ArcBest Announces Third Quarter 2023 Results

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ArcBest efficiently provided integrated logistics solutions to customers in a changing market

  • Asset-Based operating ratio of 89.9 percent. On a non-GAAP basis, Asset-Based operating ratio of 88.8 percent, an improvement of 400 basis points versus second quarter 2023.
  • Year-to-date, returned $85.5 million of capital to shareholders through common stock share repurchases and dividends

 

FORT SMITH, Ark., October 27, 2023 — ArcBest® (Nasdaq: ARCB), a leader in supply chain logistics, today reported third quarter 2023 revenue from continuing operations of $1.1 billion, compared to $1.3 billion in the third quarter of 2022. ArcBest’s third quarter 2023 operating income from continuing operations was $45.1 million, compared to $115.3 million in the third quarter of 2022, and net income from continuing operations was $34.9 million, or $1.42 per diluted share, compared to $88.6 million, or $3.49 per diluted share, in the prior-year period. ArcBest’s third quarter 2023 results were impacted by $30.2 million of noncash lease impairment charges with no comparable charges in the prior-year period.

Excluding certain items in both periods as identified in the attached reconciliation tables, third quarter 2023 non‑GAAP operating income from continuing operations was $74.7 million, compared to $130.6 million in the prior‑year period. On a non-GAAP basis, net income from continuing operations was $56.7 million, or $2.31 per diluted share, compared to $96.1 million, or $3.79 per diluted share, in third quarter 2022.

“At ArcBest, our ability to see the world through customers’ eyes has positioned our company as the partner of choice for integrated logistics solutions for 100 years,” said Judy R. McReynolds, ArcBest chairman, president and CEO. “Our success is underpinned by the ability to efficiently solve logistics challenges and help customers navigate market disruptions, rapidly changing economic conditions, and increased supply chain complexity.”

 

Third Quarter Results of Operations Comparisons

Asset-Based

Third Quarter 2023 Versus Third Quarter 2022

  • Revenue of $741.2 million compared to $791.5 million, a per-day decrease of 4.1 percent.
  • Total tonnage per day decreased 6.3 percent; LTL-rated weight per shipment decreased 6.4 percent.
  • Total shipments per day increased 1.5 percent.
  • Total billed revenue per hundredweight increased 1.9 percent. Revenue per hundredweight on LTL-rated business, excluding fuel surcharge, increased by a percentage in the mid-single digits.
  • Operating income of $74.8 million and an operating ratio of 89.9 percent compared to operating income of $109.3 million and an operating ratio of 86.2 percent. On a non-GAAP basis, operating income of $82.8 million and an operating ratio of 88.8 percent compared to operating income of $116.6 million and an operating ratio of 85.3 percent.

Compared to the prior-year period, third quarter revenue in ArcBest’s Asset-Based business declined due to a weaker logistics industry backdrop, including continued manufacturing sector contraction. However, this impact was somewhat offset by increased revenue from new shipments added as a result of recent market disruption associated with the third quarter bankruptcy of a major LTL competitor. Core, LTL-rated average daily shipments, tonnage and revenue increased more than 20% compared to second quarter 2023 due to this additional new profitable business. As new core shipments were added during the quarter, overall Asset-Based network capacity was re-allocated to serve this increase in business by reducing shipments sourced from the transactional LTL pricing program. Average shipment size decreased during the quarter as larger average sized transactional shipments were replaced by lower average sized core shipments.

Asset-Based yields were positively impacted by the change in shipment mix moving through the ABF network and the improved pricing strength as a result of the reduction in LTL industry carrier capacity. On a sequential basis, compared to the second quarter, total revenue per hundredweight increased by over 16 percent while year-over-year total revenue per hundredweight increased approximately 2 percent compared to a strong year-over-year increase during last year’s third quarter. The overall pricing environment continues to be rational and has been strengthened by the recent market changes.

Higher employee wage and benefit costs associated with the implementation of ABF Freight’s new labor agreement added approximately 350 operating ratio basis points in the third quarter, relative to the second quarter. Despite those increased operating expenses, improved yields and initiatives enacted to reduce costs in other operational areas of the Asset-Based network, combined with effective handling of the changing profile of shipments, resulted in sequential improvement in the non-GAAP Asset-Based operating ratio of 400 basis points compared to the second quarter.

Asset-Light

Third Quarter 2023 Versus Third Quarter 2022

  • Revenue of $419.3 million compared to $515.2 million, a per-day decrease of 16.7 percent.
  • Operating loss of $3.7 million compared to operating income of $15.4 million. On a non‑GAAP basis, operating loss of $3.9 million compared to operating income of $18.9 million.
  • Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) of negative $2.0 million compared to positive $20.5 million, as detailed in the attached non-GAAP reconciliation tables.

Third quarter Asset-Light results, compared to the prior-year period, reflect lower revenue per shipment and reduced margins associated with business mix changes and the soft rate environment. Our truckload solution experienced significant margin compression as decreases in customer pricing exceeded the reduced cost of purchased transportation. Asset-Light average daily shipments increased during the recent quarter despite a period of weak demand. Market disruption in LTL carrier capacity resulted in the need for some shippers to find alternative sources for moving goods within our managed transportation solution. Efforts to more effectively match costs with business levels continue, which lowered operating expenses.

Share Repurchase Program and Common Stock Dividends

In September 2023, ArcBest entered into a 10b5-1 plan allowing for share repurchases during the current closed trading window under ArcBest’s share repurchase program. ArcBest has settled repurchases of 798,818 shares of common stock for an aggregate cost of $76.8 million, year-to-date through Thursday, October 26, 2023, including under the current 10b5-1 plan and the previously disclosed 10b5-1 plan, which extended from March 16, 2023 through May 2, 2023. With these purchases, $48.2 million remains available under the current repurchase authorization for future common stock purchases.

ArcBest common stock dividends paid this year through September 30, 2023 equaled $8.7 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 third quarter 2023 results. The call will be today, Friday, October 27 at 9:00 a.m. EDT (8:00 a.m. CDT). Interested parties are invited to listen by calling (800) 916-9049 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 October 27, 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 December 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 22028126. The conference call and playback can also be accessed, through December 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 over 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 September 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 

 

Nine Months Ended 

 

 

 

September 30

 

September 30

 

 

    

2023

    

2022

    

2023

    

2022

 

 

 

(Unaudited)

 

 

 

($ thousands, except share and per share data)

 

REVENUES

 

$

 1,128,350

 

$

 1,275,730

 

$

 3,337,908

 

$

 3,865,513

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 1,083,259

 

 

 1,160,394

 

 

 3,229,542

 

 

 3,521,196

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME

 

 

 45,091

 

 

 115,336

 

 

 108,366

 

 

 344,317

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (COSTS)

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and dividend income

 

 

 3,946

 

 

 1,127

 

 

 10,604

 

 

 1,579

 

Interest and other related financing costs

 

 

 (2,236)

 

 

 (1,755)

 

 

 (6,768)

 

 

 (5,558)

 

Other, net

 

 

 89

 

 

 (189)

 

 

 6,907

 

 

 (3,822)

 

 

 

 

 1,799

 

 

 (817)

 

 

 10,743

 

 

 (7,801)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

 

 

 46,890

 

 

 114,519

 

 

 119,109

 

 

 336,516

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME TAX PROVISION

 

 

 11,963

 

 

 25,906

 

 

 25,735

 

 

 78,353

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME FROM CONTINUING OPERATIONS

 

 

 34,927

 

 

 88,613

 

 

 93,374

 

 

 258,163

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX(1)

 

 

 (10)

 

 

 229

 

 

 53,269

 

 

 2,709

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME

 

$

 34,917

 

$

 88,842

 

$

 146,643

 

$

 260,872

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BASIC EARNINGS PER COMMON SHARE(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

 1.46

 

$

 3.60

 

$

 3.87

 

$

 10.48

 

Discontinued operations(1)

 

 

 —

 

 

 0.01

 

 

 2.21

 

 

 0.11

 

 

 

$

 1.45

 

$

 3.61

 

$

 6.08

 

$

 10.59

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DILUTED EARNINGS PER COMMON SHARE(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

 1.42

 

$

 3.49

 

$

 3.77

 

$

 10.07

 

Discontinued operations(1)

 

 

 —

 

 

 0.01

 

 

 2.15

 

 

 0.11

 

 

 

$

 1.42

 

$

 3.50

 

$

 5.92

 

$

 10.18

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AVERAGE COMMON SHARES OUTSTANDING

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 24,004,255

 

 

 24,605,228

 

 

 24,119,449

 

 

 24,640,706

 

Diluted

 

 

 24,525,258

 

 

 25,372,755

 

 

 24,756,993

 

 

 25,626,225

 


  1. Discontinued operations represents the FleetNet segment, which sold on February 28, 2023. The nine months ended September 30, 2023 includes the net gain on sale of FleetNet of $52.3 million after-tax, or $2.17 basic earnings per share and $2.11 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

 

 

 

 

 

 

 

 

 

 

 

September 30

 

December 31

 

 

    

2023

    

2022

 

 

 

(Unaudited)

 

 

 

($ thousands, except share data)

 

ASSETS

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

 251,503

 

$

 158,264

 

Short-term investments

 

 

 89,326

 

 

 167,662

 

Accounts receivable, less allowances (2023 - $10,825; 2022 - $13,892)

 

 

 469,490

 

 

 517,494

 

Other accounts receivable, less allowances (2023 - $730; 2022 - $713)

 

 

 10,984

 

 

 11,016

 

Prepaid expenses

 

 

 30,957

 

 

 39,484

 

Prepaid and refundable income taxes

 

 

 26,534

 

 

 19,239

 

Current assets of discontinued operations

 

 

 —

 

 

 64,736

 

Other

 

 

 11,342

 

 

 11,888

 

TOTAL CURRENT ASSETS

 

 

 890,136

 

 

 989,783

 

 

 

 

 

 

 

 

 

PROPERTY, PLANT AND EQUIPMENT

 

 

 

 

 

 

 

Land and structures

 

 

 430,263

 

 

 401,840

 

Revenue equipment

 

 

 1,094,183

 

 

 1,038,832

 

Service, office, and other equipment

 

 

 313,062

 

 

 298,234

 

Software

 

 

 169,434

 

 

 167,164

 

Leasehold improvements

 

 

 26,062

 

 

 23,466

 

 

 

 

 2,033,004

 

 

 1,929,536

 

Less allowances for depreciation and amortization

 

 

 1,170,914

 

 

 1,129,366

 

 

 

 

 862,090

 

 

 800,170

 

 

 

 

 

 

 

 

 

GOODWILL

 

 

 304,753

 

 

 304,753

 

INTANGIBLE ASSETS, NET

 

 

 104,288

 

 

 113,733

 

OPERATING RIGHT-OF-USE ASSETS

 

 

 164,082

 

 

 166,515

 

DEFERRED INCOME TAXES

 

 

 7,618

 

 

 6,342

 

LONG-TERM ASSETS OF DISCONTINUED OPERATIONS

 

 

 —

 

 

 11,097

 

OTHER LONG-TERM ASSETS

 

 

 104,479

 

 

 101,893

 

TOTAL ASSETS

 

$

 2,437,446

 

$

 2,494,286

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

Accounts payable

 

$

 245,899

 

$

 269,854

 

Income taxes payable

 

 

 1,390

 

 

 16,017

 

Accrued expenses

 

 

 322,809

 

 

 338,457

 

Current portion of long-term debt

 

 

 66,862

 

 

 66,252

 

Current portion of operating lease liabilities

 

 

 31,414

 

 

 26,225

 

Current liabilities of discontinued operations

 

 

 —

 

 

 51,665

 

TOTAL CURRENT LIABILITIES

 

 

 668,374

 

 

 768,470

 

 

 

 

 

 

 

 

 

LONG-TERM DEBT, less current portion

 

 

 176,296

 

 

 198,371

 

OPERATING LEASE LIABILITIES, less current portion

 

 

 171,755

 

 

 147,828

 

POSTRETIREMENT LIABILITIES, less current portion

 

 

 12,167

 

 

 12,196

 

LONG-TERM LIABILITIES OF DISCONTINUED OPERATIONS

 

 

 —

 

 

 781

 

CONTINGENT CONSIDERATION

 

 

 99,200

 

 

 112,000

 

OTHER LONG-TERM LIABILITIES

 

 

 38,552

 

 

 42,745

 

DEFERRED INCOME TAXES

 

 

 50,369

 

 

 60,494

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

Common stock, $0.01 par value, authorized 70,000,000 shares;
issued 2023: 30,017,658 shares; 2022: 29,758,716 shares

 

 

 300

 

 

 298

 

Additional paid-in capital

 

 

 338,368

 

 

 339,582

 

Retained earnings

 

 

 1,226,640

 

 

 1,088,693

 

   Treasury stock, at cost, 2023: 6,217,885 shares; 2022: 5,529,383 shares

 

 

 (350,161)

 

 

 (284,275)

 

Accumulated other comprehensive income

 

 

 5,586

 

 

 7,103

 

TOTAL STOCKHOLDERS’ EQUITY

 

 

 1,220,733

 

 

 1,151,401

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

 2,437,446

 

$

 2,494,286

 

 

 

 

 

ARCBEST CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended 

 

 

 

September 30

 

 

    

2023

    

2022

 

 

 

(Unaudited)

 

 

 

($ thousands)

 

 OPERATING ACTIVITIES

 

 

 

 

 

 

 

Net income

 

$

 146,643

 

$

 260,872

 

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

 

 

 

 

 

 

 

Depreciation and amortization

 

 

 98,711

 

 

 95,169

 

Amortization of intangibles

 

 

 9,631

 

 

 9,691

 

Share-based compensation expense

 

 

 8,590

 

 

 9,816

 

Provision for losses on accounts receivable

 

 

 2,621

 

 

 5,065

 

Change in deferred income taxes

 

 

 (10,880)

 

 

 3,745

 

(Gain) loss on sale of property and equipment

 

 

 1,134

 

 

 (9,759)

 

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

 

 

 (12,800)

 

 

 810

 

Change in fair value of equity investment

 

 

 (3,739)

 

 

 —

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Receivables

 

 

 43,478

 

 

 (54,889)

 

Prepaid expenses

 

 

 8,640

 

 

 7,550

 

Other assets

 

 

 2,393

 

 

 287

 

Income taxes

 

 

 (22,051)

 

 

 (11,068)

 

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

 

 

 3,286

 

 

 1,579

 

Accounts payable, accrued expenses, and other liabilities

 

 

 (40,863)

 

 

 31,983

 

NET CASH PROVIDED BY OPERATING ACTIVITIES

 

 

 194,755

 

 

 350,449

 

 

 

 

 

 

 

 

 

 INVESTING ACTIVITIES

 

 

 

 

 

 

 

Purchases of property, plant and equipment, net of financings

 

 

 (129,779)

 

 

 (76,068)

 

Proceeds from sale of property and equipment

 

 

 5,972

 

 

 13,938

 

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

 

 

 (80,353)

 

 

 (145,254)

 

Proceeds from sale of short-term investments

 

 

 160,570

 

 

 48,161

 

Capitalization of internally developed software

 

 

 (9,424)

 

 

 (13,922)

 

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

 

 

 47,935

 

 

 (170,391)

 

 

 

 

 

 

 

 

 

 FINANCING ACTIVITIES

 

 

 

 

 

 

 

Borrowings under credit facilities

 

 

 —

 

 

 58,000

 

Proceeds from notes payable

 

 

 —

 

 

 12,113

 

Payments on long-term debt

 

 

 (52,489)

 

 

 (99,567)

 

Net change in book overdrafts

 

 

 (12,489)

 

 

 2,102

 

Deferred financing costs

 

 

 57

 

 

 (53)

 

Payment of common stock dividends

 

 

 (8,696)

 

 

 (7,892)

 

Purchases of treasury stock

 

 

 (65,886)

 

 

 (50,117)

 

Payments for tax withheld on share-based compensation

 

 

 (10,056)

 

 

 (15,733)

 

NET CASH USED IN FINANCING ACTIVITIES

 

 

 (149,559)

 

 

 (101,147)

 

 

 

 

 

 

 

 

 

NET INCREASE IN CASH AND CASH EQUIVALENTS

 

 

 93,131

 

 

 78,911

 

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

 

$

 251,503

 

$

 155,531

 

 

 

 

 

 

 

 

 

 NONCASH INVESTING ACTIVITIES

 

 

 

 

 

 

 

Equipment financed

 

$

 31,024

 

$

 57,241

 

Accruals for equipment received

 

$

 5,743

 

$

 5,587

 

Lease liabilities arising from obtaining right-of-use assets

 

$

 49,033

 

$

 78,324

 


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

 

Note: The statements of cash flows for the nine months ended September 30, 2023 and 2022 include cash flows from continuing operations and cash flows from 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 

 

 

Nine Months Ended 

 

 

September 30

 

 

September 30

 

 

2023

    

 

2022

    

 

2023

    

 

2022

 

 

(Unaudited)

 

 

($ thousands, except percentages)

 

REVENUES FROM CONTINUING OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset-Based

$

 741,186

 

 

 

 

$

 791,531

 

 

 

 

$

 2,161,018

 

 

 

 

$

 2,299,464

 

 

 

Asset-Light(1)

 

 419,312

 

 

 

 

 

 515,235

 

 

 

 

 

 1,267,220

 

 

 

 

 

 1,660,174

 

 

 

Other and eliminations

 

 (32,148)

 

 

 

 

 

 (31,036)

 

 

 

 

 

 (90,330)

 

 

 

 

 

 (94,125)

 

 

 

Total consolidated revenues from continuing operations

$

 1,128,350

 

 

 

 

$

 1,275,730

 

 

 

 

$

 3,337,908

 

 

 

 

$

 3,865,513

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES FROM CONTINUING OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset-Based

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries, wages, and benefits

$

 357,582

 

 48.2

%

 

$

 332,359

 

 42.0

%

 

$

 1,037,725

 

 48.0

%

 

$

 973,924

 

 42.4

%

Fuel, supplies, and expenses

 

 91,493

 

 12.4

 

 

 

 97,279

 

 12.3

 

 

 

 276,678

 

 12.8

 

 

 

 281,406

 

 12.2

 

Operating taxes and licenses

 

 13,865

 

 1.9

 

 

 

 13,089

 

 1.6

 

 

 

 41,938

 

 1.9

 

 

 

 38,405

 

 1.7

 

Insurance

 

 13,654

 

 1.8

 

 

 

 13,180

 

 1.7

 

 

 

 39,816

 

 1.8

 

 

 

 35,808

 

 1.5

 

Communications and utilities

 

 4,729

 

 0.6

 

 

 

 4,794

 

 0.6

 

 

 

 14,586

 

 0.7

 

 

 

 14,129

 

 0.6

 

Depreciation and amortization

 

 26,537

 

 3.6

 

 

 

 24,117

 

 3.0

 

 

 

 76,721

 

 3.6

 

 

 

 72,885

 

 3.2

 

Rents and purchased transportation

 

 79,233

 

 10.7

 

 

 

 123,714

 

 15.6

 

 

 

 271,899

 

 12.6

 

 

 

 348,249

 

 15.1

 

Shared services

 

 70,699

 

 9.5

 

 

 

 72,286

 

 9.1

 

 

 

 209,780

 

 9.7

 

 

 

 215,020

 

 9.4

 

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

 

 540

 

 0.1

 

 

 

 (5,910)

 

 (0.7)

 

 

 

 905

 

 —

 

 

 

 (9,975)

 

 (0.4)

 

Innovative technology costs(3)

 

 7,300

 

 1.0

 

 

 

 6,068

 

 0.8

 

 

 

 21,711

 

 1.0

 

 

 

 20,982

 

 0.9

 

Other

 

 731

 

 0.1

 

 

 

 1,243

 

 0.2

 

 

 

 3,640

 

 0.2

 

 

 

 2,629

 

 0.1

 

Total Asset-Based

 

 666,363

 

 89.9

%

 

 

 682,219

 

 86.2

%

 

 

 1,995,399

 

 92.3

%

 

 

 1,993,462

 

 86.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset-Light(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchased transportation

$

 365,217

 

 87.1

%

 

$

 425,567

 

 82.6

%

 

$

 1,078,482

 

 85.1

%

 

$

 1,382,107

 

 83.3

%

Supplies and expenses

 

 2,773

 

 0.7

 

 

 

 4,378

 

 0.9

 

 

 

 10,193

 

 0.8

 

 

 

 11,907

 

 0.7

 

Depreciation and amortization(4)

 

 5,097

 

 1.2

 

 

 

 5,072

 

 1.0

 

 

 

 15,250

 

 1.2

 

 

 

 15,720

 

 0.9

 

Shared services

 

 47,411

 

 11.3

 

 

 

 56,371

 

 10.9

 

 

 

 147,825

 

 11.7

 

 

 

 164,554

 

 9.9

 

Contingent consideration(5)

 

 (17,840)

 

 (4.3)

 

 

 

 —

 

 —

 

 

 

 (12,800)

 

 (1.0)

 

 

 

 810

 

 —

 

Lease impairment charges(6)

 

 14,407

 

 3.4

 

 

 

 —

 

 —

 

 

 

 14,407

 

 1.1

 

 

 

 —

 

 —

 

Gain on sale of subsidiary(7)

 

 —

 

 —

 

 

 

 —

 

 —

 

 

 

 —

 

 —

 

 

 

 (402)

 

 —

 

Other

 

 5,951

 

 1.5

 

 

 

 8,463

 

 1.6

 

 

 

 18,478

 

 1.5

 

 

 

 21,499

 

 1.3

 

Total Asset-Light

 

 423,016

 

 100.9

%

 

 

 499,851

 

 97.0

%

 

 

 1,271,835

 

 100.4

%

 

 

 1,596,195

 

 96.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other and eliminations(8)

 

 (6,120)

 

 

 

 

 

 (21,676)

 

 

 

 

 

 (37,692)

 

 

 

 

 

 (68,461)

 

 

 

Total consolidated operating expenses from continuing operations

$

 1,083,259

 

 96.0

%

 

$

 1,160,394

 

 91.0

%

 

$

 3,229,542

 

 96.8

%

 

$

 3,521,196

 

 91.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME (LOSS) FROM CONTINUING OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset-Based

$

 74,823

 

 

 

 

$

 109,312

 

 

 

 

$

 165,619

 

 

 

 

$

 306,002

 

 

 

Asset-Light(1)

 

 (3,704)

 

 

 

 

 

 15,384

 

 

 

 

 

 (4,615)

 

 

 

 

 

 63,979

 

 

 

Other and eliminations(8)

 

 (26,028)

 

 

 

 

 

 (9,360)

 

 

 

 

 

 (52,638)

 

 

 

 

 

 (25,664)

 

 

 

Total consolidated operating income from continuing operations

$

 45,091

 

 

 

 

$

 115,336

 

 

 

 

$

 108,366

 

 

 

 

$

 344,317

 

 

 


  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. The three and nine months ended September 30, 2023 include $0.7 million of noncash lease-related impairment charges for a service center. The three and nine months ended September 30, 2022 include a $4.3 million noncash gain on a like-kind property exchange of a service center.
  3. Represents costs associated with the Vaux freight handling pilot test program at ABF Freight. The decision was made to pause the pilot during third quarter 2023, as previously announced.
  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. 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.
  8. “Other and eliminations” includes $15.1 million of noncash lease-related impairment charges for a Vaux 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 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 

 

Nine Months Ended 

 

 

September 30

 

September 30

 

 

    

2023

 

2022

    

2023

 

2022

 

ArcBest Corporation - Consolidated

 

(Unaudited)

 

 

 

($ thousands, except per share data)

 

Operating Income from Continuing Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

Amounts on GAAP basis

 

$

 45,091

 

$

 115,336

 

$

 108,366

 

$

 344,317

 

Innovative technology costs, pre-tax(1)

 

 

 14,059

 

 

 10,056

 

 

 41,358

 

 

 30,083

 

Purchase accounting amortization, pre-tax(2)

 

 

 3,192

 

 

 3,213

 

 

 9,576

 

 

 9,640

 

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

 

 

 (17,840)

 

 

 —

 

 

 (12,800)

 

 

 810

 

Lease impairment charges, pre-tax(4)

 

 

 30,162

 

 

 —

 

 

 30,162

 

 

 —

 

Gain on sale of subsidiary, pre-tax(5)

 

 

 —

 

 

 —

 

 

 —

 

 

 (402)

 

Nonunion vacation policy enhancement, pre-tax(6)

 

 

 —

 

 

 1,990

 

 

 —

 

 

 1,990

 

Non-GAAP amounts

 

$

 74,664

 

$

 130,595

 

$

 176,662

 

$

 386,438

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income from Continuing Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

Amounts on GAAP basis

 

$

 34,927

 

$

 88,613

 

$

 93,374

 

$

 258,163

 

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

 

 

 10,630

 

 

 7,608

 

 

 31,316

 

 

 22,686

 

Purchase accounting amortization, after-tax(2)

 

 

 2,398

 

 

 2,396

 

 

 7,194

 

 

 7,189

 

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

 

 

 (13,404)

 

 

 —

 

 

 (9,617)

 

 

 604

 

Lease impairment charges, after-tax(4)

 

 

 22,571

 

 

 —

 

 

 22,571

 

 

 —

 

Gain on sale of subsidiary, after-tax(5)

 

 

 —

 

 

 —

 

 

 —

 

 

 (317)

 

Nonunion vacation policy enhancement, after-tax(6)

 

 

 —

 

 

 1,479

 

 

 —

 

 

 1,479

 

Change in fair value of equity investment, after-tax(7)

 

 

 —

 

 

 —

 

 

 (2,786)

 

 

 —

 

Life insurance proceeds and changes in cash surrender value

 

 

 (212)

 

 

 176

 

 

 (2,794)

 

 

 3,679

 

Tax benefit from vested RSUs(8)

 

 

 (188)

 

 

 (2,381)

 

 

 (5,103)

 

 

 (8,310)

 

Tax credits(9)

 

 

 —

 

 

 (1,831)

 

 

 —

 

 

 (1,190)

 

Non-GAAP amounts

 

$

 56,722

 

$

 96,060

 

$

 134,155

 

$

 283,983

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings Per Share from Continuing Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

Amounts on GAAP basis

 

$

 1.42

 

$

 3.49

 

$

 3.77