ABF to Pay $64 Million Goodwill Charge

Arkansas Best will take a $64 million charge in the fourth quarter because of impairment to the value of goodwill at its less-than-truckload subsidiary, ABF Freight System.

The company blamed the charge on "extremely challenging freight conditions" in "a deep and prolonged recessionary period" that "severely impacted" the LTL trucking industry.

"These factors have adversely affected the recoverability of goodwill," the Fort Smith, Ark.-based company said in a Securities and Exchange Commission filing today. The charge will not affect the carrier's operations, liquidity or credit agreements, ABF said.

ABF joined other LTL carriers in a general rate increase earlier this month, raising its base rates 5.7 percent on average Jan. 11. Old Dominion Freight Lines raised its rates 4.4 percent Jan. 18, and FedEx Freight will hike its pricing 5.9 percent Feb. 1. UPS Freight in December said it would raise rates 5.7 percent.

ABF, the fifth-largest LTL carrier in the U.S. by revenue, lost $14 million in the third quarter last year, compared with a $25.2 million profit in the third quarter of 2008. However, its earnings improved from the second quarter, when it lost $26.8 million.

A new president and CEO, Judy R. McReynolds, took control of Arkansas Best Jan. 1, following the retirement of long-time top executive Robert A. Davidson.

Contact William B. Cassidy at wcassidy@joc.com.