As the economy continues to tip toe toward a healthier state, consumer confidence has risen substantially from a year ago but remains wobbly on a month-to-month basis. This caution heeded in consumer confidence has direct correlations to a rise in debt load and unpredictability in the job market.

A recent National Foundation for Credit Counseling (NFCC) online poll revealed that close to one in five consumers, 18%, believe that carrying credit card debt over from month-to-month is a responsible way to manage finances.

“This data suggests that not only are many Americans are using credit cards to fund a lifestyle their income can’t support, but they are comfortable doing so,” said Gail Cunningham, spokeswoman for the NFCC.  

She urges consumers to be aware of the following consequences associated with continually carrying credit card debt from month to month:
• Interest on a credit card is typically calculated on an average daily balance. For those who carry a balance over from the previous cycle, interest is not only charged on the unpaid balance, but on any new purchases added to the balance. With interested added onto the balance month after month, consumers end up paying interest on the interest.


• Carrying a balance has the potential to negatively impact a person’s debt to credit ratio, one of the main components of credit scores.


• A higher balance decreases the amount of credit available for future purchases.

The average U.S. household credit card debt stands at $7,149, the result of a small number of deeply indebted households forcing up the numbers, said William Bailey, professor of family finance at the University of Arkansas. He said when a consumer’s revolving debt is 16% or more of their net income, they are considered an indebted household. Looking only at indebted households, the average credit card debt owed is $15,325 per household.

U.S. credit card debt reached $856 billion in July, and government statistics indicated roughly 47% of American households owe balances on at least one credit card.

Bailey said a growing number of consumers are living on the edge and financing their life styles with credit cards, which is a slippery slope. He said after the recession in 2009 consumers began paying down their debt, but as the recovery gradually extended year after year, consumer attitudes now reflect more ease with carrying debt.

A separate study by TransUnion indicates that consumers who carry revolving balances are more likely to fall 90-days delinquent. Revolvers, those who carry balances and pay the minimum owed, are three times more riskier on new cards and carry five times more risk than those consumers who pay off their full balances each month. The study ran from March 2011 through 2012 and found that 44% of the new cards issued in this period were to “revolvers,” while 38% of the new bankcard accounts were for “transactors,” those who repay the full balance each month.

Another 18% of consumers were in an inactive status with their cards.

TransUnion also found “revolvers” were three times riskier than “transactors” when opening an auto loan.

Credit counselors said while carrying a debt load has its perils, there may also be disadvantages related to charging too little. In the NFCC poll, 21% of the respondents indicated they didn’t use credit cards at all. Bailey wasn’t surprised to see those results citing older citizens and the unbanked as the primary consumers who don’t use charge cards.

The NFCC report noted that cash and debit card transactions are not typically reported to credit agencies, which can make it difficult for a consumer to build up their credit rating, which is needed in most cases to purchase a car or home.
         
They also say credit cards provide less risk of loss exposure if stolen. Cash is just gone, but most credit card companies have consumer protection features that protect against losses if the card is lost or stolen.

In the NFCC poll, 61% of respondents believed that paying credit card debt in full each month is the only responsible way to manage personal finances. Bailey said those respondents aren’t likely the average consumer, because credit card balances are rising on a per-capita basis.

It's been a mixed bag for Crawford County's economy this year, with a loss of one major employer even while other employers have been expanding.

The year got off to a rough start in February when Allens Canning Company announced that it would close its canning operation in Van Buren, relocating it to Siloam Springs. The result was a loss of 150 jobs.

While the closure of the facility left a human toll in lost jobs, it also put a dent in unexpected areas, such as municipal utilities. Van Buren Municipal Utilities Director Steve Dufresne said the company consumed as much as 900,000 gallons of water per day, resulting in about $1 million in annual business.

Even though the year may have started with bleak prospects, a $4 million expansion project announced in June at Tankersley Food Service in the Van Buren Industrial Park showed that the local economy was not completely in a slump.

In addition to adding more than 28,000-square feet of freezer space, the company will hire between 20 and 40 additional workers to man the expanded facility. At the time, Drew Williams of the Arkansas Economic Development Commission said business expansion was the big driver of the state's economy.

"We know that about 80% of our job creation is done through existing businesses retention," he said. "We know that's true in Arkansas and the rest of the country."

Jackie Krutsch, executive director of the Van Buren Chamber of Commerce, said she is seeing it all across the economy – not only Van Buren, but all of Crawford County.

"I just think a lot of smaller businesses and some really large businesses are expanding in what I would say are ways that aren't typically covered by the media - adding three people, seven people, 10 people. A lot of times, they don't even tell us."

To the east of Van Buren, Alma Chamber of Commerce Executive Director Lisa Norris said expanding businesses have also been helping the economy of her community, which lies about 20 minutes northeast of Fort Smith and 45 minutes south of Fayetteville.

A specific example she points to is Alma Healthcare and Rehabilitation, which is expanding its facility just off of Interstate 40.

"They're looking to hire at least 20 people. I don't know the average wage, but the majority of jobs they're looking to hire are CNA-type jobs (certified nursing assistants). But they are also looking for speech and physical therapists, a wide range of jobs that are going to be opening. But the majority will be CNA-type jobs."

With the expansions that have taken place, unemployment in the county has dipped considerably lower for the month of June, the most recent month data was available, compared to the peak of the county's unemployment.

In June, the rate was 7.7% unemployed, with 2,175 without jobs. The number of people in the labor force, or those wanting a job, stood at 28,300, with 26,125 currently employed. By contrast, February 2011 saw an unemployment rate of 9.3%, with 2,575 individuals out of a job. The labor force was smaller at that time, with only 27,850 wanting a job and 25,275 employed.

Asked how the county will sustain its more positive numbers as of late, Krutsch said she believes the service sector is where the growth will be.

"In Van Buren, the service sector 10 years ago wasn't really here and now one of our largest employers is Experian with close to 500 employees. I think future growth will be made up of service sector, but will also continue to be a mix (of service sector and manufacturing jobs)."

She said companies like Bekaert Corporation have recently added jobs and facility space, as has Arkansas Poly, a plastic packing manufacturer. With the expansion from those two companies, she thinks it shows the possible resurgence of manufacturing jobs in the county.

The one loss Krutsch said will not hurt the county is the relocation of the HMA service center from Van Buren to Fort Smith, bringing with it possibly hundreds of new jobs. If all goes according to plan and the expansion goes through, the company will be leaving its Van Buren facility behind. But the benefit of the added jobs to the Fort Smith area economy will still benefit Van Buren, she said.

"We didn't see it as job losses. They have roughly 100 people (already working) there and are adding another 300 for a service center. There will be others who live here in Van Buren and Crawford County who drive the 12 minutes to the Phoenix Expo (Center, where the new HMA service center will be housed). We worked with the Fort Smith Chamber in searching for a location and we celebrate that."

The board of directors of Tyson Foods Inc., recently declared the quarterly dividend of 5 cents per share on its Class A common stock and 4.5 cents per share on Class B common stock.

The cash dividend is payable on Dec. 13, to shareholders of record at the close of business on Nov. 29.

Optimism around Tyson Foods shares has been high on the heels of the company’s strong earnings reported on Monday (Aug. 5).

Tyson shares set a 52-week high of $30.93 during intraday trading on Wednesday (Aug. 7) before settling back to close at $30.60, a gain of 11 cents.

During a February interview with The City Wire, Jeff Amerine said much of the research conducted by scientists at the University of Arkansas is “potentially groundbreaking.”

On Wednesday (Aug. 7), the University of Arkansas provided statistical evidence to support Amerine’s excitement about the university’s research programs. University officials announced that faculty and staff reported 42 inventions in fiscal year 2013 (July 1, 2012-June 30, 2013).

“There are so many things that happen every day, or that I learn about every day, where I stop and say, ‘Yeah, that could be huge,’” Amerine, director of licensing for the university’s Technology Ventures division, said during the February interview.

In the statement issued Wednesday, Amerine said the record number of intellectual property disclosures by university researchers in the recent year is likely to be surpassed.

“The number is trending up, which is significant,” Amerine said in the statement. “We’ll find in the future that getting more than 40 will be a regular occurrence.”

The 42 disclosures reported in 2013 included 18 by faculty with “dual appointments” at the Fayetteville campus and the University of Arkansas System’s statewide Division of Agriculture, which includes the Arkansas Agricultural Experiment Station and Cooperative Extension Service. The division’s intellectual property is managed by Lisa Childs overseas the Agriculture Division’s Technology Commercialization Office.

“The offices encourage campus researchers to formally report their discoveries, because completing the intellectual property disclosure form is the first step toward transferring their inventions into marketplace products and services. Submitting the form is also required under a patent and copyright policy approved by trustees of the University of Arkansas System,” noted the UA statement.

THE PROCESS
The disclosure process typically begins when a “researcher realizes they have uncovered inventive content, either patentable or protected as a trade secret, or in a rare instance a creation that could be trademarked.”

Amerine said historically the benefit to researchers is to have their work published in a peer-review journal. But in instances of potentially valuable research, university faculty and staff need to go a different route.

“We try to encourage the people who do the research to value this as much as they value publication,” Amerine said. “We want high-quality disclosures, as if they were submitting something that will be reviewed by their peers. We do sympathize with researchers because the IP disclosure is one more thing for them to do. We want them to know we are here to help.”

POTENTIAL VALUE
John Villasenor, writing for Forbes in an article published November 2012, was surprised at results from an informal poll of UCLA graduate students who weren’t aware of the value of intellectual property.

“By obtaining a greater number of patents and then licensing them to industry, universities hope to both boost revenues and speed the introduction of the results of their research into the market. In theory, this will benefit universities, companies, and the broader public,” Villasenor wrote. “But the success of this endeavor relies on the ability of university researchers – who are very often graduate students – to recognize potentially patentable inventions and take the steps necessary to protect them by initiating and participating in the patent prosecution process.”

There can be tremendous value in patents derived from university research. A recent article at Intellectual Asset Management noted that the Microsoft and Apple patents often get the media attention, but smaller companies are also making big profits on patents.

“Lower down the scale in terms of company size, Aware Inc – an R&D-based business which develops and licenses software for the biometrics, telecommunications and healthcare industries, and which employs fewer than 100 staff – generated $91 million from two patent divestments in 2012: one to Intel for $75 million, and the other to TQ Delta LLC for $16 million,” noted the IAM article.

LOCAL VALUE
A local example of this growing value is Springdale-based NanoMech. The company was launched in 2002, and emerged from the university’s nanoscience research.

Nanoscience researchers, led by Dr. Ajay Malshe, found a way to cover cutting tools with cubic boron nitirate – a nano-compound that can extend the life of manufacturing tools by six times. The coating process was patented as TuffTek and has garnered the attention of John Deere, Honda and Caterpillar.

NanoMech’s success was recently noted by Arkansas Gov. Mike Beebe in a commentary about the importance of research to the state’s economy.

“The critical relationship between education and economic growth is demonstrated in its purest form when academic scholarship creates new technologies that carry the potential for new jobs and industry. We've seen this happen when research conducted at colleges and universities evolves into new businesses with new products created by new employees.”

‘CHALLENGING PROCESS’
Amerine said the university works to create relationships with companies or start-ups who may benefit from the research.

“If we get to a point where we think there is something that is valuable and has patentable ground we’ll work with outside patent attorneys and spend the money on a provisional patent,” he said.

Amerine also said it is a “challenging process,” in which the time from initial application to patent award could be four years.

An example of the process is Fayetteville-based Boston Mountain Biotech. Bob Beitle, professor of chemical engineering, Ellen Brune, who earned a doctorate in chemical engineering in May, and Ralph Henry, Distinguished Professor of biology, created a method to “simplify the development and manufacturing of protein therapeutics.” Two researchers at the University of Pittsburgh were also part of the team.

University officials filed a provisional patent application in March 2012 and licensed Boston Mountain to commercialize the technology.

“Moving our technology from the lab bench to a company was an eye-opening experience,” Beitle said in the statement. “The level of detail necessary to complete the PCT application was unexpected and had a steep learning curve. The process was made easier by working with Technology Ventures early so both sides — inventors of the technology, licensees, and those responsible for the grueling paper trail — aligned quickly.”

Dr. Ongkarn Sarasombath has joined the practice of Dr. Paul Howell and Elaine Thrift, APN in the Cooper Clinic Department of Endocrinology.

Sarasombath recently completed a diabetes and metabolism fellowship at the University of Missouri in Columbia. He completed a Fellowship in Geriatric Medicine and his Internal Medicine Residency through the University of Hawaii, Honolulu.

As an endocrinologist, he will specialize in treating diabetes, thyroid disease, osteoporosis, disorders of the pituitary and adrenal glands, and other hormonal and metabolic disorders.

Sarasombath’s practice is located in the main Cooper Clinic location, 6801 Rogers Ave., in Fort Smith. He will begin seeing patients Sept. 3. New patients, including those with Medicare coverage, are now being accepted.

Cooper Clinic is a physician-owned multi-specialty group with doctors in 25 specialties/subspecialties at 16 locations.

Remington Arms Co. broke ground on a $32 million expansion in Lonoke that should employ around 60 new workers.

The expansion will include construction of a new building and is expected to be in operation by the second quarter of 2014. The project will allow Remington to produce more ammunition to meet consumer demand, which the firm says is at a high.

Madison, N.C.-based Remington, the oldest gun maker in the U.S., has been in Lonoke sine 1969.

“As we strive to create new relationships with new partners, we must never forget the ones we already have,” said Gov. Mike Beebe in reference to helping an existing manufacturer. “It is so much easier to expand existing business than it is to create new ones.”

“As an avid hunter and gun owner, I’m particularly excited to help announce this expansion,” said Sen. Mark Pryor, who attended the groundbreaking event. “Remington has been an economic engine in our state for years, and this will allow them to bring even more jobs and development to central Arkansas.”

Remington unveiled its plans to expand its Lonoke plant earlier this year.

Arkansas’ two largest metropolitan areas once again find themselves ranked among the nation’s top places to do business.

Forbes magazine on Wednesday placed Northwest Arkansas (No. 28) and Central Arkansas (No.32) near the top of 200 metropolitan statistical areas as “Best Places for Business and Careers.”

“People in both of our regions and around the state are working together to show some of the business advantages to being in Arkansas,” Mike Malone, president and CEO of the Northwest Arkansas Council, said in a statement “In both regions, efforts to create high-paying jobs, improve educational attainment and develop regional amenities are paying dividends. Our economies in Central and Northwest Arkansas are unique enough that we don’t compete, and we can root for the other’s success.”

The Northwest Arkansas economy is recognized as home to Wal-Mart Stores, Tyson Foods, J.B. Hunt Transport Services, Simmons Foods and the University of Arkansas, the state’s flagship institution. In all, there are 30 companies in the region with annual revenue exceeding $100 million.

Central Arkansas’ diverse economy, centered around the state capital in Little Rock, is home to Stephen’s Inc., Windstream Communications, Dillard’s Inc., Acxiom, Dassault Falcon Jet Corp., The William J. Clinton Presidential Center, Winrock International and Heifer International.

Jay Chesshir, president and CEO of the Little Rock Regional Chamber of Commerce said, “Great states have great regions that work together. With global competition, it’s never been more important to combine efforts to amplify Arkansas’ unique position in the world. These rankings are more evidence that our collaborative efforts yield results.”

The top 50 communities listed this year by Forbes as “Best Places for Business and Careers” are widely recognized by economic developers and in many publications as the nation’s elite regions. They provide good jobs, excellent schools and a high quality of life. They are solid communities now, and their leaders are determined to see them keep getting better, said Mike Harvey, the Council’s chief operating officer.

Even though Whirlpools' final remedy work plan to clean up toxic, potentially cancer-causing trichloroethylene (TCE) has not yet been approved by the Arkansas Department of Environmental Quality, it has not stopped the company's environmental consultants from moving forward with at least one part of the proposal.

In an e-mail to ADEQ's Division Chief of Hazardous Waste Tammie Hynum, Principal Consultant Greg Gillespie of ENVIRON Corporation said Whirlpool would like for soil vapor monitoring to begin, even before waiting for approval of the final remedy work plan.

"As we discussed during our call last week, Whirlpool would like implement the additional soil gas work defined by the July 16, 2013 Work Plan," he said. "As requested attached is a letter with the relevant section of the work plan included for you to review / approve."

The letter explained that the work would be conducted in the offsite residential area north of Ingersoll Avenue.

"As we discussed during our phone conversation Aug. 1, 2013, the July 16, 2013, Final Remedy Work Plan (Work Plan) submitted by ENVIRON on behalf of Whirlpool presented activities to collect additional soil gas data in the offsite residential area north of Ingersoll Avenue to further substantiate there is no unacceptable risk from vapor intrusion at the site," the letter read.

Gillespie also said the work would "commence independent of the Revised Risk Management Plan (RRMP) and Work Plan currently being reviewed by ADEQ."

In the request to begin off-site soil vapor monitoring, Whirlpool's environmental consultants say that while their data backs up the company's claims that dangerous levels of TCE have not been found in the soil vapor, "Whirlpool concluded that additional soil gas monitoring points should be installed in order to enhance coverage of the off-site plume."

The company said in the letter that it would work with ADEQ to determine locations for the monitoring sites based on two criteria:
1. Proximity to existing off-site groundwater monitoring wells with higher concentrations of TCE; and
2. Proximity to an occupied residential building.

"The idea is to install additional soil gas monitoring points at locations that have higher potential for vapor intrusion to occur compared with other locations in the area," Gillespie said.

If TCE is found at dangerous levels in the soil vapors, he said additional "investigation" would be proposed to ADEQ.

"Such additional investigation may include the collection of sub-slab soil gas samples from under existing residences with concrete slabs. The sub-slab soil gas samples would be used to determine if the vapor intrusion pathway from groundwater actually extends to a particular building foundation and presents a potential for significant soil gas entry through the slab. If the targeted sub slab sampling indicates potential for vapor intrusion into the residence, indoor air data will then be collected."

In the letter, Gillespie claimed that false positives can occur with indoor testing as a result of household items that he said contain TCE as an active ingredient. He said items, including lubricants, adhesives, adhesive removers, automotive and household cleaners, aerosol and liquid spot removers, oven cleaners, silicone lubricants and aerosol gun cleaners all could contain TCE.

"Because of such indoor sources, it is not unusual to find measurable levels of TCE in residential indoor air even when no vapor intrusion is occurring."

In order to prevent impacts from possible indoor sources of TCE, Gillespie said the "industry standard" of gathering of sub-slab soil gas data would be the most effective way to collect the needed information.

A decision by ADEQ on Whirlpool's request has not yet been announced.

The part-time workforce continues to expand at a faster rate thanks to several factors in play. While some expect the trend to continue as the new health care law is ushered in this next year, other analysts said it’s part of a gradual shift in the overall employment landscape.

In July, U.S. employers added a disappointing 162,000 jobs and economists quickly said those numbers are skewed toward part-time work in low-wage industries such as retail and food service. Retailers led job gains with 47,000, and restaurants and bars added 38,000, according to Bureau of Labor Statistics data.

A separate survey of employers indicates the ranks of part-time workers have risen by 791,000 since March. The part-time workforce has grown more than four times faster than the full-time segment which expanded by 187,000 jobs since March.

William Bailey, professor of family finance at the University of Arkansas, said households who have to settle for part-time employment over an extended period will likely compromise their ability to save for a home or retirement.

“This really is not a new phenomenon. Some industries like retail and food service have always hired more part-time workers, and while they may offer health insurance or retirement options, the lower wages and 30-hour work week do not provide sufficient income for the worker to take part in those benefits,” Bailey said.

Sophia Koropeckyj, managing economist with Moody’s Analytics, said it’s not usual to see part-time jobs grow faster than full-time given the economy is languishing in recovery mode.

“When an economy is moving slowly, those sectors that are less productive like retail and food service have to add more people. The only way they meet the growing demand is to add people. But, because they typically pay lower wages it’s not as expensive to add them,” Koropeckyj  said.

She said there are several factors at work which has part-time employment growing ahead of full-time.

“The number of folks working more than one job continues to rise and we don’t think that will change anytime soon,” Koropeckyj said. “If they could find one higher paying job they would take it, but until then they will have to moonlight.”


FREELANCE BY CHOICE
Independent economist Jeff Collins said there is a growing number of younger folks who actually prefer to freelance on a part-time by project basis. These are people who are not looking for full-time work.

“These freelancers are often skilled technology engineers that have good job security given the demand for their talent. They command higher wages and often work on a project basis with many different employers,” Collins said.

Wal-Mart is one of the local companies that employs vast numbers of technology freelancers on a project basis. Rockfish Interactive also uses a number of freelancers. Collins said the freelance model makes sense for some businesses, particularly in the area of technology as there is often a talent shortage.

Jason Long owns a small retail consultant firm in St. Louis and said as a small business he prefers to hire some of the services he needs, such as website design or accounting, on an outsource basis.

“It just makes sense for me to outsource certain duties or employ specialists on a contract basis. This allows my business operations to stay nimble,” Long said.

CAUTIOUS ATTITUDE
Collins said it’s too soon to draw the conclusion that the growth in part-time jobs is directly related to the expanded health care law, and he agreed with Koropeckyj that there are also a number of employers who need to bring on extra help with minimal strings as they are still cautious about the economy.

“It’s easier for a company to use temporary staffing or part-time workers to fill an immediate need, and it’s less cumbersome to cut those ties if they should have to pull back in the future,” Collins said.

Georgette Ferus, district director for Staffmark in Bentonville, said she has not seen an abnormal rise in the number of permanent part-time positions yet. But, she has a fair amount of short-term or contract work openings at this time.

“Many of those positions are seasonal as retailers gear up for the holidays. We have warehouse positions and other logistics jobs to help with inventory increases for the holidays,” Ferus said.

A search on the internet job site indeed.com shows numerous opportunities for part-time employment in Northwest Arkansas and Fort Smith within the areas of freight, higher education, retail, medical, clerical, technology, government and nonprofit organizations.

Ferus said employers are still using staffing services to meet added demand because of the deep cuts they made several years ago in their own employment numbers.

LONG-TERM IMPLICATIONS
None of the economists contacted for this story believe the rapid rise in part-time employment will continue indefinitely, but they do expect the numbers to remain elevated as companies usher in the Affordable Care Act, of which some key provisions have been delayed to 2015.

Koropeckyj said while it may be difficult to imagine a thriving economy at this time, she doesn’t believe the slow growth periods of the past three years will persist for over decades. She said there are long-term risks associated with those folks who work multiple half-time jobs over an extended period when they can’t find full-time work in their trained field.

“Employers could be more apt to hire fresh college graduates for those better paying full-time jobs once they open up. I can see employers passing on candidates who have worked outside their field of study because those skills may be rusty,” Koropecky said.

She said there have been studies that show college students who seek jobs after graduation during a down economy earn less money over time than those who graduate during a healthy economy. That is largely because they are forced to accept lower-paying jobs in unrelated fields and it’s much harder for them to move up when the economy does improve.

A Fort Smith family was given a surprise today (Aug. 8) as the Electric Cooperatives of Arkansas announced that Kyle and Alisha Quenga had won a $50,000 energy efficiency home makeover.

The couple, along with their two children, were under the impression that they had come in second place in the contest, having been told they would be winning a new water heater. But they were surprised when Bret Curry, the manager of residential energy marketing at Electric Cooperatives, announced that the family had won the grand prize.

in choosing the Quenga family home for the makeover, Curry had said the family underwent an energy audit, along with the other finalists, after being selected from more than 2,800 applicants.

"Our diagnostic testing revealed that more than 70 percent of the air volume with the home (built in 1979) was leaking outside every minute of each day," he said. "We also discovered substandard insulation levels, inefficient windows, dramatic ductwork leakage, an older inefficient heating and cooling system and no-Energy Star appliances. Combine all of these circumstances and you have a very uncomfortable home with very high utility bills."

Prior to the surprise announcement, which the Quangas were told would an announcement of their second-place win, Curry said the makeover would be life-altering.

"These people have high bills, they have a very uncomfortable home and they are about to have their lives changed forever."

In the next four to six weeks, various companies will be in and out of the Quenga home to make improvements that will save the family from being not only uncomfortable during both the summer and winter months, but will also save them serious money each month when they pay their utility bill.

The following items will be provided to the family at no cost as winners of the contest:
• An ultra-efficient water furnace geothermal heat pump installed by Rood Heating and Air;
• High-efficiency windows provided by the Harry G. Barr Company;
• Energy Star appliances and a GeoSpring Hybrid water heater provided by General Electric; and
• Demilac Sealaction 500 expanding foam will be installed by Building Performance Solutions in the crawlspace and attic.

Many of the companies involved with the project are Arkansas-based companies, according to Curry, who added that finding and using local businesses was an important part of the contest.

Once the audit is complete, another energy audit will be conducted to determine the home's new level of efficiency.

Alisha Quenga said once the makeover is complete, her family would be able to afford to do more than just pay the ever-increasing utility bill.

"Oh, it's going to make a world of difference for us. We're going to be able to be more comfortable in the house and also save money. We'll be able to do way more stuff we wouldn't have been able to do."

She said with a grin that a trip, possibly to Disneyland, could be on the horizon, depending on how much they family was able save each month with the expected lower monthly bills.

Curry said he hoped the makeover would highlight for other families how they could make changes to their homes that would save them money in the long run.

"Now some of these are expensive and we realize not everyone can win a makeover, however, they can implement these things one at a time. We target the key areas that impact their bills and comfort."

One area he said where a lot of energy escapes is from drafty windows, which is why Curry said replacing inefficient windows and fixing cracks around the window seal is so important.

Running Energy Star-rated appliances is also important to reduce overall energy consumption, according to Curry.

Kyle Quenga said the makeover, which started at his home this afternoon, was more than he could have hoped for and he made sure the Electric Cooperatives knew his appreciation.

"I would like to thank every one of you. This is an absolute blessing. God bless you."

Tyson Foods said this week come September it will suspend the purchases of cattle which have ingested the feed additive Zilmax .

Tyson said it made the decision after recent instances of cattle arriving at some of its plants with difficulty walking or inability to move. The company said it was unsure what caused the problems, but some animal health experts suggested a possible link to Zilmax.

After Tyson’s decision was made public, cattle futures began to rally on the Chicago Mercantile Exchange as removing Zilmax from feed can result in lighter weights.

Cattle futures hit a three-month high fueled by speculation that beef prices could move higher on tighter supplies and lighter weights.    

August live cattle futures ended up $1.45 at $122.765 on Thursday (Aug.8). The October contract closed $2.40 higher at $127.075.

Merck & Co., the manufacturer of Zilmax, said this week the drug was deemed safe for cattle after extensive reviews by regulatory authorities.
 

Second quarter net income of $4.878 million is a welcome sign for officials at Fort Smith-based Arkansas Best Corp., but was less that what Wall Street was expecting.

Per share net income was 18 cents. The consensus analyst estimate was 20 cents per share on total revenue of $572.48 million.

The quarterly net income was down 58.8% compared to the $11.8 million earned in the second quarter of 2012. However, the second quarter 2012 net income included an $8 million tax benefit.

Revenue during the quarter was $576.899 million, well ahead of the $510.543 million during the second quarter of 2012, and also ahead of the consensus estimate.

The second quarter gain followed a first quarter loss of $13.4 million.

"As economic growth remains moderate and inconsistent, Arkansas Best continues to make progress in positioning each of its companies for future success," Arkansas Best President and CEO Judy McReynolds said in the earnings statement. "ABF now looks toward a better future with lower costs and greater operational flexibility. Investments made in emerging, non-asset-based businesses are positively impacting our bottom line by improving the way we go to market as customers seek more end-to-end logistics solutions.”

For the first six months of 2013, the company has a loss of $8.517 million, more than the loss of $6.321 million during the same period in 2012. Operating revenue for the first half of the year is $1.097 billion, better than the $951.41 million during the same period of 2012.

In 2012, the transportation holding company posted a $7.7 million loss, a wide swing from the $6.159 million gain in 2011. The largest subsidiary of Arkansas Best is ABF Freight System, one of the largest less-than-truckload carriers in the U.S.

The company noted a major positive event during the quarter. The International Brotherhood of Teamsters announced June 27 that a new contract was approved, but some supplemental provisions were rejected.

Officials with Arkansas Best and the Teamsters have negotiated the rejected provisions, and the Teamsters announced Aug. 6 that ballots had been mailed to seven “local/area supplements” for approval. The ballot deadline is Aug. 28.

The contract, once fully ratified, will cover about 7,500 ABF employees who are members of the union. Most of those workers are drivers.

Brad Delco, an analyst with Stephens Inc., believes the new contract will be good for the bottom line of ABF Freight. He reiterated his “overweight” rate of Arkansas Best shares and raised the trade target from $18 per share to $30 per share.

However, the benefits of the new contract are not likely to begin until later in the third quarter.

"We achieved a major milestone for our company in recent weeks with the ratification of a national five-year labor contract at ABF and most supplemental agreements,” McReynolds said. “We expect to obtain employee ratification of all remaining supplements in the coming weeks. Once this important process is concluded, it will represent a pivotal moment for Arkansas Best, as we will be able to turn our undivided attention to driving improved profitability at ABF, while continuing the expansion and growth of our emerging businesses.”

The four non-asset based businesses generated 23% of the company’s total revenue during the quarter, and all have posted operating income gains during the first half of 2013.

Arkansas Best has been unable to post two consecutive years of income gains since 2008. The company posted a loss of $7.7 million loss in 2012. Net income for 2011 reached $6.159 million, a huge swing from the $32.693 million loss during 2010. The company posted a net income loss of $127.522 million loss in 2009, with $64 million representing an accounting charge. The company posted net income of $29.168 million in 2008.

Arkansas Best shares (NASDAQ: ABFS) closed Thursday (Aug.8 ) at $19.71. During the past 52 weeks the share price has ranged from a $24 high to a $6.43 low.

Ashley Mason, MD, OB/GYN has joined Creekside Center for Women on the campus of Willow Creek Women’s Hospital, in Johnson.

Mason completed her obstetrics and gynecology residency at and earned her doctor of medicine degree from the University of Arkansas for Medical Sciences (UAMS). She earned bachelor’s degree in biology from Arkansas Tech University in Russellville.

“I chose to specialize in OB/GYN because it is a specialty that as a physician, I can build a long term relationship with my patient,” Mason said. “I have the opportunity to play a vital role in a woman’s life through the family planning, birth of their children, and menopause years.”


Fugitive Edward Snowden, Ecuadorian roses and Sam’s Club are yet more examples of the tangled webs created by international politics and international trade.

The trade tiff is small in terms of dollars and it’s possible that consumers will see no impact, but the incident is a reminder of the sometimes surprising connections between world events and local retail shelves.

Snowden, while on the lam and wanted by the U.S. for espionage, was offered refuge by Ecuador and Russia in recent weeks, angering public officials.

U.S. Sen. Robert Menendez, D-N.J., and chairman of the Senate Foreign Relations Committee warned Ecuadoran President Rafael Correa – and Russia – that granting Snowden asylum could jeopardize trade agreements. On June 29, Vice President Joe Biden asked Correa to reject any request for Ecuadoran asylum, according to CBS news.

But Ecuador renounced a trade pact with the U.S. in late June and U.S. lawmakers allowed the treaty to expire before taking their recess Aug. 2. Without the treaty, tariffs on certain Ecuadoran goods will rise, as high as 14.9% for broccoli and 6.8% for certain types of flowers.

The U.S. imports roughly $149 million of cut flowers from Ecuador each year, the majority of which are roses.

According to SamsClub.com, there are 442 different flowers for sale. Some 85% of the roses listed on the site is sourced from Ecuador. There were 62 different varieties of Ecuadoran roses on the site. Other roses offered were predominantly from Colombia.

"Sam’s Club merchants are aware of the tariff issues and continue to provide the premium quality Ecuadorian roses at the great value and seven-day freshness guarantee that our members rely on,” said Carrie Foster, Sam’s spokeswoman in Bentonville.

On Wednesday (Aug. 7) nearly all of the Fayetteville Sam's Club floral department's inventory came from Colombia. Only two varieties came from elsewhere. The lilies and gladiolus were U.S. grown.

Dan Hendrix, president and CEO of the Arkansas World Trade Center, said other Arkansas imports from Ecuador include metal spoons, plastic pallets and retainer rings, but quantifying the individual statistics is difficult as they are reported in aggregate numbers.

“The import data is very difficult to track to specific states and covers only waterborne commerce. We know we are receiving cut flowers from Ecuador but probably through a third-party expeditor," Hendrix said.

An alternate route to avoid tariffs on certain goods from Ecuador by placing them in the Generalized System of Preferences probably won't pass muster. The U.S. Trade Representative's office said a decision on such requests had been deferred, according to Reuters.

Trade is a two-way street and on the flip side, Arkansas businesses exported $15.2 million in goods to Ecuador last year. Half of those sales were agricultural and the remainder were divided among chemicals, primary metal manufacturing and non-electrical machinery.

The treaty that has facilitated trade between the U.S. and Ecuador went into effect in 1991. Then-President George H.W. Bush signed the Andean Trade Promotion and Drug Eradication Act, which allowed Bolivia, Colombia, Ecuador and Peru to sell goods to U.S. companies without paying duties, to discourage cocaine production.

More residents and property owners will soon join two lawsuits previously filed against Whirlpool that seek relief for property damage caused by potentially cancer-causing trichloroethylene (TCE) that Whirlpool admits leaked into the groundwater in and near its former manufacturing facility in Fort Smith.

The news comes on the same day that Debbie Keith, a resident who has been a vocal critic of Whirlpool and solicited the assistance of famed environmental activist Erin Brockovich, said the Brockovich firm would not be coming back to the area and would no longer be a part of the fight against the home appliance maker.

Ross Noland, an attorney with the Little Rock-based McMath Woods Law Firm, said an amended complaint to the one filed in Sebastian County Circuit Court on May 23 would likely be filed within weeks.

"It's no secret that we're about to amend our complaint. We're about to double or triple the number of complaints," he said.

And according to Ketih, that may be the reason Brockovich is pulling out of Fort Smith.

"I've been working with them (the Brockovich firm) all along. But there are local attorneys from Little Rock and Fayetteville that have hit the ground running. They have solicited neighbors and tied up about 60% of the residents."

She said she would not want Brockovich to come back if it was not going to be something in which residents would participate. She said questionnaires were prepared by Brockovich and presented to all residents affected by the plume, but none were returned. People, Keith said, were intimidated by the 18-page document. Keith also made clear that Brockovich was not going to "step on anyone's toes" to represent clients in what could be a long, drawn out battle with Whirlpool.

"Erin and (her colleagues) aren't here to step on anyone's toes and they aren't going to fight about who is going to represent the neighborhood. They are too busy and they don't have to do it."

It was only June 19 when Brockovich herself called The City Wire to respond to an article questioning the firm's perceived lack of communication or action since her first trip to Fort Smith on March 26.

In the June 19 phone call, Brockovich said, "We are coming back and we are still investigating and we have no intention of abandoning the community."

Brockovich also promised that her team would be returning to Fort Smith in July, "either the 26th, 27th, 28th. (We're trying) to get everyone scheduled together and what would be most convenient." Calls to Brockovich have gone unanswered for the last two days, though she previously told The City Wire to call her personal cell phone anytime.

Keith said her concern now is that testing to insure the public is protecting from harmful vapors or chemicals will not be undertaken by Noland or attorneys who may come to represent other residents.

"The local attorneys are just concerned about getting their 33 and a third. That's what I'm upset about. And I wouldn't care who did it as long as the numbers got checked. Whirlpool (now) knows an independent person won't come in and check for that kind of stuff."

Noland said his law firm does have a consultant on retainer to handle environmental testing.

"We do have a consulting geologist that we have worked with in multiple cases and we will be consulting with him throughout the process, but as far as specifics, we haven't made up on mind on specifics (about what to test)."

It is unclear when the lawsuit may go to trial, though Noland has said that he has been in contact with counsel representing Whirlpool.

"We're going to amend that complaint soon. We've been in communication with (attorneys representing) Whirlpool. We'll see where it goes. We are open to negotiating with them. That's it."

Environmental consultants for Whirlpool have challenged the Arkansas Department of Environmental Quality's assertion that a toxic plume of trichloroethylene (TCE) near the company's former manufacturing facility in Fort Smith could be moving.

In an official response dated today, toxicologist Tamara R. House-Knight of ENVIRON Corp. said fluctuations in the plume do not represent a movement of the plume.

"We appreciate ADEQ's observation of the slight changes in concentrations of TCE within the plume, however these fluctuations in the existing southern wells presented in the Monitoring Report do not suggest that there is an expansion of the plume to the south," she wrote. "Although TCE concentrations fluctuate within the plume, the groundwater data for monitoring wells ITMW-05, ITMW-09 and ITMW-10 presented in the 2012-2013 Monitoring Report were generally consistent with data collected in this area during the prior sampling events from 2008 to 2011."

The response comes on the same day an attorney representing several property owners and residents confirmed that the original lawsuits, filed on May 23, would be amended within weeks, likely doubling or tripling the number of plaintiffs seeking damages or other relief from the company for property damage caused by the TCE contamination.

Attorney Ross Noland of the McMath Woods Law Firm in Little Rock said his company would like employee the assistance of a geologist to conduct independent testing of the potentially cancer-causing TCE plume, which resulted from the use of a degreasing solvent at the Whirlpool plant during the 1980s.

"We do have a consulting geologist that we have worked with in multiple cases and we will be consulting with him throughout the process, but as far as specifics, we haven't made up on mind on specifics (about what to test)."

The letter today from House-Knight said TCE had not been found south of the plume in tests done since the year 2000, including during the fall of 2012 and spring of 2013.

"Also, in the monitoring well to the east, ITMW-04, TCE concentrations have been either non-detect or detected below the MCL since 2003 with intermittent TCE concentrations detected above the MCL," she wrote. "These wells assist in bounding the general extent of the plume and show that the plume as perviously delineated has not expanded. … Collectively, these data reaffirm that the defined southern plume is not expanding and continues to be confined to the Whirlpool property."

House-Knight said the company welcomed the "opportunity to discuss this letter and associated concerns with you at the earliest convenience."

No date has yet been set for a discussion between ADEQ and representatives for Whirlpool.

Community Clinic of Northwest Arkansas provides primary health care to about 30,000 residents a year and the need for their services continues to escalate.

“We estimate there are roughly 90,000 folks in this region without health insurance and even with the Affordable Health Care Act mandate we think anywhere from 25% to 30% will postpone sign-up for the first two years,” said Kathy Grisham, executive director.

With that, she said Community Clinic is preparing for more patients between 2014 and 2015.

On Monday, (Aug. 12) the nonprofit held an open house showcasing a new 4,000 square-foot expansion to its health clinic in Rogers, aimed to address the growing demand for its services.

The nonprofit runs five medical clinics in Northwest Arkansas, in Springdale, Siloam Springs and Rogers. There are also two in-school clinics within the Springdale School system — Jones and Owl Creek Elementary.

Grisham said the clinic in Rogers is the largest and busiest of all the locations, accounting for 37% of all the overall visits in 2012. The Rogers center just added 17 exam rooms, two behavioral health offices, x-ray lab and completed restroom renovations to help meet the growing need. The x-ray lab is a new service which cost the nonprofit $90,000 to add.

She said since 2008 Community Clinic has experienced explosive growth and increasing demand for its full range of health care services. The patient count has grown 102% in the past five years and they are bracing for more growth as a result of the Affordable Care Act as the private insurance option is adopted.

About 40% of the patients at Community Clinic are uninsured and 90% of the client base has a household income under 200% of the federal poverty level. A small percentage of them have commercial insurance and the rest has Medicare.

Grisham said the clinic is a sustainable model that has been in operation and expanding since 1994. As a nonprofit, the Community Clinic receives $600,000 in annual funding from a federal grant that is renewed every three years with annual filing updates. But, that accounts for only 15% of Community Clinic’s annual budget, Grisham said.

The Community Clinic services are not free, and Grisham said patients that fall under the income guidelines pay reduced charges on a sliding scale. An individual earning less than $22,980 would pay $20 per visit and that includes labs and x-rays. For a family four the income could be $47,100 to get that reduced charge.

Last year Community Clinic logged 101,000 visits from its growing patient base, which included those seeking prenatal care, pediatric, family health and women’s health services.

Bob Bastian, former board member of Community Clinic, said he remembers walking the empty halls of emergency room facility at St. Mary’s Hospital just after the new hospital was completed.

“Today that old emergency room has been transformed into a thriving center for preventive health care, which has been important in Rogers since the Popular Street Clinic opened 20 years ago. Back then that small center was open just one night a week and it was staffed by volunteers to ensure those who needed heath care had access. There have been a lot of transformations since then, Bastian said during Monday’s open house.

Grisham said Community Clinic employs a staff of 210, and more than half of them are multilingual.

“In the early days we used volunteers, but the need continued to grow and now we employ the doctors, nurse practitioners, nurses and other health professionals who work for the Community Clinic on a full-time basis,” she said.

The clinic is a one-stop health resource for the entire family.


“We treat families, maybe the dad has insurance from his job, but can’t afford to cover the whole family. If they meet the income requirements we can treat them all with preventative and chronic care situations and they can pay the lower prices,” Grisham said.

The Community Clinic’s goal is the help its patients access affordable health care, and avoid the costlier services such as emergency room and hospitalizations, while also promoting quality of life.

She said the Community Clinic continues to fulfill the critical role as the region’s largest health safety net.

Officials with Vikon Farms, a poultry processing company based in Azusa, Calif., announced Monday (Aug. 12) plans to locate a new processing facility in Arkadelphia, which will employ more than 172 people within four years.

Vikon will invest $5.4 million in the facility, formerly home to Petit Jean Poultry. In addition to the jobs created directly by the new processing facility, Vikon will also contract with a significant number of growers from El Dorado and Union County along with a Vikon supported hatchery in Prescott, according to a statement from the Arkansas Economic Development Commission.

Vikon produces a specialty breed of chicken that serves numerous Asian markets.

"We are excited to be here,” said Quan Phu, president and CEO of Vikon Farms, said in the statement. “We appreciate the extensive amount of support from the Arkadelphia Economic Development Alliance and Arkansas Economic Development Commission. Our expansion to Arkansas could not have been done without the unwavering assistance of the Arkadelphia, El Dorado, and Prescott communities.”

Vikon Farms raises chickens that are free-range and naturally grown. The poultry maintains an all grain diet with no hormones or antibiotics added.
 
“Vikon Farms is doing more than bringing jobs to Arkadelphia; they’re building agricultural partnerships with growers in our region,” Gov. Mike Beebe said.  “I know they will be satisfied with the dedicated workforce they will find in Arkadelphia and Clark County as they establish their Arkansas operation.”
 
Vikon Farms will be the first company to locate in Arkadelphia and Clark County since the passage of the community’s Economic Development Tax.

Arkansas Farm Bureau President Randy Veach, Aristotle, Inc. President Elizabeth Bowles, and Northwest Arkansas Council CEO Mike Malone discussed the state of the state’s economy on Sunday night’s edition of Talk Business Arkansas – a television show that airs in central Arkansas.

The panel explored the direction of Arkansas economic conditions and what they see happening in their fields of agriculture, technology, start-up companies and Fortune 500 firms.

All three panelists agreed that despite steady unemployment in the 7.3% range, improving home sales and modest consumer spending increases, the economy remains “mixed.”

AGRICULTURE
Veach said the unemployment rate is still too high despite its decline from higher levels during the recession and early recovery.

“There’s a lot of folks that have been looking for a job for a long time. They’ve quit looking for a job now and it’s just hard to know how many that is,” he said.

He also said that while land values have been increasing – a potentially good trend – other aspects of agriculture, such as the cost of farming have risen.

“A lot of our expenses and input items have really increased in expense,” he said.

Veach was asked if he thinks a contentious Farm Bill will pass Congress this year.

“Probably not,” he said. “The likelihood of us getting something resolved between now and the end of the year is going to be difficult for many reasons.”

Not only are the House and Senate far apart on aspects of the nutrition portion of the bill, they also may be at an impasse on repealing the permanent aspects of the law, and Veach worries that without the bill, Arkansas will lose hundreds of millions of dollars of direct payments – an economic stimulus that will hurt the state’s farmers.

TECHNOLOGY
Bowles said she’s encouraged that home sales are improving. That tends to be an economic indicator that results in broadband addition, which her firm Aristotle, Inc. supports. She wants to see consumer spending improve in hopes of jump-starting more broadband users and, in turn, higher marketing spending which would boost the web site and marketing division of her technology firm.

“Overall, while I would say that it [the economy] is moving in the right direction, it’s moving much slower, at a much slower pace than we would prefer to see – mixed definitely,” Bowles said.

She also has high hopes for a state initiative that is examining broadband expansion in Arkansas’ public schools. The state is behind other states in its push for broadband to K-12 schools and Bowles serves on a Governor’s task force looking for a solution to rapidly and expansively broaden capabilities for high-speed Internet service throughout the state.

“I think that you will see a lot of movement towards getting broadband into the public schools and having providers offer broadband in the public schools will allow them to offer broadband to the communities that surround the schools, which I submit to you is equally important,” she said. “Because once those kids leave school, they have to have broadband at home so they can study.

Bowles hopes for a “blended solution” that would incorporate traditional broadband models – such as cable and fiber – with new technology, such as fixed wireless broadband at a much lower cost.

ENTREPRENEURSHIP
Malone, who heads the influential Northwest Arkansas Council – a representative group of the biggest companies in that corner of the state, also sees mixed signals in the state’s overall economy. Northwest Arkansas has experienced a stronger rebound and has surpassed the number of workers lost during the recession.

“I think statewide, I’d agree with my counterparts that it’s mixed, but I like the optimism,” he said. “I think if we see a couple of more quarters like we’ve seen the first half of this year, I’m ready to declare it good.”

While Wal-Mart, Tyson Foods, J.B. Hunt and the University of Arkansas serve as major catalysts for the northwest Arkansas economy, in recent years Malone’s group has focused efforts on a start-up ecosystem to support those firms and to grow the next generation of Sam Waltons, John Tysons and J.B. Hunts.

“The area was built by some of the world’s best entrepreneurs decades ago and they’ve really made a success of all those industries,” Malone said.

He noted that earlier this year three start-up companies in the region received more than $100 million in investment capital from outside of northwest Arkansas.

“We’re real encouraged by our start-up scene. There are workforce challenges – we certainly need technology-trained workers. There are capital needs – these start-up ideas need to be funded to really grow their companies. We’ve got great potential with start-ups in northwest Arkansas,” Malone added.

Fort Smith-based Arkansas Best Corp. is likely to end 2013 in positive income territory, but a delay in implementation of a new labor contract has caused several analysts who cover the transportation holding company to lower the earnings estimates.

Arkansas Best, the parent company of ABF Freight System, one of the largest less-than-truckload carriers in the U.S., announced Friday (Aug. 9) that second quarter net income was $4.878 million. The market was expecting more, but investors liked the report, with Arkansas Best shares (NASDAQ: ABFS) gaining $3.19 to close the day at $22.90.

A 2013 in positive territory will avoid two consecutive years of losses for the company. In 2012, the company posted a $7.7 million loss, a wide swing from the $6.159 million gain in 2011.

Also, ending on a positive note means the company will have to perform well in the back half of the year. For the first six months of 2013, the company has a loss of $8.517 million.

Analysts watching the company had based previous earnings estimates on the company’s new contract with the International Brotherhood of Teamsters being implemented earlier in the year. A five-year contract was approved on June 27, but some supplemental provisions were rejected. Officials with Arkansas Best and the Teamsters negotiated the rejected provisions, and the Teamsters announced Aug. 6 that ballots had been mailed to seven “local/area supplements” for approval. The ballot deadline is Aug. 28.

The contract, once fully ratified, will cover about 7,500 ABF employees who are members of the union. The contract includes an immediate 7% wage reduction that is recovered by the fifth year of the contract. The company was also able to negotiate for flexibility in work schedules and work across job classifications. Most of those workers are drivers.

“Once this important process is concluded, it will represent a pivotal moment for Arkansas Best, as we will be able to turn our undivided attention to driving improved profitability at ABF, while continuing the expansion and growth of our emerging businesses,” Arkansas Best President and CEO said in the earnings report. “As our customers look to us for total solutions to their complex supply chain needs, we are now better positioned than at any time in our history to fulfill those requirements.”

Brad Delco, a transportation industry analyst with Little Rock-based Stephens Inc., initially said benefits from the new contract would result in 2013 net earnings of 60 cents per share, or near $16.25 million. However, because the benefits of the new contract are not likely to begin until later in the third quarter, Delco lowered the estimate to 30 cents per share in a Friday note to investors.

For the same reason, Wells Fargo lowered its 2013 per share estimate for Arkansas Best to 43 cents from 67 cents.

It’s no small shift. For example, Delco’s lowered estimate shaves more than $8 million from the Arkansas Best bottom line. The lowered estimate by Wells Fargo reflects a reduction of almost $6.5 million from 2013 net income for Arkansas Best.

Delco and Wells Fargo are on the optimistic side of the group of analysts who watch Arkansas Best. The consensus of analysts’ estimates is that the company will post total revenue in 2013 of $2.25 billion, and will post net income of 23 cents per share, or about $6.2 million. Per share income is estimated by the consensus to reach $1.35 in 2014, on potential total revenue of $2.37 billion.

Delco targets a 3.3% increase in tonnage hauled in fiscal year 2013, which he estimates will boost total trucking revenue to $1.761 billion, up $45.5 million compared to 2013. According to Delco, the gains should improve in fiscal 2014. Trucking revenue should reach $1.894 billion, with tonnage up 3%. Operating income in 2014 could reach $62.2 million, compared to the $21.1 million in the 2013 estimate, Delco estimates.

In the second quarter 2013 Stephens LTL rate index released Monday (Aug. 12), Delco and research associate Ben Hearnsberger reported the index was up 2.8% in the quarter compared to the second quarter of 2012. The index is based on revenue per hundredweight carried (sans fuels charges). A good sign for Arkansas Best and other LTL carriers is that the second quarter index growth was the second highest year-over-year gain since 2005.

“Going forward, we would expect to see similar growth with the full year coming in around +3%,” noted the LTL index report.

In his note to investors on Arkansas Best, Delco also hints that the company may further cut costs by closing terminals.

“As soon as these agreements are ratified ABFS will begin to recognize the cost savings included in the new agreement. Beyond this, we think ABFS addresses its industry low tonnage/terminal and tonnage/door issues by rationalizing its network,” Delco said. “Management noted in the press release that ‘further details on expected future cost savings’ will be provided after the supplemental agreements are signed.

Delco suggests that each closed terminal could save the company just short of $1 million. A complete “rationalizing” of the network could ultimately generate up to $32.5 million in annual savings, Delco wrote.