Strong gains in productivity and service
metrics
- Delivered second quarter 2024 net income of $46.9 million, or
$1.96 per diluted share, and non-GAAP net income of $47.4 million,
or $1.98 per diluted share.
- Significant efficiency improvements at ABF Freight while
delivering the best on-time service in five years.
- Improved Asset-Based operating income, despite higher labor
contract costs and lower revenue.
ArcBest® (Nasdaq: ARCB), a leader in supply chain logistics,
today reported second quarter 2024 revenue from continuing
operations of $1.08 billion, compared to $1.10 billion in the
second quarter of 2023. Second quarter 2024 operating income from
continuing operations was $48.8 million, compared to $42.1 million
in the prior year period, and net income from continuing operations
was $46.9 million, or $1.96 per diluted share, compared to $39.6
million, or $1.60 per diluted share, in 2023.
Excluding certain items in both periods as identified in the
attached reconciliation tables, second quarter 2024 non‑GAAP
operating income from continuing operations was $64.2 million,
compared to $50.1 million in the prior year period, an improvement
of $14.1 million. On a non-GAAP basis, net income from continuing
operations was $47.4 million, or $1.98 per diluted share, compared
to $38.0 million, or $1.54 per diluted share, in the second quarter
of 2023.
“I am incredibly proud of our employees’ commitment to utilizing
our quality process in pursuit of excellence every day. This
dedication has led to significant improvements in our operational
execution, with ABF Freight achieving its best on-time service
performance in recent years,” said Judy R. McReynolds, ArcBest
Chairman and CEO. “Furthermore, our substantial year-over-year
improvement in operating income is a solid performance, especially
considering ongoing macroeconomic headwinds.”
Results of Operations
Comparisons
Asset-Based
Second Quarter 2024
Versus Second
Quarter 2023
- Revenue of $712.7 million compared to $722.0 million, a per-day
decrease of 2.1 percent.
- Total tonnage per day decrease of 20.3 percent.
- Total shipments per day decrease of 4.8 percent.
- Total billed revenue per hundredweight increase of 23.0
percent.
- Core daily shipments increase of 14 percent and tonnage
increase of 11 percent.
- Operating income of $72.8 million and an operating ratio of
89.8 percent, on both a GAAP and non-GAAP basis, compared to
prior-year GAAP operating income of $43.3 million and an operating
ratio of 94.0 percent and prior-year non-GAAP operating income of
$51.7 million and an operating ratio of 92.8 percent.
On a non-GAAP basis, the Asset-Based segment generated $21.1
million more operating income than second quarter 2023 despite
lower revenue levels and higher labor costs, which highlights the
continued focus on serving core customers well and improving
operational efficiencies. Total second quarter daily shipment and
tonnage levels were below the prior year, due primarily to fewer
transactional shipments offset by increased core shipments, which
positively impacted productivity and contributed to an improved
operating ratio. On a non-GAAP basis, the Asset‑Based segment
delivered its second-best operating income result for a second
quarter in company history.
Pricing momentum continued in the quarter, driven by improved
freight mix, higher pricing on transactional shipments and contract
renewal increases of 5.1 percent. Overall, LTL industry pricing
remains rational.
Compared sequentially to the first quarter of 2024, second
quarter 2024 revenue per day was up 5.3 percent, tons per day
improved 2.3 percent and shipments per day were better by 1.9
percent. Second quarter billed revenue per hundredweight increased
3.2 percent from first quarter 2024. The operating ratio improved
220 basis points sequentially, which was within the range of
sequential quarterly changes seen in recent years.
Asset-Light
Second Quarter 2024 Versus Second Quarter
2023
- Revenue of $395.8 million compared to $409.8 million, a per-day
decrease of 4.2 percent.
- Operating loss of $9.5 million compared to operating income of
$13.2 million. On a non‑GAAP basis, operating loss of $2.5 million
compared to operating income of $6.4 million.
- Adjusted earnings before interest, taxes, depreciation and
amortization (“Adjusted EBITDA”) of negative $0.6 million compared
to $8.3 million, as detailed in the attached non-GAAP
reconciliation tables.
Compared to the second quarter of 2023, Asset-Light revenues
were impacted by lower revenue per shipment and reduced margins
associated with the soft rate environment and a higher mix of
managed transportation business, which has lower revenue per
shipment and margins. Shipments per day grew 12.6 percent, driven
in part by customers turning to ArcBest’s managed solution to
optimize their logistics spend. The decline in financial results on
a year-over-year basis was primarily due to lower rates and margins
for truckload solutions, reflecting the soft freight environment
and excess full truckload capacity. The segment continues to
benefit from productivity initiatives, as shipments per employee
per day and SG&A cost per shipment both significantly improved
on a year-over-year basis.
Compared sequentially to first quarter 2024, second quarter 2024
revenue per day was down one percent. Purchased transportation
costs decreased sequentially as carrier rates dipped following the
first quarter spike related to winter weather. The reduced
purchased transportation costs were the biggest contributor to the
lower non-GAAP operating loss in second quarter 2024, versus first
quarter. Total shipments per day decreased 1.4 percent compared to
first quarter 2024 and revenue per shipment was flat.
Conference Call
ArcBest will host a conference call with company executives to
discuss the quarterly results. The call will be today, Friday,
August 2, 2024 at 9:30 a.m. EDT (8:30 a.m. CDT). Interested parties
are invited to listen by calling (800) 715‑9871 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 August 2, 2024, 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 August 15,
2024. To listen to the playback, dial (800) 770-2030. The
conference call ID for the live conference call and the playback is
4743250. The conference call and playback can also be accessed
through August 15, 2024 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 15,000 employees across 250 campuses
and service centers, the company is a logistics powerhouse, using
its technology, expertise and scale to connect shippers with the
solutions they need — from ground, air and ocean transportation to
fully managed supply chains. ArcBest has a long history of
innovation that is enriched by deep customer relationships. With a
commitment to helping customers navigate supply chain challenges
now and in the future, the company is developing ground-breaking
technology like Vaux™, one of the TIME Best Inventions of 2023. 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 may constitute “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995,
including, among others, statements regarding (i) our expectations
about our intrinsic value or our prospects for growth and value
creation and (ii) our financial outlook, position, strategies,
goals, and expectations. Terms such as “anticipate,” “believe,”
“could,” “estimate,” “expect,” “forecast,” “foresee,” “intend,”
“may,” “plan,” “predict,” “project,” “scheduled,” “should,”
“would,” and similar expressions and the negatives of such terms
are intended to identify forward-looking statements. These
statements are based on management’s beliefs, assumptions, and
expectations based on currently available information, are not
guarantees of future performance, and involve certain risks and
uncertainties (some of which are beyond our control). Although we
believe that the expectations reflected in these forward-looking
statements are reasonable as and when made, we cannot provide
assurance that our expectations will prove to be correct. Actual
outcomes and results could materially differ from what is
expressed, implied, or forecasted in these statements due to a
number of factors, including, but not limited to: the effects of a
widespread outbreak of an illness or disease or any other public
health crisis, as well as regulatory measures implemented in
response to such events; external events which may adversely affect
us or the third parties who provide services for us, for which our
business continuity plans may not adequately prepare us, including,
but not limited to, acts of war or terrorism, or military
conflicts; data privacy breaches, cybersecurity incidents, and/or
failures of our information systems, including disruptions or
failures of services essential to our operations or upon which our
information technology platforms rely; interruption or failure of
third-party software or information technology systems or licenses;
untimely or ineffective development and implementation of, or
failure to realize the potential benefits associated with, new or
enhanced technology or processes, including our customer pilot
offering of Vaux; the loss or reduction of business from large
customers or an overall reduction in our customer base; the timing
and performance of growth initiatives and the ability to manage our
cost structure; the cost, integration, and performance of any
recent or future acquisitions and the inability to realize the
anticipated benefits of the acquisition within the expected time
period or at all; unsolicited takeover proposals, proxy contests,
and other proposals/actions by activist investors; maintaining our
corporate reputation and intellectual property rights; nationwide
or global disruption in the supply chain resulting in increased
volatility in freight volumes; competitive initiatives and pricing
pressures; increased prices for and decreased availability of
equipment, including new revenue equipment, decreases in value of
used revenue equipment, and higher costs of equipment-related
operating expenses such as maintenance, fuel, and related taxes;
availability of fuel, the effect of volatility in fuel prices and
the associated changes in fuel surcharges on securing increases in
base freight rates, and the inability to collect fuel surcharges;
relationships with employees, including unions, and our ability to
attract, retain, and upskill employees; unfavorable terms of, or
the inability to reach agreement on, future collective bargaining
agreements or a workforce stoppage by our employees covered under
ABF Freight’s collective bargaining agreement; union employee wages
and benefits, including changes in required contributions to
multiemployer plans; availability and cost of reliable third-party
services; our ability to secure independent owner-operators and/or
operational or regulatory issues related to our use of their
services; litigation or claims asserted against us; governmental
regulations; environmental laws and regulations, including
emissions-control regulations; default on covenants of financing
arrangements and the availability and terms of future financing
arrangements; our ability to generate sufficient cash from
operations to support significant ongoing capital expenditure
requirements and other business initiatives; self-insurance claims,
insurance premium costs, and loss of our ability to self-insure;
potential impairment of long-lived assets and goodwill and
intangible assets; general economic conditions and related shifts
in market demand that impact the performance and needs of
industries we serve and/or limit our customers’ access to adequate
financial resources; increasing costs due to inflation and higher
interest rates; seasonal fluctuations, adverse weather conditions,
natural disasters, and climate change; and other financial,
operational, and legal risks and uncertainties detailed from time
to time in ArcBest Corporation’s public filings with the Securities
and Exchange Commission (“SEC”).
For additional information regarding known material factors that
could cause our actual results to differ from those expressed in
these forward-looking statements, please see our filings with the
SEC, including our Annual Report on Form 10-K, Quarterly Reports on
Form 10-Q, and Current Reports on Form 8K.
Readers are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date hereof.
We undertake no obligation to publicly update or revise any
forward-looking statements after the date they are made, whether as
a result of new information, future events, or otherwise.
Financial Data and Operating
Statistics
The following tables show financial data and operating
statistics on ArcBest® and its reportable segments.
ARCBEST CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
Three Months Ended
Six Months Ended
June 30
June 30
2024
2023
2024
2023
(Unaudited)
($ thousands, except share and
per share data)
REVENUES
$
1,077,831
$
1,103,464
$
2,114,250
$
2,209,558
OPERATING EXPENSES
1,028,986
1,061,348
2,042,970
2,146,283
OPERATING INCOME
48,845
42,116
71,280
63,275
OTHER INCOME (COSTS)
Interest and dividend income
3,241
3,725
6,556
6,658
Interest and other related financing
costs
(2,078
)
(2,205
)
(4,306
)
(4,532
)
Other, net
(781
)
5,038
(28,980
)
6,818
382
6,558
(26,730
)
8,944
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES
49,227
48,674
44,550
72,219
INCOME TAX PROVISION
2,303
9,074
538
13,772
NET INCOME FROM CONTINUING
OPERATIONS
46,924
39,600
44,012
58,447
INCOME FROM DISCONTINUED OPERATIONS,
NET OF TAX(1)
—
843
600
53,279
NET INCOME
$
46,924
$
40,443
$
44,612
$
111,726
BASIC EARNINGS PER COMMON
SHARE(2)
Continuing operations
$
1.99
$
1.65
$
1.87
$
2.42
Discontinued operations(1)
—
0.04
0.03
2.20
$
1.99
$
1.68
$
1.89
$
4.62
DILUTED EARNINGS PER COMMON
SHARE(2)
Continuing operations
$
1.96
$
1.60
$
1.83
$
2.35
Discontinued operations(1)
—
0.03
0.02
2.14
$
1.96
$
1.64
$
1.86
$
4.49
AVERAGE COMMON SHARES
OUTSTANDING
Basic
23,618,318
24,064,882
23,589,814
24,175,893
Diluted
23,919,613
24,672,948
24,025,499
24,864,691
_________________________ 1)
Represents the discontinued operations of
FleetNet America® (“FleetNet”), which sold on February 28, 2023.
The six months ended June 30, 2024 represents adjustments related
to the prior year gain on sale of FleetNet. The six months ended
June 30, 2023 includes the net gain on sale of FleetNet of $52.3
million after-tax, or $2.16 basic earnings per share and $2.10
diluted earnings per share.
2)
Earnings per common share is calculated in
total and may not equal the sum of earnings per common share from
continuing operations and discontinued operations due to
rounding.
ARCBEST CORPORATION
CONSOLIDATED BALANCE SHEETS
June 30
December 31
2024
2023
(Unaudited)
Note
($ thousands, except share
data)
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
215,590
$
262,226
Short-term investments
44,865
67,842
Accounts receivable, less allowances (2024
- $8,788; 2023 - $10,346)
429,511
430,122
Other accounts receivable, less allowances
(2024 - $654; 2023 - $731)
11,846
52,124
Prepaid expenses
31,835
37,034
Prepaid and refundable income taxes
22,555
24,319
Other
11,011
11,116
TOTAL CURRENT ASSETS
767,213
884,783
PROPERTY, PLANT AND EQUIPMENT
Land and structures
507,194
460,068
Revenue equipment
1,143,985
1,126,055
Service, office, and other equipment
326,633
319,466
Software
177,933
173,354
Leasehold improvements
27,675
24,429
2,183,420
2,103,372
Less allowances for depreciation and
amortization
1,212,381
1,188,548
PROPERTY, PLANT AND EQUIPMENT,
NET
971,039
914,824
GOODWILL
304,753
304,753
INTANGIBLE ASSETS, NET
94,740
101,150
OPERATING RIGHT-OF-USE ASSETS
186,779
169,999
DEFERRED INCOME TAXES
9,974
8,140
OTHER LONG-TERM ASSETS
74,031
101,445
TOTAL ASSETS
$
2,408,529
$
2,485,094
LIABILITIES AND STOCKHOLDERS’
EQUITY
CURRENT LIABILITIES
Accounts payable
$
222,303
$
214,004
Income taxes payable
—
10,410
Accrued expenses
332,258
378,029
Current portion of long-term debt
58,615
66,948
Current portion of operating lease
liabilities
32,674
32,172
TOTAL CURRENT LIABILITIES
645,850
701,563
LONG-TERM DEBT, less current
portion
144,972
161,990
OPERATING LEASE LIABILITIES, less
current portion
185,637
176,621
POSTRETIREMENT LIABILITIES, less
current portion
13,264
13,319
CONTINGENT CONSIDERATION
104,070
92,900
OTHER LONG-TERM LIABILITIES
37,606
40,553
DEFERRED INCOME TAXES
45,592
55,785
STOCKHOLDERS’ EQUITY
Common stock, $0.01 par value, authorized
70,000,000 shares; issued 2024: 30,399,853 shares; 2023: 30,024,125
shares
304
300
Additional paid-in capital
324,645
340,961
Retained earnings
1,311,549
1,272,584
Treasury stock, at cost, 2024: 6,711,805
shares; 2023: 6,460,137 shares
(407,433
)
(375,806
)
Accumulated other comprehensive income
2,473
4,324
TOTAL STOCKHOLDERS’ EQUITY
1,231,538
1,242,363
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$
2,408,529
$
2,485,094
_________________________
Note: The balance sheet at December 31,
2023 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
Six Months Ended
June 30
2024
2023
(Unaudited)
($ thousands)
OPERATING ACTIVITIES
Net income
$
44,612
$
111,726
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
66,693
64,804
Amortization of intangibles
6,416
6,398
Share-based compensation expense
6,322
5,585
Provision for losses on accounts
receivable
1,248
2,257
Change in deferred income taxes
(11,457
)
(8,228
)
Loss on sale of property and equipment
565
1,188
Pre-tax gain on sale of discontinued
operations
(806
)
(70,215
)
Change in fair value of contingent
consideration
11,170
5,040
Change in fair value of equity
investment
28,739
(3,739
)
Changes in operating assets and
liabilities:
Receivables
38,702
83,542
Prepaid expenses
5,199
6,353
Other assets
(2,789
)
759
Income taxes
(8,806
)
(35,968
)
Operating right-of-use assets and lease
liabilities, net
(7,262
)
3,059
Accounts payable, accrued expenses, and
other liabilities
(38,344
)
(68,804
)
NET CASH PROVIDED BY OPERATING
ACTIVITIES
140,202
103,757
INVESTING ACTIVITIES
Purchases of property, plant and
equipment, net of financings
(104,909
)
(83,171
)
Proceeds from sale of property and
equipment
2,341
2,853
Proceeds from sale of discontinued
operations
—
100,949
Purchases of short-term investments
(5,236
)
(46,858
)
Proceeds from sale of short-term
investments
28,504
63,693
Capitalization of internally developed
software
(7,779
)
(7,010
)
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES
(87,079
)
30,456
FINANCING ACTIVITIES
Payments on long-term debt
(35,705
)
(35,114
)
Net change in book overdrafts
(4,146
)
(13,171
)
Deferred financing costs
—
57
Payment of common stock dividends
(5,647
)
(5,809
)
Purchases of treasury stock
(31,627
)
(41,240
)
Payments for tax withheld on share-based
compensation
(22,634
)
(10,022
)
NET CASH USED IN FINANCING
ACTIVITIES
(99,759
)
(105,299
)
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS
(46,636
)
28,914
Cash and cash equivalents of continuing
operations at beginning of period
262,226
158,264
Cash and cash equivalents of discontinued
operations at beginning of period
—
108
CASH AND CASH EQUIVALENTS AT END OF
PERIOD
$
215,590
$
187,286
NONCASH INVESTING ACTIVITIES
Equipment financed
$
10,354
$
3,478
Accruals for equipment received
$
3,904
$
10,106
Lease liabilities arising from obtaining
right-of-use assets
$
26,001
$
43,366
_________________________
Note: The statements of cash flows for the
six months ended June 30, 2024 and 2023 include cash flows from
continuing operations and cash flows from discontinued operations
of FleetNet, which sold on February 28, 2023.
ARCBEST CORPORATION
FINANCIAL STATEMENT OPERATING SEGMENT
DATA AND OPERATING RATIOS
Three Months Ended
Six Months Ended
June 30
June 30
2024
2023
2024
2023
(Unaudited)
($ thousands, except
percentages)
REVENUES FROM CONTINUING
OPERATIONS
Asset-Based
$
712,725
$
722,015
$
1,384,192
$
1,419,832
Asset-Light
395,817
409,816
792,180
847,908
Other and eliminations
(30,711
)
(28,367
)
(62,122
)
(58,182
)
Total consolidated revenues from
continuing operations
$
1,077,831
$
1,103,464
$
2,114,250
$
2,209,558
OPERATING EXPENSES FROM CONTINUING
OPERATIONS
Asset-Based
Salaries, wages, and benefits
$
352,678
49.5
%
$
344,538
47.7
%
$
697,677
50.4
%
$
680,143
47.9
%
Fuel, supplies, and expenses
82,938
11.6
90,897
12.6
163,982
11.8
185,185
13.1
Operating taxes and licenses
13,557
1.9
14,094
2.0
27,086
2.0
28,073
2.0
Insurance
16,964
2.4
12,889
1.8
31,446
2.3
26,162
1.8
Communications and utilities
4,412
0.6
4,553
0.6
9,211
0.7
9,857
0.7
Depreciation and amortization
26,646
3.8
25,273
3.5
53,653
3.9
50,184
3.5
Rents and purchased transportation
70,315
9.9
101,922
14.1
135,986
9.8
192,666
13.6
Shared services
72,245
10.1
74,468
10.3
137,159
9.9
139,081
9.8
(Gain) loss on sale of property and
equipment
(91
)
—
416
0.1
58
—
365
—
Innovative technology costs(1)
—
—
8,343
1.1
—
—
14,411
1.0
Other
269
—
1,297
0.2
1,686
0.1
2,909
0.2
Total Asset-Based
639,933
89.8
%
678,690
94.0
%
1,257,944
90.9
%
1,329,036
93.6
%
Asset-Light
Purchased transportation
$
339,247
85.7
%
$
343,102
83.7
%
$
683,369
86.3
%
$
713,265
84.1
%
Salaries, wages, and benefits(2)
31,036
7.8
32,485
7.9
61,340
7.7
67,495
8.0
Supplies and expenses(2)
2,768
0.7
2,905
0.7
5,577
0.7
6,534
0.8
Depreciation and amortization(3)
5,039
1.3
5,085
1.2
10,117
1.3
10,153
1.2
Shared services(2)
17,297
4.4
16,500
4.1
33,571
4.2
33,014
3.9
Contingent consideration(4)
3,850
1.0
(10,000
)
(2.4
)
11,170
1.4
5,040
0.6
Other(2)
6,078
1.5
6,559
1.6
11,792
1.5
13,318
1.5
Total Asset-Light
405,315
102.4
%
396,636
96.8
%
816,936
103.1
%
848,819
100.1
%
Other and eliminations(5)
(16,262
)
(13,978
)
(31,910
)
(31,572
)
Total consolidated operating expenses from
continuing operations
$
1,028,986
95.5
%
$
1,061,348
96.2
%
$
2,042,970
96.6
%
$
2,146,283
97.1
%
OPERATING INCOME (LOSS) FROM CONTINUING
OPERATIONS
Asset-Based
$
72,792
$
43,325
$
126,248
$
90,796
Asset-Light
(9,498
)
13,180
(24,756
)
(911
)
Other and eliminations(5)
(14,449
)
(14,389
)
(30,212
)
(26,610
)
Total consolidated operating income from
continuing operations
$
48,845
$
42,116
$
71,280
$
63,275
_________________________ 1)
Represents costs associated with the
freight handling pilot test program at ABF Freight, for which the
decision was made to pause the pilot during third quarter 2023.
2)
For the 2023 period, certain expenses have
been reclassed to conform to the current year presentation,
including amounts previously reported in “Shared services” that
were reclassed to present “Salaries, wages, and benefits” expenses
in a separate line item.
3)
Includes amortization of intangibles
associated with acquired businesses.
4)
Represents the change in fair value of the
contingent earnout consideration recorded for the MoLo acquisition.
The liability for contingent consideration is remeasured at each
quarterly reporting date, and any change in fair value as a result
of the recurring assessments is recognized in operating income
(loss). The contingent consideration for the MoLo acquisition will
be paid based on achievement of certain targets of adjusted
earnings before interest, taxes, depreciation, and amortization, as
adjusted for certain items pursuant to the merger agreement, for
years 2023 through 2025, including catch-up provisions.
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, costs related to our customer pilot
offering of Vaux, and other investments in ArcBest technology and
innovations.
ARCBEST CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP
FINANCIAL MEASURES
Non-GAAP Financial Measures
We report our financial results in
accordance with U.S. generally accepted accounting principles
(“GAAP”). However, management believes that certain non-GAAP
performance measures and ratios utilized for internal analysis
provide analysts, investors, and others the same information that
we use internally for purposes of assessing our core operating
performance and provides meaningful comparisons between current and
prior period results, as well as important information regarding
performance trends. Accordingly, non-GAAP results are presented on
a continuing operations basis, excluding the discontinued
operations of FleetNet, which sold on February 28, 2023. The use of
certain non-GAAP measures improves comparability in analyzing our
performance because it removes the impact of items from operating
results that, in management's opinion, do not reflect our core
operating performance. Other companies may calculate non-GAAP
measures differently; therefore, our calculation may not be
comparable to similarly titled measures of other companies. Certain
information discussed in the scheduled conference call could be
considered non-GAAP measures. Non-GAAP financial measures should be
viewed in addition to, and not as an alternative for, our reported
results. These financial measures should not be construed as better
measurements than operating income, net income or earnings per
share, as determined under GAAP.
Three Months Ended
Six Months Ended
June 30
June 30
2024
2023
2024
2023
ArcBest Corporation -
Consolidated
(Unaudited)
($ thousands, except per share
data)
Operating Income from Continuing
Operations
Amounts on GAAP basis
$
48,845
$
42,116
$
71,280
$
63,275
Innovative technology costs,
pre-tax(1)
8,311
14,821
18,009
27,299
Purchase accounting amortization,
pre-tax(2)
3,192
3,192
6,384
6,384
Change in fair value of contingent
consideration, pre-tax(3)
3,850
(10,000
)
11,170
5,040
Non-GAAP amounts
$
64,198
$
50,129
$
106,843
$
101,998
Net Income from Continuing
Operations
Amounts on GAAP basis
$
46,924
$
39,600
$
44,012
$
58,447
Innovative technology costs, after-tax
(includes related financing costs)(1)
6,380
11,206
13,820
20,686
Purchase accounting amortization,
after-tax(2)
2,400
2,398
4,801
4,796
Change in fair value of contingent
consideration, after-tax(3)
2,896
(7,512
)
8,401
3,787
Change in fair value of equity investment,
after-tax(4)
—
(2,786
)
21,603
(2,786
)
Life insurance proceeds and changes in
cash surrender value
(440
)
(1,086
)
(1,673
)
(2,582
)
Tax benefit from vested RSUs(5)
(10,777
)
(3,864
)
(11,264
)
(4,915
)
Non-GAAP amounts
$
47,383
$
37,956
$
79,700
$
77,433
Diluted Earnings Per Share from
Continuing Operations
Amounts on GAAP basis
$
1.96
$
1.60
$
1.83
$
2.35
Innovative technology costs, after-tax
(includes related financing costs)(1)
0.27
0.45
0.58
0.83
Purchase accounting amortization,
after-tax(2)
0.10
0.10
0.20
0.19
Change in fair value of contingent
consideration, after-tax(3)
0.12
(0.30
)
0.35
0.15
Change in fair value of equity investment,
after-tax(4)
—
(0.11
)
0.90
(0.11
)
Life insurance proceeds and changes in
cash surrender value
(0.02
)
(0.04
)
(0.07
)
(0.10
)
Tax benefit from vested RSUs(5)
(0.45
)
(0.16
)
(0.47
)
(0.20
)
Non-GAAP amounts(6)
$
1.98
$
1.54
$
3.32
$
3.11
_________________________
See “Notes to Non-GAAP Financial Tables”
for footnotes to this ArcBest Corporation – Consolidated non-GAAP
table.
ARCBEST CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES –
Continued
Three Months Ended
Six Months Ended
June 30
June 30
2024
2023
2024
2023
Segment Operating Income (Loss)
Reconciliations
(Unaudited)
($ thousands, except
percentages)
Asset-Based Segment
Operating Income ($) and Operating
Ratio (% of revenues)
Amounts on GAAP basis
$
72,792
89.8
%
$
43,325
94.0
%
$
126,248
90.9
%
$
90,796
93.6
%
Innovative technology costs,
pre-tax(7)
—
—
8,343
(1.1
)
—
—
14,411
(1.0
)
Non-GAAP amounts(6)
$
72,792
89.8
%
$
51,668
92.8
%
$
126,248
90.9
%
$
105,207
92.6
%
Asset-Light Segment
Operating Income (Loss) ($) and
Operating Ratio (% of revenues)
Amounts on GAAP basis
$
(9,498
)
102.4
%
$
13,180
96.8
%
$
(24,756
)
103.1
%
$
(911
)
100.1
%
Purchase accounting amortization,
pre-tax(2)
3,192
(0.8
)
3,192
(0.8
)
6,384
(0.8
)
6,384
(0.8
)
Change in fair value of contingent
consideration, pre-tax(3)
3,850
(1.0
)
(10,000
)
2.4
11,170
(1.4
)
5,040
(0.6
)
Non-GAAP amounts(6)
$
(2,456
)
100.6
%
$
6,372
98.4
%
$
(7,202
)
100.9
%
$
10,513
98.8
%
Other and Eliminations
Operating Income (Loss) ($)
Amounts on GAAP basis
$
(14,449
)
$
(14,389
)
$
(30,212
)
$
(26,610
)
Innovative technology costs,
pre-tax(1)
8,311
6,478
18,009
12,888
Non-GAAP amounts(6)
$
(6,138
)
$
(7,911
)
$
(12,203
)
$
(13,722
)
_________________________
Note: See “Notes to Non-GAAP Financial
Tables” for footnotes to this Segment Operating Income (Loss)
Reconciliations non-GAAP table.
ARCBEST CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES –
Continued
Effective Tax Rate
Reconciliation
ArcBest Corporation -
Consolidated
(Unaudited)
($ thousands, except percentages)
Three Months Ended June 30,
2024
Other
Income
Income
CONTINUING OPERATIONS
Operating
Income
Before Income
Tax
Net
Income
(Costs)
Taxes
Provision
Income
Tax Rate(8)
Amounts on GAAP basis
$
48,845
$
382
$
49,227
$
2,303
$
46,924
4.7
%
Innovative technology costs(1)
8,311
172
8,483
2,103
6,380
24.8
Purchase accounting amortization(2)
3,192
—
3,192
792
2,400
24.8
Change in fair value of contingent
consideration(3)
3,850
—
3,850
954
2,896
24.8
Life insurance proceeds and changes in
cash surrender value
—
(440
)
(440
)
—
(440
)
—
Tax benefit from vested RSUs(5)
—
—
—
10,777
(10,777
)
—
Non-GAAP amounts
$
64,198
$
114
$
64,312
$
16,929
$
47,383
26.3
%
Six Months Ended June 30,
2024
Other
Income
Income
Operating
Income
Before Income
Tax
Net
Income
(Costs)
Taxes
Provision
Income
Tax Rate(8)
Amounts on GAAP basis
$
71,280
$
(26,730
)
$
44,550
$
538
$
44,012
1.2
%
Innovative technology costs(1)
18,009
367
18,376
4,556
13,820
24.8
Purchase accounting amortization(2)
6,384
—
6,384
1,583
4,801
24.8
Change in fair value of contingent
consideration(3)
11,170
—
11,170
2,769
8,401
24.8
Change in fair value of equity
investment(4)
—
28,739
28,739
7,136
21,603
24.8
Life insurance proceeds and changes in
cash surrender value
—
(1,673
)
(1,673
)
—
(1,673
)
—
Tax benefit from vested RSUs(5)
—
—
—
11,264
(11,264
)
—
Non-GAAP amounts
$
106,843
$
703
$
107,546
$
27,846
$
79,700
25.9
%
Three Months Ended June 30,
2023
Other
Income
Income
CONTINUING OPERATIONS
Operating
Income
Before Income
Tax
Net
Income
(Costs)
Taxes
Provision
Income
Tax Rate(8)
Amounts on GAAP basis
$
42,116
$
6,558
$
48,674
$
9,074
$
39,600
18.6
%
Innovative technology costs(1)
14,821
241
15,062
3,856
11,206
25.6
Purchase accounting amortization(2)
3,192
—
3,192
794
2,398
24.9
Change in fair value of contingent
consideration(3)
(10,000
)
—
(10,000
)
(2,488
)
(7,512
)
(24.9
)
Change in fair value of equity
investment(4)
—
(3,739
)
(3,739
)
(953
)
(2,786
)
(25.5
)
Life insurance proceeds and changes in
cash surrender value
—
(1,086
)
(1,086
)
—
(1,086
)
—
Tax benefit from vested RSUs(5)
—
—
—
3,864
(3,864
)
—
Non-GAAP amounts
$
50,129
$
1,974
$
52,103
$
14,147
$
37,956
27.2
%
Six Months Ended June 30,
2023
Other
Income
Income
Operating
Income
Before Income
Tax
Net
Income
(Costs)
Taxes
Provision
Income
Tax Rate(8)
Amounts on GAAP basis
$
63,275
$
8,944
$
72,219
$
13,772
$
58,447
19.1
%
Innovative technology costs(1)
27,299
500
27,799
7,113
20,686
25.6
Purchase accounting amortization(2)
6,384
—
6,384
1,588
4,796
24.9
Change in fair value of contingent
consideration(3)
5,040
—
5,040
1,253
3,787
24.9
Change in fair value of equity
investment(4)
—
(3,739
)
(3,739
)
(953
)
(2,786
)
(25.5
)
Life insurance proceeds and changes in
cash surrender value
—
(2,582
)
(2,582
)
—
(2,582
)
—
Tax benefit from vested RSUs(5)
—
—
—
4,915
(4,915
)
—
Non-GAAP amounts
$
101,998
$
3,123
$
105,121
$
27,688
$
77,433
26.3
%
_________________________
Note: See “Notes to Non-GAAP Financial
Tables” for footnotes to this Effective Tax Rate Reconciliation
non-GAAP table.
ARCBEST CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP
FINANCIAL MEASURES – Continued
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 segment and changes in the fair values
of contingent consideration and our equity investment, which are
significant expenses resulting from strategic decisions or other
factors 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 from continuing
operations, which is the most directly comparable GAAP measure. The
calculation of Asset-Light Adjusted EBITDA as presented below
begins with operating income (loss), as other income (costs),
income taxes, and net income from continuing operations 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
Six Months Ended
June 30
June 30
2024
2023
2024
2023
(Unaudited)
($ thousands)
ArcBest Corporation - Consolidated
Adjusted EBITDA from Continuing Operations
Net Income from Continuing
Operations
$
46,924
$
39,600
$
44,012
$
58,447
Interest and other related financing
costs
2,078
2,205
4,306
4,532
Income tax provision
2,303
9,074
538
13,772
Depreciation and amortization(9)
36,276
35,811
73,109
70,821
Amortization of share-based
compensation
3,433
3,350
6,322
5,532
Change in fair value of contingent
consideration(3)
3,850
(10,000
)
11,170
5,040
Change in fair value of equity
investment(4)
—
(3,739
)
28,739
(3,739
)
Consolidated Adjusted EBITDA from
Continuing Operations
$
94,864
$
76,301
$
168,196
$
154,405
_________________________
Note: See “Notes to Non-GAAP Financial
Tables” for footnotes to this ArcBest Corporation – Consolidated
Adjusted EBITDA from Continuing Operations non-GAAP table.
Three Months Ended
Six Months Ended
June 30
June 30
2024
2023
2024
2023
(Unaudited)
($ thousands)
Asset-Light Adjusted EBITDA
Operating Income (Loss)
$
(9,498
)
$
13,180
$
(24,756
)
$
(911
)
Depreciation and amortization(9)
5,039
5,085
10,117
10,153
Change in fair value of contingent
consideration(3)
3,850
(10,000
)
11,170
5,040
Asset-Light Adjusted EBITDA
$
(609
)
$
8,265
$
(3,469
)
$
14,282
_________________________
Note: See “Notes to Non-GAAP Financial
Tables” for footnotes to this Asset-Light Adjusted EBITDA non-GAAP
table.
ARCBEST CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES –
Continued
Notes to Non-GAAP Financial
Tables
The following footnotes apply to the
non-GAAP financial tables presented in this press release.
1)
Represents costs related to our customer
pilot offering of Vaux and initiatives to optimize our performance
through technological innovation. The 2023 period also includes
costs associated with the freight handling pilot test program at
ABF Freight, for which the decision was made to pause the pilot
during third quarter 2023.
2)
Represents the amortization of acquired
intangible assets in the Asset-Light segment.
3)
Represents change in fair value of the
contingent earnout consideration recorded for the MoLo acquisition,
as previously described in the footnotes to the Financial Statement
Operating Segment Data and Operating Ratios table.
4)
For the six months ended June 30, 2024,
represents a noncash impairment charge to write off our equity
investment in Phantom Auto, a provider of human-centered remote
operation software, which ceased operations during first quarter
2024. For the three and six months ended June 30, 2023, represents
the increase in fair value of our investment in Phantom Auto based
on observable price changes during second quarter 2023.
5)
Represents recognition of the tax impact
for the vesting of share-based compensation.
6)
Non-GAAP amounts are calculated in total
and may not equal the sum of the GAAP amounts and the non-GAAP
adjustments due to rounding.
7)
Represents costs associated with the
freight handling pilot test program at ABF Freight, for which the
decision was made to pause the pilot during third quarter 2023.
8)
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.
9)
Includes amortization of intangibles
associated with acquired businesses.
ARCBEST CORPORATION
OPERATING STATISTICS
Three Months Ended
Six Months Ended
June 30
June 30
2024
2023
% Change
2024
2023
% Change
(Unaudited)
Asset-Based
Workdays
64.0
63.5
127.5
127.5
Billed Revenue(1) / CWT
$
50.09
$
40.72
23.0
%
$
49.34
$
41.33
19.4
%
Billed Revenue(1) / Shipment
$
562.17
$
545.35
3.1
%
$
552.64
$
537.38
2.8
%
Tonnage / Day
11,186
14,027
(20.3
%)
11,062
13,586
(18.6
%)
Shipments / Day
19,934
20,946
(4.8
%)
19,751
20,901
(5.5
%)
Shipments / DSY hour
0.448
0.417
7.4
%
0.445
0.424
5.0
%
Weight / Shipment
1,122
1,339
(16.2
%)
1,120
1,300
(13.8
%)
Average Length of Haul (Miles)
1,135
1,122
1.2
%
1,123
1,109
1.3
%
_________________________ 1)
Revenue for undelivered freight is
deferred for financial statement purposes in accordance with the
Asset-Based segment 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.
Year Over Year %
Change
Three Months Ended
Six Months Ended
June 30, 2024
June 30, 2024
(Unaudited)
Asset-Light(2)
Revenue / Shipment
(14.9%)
(17.4%)
Shipments / Day
12.6%
13.1%
_________________________ 2)
Statistical data for the periods presented
include transactions related to managed transportation solutions
which were previously excluded from the presentation of operating
statistics for the Asset-Light segment for the three and six months
ended June 30, 2023.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240802936060/en/
Investor Relations Contact: Amy Mendenhall Title: Vice President
– Treasury & Investor Relations Phone: 479-785-6200 Email:
invrel@arcb.com
Media Contact: Autumnn Mahar Title: Director External
Communications and Public Relations Phone: 479-494-8221 Email:
amahar@arcb.com
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