ArcBest® Announces First Quarter 2022 Results

Investor Relations Contact: David Humphrey

Media Contact: Autumnn Mahar

Title: Vice President – Investor Relations

Title: Senior Manager, PR and Social

Phone: 479-785-6200 

Phone: 479-494-8221

Email: dhumphrey@arcb.com

Email: amahar@arcb.com

 

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Solidifies Position as Leading Integrated Logistics Company and Delivers Record Profitability

  • First quarter 2022 revenue of $1.3 billion increased 61.0 percent over first quarter 2021.
  • Net income improved to $69.6 million, or $2.68 per diluted share. On a non-GAAP basis, first quarter 2022 net income was $79.8 million, or $3.08 per diluted share.
  • Continued significant investments in technology, customer solutions and people to drive revenue growth.

FORT SMITH, Arkansas, April 29, 2022 — ArcBest® (Nasdaq: ARCB), a leader in supply chain logistics, today reported first quarter 2022 revenue of $1.3 billion, reflecting an increase of $505.9 million compared to first quarter 2021. Each of ArcBest’s operating segments achieved double-digit percentage revenue growth over the prior year period. First quarter 2022 results include the impact of the acquisition of MoLo Solutions, LLC (“MoLo”), which was completed in November 2021.

ArcBest’s first quarter 2022 operating income was $94.9 million and net income was $69.6 million, or $2.68 per diluted share, compared to operating income of $32.2 million and net income of $23.4 million, or $0.87 per diluted share, in the first quarter of 2021. 

Excluding certain items in both periods as identified in the attached reconciliation tables, first quarter non-GAAP operating income was $108.6 million, compared to $40.8 million in the prior-year period. On a non-GAAP basis, net income was $79.8 million, or $3.08 per diluted share, compared to $28.5 million, or $1.06 per diluted share, in the first quarter of 2021.

Our outstanding first quarter results, including record profitability, demonstrate our success in transforming ArcBest and positioning it as one of the country’s leading integrated logistics companies,” said Judy R. McReynolds, ArcBest chairman, president and CEO. “Our strategy is working, underscored by improved operating margins across the business, and we are aggressively investing in our vision to ensure we continue innovating, developing our talent, enhancing our ability to serve customers and driving incremental revenue growth. As announced yesterday, our strong cash flow allows us to return more capital to shareholders by increasing both our share repurchase program and our dividend. We are confident our talented team is poised to execute on our clearly defined strategy, which will accelerate our growth trajectory while positioning ArcBest to operate even more efficiently and consistently for years to come.”

First Quarter Results of Operations Comparisons

Asset-Based

First Quarter 2022 Versus First Quarter 2021

  • Revenue of $705.3 million compared to $556.3 million, a per-day increase of 25.8 percent.
  • Total tonnage per day increase of 3.6 percent, including an increase of 0.9 percent in LTL-rated weight per shipment.
  • Total shipments per day increased 0.2 percent.
  • Total billed revenue per hundredweight increased 21.1 percent and was positively impacted by higher fuel surcharges. Revenue per hundredweight on LTL-rated business, excluding fuel surcharge, improved by a percentage in the double digits.
  • Operating income of $80.0 million compared to $30.1 million. On a non-GAAP basis, operating income of $87.0 million compared to $36.9 million.

Strength in the pricing environment and an increase in ABF Freight’s average weight per shipment both contributed to strong first quarter revenue growth in ArcBest’s Asset-Based business versus the prior year period. Despite inflationary pressures, customer demand and market rates remained solid and ArcBest continued to deliver on the increasing  supply chain needs of its customers through customized logistics solutions. Freight trends with ArcBest’s core LTL customers were also positive throughout the quarter while activities designed to optimize revenue, network balance, freight mix and shipments resulted in more efficient utilization of labor and network resources, and improved profitability. Asset-Based hiring initiatives were successful, contributing to ABF Freight adding over 600 new employees across key locations during the quarter.

Asset-Light

First Quarter 2022 Versus First Quarter 2021 (including the results of MoLo)

  • Revenue of $673.7 million compared to $311.5 million, a per-day increase of 114.6 percent.
  • Operating income of $22.8 million compared to $9.3 million. On a non-GAAP basis, operating income of $26.9 million compared to $10.2 million.
  • Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) of $29.3 million compared to $12.1 million, as detailed in the attached non-GAAP reconciliation tables.

 

Enhanced customer demand and higher market rates drove strong first quarter revenue growth and record profitability in the ArcBest Asset-Light segment. The integration of MoLo and related synergy realization remains on schedule and is progressing as expected, contributing to increases in truckload brokerage revenue and business levels over the same period last year. In addition, supply chain solutions offered through managed transportation, expedite and international services were meaningful contributors to the enhanced financial results of the Asset‑Light business. The higher operating income reflects increased revenue and effective cost management, which also resulted in greater operating leverage.

At FleetNet, increases in total events and revenue per event contributed to growth in total revenue and profitability compared to the prior year period.

NOTE

 ‡ - The ArcBest and FleetNet reportable segments, combined, represent Asset-Light operations.

Conference Call

ArcBest will host a conference call with company executives to discuss the 2022 first quarter results. The call will be today, Friday, April 29, at 9:30 a.m. EDT (8:30 a.m. CDT). Interested parties are invited to listen by calling (800) 891-9945 or by joining the webcast which can be found on ArcBest’s website at arcb.com. Slides to accompany this call are included in Exhibit 99.3 of the Form 8-K filed on April 29, 2022, 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 June 15, 2022. To listen to the playback, dial (800) 633‑8284 or (402) 977‑9140 (for international callers). The conference call ID for the playback is 22017045. The conference call and playback can also be accessed, through June 15, 2022, 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 nearly 15,000 employees across more than 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 their 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 March 31, 2022 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 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 acts of war or terrorism or military conflicts; 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; interruption or failure of third-party software or information technology systems or licenses; untimely or ineffective development and implementation of, or failure to realize potential benefits associated with, new or enhanced technology or processes, including the pilot test program at ABF Freight; the loss or reduction of business from large customers; the ability to manage our cost structure, and the timing and performance of growth initiatives; 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; market fluctuations and interruptions affecting the price of our stock or the price or timing of our share repurchase programs; maintaining our corporate reputation and intellectual property rights; nationwide or global disruption in the supply chain increasing 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 develop 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; 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; seasonal fluctuations and adverse weather conditions; 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 (the “SEC”).

For additional information regarding known material factors that could cause our actual results to differ from our projected results, 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 

 

 

 

March 31

 

 

    

2022

    

2021

    

 

 

(Unaudited)

 

 

 

($ thousands, except share and per share data)

 

REVENUES

 

$

 1,335,074

 

$

 829,213

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 1,240,146

 

 

 797,022

 

 

 

 

 

 

 

 

 

OPERATING INCOME

 

 

 94,928

 

 

 32,191

 

 

 

 

 

 

 

 

 

OTHER INCOME (COSTS)

 

 

 

 

 

 

 

Interest and dividend income

 

 

 106

 

 

 392

 

Interest and other related financing costs

 

 

 (1,939)

 

 

 (2,428)

 

Other, net

 

 

 (826)

 

 

 1,192

 

 

 

 

 (2,659)

 

 

 (844)

 

 

 

 

 

 

 

 

 

INCOME BEFORE INCOME TAXES

 

 

 92,269

 

 

 31,347

 

 

 

 

 

 

 

 

 

INCOME TAX PROVISION

 

 

 22,700

 

 

 7,986

 

 

 

 

 

 

 

 

 

NET INCOME

 

$

 69,569

 

$

 23,361

 

 

 

 

 

 

 

 

 

EARNINGS PER COMMON SHARE

 

 

 

 

 

 

 

Basic

 

$

 2.82

 

$

 0.92

 

Diluted

 

$

 2.68

 

$

 0.87

 

 

 

 

 

 

 

 

 

AVERAGE COMMON SHARES OUTSTANDING

 

 

 

 

 

 

 

Basic

 

 

 24,710,685

 

 

 25,454,921

 

Diluted

 

 

 25,911,200

 

 

 26,930,402

 

 

 

 

 

 

 

 

 

CASH DIVIDENDS DECLARED PER COMMON SHARE

 

$

 0.08

 

$

 0.08

 

 

ARCBEST CORPORATION

CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

 

 

 

 

March 31

 

December 31

 

 

    

2022

    

2021

 

 

 

(Unaudited)

 

Note

 

 

 

($ thousands, except share data)

 

ASSETS

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

 64,108

 

$

 76,620

 

Short-term investments

 

 

 37,024

 

 

 48,339

 

Accounts receivable, less allowances (2022 - $15,737; 2021 - $13,226)

 

 

 676,200

 

 

 582,344

 

Other accounts receivable, less allowances (2022 - $697; 2021 - $690)

 

 

 22,109

 

 

 13,094

 

Prepaid expenses

 

 

 42,688

 

 

 40,104

 

Prepaid and refundable income taxes

 

 

 9,010

 

 

 9,654

 

Other

 

 

 9,440

 

 

 5,898

 

TOTAL CURRENT ASSETS

 

 

 860,579

 

 

 776,053

 

 

 

 

 

 

 

 

 

PROPERTY, PLANT AND EQUIPMENT

 

 

 

 

 

 

 

Land and structures

 

 

 352,420

 

 

 350,694

 

Revenue equipment

 

 

 981,317

 

 

 980,283

 

Service, office, and other equipment

 

 

 259,201

 

 

 251,085

 

Software

 

 

 180,641

 

 

 175,989

 

Leasehold improvements

 

 

 17,226

 

 

 16,931

 

 

 

 

 1,790,805

 

 

 1,774,982

 

Less allowances for depreciation and amortization

 

 

 1,098,431

 

 

 1,079,061

 

 

 

 

 692,374

 

 

 695,921

 

 

 

 

 

 

 

 

 

GOODWILL

 

 

 299,008

 

 

 300,337

 

INTANGIBLE ASSETS, NET

 

 

 123,363

 

 

 126,580

 

OPERATING RIGHT-OF-USE ASSETS

 

 

 125,988

 

 

 106,686

 

DEFERRED INCOME TAXES

 

 

 5,324

 

 

 5,470

 

OTHER LONG-TERM ASSETS

 

 

 103,063

 

 

 101,629

 

TOTAL ASSETS

 

$

 2,209,699

 

$

 2,112,676

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

Accounts payable

 

$

 340,966

 

$

 311,401

 

Income taxes payable

 

 

 8,364

 

 

 12,087

 

Accrued expenses

 

 

 276,888

 

 

 305,851

 

Current portion of long-term debt

 

 

 89,766

 

 

 50,615

 

Current portion of operating lease liabilities

 

 

 24,127

 

 

 22,740

 

TOTAL CURRENT LIABILITIES

 

 

 740,111

 

 

 702,694

 

 

 

 

 

 

 

 

 

LONG-TERM DEBT, less current portion

 

 

 168,912

 

 

 174,917

 

OPERATING LEASE LIABILITIES, less current portion

 

 

 106,463

 

 

 88,835

 

POSTRETIREMENT LIABILITIES, less current portion

 

 

 16,710

 

 

 16,733

 

OTHER LONG-TERM LIABILITIES

 

 

 130,471

 

 

 135,537

 

DEFERRED INCOME TAXES

 

 

 63,860

 

 

 64,893

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

Common stock, $0.01 par value, authorized 70,000,000 shares;
      issued 2022: 29,384,711 shares; 2021: 29,359,957 shares

 

 

 294

 

 

 294

 

Additional paid-in capital

 

 

 344,429

 

 

 318,033

 

Retained earnings

 

 

 868,905

 

 

 801,314

 

   Treasury stock, at cost, 2022: 4,900,512 shares; 2021: 4,492,514 shares

 

 

 (235,779)

 

 

 (194,273)

 

Accumulated other comprehensive income

 

 

 5,323

 

 

 3,699

 

TOTAL STOCKHOLDERS’ EQUITY

 

 

 983,172

 

 

 929,067

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

 2,209,699

 

$

 2,112,676

 

 

Note: The balance sheet at December 31, 2021 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

 

ARCBEST CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended 

 

 

 

March 31

 

 

    

2022

    

2021

 

 

 

Unaudited

 

 

 

($ thousands)

 

 OPERATING ACTIVITIES

 

 

 

 

 

 

 

Net income

 

$

 69,569

 

$

 23,361

 

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

 

 

 

 

 

 

 

Depreciation and amortization

 

 

 31,591

 

 

 29,387

 

Amortization of intangibles

 

 

 3,232

 

 

 967

 

Share-based compensation expense

 

 

 2,763

 

 

 2,354

 

Provision for losses on accounts receivable

 

 

 1,628

 

 

 (96)

 

Change in deferred income taxes

 

 

 (1,417)

 

 

 (4,998)

 

Gain on sale of property and equipment and lease termination

 

 

 (3,002)

 

 

 (8,635)

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Receivables

 

 

 (103,677)

 

 

 (22,568)

 

Prepaid expenses

 

 

 (2,858)

 

 

 (2,582)

 

Other assets

 

 

 (2,781)

 

 

 (164)

 

Income taxes

 

 

 (3,017)

 

 

 6,376

 

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

 

 

 14

 

 

 567

 

Accounts payable, accrued expenses, and other liabilities

 

 

 (3,298)

 

 

 (1,435)

 

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

 

 

 (11,253)

 

 

 22,534

 

 

 

 

 

 

 

 

 

 INVESTING ACTIVITIES

 

 

 

 

 

 

 

Purchases of property, plant and equipment, net of financings

 

 

 (19,471)

 

 

 (9,588)

 

Proceeds from sale of property and equipment

 

 

 5,334

 

 

 10,079

 

Purchases of short-term investments

 

 

 (12,339)

 

 

 (18,130)

 

Proceeds from sale of short-term investments

 

 

 23,590

 

 

 24,418

 

Capitalization of internally developed software

 

 

 (4,510)

 

 

 (5,705)

 

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

 

 

 (7,396)

 

 

 1,074

 

 

 

 

 

 

 

 

 

 FINANCING ACTIVITIES

 

 

 

 

 

 

 

Borrowings under credit facilities

 

 

 58,000

 

 

 —

 

Payments on long-term debt

 

 

 (32,967)

 

 

 (17,387)

 

Net change in book overdrafts

 

 

 955

 

 

 (5,434)

 

Payment of common stock dividends

 

 

 (1,978)

 

 

 (2,037)

 

Purchases of treasury stock

 

 

 (16,506)

 

 

 (1,001)

 

Payments for tax withheld on share-based compensation

 

 

 (1,367)

 

 

 (161)

 

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

 

 

 6,137

 

 

 (26,020)

 

 

 

 

 

 

 

 

 

NET DECREASE IN CASH AND CASH EQUIVALENTS

 

 

 (12,512)

 

 

 (2,412)

 

Cash and cash equivalents at beginning of period

 

 

 76,620

 

 

 303,954

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

 

$

 64,108

 

$

 301,542

 

 

 

 

 

 

 

 

 

 NONCASH INVESTING ACTIVITIES

 

 

 

 

 

 

 

Equipment financed

 

$

 8,113

 

$

 —

 

Accruals for equipment received

 

$

 712

 

$

 233

 

Lease liabilities arising from obtaining right-of-use assets

 

$

 25,473

 

$

 1,959

 

 

 

ARCBEST CORPORATION

FINANCIAL STATEMENT OPERATING SEGMENT DATA AND OPERATING RATIOS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended 

 

 

 

March 31

 

 

    

2022

    

 

2021

    

 

 

Unaudited

 

 

 

($ thousands, except percentages)

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

Asset-Based

 

$

 705,311

 

 

 

 

$

 556,292

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ArcBest(1)

 

 

 595,284

 

 

 

 

 

 252,336

 

 

 

FleetNet

 

 

 78,378

 

 

 

 

 

 59,163

 

 

 

Total Asset-Light

 

 

 673,662

 

 

 

 

 

 311,499

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other and eliminations

 

 

 (43,899)

 

 

 

 

 

 (38,578)

 

 

 

Total consolidated revenues

 

$

 1,335,074

 

 

 

 

$

 829,213

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

Asset-Based

 

 

 

 

 

 

 

 

 

 

 

 

Salaries, wages, and benefits

 

$

 313,497

 

 44.5

%

 

$

 285,694

 

 51.4

%

Fuel, supplies, and expenses

 

 

 84,831

 

 12.0

 

 

 

 60,841

 

 10.9

 

Operating taxes and licenses

 

 

 12,493

 

 1.8

 

 

 

 12,248

 

 2.2

 

Insurance

 

 

 10,431

 

 1.5

 

 

 

 8,939

 

 1.6

 

Communications and utilities

 

 

 4,687

 

 0.7

 

 

 

 4,970

 

 0.9

 

Depreciation and amortization

 

 

 24,305

 

 3.4

 

 

 

 23,484

 

 4.2

 

Rents and purchased transportation

 

 

 102,985

 

 14.6

 

 

 

 75,588

 

 13.6

 

Shared services

 

 

 67,150

 

 9.5

 

 

 

 55,866

 

 10.1

 

Gain on sale of property and equipment(2)

 

 

 (2,695)

 

 (0.4)

 

 

 

 (8,695)

 

 (1.6)

 

Innovative technology costs(3)

 

 

 6,960

 

 1.0

 

 

 

 6,868

 

 1.2

 

Other

 

 

 633

 

 0.1

 

 

 

 434

 

 0.1

 

Total Asset-Based

 

 

 625,277

 

 88.7

%

 

 

 526,237

 

 94.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

ArcBest(1)

 

 

 

 

 

 

 

 

 

 

 

 

Purchased transportation

 

$

 508,380

 

 85.4

%

 

$

 210,995

 

 83.6

%

Supplies and expenses

 

 

 3,266

 

 0.6

 

 

 

 2,568

 

 1.0

 

Depreciation and amortization(4)

 

 

 5,180

 

 0.9

 

 

 

 2,386

 

 1.0

 

Shared services

 

 

 50,197

 

 8.4

 

 

 

 26,072

 

 10.3

 

Other

 

 

 7,145

 

 1.2

 

 

 

 2,050

 

 0.8

 

 

 

 

 574,168

 

 96.5

%

 

 

 244,071

 

 96.7

%

FleetNet

 

 

 76,661

 

 97.8

%

 

 

 58,140

 

 98.3

%

Total Asset-Light

 

 

 650,829

 

 

 

 

 

 302,211

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other and eliminations(5)

 

 

 (35,960)

 

 

 

 

 

 (31,426)

 

 

 

Total consolidated operating expenses

 

$

 1,240,146

 

 92.9

%

 

$

 797,022

 

 96.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME

 

 

 

 

 

 

 

 

 

 

 

 

Asset-Based

 

$

 80,034

 

 

 

 

$

 30,055

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ArcBest(1)

 

 

 21,116

 

 

 

 

 

 8,265

 

 

 

FleetNet

 

 

 1,717

 

 

 

 

 

 1,023

 

 

 

Total Asset-Light

 

 

 22,833

 

 

 

 

 

 9,288

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other and eliminations(5)

 

 

 (7,939)

 

 

 

 

 

 (7,152)

 

 

 

Total consolidated operating income

 

$

 94,928

 

 

 

 

$

 32,191

 

 

 


  1. The 2022 period includes the operations of MoLo, which was acquired on November 1, 2021.
  2. The 2021 period includes an $8.6 million gain on the sale of an unutilized service center property.
  3. Represents costs associated with the freight handling pilot test program at ABF Freight.
  4. Depreciation and amortization includes amortization of intangibles associated with acquired businesses.
  5. “Other and eliminations” includes corporate costs for certain unallocated shared service costs which are not attributable to any segment, additional investments to offer comprehensive transportation and logistics services across multiple operating segments, and other investments in ArcBest technology and innovations, including innovative technology costs.

 

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. 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 

 

 

 

March 31

 

 

    

2022

 

2021

    

ArcBest Corporation - Consolidated

 

(Unaudited)

 

 

 

($ thousands, except per share data)

 

Operating Income

 

 

 

 

 

 

 

Amounts on GAAP basis

 

$

 94,928

 

$

 32,191

 

Innovative technology costs, pre-tax(1)

 

 

 9,686

 

 

 7,667

 

Purchase accounting amortization(2)

 

 

 3,213

 

 

 937

 

Change in fair value of contingent consideration(3)

 

 

 810

 

 

 —

 

Non-GAAP amounts

 

$

 108,637

 

$

 40,795

 

 

 

 

 

 

 

 

 

Net Income

 

 

 

 

 

 

 

Amounts on GAAP basis

 

$

 69,569

 

$

 23,361

 

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

 

 

 7,289

 

 

 5,824

 

Purchase accounting amortization(2)

 

 

 2,396

 

 

 702

 

Change in fair value of contingent consideration(3)

 

 

 604

 

 

 —

 

Life insurance proceeds and changes in cash surrender value

 

 

 793

 

 

 (1,266)

 

Tax benefit from vested RSUs(4)

 

 

 (870)

 

 

 (135)

 

Non-GAAP amounts

 

$

 79,781

 

$

 28,486

 

 

 

 

 

 

 

 

 

Diluted Earnings Per Share

 

 

 

 

 

 

 

Amounts on GAAP basis

 

$

 2.68

 

$

 0.87

 

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

 

 

 0.28

 

 

 0.22

 

Purchase accounting amortization(2)

 

 

 0.09

 

 

 0.03

 

Change in fair value of contingent consideration(3)

 

 

 0.02

 

 

 —

 

Life insurance proceeds and changes in cash surrender value

 

 

 0.03

 

 

 (0.05)

 

Tax benefit from vested RSUs(4)

 

 

 (0.03)

 

 

 (0.01)

 

Non-GAAP amounts(5)

 

$

 3.08

 

$

 1.06

 

 


  1. Represents costs associated with the freight handling pilot test program at ABF Freight and initiatives to optimize our performance through technological innovation, including costs related to our investment in human-centered remote operation software.
  2. Represents the amortization of acquired intangible assets related to the November 1, 2021 acquisition of MoLo and previously acquired businesses in the ArcBest segment.
  3. Represents change in fair value of the contingent 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. As previously disclosed, 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.
  4. The Company recognizes the tax impact for the vesting of share-based compensation resulting in excess tax expense (benefit).
  5. Non-GAAP EPS is calculated in total and may not foot due to rounding.

 

 

 

Three Months Ended 

 

 

 

March 31

 

 

    

2022

 

2021

 

Segment Operating Income Reconciliations

 

(Unaudited)

 

 

 

($ thousands, except percentages)

 

Asset-Based Segment

 

 

 

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

 

 

 

Amounts on GAAP basis

 

$

 80,034

 

 88.7

%  

 

$

 30,055

 

 94.6

%  

 

Innovative technology costs, pre-tax(1)

 

 

 6,960

 

 (1.0)

 

 

 

 6,868

 

 (1.2)

 

 

Non-GAAP amounts

 

$

 86,994

 

 87.7

%  

 

$

 36,923

 

 93.4

%  

 

 

 

 

 

Asset-Light

 

 

 

ArcBest Segment

 

 

 

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

 

 

 

Amounts on GAAP basis

 

$

 21,116

 

 96.5

%  

 

$

 8,265

 

 96.7

%  

 

Purchase accounting amortization(2)

 

 

 3,213

 

 (0.5)

 

 

 

 937

 

 (0.4)

 

 

Change in fair value of contingent consideration(3)

 

 

 810

 

 (0.1)

 

 

 

 —

 

 —

 

 

Non-GAAP amounts

 

$

 25,139

 

 95.9

%  

 

$

 9,202

 

 96.3

%  

 

 

 

 

 

FleetNet Segment

 

 

 

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

 

 

 

Amounts on GAAP basis

 

$

 1,717

 

 97.8

%  

 

$

 1,023

 

 98.3

%  

 

 

 

 

 

Total Asset-Light

 

 

 

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

 

 

 

Amounts on GAAP basis

 

$

 22,833

 

 96.6

%  

 

$

 9,288

 

 97.0

%  

 

Purchase accounting amortization(2)

 

 

 3,213

 

 (0.5)

 

 

 

 937

 

 (0.3)

 

 

Change in fair value of contingent consideration(3)

 

 

 810

 

 (0.1)

 

 

 

 —

 

 —

 

 

Non-GAAP amounts

 

$

 26,856

 

 96.0

%  

 

$

 10,225

 

 96.7

%  

 

 

 

 

 

Other and Eliminations

 

 

 

Operating Loss ($)

 

 

 

Amounts on GAAP basis

 

$

 (7,939)

 

 

 

 

$

 (7,152)

 

 

 

 

Innovative technology costs, pre-tax(4)

 

 

 2,726

 

 

 

 

 

 799

 

 

 

 

Non-GAAP amounts

 

$

 (5,213)

 

 

 

 

$

 (6,353)

 

 

 

 

 


  1. Represents costs associated with the freight handling pilot test program at ABF Freight.
  2. Represents the amortization of acquired intangible assets related to the November 1, 2021 acquisition of MoLo and previously acquired businesses in the ArcBest segment.
  3. Represents change in fair value of the contingent consideration recorded for the MoLo acquisition, as previously described in the footnotes to the ArcBest Corporation – Consolidated non-GAAP table.
  4. Represents costs associated with initiative to optimize our performance through technological innovation, including costs related to our investment in human-centered remote operation software, and costs related to the freight handling pilot test program at ABF Freight.

 

Effective Tax Rate Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ArcBest Corporation - Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ thousands, except percentages)

 

Three Months Ended March 31, 2022

 

 

 

 

 

Other

 

Income

 

Income

 

 

 

 

 

 

 

 

Operating

 

Income

 

Before Income

 

Tax

 

Net

 

 

 

 

Income

 

(Costs)

 

Taxes

 

Provision

 

Income

 

Tax Rate(5)

Amounts on GAAP basis

 

$

 94,928

 

$

 (2,659)

 

$

 92,269

 

$

 22,700

 

$

 69,569

 

 24.6

%  

Innovative technology costs(1)

 

 

 9,686

 

 

 129

 

 

 9,815

 

 

 2,526

 

 

 7,289

 

 25.7

 

Purchase accounting amortization(2)

 

 

 3,213

 

 

 —

 

 

 3,213

 

 

 817

 

 

 2,396

 

 25.4

 

Change in fair value of contingent consideration(3)

 

 

 810

 

 

 —

 

 

 810

 

 

 206

 

 

 604

 

 25.4

 

Life insurance proceeds and changes in cash surrender value

 

 

 —

 

 

 793

 

 

 793

 

 

 —

 

 

 793

 

 —

 

Tax benefit from vested RSUs(4)

 

 

 —

 

 

 —

 

 

 —

 

 

 870

 

 

 (870)

 

 —

 

Non-GAAP amounts

 

$

 108,637

 

$

 (1,737)

 

$

 106,900

 

$

 27,119

 

$

 79,781

 

 25.4

%  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2021

 

 

 

 

Other

 

Income

 

Income

 

 

 

 

 

 

 

Operating

 

Income

 

Before Income

 

Tax

 

Net

 

 

 

 

Income

 

(Costs)

 

Taxes

 

Provision

 

Income

 

Tax Rate(5)

Amounts on GAAP basis

 

$

 32,191

 

$

 (844)

 

$

 31,347

 

$

 7,986

 

$

 23,361

 

 25.5

%  

Innovative technology costs(1)

 

 

 7,667

 

 

 174

 

 

 7,841

 

 

 2,017

 

 

 5,824

 

 25.7

 

Purchase accounting amortization(2)

 

 

 937

 

 

 —

 

 

 937

 

 

 235

 

 

 702

 

 25.1

 

Life insurance proceeds and changes in cash surrender value

 

 

 —

 

 

 (1,266)

 

 

 (1,266)

 

 

 —

 

 

 (1,266)

 

 —

 

Tax benefit from vested RSUs(4)

 

 

 —

 

 

 —

 

 

 —

 

 

 135

 

 

 (135)

 

 —

 

Non-GAAP amounts

 

$

 40,795

 

$

 (1,936)

 

$

 38,859

 

$

 10,373

 

$

 28,486

 

 26.7

%  

 


  1. Represents costs associated with the freight handling pilot test program at ABF Freight and initiatives to optimize our performance through technological innovation, including costs related to our investment in human-centered remote operation software.
  2. Represents the amortization of acquired intangible assets related to the November 1, 2021 acquisition of MoLo and previously acquired businesses in the ArcBest segment.
  3. Represents change in fair value of the contingent consideration recorded for the MoLo acquisition, as previously described in the footnotes to the ArcBest Corporation – Consolidated non-GAAP table.
  4. The Company recognizes the tax impact for the vesting of share-based compensation resulting in excess tax expense (benefit).
  5. Tax rate for total “Amounts on GAAP basis” represents the effective tax rate. The tax effects of non-GAAP adjustments are calculated based on the statutory rate applicable to each item based on tax jurisdiction, unless the nature of the item requires the tax effect to be estimated by applying a specific tax treatment.

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

Management uses Adjusted EBITDA as a key measure of performance and for business planning. The measure is particularly meaningful for analysis of operating performance because it excludes amortization of acquired intangibles and software of the Asset-Light businesses and changes in the fair value of contingent consideration, 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 credit agreement. The calculation of Consolidated Adjusted EBITDA as presented below begins with net income, which is the most directly comparable GAAP measure. The calculation of Asset-Light Adjusted EBITDA as presented below begins with operating income, as other income (costs), income taxes, and net income are reported at the consolidated level and not included in the operating segment financial information evaluated by management to make operating decisions.

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended 

 

 

 

March 31

 

 

    

2022

    

2021

    

 

 

(Unaudited)

 

ArcBest Corporation - Consolidated Adjusted EBITDA

 

($ thousands)

 

 

 

 

Net Income

 

$

 69,569

 

$

 23,361

 

Interest and other related financing costs

 

 

 1,939

 

 

 2,428

 

Income tax provision

 

 

 22,700

 

 

 7,986

 

Depreciation and amortization(1)

 

 

 34,823

 

 

 30,354

 

Amortization of share-based compensation

 

 

 2,763

 

 

 2,354

 

Change in fair value of contingent consideration(2)

 

 

 810

 

 

 —

 

Consolidated Adjusted EBITDA

 

$

 132,604

 

$

 66,483

 


  1. Includes amortization of intangibles associated with acquired businesses.
  2. Represents change in fair value of the contingent consideration recorded for the MoLo acquisition, as previously described in the footnotes to the ArcBest Corporation – Consolidated non-GAAP table.

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended 

 

 

 

March 31

 

 

    

2022

 

2021

 

Asset-Light Adjusted EBITDA

 

(Unaudited)

 

 

 

($ thousands)

 

 

 

 

 

ArcBest

 

 

 

 

 

 

 

Operating Income

 

$

 21,116

 

$

 8,265

 

Depreciation and amortization(3)

 

 

 5,180

 

 

 2,386

 

Change in fair value of contingent consideration(4)

 

 

 810

 

 

 —

 

Adjusted EBITDA

 

$

 27,106

 

$

 10,651

 

 

 

 

 

FleetNet

 

 

 

Operating Income

 

$

 1,717

 

$

 1,023

 

Depreciation and amortization(3)

 

 

 427

 

 

 415

 

Adjusted EBITDA

 

$

 2,144

 

$

 1,438

 

 

 

 

 

Total Asset-Light

 

 

 

 

 

 

 

Operating Income

 

$

 22,833

 

$

 9,288

 

Depreciation and amortization(3)

 

 

 5,607

 

 

 2,801

 

Change in fair value of contingent consideration(4)

 

 

 810

 

 

 —

 

Adjusted EBITDA

 

$

 29,250

 

$

 12,089

 


  1. Includes amortization of intangibles associated with acquired businesses.
  2. Represents change in fair value of the contingent consideration recorded for the MoLo acquisition, as previously described in the footnotes to the ArcBest Corporation – Consolidated non-GAAP table.

 

ARCBEST CORPORATION

OPERATING STATISTICS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended