ArcBest (ARCB) 8-K Results of Operations and Financial Condition

EXHIBIT 99.1

FOR IMMEDIATE RELEASE

ARKANSAS BEST CORPORATION
ANNOUNCES THIRD QUARTER EARNINGS OF $1.07 PER SHARE;
ABF^®’s OPERATING RATIO IS 89.2%

     (Fort Smith, Arkansas, October 21, 2004) — Arkansas Best Corporation (Nasdaq: ABFS) today announced third quarter 2004 net income of $27.4 million, or $1.07 per diluted common share. For the third quarter of 2003, net income was $17.0 million, or $0.67 per diluted common share. Arkansas Best’s revenue during the third quarter of 2004 was $461.9 million, an increase of 12.6% over the third quarter of 2003.

ABF Freight System, Inc.^®

     ABF Freight System, Inc., the company’s largest subsidiary, had third quarter 2004 revenue of $427.9 million, a per-day increase of 16.3% compared to third quarter 2003 revenue of $368.1 million. ABF’s third quarter 2004 operating ratio was 89.2% versus an operating ratio of 92.0% during the third quarter of 2003. “By taking advantage of available operating leverage during a period of strong business levels, ABF produced outstanding third quarter results,” said Robert A. Young III, Arkansas Best Chairman, President and Chief Executive Officer. “ABF’s quarterly operating ratio was the second best of any third quarter in the last twenty-five years, surpassed only by the third quarter of the highly profitable year of 2000. ABF’s operating income during this quarter exceeded that of the third quarter of 2000 by over twelve percent.”

     ABF’s third quarter 2004 LTL tonnage per day increased 10.0% compared to the same period last year. “The third quarter began with an unusually strong July increase in year-over-year LTL tonnage that sustained the upward monthly trend of the second quarter,” said Mr. Young. “Though the rate of LTL tonnage growth slowed somewhat in August and September, the overall third quarter increase in ABF’s core business can certainly be categorized as strong. Versus the second quarter of 2004, ABF’s third quarter LTL tonnage per day increased 4.9%. “This level of sequential, LTL tonnage growth is two percent better than the average increase between these same time periods during the previous five-year period,” said Mr. Young.

     “Through the first nineteen days of October, average daily tonnage figures in our core LTL business are slightly over nine percent higher than the comparable period last year. We continue to be encouraged by the positive tonnage pattern ABF is experiencing so far in the fourth quarter,” said Mr. Young.

     Billed LTL revenue per hundredweight, excluding fuel surcharge, was $24.50, an increase of 1.7% over last year’s third quarter figure of $24.10. “ABF’s average LTL shipment was approximately two percent larger than in last year’s third quarter. LTL length of haul decreased by about two percent, when compared to the same period of 2003. Both of these profile changes have an adverse effect on nominal yield growth,” said Mr. Young. “The LTL pricing environment remained firm as industry capacity continued to tighten during the historically busy third quarter. ABF is working with its customers to provide the best possible value in moving their goods.”

     ABF’s truckload tonnage per day in the third quarter grew by 14.1% when compared to last year. Billed truckload revenue per hundredweight, excluding fuel surcharge, increased by 4.7% over last year’s third quarter figure. “The shortage of available truckload capacity continued to provide ABF with opportunities to handle full-load, spot shipments at favorable prices,” said Mr. Young. “In these situations however, ABF gives initial consideration to devoting available system resources to its core LTL customer base.”

     “As a result of improving business levels and recent employee retirements, ABF has experienced an increased demand for additional employees in specific locations, particularly for over-the-road drivers, city drivers and freight handlers. Although the ABF positions are highly desirable in the industry, our pace of hiring has been slower than we would have preferred, due to the improvement in the economy and to ABF’s high employee standards related to safety and work experience. As a result, ABF used a higher-than-normal percentage of rail for linehaul movement and a greater level of overtime. Fortunately, our employment efforts are being successful. We expect to continue our recruitment efforts as freight volumes increase into 2005,” said Mr. Young.

     Productivity measures at ABF were generally equal to those experienced during the third quarter of last year. “In many cases, additional business enhances the productivity of ABF’s dock and city employees,” said Mr. Young. “However, in certain locations, productivity has been negatively impacted because of high freight volumes. During these busy times, ABF continues to emphasize the timeliness and efficiency of shipment handling in order to preserve established standards of customer service.”

     “ABF’s third quarter LTL tonnage per day remains more than two percent below that of the same period of 2000. As a result, ABF still has some additional operating leverage in its terminal network. During the third quarter, ABF maintained its focus on strict control of overhead and fixed costs,” said Mr. Young. “Going forward, ABF will prudently add both personnel and capital resources as required to profitably handle business levels.”

     On September 30 of this year, the U.S. Congress voted to extend the current Hours of Service regulations until no later than September 30, 2005. This followed a mid-July 2004 ruling, by the U.S. Court of Appeals for the District of Columbia, that vacated those rules. “ABF believes that the existing rules have had a positive impact on highway safety and the welfare of our employees,” said Mr. Young.

Clipper

     For the third quarter of 2004, Clipper had revenues of $24.6 million. Excluding the revenue associated with Clipper’s LTL freight business, the sale of which was closed on December 31, 2003, Clipper’s revenue in the third quarter of 2003 was $24.9 million. Clipper’s third quarter 2004 operating ratio was 99.2% compared to a third quarter 2003 operating ratio, excluding LTL, of 96.4%. “Revenue increases in Clipper’s brokerage and temperature-controlled divisions were offset by lower revenue in the intermodal portion of Clipper’s dry freight business,” said Mr. Young. “Because of tight capacity, Clipper’s rail suppliers increased their per-mile charges despite providing poor linehaul service and causing increases in Clipper’s claims costs due to extended holding of reefer equipment. As a result, the profitability of Clipper’s intermodal and temperature-controlled divisions suffered significantly. In addition, tightened truckload capacity negatively impacted the profitability of Clipper’s brokerage division as potential loads greatly exceeded the number of trucks available to move them.”

Credit Ratings Outlook

     On October 15, Standard & Poor’s revised its outlook on Arkansas Best Corporation to positive from stable. At the same time, Standard & Poor’s affirmed Arkansas Best’s BBB+ corporate credit rating. In its press release announcing this change, Standard & Poor’s stated, “The change to a positive outlook was driven by the company’s continued strong operating performance, which has resulted from increased tonnage levels, improved pricing and management initiatives to control costs and improve productivity.” In addition, Standard & Poor’s stated, “Ratings on Arkansas Best Corporation reflect the company’s solid competitive position, moderate financial policies and strong financial profile.”

Common Stock Purchase

     During the third quarter of 2004, Arkansas Best did not make any open market purchases of its common stock. Since February 2003, as a part of a previously announced program to repurchase up to a maximum of $25 million of its common stock, Arkansas Best has purchased a total of 471,500 shares totaling $12.4 million. Arkansas Best plans to continue making open-market purchases of its stock on an opportunistic basis.

Conference Call

     Arkansas Best Corporation will host a conference call with company executives to discuss the 2004 third quarter results. The call will be today, Thursday, October 21, at 12:00 Noon EDT (11:00 a.m. CDT). Interested parties are invited to listen by calling (877) 275-1257. Following the call, a recorded playback will be available through the end of October. To listen to the playback, dial (800) 642-1687. The conference call ID for the playback is 1162464. The conference call and playback can also be accessed, through Sunday, October 31, on Arkansas Best’s Internet Web site atwww.arkbest.com.

Company Description

     Arkansas Best Corporation, headquartered in Fort Smith, Arkansas, is a diversified transportation holding company with two primary operating subsidiaries. ABF Freight System, Inc., in continuous service since 1923, provides national transportation of less-than-truckload (“LTL”) general commodities throughout North America. Clipper is an intermodal marketing company that provides domestic freight services utilizing rail and over-the-road transportation.

Forward-Looking Statements

     The following is a “safe harbor” statement under the Private Securities Litigation Reform Act of 1995: Statements contained in this press release that are not based on historical facts are “forward-looking statements.” Terms such as “estimate,” “forecast,” “expect,” “predict,” “plan,” “anticipate,” “believe,” “intend,” “should,” “would,” “scheduled,” and similar expressions and the negatives of such terms are intended to identify forward-looking statements. Such statements are by their nature subject to uncertainties and risk, including, but not limited to, union relations; availability and cost of capital; shifts in market demand; weather conditions; the performance and needs of industries served by Arkansas Best’s subsidiaries; actual future costs of operating expenses such as fuel and related taxes; self-insurance claims and employee wages and benefits; actual costs of continuing investments in technology; the timing and amount of capital

expenditures; competitive initiatives and pricing pressures; general economic conditions; and other financial, operational and legal risks and uncertainties detailed from time to time in the Company’s Securities and Exchange Commission (“SEC”) public filings.

     The following tables show financial data and operating statistics on Arkansas Best Corporation and its subsidiary companies.

ARKANSAS BEST CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2004			2003			2004			2003
	($ thousands, except share and per share data)
OPERATING REVENUES(2)	$	461,888		$	410,362		$	1,261,224		$	1,161,295
OPERATING EXPENSES AND COSTS(2)		417,663			381,717			1,176,715			1,109,256
OPERATING INCOME		44,225			28,645			84,509			52,039
OTHER INCOME (EXPENSE)
Net gains (losses) on sales of property and other		248			(217	)		433			(211	)
Gain on sale — Wingfoot		—			—			—			12,060
Fair value changes and payments on interest rate swap(1)		300			(51	)		449			(10,333	)
Interest expense		(102	)		(434	)		(388	)		(2,941	)
Other, net		745			613			210			311
		1,191			(89	)		704			(1,114	)
INCOME BEFORE INCOME TAXES		45,416			28,556			85,213			50,925
FEDERAL AND STATE INCOME TAXES
Current		15,725			8,034			29,483			11,895
Deferred		2,322			3,546			4,602			7,598
		18,047			11,580			34,085			19,493
NET INCOME	$	27,369		$	16,976		$	51,128		$	31,432
Basic:
NET INCOME PER SHARE	$	1.09		$	0.68		$	2.04		$	1.26
AVERAGE COMMON SHARES OUTSTANDING (BASIC):		25,067,784			24,787,831			25,077,859			24,861,966
Diluted:
NET INCOME PER SHARE	$	1.07		$	0.67		$	2.00		$	1.24
AVERAGE COMMON SHARES OUTSTANDING (DILUTED):		25,546,370			25,287,271			25,501,009			25,339,629
CASH DIVIDENDS PAID PER COMMON SHARE	$	0.12		$	0.08		$	0.36		$	0.24

(1)

The nine months ended September 30, 2003 includes a pre-tax noncash charge of $8.9 million due to no longer forecasting interest payments on $110.0 million of borrowings.

(2)

Beginning in the first quarter 2004, there has been a reclassification between revenue and expense associated with certain shipments where ABF utilizes a third-party carrier for pickup or delivery of freight but remains the primary obligor. The amounts reclassified for the three months ended September 30, 2004 and 2003 were $7.5 million in each period. The amounts reclassified for the nine months ended September 30, 2004 and 2003 were $21.3 million and $21.0 million, respectively.

ARKANSAS BEST CORPORATION
CONSOLIDATED BALANCE SHEETS

	September 30		December 31
	2004		2003
	(Unaudited)		Note
	($ thousands, except share data)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	45,282	$	5,251
Accounts receivable, less allowances (2004 — $4,129; 2003 — $3,558)		162,039		132,320
Prepaid expenses		10,123		8,600
Deferred income taxes		30,121		27,006
Other		3,535		3,400
TOTAL CURRENT ASSETS		251,100		176,577
PROPERTY, PLANT AND EQUIPMENT
Land and structures		222,218		215,476
Revenue equipment		395,626		370,102
Service, office and other equipment		112,123		107,066
Leasehold improvements		13,377		13,048
		743,344		705,692
Less allowances for depreciation and amortization		375,170		358,564
		368,174		347,128
PREPAID PENSION COSTS		26,945		32,887
OTHER ASSETS		71,109		68,572
ASSETS HELD FOR SALE		3,616		8,183
GOODWILL, less accumulated amortization (2004 and 2003 — $32,037)		63,883		63,878
	$	784,827	$	697,225

Note: The balance sheet at December 31, 2003 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.

ARKANSAS BEST CORPORATION
CONSOLIDATED BALANCE SHEETS — continued

	September 30			December 31
	2004			2003
	(Unaudited)			Note
	($ thousands, except share data)
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Bank overdraft and drafts payable	$	13,061		$	8,861
Accounts payable		66,573			55,764
Federal and state income taxes		9,541			2,816
Accrued expenses		147,117			125,148
Current portion of long-term debt		383			353
TOTAL CURRENT LIABILITIES		236,675			192,942
LONG-TERM DEBT, less current portion		1,491			1,826
FAIR VALUE OF INTEREST RATE SWAP		2,035			6,330
OTHER LIABILITIES		64,331			66,284
DEFERRED INCOME TAXES		36,819			29,106
FUTURE MINIMUM RENTAL COMMITMENTS, NET (2004 — $48,613; 2003 — $49,615)		—			—
OTHER COMMITMENTS AND CONTINGENCIES		—			—
STOCKHOLDERS’ EQUITY
Common stock, $.01 par value, authorized 70,000,000 shares; issued 2004: 25,675,556 shares; 2003: 25,295,984 shares		257			253
Additional paid-in capital		225,859			217,781
Retained earnings		234,747			192,610
Treasury stock, at cost, 2004: 531,282 shares; 2003: 259,782 shares		(13,334	)		(5,807	)
Accumulated other comprehensive loss		(4,053	)		(4,100	)
TOTAL STOCKHOLDERS’ EQUITY		443,476			400,737
	$	784,827		$	697,225

Note: The balance sheet at December 31, 2003 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.

ARKANSAS BEST CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

	Nine Months Ended
	September 30
	2004			2003
	($ thousands)
OPERATING ACTIVITIES
Net income	$	51,128		$	31,432
Adjustment to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		40,533			37,483
Other amortization		219			259
Provision for losses on accounts receivable		974			1,057
Provision for deferred income taxes		4,602			7,598
Fair value of interest rate swap		(4,294	)		7,743
(Gain) loss on sales of assets and other		(2,046	)		183
Gain on sale of Wingfoot		—			(12,060	)
Changes in operating assets and liabilities:
Receivables		(30,712	)		(11,106	)
Prepaid expenses		(1,524	)		(3,668	)
Other assets		1,363			(19,280	)
Accounts payable, bank drafts payable, taxes payable, accrued expenses and other liabilities		40,431			16,494
NET CASH PROVIDED BY OPERATING ACTIVITIES		100,674			56,135
INVESTING ACTIVITIES
Purchases of property, plant and equipment		(63,779	)		(63,935	)
Proceeds from asset sales		12,333			2,525
Proceeds from sale of Wingfoot		—			71,309
Capitalization of internally developed software and other		(3,020	)		(2,854	)
NET CASH (USED) PROVIDED BY INVESTING ACTIVITIES		(54,466	)		7,045
FINANCING ACTIVITIES
Borrowings under revolving credit facilities		34,300			207,200
Payments under revolving credit facilities		(34,300	)		(299,500	)
Payments on long-term debt		(305	)		(278	)
Net increase in bank overdraft		4,256			2,796
Dividends paid on common stock		(8,991	)		(5,958	)
Purchase of treasury stock		(7,527	)		(4,852	)
Proceeds from the exercise of stock options		6,390			1,273
Other, net		—			(517	)
NET CASH USED BY FINANCING ACTIVITIES		(6,177	)		(99,836	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		40,031			(36,656	)
Cash and cash equivalents at beginning of period		5,251			39,644
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	45,282		$	2,988

ARKANSAS BEST CORPORATION
FINANCIAL STATEMENT OPERATING SEGMENT DATA AND OPERATING RATIOS (Unaudited)

	Three Months Ended										Nine Months Ended
	September 30										September 30
	2004					2003					2004					2003
	($ thousands)
OPERATING REVENUES
ABF Freight System, Inc.(1)(2)
LTL	$	390,929				$	338,453				$	1,067,350				$	961,627
TL		36,982					29,640					97,706					81,317
Total		427,911					368,093					1,165,056					1,042,944
Clipper		24,610					33,980					70,551					95,446
Other revenues and eliminations		9,367					8,289					25,617					22,905
Total consolidated operating revenues	$	461,888				$	410,362				$	1,261,224				$	1,161,295
OPERATING EXPENSES AND COSTS
ABF Freight System, Inc.(1)
Salaries and wages	$	250,820		58.6	%	$	229,552		62.4	%	$	719,886		61.8	%	$	671,782		64.4	%
Supplies and expenses		53,495		12.5			45,097		12.3			150,405		12.9			133,323		12.8
Operating taxes and licenses		10,909		2.6			9,840		2.7			31,645		2.7			29,568		2.8
Insurance		6,911		1.6			6,158		1.7			18,190		1.6			17,801		1.7
Communications and utilities		3,427		0.8			3,516		1.0			10,728		0.9			10,985		1.1
Depreciation and amortization		12,138		2.8			11,116		3.0			35,240		3.0			31,788		3.0
Rents and purchased transportation(2)		43,657		10.2			32,699		8.9			109,568		9.4			90,009		8.6
Other		912		0.2			1,055		0.2			2,346		0.3			2,758		0.3
(Gain) on sale of equipment		(573	)	(0.1	)		(228	)	(0.2	)		(673	)	(0.1	)		(28	)	—
		381,696		89.2	%		338,805		92.0	%		1,077,335		92.5	%		987,986		94.7	%
Clipper
Cost of services		22,419		91.1	%		29,292		86.2	%		63,914		90.6	%		82,480		86.4	%
Selling, administrative and general		1,985		8.1			4,064		12.0			6,274		8.9			12,108		12.7
Loss on sale of equipment		15		—			6		—			17		—			1		—
		24,419		99.2	%		33,362		98.2	%		70,205		99.5	%		94,589		99.1	%
Other expenses and eliminations		11,548					9,550					29,175					26,681
Total consolidated operating expenses and costs	$	417,663				$	381,717				$	1,176,715				$	1,109,256
OPERATING INCOME (LOSS)
ABF Freight System, Inc. (1)	$	46,215				$	29,288				$	87,721				$	54,958
Clipper		191					618					346					857
Other loss and eliminations		(2,181	)				(1,261	)				(3,558	)				(3,776	)
Total consolidated operating income	$	44,225				$	28,645				$	84,509				$	52,039

(1)

Includes U.S., Canadian, and Puerto Rican operations of ABF affiliates.

(2)

Beginning in the first quarter 2004, there has been a reclassification between revenue and expense associated with certain shipments where ABF utilizes a third-party carrier for pickup or delivery of freight but remains the primary obligor. The amounts reclassified for the three months ended September 30, 2004 and 2003 were $7.5 million in each period. The amounts reclassified for the nine months ended September 30, 2004 and 2003 were $21.3 million and $21.0 million, respectively.

ARKANSAS BEST CORPORATION
FINANCIAL STATISTICS AND GAAP EARNINGS RECONCILIATIONS (Unaudited)

	Rolling
	Twelve Months Ended
	September 30, 2004
FINANCIAL STATISTICS
After-Tax Return on Stockholders’ Equity (net income / average equity)		15.92%
Debt to Equity Ratio		0.00 : 1
After-Tax Return on Capital Employed (1)		15.65%

(1) (Net income + interest after tax) / (average total debt + average equity)

RECONCILIATIONS OF GAAP EARNINGS

	Three Months Ended								Nine Months Ended
	September 30, 2003								September 30, 2003
			Operating								Operating
			Income								Income
	Revenue		(Loss)			O.R.%			Revenue		(Loss)			O.R.%
	($ thousands)
Clipper — Pre-tax
Clipper GAAP	$	33,980	$	618			98.2	%	$	95,446	$	857			99.1	%
Less Clipper LTL		9,108		(268	)		102.9			26,741		(990	)		103.7
Clipper, excluding LTL	$	24,872	$	886			96.4	%	$	68,705	$	1,847			97.3	%

ABF FREIGHT SYSTEM, INC.
OPERATING STATISTICS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2004

		Three Months Ended September 30							Nine Months Ended September 30
		2004		2003		% Change			2004		2003		% Change
Billed Revenue*/CWT	LTL	$	26.04	$	24.89		4.6	%	$	25.35	$	24.32		4.2	%
	TL	$	9.92	$	9.11		8.9	%	$	9.38	$	8.75		7.2	%
	Total	$	22.84	$	21.84		4.6	%	$	22.18	$	21.36		3.8	%
Billed Revenue*/CWT	LTL	$	24.50	$	24.10		1.7	%	$	24.04	$	23.45		2.5	%
(without fuel surcharge)	TL	$	9.22	$	8.81		4.7	%	$	8.86	$	8.53		3.9	%
	Total	$	21.47	$	21.15		1.5	%	$	21.03	$	20.61		2.0	%
Billed Revenue*/Shipment	LTL	$	259.83	$	243.82		6.6	%	$	250.48	$	236.98		5.7	%
	TL	$	1,613.55	$	1,489.78		8.3	%	$	1,538.84	$	1,423.61		8.1	%
	Total	$	280.14	$	261.43		7.2	%	$	269.40	$	253.45		6.3	%
Billed Revenue*/Shipment	LTL	$	244.49	$	236.06		3.6	%	$	237.53	$	228.47		4.0	%
(without fuel surcharge)	TL	$	1,500.11	$	1,441.42		4.1	%	$	1,452.82	$	1,387.04		4.7	%
	Total	$	263.33	$	253.09		4.0	%	$	255.37	$	244.56		4.4	%
Tonnage	LTL		749,781		681,485		10.0	%		2,116,305		1,983,958		6.7	%
(tons)	TL		186,170		163,158		14.1	%		523,345		466,184		12.3	%
	Total		935,951		844,643		10.8	%		2,639,650		2,450,142		7.7	%
Shipments	LTL		1,502,977		1,391,605		8.0	%		4,283,408		4,072,283		5.2	%
	TL		22,896		19,946		14.8	%		63,825		57,323		11.3	%
	Total		1,525,873		1,411,551		8.1	%		4,347,233		4,129,606		5.3	%

* Billed Revenue does not include revenue deferral required for financial statement purposes under the Company’s revenue recognition policy.

There were 64 workdays in the three months ended September 30, 2004 and in the three months ended September 30, 2003. There were 192 workdays in the nine months ended September 30, 2004 and 191 workdays in the nine months ended September 30, 2003. Includes U.S., Canadian and Puerto Rican operations of ABF affiliates.

Contact:    Mr. David E. Loeffler, Senior Vice President, Chief Financial Officer and Treasurer
Telephone: (479) 785-6157
 
Mr. David Humphrey, Director of Investor Relations
Telephone: (479) 785-6200

END OF RELEASE