ArcBest Corporation Announces Second Quarter 2016 Results
FOR IMMEDIATE RELEASE
Investor Relations Contact: David Humphrey
Title: Vice President – Investor Relations
Email: dhumphrey@arcb.com
Phone: 479-785-6200
Media Contact: Kathy Fieweger
Email: kfieweger@arcb.com
Phone: 479-719-4358
ArcBest Corporation® Announces Second Quarter 2016 Results
- Second quarter 2016 revenue of $676.6 million and net income of $10.2 million, or $0.39 per diluted share.
- Second quarter ABF Freight® operating results were impacted by lower daily revenue combined with costs associated with the handling of smaller average sized shipments.
- ArcBest’s asset-light logistics revenue equaled 30 percent of total revenue.
FORT SMITH Arkansas, July 29, 2016 – ArcBest Corporation® (Nasdaq: ARCB) today reported second quarter 2016 net income of $10.2 million, or $0.39 per diluted share, compared to second quarter 2015 net income of $20.0 million, or $0.74 per diluted share. The inconsistent economic operating environment combined with a surplus of transportation capacity continues to impact available business levels and operating margins at ABF Freight and at each of ArcBest’s asset-light logistics companies. In the midst of this challenging period, ArcBest continues to successfully build on the strategic opportunities it has to gain new business, strengthen shipper relationships and offer additional services to existing customers. The ArcBest companies are focused on delivering superior service levels while working together to offer comprehensive logistics solutions that meet customer needs at a fair price.
Excluding certain items in both periods, ArcBest’s non-GAAP net income was $10.0 million, or $0.38 per diluted share, in second quarter 2016 compared to earnings of $20.2 million, or $0.75 per diluted share, last year.
“Despite the current environment, we have a tremendous market opportunity within a customer base that values our differentiated customer experience,” said ArcBest Chairman, President and CEO Judy R. McReynolds. “The ArcBest companies continue to provide more logistics service options to our customers, who in turn value the trusted advice and deep industry knowledge we bring to help solve their logistics challenges.”
Freight Transportation (ABF Freight)
Results of Operations
Second Quarter 2016
- Revenue of $486.7 million compared to $504.4 million in second quarter 2015, a per-day decrease of 4.3 percent. Year-over-year reductions in fuel surcharge associated with lower diesel fuel prices contributed to ABF Freight’s lower revenue compared to last year.
- Tonnage per day decrease of 4.0 percent compared to second quarter 2015.
- Shipments per day decrease of 0.4 percent compared to second quarter 2015.
- Total billed revenue per hundredweight increased slightly, by 0.1 percent, compared to the prior year reflecting reduced fuel surcharges. Excluding fuel surcharge, the percentage increase on ABF Freight’s traditional LTL freight was in the low-single digits.
- Operating income of $17.4 million and an operating ratio of 96.4 percent compared to $28.1 million and an operating ratio of 94.4 percent in second quarter 2015. Excluding adjustments for nonunion pension settlement charges, operating income of $17.8 million and an operating ratio of 96.3 percent.
Factors impacting ABF Freight’s business levels and operating results are consistent with those seen earlier in the year. ABF Freight’s decreasing average weight per shipment has been driven by market factors that include abundant customer inventory levels combined with excess industry capacity available to move customers’ larger-sized shipments. Along with the effects of lower fuel surcharges, these factors have contributed to reduced second quarter revenue compared to last year. Though the current LTL pricing environment is competitive, it remains rational. Despite the impact of lower fuel surcharges, ABF Freight achieved reasonable increases on shipper pricing agreements and an average 2.9 percent increase on customer contract renewals during the quarter.
The continued strength in shipments relative to tonnage levels resulted in dock and street labor costs disproportionate to the revenue associated with reduced tonnage levels. ABF Freight’s traditional focus on customer service, even during periods of slower demand, is also putting some pressure on productivity metrics and operating margins. The consistent replacement of road and city tractors with newer units is yielding the expected positive cost benefits in the areas of equipment repair and maintenance, fuel economy and equipment rentals.
Asset-Light Logistics
Results of Operations
Second Quarter 2016
- Revenue of $205.2 million compared to $204.9 million in second quarter 2015.
- Asset-light revenue equaled 30 percent of total consolidated revenue, compared to 29 percent during the same period last year.
Combined second quarter revenue for ArcBest’s asset-light logistics business increased slightly compared to last year due to the effects of revenue growth at ABF Logistics, primarily related to its December 2015 acquisition of Bear Transportation, offset by market-driven revenue declines at ArcBest’s remaining asset-light logistics companies.
At ABF Logistics, revenue and gross margin per shipment decreased due to the impact of lower fuel prices and lower market rates resulting from excess truckload capacity in the spot market. Despite strong shipment growth at its legacy locations, driven by continued expansion of its customer base and collaboration among the ArcBest companies, legacy brokerage revenue was only slightly positive due to the lower revenue per shipment. Systems integration, training and alignment of positions at the newly acquired Bear locations were substantially completed during second quarter 2016 but negatively impacted employee productivity, and thus operating results. As efficiencies improve, these new locations are expected to contribute positively to earnings by the end of 2016.
Second quarter revenue at each of ArcBest’s other asset-light logistics companies was below the previous year due to lower market demand, an abundance of available transportation capacity and changes in customer mix. Reduced demand for the premium and expedited logistics services offered by Panther, combined with customer needs for smaller shipments moving shorter distances, has contributed to lower revenue levels and reduced operating margins. The slight decline in FleetNet’s revenue was due to decreases in event activity in both emergency roadside services and fleet maintenance and reduced business levels from transportation-related commercial customers. Despite continued success in adding business with its consumer and corporate customers, ABF Moving’s total second quarter revenue decreased because of the decline in government shipments handled.
“It is important to note that even during the current economic environment we continue to receive very positive feedback from many customers. They tell us that our expanded offerings are exactly in line with their evolving requirements for end-to-end shipping solutions and, increasingly, a single point of contact,” said McReynolds.
Conference Call
ArcBest Corporation will host a conference call with company executives to discuss the 2016 second quarter results. The call will be today, Friday, July 29, at 9:30 a.m. ET (8:30 a.m. CT). Interested parties are invited to listen by calling (888) 612-1051. Following the call, a recorded playback will be available through the end of the day on September 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 21813608. The conference call and playback can also be accessed, through September 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 June 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
|
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|
|
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|
|
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Three Months Ended |
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Six Months Ended |
||||||||
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|
June 30 |
|
June 30 |
||||||||
|
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
||||
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|
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(Unaudited) |
||||||||||
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|
|
($ thousands, except share and per share data) |
||||||||||
|
REVENUES |
|
$ |
676,627 |
|
$ |
696,115 |
|
$ |
1,298,082 |
|
$ |
1,309,391 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
659,973 |
|
|
662,649 |
|
|
1,290,693 |
|
|
1,274,645 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING INCOME |
|
|
16,654 |
|
|
33,466 |
|
|
7,389 |
|
|
34,746 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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OTHER INCOME (COSTS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and dividend income |
|
|
387 |
|
|
271 |
|
|
788 |
|
|
505 |
|
Interest and other related financing costs |
|
|
(1,231) |
|
|
(1,025) |
|
|
(2,478) |
|
|
(2,027) |
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Other, net |
|
|
571 |
|
|
197 |
|
|
937 |
|
|
597 |
|
|
|
|
(273) |
|
|
(557) |
|
|
(753) |
|
|
(925) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME TAXES |
|
|
16,381 |
|
|
32,909 |
|
|
6,636 |
|
|
33,821 |
|
|
|
|
|
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|
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INCOME TAX PROVISION |
|
|
6,150 |
|
|
12,942 |
|
|
2,508 |
|
|
13,109 |
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|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME |
|
$ |
10,231 |
|
$ |
19,967 |
|
$ |
4,128 |
|
$ |
20,712 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER COMMON SHARE(1) |
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Basic |
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$ |
0.39 |
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$ |
0.76 |
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$ |
0.16 |
|
$ |
0.79 |
|
Diluted |
|
$ |
0.39 |
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$ |
0.74 |
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$ |
0.16 |
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$ |
0.77 |
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AVERAGE COMMON SHARES OUTSTANDING |
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Basic |
|
|
25,791,026 |
|
|
26,021,874 |
|
|
25,806,774 |
|
|
26,036,375 |
|
Diluted |
|
|
26,246,868 |
|
|
26,593,451 |
|
|
26,295,683 |
|
|
26,592,615 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH DIVIDENDS DECLARED PER COMMON SHARE |
|
$ |
0.08 |
|
$ |
0.06 |
|
$ |
0.16 |
|
$ |
0.12 |
- ArcBest uses the two-class method for calculating earnings per share. This method, as calculated below, 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.
|
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NET INCOME |
|
$ |
10,231 |
|
$ |
19,967 |
|
$ |
4,128 |
|
$ |
20,712 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EFFECT OF UNVESTED RESTRICTED STOCK AWARDS |
|
|
(80) |
|
|
(203) |
|
|
(38) |
|
|
(227) |
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
ADJUSTED NET INCOME FOR CALCULATING EARNINGS PER COMMON SHARE (1) |
|
$ |
10,151 |
|
$ |
19,764 |
|
$ |
4,090 |
|
$ |
20,485 |
ARCBEST CORPORATION
|
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|
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|
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|
|
June 30 |
|
December 31 |
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||
|
|
|
2016 |
|
2015 |
|
||
|
|
|
(Unaudited) |
|
|
Note |
|
|
|
|
|
($ thousands, except share data) |
|
||||
|
ASSETS |
|
|
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
152,236 |
|
$ |
164,973 |
|
|
Short-term investments |
|
|
64,081 |
|
|
61,597 |
|
|
Restricted cash |
|
|
961 |
|
|
1,384 |
|
|
Accounts receivable, less allowances (2016 - $4,789; 2015 - $4,825) |
|
|
238,775 |
|
|
236,097 |
|
|
Other accounts receivable, less allowances (2016 - $810; 2015 - $1,029) |
|
|
7,346 |
|
|
6,718 |
|
|
Prepaid expenses |
|
|
21,558 |
|
|
20,801 |
|
|
Deferred income taxes |
|
|
37,316 |
|
|
38,443 |
|
|
Prepaid and refundable income taxes |
|
|
20,386 |
|
|
18,134 |
|
|
Other |
|
|
5,220 |
|
|
3,936 |
|
|
TOTAL CURRENT ASSETS |
|
|
547,879 |
|
|
552,083 |
|
|
|
|
|
|
|
|
|
|
|
PROPERTY, PLANT AND EQUIPMENT |
|
|
|
|
|
|
|
|
Land and structures |
|
|
287,545 |
|
|
273,839 |
|
|
Revenue equipment |
|
|
723,312 |
|
|
699,844 |
|
|
Service, office, and other equipment |
|
|
151,520 |
|
|
145,286 |
|
|
Software |
|
|
131,328 |
|
|
127,010 |
|
|
Leasehold improvements |
|
|
25,955 |
|
|
25,419 |
|
|
|
|
|
1,319,660 |
|
|
1,271,398 |
|
|
Less allowances for depreciation and amortization |
|
|
812,287 |
|
|
788,351 |
|
|
|
|
|
507,373 |
|
|
483,047 |
|
|
|
|
|
|
|
|
|
|
|
GOODWILL |
|
|
96,572 |
|
|
96,465 |
|
|
INTANGIBLE ASSETS, NET |
|
|
75,300 |
|
|
76,787 |
|
|
OTHER ASSETS |
|
|
56,050 |
|
|
54,527 |
|
|
|
|
$ |
1,283,174 |
|
$ |
1,262,909 |
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
145,423 |
|
$ |
130,869 |
|
|
Income taxes payable |
|
|
— |
|
|
91 |
|
|
Accrued expenses |
|
|
184,141 |
|
|
188,727 |
|
|
Current portion of long-term debt |
|
|
55,406 |
|
|
44,910 |
|
|
TOTAL CURRENT LIABILITIES |
|
|
384,970 |
|
|
364,597 |
|
|
|
|
|
|
|
|
|
|
|
LONG-TERM DEBT, less current portion |
|
|
170,044 |
|
|
167,599 |
|
|
PENSION AND POSTRETIREMENT LIABILITIES |
|
|
45,595 |
|
|
51,241 |
|
|
OTHER LIABILITIES |
|
|
12,301 |
|
|
12,689 |
|
|
DEFERRED INCOME TAXES |
|
|
87,773 |
|
|
78,055 |
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Common stock, $0.01 par value, authorized 70,000,000 shares; |
|
|
281 |
|
|
279 |
|
|
Additional paid-in capital |
|
|
311,924 |
|
|
309,653 |
|
|
Retained earnings |
|
|
376,780 |
|
|
376,827 |
|
|
Treasury stock, at cost, 2016: 2,363,533 shares; 2015: 2,080,187 shares |
|
|
(75,651) |
|
|
(70,535) |
|
|
Accumulated other comprehensive loss |
|
|
(30,843) |
|
|
(27,496) |
|
|
TOTAL STOCKHOLDERS’ EQUITY |
|
|
582,491 |
|
|
588,728 |
|
|
|
|
$ |
1,283,174 |
|
$ |
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
|
|
|
|
|
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|
|
|
|
|
|
Six Months Ended |
|
||||
|
|
|
June 30 |
|
||||
|
|
|
2016 |
|
2015 |
|
||
|
|
|
Unaudited |
|
||||
|
|
|
($ thousands) |
|
||||
|
OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
Net income |
|
$ |
4,128 |
|
$ |
20,712 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
48,913 |
|
|
42,630 |
|
|
Amortization of intangibles |
|
|
1,986 |
|
|
2,218 |
|
|
Pension settlement expense |
|
|
1,464 |
|
|
1,716 |
|
|
Share-based compensation expense |
|
|
4,200 |
|
|
4,233 |
|
|
Provision for losses on accounts receivable |
|
|
418 |
|
|
627 |
|
|
Deferred income tax provision (benefit) |
|
|
13,535 |
|
|
(2,559) |
|
|
Gain on sale of property and equipment |
|
|
(2,486) |
|
|
(1,049) |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Receivables |
|
|
(3,815) |
|
|
(16,560) |
|
|
Prepaid expenses |
|
|
(806) |
|
|
1,691 |
|
|
Other assets |
|
|
(3,286) |
|
|
385 |
|
|
Income taxes |
|
|
(4,262) |
|
|
12,306 |
|
|
Accounts payable, accrued expenses, and other liabilities |
|
|
(7,539) |
|
|
8,316 |
|
|
NET CASH PROVIDED BY OPERATING ACTIVITIES |
|
|
52,450 |
|
|
74,666 |
|
|
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment, net of financings |
|
|
(26,082) |
|
|
(34,205) |
|
|
Proceeds from sale of property and equipment |
|
|
6,250 |
|
|
2,690 |
|
|
Purchases of short-term investments |
|
|
(18,685) |
|
|
(10,780) |
|
|
Proceeds from sale of short-term investments |
|
|
16,415 |
|
|
2,967 |
|
|
Business acquisitions, net of cash acquired |
|
|
197 |
|
|
(5,219) |
|
|
Capitalization of internally developed software |
|
|
(5,098) |
|
|
(4,099) |
|
|
NET CASH USED IN INVESTING ACTIVITIES |
|
|
(27,003) |
|
|
(48,646) |
|
|
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
Borrowings under credit facilities |
|
|
— |
|
|
70,000 |
|
|
Borrowings under accounts receivable securitization program |
|
|
— |
|
|
35,000 |
|
|
Payments on long-term debt |
|
|
(22,827) |
|
|
(84,555) |
|
|
Net change in book overdrafts |
|
|
(6,489) |
|
|
(1,522) |
|
|
Net change in restricted cash |
|
|
423 |
|
|
(1) |
|
|
Deferred financing costs |
|
|
— |
|
|
(824) |
|
|
Payment of common stock dividends |
|
|
(4,175) |
|
|
(3,162) |
|
|
Purchases of treasury stock |
|
|
(5,116) |
|
|
(5,982) |
|
|
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES |
|
|
(38,184) |
|
|
8,954 |
|
|
|
|
|
|
|
|
|
|
|
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
|
|
(12,737) |
|
|
34,974 |
|
|
Cash and cash equivalents at beginning of period |
|
|
164,973 |
|
|
157,042 |
|
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
|
$ |
152,236 |
|
$ |
192,016 |
|
|
|
|
|
|
|
|
|
|
|
NONCASH INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
Accruals for equipment received |
|
$ |
10,614 |
|
$ |
8,972 |
|
|
Equipment financed |
|
$ |
35,768 |
|
$ |
12,670 |
|
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 provides 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. Furthermore, management uses EBITDA and Adjusted EBITDA as a key measure of performance and for business planning. 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; and 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 defined by GAAP.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
||||||||||||||||||
|
|
|
June 30 |
|
June 30 |
|
||||||||||||||||||||
|
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
||||||||||||||||
|
|
|
(Unaudited) |
|
||||||||||||||||||||||
|
|
|
($ thousands, except percentages) |
|
||||||||||||||||||||||
|
Freight Transportation (ABF Freight) |
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||||
|
Operating Income ($) Operating Ratio (% of revenues) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Amounts on GAAP basis |
|
$ |
17,372 |
|
96.4 |
% |
|
$ |
28,092 |
|
94.4 |
% |
|
$ |
8,373 |
|
99.1 |
% |
|
$ |
28,135 |
|
97.0 |
% |
|
|
Pension settlement expense |
|
|
424 |
|
(0.1) |
|
|
|
448 |
|
(0.1) |
|
|
|
1,101 |
|
(0.1) |
|
|
|
1,288 |
|
(0.1) |
|
|
|
Non-GAAP amounts |
|
$ |
17,796 |
|
96.3 |
% |
|
$ |
28,540 |
|
94.3 |
% |
|
$ |
9,474 |
|
99.0 |
% |
|
$ |
29,423 |
|
96.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|||||||||
|
|
|
June 30 |
|
|
June 30 |
|
|||||||
|
|
|
2016 |
|
2015 |
|
|
2016 |
|
|
2015 |
|
||
|
|
|
(Unaudited) |
|||||||||||
|
|
|
($ thousands, except percentages) |
|||||||||||
|
ArcBest Corporation - Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts on GAAP basis |
|
$ |
16,654 |
|
$ |
33,466 |
|
$ |
7,389 |
|
$ |
34,746 |
|
|
Pension settlement expense |
|
|
564 |
|
|
597 |
|
|
1,464 |
|
|
1,716 |
|
|
Non-GAAP amounts |
|
$ |
17,218 |
|
$ |
34,063 |
|
$ |
8,853 |
|
$ |
36,462 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts on GAAP basis |
|
$ |
10,231 |
|
$ |
19,967 |
|
$ |
4,128 |
|
$ |
20,712 |
|
|
Life insurance proceeds and changes in cash surrender value |
|
|
(537) |
|
|
(126) |
|
|
(892) |
|
|
(528) |
|
|
Pension settlement expense, after-tax |
|
|
345 |
|
|
364 |
|
|
895 |
|
|
1,048 |
|
|
Non-GAAP amounts |
|
$ |
10,039 |
|
$ |
20,205 |
|
$ |
4,131 |
|
$ |
21,232 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts on GAAP basis |
|
$ |
0.39 |
|
$ |
0.74 |
|
$ |
0.16 |
|
$ |
0.77 |
|
|
Life insurance proceeds and changes in cash surrender value |
|
|
(0.02) |
|
|
- |
|
|
(0.03) |
|
|
(0.02) |
|
|
Pension settlement expense, after-tax |
|
|
0.01 |
|
|
0.01 |
|
|
0.03 |
|
|
0.04 |
|
|
Non-GAAP amounts |
|
$ |
0.38 |
|
$ |
0.75 |
|
$ |
0.16 |
|
$ |
0.79 |
|
ARCBEST CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES – Continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (Adjusted EBITDA) |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|||||||||
|
|
|
June 30 |
|
|
June 30 |
|
|||||||
|
|
|
2016 |
|
2015 |
|
|
2016 |
|
|
2015 |
|
||
|
|
|
(Unaudited) |
|||||||||||
|
|
|
($ thousands) |
|||||||||||
|
ArcBest Corporation - Consolidated |
|
|
|||||||||||
|
|
|
|
|||||||||||
|
Net income |
|
$ |
10,231 |
|
$ |
19,967 |
|
$ |
4,128 |
|
$ |
20,712 |
|
|
Interest and other related financing costs |
|
|
1,231 |
|
|
1,025 |
|
|
2,478 |
|
|
2,027 |
|
|
Income tax provision |
|
|
6,150 |
|
|
12,942 |
|
|
2,508 |
|
|
13,109 |
|
|
Depreciation and amortization |
|
|
25,748 |
|
|
22,617 |
|
|
50,899 |
|
|
44,848 |
|
|
Amortization of share-based compensation |
|
|
2,491 |
|
|
2,586 |
|
|
4,200 |
|
|
4,233 |
|
|
Amortization of net actuarial losses of benefit plans and pension settlement expense(1) |
|
|
1,840 |
|
|
1,665 |
|
|
3,909 |
|
|
3,858 |
|
|
|
|
$ |
47,691 |
|
$ |
60,802 |
|
$ |
68,122 |
|
$ |
88,787 |
|
- Consolidated pension settlement expense totaled $0.6 million (pre-tax) for the three months ended June 30, 2016 and 2015, and totaled $1.5 million (pre-tax) and $1.7 million (pre-tax) for the six months ended June 30, 2016 and 2015, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) |
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30 |
|
||||||||||||||||
|
|
|
2016 |
|
2015 |
|
||||||||||||||
|
|
|
|
|
|
Depreciation |
|
|
|
|
|
|
|
Depreciation |
|
|
|
|
||
|
|
|
Operating |
|
and |
|
|
|
Operating |
|
and |
|
|
|
||||||
|
|
|
Income |
|
Amortization |
|
EBITDA |
|
Income |
|
Amortization |
|
EBITDA |
|
||||||
|
|
|
(Unaudited) |
|
||||||||||||||||
|
|
|
($ thousands) |
|
||||||||||||||||
|
Asset-Light Logistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premium Logistics (Panther)(2) |
|
$ |
1,102 |
|
$ |
2,868 |
|
$ |
3,970 |
|
$ |
4,838 |
|
$ |
2,939 |
|
$ |
7,777 |
|
|
Transportation Management (ABF Logistics) |
|
|
496 |
|
|
410 |
|
|
906 |
|
|
1,808 |
|
|
246 |
|
|
2,054 |
|
|
Emergency & Preventative Maintenance (FleetNet) |
|
|
596 |
|
|
301 |
|
|
897 |
|
|
1,017 |
|
|
276 |
|
|
1,293 |
|
|
Household Goods Moving Services (ABF Moving) |
|
|
870 |
|
|
180 |
|
|
1,050 |
|
|
1,997 |
|
|
338 |
|
|
2,335 |
|
|
Total asset-light logistics |
|
$ |
3,064 |
|
$ |
3,759 |
|
$ |
6,823 |
|
$ |
9,660 |
|
$ |
3,799 |
|
$ |
13,459 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30 |
|
||||||||||||||||
|
|
|
2016 |
|
2015 |
|
||||||||||||||
|
|
|
|
|
Depreciation |
|
|
|
|
|
|
Depreciation |
|
|
|
|
||||
|
|
|
Operating |
|
and |
|
|
|
Operating |
|
and |
|
|
|
||||||
|
|
|
Income |
|
Amortization |
|
EBITDA |
|
Income |
|
Amortization |
|
EBITDA |
|
||||||
|
|
|
(Unaudited) |
|
||||||||||||||||
|
|
|
($ thousands) |
|
||||||||||||||||
|
Asset-Light Logistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premium Logistics (Panther)(2) |
|
$ |
1,358 |
|
$ |
5,705 |
|
$ |
7,063 |
|
$ |
6,033 |
|
$ |
5,863 |
|
$ |
11,896 |
|
|
Transportation Management (ABF Logistics) |
|
|
1,162 |
|
|
834 |
|
|
1,996 |
|
|
2,583 |
|
|
530 |
|
|
3,113 |
|
|
Emergency & Preventative Maintenance (FleetNet) |
|
|
1,580 |
|
|
588 |
|
|
2,168 |
|
|
2,187 |
|
|
559 |
|
|
2,746 |
|
|
Household Goods Moving Services (ABF Moving) |
|
|
121 |
|
|
383 |
|
|
504 |
|
|
1,634 |
|
|
688 |
|
|
2,322 |
|
|
Total asset-light logistics |
|
$ |
4,221 |
|
$ |
7,510 |
|
$ |
11,731 |
|
$ |
12,437 |
|
$ |
7,640 |
|
$ |
20,077 |
|
- 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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
Six Months Ended |
|
|
|
||||||||||||||
|
|
|
June 30 |
|
|
|
|
June 30 |
|
|
|
||||||||||||||
|
|
|
2016 |
|
|
|
|
2015 |
|
|
|
|
2016 |
|
|
|
|
2015 |
|
|
|
||||
|
|
|
Unaudited |
|
|
|
|||||||||||||||||||
|
|
|
($ thousands, except percentages) |
|
|
|
|||||||||||||||||||
|
REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freight Transportation (ABF Freight) |
|
$ |
486,731 |
|
|
|
|
$ |
504,371 |
|
|
|
|
$ |
926,239 |
|
|
|
|
$ |
945,578 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premium Logistics (Panther) |
|
|
69,705 |
|
|
|
|
|
80,271 |
|
|
|
|
|
135,783 |
|
|
|
|
|
155,563 |
|
|
|
|
Transportation Management (ABF Logistics) |
|
|
67,955 |
|
|
|
|
|
50,419 |
|
|
|
|
|
134,902 |
|
|
|
|
|
97,791 |
|
|
|
|
Emergency & Preventative Maintenance (FleetNet) |
|
|
41,780 |
|
|
|
|
|
42,015 |
|
|
|
|
|
85,344 |
|
|
|
|
|
84,504 |
|
|
|
|
Household Goods Moving Services (ABF Moving) |
|
|
25,742 |
|
|
|
|
|
32,225 |
|
|
|
|
|
43,886 |
|
|
|
|
|
50,793 |
|
|
|
|
Total asset-light logistics |
|
|
205,182 |
|
|
|
|
|
204,930 |
|
|
|
|
|
399,915 |
|
|
|
|
|
388,651 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other and eliminations |
|
|
(15,286) |
|
|
|
|
|
(13,186) |
|
|
|
|
|
(28,072) |
|
|
|
|
|
(24,838) |
|
|
|
|
Total consolidated revenues |
|
$ |
676,627 |
|
|
|
|
$ |
696,115 |
|
|
|
|
$ |
1,298,082 |
|
|
|
|
$ |
1,309,391 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freight Transportation (ABF Freight) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries, wages, and benefits |
|
$ |
303,693 |
|
62.4 |
% |
|
$ |
301,639 |
|
59.8 |
% |
|
$ |
600,300 |
|
64.8 |
% |
|
$ |
580,010 |
61.3 |
% |
|
|
Fuel, supplies, and expenses |
|
|
72,279 |
|
14.8 |
|
|
|
79,647 |
|
15.8 |
|
|
|
138,968 |
|
15.0 |
|
|
|
158,673 |
16.8 |
|
|
|
Operating taxes and licenses |
|
|
12,154 |
|
2.5 |
|
|
|
12,322 |
|
2.4 |
|
|
|
24,134 |
|
2.6 |
|
|
|
24,318 |
2.6 |
|
|
|
Insurance |
|
|
7,660 |
|
1.6 |
|
|
|
6,267 |
|
1.2 |
|
|
|
14,126 |
|
1.5 |
|
|
|
12,052 |
1.3 |
|
|
|
Communications and utilities |
|
|
4,279 |
|
0.9 |
|
|
|
3,766 |
|
0.8 |
|
|
|
8,651 |
|
0.9 |
|
|
|
7,751 |
0.8 |
|
|
|
Depreciation and amortization |
|
|
20,911 |
|
4.3 |
|
|
|
18,286 |
|
3.6 |
|
|
|
41,303 |
|
4.5 |
|
|
|
35,686 |
3.8 |
|
|
|
Rents and purchased transportation |
|
|
47,800 |
|
9.8 |
|
|
|
52,380 |
|
10.4 |
|
|
|
87,496 |
|
9.5 |
|
|
|
94,224 |
10.0 |
|
|
|
Gain on sale of property and equipment |
|
|
(2,197) |
|
(0.5) |
|
|
|
(594) |
|
(0.1) |
|
|
|
(2,369) |
|
(0.3) |
|
|
|
(838) |
(0.1) |
|
|
|
Pension settlement expense(1) |
|
|
424 |
|
0.1 |
|
|
|
448 |
|
0.1 |
|
|
|
1,101 |
|
0.1 |
|
|
|
1,288 |
0.1 |
|
|
|
Other |
|
|
2,356 |
|
0.5 |
|
|
|
2,118 |
|
0.4 |
|
|
|
4,156 |
|
0.5 |
|
|
|
4,279 |
0.4 |
|
|
|
|
|
|
469,359 |
|
96.4 |
% |
|
|
476,279 |
|
94.4 |
% |
|
|
917,866 |
|
99.1 |
% |
|
|
917,443 |
97.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premium Logistics (Panther) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchased transportation |
|
|
52,007 |
|
74.6 |
% |
|
|
58,510 |
|
72.9 |
% |
|
|
100,858 |
|
74.3 |
% |
|
|
114,554 |
73.6 |
% |
|
|
Depreciation and amortization(2) |
|
|
2,868 |
|
4.1 |
|
|
|
2,939 |
|
3.7 |
|
|
|
5,705 |
|
4.2 |
|
|
|
5,863 |
3.8 |
|
|
|
Salaries, benefits, insurance, and other |
|
|
13,728 |
|
19.7 |
|
|
|
13,984 |
|
17.4 |
|
|
|
27,862 |
|
20.5 |
|
|
|
29,113 |
18.7 |
|
|
|
|
|
|
68,603 |
|
98.4 |
% |
|
|
75,433 |
|
94.0 |
% |
|
|
134,425 |
|
99.0 |
% |
|
|
149,530 |
96.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation Management (ABF Logistics) |
|
|
67,459 |
|
|
|
|
|
48,611 |
|
|
|
|
|
133,740 |
|
|
|
|
|
95,208 |
|
|
|
|
Emergency & Preventative Maintenance (FleetNet) |
|
|
41,184 |
|
|
|
|
|
40,998 |
|
|
|
|
|
83,764 |
|
|
|
|
|
82,317 |
|
|
|
|
Household Goods Moving Services (ABF Moving) |
|
|
24,872 |
|
|
|
|
|
30,228 |
|
|
|
|
|
43,765 |
|
|
|
|
|
49,159 |
|
|
|
|
Total asset-light logistics (1) |
|
|
202,118 |
|
|
|
|
|
195,270 |
|
|
|
|
|
395,694 |
|
|
|
|
|
376,214 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other and eliminations(1) |
|
|
(11,504) |
|
|
|
|
|
(8,900) |
|
|
|
|
|
(22,867) |
|
|
|
|
|
(19,012) |
|
|
|
|
Total consolidated operating expenses and costs(1) |
|
$ |
659,973 |
|
|
|
|
$ |
662,649 |
|
|
|
|
$ |
1,290,693 |
|
|
|
|
$ |
1,274,645 |
|
|
|
- Pension settlement expense totaled $0.6 million (pre-tax) on a consolidated basis for the three months ended June 30, 2016 and 2015, and totaled $1.5 million (pre-tax) and $1.7 million (pre-tax) for the six months ended June 30, 2016 and 2015, respectively. For the three months ended June 30, 2016 and 2015, pre-tax pension settlement expense of $0.4 million was reported by ABF Freight; $0.1 million was reported in Other and eliminations; and less than $0.1 million was reported by the asset-light logistics segments. For the six months ended June 30, 2016 and 2015, pre-tax pension settlement expense of $1.1 million and $1.3 million, respectively, was reported by ABF Freight; $0.3 million was reported in Other and eliminations; and $0.1 million was reported by the asset-light logistics segments.
- Depreciation and amortization consists primarily of amortization of intangibles, including customer relationships and software associated with the June 15, 2012 acquisition of Panther.
ARCBEST CORPORATION
FINANCIAL STATEMENT OPERATING SEGMENT DATA AND OPERATING RATIOS – Continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
||||||||
|
|
|
June 30 |
|
June 30 |
|
||||||||
|
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
||||
|
|
|
(Unaudited) |
|
||||||||||
|
|
|
($ thousands) |
|
||||||||||
|
OPERATING INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freight Transportation (ABF Freight) (1) |
|
$ |
17,372 |
|
$ |
28,092 |
|
$ |
8,373 |
|
$ |
28,135 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premium Logistics (Panther) |
|
|
1,102 |
|
|
4,838 |
|
|
1,358 |
|
|
6,033 |
|
|
Transportation Management (ABF Logistics) |
|
|
496 |
|
|
1,808 |
|
|
1,162 |
|
|
2,583 |
|
|
Emergency & Preventative Maintenance (FleetNet) |
|
|
596 |
|
|
1,017 |
|
|
1,580 |
|
|
2,187 |
|
|
Household Goods Moving Services (ABF Moving) |
|
|
870 |
|
|
1,997 |
|
|
121 |
|
|
1,634 |
|
|
Total asset-light logistics |
|
|
3,064 |
|
|
9,660 |
|
|
4,221 |
|
|
12,437 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other and eliminations |
|
|
(3,782) |
|
|
(4,286) |
|
|
(5,205) |
|
|
(5,826) |
|
|
Total consolidated operating income |
|
$ |
16,654 |
|
$ |
33,466 |
|
$ |
7,389 |
|
$ |
34,746 |
|
- 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.)
ARCBEST CORPORATION
OPERATING STATISTICS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|||||||||||
|
|
|
June 30 |
|
June 30 |
|
|||||||||||
|
|
|
2016 |
|
2015 |
|
% Change |
|
2016 |
2015 |
|
% Change |
|
||||
|
|
|
(Unaudited) |
|
|||||||||||||
|
Freight Transportation (ABF Freight) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Workdays |
|
|
64.0 |
|
|
63.5 |
|
|
|
|
127.5 |
|
126.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Billed Revenue(2) CWT |
|
$ |
29.07 |
|
$ |
29.04 |
|
0.1% |
|
$ |
28.41 |
$ |
28.57 |
|
(0.6%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Billed Revenue(2) / Shipment |
|
$ |
371.64 |
|
$ |
385.16 |
|
(3.5%) |
|
$ |
364.20 |
$ |
379.18 |
|
(4.0%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shipments |
|
|
1,323,606 |
|
|
1,318,566 |
|
0.4% |
|
|
2,559,929 |
|
2,507,363 |
|
2.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shipments / Day |
|
|
20,681 |
|
|
20,765 |
|
(0.4%) |
|
|
20,078 |
|
19,900 |
|
0.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tonnage (Tons) |
|
|
846,203 |
|
|
874,330 |
|
(3.2%) |
|
|
1,640,675 |
|
1,663,661 |
|
(1.4%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tons/Day |
|
|
13,222 |
|
|
13,769 |
|
(4.0%) |
|
|
12,868 |
|
13,204 |
|
(2.5%) |
|
- 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.
###