ArcBest Announces First Quarter 2024 Results

Continued focus on service excellence, disciplined pricing, growth, and efficiency

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FORT SMITH, Arkansas, April 30, 2024 — ArcBest® (Nasdaq: ARCB), a leader in supply chain logistics, today reported first quarter 2024 revenue from continuing operations of $1.0 billion, compared to $1.1 billion in the first quarter of 2023. First quarter 2024 operating income from continuing operations was $22.4 million, compared to $21.2 million in the prior year period, and net loss from continuing operations was $2.9 million, or $0.12 per diluted share, compared to net income of $18.8 million, or $0.75 per diluted share, in 2023. Included in the first quarter net loss from continuing operations is a $21.6 million after-tax, noncash impairment charge associated with ArcBest’s equity investment in Phantom Auto, which ceased operations during the first quarter of 2024.

Excluding certain items in both periods as identified in the attached reconciliation tables, first quarter 2024 non‑GAAP operating income from continuing operations was $42.6 million, compared to $51.9 million in the prior‑year period. While the non-GAAP operating income for the Asset-Based segment was unchanged versus the prior-year period, Asset-Light non-GAAP operating income declined $8.9 million compared to the prior-year period, reflecting the current macro weakness impacting demand combined with excess capacity serving the full truckload market.

On a non-GAAP basis, net income from continuing operations was $32.3 million, or $1.34 per diluted share, compared to $39.5 million, or $1.58 per diluted share, in the first quarter of 2023.

“Reflecting on the past quarter, I am proud of our employees for their commitment to excellence, which resulted in better customer service and operational efficiency gains,” said Judy R. McReynolds, ArcBest Chairman, President and CEO. “This commitment was also evident in our performance in this softer freight environment and the receipt of numerous customer and industry recognitions, including ABF’s recent receipt of the prestigious ATA Excellence in Security Award.”

First Quarter Results of Operations Comparisons

Asset-Based

First Quarter 2024 Versus First Quarter 2023

  • Revenue of $671.5 million compared to $697.8 million, a per-day decrease of 3.0 percent.
  • Total tonnage per day decrease of 16.8 percent.
  • Total shipments per day decrease of 6.2 percent.
  • Total billed revenue per hundredweight increase of 15.6 percent.
  • Core daily shipments increase of 12 percent and tonnage increase of 9 percent.
  • Operating income of $53.5 million and an operating ratio of 92.0 percent, on both a GAAP and non-GAAP basis, compared to prior-year GAAP operating income of $47.5 million and an operating ratio of 93.2 percent and prior-year non-GAAP operating income of $53.5 million and an operating ratio of 92.3 percent.

 

On a non-GAAP basis, the Asset-Based segment generated the same operating income as first quarter 2023 on lower revenue levels, which highlights the Company’s continued focus on serving core customers well and improving efficiencies in our operations.  Total first quarter daily shipment and tonnage levels were below the prior year, as we continued to adjust freight mix, which positively impacted productivity and contributed to an improved operating ratio.

Pricing momentum continued in the quarter, driven by improved freight mix, higher pricing on transactional shipments and contract renewal increases of 5.3 percent. Overall, LTL industry pricing remains rational.

Compared sequentially to the strong fourth quarter of 2023, first quarter 2024 was impacted by weather in January and fewer workdays in March. Revenue per day was down 8.4 percent, tons per day declined 5.7 percent and shipments per day were down 1.8 percent, sequentially. First quarter billed revenue per hundredweight decreased 0.9 percent, compared to fourth quarter 2023. Although union benefit costs were higher in first quarter 2024, continued focus on operational efficiency resulted in improved productivity and lower overall operating expenses. The operating ratio increased 430 basis points sequentially, which was generally in-line with seasonal changes seen during previous soft freight environments.

Asset-Light

First Quarter 2024 Versus First Quarter 2023

  • Revenue of $396.4 million compared to $438.1 million, a per-day decrease of 8.8 percent.
  • Operating loss of $15.3 million compared to operating loss of $14.1 million. On a non‑GAAP basis, operating loss of $4.7 million compared to operating income of $4.1 million.
  • Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) of negative $2.9 million compared to $6.0 million, as detailed in the attached non-GAAP reconciliation tables.

Compared to the first quarter of 2023, Asset-Light results were impacted by lower revenue per shipment and reduced margins associated with changes in business mix and the soft rate environment. Shipments per day grew by 13.6 percent, as the managed transportation solution successfully partnered with more customers to optimize their logistics spend. Our biggest challenge to profitability resulted from lower rates and margins for truckload solutions. However, increased productivity mitigated market softness as shipments per employee per day and SG&A cost per shipment both significantly improved on a year-over-year basis.

Compared sequentially to the fourth quarter 2023, first quarter 2024 revenue per day was down 7.1 percent. Weather events in January resulted in significantly higher purchased transportation costs as a percentage of revenue. The non-GAAP operating loss in the first quarter was primarily attributable to performance in the month of January, as the segment saw improvements throughout the rest of the quarter. Total shipments per day were flat compared to fourth quarter 2023, with managed transportation seeing sequential growth.  Operating expenses were slightly lower as employee productivity and cost per shipment metrics improved from fourth quarter levels. With a focus on growth and efficiency, the Company remains well-positioned for an eventual recovery of the full truckload and ground expedite markets.

Conference Call

ArcBest will host a conference call with company executives to discuss the first quarter 2024 results. The call will be today, Tuesday, April 30, 2024 at 9:30 a.m. EDT (8:30 a.m. CDT). Interested parties are invited to listen by calling (800) 715-9871 or by joining the webcast which can be found on ArcBest’s website at arcb.com. Slides to accompany this call are included in Exhibit 99.3 of the Form 8-K filed on April 30, 2024, will be posted and available to download on the company’s website prior to the scheduled conference time, and will be included in the webcast. Following the call, a recorded playback will be available through the end of the day on May 15, 2024. To listen to the playback, dial (800) 770-2030. The conference call ID for the live conference call and the playback is 6865438. The conference call and playback can also be accessed through May 15, 2024 on ArcBest’s website at arcb.com.

About ArcBest

ArcBest® (Nasdaq: ARCB) is a multibillion-dollar integrated logistics company that helps keep the global supply chain moving. Founded in 1923 and now with 15,000 employees across 250 campuses and service centers, the company is a logistics powerhouse, using its technology, expertise and scale to connect shippers with the solutions they need — from ground, air and ocean transportation to fully managed supply chains. ArcBest has a long history of innovation that is enriched by deep customer relationships. With a commitment to helping customers navigate supply chain challenges now and in the future, the company is developing ground-breaking technology like Vaux™, one of TIME’s Best Inventions of 2023. For more information, visit arcb.com.

The following is a “safe harbor” statement under the Private Securities Litigation Reform Act of 1995: Certain statements and information in this press release concerning results for the three months ended March 31, 2024 may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others, statements regarding (i) our expectations about our intrinsic value or our prospects for growth and value creation and (ii) our financial outlook, position, strategies, goals, and expectations. 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: the effects of a widespread outbreak of an illness or disease or any other public health crisis, as well as regulatory measures implemented in response to such events; external events which may adversely affect us or the third parties who provide services for us, for which our business continuity plans may not adequately prepare us, including, but not limited to, acts of war or terrorism, or military conflicts; data privacy breaches, cybersecurity incidents, and/or failures of our information systems, including disruptions or failures of services essential to our operations or upon which our information technology platforms rely; interruption or failure of third-party software or information technology systems or licenses; untimely or ineffective development and implementation of, or failure to realize the potential benefits associated with, new or enhanced technology or processes, including our customer pilot offering of Vaux; the loss or reduction of business from large customers or an overall reduction in our customer base; the timing and performance of growth initiatives and the ability to manage our cost structure; the cost, integration, and performance of any recent or future acquisitions and the inability to realize the anticipated benefits of the acquisition within the expected time period or at all; unsolicited takeover proposals, proxy contests, and other proposals/actions by activist investors; maintaining our corporate reputation and intellectual property rights; nationwide or global disruption in the supply chain resulting in increased volatility in freight volumes; competitive initiatives and pricing pressures; increased prices for and decreased availability of equipment, including new revenue equipment, decreases in value of used revenue equipment, and higher costs of equipment-related operating expenses such as maintenance, fuel, and related taxes; 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; relationships with employees, including unions, and our ability to attract, retain, and upskill 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; union employee wages and benefits, including changes in required contributions to multiemployer plans; 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; litigation or claims asserted against us; governmental regulations; environmental laws and regulations, including emissions-control regulations; default on covenants of financing arrangements and the availability and terms of future financing arrangements; our ability to generate sufficient cash from operations to support significant ongoing capital expenditure requirements and other business initiatives; self-insurance claims, insurance premium costs, and loss of our ability to self-insure; potential impairment of long-lived assets and goodwill and intangible assets; 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; increasing costs due to inflation and higher interest rates; seasonal fluctuations, adverse weather conditions, natural disasters, and climate change; and other financial, operational, and legal risks and uncertainties detailed from time to time in ArcBest Corporation’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 those expressed in these forward-looking statements, please see our filings with the SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8K.

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.

Financial Data and Operating Statistics

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

 

ARCBEST CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended 

 

 

 

March 31

 

 

    

2024

    

2023

    

 

 

(Unaudited)

 

 

 

($ thousands, except share and per share data)

 

REVENUES

 

$

 1,036,419

 

$

 1,106,094

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 1,013,984

 

 

 1,084,935

 

 

 

 

 

 

 

 

 

OPERATING INCOME

 

 

 22,435

 

 

 21,159

 

 

 

 

 

 

 

 

 

OTHER INCOME (COSTS)

 

 

 

 

 

 

 

Interest and dividend income

 

 

 3,315

 

 

 2,933

 

Interest and other related financing costs

 

 

 (2,228)

 

 

 (2,327)

 

Other, net

 

 

 (28,199)

 

 

 1,780

 

 

 

 

 (27,112)

 

 

 2,386

 

 

 

 

 

 

 

 

 

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

 

 

 (4,677)

 

 

 23,545

 

 

 

 

 

 

 

 

 

INCOME TAX PROVISION (BENEFIT)

 

 

 (1,765)

 

 

 4,698

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS) FROM CONTINUING OPERATIONS

 

 

 (2,912)

 

 

 18,847

 

 

 

 

 

 

 

 

 

INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX(1)

 

 

 600

 

 

 52,436

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS)

 

$

 (2,312)

 

$

 71,283

 

 

 

 

 

 

 

 

 

BASIC EARNINGS PER COMMON SHARE(2)

 

 

 

 

 

 

 

Continuing operations

 

$

 (0.12)

 

$

 0.78

 

Discontinued operations(1)

 

 

 0.03

 

 

 2.16

 

 

 

$

 (0.10)

 

$

 2.93

 

 

 

 

 

 

 

 

 

DILUTED EARNINGS PER COMMON SHARE(2)

 

 

 

 

 

 

 

Continuing operations

 

$

 (0.12)

 

$

 0.75

 

Discontinued operations(1)

 

 

 0.03

 

 

 2.09

 

 

 

$

 (0.10)

 

$

 2.84

 

 

 

 

 

 

 

 

 

AVERAGE COMMON SHARES OUTSTANDING

 

 

 

 

 

 

 

Basic

 

 

 23,561,309

 

 

 24,288,138

 

Diluted

 

 

 23,561,309

 

 

 25,057,726

 


  1. Represents the discontinued operations of FleetNet America® (“FleetNet”), which sold on February 28, 2023. The 2024 period represents adjustments related to the prior year gain on sale of FleetNet. The 2023 period includes the net gain on sale of FleetNet of $51.4 million after-tax, or $2.12 basic earnings per share and $2.05 diluted earnings per share, recognized in the first quarter of 2023.
  2. Earnings per common share is calculated in total and may not equal the sum of earnings per common share from continuing operations and discontinued operations due to rounding.
 

ARCBEST CORPORATION

CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

 

 

 

 

March 31

 

December 31

 

 

    

2024

    

2023

 

 

 

(Unaudited)

 

Note

 

 

 

($ thousands, except share data)

 

ASSETS

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

 172,855

 

$

 262,226

 

Short-term investments

 

 

 68,065

 

 

 67,842

 

Accounts receivable, less allowances (2024 - $9,184; 2023 - $10,346)

 

 

 433,717

 

 

 430,122

 

Other accounts receivable, less allowances (2024 - $733; 2023 - $731)

 

 

 11,389

 

 

 52,124

 

Prepaid expenses

 

 

 39,232

 

 

 37,034

 

Prepaid and refundable income taxes

 

 

 22,084

 

 

 24,319

 

Other

 

 

 11,136

 

 

 11,116

 

TOTAL CURRENT ASSETS

 

 

 758,478

 

 

 884,783

 

 

 

 

 

 

 

 

 

PROPERTY, PLANT AND EQUIPMENT

 

 

 

 

 

 

 

Land and structures

 

 

 491,555

 

 

 460,068

 

Revenue equipment

 

 

 1,119,446

 

 

 1,126,055

 

Service, office, and other equipment

 

 

 318,252

 

 

 319,466

 

Software

 

 

 176,988

 

 

 173,354

 

Leasehold improvements

 

 

 25,173

 

 

 24,429

 

 

 

 

 2,131,414

 

 

 2,103,372

 

Less allowances for depreciation and amortization

 

 

 1,193,584

 

 

 1,188,548

 

PROPERTY, PLANT AND EQUIPMENT, NET

 

 

 937,830

 

 

 914,824

 

 

 

 

 

 

 

 

 

GOODWILL

 

 

 304,753

 

 

 304,753

 

INTANGIBLE ASSETS, NET

 

 

 97,940

 

 

 101,150

 

OPERATING RIGHT-OF-USE ASSETS

 

 

 174,987

 

 

 169,999

 

DEFERRED INCOME TAXES

 

 

 10,032

 

 

 8,140

 

OTHER LONG-TERM ASSETS

 

 

 73,123

 

 

 101,445

 

TOTAL ASSETS

 

$

 2,357,143

 

$

 2,485,094

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

Accounts payable

 

$

 209,908

 

$

 214,004

 

Income taxes payable

 

 

 8

 

 

 10,410

 

Accrued expenses

 

 

 313,494

 

 

 378,029

 

Current portion of long-term debt

 

 

 63,179

 

 

 66,948

 

Current portion of operating lease liabilities

 

 

 31,986

 

 

 32,172

 

TOTAL CURRENT LIABILITIES

 

 

 618,575

 

 

 701,563

 

 

 

 

 

 

 

 

 

LONG-TERM DEBT, less current portion

 

 

 148,992

 

 

 161,990

 

OPERATING LEASE LIABILITIES, less current portion

 

 

 174,085

 

 

 176,621

 

POSTRETIREMENT LIABILITIES, less current portion

 

 

 13,318

 

 

 13,319

 

CONTINGENT CONSIDERATION

 

 

 100,220

 

 

 92,900

 

OTHER LONG-TERM LIABILITIES

 

 

 34,422

 

 

 40,553

 

DEFERRED INCOME TAXES

 

 

 44,798

 

 

 55,785

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

Common stock, $0.01 par value, authorized 70,000,000 shares;
issued 2024: 30,038,556 shares; 2023: 30,024,125 shares

 

 

 300

 

 

 300

 

Additional paid-in capital

 

 

 343,102

 

 

 340,961

 

Retained earnings

 

 

 1,267,444

 

 

 1,272,584

 

   Treasury stock, at cost, 2024: 6,580,818 shares; 2023: 6,460,137 shares

 

 

 (391,458)

 

 

 (375,806)

 

Accumulated other comprehensive income

 

 

 3,345

 

 

 4,324

 

TOTAL STOCKHOLDERS’ EQUITY

 

 

 1,222,733

 

 

 1,242,363

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

 2,357,143

 

$

 2,485,094

 


Note: The balance sheet at December 31, 2023 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

 

 

    

2024

    

2023

 

 

 

(Unaudited)

 

 

 

($ thousands)

 

 OPERATING ACTIVITIES

 

 

 

 

 

 

 

Net income (loss)

 

$

 (2,312)

 

$

 71,283

 

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

 

 33,616

 

 

 32,187

 

Amortization of intangibles

 

 

 3,217

 

 

 3,203

 

Share-based compensation expense

 

 

 2,889

 

 

 2,235

 

Provision for losses on accounts receivable

 

 

 1,055

 

 

 1,427

 

Change in deferred income taxes

 

 

 (12,548)

 

 

 (9,814)

 

(Gain) loss on sale of property and equipment

 

 

 217

 

 

 (9)

 

Pre-tax gain on sale of discontinued operations

 

 

 (806)

 

 

 (69,083)

 

Change in fair value of contingent consideration

 

 

 7,320

 

 

 15,040

 

Change in fair value of equity investment

 

 

 28,739

 

 

 —

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Receivables

 

 

 35,059

 

 

 43,977

 

Prepaid expenses

 

 

 (2,198)

 

 

 (1,464)

 

Other assets

 

 

 (1,218)

 

 

 3,874

 

Income taxes

 

 

 (8,305)

 

 

 6,221

 

Operating right-of-use assets and lease liabilities, net

 

 

 (7,710)

 

 

 1,570

 

Accounts payable, accrued expenses, and other liabilities

 

 

 (70,548)

 

 

 (79,984)

 

NET CASH PROVIDED BY OPERATING ACTIVITIES

 

 

 6,467

 

 

 20,663

 

 

 

 

 

 

 

 

 

 INVESTING ACTIVITIES

 

 

 

 

 

 

 

Purchases of property, plant and equipment, net of financings

 

 

 (55,049)

 

 

 (34,657)

 

Proceeds from sale of property and equipment

 

 

 1,292

 

 

 1,833

 

Proceeds from sale of discontinued operations

 

 

 —

 

 

 101,138

 

Purchases of short-term investments

 

 

 (5,236)

 

 

 (35,588)

 

Proceeds from sale of short-term investments

 

 

 5,635

 

 

 41,865

 

Capitalization of internally developed software

 

 

 (3,635)

 

 

 (3,631)

 

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

 

 

 (56,993)

 

 

 70,960

 

 

 

 

 

 

 

 

 

 FINANCING ACTIVITIES

 

 

 

 

 

 

 

Payments on long-term debt

 

 

 (16,767)

 

 

 (17,649)

 

Net change in book overdrafts

 

 

 (2,850)

 

 

 (10,493)

 

Deferred financing costs

 

 

 —

 

 

 63

 

Payment of common stock dividends

 

 

 (2,828)

 

 

 (2,915)

 

Purchases of treasury stock

 

 

 (15,652)

 

 

 (14,092)

 

Payments for tax withheld on share-based compensation

 

 

 (748)

 

 

 (1,590)

 

NET CASH USED IN FINANCING ACTIVITIES

 

 

 (38,845)

 

 

 (46,676)

 

 

 

 

 

 

 

 

 

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

 

 

 (89,371)

 

 

 44,947

 

Cash and cash equivalents of continuing operations at beginning of period

 

 

 262,226

 

 

 158,264

 

Cash and cash equivalents of discontinued operations at beginning of period

 

 

 —

 

 

 108

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

 

$

 172,855

 

$

 203,319

 

 

 

 

 

 

 

 

 

 NONCASH INVESTING ACTIVITIES

 

 

 

 

 

 

 

Equipment financed

 

$

 —

 

$

 3,478

 

Accruals for equipment received

 

$

 915

 

$

 1,453

 

Lease liabilities arising from obtaining right-of-use assets

 

$

 5,694

 

$

 30,581

 


Note: The statements of cash flows for the three months ended March 31, 2024 and 2023 include cash flows from continuing operations and cash flows from discontinued operations of FleetNet, which sold on February 28, 2023.

 

ARCBEST CORPORATION

FINANCIAL STATEMENT OPERATING SEGMENT DATA AND OPERATING RATIOS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended 

 

 

 

March 31

 

 

 

2024

    

 

2023

    

 

 

(Unaudited)

 

 

 

($ thousands, except percentages)

 

 

REVENUES FROM CONTINUING OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

Asset-Based

$

 671,467

 

 

 

 

$

 697,817

 

 

 

 

Asset-Light

 

 396,363

 

 

 

 

 

 438,092

 

 

 

 

Other and eliminations

 

 (31,411)

 

 

 

 

 

 (29,815)

 

 

 

 

Total consolidated revenues from continuing operations

$

 1,036,419

 

 

 

 

$

 1,106,094

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES FROM CONTINUING OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

Asset-Based

 

 

 

 

 

 

 

 

 

 

 

 

Salaries, wages, and benefits

$

 344,999

 

 51.4

%

 

$

 335,605

 

 48.1

%

 

Fuel, supplies, and expenses

 

 81,044

 

 12.1

 

 

 

 94,288

 

 13.5

 

 

Operating taxes and licenses

 

 13,529

 

 2.0

 

 

 

 13,979

 

 2.0

 

 

Insurance

 

 14,482

 

 2.1

 

 

 

 13,273

 

 1.9

 

 

Communications and utilities

 

 4,799

 

 0.7

 

 

 

 5,304

 

 0.8

 

 

Depreciation and amortization

 

 27,007

 

 4.0

 

 

 

 24,911

 

 3.6

 

 

Rents and purchased transportation

 

 65,671

 

 9.8

 

 

 

 90,744

 

 13.0

 

 

Shared services

 

 64,914

 

 9.7

 

 

 

 64,613

 

 9.2

 

 

(Gain) loss on sale of property and equipment

 

 149

 

 —

 

 

 

 (51)

 

 —

 

 

Innovative technology costs(1)

 

 —

 

 —

 

 

 

 6,068

 

 0.9

 

 

Other

 

 1,417

 

 0.2

 

 

 

 1,612

 

 0.2

 

 

Total Asset-Based

 

 618,011

 

 92.0

%

 

 

 650,346

 

 93.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset-Light

 

 

 

 

 

 

 

 

 

 

 

 

Purchased transportation

$

 344,122

 

 86.8

%

 

$

 370,163

 

 84.5

%

 

Salaries, wages, and benefits(2)

 

 30,304

 

 7.6

 

 

 

 34,894

 

 8.0

 

 

Supplies and expenses(2)

 

 2,809

 

 0.7

 

 

 

 3,629

 

 0.8

 

 

Depreciation and amortization(3)

 

 5,078

 

 1.3

 

 

 

 5,068

 

 1.2

 

 

Shared services(2)

 

 16,274

 

 4.1

 

 

 

 16,535

 

 3.8

 

 

Contingent consideration(4)

 

 7,320

 

 1.8

 

 

 

 15,040

 

 3.4

 

 

Other(2)

 

 5,714

 

 1.5

 

 

 

 6,854

 

 1.5

 

 

Total Asset-Light

 

 411,621

 

 103.8

%

 

 

 452,183

 

 103.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other and eliminations(5)

 

 (15,648)

 

 

 

 

 

 (17,594)

 

 

 

 

Total consolidated operating expenses from continuing operations

$

 1,013,984

 

 97.8

%

 

$

 1,084,935

 

 98.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME (LOSS) FROM CONTINUING OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

Asset-Based

$

 53,456

 

 

 

 

$

 47,471

 

 

 

 

Asset-Light

 

 (15,258)

 

 

 

 

 

 (14,091)

 

 

 

 

Other and eliminations(5)

 

 (15,763)

 

 

 

 

 

 (12,221)

 

 

 

 

Total consolidated operating income from continuing operations

$

 22,435

 

 

 

 

$

 21,159

 

 

 

 


  1. Represents costs associated with the freight handling pilot test program at ABF Freight, for which the decision was made to pause the pilot during third quarter 2023.
  2. For the 2023 period, certain expenses have been reclassed to conform to the current year presentation, including amounts previously reported in “Shared services” that were reclassed to present “Salaries, wages, and benefits” expenses in a separate line item.
  3. Depreciation and amortization includes amortization of intangibles associated with acquired businesses.
  4. Represents the change in fair value of the contingent earnout consideration recorded for the MoLo acquisition. The liability for contingent consideration is remeasured at each quarterly reporting date, and any change in fair value as a result of the recurring assessments is recognized in operating loss. The contingent consideration for the MoLo acquisition will be paid based on achievement of certain targets of adjusted earnings before interest, taxes, depreciation, and amortization, as adjusted for certain items pursuant to the merger agreement, for years 2023 through 2025, including catch-up provisions.
  5. “Other and eliminations” includes corporate costs for certain unallocated shared service costs which are not attributable to any segment, additional investments to offer comprehensive transportation and logistics services across multiple operating segments, costs related to our customer pilot offering of Vaux, and other investments in ArcBest technology and innovations.

 

 

ARCBEST CORPORATION

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES

 

Non-GAAP Financial Measures

We report our financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). However, management believes that certain non-GAAP performance measures and ratios 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, non-GAAP results are presented on a continuing operations basis, excluding the discontinued operations of FleetNet, which sold on February 28, 2023. The use of certain non-GAAP 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. Other companies may calculate non-GAAP measures differently; therefore, our calculation 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 (loss), operating cash flow, net income (loss) or earnings per share, as determined under GAAP.

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended 

 

 

 

March 31

 

 

    

2024

 

2023

    

ArcBest Corporation - Consolidated

 

(Unaudited)

 

 

 

($ thousands, except per share data)

 

Operating Income from Continuing Operations

 

 

 

 

 

 

 

Amounts on GAAP basis

 

$

 22,435

 

$

 21,159

 

Innovative technology costs, pre-tax(1)

 

 

 9,698

 

 

 12,478

 

Purchase accounting amortization, pre-tax(2)

 

 

 3,192

 

 

 3,192

 

Change in fair value of contingent consideration, pre-tax(3)

 

 

 7,320

 

 

 15,040

 

Non-GAAP amounts

 

$

 42,645

 

$

 51,869

 

 

 

 

 

 

 

 

 

Net Income (Loss) from Continuing Operations

 

 

 

 

 

 

 

Amounts on GAAP basis

 

$

 (2,912)

 

$

 18,847

 

Innovative technology costs, after-tax (includes related financing costs)(1)

 

 

 7,440

 

 

 9,480

 

Purchase accounting amortization, after-tax(2)

 

 

 2,401

 

 

 2,398

 

Change in fair value of contingent consideration, after-tax(3)

 

 

 5,505

 

 

 11,299

 

Change in fair value of equity investment, after-tax(4)

 

 

 21,603

 

 

 —

 

Life insurance proceeds and changes in cash surrender value

 

 

 (1,233)

 

 

 (1,496)

 

Tax benefit from vested RSUs(5)

 

 

 (487)

 

 

 (1,051)

 

Non-GAAP amounts

 

$

 32,317

 

$

 39,477

 

 

 

 

 

 

 

 

 

Diluted Earnings Per Share from Continuing Operations(6)

 

 

 

 

 

 

 

Amounts on GAAP basis

 

$

 (0.12)

 

$

 0.75

 

Innovative technology costs, after-tax (includes related financing costs)(1)

 

 

 0.31

 

 

 0.38

 

Purchase accounting amortization, after-tax(2)

 

 

 0.10

 

 

 0.10

 

Change in fair value of contingent consideration, after-tax(3)

 

 

 0.23

 

 

 0.45

 

Change in fair value of equity investment, after-tax(4)

 

 

 0.90

 

 

 —

 

Life insurance proceeds and changes in cash surrender value

 

 

 (0.05)

 

 

 (0.06)

 

Tax benefit from vested RSUs(5)

 

 

 (0.02)

 

 

 (0.04)

 

Non-GAAP amounts(7)

 

$

 1.34

 

$

 1.58

 


See “Notes to Non-GAAP Financial Tables” for footnotes to this ArcBest Corporation – Consolidated non-GAAP table.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended 

 

 

 

March 31

 

 

    

2024

 

2023

 

Segment Operating Income (Loss) Reconciliations

 

(Unaudited)

 

 

 

($ thousands, except percentages)

 

Asset-Based Segment

 

 

 

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

 

 

 

Amounts on GAAP basis

 

$

 53,456

 

 92.0

%  

 

$

 47,471

 

 93.2

%  

 

Innovative technology costs, pre-tax(8)

 

 

 —

 

 —

 

 

 

 6,068

 

 (0.9)

 

 

Non-GAAP amounts(7)

 

$

 53,456

 

 92.0

%  

 

$

 53,539

 

 92.3

%  

 

 

 

 

 

Asset-Light Segment

 

 

 

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

 

 

 

Amounts on GAAP basis

 

$

 (15,258)

 

 103.8

%  

 

$

 (14,091)

 

 103.2

%  

 

Purchase accounting amortization, pre-tax(2)

 

 

 3,192

 

 (0.8)

 

 

 

 3,192

 

 (0.7)

 

 

Change in fair value of contingent consideration, pre-tax(3)

 

 

 7,320

 

 (1.8)

 

 

 

 15,040

 

 (3.4)

 

 

Non-GAAP amounts(7)

 

$

 (4,746)

 

 101.2

%  

 

$

 4,141

 

 99.1

%  

 

 

 

 

 

Other and Eliminations

 

 

 

Operating Income (Loss) ($)

 

 

 

Amounts on GAAP basis

 

$

 (15,763)

 

 

 

 

$

 (12,221)

 

 

 

 

Innovative technology costs, pre-tax(1)

 

 

 9,698

 

 

 

 

 

 6,410

 

 

 

 

Non-GAAP amounts(7)

 

$

 (6,065)

 

 

 

 

$

 (5,811)

 

 

 

 


Note: See “Notes to Non-GAAP Financial Tables” for footnotes to this Segment Operating Income (Loss) Reconciliations non-GAAP table.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effective Tax Rate Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ArcBest Corporation - Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ thousands, except percentages)

 

Three Months Ended March 31, 2024

 

 

 

 

 

Other

 

Income (Loss)

 

Income Tax

 

Net

 

 

 

CONTINUING OPERATIONS

 

Operating

 

Income

 

Before Income

 

Provision

 

Income

 

 

 

 

Income

 

(Costs)

 

Taxes

 

(Benefit)

 

(Loss)

 

Tax Rate(9)

Amounts on GAAP basis

 

$

 22,435

 

$

 (27,112)

 

$

 (4,677)

 

$

 (1,765)

 

$

 (2,912)

 

 (37.7)

%  

Innovative technology costs(1)

 

 

 9,698

 

 

 195

 

 

 9,893

 

 

 2,453

 

 

 7,440

 

 24.8

 

Purchase accounting amortization(2)

 

 

 3,192

 

 

 —

 

 

 3,192

 

 

 791

 

 

 2,401

 

 24.8

 

Change in fair value of contingent consideration(3)

 

 

 7,320

 

 

 —

 

 

 7,320

 

 

 1,815

 

 

 5,505

 

 24.8

 

Change in fair value of equity investment(4)

 

 

 —

 

 

 28,739

 

 

 28,739

 

 

 7,136

 

 

 21,603

 

 24.8

 

Life insurance proceeds and changes in cash surrender value

 

 

 —

 

 

 (1,233)

 

 

 (1,233)

 

 

 —

 

 

 (1,233)

 

 —

 

Tax benefit from vested RSUs(5)

 

 

 —

 

 

 —

 

 

 —

 

 

 487

 

 

 (487)

 

 —

 

Non-GAAP amounts

 

$

 42,645

 

$

 589

 

$

 43,234

 

$

 10,917

 

$

 32,317

 

 25.3

%  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2023

 

 

 

 

Other

 

Income

 

Income

 

 

 

 

 

CONTINUING OPERATIONS

 

Operating

 

Income

 

Before Income

 

Tax

 

Net

 

 

 

 

Income

 

(Costs)

 

Taxes

 

Provision

 

Income

 

Tax Rate(9)

Amounts on GAAP basis

 

$

 21,159

 

$

 2,386

 

$

 23,545

 

$

 4,698

 

$

 18,847

 

 20.0

%  

Innovative technology costs(1)

 

 

 12,478

 

 

 259

 

 

 12,737

 

 

 3,257

 

 

 9,480

 

 25.6

 

Purchase accounting amortization(2)

 

 

 3,192

 

 

 —

 

 

 3,192

 

 

 794

 

 

 2,398

 

 24.9

 

Change in fair value of contingent consideration(3)

 

 

 15,040

 

 

 —

 

 

 15,040

 

 

 3,741

 

 

 11,299

 

 24.9

 

Life insurance proceeds and changes in cash surrender value

 

 

 —

 

 

 (1,496)

 

 

 (1,496)

 

 

 —

 

 

 (1,496)

 

 —

 

Tax benefit from vested RSUs(5)

 

 

 —

 

 

 —

 

 

 —

 

 

 1,051

 

 

 (1,051)

 

 —

 

Non-GAAP amounts

 

$

 51,869

 

$

 1,149

 

$

 53,018

 

$

 13,541

 

$

 39,477

 

 25.5

%  

 


Note: See “Notes to Non-GAAP Financial Tables” for footnotes to this Effective Tax Rate Reconciliation non-GAAP table.

 

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

Management uses Adjusted EBITDA as a key measure of performance and for business planning. The measure is particularly meaningful for analysis of operating performance because it excludes amortization of acquired intangibles and software of the Asset-Light segment and changes in the fair values of contingent consideration and our equity investment, which are significant expenses resulting from strategic decisions or other factors rather than core daily operations. Additionally, Adjusted EBITDA is a primary component of the financial covenants contained in our credit agreement. The calculation of Consolidated Adjusted EBITDA as presented below begins with net income (loss) from continuing operations, which is the most directly comparable GAAP measure. The calculation of Asset-Light Adjusted EBITDA as presented below begins with operating income (loss), as other income (costs), income taxes, and net income (loss) from continuing operations are reported at the consolidated level and not included in the operating segment financial information evaluated by management to make operating decisions.

 

 

 

 

 

 

 

 

 

 

Three Months Ended 

 

 

 

March 31

 

 

    

2024

    

2023

    

 

 

(Unaudited)

 

 

($ thousands)

ArcBest Corporation - Consolidated Adjusted EBITDA from Continuing Operations

 

 

Net Income (Loss) from Continuing Operations

 

$

 (2,912)

 

$

 18,847

 

Interest and other related financing costs

 

 

 2,228

 

 

 2,327

 

Income tax provision (benefit)

 

 

 (1,765)

 

 

 4,698

 

Depreciation and amortization(10)

 

 

 36,833

 

 

 35,010

 

Amortization of share-based compensation

 

 

 2,889

 

 

 2,182

 

Change in fair value of contingent consideration(3)

 

 

 7,320

 

 

 15,040

 

Change in fair value of equity investment(4)

 

 

 28,739

 

 

 —

 

Consolidated Adjusted EBITDA from Continuing Operations

 

$

 73,332

 

$

 78,104

 


Note: See “Notes to Non-GAAP Financial Tables” for footnotes to this ArcBest Corporation – Consolidated Adjusted EBITDA from Continuing Operations non-GAAP table.

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended 

 

 

 

March 31

 

 

    

2024

 

2023

 

 

 

(Unaudited)

 

 

 

($ thousands)

 

Asset-Light Adjusted EBITDA

 

 

 

 

 

 

 

Operating Income (Loss)

 

$

 (15,258)

 

$

 (14,091)

 

Depreciation and amortization(10)

 

 

 5,078

 

 

 5,068