ArcBest Announces Fourth Quarter and Full Year 2023 Results

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Strong execution helping customers navigate market disruption combined with continued cost discipline

Strategic capital allocation with returns to shareholders and investments in growth

 

  • Delivered fourth quarter 2023 net income of $48.8 million, or $2.01 per diluted share, with non-GAAP fourth quarter 2023 net income of $60.0 million, or $2.47 per diluted share.
  • Achieved full year 2023 net income from continuing operations of $142.2 million, or $5.77 per diluted share. On a non-GAAP basis, full year 2023 net income was $194.1 million, or $7.88 per diluted share.
  • Returned $103 million to shareholders in 2023 through share repurchases and quarterly cash dividends.
  • ArcBest’s board has increased the company’s share repurchase program authorization to $125 million.

 

FORT SMITH, Ark., February 6, 2024 — ArcBest® (Nasdaq: ARCB), a leader in supply chain logistics, today reported fourth quarter 2023 revenue from continuing operations of $1.1 billion, compared to $1.2 billion in the fourth quarter of 2022. ArcBest’s fourth quarter 2023 operating income from continuing operations was $64.3 million, compared to $50.2 million in the fourth quarter of 2022, and net income from continuing operations was $48.8 million, or $2.01 per diluted share, compared to $36.5 million, or $1.45 per diluted share, in the prior-year period.

Excluding certain items in both periods as identified in the attached reconciliation tables, fourth quarter 2023 non‑GAAP operating income from continuing operations was $81.7 million, compared to $81.6 million in the prior‑year period. On a non-GAAP basis, net income from continuing operations was $60.0 million, or $2.47 per diluted share, compared to $60.8 million, or $2.42 per diluted share, in fourth quarter 2022.

ArcBest’s full year 2023 revenue from continuing operations totaled $4.4 billion compared to $5.0 billion in 2022. Net income from continuing operations was $142.2 million, or $5.77 per diluted share, compared to net income of $294.6 million, or $11.55 per diluted share in 2022. On a non-GAAP basis, ArcBest’s 2023 net income from continuing operations was $194.1 million, or $7.88 per diluted share, compared to net income of $344.7 million, or $13.52 per diluted share, in 2022.

“2023 was a milestone year for ArcBest as we celebrated our 100-year anniversary and again delivered solid financial results,” said Judy R. McReynolds, ArcBest chairman, president and CEO. “In a year marked by market disruptions and increased supply chain complexity, our people remained a critical driver of our success, helping us achieve the second best revenue performance in ArcBest’s history. In addition to significant operational and efficiency improvements in 2023, we are proud to have renewed our five-year labor agreement and received recognition for our innovation efforts and commitment to service excellence. These achievements are supported by our customer-led growth strategy and focus on shareholder value. We look forward to accelerating growth, increasing efficiency and fostering innovation as we look ahead to even greater success in our next hundred years.

Fourth Quarter Results of Operations Comparisons

Asset-Based

Fourth Quarter 2023 Versus Fourth Quarter 2022

  • Revenue of $710.0 million compared to $711.4 million, a per-day decrease of 1.0 percent.
  • Total tonnage per day decrease of 7.2 percent, including a decrease of 6.5 percent in LTL-rated weight per shipment.
  • Total shipments per day decrease of 0.8 percent.
  • Total billed revenue per hundredweight increased 6.8 percent. Revenue per hundredweight on LTL-rated business, excluding fuel surcharge, increased by a percentage in the double digits.
  • Operating income of $87.5 million and an operating ratio of 87.7 percent. This compares to prior-period operating income of $75.1 million and an operating ratio of 89.4 percent, and to prior-period non-GAAP operating income of $81.4 million and a non-GAAP operating ratio of 88.6 percent.

 

Despite a softer freight environment leading to reduced customer demand, fourth quarter Asset-Based daily revenue was only slightly below the prior-year period. This resilience is largely attributable to ArcBest’s effective strategies in helping customers navigate market disruptions, coupled with a disciplined pricing approach. Total fourth quarter daily shipment and tonnage levels were below the prior-year period. A shift in freight mix toward core, LTL-rated shipments positively impacted Asset-Based freight-handling metrics and operating results. Cost control actions, initiated in the third quarter of 2023 also positively contributed to the fourth quarter Asset-Based operating ratio. On a non-GAAP basis, Asset-Based operating income was the second best for a fourth quarter in ArcBest’s history.

Fourth quarter Asset-Based billed revenue per hundredweight increased approximately seven percent over the prior year driven by growth in core, LTL-rated shipments and the resulting improvement in freight mix. On a sequential basis compared to the third quarter, total billed revenue per hundredweight increased by nearly four percent. Overall, LTL industry pricing remains rational, and the improving trends associated with recent market changes have continued.

Asset-Light

Fourth Quarter 2023 Versus Fourth Quarter 2022

  • Revenue of $413.4 million compared to $479.1 million, a per-day decrease of 14.4 percent.
  • Operating loss of $7.7 million compared to operating loss of $11.3 million. On a non‑GAAP basis, operating loss of $1.3 million compared to operating income of $9.4 million.
  • Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) of $0.7 million compared to $11.2 million, as detailed in the attached non-GAAP reconciliation tables.

 

Compared to the fourth quarter of 2022, Asset-Light results were impacted by lower revenue per shipment and reduced margins associated with changes in business mix and the soft rate environment. Total shipments grew by 12.4% per day, as the managed transportation solution helped customers navigate recent LTL market disruption. However, lower rates and margins for the truckload solution were the biggest drivers of reduced profitability. ArcBest continued its efforts to effectively match costs with business levels, which reduced fourth quarter Asset-Light operating expenses.

Full Year Results of Operations Comparisons

Asset-Based

Full Year 2023 Versus Full Year 2022

  • Revenue of $2.9 billion, compared to $3.0 billion, a per-day decrease of 4.5 percent.
  • Tonnage per day decrease of 2.4 percent.
  • Shipments per day increase of 3.2 percent.
  • Total billed revenue per hundredweight decrease of 2.2 percent, negatively impacted by lower fuel surcharges and freight mix changes throughout the year.
  • Operating income of $253.2 million compared to $381.1 million. On a non-GAAP basis, operating income of $275.5 million compared to $409.6 million.

 

Asset-Light

Full Year 2023 Versus Full Year 2022

  • Revenue of $1.7 billion compared to $2.1 billion, a per-day decrease of 21.3 percent.
  • Operating loss of $12.3 million, compared to operating income of $52.7 million. On a non-GAAP basis, operating income of $5.3 million compared to $83.8 million.
  • Adjusted EBITDA of $12.9 million compared to $91.4 million.

 

Capital Expenditures

In 2023, total net capital expenditures, including equipment financed, were $245 million. Net capital expenditures in 2023 included $144 million of revenue equipment, the majority of which was for ArcBest’s Asset-Based operation. Capital expenditures in 2023 were lower than expected because of delays in some real estate facility projects and supply chain-related manufacturing delays and cancellations, primarily on new city tractors and trailers. These delayed expenditures are expected to occur in 2024. Depreciation and amortization costs on property, plant and equipment were $133 million in 2023.

Share Repurchase and Quarterly Dividend Programs

ArcBest generated solid cash from operations in 2023 and returned $103 million to shareholders through its share repurchase and dividend programs. During 2023, ArcBest settled repurchases of 930,754 shares of common stock for an aggregate cost of $91.5 million and paid dividends to shareholders totaling $11.5 million.

In addition, on February 5, 2024, ArcBest’s board of directors increased the total amount available under the company’s common stock repurchase program to $125 million.

NOTE‡ - Asset-Light represents the reportable segment previously named ArcBest. Asset-Light financial results previously included the ArcBest segment and FleetNet, which was sold on February 28, 2023.

Conference Call

ArcBest will host a conference call with company executives to discuss the fourth quarter and full year 2023 results. The call will be today, Tuesday, February 6 at 9:30 a.m. EST (8:30 a.m. CST). Interested parties are invited to listen by calling (800) 599-2055 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 February 6, 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 March 15, 2024. To listen to the playback, dial (800) 770-2030. The conference call ID for the live conference call and the playback is 6835093. The conference call and playback can also be accessed through March 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 and twelve months ended December 31, 2023, 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 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.

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 

 

Year Ended 

 

 

 

December 31

 

December 31

 

 

    

2023

    

2022

    

2023

    

2022

 

 

 

(Unaudited)

 

 

 

($ thousands, except share and per share data)

 

REVENUES

 

$

 1,089,535

 

$

 1,163,495

 

$

 4,427,443

 

$

 5,029,008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 1,025,282

 

 

 1,113,286

 

 

 4,254,824

 

 

 4,634,482

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME

 

 

 64,253

 

 

 50,209

 

 

 172,619

 

 

 394,526

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (COSTS)

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and dividend income

 

 

 4,124

 

 

 2,294

 

 

 14,728

 

 

 3,873

 

Interest and other related financing costs

 

 

 (2,326)

 

 

 (2,168)

 

 

 (9,094)

 

 

 (7,726)

 

Other, net

 

 

 1,755

 

 

 1,452

 

 

 8,662

 

 

 (2,370)

 

 

 

 

 3,553

 

 

 1,578

 

 

 14,296

 

 

 (6,223)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

 

 

 67,806

 

 

 51,787

 

 

 186,915

 

 

 388,303

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME TAX PROVISION

 

 

 19,016

 

 

 15,302

 

 

 44,751

 

 

 93,655

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME FROM CONTINUING OPERATIONS

 

 

 48,790

 

 

 36,485

 

 

 142,164

 

 

 294,648

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX(1)

 

 

 —

 

 

 852

 

 

 53,269

 

 

 3,561

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME

 

$

 48,790

 

$

 37,337

 

$

 195,433

 

$

 298,209

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BASIC EARNINGS PER COMMON SHARE(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

 2.06

 

$

 1.49

 

$

 5.92

 

$

 11.98

 

Discontinued operations(1)

 

 

 —

 

 

 0.03

 

 

 2.22

 

 

 0.14

 

 

 

$

 2.06

 

$

 1.53

 

$

 8.14

 

$

 12.13

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DILUTED EARNINGS PER COMMON SHARE(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

 2.01

 

$

 1.45

 

$

 5.77

 

$

 11.55

 

Discontinued operations(1)

 

 

 —

 

 

 0.03

 

 

 2.16

 

 

 0.14

 

 

 

$

 2.01

 

$

 1.48

 

$

 7.93

 

$

 11.69

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AVERAGE COMMON SHARES OUTSTANDING

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 23,713,434

 

 

 24,420,325

 

 

 24,018,801

 

 

 24,585,205

 

Diluted

 

 

 24,248,584

 

 

 25,146,664

 

 

 24,634,617

 

 

 25,504,508

 


  1. Represents the discontinued operations of FleetNet America® (“FleetNet”), which sold on February 28, 2023. The year ended December 31, 2023 includes the net gain on sale of FleetNet of $52.3 million after-tax, or $2.18 basic earnings per share and $2.12 diluted earnings per share.
  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

 

 

 

 

 

 

 

 

 

 

December 31

 

December 31

 

 

    

2023

    

2022

 

 

 

(Unaudited)

 

 

 

($ thousands, except share data)

 

ASSETS

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

 262,226

 

$

 158,264

 

Short-term investments

 

 

 67,842

 

 

 167,662

 

Accounts receivable, less allowances (2023 - $10,346; 2022 - $13,892)

 

 

 430,122

 

 

 517,494

 

Other accounts receivable, less allowances (2023 - $731; 2022 - $713)

 

 

 52,124

 

 

 11,016

 

Prepaid expenses

 

 

 37,034

 

 

 39,484

 

Prepaid and refundable income taxes

 

 

 24,319

 

 

 19,239

 

Current assets of discontinued operations

 

 

 —

 

 

 64,736

 

Other

 

 

 11,116

 

 

 11,888

 

TOTAL CURRENT ASSETS

 

 

 884,783

 

 

 989,783

 

 

 

 

 

 

 

 

 

PROPERTY, PLANT AND EQUIPMENT

 

 

 

 

 

 

 

Land and structures

 

 

 460,068

 

 

 401,840

 

Revenue equipment

 

 

 1,126,055

 

 

 1,038,832

 

Service, office, and other equipment

 

 

 319,466

 

 

 298,234

 

Software

 

 

 173,354

 

 

 167,164

 

Leasehold improvements

 

 

 24,429

 

 

 23,466

 

 

 

 

 2,103,372

 

 

 1,929,536

 

Less allowances for depreciation and amortization

 

 

 1,188,548

 

 

 1,129,366

 

PROPERTY, PLANT AND EQUIPMENT, NET

 

 

 914,824

 

 

 800,170

 

 

 

 

 

 

 

 

 

GOODWILL

 

 

 304,753

 

 

 304,753

 

INTANGIBLE ASSETS, NET

 

 

 101,150

 

 

 113,733

 

OPERATING RIGHT-OF-USE ASSETS

 

 

 169,999

 

 

 166,515

 

DEFERRED INCOME TAXES

 

 

 8,140

 

 

 6,342

 

LONG-TERM ASSETS OF DISCONTINUED OPERATIONS

 

 

 —

 

 

 11,097

 

OTHER LONG-TERM ASSETS

 

 

 101,445

 

 

 101,893

 

TOTAL ASSETS

 

$

 2,485,094

 

$

 2,494,286

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

Accounts payable

 

$

 214,004

 

$

 269,854

 

Income taxes payable

 

 

 10,410

 

 

 16,017

 

Accrued expenses

 

 

 378,029

 

 

 338,457

 

Current portion of long-term debt

 

 

 66,948

 

 

 66,252

 

Current portion of operating lease liabilities

 

 

 32,172

 

 

 26,225

 

Current liabilities of discontinued operations

 

 

 —

 

 

 51,665

 

TOTAL CURRENT LIABILITIES

 

 

 701,563

 

 

 768,470

 

 

 

 

 

 

 

 

 

LONG-TERM DEBT, less current portion

 

 

 161,990

 

 

 198,371

 

OPERATING LEASE LIABILITIES, less current portion

 

 

 176,621

 

 

 147,828

 

POSTRETIREMENT LIABILITIES, less current portion

 

 

 13,319

 

 

 12,196

 

LONG-TERM LIABILITIES OF DISCONTINUED OPERATIONS

 

 

 —

 

 

 781

 

CONTINGENT CONSIDERATION

 

 

 92,900

 

 

 112,000

 

OTHER LONG-TERM LIABILITIES

 

 

 40,553

 

 

 42,745

 

DEFERRED INCOME TAXES

 

 

 55,785

 

 

 60,494

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

Common stock, $0.01 par value, authorized 70,000,000 shares;
issued 2023: 30,024,125 shares; 2022: 29,758,716 shares

 

 

 300

 

 

 298

 

Additional paid-in capital

 

 

 340,961

 

 

 339,582

 

Retained earnings

 

 

 1,272,584

 

 

 1,088,693

 

   Treasury stock, at cost, 2023: 6,460,137 shares; 2022: 5,529,383 shares

 

 

 (375,806)

 

 

 (284,275)

 

Accumulated other comprehensive income

 

 

 4,324

 

 

 7,103

 

TOTAL STOCKHOLDERS’ EQUITY

 

 

 1,242,363

 

 

 1,151,401

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

 2,485,094

 

$

 2,494,286

 

 

ARCBEST CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

 

 

 

 

 

 

 

 

Year Ended 

 

 

 

December 31

 

 

    

2023

    

2022

 

 

 

(Unaudited)

 

 

 

($ thousands)

 

 OPERATING ACTIVITIES

 

 

 

 

 

 

 

Net income

 

$

 195,433

 

$

 298,209

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

 

 132,900

 

 

 127,119

 

Amortization of intangibles

 

 

 12,829

 

 

 12,920

 

Share-based compensation expense

 

 

 11,438

 

 

 12,775

 

Provision for losses on accounts receivable

 

 

 3,630

 

 

 6,955

 

Change in deferred income taxes

 

 

 (5,566)

 

 

 (6,250)

 

(Gain) loss on sale of property and equipment

 

 

 4,797

 

 

 (11,650)

 

Gain on sale of subsidiary

 

 

 —

 

 

 (402)

 

Pre-tax gain on sale of discontinued operations

 

 

 (70,201)

 

 

 —

 

Lease impairment charges

 

 

 30,162

 

 

 —

 

Change in fair value of contingent consideration

 

 

 (19,100)

 

 

 18,300

 

Change in fair value of equity investment

 

 

 (3,739)

 

 

 —

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Receivables

 

 

 41,189

 

 

 (10,349)

 

Prepaid expenses

 

 

 2,563

 

 

 (410)

 

Other assets

 

 

 3,830

 

 

 (2,941)

 

Income taxes

 

 

 (10,657)

 

 

 (5,041)

 

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

 

 

 2,920

 

 

 2,952

 

Accounts payable, accrued expenses, and other liabilities

 

 

 (10,261)

 

 

 28,632

 

NET CASH PROVIDED BY OPERATING ACTIVITIES

 

 

 322,167

 

 

 470,819

 

 

 

 

 

 

 

 

 

 INVESTING ACTIVITIES

 

 

 

 

 

 

 

Purchases of property, plant and equipment, net of financings

 

 

 (219,021)

 

 

 (148,223)

 

Proceeds from sale of property and equipment

 

 

 7,763

 

 

 19,691

 

Proceeds from sale of discontinued operations

 

 

 100,949

 

 

 —

 

Business acquisition, net of cash acquired(1)

 

 

 —

 

 

 2,279

 

Proceeds from sale of subsidiary

 

 

 —

 

 

 475

 

Purchases of short-term investments

 

 

 (96,537)

 

 

 (182,352)

 

Proceeds from sale of short-term investments

 

 

 198,120

 

 

 64,329

 

Capitalization of internally developed software

 

 

 (12,977)

 

 

 (17,282)

 

NET CASH USED IN INVESTING ACTIVITIES

 

 

 (21,703)

 

 

 (261,083)

 

 

 

 

 

 

 

 

 

 FINANCING ACTIVITIES

 

 

 

 

 

 

 

Borrowings under credit facilities

 

 

 —

 

 

 58,000

 

Proceeds from notes payable

 

 

 —

 

 

 14,206

 

Payments on long-term debt

 

 

 (69,180)

 

 

 (115,540)

 

Net change in book overdrafts

 

 

 (14,101)

 

 

 8,356

 

Deferred financing costs

 

 

 55

 

 

 (952)

 

Payment of common stock dividends

 

 

 (11,542)

 

 

 (10,830)

 

Purchases of treasury stock

 

 

 (91,531)

 

 

 (65,002)

 

Payments for tax withheld on share-based compensation

 

 

 (10,311)

 

 

 (16,222)

 

NET CASH USED IN FINANCING ACTIVITIES

 

 

 (196,610)

 

 

 (127,984)

 

 

 

 

 

 

 

 

 

NET INCREASE IN CASH AND CASH EQUIVALENTS

 

 

 103,854

 

 

 81,752

 

Cash and cash equivalents of continuing operations at beginning of period

 

 

 158,264

 

 

 76,568

 

Cash and cash equivalents of discontinued operations at beginning of period

 

 

 108

 

 

 52

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

 

$

 262,226

 

$

 158,372

 

 

 

 

 

 

 

 

 

 NONCASH INVESTING ACTIVITIES

 

 

 

 

 

 

 

Equipment financed

 

$

 33,495

 

$

 82,425

 

Accruals for equipment received

 

$

 1,727

 

$

 4,337

 

Lease liabilities arising from obtaining right-of-use assets

 

$

 62,425

 

$

 87,294

 


  1. Represents cash received from escrow for post-closing adjustments related to the acquisition of MoLo.

 

Note: The statements of cash flows for the year ended December 31, 2023 and 2022 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 

 

 

Year Ended 

 

 

December 31

 

 

December 31

 

 

2023

    

 

2022

    

 

2023

    

 

2022

 

 

(Unaudited)

 

 

($ thousands, except percentages)

 

REVENUES FROM CONTINUING OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset-Based

$

 709,986

 

 

 

 

$

 711,436

 

 

 

 

$

 2,871,004

 

 

 

 

$

 3,010,900

 

 

 

Asset-Light(1)

 

 413,425

 

 

 

 

 

 479,098

 

 

 

 

 

 1,680,645

 

 

 

 

 

 2,139,272

 

 

 

Other and eliminations

 

 (33,876)

 

 

 

 

 

 (27,039)

 

 

 

 

 

 (124,206)

 

 

 

 

 

 (121,164)

 

 

 

Total consolidated revenues from continuing operations

$

 1,089,535

 

 

 

 

$

 1,163,495

 

 

 

 

$

 4,427,443

 

 

 

 

$

 5,029,008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES FROM CONTINUING OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset-Based

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries, wages, and benefits

$

 342,031

 

 48.2

%

 

$

 319,563

 

 44.9

%

 

$

 1,379,756

 

 48.1

%

 

$

 1,293,487

 

 43.0

%

Fuel, supplies, and expenses

 

 84,677

 

 11.9

 

 

 

 97,152

 

 13.7

 

 

 

 361,355

 

 12.6

 

 

 

 378,558

 

 12.6

 

Operating taxes and licenses

 

 13,980

 

 2.0

 

 

 

 13,885

 

 1.9

 

 

 

 55,918

 

 1.9

 

 

 

 52,290

 

 1.7

 

Insurance

 

 12,209

 

 1.7

 

 

 

 11,574

 

 1.6

 

 

 

 52,025

 

 1.8

 

 

 

 47,382

 

 1.6

 

Communications and utilities

 

 4,702

 

 0.6

 

 

 

 4,820

 

 0.7

 

 

 

 19,288

 

 0.7

 

 

 

 18,949

 

 0.6

 

Depreciation and amortization

 

 27,444

 

 3.9

 

 

 

 24,437

 

 3.4

 

 

 

 104,165

 

 3.6

 

 

 

 97,322

 

 3.2

 

Rents and purchased transportation

 

 66,676

 

 9.4

 

 

 

 92,918

 

 13.1

 

 

 

 338,575

 

 11.8

 

 

 

 441,167

 

 14.6

 

Shared services

 

 69,468

 

 9.8

 

 

 

 66,678

 

 9.4

 

 

 

 279,248

 

 9.7

 

 

 

 281,698

 

 9.4

 

(Gain) loss on sale of property and equipment and lease impairment charges(2)

 

 77

 

 —

 

 

 

 (2,493)

 

 (0.4)

 

 

 

 982

 

 —

 

 

 

 (12,468)

 

 (0.4)

 

Innovative technology costs(3)

 

 —

 

 —

 

 

 

 6,225

 

 0.9

 

 

 

 21,711

 

 0.8

 

 

 

 27,207

 

 0.9

 

Other

 

 1,189

 

 0.2

 

 

 

 1,546

 

 0.2

 

 

 

 4,829

 

 0.2

 

 

 

 4,175

 

 0.1

 

Total Asset-Based

 

 622,453

 

 87.7

%

 

 

 636,305

 

 89.4

%

 

 

 2,617,852

 

 91.2

%

 

 

 2,629,767

 

 87.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset-Light(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchased transportation

$

 357,122

 

 86.4

%

 

$

 402,561

 

 84.0

%

 

$

 1,435,604

 

 85.4

%

 

$

 1,784,668

 

 83.4

%

Supplies and expenses

 

 2,934

 

 0.7

 

 

 

 3,451

 

 0.7

 

 

 

 12,094

 

 0.7

 

 

 

 13,955

 

 0.6

 

Depreciation and amortization(4)

 

 5,120

 

 1.2

 

 

 

 5,010

 

 1.0

 

 

 

 20,370

 

 1.2

 

 

 

 20,730

 

 1.0

 

Shared services

 

 46,471

 

 11.3

 

 

 

 53,579

 

 11.2

 

 

 

 194,296

 

 11.6

 

 

 

 218,133

 

 10.2

 

Contingent consideration(5)

 

 (6,300)

 

 (1.5)

 

 

 

 17,490

 

 3.7

 

 

 

 (19,100)

 

 (1.1)

 

 

 

 18,300

 

 0.9

 

Lease impairment charges(6)

 

 —

 

 —

 

 

 

 —

 

 —

 

 

 

 14,407

 

 0.9

 

 

 

 —

 

 —

 

Legal settlement(7)

 

 9,500

 

 2.3

 

 

 

 —

 

 —

 

 

 

 9,500

 

 0.6

 

 

 

 —

 

 —

 

Gain on sale of subsidiary(8)

 

 —

 

 —

 

 

 

 —

 

 —

 

 

 

 —

 

 —

 

 

 

 (402)

 

 —

 

Other

 

 6,234

 

 1.5

 

 

 

 8,261

 

 1.7

 

 

 

 25,745

 

 1.4

 

 

 

 31,163

 

 1.4

 

Total Asset-Light

 

 421,081

 

 101.9

%

 

 

 490,352

 

 102.3

%

 

 

 1,692,916

 

 100.7

%

 

 

 2,086,547

 

 97.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other and eliminations(9)

 

 (18,252)

 

 

 

 

 

 (13,371)

 

 

 

 

 

 (55,944)

 

 

 

 

 

 (81,832)

 

 

 

Total consolidated operating expenses from continuing operations

$

 1,025,282

 

 94.1

%

 

$

 1,113,286

 

 95.7

%

 

$

 4,254,824

 

 96.1

%

 

$

 4,634,482

 

 92.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME (LOSS) FROM CONTINUING OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset-Based

$

 87,533

 

 

 

 

$

 75,131

 

 

 

 

$

 253,152

 

 

 

 

$

 381,133

 

 

 

Asset-Light(1)

 

 (7,656)

 

 

 

 

 

 (11,254)

 

 

 

 

 

 (12,271)

 

 

 

 

 

 52,725

 

 

 

Other and eliminations(9)

 

 (15,624)

 

 

 

 

 

 (13,668)

 

 

 

 

 

 (68,262)

 

 

 

 

 

 (39,332)

 

 

 

Total consolidated operating income from continuing operations

$

 64,253

 

 

 

 

$

 50,209

 

 

 

 

$

 172,619

 

 

 

 

$

 394,526

 

 

 


  1. Asset-Light represents the reportable segment previously named ArcBest. Asset-Light financial results previously included the ArcBest segment and FleetNet, which sold on February 28, 2023.
  2. The year ended December 31, 2023 includes $0.7 million of noncash lease-related impairment charges for a service center. The year ended December 31, 2022 includes a $4.3 million noncash gain on a like-kind property exchange of a service center.
  3. 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.
  4. Depreciation and amortization includes amortization of intangibles associated with acquired businesses.
  5. 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 income (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.
  6. Represents noncash lease-related impairment charges for certain office spaces that were made available for sublease.
  7. Represents estimated settlement expenses related to the classification of certain Asset-Light employees under the Fair Labor Standards Act.
  8. Gain relates to the contingent amount recognized in second quarter 2022 when funds from the May 2021 sale of the labor services portion of the Asset-Light segment’s moving business were released from escrow.
  9. “Other and eliminations” includes $15.1 million of noncash lease-related impairment charges for a freight handling pilot facility, 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, 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, operating cash flow, net income or earnings per share, as determined under GAAP.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended 

 

Year Ended 

 

 

December 31

 

December 31

 

 

    

2023

 

2022

    

2023

 

2022

 

ArcBest Corporation - Consolidated

 

(Unaudited)

 

 

 

($ thousands, except per share data)

 

Operating Income from Continuing Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

Amounts on GAAP basis

 

$

 64,253

 

$

 50,209

 

$

 172,619

 

$

 394,526

 

Innovative technology costs, pre-tax(1)

 

 

 11,005

 

 

 10,713

 

 

 52,363

 

 

 40,796

 

Purchase accounting amortization, pre-tax(2)

 

 

 3,192

 

 

 3,213

 

 

 12,768

 

 

 12,853

 

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

 

 

 (6,300)

 

 

 17,490

 

 

 (19,100)

 

 

 18,300

 

Lease impairment charges, pre-tax(4)

 

 

 —

 

 

 —

 

 

 30,162

 

 

 —

 

Legal settlement, pre-tax(5)

 

 

 9,500

 

 

 —

 

 

 9,500

 

 

 —

 

Gain on sale of subsidiary, pre-tax(6)

 

 

 —

 

 

 —

 

 

 —

 

 

 (402)

 

Nonunion vacation policy enhancement, pre-tax(7)

 

 

 —

 

 

 —

 

 

 —

 

 

 1,990

 

Non-GAAP amounts

 

$

 81,650

 

$

 81,625

 

$

 258,312

 

$

 468,063

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income from Continuing Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

Amounts on GAAP basis

 

$

 48,790

 

$

 36,485

 

$

 142,164

 

$

 294,648

 

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

 

 

 8,364

 

 

 8,136

 

 

 39,680

 

 

 30,822

 

Purchase accounting amortization, after-tax(2)

 

 

 2,399

 

 

 2,396

 

 

 9,593

 

 

 9,585

 

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

 

 

 (4,733)

 

 

 13,043

 

 

 (14,350)

 

 

 13,647

 

Lease impairment charges, after-tax(4)

 

 

 —

 

 

 —

 

 

 22,571

 

 

 —

 

Legal settlement, after-tax(5)

 

 

 7,137

 

 

 —

 

 

 7,137

 

 

 —

 

Gain on sale of subsidiary, after-tax(6)

 

 

 —

 

 

 —

 

 

 —

 

 

 (317)

 

Nonunion vacation policy enhancement, after-tax(7)

 

 

 —

 

 

 —

 

 

 —

 

 

 1,479

 

Change in fair value of equity investment, after-tax(8)

 

 

 —

 

 

 —

 

 

 (2,786)

 

 

 —

 

Life insurance proceeds and changes in cash surrender value

 

 

 (1,787)

 

 

 (942)

 

 

 (4,581)

 

 

 2,737

 

Tax expense (benefit) from vested RSUs(9)

 

 

 (187)

 

 

 223

 

 

 (5,290)

 

 

 (8,087)

 

Tax credits(10)

 

 

 —

 

 

 1,424

 

 

 —

 

 

 234

 

Non-GAAP amounts

 

$

 59,983

 

$

 60,765

 

$