of the country, although it is too early to discuss any details.

We remain strongly committed to our efficient longhaul franchise, but we also see significant growth opportunities in these regional lanes. We expect to spend some capital to support our growth in the regional market and we are prepared to invest available cash when those investments meet our return target. In some cases, RPM capital investment will be necessary before all of the anticipated business within ABF's network.

As Judy mentioned earlier during the second quarter, we sold Clipper Exxpress. Clipper's management has been performing well. Clipper has been growing in each of the periods of business; however, Clipper was too small to have a meaningful impact on Arkansas Best results and there were no synergies with the rest of our business, especially ABF. Therefore we were pleased to be able to identify a buyer that finds Clipper to be a strategic fit within their current business. We thank the excellent management team at Clipper for their contribution to Arkansas Best and we certainly wish them much success in the future.

I will turn the call over to David for Q&A.

Lawana, I think we're ready for some questions.

(OPERATOR INSTRUCTIONS) Edward Wolfe, Bear Stearns.

Just a -- I'm sorry because I got on a little bit late, but I understand from one of my associates that you talked about decelerating tonnage trends year-over-year throughout the quarter and pricing accelerating throughout the quarter trend. Can you just go over those with a little specificity of what you are seeing and include July in that picture?

No, Ed. We said exactly the opposite. We said that we saw accelerating tonnage trends each month during the quarter. You've got to be a little careful looking at the period because as you know the April has the Easter effect in there, so it would naturally be a little dampened. On the other hand, June has the absolute perfect calendar construction, so the raw numbers were a little better than what you'd expect steady-state. But even when you adjust for those two factors, we saw accelerating tonnage trends during the quarter. However July looks like it's running slightly below second quarter, but again, it is just too small a sample to draw any real conclusions.

When you say below meaning accelerating less or actually down year-over-year in July?

Tonnage is up in July. It is up at a level that appears to be slightly below the increase that we saw in the second quarter, but (multiple speakers)

It's a game of words, isn't it?

But again, it kind of gets silly at some point to be basing any conclusions on a little slice of July, but tonnage is up, up, up and up, and appears to be generally accelerating.

Bob, will you give numbers for the months? If it was up on average 6.4% (technical difficulty) what was April, May, June, July? How much were they up?

We're not going to disclose the individual levels because the number in April was below what you would have expected because of the Easter holiday. The number in June, the raw number is higher than you would expect because of the calendar construction, probably too high to be meaningful. So we will just stick with the explanation that we saw accelerating tonnage trends during the quarter.

Okay, and is some of the July impact or is it adjusted for the July 4th on a Tuesday?

We discovered that July 4th was in July this year and also happened the same thing last year, which is kind of the trend. However July 4th this year was on a Tuesday. It kind of screws up your Mondays and we are just talking about (inaudible) and apples growing (inaudible).

Okay. With the rollout of the regional business, you mentioned in your release that it is not material and you wouldn't expect it to be material to revenue to the end of this year, beginning of next. What does not material mean? Can you give us some kind of guidance of where that revenue looks like at this point?

Not material seems to be not material, Ed. It is not bumping the needle. We are not really starting to market until August 1 in these, so it is still kind of a secret. We are picking up some freight from existing customers, but it is not affecting our results.

And have you marketed in the original thirteen facilities at this point and it's just the additional ones you haven't started to market, or is this for everything?

We did market some in the additional 13, but again the additional 13 was not about attracting price. It was about refining our procedures, getting our [coffer] in place, and so while we actually went out and sold in those 13 facilities, those results were not material to our overall (technical difficulty) either. We said when we ticked this off that we'd expect to see results in about 18 to 24 months. That was about six months ago, so it fits in with our results next year.

Then just the opposite side of the question you said I got wrong, I said it sounded like pricing and yields were improving month over month over month. You said maybe they are decelerating a little bit?

No, we didn't make any statement about month by month yields. Again, you had the general rate increase earlier this year and I think overall we disclosed that the total revenue per hundredweight was up 5.5 with fuel surcharge and 1.9% without and we're satisfied with those numbers.

When you look at real pricing, what would be your estimate for what pricing is, with some changes in your mix and all that, what does that 1.9 in terms of real pricing mean?

I have got an engineering degree and I have run these correlation models trying to come up with profile neutrals and there's a lot of noise and signals in the numbers; correlations yet are low and it's not a meaningful number. We're satisfied with the results and overall the profitability reflected it.

Thank you very much for the time.

Justin Yagerman, Wachovia Securities.

Where -- when you look at the core, can you just kind of talk about the service centers in your network and if that has changed all and kind of what, if it hasn't, how capacity utilization has shifted? Because it looks like you were getting some pretty strong operating leverage off of the density driving through your network.

We have the same number of customer service facilities in the quarter as we had last year. We have added a few doors. We actually got out of the systems facilities and reduced some doors. So there is not a meaningful change in our capacity.

So if you looked at that, I guess where would you place capacity utilization then for the quarter? Were you guys -- I mean feeling things at the tightest part of the quarter stretched to the limits or was there enough room that you're going to be able to expand this if things pick up in the back half of this year?

Well, we have had 6% tonnage increase in the quarter and as you know from our CapEx, we didn't add any road capacity, so as I have said before, the system is kind of like a rubber band -- a balloon. You're able to absorb some capacity and deal with it. During the quarter, we increased our rail usage and we also increased our city cartage usage, and those helped absorb some of the increases.

Going forward I would expect to move some of that business back onto ABF trucks and also we had some spot volume. I think going forward certainly into the third quarter, you would see us reduce the amount of spot volume that we have to protect the customer core LTL business. So if capacity in this industry is a concept kind of overblown, so if everything we have is pretty much variable. There is a little bit of short-term fix impact but it goes away pretty quickly.

One place that we will add capacity is to accommodate the regional growth. As you know, we are building a regional linehaul operating structure there that is parallel to our longhaul franchise, so you will see us add some linehaul capacity in the regional networks, but that will be incremental and not enough to affect overall results materially.

Where was rail usage in the quarter?

It was up over --

It was about 16%.

It was up over last year. It was less in '04, somewhere between the two.

I think 16 compared to really close to 15 for last year's second quarter.

When you look at the profile of your freight and the weight was up significantly just relative to how that typically moves I'd say, where -- can you identify at all where the heavier freight is coming from? Is it more retail? Is it more manufacturing? What is driving this heavier weight per shipment in what feels like a slowing down maybe economy at best right now?

I think you are right. The 4.7% average typifies -- is pretty significant particularly when you consider that that is (indiscernible) on top of the 3.3% growth last year. I think we are still seeing some business come to us from other modes and as I have indicated before, some of that is spot volume that I suspect won't be as significant going forward. I think you are still seeing rail issues affecting truckload and there's some trickle-down effect to that as well.

But in terms of the verticals that it's coming from, can you identify if it is manufacturing or retail derived?

No, we can't. It is very difficult for us to identify business by sector. We don't identify commodity [coast] on our freight. (technical difficulty) doesn't allows us to do that plus if you have business that's moving from a manufacturer to a retail, is that an increase in manufacturing or is that an increase in retail? Both, so we just don't track the verticals close enough to do that.

All right. It may be a little early to answer this but have you been seeing any change in the pricing markets since FedEx bought Watkins?

We have heard a few positive rumblings, but nothing material. We're seeing more of that taking place over at UPS Freight however. I think in both of those cases we will see some pricing rationalization and as I said before, I think both of those will eventually be positive to the industry.

And last but I guess not least, can you update your thoughts on CapEx for this year or next year? Then tax rate looked like it was slightly lower. What is a run rate that we should be using in our models for that?

Justin, earlier in my comments I gave an update on the CapEx. We expect to be in the original range that we gave which was $125 million to $145 million, but we do expect to be in the higher end of that range and that is really coming from some equipment additions that we are going to make that relate to the RPM, the regional performance model rollout in the East.

The tax rate question that you asked, our tax rate was 38.9 for the quarter. We're expecting low 39s for the remainder of the year and really that's come down some because of the increase that we've had in our tax exempt income.

That CapEx number is gross I'm assuming?

Net.

That's net. Okay. And just directionally, do you have any idea or would you be willing to say which way that's going at least in 2007?

We really are not prepared to report on that yet. We have got to pull together all of our plans for 2007, and that is going to involve a lot of change from where we are today. So we will report on that as we usually do, really in January '07.

Okay. Thanks for your time. I appreciate it.

Brannon Cook, JPMorgan.

Good O/R improvement in the quarter, and it looks like you clearly benefited from solid demand environment and pricing and good execution. Obviously you had the GRI that came out I guess about seven weeks earlier in the quarter. And I was trying to get a better sense of how big of an impact you think that had on margins in the quarter? Clearly some good improvement there. Would it be reasonable to expect the pace of O/R improvement would moderate in 3Q as you would not have the earlier GRI giving you a tailwind there?

I don't have a good answer for that. First of all, we're not going to give guidance to our O/R going forward and certainly having a GRI earlier did help us in the vertical and [as by how much].

Okay, then the question on growing the shorter haul business that you're focusing on, are you growing that primarily with existing customers? Were you're going in and trying to get shorter haul freight or have you started to market externally more to new accounts?

Certainly we would expect growth from both, but it is clear that our early successes will come from existing customers.

And do you think you're going to get more aggressive marketing that to new customers really looking toward next year?

We're going to send our sales force out into the marketplace and again, I would expect them to sell first to existing customers, but also they will be presenting their services to the marketplace.

Okay, thank you.

Jordan Alliger, Deutsche Bank.

Just a couple of things. I think you mentioned in the release that you saw 10% growth in freight travel in 800 miles or less and I'm just sort of wondering what proportion of your business actually does that represent these days?

It now represents 37, a little over 37% of our [tonnage].

Okay. And the new, the change in operating procedures and the regional I guess regional performance model, I guess that is going to be -- that's part of that less than 800 miles. In other words, I'm just trying to understand you're at 37% already, is this regional performance model a cutoff point even below the 800 miles?

It will be primarily centered in business that’s less than 800 miles, but as you suggested, it is not yet having an impact on that number.

Okay. Given the changes you have made and I guess the plans that you have -- you are working on but it is still too early to say the phasing on, is there a sense for how much your structure of Arkansas Best, how much it will allow for mix of this shorter length of haul business to grow to over time? Do you have a bogey where you'd like to see that 37% go to?

We have got a business plan but we're not going to disclose what the targets are.

Okay. Just a final question. Productivity was up nicely in the second quarter, as you talked about. Do you envision that type of productivity to extend going forward into the back half of this year? Can you keep that pace comparable?

We're certainly going to tell our operating folks that it needs to be.

Okay. How much of that is contingent on just I guess the volume base as opposed to some of the stuff the operating guys could do?

Clarify the question, Jordan. I don't understand it.

In other words, a lot of productivity I would imagine gets enhanced when you have a pretty good volume quarter and it helps overall utilization in your facilities, the trucks, etc. How much of overall productivity comes -- is that versus specific things you may be doing on the operational side?

You know, when we have a good amount of growth, sometimes it actually hurts your productivity. For instance, you end up having to [adopt] rates rather than cross [docket], but we think the kind of weight per hour that we are doing now is attainable. As I indicated before, productivity has certainly been helped by the higher weight per shipment. It is possible that as our proportions of spot volume rates drop, the average shipment size may drop which means that our weight per hour may be effective. But also I think that as we get more current, that will help productivity. I can't project what the overall combined impact will be.

Fair enough. Thank you.

Ken Hoexter, Merrill Lynch.

Just on the 10.5% growth that you're seeing on the regional side, obviously now with FedEx, UPS, and I guess even Yellow getting more aggressive there, do you see that continuing to outpace GDP for that kind of a great expense? Do you see -- obviously you're making significant investments in that, so I'm just wondering kind of what your outlook on that regional side of the business and how large with the longhaul side I guess only growing about 2.5%? Just doing that with the number you just gave us. Should we continue to see that regional side get to what size of the business overall?

Well I think it has been clear for some time that the regional business is larger and growing faster and that is one of the things that makes us interested in improving our operating [procedures] for the regional market. I think the 10% represents -- it shows that we can be a factor in that market. But so far it is just us getting our share of the growth. We expect what we're doing in the regional market helps us tap into a broader segment of that market to provide more competitive lanes and more competitive prices. But the 10% isn't anything that we have done within the Company. It is just getting our share of a larger market.

Okay. If I can come back to the sequential rollout through the quarter, you noted that I guess April was real rough. May was kind of in the middle. And then June was very, very strong and July is coming in I guess at or below the average of that, which would bring us back to kind of April to early May comparisons just based on the numbers you are throwing out. Is that a fair comparison or are you less concerned about how July is rolling out in that?

The characterization of April as rough was not ours. There was healthy growth in April and in May and June. It is just it got better during the quarter even if you consider the complex calendar effect of (inaudible). And July is doing fine. It is not at the level that we saw in June. It is the lower (indiscernible) making slightly below the quarter, but again, Ken, I will just emphasize we're here growing in comparison to the (inaudible) lines in July that has an unusual calendar construction. We're certainly not drawing the conclusions.

All right. If I can come back to the CapEx question -- I just want to understand because I want to understand the '07. I know you're not giving guidance on what you may spend in '07, but as you add this, I guess you're adding more of the Eastern seaboard on the regional side, what do you need to spend in order to -- is it more just reshaping how you run those service centers or are their capital costs involved on the regional expansion?

There will be capital costs involved on the regional expansion. There's no doubt about that. As I mentioned in my comments earlier, we believe we're going to be at the higher end of the original range that we provided and the majority of those expenditures were going to be to try to position us for what we're going to do in the East. And so you will continue to see us have expenditures ahead of the regional expansion because it is necessary to get the framework in place to provide the service levels that we need to provide.

So, but again, we're not going to give you guidance for '07 for the most part because we don't know what those numbers are ourselves yet. We're still working through that and there's a lot of issues that we're dealing with and we're not in a position to provide those numbers.

Again I would encourage you to think of this business as a variable cost business. If we are successful and having meaningful growth in the regional markets, you should expect to see capital investment and labor investments commensurate with the rest of our business.

Good point. Thanks, Bob.

David Ross, Stifel Nicolaus.

I was hoping you could clarify a little bit, Bob, the comments you made on the increase in average shipment size earlier. I guess you mentioned that it was due partially to truckload overflow freight fill. And then I guess partially due to a better economy and maybe a change in freight mix. If you could just break down (technical difficulty) how much each of those factors influenced the increased shipment size?

David, I think you are correct but we've already told you all we know there.

Okay. Then a little bit I guess more color on the regional rollouts. You're building out the regional linehaul operating structure. Can you I guess explain how that is different from the regular linehaul structure? I guess they run on more expedited transit times or something like that?

The longhaul franchise based around distribution centers and we have 10 of those scattered across the country, it is the most efficient way for handling longhaul freight. It is not very effective for handling regional freight because it introduces too much security and too much cost to handle the freight. So we're in the process of setting up a parallel shorthaul/linehaul network. It uses several techniques. It uses what we call next day [exchange] point; other carriers may call it information assembly centers. We also have the ability to run (indiscernible) pick, sequential soft haul models. And then we've got the ability to simply run a driver over to the next town for the freight. All of those are essentially in parallel regional linehaul networks we're using the same terminal infrastructure, the same sales force, the same local pick up and delivery operation and obviously the same backhaul functions.

Okay, that makes sense. Lastly, could you just explain I guess how the labor fits into all that, how the work rule flexibility is either hindering you are not having much of an effect on your being as effective as you could in the regional market? And whether or not you're going to try to get any work rule changes in this next negotiation?

Our labor contract actually provides for a concept called premium service employees, which is a [call] back classification employee. We have those procedures installed in the East, in a quarter of our terminals and I can tell you that our employees and also IBT officials in the East are very supportive of this concept and everybody here is on the same page. We are in the process of explaining the same opportunities across the rest of our systems. But so far we have had great cooperation from our employees and from IBT officials in terms of removing some of those work rule inflexibilities that have honestly kept us out of this market for a long time.

Yes, I am familiar with the premium service, the (indiscernible) concept and I guess I know that you tend to offer that to your better employees or better drivers because it is more pay. Have you had any issues replacing those drivers that have chosen to become the premium service employees?

We have been pretty successful in hiring. We had spot shortages in some markets due to our very high hiring standards, but we have the premier driving job in the industry. The pay and benefits are excellent. The working conditions are also great. Our drivers get home every night or every other night. They drive new equipment. So any labor driver shortages that we have are short term and they are self-imposed because we are very, very conscious of our safety record. We have won the ATA President's trophy for safety five times. No other carrier has ever done that it is not by accident. We've got the best drivers in the industry and that's why we have the best safety record in the industry and we're going to continue to maintain those standards.

Thanks a lot for your help.

Chad Bruso, Morgan Stanley.

Just a general question, Bob. Since you have taken over, there seems to be more of a focus here on volume growth at ABF than maybe there was in the past, and that could be just timing more than anything else, but could you talk about maybe if there has been a philosophy change or a change in the target for volume growth over the long term or is that just a misperception?

Well, people here say it is because they got me out of pricing, things were a little easier, but that is a myth. You know ABF well enough to know that you don't have short-term changes in philosophy. We put a plan together and we work it for the long term, but even saying that, there is not a pricing level that you turn more liberal or more conservative. We examine every deal, decide whether it is good for ABF. If we end up with more deals that are good for us, we grow. If we end up with lesser deals, then we grow less, but we are not saying, gee, we need more business this month, we're going to take on some bad deals. That never happens here.

We have done an account by account pricing philosophy that has served us well over dozens of years and I am pleased to see that we're continuing to do that even though I am no longer directly involved in that. We have also got some pretty exciting growth opportunities. Some of those are in various stages of maturation. We've talked about one of them, the regional performance model which we think is a quantum change at our Company. We now have the ability to attract rates that just wasn't available to us before, that is going to provide us some growth. But it is not a change in revenue versus profitability philosophy. It is just development of growth opportunities. Does that explain --?

That is very helpful. If I do try to segment the markets a little bit, you mentioned earlier that maybe one of the changes that is helping the growth here is that you're finally starting to get your fair share of the two-day market. I guess just on that front, I think you also said that it wasn't really anything that you had been doing internally at ABF, but this is also somewhere where you have been focused in the past. Has there been a structural change in the market that is allowing you to grow faster in that market or are there market share opportunities that -- or density or other reasons you are now able to take on that you had not in the past? Help us on that front, if you could.

I think the underlying market, the underlying regional market is growing faster than the longhaul market. Therefore our business which is regional in nature has been growing. We are making changes in this company to get more effective in that market, but you've not yet seen the impact of those changes.

How fast would you estimate that market is growing? I mean I assume it is not growing at 10% but maybe faster than the low single digits the longhaul market is growing?

I don't have a feel for that.

Okay, thanks for the time.

Ladies and gentlemen, we have reached the end of the allotted time for questions and answers. Mr. Humphrey, are there any closing remarks?

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

Thank you. This concludes today's Arkansas Best Corporation second-quarter 2006 earnings conference call. You may now disconnect.