ArcBest Announces Second Quarter 2023 Results

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Well-positioned to serve customers in a rapidly changing market

Increased focus on efficient and effective operations

  • Second quarter 2023 net income of $40.4 million, or $1.64 per diluted share.
  • Second quarter 2023 net income from continuing operations of $39.6 million, or $1.60 per diluted share. On a non-GAAP basis, second quarter 2023 net income from continuing operations of $38.0 million, or $1.54 per diluted common share.


FORT SMITH, Ark., July 28, 2023 — ArcBest® (Nasdaq: ARCB), a leader in supply chain logistics, today reported second quarter 2023 revenue from continuing operations of $1.1 billion, compared to $1.3 billion in the second quarter of 2022. Second quarter 2023 net income was $40.4 million, or $1.64 per diluted share, compared to $102.5 million, or $4.00 per diluted share, in the second quarter of 2022.

ArcBest’s second quarter 2023 operating income from continuing operations was $42.1 million, compared to $136.0 million in the second quarter of 2022, and net income from continuing operations was $39.6 million, or $1.60 per diluted share, compared to $101.5 million, or $3.97 per diluted share, in the prior-year period.

Excluding certain items in both periods as identified in the attached reconciliation tables, second quarter 2023 non‑GAAP operating income from continuing operations was $50.1 million, compared to $149.2 million in the prior‑year period. On a non-GAAP basis, net income from continuing operations was $38.0 million, or $1.54 per diluted share, compared to $109.1 million, or $4.26 per diluted share, in second quarter 2022.

“ArcBest is uniquely positioned to meet customers’ needs, especially in a market that is rapidly changing,” said Judy R. McReynolds, ArcBest chairman, president and CEO. “We serve as trusted advisors – ready to keep customer supply chains moving with a full suite of logistics solutions, including a nationwide network of asset-based LTL capacity.”

ArcBest recognizes the importance of operating in the most efficient and effective way possible, which enables growth and creates value. In its Asset-Based segment, ArcBest has seen productivity and service improvements from deploying highly-experienced teams to train managers and employees on operational best practices in certain locations. Based on this success, ArcBest is redeploying resources to expand these training efforts. ArcBest also sees the opportunity to improve Asset-Based profitability by prioritizing network capacity to serve core customers that value long-term partnerships. In its Asset-Light segment, ArcBest is focused on aligning costs with business levels and achieved the $3 million of previously announced cost reductions for second quarter 2023.

Second Quarter Results of Operations Comparisons

Asset-Based

Second Quarter 2023 Versus Second Quarter 2022

  • Revenue of $722.0 million compared to $802.6 million, a per-day decrease of 10.0 percent.
  • Total tonnage per day increased 0.9 percent; LTL-rated weight per shipment decreased 1.5 percent.
  • Total shipments per day increased 4.2 percent.
  • Total billed revenue per hundredweight decreased 11.0 percent. Revenue per hundredweight on LTL-rated business, excluding fuel surcharge, decreased by a percentage in the mid-single digits.
  • Operating income of $43.3 million and an operating ratio of 94.0 percent compared to operating income of $116.7 million and an operating ratio of 85.5 percent. On a non-GAAP basis, operating income of $51.7 million and an operating ratio of 92.8 percent compared to operating income of $124.6 million and an operating ratio of 84.5 percent.

The decrease in second quarter total revenue for ArcBest’s Asset-Based business compared to the prior-year period was primarily due to a general slowing of core customer order frequency, smaller average shipment quantities related to a weaker economy and less fuel surcharge revenue based on lower diesel fuel prices. ArcBest maintained more consistent business and labor levels during the second quarter by using its tech-enabled, dynamic LTL-rated pricing program to secure incrementally profitable shipments to more effectively utilize available ABF Freight network capacity. As a result, LTL-rated shipments and tonnage in ArcBest’s Asset-Based business increased compared to the prior-year period. On a sequential basis compared to the first quarter, LTL-rated tonnage increased while shipments were flat, which is weaker than normal, seasonal expectations.

The pricing environment continues to be rational as pricing on core LTL-rated business, excluding fuel surcharges, increased by a percentage in the high-single digits in second quarter 2023. On a sequential basis, compared to the first quarter, revenue per hundredweight, excluding fuel surcharge, on core LTL-rated business increased by a percentage in the low-single digits. The decrease in the second quarter 2023 revenue per hundredweight pricing measure was driven by the change in mix associated with a decrease in core LTL-rated shipments and an increase in dynamic, market-priced LTL-rated shipments as well as an increase in heavier-weighted truckload-rated shipments compared to the prior-year period. The year-over-year total revenue per hundredweight decrease in second quarter 2023 followed a 17.7 percent increase in second quarter 2022 versus second quarter 2021. In addition, lower diesel fuel prices, and the resulting decrease in fuel surcharge revenue, meaningfully impacted year-over-year and sequential comparisons of revenue per hundredweight statistics.

Asset-Light

Second Quarter 2023 Versus Second Quarter 2022

  • Revenue of $409.8 million compared to $549.7 million, a per-day decrease of 25.4 percent.
  • Operating income of $13.2 million compared to operating income of $27.5 million. On a non‑GAAP basis, operating income of $6.4 million compared to $30.3 million.
  • Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) of $8.3 million compared to $32.5 million, as detailed in the attached non-GAAP reconciliation tables.

Current year second quarter revenue results were impacted by lower average revenue per shipment as a result of a softer market environment. Despite the increase in daily shipments resulting from growth in the truckload business, lower shipment rates and related shipment margins drove reduced second quarter profitability. During last year’s second quarter, as purchased transportation buy rates steadily decreased, Asset-Light benefited from higher market rates on committed business, which resulted in record profitability.

During the second quarter, employee-related and outside services cost reductions were implemented to better align resources with business levels. As a result, excluding purchased transportation and the impact of the change in fair value of contingent consideration, operating expenses were managed lower by $3 million, or 5 percent, compared to first quarter 2023.

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.

Share Repurchase Program

Year-to-date through the end of the second quarter, ArcBest has returned $41.2 million of capital to shareholders through common stock share repurchases and $83.8 million remains available under the current repurchase authorization for future common stock purchases.

Conference Call

ArcBest will host a conference call with company executives to discuss the second quarter 2023 results. The call will be today, Friday, July 28 at 9:30 a.m. EDT (8:30 a.m. CDT). Interested parties are invited to listen by calling (800) 757-9216 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 July 28, 2023, 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 September 15, 2023. To listen to the playback, dial (800) 633-8284 or (402) 977-9140 (for international callers). The conference call ID for the playback is 22027510. The conference call and playback can also be accessed, through September 15, 2023, 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 over 15,000 employees across nearly 250 campuses and service centers, the company is a logistics powerhouse, fueled by the simple notion of finding a way to get the job done. Through innovative thinking, agility and trust, ArcBest leverages its full suite of shipping and logistics solutions to meet customers’ critical needs, each and every day. 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 June 30, 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, including the COVID-19 pandemic, 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 the Vaux freight handling pilot test program at ABF Freight and our customer pilot offering of Vaux, including human-centered remote operation software; the loss or reduction of business from large customers; 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, including the acquisition of MoLo Solutions, LLC, and the inability to realize the anticipated benefits of the acquisition within the expected time period or at all; 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 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 and insurance premium costs; potential impairment of 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 rising 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 

 

Six Months Ended 

 

 

 

June 30

 

June 30

 

 

    

2023

    

2022

    

2023

    

2022

 

 

 

(Unaudited)

 

 

 

($ thousands, except share and per share data)

 

REVENUES

 

$

 1,103,464

 

$

 1,321,692

 

$

 2,209,558

 

$

 2,589,783

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 1,061,348

 

 

 1,185,654

 

 

 2,146,283

 

 

 2,360,802

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME

 

 

 42,116

 

 

 136,038

 

 

 63,275

 

 

 228,981

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (COSTS)

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and dividend income

 

 

 3,725

 

 

 353

 

 

 6,658

 

 

 452

 

Interest and other related financing costs

 

 

 (2,205)

 

 

 (1,863)

 

 

 (4,532)

 

 

 (3,803)

 

Other, net

 

 

 5,038

 

 

 (2,807)

 

 

 6,818

 

 

 (3,633)

 

 

 

 

 6,558

 

 

 (4,317)

 

 

 8,944

 

 

 (6,984)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

 

 

 48,674

 

 

 131,721

 

 

 72,219

 

 

 221,997

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME TAX PROVISION

 

 

 9,074

 

 

 30,179

 

 

 13,772

 

 

 52,447

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME FROM CONTINUING OPERATIONS

 

 

 39,600

 

 

 101,542

 

 

 58,447

 

 

 169,550

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX(1)

 

 

 843

 

 

 919

 

 

 53,279

 

 

 2,480

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME

 

$

 40,443

 

$

 102,461

 

$

 111,726

 

$

 172,030

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BASIC EARNINGS PER COMMON SHARE(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

 1.65

 

$

 4.13

 

$

 2.42

 

$

 6.88

 

Discontinued operations(1)

 

 

 0.04

 

 

 0.04

 

 

 2.20

 

 

 0.10

 

 

 

$

 1.68

 

$

 4.16

 

$

 4.62

 

$

 6.98

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DILUTED EARNINGS PER COMMON SHARE(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

 1.60

 

$

 3.97

 

$

 2.35

 

$

 6.58

 

Discontinued operations(1)

 

 

 0.03

 

 

 0.04

 

 

 2.14

 

 

 0.10

 

 

 

$

 1.64

 

$

 4.00

 

$

 4.49

 

$

 6.68

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AVERAGE COMMON SHARES OUTSTANDING

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 24,064,882

 

 

 24,607,362

 

 

 24,175,893

 

 

 24,658,739

 

Diluted

 

 

 24,672,948

 

 

 25,596,031

 

 

 24,864,691

 

 

 25,756,314

 


  1. Discontinued operations represents the FleetNet segment, which sold on February 28, 2023. The six months ended June 30, 2023 includes net gain on sale of FleetNet of $52.3 million after-tax, or $2.16 basic earnings per share and $2.10 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.
 
  1.  

ARCBEST CORPORATION

CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

 

 

 

 

June 30

 

December 31

 

 

    

2023

    

2022

 

 

 

(Unaudited)

 

 

 

($ thousands, except share data)

 

ASSETS

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

 187,286

 

$

 158,264

 

Short-term investments

 

 

 153,116

 

 

 167,662

 

Accounts receivable, less allowances (2023 - $11,318; 2022 - $13,892)

 

 

 429,570

 

 

 517,494

 

Other accounts receivable, less allowances (2023 - $721; 2022 - $713)

 

 

 11,160

 

 

 11,016

 

Prepaid expenses

 

 

 33,244

 

 

 39,484

 

Prepaid and refundable income taxes

 

 

 39,230

 

 

 19,239

 

Current assets of discontinued operations

 

 

 —

 

 

 64,736

 

Other

 

 

 11,584

 

 

 11,888

 

TOTAL CURRENT ASSETS

 

 

 865,190

 

 

 989,783

 

 

 

 

 

 

 

 

 

PROPERTY, PLANT AND EQUIPMENT

 

 

 

 

 

 

 

Land and structures

 

 

 421,821

 

 

 401,840

 

Revenue equipment

 

 

 1,062,854

 

 

 1,038,832

 

Service, office, and other equipment

 

 

 309,952

 

 

 298,234

 

Software

 

 

 167,292

 

 

 167,164

 

Leasehold improvements

 

 

 26,240

 

 

 23,466

 

 

 

 

 1,988,159

 

 

 1,929,536

 

Less allowances for depreciation and amortization

 

 

 1,159,626

 

 

 1,129,366

 

 

 

 

 828,533

 

 

 800,170

 

 

 

 

 

 

 

 

 

GOODWILL

 

 

 304,753

 

 

 304,753

 

INTANGIBLE ASSETS, NET

 

 

 107,467

 

 

 113,733

 

OPERATING RIGHT-OF-USE ASSETS

 

 

 194,597

 

 

 166,515

 

DEFERRED INCOME TAXES

 

 

 6,918

 

 

 6,342

 

LONG-TERM ASSETS OF DISCONTINUED OPERATIONS

 

 

 —

 

 

 11,097

 

OTHER LONG-TERM ASSETS

 

 

 106,644

 

 

 101,893

 

TOTAL ASSETS

 

$

 2,414,102

 

$

 2,494,286

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

Accounts payable

 

$

 245,998

 

$

 269,854

 

Income taxes payable

 

 

 —

 

 

 16,017

 

Accrued expenses

 

 

 299,339

 

 

 338,457

 

Current portion of long-term debt

 

 

 64,882

 

 

 66,252

 

Current portion of operating lease liabilities

 

 

 31,047

 

 

 26,225

 

Current liabilities of discontinued operations

 

 

 —

 

 

 51,665

 

TOTAL CURRENT LIABILITIES

 

 

 641,266

 

 

 768,470

 

 

 

 

 

 

 

 

 

LONG-TERM DEBT, less current portion

 

 

 168,105

 

 

 198,371

 

OPERATING LEASE LIABILITIES, less current portion

 

 

 174,145

 

 

 147,828

 

POSTRETIREMENT LIABILITIES, less current portion

 

 

 12,169

 

 

 12,196

 

LONG-TERM LIABILITIES OF DISCONTINUED OPERATIONS

 

 

 —

 

 

 781

 

CONTINGENT CONSIDERATION

 

 

 117,040

 

 

 112,000

 

OTHER LONG-TERM LIABILITIES

 

 

 37,314

 

 

 42,745

 

DEFERRED INCOME TAXES

 

 

 52,702

 

 

 60,494

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

Common stock, $0.01 par value, authorized 70,000,000 shares;
issued 2023: 30,007,634 shares; 2022: 29,758,716 shares

 

 

 300

 

 

 298

 

Additional paid-in capital

 

 

 335,397

 

 

 339,582

 

Retained earnings

 

 

 1,194,610

 

 

 1,088,693

 

   Treasury stock, at cost, 2023: 5,982,679 shares; 2022: 5,529,383 shares

 

 

 (325,515)

 

 

 (284,275)

 

Accumulated other comprehensive income

 

 

 6,569

 

 

 7,103

 

TOTAL STOCKHOLDERS’ EQUITY

 

 

 1,211,361

 

 

 1,151,401

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

 2,414,102

 

$

 2,494,286

 

 

 

 

 

ARCBEST CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended 

 

 

 

June 30

 

 

    

2023

    

2022

 

 

 

(Unaudited)

 

 

 

($ thousands)

 

 OPERATING ACTIVITIES

 

 

 

 

 

 

 

Net income

 

$

 111,726

 

$

 172,030

 

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

 

 

 

 

 

 

 

Depreciation and amortization

 

 

 64,804

 

 

 63,690

 

Amortization of intangibles

 

 

 6,398

 

 

 6,463

 

Share-based compensation expense

 

 

 5,585

 

 

 6,641

 

Provision for losses on accounts receivable

 

 

 2,257

 

 

 3,583

 

Change in deferred income taxes

 

 

 (8,228)

 

 

 (6,371)

 

(Gain) loss on sale of property and equipment

 

 

 1,188

 

 

 (4,073)

 

Gain on sale of subsidiary

 

 

 —

 

 

 (402)

 

Pre-tax gain on sale of discontinued operations

 

 

 (70,215)

 

 

 —

 

Change in fair value of contingent consideration

 

 

 5,040

 

 

 810

 

Change in fair value of equity investment

 

 

 (3,739)

 

 

 —

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Receivables

 

 

 83,542

 

 

 (87,092)

 

Prepaid expenses

 

 

 6,353

 

 

 7,477

 

Other assets

 

 

 759

 

 

 72

 

Income taxes

 

 

 (35,968)

 

 

 4,211

 

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

 

 

 3,059

 

 

 114

 

Accounts payable, accrued expenses, and other liabilities

 

 

 (68,804)

 

 

 17,470

 

NET CASH PROVIDED BY OPERATING ACTIVITIES

 

 

 103,757

 

 

 184,623

 

 

 

 

 

 

 

 

 

 INVESTING ACTIVITIES

 

 

 

 

 

 

 

Purchases of property, plant and equipment, net of financings

 

 

 (83,171)

 

 

 (49,682)

 

Proceeds from sale of property and equipment

 

 

 2,853

 

 

 9,115

 

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

 

 

 (46,858)

 

 

 (64,330)

 

Proceeds from sale of short-term investments

 

 

 63,693

 

 

 35,840

 

Capitalization of internally developed software

 

 

 (7,010)

 

 

 (8,541)

 

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

 

 

 30,456

 

 

 (74,844)

 

 

 

 

 

 

 

 

 

 FINANCING ACTIVITIES

 

 

 

 

 

 

 

Borrowings under credit facilities

 

 

 —

 

 

 58,000

 

Proceeds from notes payable

 

 

 —

 

 

 7,280

 

Payments on long-term debt

 

 

 (35,114)

 

 

 (84,905)

 

Net change in book overdrafts

 

 

 (13,171)

 

 

 6,085

 

Deferred financing costs

 

 

 57

 

 

 —

 

Payment of common stock dividends

 

 

 (5,809)

 

 

 (4,927)

 

Purchases of treasury stock

 

 

 (41,240)

 

 

 (31,237)

 

Payments for tax withheld on share-based compensation

 

 

 (10,022)

 

 

 (9,637)

 

NET CASH USED IN FINANCING ACTIVITIES

 

 

 (105,299)

 

 

 (59,341)

 

 

 

 

 

 

 

 

 

NET INCREASE IN CASH AND CASH EQUIVALENTS

 

 

 28,914

 

 

 50,438

 

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

 

$

 187,286

 

$

 127,058

 

 

 

 

 

 

 

 

 

 NONCASH INVESTING ACTIVITIES

 

 

 

 

 

 

 

Equipment financed

 

$

 3,478

 

$

 19,498

 

Accruals for equipment received

 

$

 10,106

 

$

 7,574

 

Lease liabilities arising from obtaining right-of-use assets

 

$

 43,366

 

$

 30,210

 


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

 

Note: The statements of cash flows for the six months ended June 30, 2023 and 2022, includes cash flows from continuing operations and cash flows from the discontinued operations of FleetNet America®, which was sold on February 28, 2023.
ARCBEST CORPORATION

FINANCIAL STATEMENT OPERATING SEGMENT DATA AND OPERATING RATIOS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended 

 

 

Six Months Ended 

 

 

June 30

 

 

June 30

 

 

2023

    

 

2022

    

 

2023

    

 

2022

 

 

(Unaudited)

 

 

($ thousands, except percentages)

 

REVENUES FROM CONTINUING OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset-Based

$

 722,015

 

 

 

 

$

 802,622

 

 

 

 

$

 1,419,832

 

 

 

 

$

 1,507,933

 

 

 

Asset-Light(1)

 

 409,816

 

 

 

 

 

 549,655

 

 

 

 

 

 847,908

 

 

 

 

 

 1,144,939

 

 

 

Other and eliminations

 

 (28,367)

 

 

 

 

 

 (30,585)

 

 

 

 

 

 (58,182)

 

 

 

 

 

 (63,089)

 

 

 

Total consolidated revenues from continuing operations

$

 1,103,464

 

 

 

 

$

 1,321,692

 

 

 

 

$

 2,209,558

 

 

 

 

$

 2,589,783

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES FROM CONTINUING OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset-Based

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries, wages, and benefits

$

 344,538

 

 47.7

%

 

$

 328,068

 

 40.9

%

 

$

 680,143

 

 47.9

%

 

$

 641,565

 

 42.5

%

Fuel, supplies, and expenses

 

 90,897

 

 12.6

 

 

 

 99,296

 

 12.4

 

 

 

 185,185

 

 13.1

 

 

 

 184,127

 

 12.2

 

Operating taxes and licenses

 

 14,094

 

 2.0

 

 

 

 12,823

 

 1.6

 

 

 

 28,073

 

 2.0

 

 

 

 25,316

 

 1.7

 

Insurance

 

 12,889

 

 1.8

 

 

 

 12,197

 

 1.5

 

 

 

 26,162

 

 1.8

 

 

 

 22,628

 

 1.5

 

Communications and utilities

 

 4,553

 

 0.6

 

 

 

 4,648

 

 0.6

 

 

 

 9,857

 

 0.7

 

 

 

 9,335

 

 0.6

 

Depreciation and amortization

 

 25,273

 

 3.5

 

 

 

 24,463

 

 3.1

 

 

 

 50,184

 

 3.5

 

 

 

 48,768

 

 3.2

 

Rents and purchased transportation

 

 101,922

 

 14.1

 

 

 

 121,550

 

 15.1

 

 

 

 192,666

 

 13.6

 

 

 

 224,535

 

 14.9

 

Shared services

 

 74,468

 

 10.3

 

 

 

 75,584

 

 9.4

 

 

 

 139,081

 

 9.8

 

 

 

 142,734

 

 9.6

 

(Gain) loss on sale of property and equipment

 

 416

 

 0.1

 

 

 

 (1,370)

 

 (0.2)

 

 

 

 365

 

 —

 

 

 

 (4,065)

 

 (0.3)

 

Innovative technology costs(2)

 

 8,343

 

 1.1

 

 

 

 7,954

 

 1.0

 

 

 

 14,411

 

 1.0

 

 

 

 14,914

 

 1.0

 

Other

 

 1,297

 

 0.2

 

 

 

 753

 

 0.1

 

 

 

 2,909

 

 0.2

 

 

 

 1,386

 

 0.1

 

Total Asset-Based

 

 678,690

 

 94.0

%

 

 

 685,966

 

 85.5

%

 

 

 1,329,036

 

 93.6

%

 

 

 1,311,243

 

 87.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset-Light(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchased transportation

$

 343,102

 

 83.7

%

 

$

 448,160

 

 81.5

%

 

$

 713,265

 

 84.1

%

 

$

 956,540

 

 83.5

%

Supplies and expenses

 

 3,348

 

 0.8

 

 

 

 4,263

 

 0.8

 

 

 

 7,420

 

 0.9

 

 

 

 7,529

 

 0.7

 

Depreciation and amortization(3)

 

 5,085

 

 1.2

 

 

 

 5,468

 

 1.0

 

 

 

 10,153

 

 1.2

 

 

 

 10,648

 

 0.9

 

Shared services

 

 48,985

 

 12.0

 

 

 

 57,986

 

 10.6

 

 

 

 100,414

 

 11.8

 

 

 

 108,183

 

 9.5

 

Contingent consideration(4)

 

 (10,000)

 

 (2.4)

 

 

 

 —

 

 —

 

 

 

 5,040

 

 0.6

 

 

 

 810

 

 0.1

 

Gain on sale of subsidiary(5)

 

 —

 

 —

 

 

 

 (402)

 

 (0.1)

 

 

 

 —

 

 —

 

 

 

 (402)

 

 —

 

Other

 

 6,116

 

 1.5

 

 

 

 6,701

 

 1.2

 

 

 

 12,527

 

 1.5

 

 

 

 13,036

 

 1.1

 

Total Asset-Light

 

 396,636

 

 96.8

%

 

 

 522,176

 

 95.0

%

 

 

 848,819

 

 100.1

%

 

 

 1,096,344

 

 95.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other and eliminations(6)

 

 (13,978)

 

 

 

 

 

 (22,488)

 

 

 

 

 

 (31,572)

 

 

 

 

 

 (46,785)

 

 

 

Total consolidated operating expenses from continuing operations

$

 1,061,348

 

 96.2

%

 

$

 1,185,654

 

 89.7

%

 

$

 2,146,283

 

 97.1

%

 

$

 2,360,802

 

 91.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME FROM CONTINUING OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset-Based

$

 43,325

 

 

 

 

$

 116,656

 

 

 

 

$

 90,796

 

 

 

 

$

 196,690

 

 

 

Asset-Light(1)

 

 13,180

 

 

 

 

 

 27,479

 

 

 

 

 

 (911)

 

 

 

 

 

 48,595

 

 

 

Other and eliminations(6)

 

 (14,389)

 

 

 

 

 

 (8,097)

 

 

 

 

 

 (26,610)

 

 

 

 

 

 (16,304)

 

 

 

Total consolidated operating income from continuing operations

$

 42,116

 

 

 

 

$

 136,038

 

 

 

 

$

 63,275

 

 

 

 

$

 228,981

 

 

 


  1. 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.
  2. Represents costs associated with the Vaux freight handling pilot test program at ABF Freight.
  3. Depreciation and amortization includes amortization of intangibles associated with acquired businesses.
  4. Represents the 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. 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.
  5. Gain relates to the contingent amount recognized in second quarter 2022 when the funds from the May 2021 sale of the labor services portion of the Asset-Light segment’s moving business were released from escrow.
  6. “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, 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 was 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 

 

Six Months Ended 

 

 

June 30

 

June 30

 

 

    

2023

 

2022

    

2023

 

2022

 

ArcBest Corporation - Consolidated

 

(Unaudited)

 

 

 

($ thousands, except per share data)

 

Operating Income from Continuing Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

Amounts on GAAP basis

 

$

 42,116

 

$

 136,038

 

$

 63,275

 

$

 228,981

 

Innovative technology costs, pre-tax(1)

 

 

 14,821

 

 

 10,341

 

 

 27,299

 

 

 20,027

 

Purchase accounting amortization, pre-tax(2)

 

 

 3,192

 

 

 3,214

 

 

 6,384

 

 

 6,427

 

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

 

 

 (10,000)

 

 

 —

 

 

 5,040

 

 

 810

 

Gain on sale of subsidiary, pre-tax(4)

 

 

 —

 

 

 (402)

 

 

 —

 

 

 (402)

 

Non-GAAP amounts

 

$

 50,129

 

$

 149,191

 

$

 101,998

 

$

 255,843

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income from Continuing Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

Amounts on GAAP basis

 

$

 39,600

 

$

 101,542

 

$

 58,447

 

$

 169,550

 

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

 

 

 11,206

 

 

 7,789

 

 

 20,686

 

 

 15,078

 

Purchase accounting amortization, after-tax(2)

 

 

 2,398

 

 

 2,397

 

 

 4,796

 

 

 4,793

 

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

 

 

 (7,512)

 

 

 —

 

 

 3,787

 

 

 604

 

Gain on sale of subsidiary, after-tax(4)

 

 

 —

 

 

 (317)

 

 

 —

 

 

 (317)

 

Change in fair value of equity investment, after-tax(5)

 

 

 (2,786)

 

 

 —

 

 

 (2,786)

 

 

 —

 

Life insurance proceeds and changes in cash surrender value

 

 

 (1,086)

 

 

 2,710

 

 

 (2,582)

 

 

 3,503

 

Tax benefit from vested RSUs(6)

 

 

 (3,864)

 

 

 (5,059)

 

 

 (4,915)

 

 

 (5,929)

 

Non-GAAP amounts

 

$

 37,956

 

$

 109,062

 

$

 77,433

 

$

 187,282

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings Per Share from Continuing Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

Amounts on GAAP basis

 

$

 1.60

 

$

 3.97

 

$

 2.35

 

$

 6.58

 

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

 

 

 0.45

 

 

 0.30

 

 

 0.83

 

 

 0.59

 

Purchase accounting amortization, after-tax(2)

 

 

 0.10

 

 

 0.09

 

 

 0.19

 

 

 0.19

 

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

 

 

 (0.30)

 

 

 —

 

 

 0.15

 

 

 0.02

 

Gain on sale of subsidiary, after-tax(4)

 

 

 —

 

 

 (0.01)

 

 

 —

 

 

 (0.01)

 

Change in fair value of equity investment, after-tax(5)

 

 

 (0.11)

 

 

 —

 

 

 (0.11)

 

 

 —

 

Life insurance proceeds and changes in cash surrender value

 

 

 (0.04)

 

 

 0.11

 

 

 (0.10)

 

 

 0.14

 

Tax benefit from vested RSUs(6)

 

 

 (0.16)

 

 

 (0.20)

 

 

 (0.20)

 

 

 (0.23)

 

Non-GAAP amounts(7)

 

$