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ArcBest Corporation Announces Third Quarter 2016 Results

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

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

 

  • Third quarter 2016 revenue of $713.9 million and net income of $12.9 million, or $0.49 per diluted share.
  • Third quarter ABF Freight® operating results were impacted by reduced freight levels.
  • ArcBest’s asset-light revenue equaled 31 percent of total consolidated revenue in September 2016 following a recent acquisition.

FORT SMITH Arkansas, November 3, 2016 — ArcBest Corporation® (Nasdaq: ARCB) today reported third quarter 2016 net income of $12.9 million, or $0.49 per diluted share, compared to third quarter 2015 net income of $19.2 million, or $0.72 per diluted share. The continued softness in the U.S. industrial economy impacted freight tonnage levels and profit margins at ABF Freight. ArcBest’s asset-light logistics companies were highlighted by improved revenue and operating profit at Panther. 

Excluding certain items in both periods, ArcBest’s non-GAAP net income was $12.7 million, or $0.48 per diluted share, in third quarter 2016 compared to third quarter earnings of $20.2 million, or $0.76 per diluted share, last year.

“As we have seen throughout the year, pricing in the less-than-truckload sector remained rational despite a soft economic environment and we continued to experience benefits from investments in new equipment,” said ArcBest Chairman, President and CEO Judy R. McReynolds. “In addition, we continued to expand our asset-light logistics service offerings with the acquisition of Logistics & Distribution Services, as we add further scale to the full supply chain solutions our customers are seeking.”

 

Freight Transportation (ABF Freight)

Results of Operations

Third Quarter 2016

  • Revenue of $509.5 million compared to $511.3 million in third quarter 2015, a slight per-day decrease. Year-over-year reductions in fuel surcharge associated with lower diesel fuel prices contributed to ABF Freight’s reduced revenue compared to last year.
  • Tonnage per day decrease of 2.8 percent compared to third quarter 2015.
  • Shipments per day increase of 1.6 percent compared to third quarter 2015.
  • Total billed revenue per hundredweight increased by 2.8 percent despite lower fuel surcharges, reflecting both price increases and changes in total shipment profile compared to the prior year.  Excluding fuel surcharge, the percentage increase on ABF Freight’s traditional LTL freight was in the mid-single digits.
  • Operating income of $18.1 million and an operating ratio of 96.5 percent compared to $26.6 million and an operating ratio of 94.8 percent in third quarter 2015.  Excluding adjustments for nonunion pension settlement charges, third quarter 2016 operating income of $18.7 million and an operating ratio of 96.4 percent.

ABF Freight experienced a slight decrease in average daily revenue reflecting reductions in fuel surcharge and the sluggish economic and market capacity effects that led to shipment growth but tonnage declines.  With lower weight and revenue per shipment, the labor hours and local purchased transportation required to service the growing shipment levels impacted operating margins.  Higher average claims costs for nonunion healthcare also unfavorably impacted the quarter.  However, investments in new power equipment contributed positively to third quarter results.  In the midst of a stable LTL industry pricing environment, ABF Freight’s disciplined yield management focus has generated reasonable account price increases.

 

Asset-Light Logistics

Results of Operations

Third Quarter 2016

  • Revenue of $217.9 million compared to $211.1 million in third quarter 2015.
  • Third quarter 2016 operating income of $6.5 million compared to $8.5 million in third quarter 2015.
  • Third quarter 2016 earnings before interest, taxes, depreciation and amortization (“EBITDA”) of $10.5 million compared to EBITDA in third quarter 2015 of $12.1 million.

Revenue growth at ArcBest’s asset-light logistics businesses was the result of stronger market demand at Panther and the effect of truckload brokerage acquisitions made since last year’s third quarter.  Panther’s profit margin improvement was driven by customer demand for Panther’s best-in-class cargo handling.  Despite solid shipment growth at its legacy brokerage locations, operating results at ABF Logistics were impacted by lower market-related revenue per shipment, the previously disclosed integration of an acquired location and disruptions in the ocean shipping market.  FleetNet’s lower third quarter revenue and profit margins reflect a reduction in emergency roadside and fleet maintenance events associated with changes in customer mix and lower business levels from transportation-related customers.  ABF Moving’s results continued to be below last year, primarily due to declines in government shipments. 

“We are encouraged by the improvements seen at Panther during the quarter and were pleased to welcome the Logistics & Distribution Services group to the ArcBest organization,” McReynolds added. “As we have continued to invest in all of our businesses, we are making good progress in giving our customers the end-to-end solutions they require from us. Our customers appreciate the value we bring in working closely with them to solve complex supply chain needs, and we will continue to evolve these relationships going forward.”

Conference Call

ArcBest Corporation will host a conference call with company executives to discuss the 2016 third quarter results. The call will be today, Thursday, November 3, at 9:30 a.m. ET (8:30 a.m. CT). Interested parties are invited to listen by calling (888) 221-6234. Following the call, a recorded playback will be available through the end of the day on December 15, 2016. To listen to the playback, dial (800) 633-8284 or (402) 977-9140 (for international callers). The conference call ID for the playback is 21819577. The conference call and playback can also be accessed, through December 15, 2016, on ArcBest’s website at arcb.com.

About ArcBest

ArcBest Corporation® (Nasdaq: ARCB) solves complex logistics and transportation challenges. Our companies and brands – ABF Freight®, ABF Logistics®, Panther Premium Logistics®, FleetNet America®, U-Pack® and ArcBest Technologies – apply the skill and the will with every shipment and supply chain solution, household move or vehicle repair. ArcBest finds a way.

For more information, visit arcb.com, abf.com, pantherpremium.com, fleetnetamerica.com and upack.com. ArcBest Corporation®. The Skill & The Will®.

Forward-Looking Statements

Certain statements and information in this press release concerning results for the three months ended September 30, 2016 may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “foresee,” “intend,” “may,” “plan,” “predict,” “project,” “scheduled,” “should,” “would” and similar expressions and the negatives of such terms are intended to identify forward-looking statements. These forward-looking statements are based on management’s beliefs, assumptions, and expectations based on currently available information, are not guarantees of future performance, and involve certain risks and uncertainties (some of which are beyond our control). Although we believe that the expectations reflected in these forward-looking statements are reasonable as and when made, we cannot provide assurance that our expectations will prove to be correct. Actual outcomes and results could materially differ from what is expressed, implied, or forecasted in these statements due to a number of factors, including, but not limited to: a failure of our information systems, including disruptions or failures of services essential to our operations or upon which our information technology platforms rely, data breach, and/or cybersecurity incidents; union and nonunion employee wages and benefits, including changes in required contributions to multiemployer plans; competitive initiatives and pricing pressures; governmental regulations; environmental laws and regulations, including emissions-control regulations; the cost, integration, and performance of any future acquisitions; relationships with employees, including unions, and our ability to attract and retain employees and/or independent owner operators; 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; 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; potential impairment of goodwill and intangible assets; availability and cost of reliable third-party services; litigation or claims asserted against us; self-insurance claims and insurance premium costs; availability of fuel, the effect of volatility in fuel prices and the associated changes in fuel surcharges on securing increases in base freight rates, and the inability to collect fuel surcharges; increased prices for and decreased availability of new revenue equipment, decreases in value of used revenue equipment, and higher costs of equipment-related operating expenses such as maintenance and fuel and related taxes; the loss of key employees or the inability to execute succession planning strategies; the impact of our brands and corporate reputation; the cost, timing, and performance of growth initiatives; default on covenants of financing arrangements and the availability and terms of future financing arrangements; timing and amount of capital expenditures; seasonal fluctuations and adverse weather conditions; regulatory, economic, and other risks arising from our international business; and other financial, operational, and legal risks and uncertainties detailed from time to time in our Securities and Exchange Commission (“SEC”) public filings.

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

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

Financial Data and Operating Statistics

The following tables show financial data and operating statistics on ArcBest Corporation and its subsidiary companies.

 

 

ARCBEST CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended 

 

Nine Months Ended 

 

 

September 30

 

September 30

 

    

2016

    

2015

    

2016

    

2015

 

 

(Unaudited)

 

 

($ thousands, except share and per share data)

REVENUES

 

$

 713,923

 

$

 709,380

 

$

 2,012,005

 

$

 2,018,771

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 693,553

 

 

 675,942

 

 

 1,984,246

 

 

 1,950,588

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME

 

 

 20,370

 

 

 33,438

 

 

 27,759

 

 

 68,183

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (COSTS)

 

 

 

 

 

 

 

 

 

 

 

 

Interest and dividend income

 

 

 390

 

 

 378

 

 

 1,178

 

 

 882

Interest and other related financing costs

 

 

 (1,296)

 

 

 (1,157)

 

 

 (3,774)

 

 

 (3,183)

Other, net

 

 

 1,091

 

 

 (613)

 

 

 2,028

 

 

 (15)

 

 

 

 185

 

 

 (1,392)

 

 

 (568)

 

 

 (2,316)

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME BEFORE INCOME TAXES

 

 

 20,555

 

 

 32,046

 

 

 27,191

 

 

 65,867

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME TAX PROVISION

 

 

 7,615

 

 

 12,892

 

 

 10,123

 

 

 26,001

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME

 

$

 12,940

 

$

 19,154

 

$

 17,068

 

$

 39,866

 

 

 

 

 

 

 

 

 

 

 

 

 

EARNINGS PER COMMON SHARE(1)

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

 0.50

 

$

 0.73

 

$

 0.66

 

$

 1.52

Diluted

 

$

 0.49

 

$

 0.72

 

$

 0.64

 

$

 1.48

 

 

 

 

 

 

 

 

 

 

 

 

 

AVERAGE COMMON SHARES OUTSTANDING

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 25,724,550

 

 

 26,009,344

 

 

 25,779,166

 

 

 26,033,467

Diluted

 

 

 26,211,524

 

 

 26,508,482

 

 

 26,263,732

 

 

 26,569,800

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH DIVIDENDS DECLARED PER COMMON SHARE

 

$

 0.08

 

$

 0.06

 

$

 0.24

 

$

 0.18


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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME

 

$

 12,940

 

$

 19,154

 

$

 17,068

 

$

 39,866

 

 

 

 

 

 

 

 

 

 

 

 

 

EFFECT OF UNVESTED RESTRICTED STOCK AWARDS

 

 

 (87)

 

 

 (172)

 

 

 (131)

 

 

 (410)

 

 

 

 

 

 

 

 

 

 

 

 

 

ADJUSTED NET INCOME FOR CALCULATING EARNINGS PER COMMON SHARE (1)

 

$

 12,853

 

$

 18,982

 

$

 16,937

 

$

 39,456

 

 

 

ARCBEST CORPORATION

CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

 

 

 

 

September 30

 

December 31

 

 

    

2016

    

2015

 

 

 

(Unaudited)

 

Note

 

 

 

($ thousands, except share data)

 

ASSETS

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

 130,395

 

$

 164,973

 

Short-term investments

 

 

 59,346

 

 

 61,597

 

Restricted cash

 

 

 962

 

 

 1,384

 

   Accounts receivable, less allowances (2016 - $5,118; 2015 - $4,825)

 

 

 256,316

 

 

 236,097

 

   Other accounts receivable, less allowances (2016 - $830; 2015 - $1,029)

 

 

 8,927

 

 

 6,718

 

Prepaid expenses

 

 

 19,622

 

 

 20,801

 

Deferred income taxes

 

 

 39,097

 

 

 38,443

 

Prepaid and refundable income taxes

 

 

 13,934

 

 

 18,134

 

Other

 

 

 4,275

 

 

 3,936

 

TOTAL CURRENT ASSETS

 

 

 532,874

 

 

 552,083

 

 

 

 

 

 

 

 

 

PROPERTY, PLANT AND EQUIPMENT

 

 

 

 

 

 

 

Land and structures

 

 

 296,324

 

 

 273,839

 

Revenue equipment

 

 

 738,350

 

 

 699,844

 

Service, office, and other equipment

 

 

 156,536

 

 

 145,286

 

Software

 

 

 134,312

 

 

 127,010

 

Leasehold improvements

 

 

 27,040

 

 

 25,419

 

 

 

 

 1,352,562

 

 

 1,271,398

 

Less allowances for depreciation and amortization

 

 

 822,623

 

 

 788,351

 

 

 

 

 529,939

 

 

 483,047

 

 

 

 

 

 

 

 

 

GOODWILL

 

 

 110,487

 

 

 96,465

 

INTANGIBLE ASSETS, NET

 

 

 82,068

 

 

 76,787

 

OTHER LONG-TERM ASSETS

 

 

 65,500

 

 

 54,527

 

 

 

$

 1,320,868

 

$

 1,262,909

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

Accounts payable

 

$

 149,971

 

$

 130,869

 

Income taxes payable

 

 

 —

 

 

 91

 

Accrued expenses

 

 

 187,822

 

 

 188,727

 

Current portion of long-term debt

 

 

 61,251

 

 

 44,910

 

TOTAL CURRENT LIABILITIES

 

 

 399,044

 

 

 364,597

 

 

 

 

 

 

 

 

 

LONG-TERM DEBT, less current portion

 

 

 176,363

 

 

 167,599

 

PENSION AND POSTRETIREMENT LIABILITIES

 

 

 42,520

 

 

 51,241

 

OTHER LONG-TERM LIABILITIES

 

 

 15,159

 

 

 12,689

 

DEFERRED INCOME TAXES

 

 

 92,629

 

 

 78,055

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

Common stock, $0.01 par value, authorized 70,000,000 shares;
issued 2016: 28,122,385 shares; 2015: 27,938,319 shares

 

 

 281

 

 

 279

 

Additional paid-in capital

 

 

 313,794

 

 

 309,653

 

Retained earnings

 

 

 387,646

 

 

 376,827

 

  Treasury stock, at cost, 2016: 2,499,879 shares; 2015: 2,080,187 shares

 

 

 (78,129)

 

 

 (70,535)

 

Accumulated other comprehensive loss

 

 

 (28,439)

 

 

 (27,496)

 

TOTAL STOCKHOLDERS’ EQUITY

 

 

 595,153

 

 

 588,728

 

 

 

$

 1,320,868

 

$

 1,262,909

 

 

Note:  The balance sheet at December 31, 2015 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

 

 

ARCBEST CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended 

 

 

 

September 30

 

 

    

2016

    

2015

 

 

 

Unaudited

 

 

 

($ thousands)

 

 OPERATING ACTIVITIES

 

 

 

 

 

 

 

Net income

 

$

 17,068

 

$

 39,866

 

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

 

 

 

 

 

 

 

Depreciation and amortization

 

 

 73,633

 

 

 65,142

 

Amortization of intangibles

 

 

 3,059

 

 

 3,079

 

Pension settlement expense

 

 

 2,267

 

 

 2,478

 

Share-based compensation expense

 

 

 6,151

 

 

 6,343

 

Provision for losses on accounts receivable

 

 

 787

 

 

 941

 

Deferred income tax provision (benefit)

 

 

 14,199

 

 

 (7,862)

 

Gain on sale of property and equipment

 

 

 (2,581)

 

 

 (1,691)

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Receivables

 

 

 (18,906)

 

 

 (14,881)

 

Prepaid expenses

 

 

 1,108

 

 

 2,353

 

Other assets

 

 

 (3,655)

 

 

 505

 

Income taxes

 

 

 2,583

 

 

 14,295

 

Accounts payable, accrued expenses, and other liabilities

 

 

 (7,786)

 

 

 9,006

 

 NET CASH PROVIDED BY OPERATING ACTIVITIES

 

 

 87,927

 

 

 119,574

 

 

 

 

 

 

 

 

 

 INVESTING ACTIVITIES

 

 

 

 

 

 

 

Purchases of property, plant and equipment, net of financings

 

 

 (45,774)

 

 

 (53,644)

 

Proceeds from sale of property and equipment

 

 

 7,296

 

 

 4,115

 

Purchases of short-term investments

 

 

 (51,760)

 

 

 (48,868)

 

Proceeds from sale of short-term investments

 

 

 54,027

 

 

 25,347

 

Business acquisitions, net of cash acquired

 

 

 (24,805)

 

 

 (5,239)

 

Capitalization of internally developed software

 

 

 (7,660)

 

 

 (6,155)

 

 NET CASH USED IN INVESTING ACTIVITIES

 

 

 (68,676)

 

 

 (84,444)

 

 

 

 

 

 

 

 

 

 FINANCING ACTIVITIES

 

 

 

 

 

 

 

Borrowings under credit facilities

 

 

 —

 

 

 70,000

 

Borrowings under accounts receivable securitization program

 

 

 —

 

 

 35,000

 

Payments on long-term debt

 

 

 (36,579)

 

 

 (92,136)

 

Net change in book overdrafts

 

 

 (3,829)

 

 

 2,179

 

Net change in restricted cash

 

 

 422

 

 

 (1)

 

Deferred financing costs

 

 

 —

 

 

 (824)

 

Payment of common stock dividends

 

 

 (6,249)

 

 

 (4,740)

 

Purchases of treasury stock

 

 

 (7,594)

 

 

 (10,004)

 

 NET CASH USED IN FINANCING ACTIVITIES

 

 

 (53,829)

 

 

 (526)

 

 

 

 

 

 

 

 

 

 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

 

 

 (34,578)

 

 

 34,604

 

Cash and cash equivalents at beginning of period

 

 

 164,973

 

 

 157,042

 

 CASH AND CASH EQUIVALENTS AT END OF PERIOD

 

$

 130,395

 

$

 191,646

 

 

 

 

 

 

 

 

 

 NONCASH INVESTING ACTIVITIES

 

 

 

 

 

 

 

Equipment financed

 

$

 61,684

 

$

 51,009

 

Accruals for equipment received

 

$

 9,391

 

$

 7,150

 

 

 

 

ARCBEST CORPORATION

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended 

 

 

Nine Months Ended 

 

 

 

 

September 30

 

September 30

 

 

    

2016

 

2015

 

2016

 

2015

 

 

 

(Unaudited)

 

 

 

($ thousands, except percentages)

 

Freight Transportation (ABF Freight)

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amounts on GAAP basis

 

$

 18,050

 

 96.5

%  

 

$

 26,577

 

 94.8

%  

 

$

 26,423

 

 98.2

%  

 

$

 54,711

 

 96.2

%  

 

Pension settlement expense

 

 

 604

 

 (0.1)

 

 

 

 572

 

 (0.1)

 

 

 

 1,705

 

 (0.1)

 

 

 

 1,860

 

 (0.1)

 

 

Non-GAAP amounts

 

$

 18,654

 

 96.4

%  

 

$

 27,149

 

 94.7

%  

 

$

 28,128

 

 98.1

%  

 

$

 56,571

 

 96.1

%  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended 

 

Nine Months Ended 

 

 

September 30

 

 

September 30

 

 

    

2016

 

2015

    

  

2016

 

 

2015

 

 

 

(Unaudited)

 

 

($ thousands, except per share data)

ArcBest Corporation - Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

 

 

 

 

 

 

 

 

 

 

 

 

Amounts on GAAP basis

 

$

 20,370

 

$

 33,438

 

$

 27,759

 

$

 68,183

 

Pension settlement expense

 

 

 803

 

 

 762

 

 

 2,267

 

 

 2,478

 

Transaction costs(1)

 

 

 561

 

 

 —

 

 

 561

 

 

 29

 

Non-GAAP amounts

 

$

 21,734

 

$

 34,200

 

$

 30,587

 

$

 70,690

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

 

 

 

 

 

 

 

 

 

 

 

 

Amounts on GAAP basis

 

$

 12,940

 

$

 19,154

 

$

 17,068

 

$

 39,866

 

Life insurance proceeds and changes in cash surrender value

 

 

 (1,088)

 

 

 613

 

 

 (1,980)

 

 

 85

 

Pension settlement expense, after-tax

 

 

 490

 

 

 466

 

 

 1,385

 

 

 1,514

 

Transaction costs, after-tax(1)

 

 

 341

 

 

 —

 

 

 341

 

 

 18

 

Non-GAAP amounts

 

$

 12,683

 

$

 20,233

 

$

 16,814

 

$

 41,483

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings Per Share

 

 

 

 

 

 

 

 

 

 

 

 

 

Amounts on GAAP basis

 

$

 0.49

 

$

 0.72

 

$

 0.64

 

$

 1.48

 

Life insurance proceeds and changes in cash surrender value

 

 

 (0.04)

 

 

 0.02

 

 

 (0.08)

 

 

 —

 

Pension settlement expense, after-tax

 

 

 0.02

 

 

 0.02

 

 

 0.05

 

 

 0.06

 

Transaction costs, after-tax(1)

 

 

 0.01

 

 

 —

 

 

 0.01

 

 

 —

 

Non-GAAP amounts

 

$

 0.48

 

$

 0.76

 

$

 0.62

 

$

 1.54

 


  1. Transaction costs for the three and nine months ended September 30, 2016 are associated with the September 2, 2016 acquisition of Logistics & Distribution Services, LLC.  Transaction costs for the nine months ended September 30, 2015 are associated with the January 2, 2015 acquisition of Smart Lines Transportation Group, LLC.

ARCBEST CORPORATION

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES – Continued

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended 

 

Nine Months Ended 

 

 

September 30

 

 

September 30

 

 

    

2016

    

2015

    

 

2016

    

 

2015

 

 

 

(Unaudited)

 

 

($ thousands)

ArcBest Corporation - Consolidated

 

 

 

 

 

Net income

 

$

 12,940

 

$

 19,154

 

$

 17,068

 

$

 39,866

 

Interest and other related financing costs

 

 

 1,296

 

 

 1,157

 

 

 3,774

 

 

 3,183

 

Income tax provision

 

 

 7,615

 

 

 12,892

 

 

 10,123

 

 

 26,001

 

Depreciation and amortization

 

 

 25,793

 

 

 23,373

 

 

 76,692

 

 

 68,221

 

Amortization of share-based compensation

 

 

 1,951

 

 

 2,110

 

 

 6,151

 

 

 6,343

 

Amortization of net actuarial losses of benefit plans and pension settlement expense(1)

 

 

 2,124

 

 

 1,655

 

 

 6,033

 

 

 5,513

 

  Consolidated Adjusted EBITDA

 

$

 51,719

 

$

 60,341

 

$

 119,841

 

$

 149,127

 


  1. Consolidated pension settlement expense totaled $0.8 million (pre-tax) for each of the three months ended September 30, 2016 and 2015 and $2.3 million (pre-tax) and $2.5 million (pre-tax) for the nine months ended September 30, 2016 and 2015, respectively.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30

 

 

 

2016

 

2015

 

 

    

 

 

    

Depreciation

    

    

 

    

 

 

    

Depreciation

    

    

 

 

 

 

Operating

 

and

 

 

 

Operating

 

and

 

 

 

 

 

Income

 

Amortization

 

EBITDA

 

Income

 

Amortization

 

EBITDA

 

 

 

(Unaudited)

 

 

 

($ thousands)

 

Asset-Light Logistics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Premium Logistics (Panther)(2)

 

$

 3,973

 

$

 2,860

 

$

 6,833

 

$

 2,733

 

$

 2,773

 

$

 5,506

 

Transportation Management (ABF Logistics)(2)

 

 

 410

 

 

 633

 

 

 1,043

 

 

 1,792

 

 

 259

 

 

 2,051

 

Emergency & Preventative Maintenance (FleetNet)

 

 

 121

 

 

 312

 

 

 433

 

 

 956

 

 

 279

 

 

 1,235

 

Household Goods Moving Services (ABF Moving)

 

 

 1,986

 

 

 186

 

 

 2,172

 

 

 3,028

 

 

 287

 

 

 3,315

 

Total asset-light logistics

 

$

 6,490

 

$

 3,991

 

$

 10,481

 

$

 8,509

 

$

 3,598

 

$

 12,107

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30

 

 

 

2016

 

2015

 

 

    

 

    

Depreciation

    

    

 

    

 

    

Depreciation

    

    

 

 

 

 

Operating

 

and

 

 

 

Operating

 

and

 

 

 

 

 

Income

 

Amortization

 

EBITDA

 

Income

 

Amortization

 

EBITDA

 

 

 

(Unaudited)

 

 

 

($ thousands)

 

Asset-Light Logistics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Premium Logistics (Panther)(2)

 

$

 5,331

 

$

 8,565

 

$

 13,896

 

$

 8,767

 

$

 8,636

 

$

 17,403

 

Transportation Management (ABF Logistics)(2)

 

 

 1,572

 

 

 1,467

 

 

 3,039

 

 

 4,375

 

 

 789

 

 

 5,164

 

Emergency & Preventative Maintenance (FleetNet)

 

 

 1,701

 

 

 900

 

 

 2,601

 

 

 3,143

 

 

 838

 

 

 3,981

 

Household Goods Moving Services (ABF Moving)

 

 

 2,107

 

 

 569

 

 

 2,676

 

 

 4,663

 

 

 975

 

 

 5,638

 

Total asset-light logistics

 

$

 10,711

 

$

 11,501

 

$

 22,212

 

$

 20,948

 

$

 11,238

 

$

 32,186

 


  1. Depreciation and amortization consists primarily of amortization of intangibles and software associated with acquired businesses.

 

 

ARCBEST CORPORATION

FINANCIAL STATEMENT OPERATING SEGMENT DATA AND OPERATING RATIOS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended 

 

 

 

 

Nine Months Ended 

 

 

 

 

 

September 30

 

 

 

 

September 30

 

 

 

 

    

2016

    

 

  

    

2015

    

 

  

    

2016

    

 

  

    

2015

 

  

 

 

 

Unaudited

 

 

 

 

 

($ thousands, except percentages)

 

 

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Freight Transportation (ABF Freight)

 

$

 509,452

 

 

 

 

$

 511,346

 

 

 

 

$

 1,435,691

 

 

 

 

$

 1,456,924

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Premium Logistics (Panther)

 

 

 75,365

 

 

 

 

 

 73,583

 

 

 

 

 

 211,148

 

 

 

 

 

 229,146

 

 

 

Transportation Management (ABF Logistics)(1)

 

 

 72,442

 

 

 

 

 

 49,270

 

 

 

 

 

 207,344

 

 

 

 

 

 147,061

 

 

 

Emergency & Preventative Maintenance (FleetNet)

 

 

 39,073

 

 

 

 

 

 45,181

 

 

 

 

 

 124,417

 

 

 

 

 

 129,685

 

 

 

Household Goods Moving Services (ABF Moving)

 

 

 31,040

 

 

 

 

 

 43,076

 

 

 

 

 

 74,926

 

 

 

 

 

 93,870

 

 

 

Total asset-light logistics

 

 

 217,920

 

 

 

 

 

 211,110

 

 

 

 

 

 617,835

 

 

 

 

 

 599,762

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other and eliminations

 

 

 (13,449)

 

 

 

 

 

 (13,076)

 

 

 

 

 

 (41,521)

 

 

 

 

 

 (37,915)

 

 

 

Total consolidated revenues

 

$

 713,923

 

 

 

 

$

 709,380

 

 

 

 

$

 2,012,005

 

 

 

 

$

 2,018,771

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Freight Transportation (ABF Freight)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries, wages, and benefits

 

$

 312,458

 

 61.3

%  

 

$

 304,865

 

 59.6

%  

 

$

 912,758

 

 63.6

%  

 

$

 884,875

 60.7

%  

 

Fuel, supplies, and expenses

 

 

 71,774

 

 14.1

 

 

 

 77,708

 

 15.2

 

 

 

 210,742

 

 14.7

 

 

 

 236,381

 16.2

 

 

Operating taxes and licenses

 

 

 12,312

 

 2.4

 

 

 

 12,444

 

 2.4

 

 

 

 36,446

 

 2.6

 

 

 

 36,762

 2.5

 

 

Insurance

 

 

 8,487

 

 1.7

 

 

 

 8,288

 

 1.6

 

 

 

 22,613

 

 1.6

 

 

 

 20,340

 1.4

 

 

Communications and utilities

 

 

 4,608

 

 0.9

 

 

 

 3,808

 

 0.8

 

 

 

 13,259

 

 0.9

 

 

 

 11,559

 0.8

 

 

Depreciation and amortization

 

 

 20,753

 

 4.1

 

 

 

 18,841

 

 3.7

 

 

 

 62,056

 

 4.3

 

 

 

 54,528

 3.8

 

 

Rents and purchased transportation

 

 

 58,350

 

 11.5

 

 

 

 56,920

 

 11.1

 

 

 

 145,846

 

 10.2

 

 

 

 151,144

 10.4

 

 

Gain on sale of property and equipment

 

 

 (81)

 

 -

 

 

 

 (565)

 

 (0.1)

 

 

 

 (2,450)

 

 (0.2)

 

 

 

 (1,403)

 (0.1)

 

 

Pension settlement expense(2)

 

 

 604

 

 0.1

 

 

 

 572

 

 0.1

 

 

 

 1,705

 

 0.1

 

 

 

 1,860

 0.1

 

 

Other

 

 

 2,137

 

 0.4

 

 

 

 1,888

 

 0.4

 

 

 

 6,293

 

 0.4

 

 

 

 6,167

 0.4

 

 

 

 

 

 491,402

 

 96.5

%  

 

 

 484,769

 

 94.8

%  

 

 

 1,409,268

 

 98.2

%  

 

 

 1,402,213

 96.2

%  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Premium Logistics (Panther)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchased transportation

 

 

 54,586

 

 72.4

%  

 

 

 54,015

 

 73.4

%  

 

 

 155,444

 

 73.6

%  

 

 

 168,569

 73.6

%  

 

Depreciation and amortization(3)

 

 

 2,860

 

 3.8

 

 

 

 2,773

 

 3.8

 

 

 

 8,565

 

 4.1

 

 

 

 8,636

 3.8

 

 

Salaries, benefits, insurance, and other

 

 

 13,946

 

 18.5

 

 

 

 14,062

 

 19.1

 

 

 

 41,808

 

 19.8

 

 

 

 43,174

 18.8

 

 

 

 

 

 71,392

 

 94.7

%  

 

 

 70,850

 

 96.3

%  

 

 

 205,817

 

 97.5

%  

 

 

 220,379

 96.2

%  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transportation Management (ABF Logistics)(1)

 

 

 72,032

 

 

 

 

 

 47,478

 

 

 

 

 

 205,772

 

 

 

 

 

 142,686

 

 

 

Emergency & Preventative Maintenance (FleetNet)

 

 

 38,952

 

 

 

 

 

 44,225

 

 

 

 

 

 122,716

 

 

 

 

 

 126,542

 

 

 

Household Goods Moving Services (ABF Moving)

 

 

 29,054

 

 

 

 

 

 40,048

 

 

 

 

 

 72,819

 

 

 

 

 

 89,207

 

 

 

Total asset-light logistics(2)

 

 

 211,430

 

 

 

 

 

 202,601

 

 

 

 

 

 607,124

 

 

 

 

 

 578,814

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other and eliminations(2)

 

 

 (9,279)

 

 

 

 

 

 (11,428)

 

 

 

 

 

 (32,146)

 

 

 

 

 

 (30,439)

 

 

 

Total consolidated operating expenses and costs(2)

 

$

 693,553

 

 

 

 

$

 675,942

 

 

 

 

$

 1,984,246

 

 

 

 

$

 1,950,588

 

 

 


  1. The 2016 periods include the operations of LDS since the September 2, 2016 acquisition date and the operations of Bear, which was acquired in December 2015.
  2. Pension settlement expense totaled $0.8 million (pre-tax) on a consolidated basis for each of the three months ended September 30, 2016 and 2015 and $2.3 million (pre-tax) and $2.5 million (pre-tax) for the nine months ended September 30, 2016 and 2015, respectively. For each of the three months ended September 30, 2016 and 2015, pre-tax pension settlement expense of $0.6 million, was reported by ABF Freight; $0.2 million was reported in Other and eliminations; and less than $0.1 million was reported by the asset-light logistics segments.  For the nine months ended September 30, 2016 and 2015, pre-tax pension settlement expense of $1.7 million and $1.9 million, respectively, was reported by ABF Freight, $0.5 million was reported by Other and elimination; and $0.1 million was reported by the asset-light logistics segments.
  3. Depreciation and amortization consists primarily of amortization of intangibles, including customer relationships and software associated with the June 15, 2012 acquisition of Panther.

 

 

 

 

ARCBEST CORPORATION

FINANCIAL STATEMENT OPERATING SEGMENT DATA AND OPERATING RATIOS – Continued

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended 

 

Nine Months Ended 

 

 

 

September 30

 

September 30

 

 

    

2016

    

2015

    

2016

    

2015

 

 

 

(Unaudited)

 

 

 

($ thousands)

 

OPERATING INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

Freight Transportation (ABF Freight) (1)

 

$

 18,050

 

$

 26,577

 

$

 26,423

 

$

 54,711

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Premium Logistics (Panther)

 

 

 3,973

 

 

 2,733

 

 

 5,331

 

 

 8,767

 

Transportation Management (ABF Logistics)(2)

 

 

 410

 

 

 1,792

 

 

 1,572

 

 

 4,375

 

Emergency & Preventative Maintenance (FleetNet)

 

 

 121

 

 

 956

 

 

 1,701

 

 

 3,143

 

Household Goods Moving Services (ABF Moving)

 

 

 1,986

 

 

 3,028

 

 

 2,107

 

 

 4,663

 

Total asset-light logistics

 

 

 6,490

 

 

 8,509

 

 

 10,711

 

 

 20,948

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other and eliminations(3)

 

 

 (4,170)

 

 

 (1,648)

 

 

 (9,375)

 

 

 (7,476)

 

Total consolidated operating income

 

$

 20,370

 

$

 33,438

 

$

 27,759

 

$

 68,183

 


  1. ABF Freight’s operating income for all periods presented was impacted by pension settlement expense. (See reconciliation of GAAP operating income to non-GAAP operating income in the Freight Transportation table previously presented.)
  2. The 2016 periods include the operations of LDS since the September 2, 2016 acquisition date and the operations of Bear, which was acquired in December 2015.
  3. For the three and nine months ended September 30, 2016 and 2015, “Other” corporate costs include additional investments in enterprise solutions to provide an improved platform for revenue growth and for offering ArcBest services across multiple operating segments. For the three months ended September 30, 2016, “Other” corporate costs also include acquisition costs (see reconciliation of GAAP operating income to non-GAAP operating income in the ArcBest Corporation – Consolidated table previously presented).

 

 

 

 

 

ARCBEST CORPORATION

OPERATING STATISTICS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended 

 

Nine Months Ended 

 

 

 

September 30

 

September 30

 

 

    

2016

    

2015

    

% Change

    

2016

2015

    

% Change

 

 

 

(Unaudited)

 

Freight Transportation (ABF Freight)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Workdays

 

 

 64.0

 

 

 64.0

 

 

 

 

 191.5

 

 190.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Billed Revenue(4) CWT

 

$

 30.52

 

$

 29.68

 

2.8%

 

$

 29.12

$

 28.95

 

0.6%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Billed Revenue(4) / Shipment

 

$

 371.67

 

$

 377.96

 

(1.7%)

 

$

 366.80

$

 378.76

 

(3.2%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shipments

 

 

 1,366,052

 

 

 1,344,083

 

1.6%

 

 

 3,925,981

 

 3,851,446

 

1.9%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shipments / Day

 

 

 21,345

 

 

 21,001

 

1.6%

 

 

 20,501

 

 20,271

 

1.1%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tonnage (Tons)

 

 

 831,815

 

 

 855,952

 

(2.8%)

 

 

 2,472,490

 

 2,519,614

 

(1.9%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tons/Day

 

 

 12,997

 

 

 13,374

 

(2.8%)

 

 

 12,911

 

 13,261

 

(2.6%)

 


  1. Revenue for undelivered freight is deferred for financial statement purposes in accordance with ABF Freight’s revenue recognition policy. Billed revenue used for calculating revenue per hundredweight measurements has not been adjusted for the portion of revenue deferred for financial statement purposes. Billed revenue has been adjusted to exclude intercompany revenue that is not related to freight transportation services.

 

 

 

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