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ArcBest Announces First Quarter 2017 Results

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Investor Relations Contact: David Humphrey
Title: Vice President – Investor Relations
Phone: 479-785-6200 
Email: dhumphrey@arcb.com

Media Contact: Kathy Fieweger
Phone: 479-719-4358
Email: kfieweger@arcb.com

ArcBestSM Announces First Quarter 2017 Results

  • First quarter 2017 revenue of $651.1 million, and a net loss of $7.4 million, or $0.29 per diluted share.  On a non-GAAP basis, a first quarter 2017 net loss of $5.8 million, or $0.22 per diluted share.
  • Higher first quarter Asset-Based revenue associated with healthy shipment growth and improved pricing
  • First quarter Asset-Light revenue and operating income increased versus the prior year

FORT SMITH, Arkansas, May 5, 2017 — ArcBestSM (Nasdaq: ARCB) today reported first quarter 2017 revenue of $651.1 million compared to first quarter 2016 revenue of $621.5 million.  The first quarter 2017 GAAP operating loss was $12.3 million compared to an operating loss of $9.3 million last year.  The net loss in this year’s first quarter was $7.4 million, or $0.29 per diluted share, compared to a first quarter 2016 net loss of $6.1 million, or $0.24 per diluted share.    

Excluding certain items in both periods as identified in the attached reconciliation tables, non-GAAP net loss was $5.8 million, or $0.22 per diluted share, in first quarter 2017 compared to a first quarter 2016 net loss of $5.9 million, or $0.23 per diluted share. On a non-GAAP basis, the operating loss was $8.7 million in first quarter 2017 compared to a first quarter 2016 operating loss of $8.4 million. The consolidated non-GAAP operating results comparison was impacted by a $2.0 million increase in the “Other and eliminations” loss driven by previously highlighted investments in technology development toward enhancing the ArcBest customer experience and the ability to offer comprehensive transportation and logistics services across multiple operating segments.

“The first quarter – typically the most challenging of the year – saw revenue growth in both our Asset-Based and Asset-Light businesses but also experienced some changing freight characteristics on the less-than-truckload side and a degree of weaker demand, particularly in the truckload sector,” said ArcBest Chairman, President and CEO Judy R. McReynolds. “Our enhanced market approach, in which we now offer most services under the ArcBest brand, became fully operational in the first quarter. We continue to see positive reception from customers about our heightened focus on meeting all of their supply chain needs. Customers also recognize the value we bring to their own businesses with our ability to manage even the most complex logistics challenges.”

Asset-Based

Results of Operations

First Quarter 2017 Versus First Quarter 2016

  • Revenue of $464.4 million compared to $439.1 million, a per-day increase of 4.9 percent.
  • Tonnage per day decrease of 0.7 percent.
  • Shipments per day increase of 5.7 percent.
  • Total billed revenue per hundredweight increased 6.3 percent and was positively impacted by changes in shipment profile and higher fuel surcharges.  Excluding fuel surcharge, the percentage increase on ArcBest’s Asset-Based LTL freight was in the low-single digits.
  • Operating loss of $10.0 million and an operating ratio of 102.2 percent compared to an operating loss of $9.0 million and an operating ratio of 102.0 percent.  On a non-GAAP basis, an operating loss of $8.5 million and an operating ratio of 101.9 percent compared to an operating loss of $8.3 million and an operating ratio of 101.8 percent.

Despite a slight decrease in daily freight tonnage, first quarter revenue for ArcBest’s Asset-Based services improved versus the same period last year due to solid increases in revenue per hundredweight.  Asset-Based services maintained pricing discipline, and average shipment rates were positively impacted by changes in freight profile and increases in fuel surcharge.  Recent trends of Asset-Based shipment growth continued, resulting in the need for increased amounts of freight handling labor and purchased transportation resources.  Equipment repositioning costs continued to be meaningfully below last year while first quarter freight handling productivity improved slightly.  Though first quarter equipment maintenance expenses were higher, new replacement tractors, scheduled to be delivered throughout the second quarter, are expected to further improve linehaul equipment efficiencies, positively impact maintenance costs and contribute to lower city pickup and delivery costs.  Increased severity of healthcare claims unfavorably affected those costs during the quarter.  Asset-Based cost controls resulting from the enhanced market approach were in-line with expectations.

Asset-Light

Results of Operations

First Quarter 2017 Versus First Quarter 2016

  • Revenue of $193.1 million compared to $186.0 million.
  • Operating income of $1.9 million compared to operating income of $1.0 million. On a non-GAAP basis, operating income of $2.8 million compared to $1.0 million.
  • Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) of $6.3 million compared to Adjusted EBITDA of $4.7 million.

The increase in Asset-Light revenue was the result of growth in expedited services and the impact of additional dedicated truckload business related to a second half 2016 acquisition.  The improvement in non-GAAP operating income reflects cost management initiatives, including expense reductions associated with the previously announced corporate restructuring.  Net revenue margins were compressed as a result of increased market rates for purchased transportation.  Compared to a strong prior year quarter, ArcBest’s international revenue and margins were weaker due to the lingering effects of disruption in the ocean shipping market.  Though it handled fewer customer events, FleetNet’s first quarter operating income was comparable to last year because of improved labor efficiencies and positive changes in customer mix.

Closing Comments

“We remain cautiously optimistic that the 2017 operating environment will improve going forward,” said McReynolds. “Regardless of the environment, our entire team is singularly focused on delivering an excellent customer experience and broadening awareness of the full scope of solutions we provide.  This includes the recent launch of our new “Welcome to Simplistics” advertising campaign, in which we underscore and highlight ArcBest’s expert ability to simplify our customers’ supply chain challenges.”

Conference Call

ArcBest Corporation will host a conference call with company executives to discuss the 2017 first quarter results. The call will be today, Friday, May 5, at 9:30 a.m. ET (8:30 a.m. CT). Interested parties are invited to listen by calling (800) 684-9134. Following the call, a recorded playback will be available through the end of the day on June 15, 2017. To listen to the playback, dial (800) 633-8284 or (402) 977-9140 (for international callers). The conference call ID for the playback is 21849557. The conference call and playback can also be accessed, through June 15, 2017, on ArcBest’s website at arcb.com.

About ArcBest

ArcBestSM (Nasdaq: ARCB) is a logistics company with creative problem solvers who have The Skill and the Will® to deliver integrated logistics solutions.  At ArcBest, We'll Find a Way to deliver knowledge, expertise and a can-do attitude with every shipment and supply chain solution, household move or vehicle repair.  For more information, visit arcb.com.

Forward-Looking Statements

Certain statements and information in this press release concerning results for the three months ended March 31, 2017 may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “foresee,” “intend,” “may,” “plan,” “predict,” “project,” “scheduled,” “should,” “would,” and similar expressions and the negatives of such terms are intended to identify forward-looking statements. These statements are based on management’s beliefs, assumptions, and expectations based on currently available information, are not guarantees of future performance, and involve certain risks and uncertainties (some of which are beyond our control). Although we believe that the expectations reflected in these forward-looking statements are reasonable as and when made, we cannot provide assurance that our expectations will prove to be correct. Actual outcomes and results could materially differ from what is expressed, implied, or forecasted in these statements due to a number of factors, including, but not limited to: a failure of our information systems, including disruptions or failures of services essential to our operations or upon which our information technology platforms rely, data breach, and/or cybersecurity incidents; not achieving some or all of the expected financial and operating benefits of our corporate restructuring or incurring additional costs or operational inefficiencies as a result of the restructuring; relationships with employees, including unions, and our ability to attract and retain employees; unfavorable terms of, or the inability to reach agreement on, future collective bargaining agreements or a workforce stoppage by our employees covered under ABF Freight’s collective bargaining agreement; competitive initiatives and pricing pressures; union and nonunion employee wages and benefits, including changes in required contributions to multiemployer plans; the cost, integration, and performance of any recent or future acquisitions; general economic conditions and related shifts in market demand that impact the performance and needs of industries we serve and/or limit our customers’ access to adequate financial resources; governmental regulations; environmental laws and regulations, including emissions-control regulations; the loss or reduction of business from large customers; litigation or claims asserted against us; the cost, timing, and performance of growth initiatives; the loss of key employees or the inability to execute succession planning strategies; availability and cost of reliable third-party services; our ability to secure independent owner operators and/or operational or regulatory issues related to our use of their services; default on covenants of financing arrangements and the availability and terms of future financing arrangements; timing and amount of capital expenditures; self-insurance claims and insurance premium costs; availability of fuel, the effect of volatility in fuel prices and the associated changes in fuel surcharges on securing increases in base freight rates, and the inability to collect fuel surcharges; increased prices for and decreased availability of new revenue equipment, decreases in value of used revenue equipment, and higher costs of equipment-related operating expenses such as maintenance and fuel and related taxes; potential impairment of goodwill and intangible assets; maintaining our intellectual property rights, brand, and corporate reputation; seasonal fluctuations and adverse weather conditions; regulatory, economic, and other risks arising from our international business;  antiterrorism and safety measures; and other financial, operational, and legal risks and uncertainties detailed from time to time in ArcBest’s public filings with the Securities and Exchange Commission (“SEC”).

For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see our filings with SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. .

Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events, or otherwise.

NOTE

 ‡ - The ArcBest and FleetNet reportable segments, combined, represent Asset-Light operations.

Financial Data and Operating Statistics

The following tables show financial data and operating statistics on ArcBestSM and its reportable segments.

ARCBEST CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

 

 

 

 

 

 

 

Three Months Ended 

 

 

 

March 31

 

 

    

2017

    

2016

    

 

 

(Unaudited)

 

 

 

($ thousands, except share and per share data)

 

REVENUES

 

$

 651,088

 

$

 621,455

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 663,341

 

 

 630,720

 

 

 

 

 

 

 

 

 

OPERATING LOSS

 

 

 (12,253)

 

 

 (9,265)

 

 

 

 

 

 

 

 

 

OTHER INCOME (COSTS)

 

 

 

 

 

 

 

Interest and dividend income

 

 

 274

 

 

 401

 

Interest and other related financing costs

 

 

 (1,315)

 

 

 (1,247)

 

Other, net

 

 

 647

 

 

 366

 

 

 

 

 (394)

 

 

 (480)

 

 

 

 

 

 

 

 

 

LOSS BEFORE INCOME TAXES

 

 

 (12,647)

 

 

 (9,745)

 

 

 

 

 

 

 

 

 

INCOME TAX BENEFIT

 

 

 (5,240)

 

 

 (3,642)

 

 

 

 

 

 

 

 

 

NET LOSS

 

$

 (7,407)

 

$

 (6,103)

 

 

 

 

 

 

 

 

 

LOSS PER COMMON SHARE(1)

 

 

 

 

 

 

 

Basic

 

$

 (0.29)

 

$

 (0.24)

 

Diluted

 

$

 (0.29)

 

$

 (0.24)

 

 

 

 

 

 

 

 

 

AVERAGE COMMON SHARES OUTSTANDING

 

 

 

 

 

 

 

Basic

 

 

 25,684,475

 

 

 25,822,522

 

Diluted

 

 

 25,684,475

 

 

 25,822,522

 

 

 

 

 

 

 

 

 

CASH DIVIDENDS DECLARED PER COMMON SHARE

 

$

 0.08

 

$

 0.08

 


  1. ArcBest uses the two-class method for calculating earnings per share. This method, as calculated below for diluted earnings per share, requires an allocation of dividends paid and a portion of undistributed net income (but not losses) to unvested restricted stock for calculating per share amounts.

 

 

 

 

 

 

 

 

NET LOSS

 

$

 (7,407)

 

$

 (6,103)

 

 

 

 

 

 

 

 

 

EFFECT OF UNVESTED RESTRICTED STOCK AWARDS

 

 

 (17)

 

 

 (18)

 

 

 

 

 

 

 

 

 

ADJUSTED NET LOSS FOR CALCULATING LOSS PER COMMON SHARE

 

$

 (7,424)

 

$

 (6,121)

 

ARCBEST CORPORATION

CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

 

 

 

March 31

 

December 31

 

 

    

2017

    

2016

 

 

 

(Unaudited)

 

Note

 

 

 

($ thousands, except share data)

 

ASSETS

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

 82,253

 

$

 114,280

 

Short-term investments

 

 

 56,984

 

 

 56,838

 

Restricted cash

 

 

 962

 

 

 962

 

   Accounts receivable, less allowances (2017 - $5,283; 2016 - $5,437)

 

 

 258,931

 

 

 260,643

 

   Other accounts receivable, less allowances (2017 - $875; 2016 - $849)             

 

 

 18,687

 

 

 22,041

 

Prepaid expenses

 

 

 27,012

 

 

 22,124

 

Prepaid and refundable income taxes

 

 

 11,008

 

 

 9,909

 

Other

 

 

 8,226

 

 

 4,300

 

TOTAL CURRENT ASSETS

 

 

 464,063

 

 

 491,097

 

 

 

 

 

 

 

 

 

PROPERTY, PLANT AND EQUIPMENT

 

 

 

 

 

 

 

Land and structures

 

 

 330,909

 

 

 324,086

 

Revenue equipment

 

 

 742,394

 

 

 743,860

 

Service, office, and other equipment

 

 

 155,618

 

 

 154,119

 

Software

 

 

 123,857

 

 

 120,877

 

Leasehold improvements

 

 

 8,993

 

 

 8,758

 

 

 

 

 1,361,771

 

 

 1,351,700

 

Less allowances for depreciation and amortization

 

 

 838,147

 

 

 819,174

 

 

 

 

 523,624

 

 

 532,526

 

 

 

 

 

 

 

 

 

GOODWILL

 

 

 108,981

 

 

 108,875

 

INTANGIBLE ASSETS, NET

 

 

 79,371

 

 

 80,507

 

DEFERRED INCOME TAXES

 

 

 3,064

 

 

 2,978

 

OTHER LONG-TERM ASSETS

 

 

 65,380

 

 

 66,095

 

 

 

$

 1,244,483

 

$

 1,282,078

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

Accounts payable

 

$

 130,750

 

$

 133,301

 

Accrued expenses

 

 

 190,829

 

 

 198,731

 

Current portion of long-term debt

 

 

 59,995

 

 

 64,143

 

TOTAL CURRENT LIABILITIES

 

 

 381,574

 

 

 396,175

 

 

 

 

 

 

 

 

 

LONG-TERM DEBT, less current portion

 

 

 167,075

 

 

 179,530

 

PENSION AND POSTRETIREMENT LIABILITIES

 

 

 37,541

 

 

 35,848

 

OTHER LONG-TERM LIABILITIES

 

 

 15,844

 

 

 16,790

 

DEFERRED INCOME TAXES

 

 

 50,773

 

 

 54,680

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

Common stock, $0.01 par value, authorized 70,000,000 shares;
issued 2017: 28,193,117 shares; 2016: 28,174,424 shares

 

 

 282

 

 

 282

 

Additional paid-in capital

 

 

 316,802

 

 

 315,318

 

Retained earnings

 

 

 377,444

 

 

 386,917

 

   Treasury stock, at cost, 2,565,399 shares

 

 

 (80,045)

 

 

 (80,045)

 

Accumulated other comprehensive loss

 

 

 (22,807)

 

 

 (23,417)

 

TOTAL STOCKHOLDERS’ EQUITY

 

 

 591,676

 

 

 599,055

 

 

 

$

 1,244,483

 

$

 1,282,078

 

Note:  The balance sheet at December 31, 2016 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.

ARCBEST CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

 

 

 

 

 

 

 

Three Months Ended 

 

 

 

March 31

 

 

    

2017

    

2016

 

 

 

Unaudited

 

 

 

($ thousands)

 

 OPERATING ACTIVITIES

 

 

 

 

 

 

 

Net loss

 

$

 (7,407)

 

$

 (6,103)

 

Adjustments to reconcile net loss

 

 

 

 

 

 

 

to net cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

 

 24,258

 

 

 24,164

 

Amortization of intangibles

 

 

 1,136

 

 

 987

 

Pension settlement expense

 

 

 1,957

 

 

 900

 

Share-based compensation expense

 

 

 1,731

 

 

 1,709

 

Provision for losses on accounts receivable

 

 

 442

 

 

 82

 

Deferred income tax provision (benefit)

 

 

 (4,197)

 

 

 5,212

 

Gain on sale of property and equipment

 

 

 (613)

 

 

 (311)

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Receivables

 

 

 3,345

 

 

 9,569

 

Prepaid expenses

 

 

 (5,174)

 

 

 (3,998)

 

Other assets

 

 

 (3,357)

 

 

 (2,954)

 

Income taxes

 

 

 (1,205)

 

 

 (10,211)

 

Accounts payable, accrued expenses, and other liabilities

 

 

 (9,155)

 

 

 (6,706)

 

 NET CASH PROVIDED BY OPERATING ACTIVITIES

 

 

 1,761

 

 

 12,340

 

 

 

 

 

 

 

 

 

 INVESTING ACTIVITIES

 

 

 

 

 

 

 

Purchases of property, plant and equipment, net of financings

 

 

 (12,273)

 

 

 (13,357)

 

Proceeds from sale of property and equipment

 

 

 1,692

 

 

 2,435

 

Purchases of short-term investments

 

 

 (6,223)

 

 

 (15,745)

 

Proceeds from sale of short-term investments

 

 

 6,125

 

 

 7,840

 

Capitalization of internally developed software

 

 

 (2,440)

 

 

 (2,668)

 

 NET CASH USED IN INVESTING ACTIVITIES

 

 

 (13,119)

 

 

 (21,495)

 

 

 

 

 

 

 

 

 

 FINANCING ACTIVITIES

 

 

 

 

 

 

 

Payments on long-term debt

 

 

 (17,297)

 

 

 (11,066)

 

Net change in book overdrafts

 

 

 (981)

 

 

 (5,095)

 

Payment of common stock dividends

 

 

 (2,066)

 

 

 (2,088)

 

Purchases of treasury stock

 

 

 —

 

 

 (2,602)

 

Payments for tax withheld on share-based compensation

 

 

 (325)

 

 

 (178)

 

 NET CASH USED IN FINANCING ACTIVITIES

 

 

 (20,669)

 

 

 (21,029)

 

 

 

 

 

 

 

 

 

 NET DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

 

 

 (32,027)

 

 

 (30,184)

 

Cash and cash equivalents and restricted cash at beginning of period

 

 

 115,242

 

 

 166,357

 

 CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD

 

$

 83,215

 

$

 136,173

 

 

 

 

 

 

 

 

 

 NONCASH INVESTING ACTIVITIES

 

 

 

 

 

 

 

Equipment financed

 

$

 694

 

$

 1,947

 

Accruals for equipment received

 

$

 440

 

$

 8,486

 

ARCBEST CORPORATION

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES

Non-GAAP Financial Measures. We report our financial results in accordance with generally accepted accounting principles (“GAAP”). However, management believes that certain non-GAAP performance measures and ratios, such as Adjusted EBITDA, utilized for internal analysis provide analysts, investors, and others the same information that we use internally for purposes of assessing our core operating performance and provides meaningful comparisons between current and prior period results, as well as important information regarding performance trends. Accordingly, using these measures improves comparability in analyzing our performance because it removes the impact of items from operating results that, in management's opinion, do not reflect our core operating performance. Management uses Adjusted EBITDA as a key measure of performance and for business planning. The measure is particularly meaningful for analysis of the Asset-Light businesses, because they exclude amortization of acquired intangibles and software, which are significant expenses resulting from strategic decisions rather than core daily operations. Additionally, Adjusted EBITDA is a primary component of the financial covenants contained in our Amended and Restated Credit Agreement. Other companies may calculate EBITDA differently; therefore, our calculation of Adjusted EBITDA may not be comparable to similarly titled measures of other companies. Certain information discussed in the scheduled conference call could be considered non-GAAP measures. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, our reported results. These financial measures should not be construed as better measurements than operating income, operating cash flow, net income or earnings per share, as determined under GAAP.

Restructuring and Operating Segment Restatements. Certain restatements have been made to the prior year’s operating segment data to conform to the current year presentation, reflecting the realignment of the Company’s organizational structure as announced on November 3, 2016. Under the new structure, the segments previously reported as Premium Logistics (Panther), Transportation Management (ABF Logistics), and Household Goods Moving Services (ABF Moving) are consolidated as a single asset-light logistics operation under ArcBest. Segment revenues and expenses were adjusted to eliminate certain intercompany charges consistent with the manner in which they are reported under the new corporate structure. Certain intercompany charges among the previously reported Panther, ABF Logistics, and ABF Moving segments which were previously eliminated in the “Other and eliminations” line, are now eliminated within the ArcBest segment. There was no impact on the Company’s consolidated revenues, operating expenses, operating income, or earnings per share as a result of the restatements.

 

 

 

 

 

 

 

 

 

 

Three Months Ended 

 

 

 

March 31

 

 

    

2017

 

2016

    

 

 

(Unaudited)

 

 

($ thousands, except per share data)

ArcBest Corporation - Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Loss

 

 

 

 

 

 

 

Amounts on GAAP basis

 

$

 (12,253)

 

$

 (9,265)

 

Restructuring charges, pre-tax(1)

 

 

 1,631

 

 

 —

 

Pension settlement expense, pre-tax

 

 

 1,957

 

 

 900

 

Non-GAAP amounts

 

$

 (8,665)

 

$

 (8,365)

 

 

 

 

 

 

 

 

 

Net Loss

 

 

 

 

 

 

 

Amounts on GAAP basis

 

$

 (7,407)

 

$

 (6,103)

 

Restructuring charges, after-tax(1)

 

 

 991

 

 

 —

 

Pension settlement expense, after-tax

 

 

 1,196

 

 

 550

 

Life insurance proceeds and changes in cash surrender value

 

 

 (580)

 

 

 (355)

 

Non-GAAP amounts

 

$

 (5,800)

 

$

 (5,908)

 

 

 

 

 

 

 

 

 

Diluted Loss Per Share

 

 

 

 

 

 

 

Amounts on GAAP basis

 

$

 (0.29)

 

$

 (0.24)

 

Restructuring charges, after-tax(1)

 

 

 0.04

 

 

 —

 

Pension settlement expense, after-tax

 

 

 0.05

 

 

 0.02

 

Life insurance proceeds and changes in cash surrender value

 

 

 (0.02)

 

 

 (0.01)

 

Non-GAAP amounts

 

$

 (0.22)

 

$

 (0.23)

 


  1. Restructuring charges relate to the realignment of the Company’s organizational structure.

ARCBEST CORPORATION

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES – Continued

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended 

 

 

 

March 31

 

 

    

2017

 

2016

 

Segment Operating Income Reconciliations

 

(Unaudited)

 

 

 

($ thousands, except percentages)

 

Asset-Based

 

 

 

Operating Income (Loss) ($) Operating Ratio (% of revenues)

 

 

 

Amounts on GAAP basis

 

$

 (10,025)

 

 102.2

%  

 

$

 (8,999)

 

 102.0

%  

 

Restructuring charges(1)

 

 

 140

 

 —

 

 

 

 —

 

 —

 

 

Pension settlement expense

 

 

 1,401

 

 (0.3)

 

 

 

 677

 

 (0.2)

 

 

Non-GAAP amounts

 

$

 (8,484)

 

 101.9

%  

 

$

 (8,322)

 

 101.8

%  

 

 

 

 

 

Asset-Light

 

 

 

 

 

 

 

ArcBest

 

 

 

Operating Income (Loss) ($) Operating Ratio (% of revenues)

 

 

 

Amounts on GAAP basis

 

$

 901

 

 99.4

%  

 

$

 8

 

 100.0

%  

 

Restructuring charges(1)

 

 

 810

 

 (0.5)

 

 

 

 —

 

 —

 

 

Pension settlement expense

 

 

 115

 

 (0.1)

 

 

 

 18

 

 —

 

 

Non-GAAP amounts

 

$

 1,826

 

 98.8

%  

 

$

 26

 

 100.0

%  

 

 

 

 

 

FleetNet

 

 

 

Operating Income (Loss) ($) Operating Ratio (% of revenues)

 

 

 

Amounts on GAAP basis

 

$

 974

 

 97.6

%  

 

$

 984

 

 97.7

%  

 

Pension settlement expense

 

 

 46

 

 (0.1)

 

 

 

 18

 

 —

 

 

Non-GAAP amounts

 

$

 1,020

 

 97.5

%  

 

$

 1,002

 

 97.7

%  

 

 

 

 

 

Total Asset-Light

 

 

 

Operating Income (Loss) ($) Operating Ratio (% of revenues)

 

 

 

Amounts on GAAP basis

 

$

 1,875

 

 99.0

%  

 

$

 992

 

 99.5

%  

 

Restructuring charges(1)

 

 

 810

 

 (0.4)

 

 

 

 —

 

 —

 

 

Pension settlement expense

 

 

 161

 

 (0.1)

 

 

 

 36

 

 —

 

 

Non-GAAP amounts

 

$

 2,846

 

 98.5

%  

 

$

 1,028

 

 99.5

%  

 

 

 

 

 

Other and Eliminations

 

 

 

Operating Income (Loss) ($) Operating Ratio (% of revenues)

 

 

 

Amounts on GAAP basis

 

$

 (4,103)

 

 135.7

%  

 

$

 (1,258)

 

 164.8

%  

 

Restructuring charges(1)

 

 

 681

 

 (10.7)

 

 

 

 —

 

 —

 

 

Pension settlement expense

 

 

 395

 

 (6.2)

 

 

 

 187

 

 (5.2)

 

 

Non-GAAP amounts

 

$

 (3,027)

 

 118.8

%  

 

$

 (1,071)

 

 159.6

%  

 


  1. Restructuring charges relate to the realignment of the Company’s organizational structure.

ARCBEST CORPORATION

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES – Continued

 

 

 

 

 

 

 

 

Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (Adjusted EBITDA)

 

 

 

 

 

 

 

 

 

 

Three Months Ended 

 

 

 

March 31

 

 

    

2017

    

2016

    

 

 

(Unaudited)

 

 

 

($ thousands)

 

ArcBest Corporation - Consolidated

 

 

 

 

 

Net loss

 

$

 (7,407)

 

$

 (6,103)

 

Interest and other related financing costs

 

 

 1,315

 

 

 1,247

 

Income tax benefit

 

 

 (5,240)

 

 

 (3,642)

 

Depreciation and amortization

 

 

 25,394

 

 

 25,151

 

Amortization of share-based compensation

 

 

 1,731

 

 

 1,709

 

Amortization of net actuarial losses of benefit plans and pension settlement expense

 

 

 3,037

 

 

 2,069

 

Restructuring charges(1)

 

 

 1,631

 

 

 —

 

Consolidated Adjusted EBITDA

 

$

 20,461

 

$

 20,431

 


  1. Restructuring charges relate to the realignment of the Company’s organizational structure.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (Adjusted EBITDA)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31

 

 

 

2017

 

2016

 

 

    

 

    

Depreciation

    

    

 

    

    

 

    

 

    

Depreciation

    

    

 

 

 

 

Operating

 

and

 

Restructuring

 

Adjusted

 

Operating

 

and

 

Adjusted

 

 

 

Income

 

Amortization

 

Charges(2)

 

EBITDA

 

Income

 

Amortization

 

EBITDA

 

 

 

(Unaudited)

 

 

 

($ thousands)

 

Asset-Light

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ArcBest(3)

 

$

 901

 

$

 3,366

 

$

 810

 

$

 5,077

 

$

 8

 

$

 3,465

 

$

 3,473

 

FleetNet

 

 

 974

 

 

 280

 

 

 —

 

 

 1,254

 

 

 984

 

 

 287

 

 

 1,271

 

Total Asset-Light

 

$

 1,875

 

$

 3,646

 

$

 810

 

$

 6,331

 

$

 992

 

$

 3,752

 

$

 4,744

 


  1. Restructuring charges relate to the realignment of the Company’s organizational structure.
  2. Depreciation and amortization consists primarily of amortization of intangibles and software associated with acquired businesses.

ARCBEST CORPORATION

FINANCIAL STATEMENT OPERATING SEGMENT DATA AND OPERATING RATIOS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended 

 

 

 

March 31

 

 

    

2017

    

2016

    

 

 

Unaudited

 

 

 

($ thousands, except percentages)

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

Asset-Based

 

$

 464,356

 

 

 

$

 439,063

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ArcBest(1)

 

 

 152,876

 

 

 

 

 142,397

 

 

 

FleetNet

 

 

 40,238

 

 

 

 

 43,564

 

 

 

Total Asset-Light

 

 

 193,114

 

 

 

 

 185,961

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other and eliminations

 

 

 (6,382)

 

 

 

 

 (3,569)

 

 

 

Total consolidated revenues

 

$

 651,088

 

 

 

$

 621,455

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

Asset-Based

 

 

 

 

 

 

 

 

 

 

 

Salaries, wages, and benefits

 

$

 304,843

 

65.7%

 

$

 296,162

 

67.4%

 

Fuel, supplies, and expenses

 

 

 75,432

 

16.3%

 

 

 66,689

 

15.2%

 

Operating taxes and licenses

 

 

 11,869

 

2.6%

 

 

 11,980

 

2.7%

 

Insurance

 

 

 7,109

 

1.5%

 

 

 6,466

 

1.5%

 

Communications and utilities

 

 

 4,822

 

1.0%

 

 

 4,372

 

1.0%

 

Depreciation and amortization

 

 

 20,983

 

4.5%

 

 

 20,392

 

4.6%

 

Rents and purchased transportation

 

 

 46,608

 

10.0%

 

 

 39,696

 

9.0%

 

Gain on sale of property and equipment

 

 

 (617)

 

(0.1%)

 

 

 (172)

 

 —

 

Pension settlement expense(2)

 

 

 1,401

 

0.3%

 

 

 677

 

0.2%

 

Other

 

 

 1,791

 

0.4%

 

 

 1,800

 

0.4%

 

Restructuring costs(3)

 

 

 140

 

 —

 

 

 —

 

 —

 

Total Asset-Based

 

 

 474,381

 

102.2%

 

 

 448,062

 

102.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

ArcBest(1)

 

 

 

 

 

 

 

 

 

 

 

Purchased transportation

 

 

 121,919

 

79.8%

 

 

 111,831

 

78.5%

 

Salaries, wages, and benefits

 

 

 16,536

 

10.8%

 

 

 18,581

 

13.1%

 

Supplies and expenses

 

 

 5,286

 

3.5%

 

 

 4,418

 

3.1%

 

Depreciation and amortization(4)

 

 

 3,366

 

2.2%

 

 

 3,465

 

2.4%

 

Other(2)

 

 

 4,058

 

2.6%

 

 

 4,094

 

2.9%

 

Restructuring costs(3)

 

 

 810

 

0.5%

 

 

 —

 

 —

 

 

 

 

 151,975

 

99.4%

 

 

 142,389

 

100.0%

 

FleetNet

 

 

 39,264

 

 

 

 

 42,580

 

 

 

Total Asset-Light

 

 

 191,239

 

 

 

 

 184,969

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other and eliminations(5)

 

 

 (2,279)

 

 

 

 

 (2,311)

 

 

 

Total consolidated operating expenses

 

$

 663,341

 

 

 

$

 630,720

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME (LOSS)(2)

 

 

 

 

 

 

 

 

 

 

 

Asset-Based

 

$

 (10,025)

 

 

 

$

 (8,999)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ArcBest(1)

 

 

 901

 

 

 

 

 8

 

 

 

FleetNet

 

 

 974

 

 

 

 

 984

 

 

 

Total Asset-Light

 

 

 1,875

 

 

 

 

 992

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other and eliminations(5)

 

 

 (4,103)

 

 

 

 

 (1,258)

 

 

 

Total consolidated operating income (loss)

 

$

 (12,253)

 

 

 

$

 (9,265)

 

 

 


  1. The 2017 period includes the operations of Logistics & Distribution Services, LLC (“LDS”), which was acquired in September 2016.
  2. Consolidated and segment operating results for all periods presented were impacted by pension settlement expense. (See ArcBest Corporation - Consolidated and Segment Operating Income Reconciliations of GAAP to Non-GAAP Financial Measures tables previously presented.)
  3. Restructuring charges relate to the realignment of the Company’s organizational structure.
  4. Depreciation and amortization consists primarily of amortization of intangibles, including customer relationships, and software associated with acquired businesses.
  5. “Other” corporate costs include $0.7 million of restructuring charges for the three months ended March 31, 2017. (See Segment Operating Income Reconciliations of GAAP to Non-GAAP Financial Measures table previously presented.) Other corporate costs also include additional investments to provide an improved platform for revenue growth and for offering ArcBest services across multiple operating segments.

ARCBEST CORPORATION

OPERATING STATISTICS

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended 

 

 

 

March 31

 

 

    

2017

    

2016

    

% Change

    

 

 

(Unaudited)

 

Asset-Based

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Workdays

 

 

 64.0

 

 

 63.5

 

 

 

 

 

 

 

 

 

 

 

 

 

Billed Revenue(1) CWT

 

$

 29.47

 

$

 27.72

 

6.3%

 

 

 

 

 

 

 

 

 

 

 

Billed Revenue(1) / Shipment

 

$

 355.86

 

$

 356.25

 

(0.1%)

 

 

 

 

 

 

 

 

 

 

 

Shipments

 

 

 1,316,918

 

 

 1,236,323

 

6.5%

 

 

 

 

 

 

 

 

 

 

 

Shipments / Day

 

 

 20,577

 

 

 19,470

 

5.7%

 

 

 

 

 

 

 

 

 

 

 

Tonnage (Tons)

 

 

 795,175

 

 

 794,472

 

0.1%

 

 

 

 

 

 

 

 

 

 

 

Tons / Day

 

 

 12,425

 

 

 12,511

 

(0.7%)

 


  1. Revenue for undelivered freight is deferred for financial statement purposes in accordance with the Asset-Based segment revenue recognition policy. Billed revenue used for calculating revenue per hundredweight measurements has not been adjusted for the portion of revenue deferred for financial statement purposes.

 

 

 

 

 

 

 

Year Over Year % Change

 

 

 

Three Months Ended 

 

 

    

March 31, 2017

 

 

 

(Unaudited)

 

ArcBest

 

 

 

 

 

 

 

 

 

Expedite(2)

 

 

 

 

Revenue / Shipment

 

 

9.9%

 

 

 

 

 

 

Shipments / Day

 

 

(1.8%)

 

 

 

 

 

 

Truckload and Truckload - Dedicated(3)

 

 

 

 

Revenue / Shipment

 

 

2.7%

 

 

 

 

 

 

Shipments / Day

 

 

16.5%

 


  1. Expedite primarily represents the expedited operations which were previously reported in the Premium Logistics (Panther) segment.
  2. Truckload represents the brokerage operations and the Truckload – Dedicated represents the dedicated operations of LDS, both of which were previously reported in the Transportation Management (ABF Logistics) segment. Comparisons are impacted by the operations of LDS, which was acquired in September 2016.

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