ArcBest Announces Second Quarter 2017 Results

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- Second quarter 2017 revenue of $720.4 million, and net income of $15.8 million, or $0.60 per diluted share. On a non-GAAP basis, second quarter 2017 net income of $14.9 million, or $0.57 per diluted share. - Increased revenue and profit in Asset-Based services resulting from shipment growth and improved pricing - Second quarter Asset-Light operating income improvement associated with revenue growth

July 28, 2017 6:00 AM EDT

FORT SMITH, Ark., July 28, 2017 /PRNewswire/ -- ArcBestSM (Nasdaq: ARCB) today reported second quarter 2017 revenue of $720.4 million compared to second quarter 2016 revenue of $676.6 million.  Second quarter 2017 operating income was $24.7 million compared to operating income of $16.7 million last year.  Net income of $15.8 million, or $0.60 per diluted share, compared to second quarter 2016 net income of $10.2 million, or $0.39 per diluted share.    

Excluding certain items in both periods as identified in the attached reconciliation tables, non-GAAP net income was $14.9 million, or $0.57 per diluted share, in second quarter 2017 compared to second quarter 2016 net income of $10.0 million, or $0.38 per diluted share. On a non-GAAP basis, operating income was $25.8 million in second quarter 2017 compared to second quarter 2016 operating income of $17.2 million.  Cost controls resulting from the enhanced market approach implemented at the beginning of the year continue to be in-line with expectations.  

"We were pleased to see improved results in the second quarter," said ArcBest Chairman, President and CEO Judy R. McReynolds. "Our responsiveness to customers' logistics needs supported by assured capacity options contributed to revenue growth and improved profitability.  Favorable trends in economic indicators are expected to positively impact the freight environment going forward.  In situations where multiple logistics solutions are increasingly required by customers to meet their own business objectives, we are well positioned to deliver."

Asset-Based

Results of Operations

Second Quarter 2017 Versus Second Quarter 2016

  • Revenue of $514.5 million compared to $486.3 million, a per-day increase of 6.7 percent.
  • Tonnage per day increase of 0.1 percent.
  • Shipments per day increase of 4.4 percent.
  • Total billed revenue per hundredweight increased 6.1 percent and was positively impacted by changes in shipment profile and higher fuel surcharges. Excluding fuel surcharge, the percentage increase on ArcBest's Asset-Based LTL freight was in the mid-single digits.
  • Operating income of $22.2 million and an operating ratio of 95.7 percent compared to operating income of $17.4 million and an operating ratio of 96.4 percent. On a non-GAAP basis, operating income of $22.7 million and an operating ratio of 95.6 percent compared to operating income of $17.8 million and an operating ratio of 96.3 percent.

The increase in total revenue and revenue per shipment for ArcBest's Asset-Based services occurred within a positive industry pricing environment.  Daily freight tonnage was flat versus the same period last year, as LTL-rated tonnage growth was partially offset by purposeful reductions in volume-quoted business.  Asset-Based expenses were positively impacted by lower costs and greater efficiencies in linehaul and equipment repositioning costs, partially offset by the need for higher amounts of freight handling labor and purchased transportation associated with the quarterly shipment growth.

Asset-Light‡

Results of Operations

Second Quarter 2017 Versus Second Quarter 2016

  • Revenue of $212.4 million compared to $196.1 million.
  • Operating income of $6.5 million compared to operating income of $2.8 million. On a non-GAAP basis, operating income of $6.7 million compared to $2.8 million.
  • Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") of $10.2 million compared to Adjusted EBITDA of $6.5 million.

ArcBest's Asset-Light revenue increase was the result of continued strength in demand for expedite services combined with the effects of additional dedicated truckload business from a September 2016 acquisition.  The significant year-over-year increase in asset-light operating income was the result of labor efficiencies, continued cost management and expedite revenue growth. Truckload revenue per shipment increased over the previous year's period, but led to lower shipment levels. While the truckload market tightened, truckload net revenue margins continued to be compressed as higher market rates for purchased transportation outpaced increases in revenue per shipment.  FleetNet maintained ongoing improvements in labor efficiencies and cost reductions that drove second quarter operating income improvement despite lower revenue and fewer total events versus last year associated with changes in customer profile.

Credit Agreement Amendment

As previously announced, on July 7, 2017 ArcBest amended the existing credit agreement with its current bank group. The new agreement increases the amount of the revolving credit facility to $200 million from $150 million, increases the revolver accordion to $100 million from $75 million and extends the credit facility maturity date approximately two and a half years to July 2022.

Closing Comments

"The improvement in the 2017 operating environment that we expected to see has materialized, giving us a solid foundation upon which to initiate our LTL, space-based pricing effort that takes effect August 1," said McReynolds. "As the freight profile we see in our network continues to evolve, we are confident this complementary pricing structure will provide better compensation in cases where the space taken up on our equipment is the most important factor to consider.  ArcBest is a trusted supply-chain advisor that understands our customers complex needs.  We continue to evolve our approach for the benefit of customers, the broader marketplace and our shareholders.  With the implementation of our enhanced market approach, we are now able to compete much more effectively for a larger segment of the logistics market by offering a wider array of solutions along with a more simplified customer experience."

Conference Call

ArcBest will host a conference call with company executives to discuss the 2017 second quarter results. The call will be today, Friday, July 28, at 9:30 a.m. ET (8:30 a.m. CT). Interested parties are invited to listen by calling (888) 209-3771. Following the call, a recorded playback will be available through the end of the day on September 15, 2017. To listen to the playback, dial (800) 633-8284 or (402) 977-9140 (for international callers). The conference call ID for the playback is 21854790. The conference call and playback can also be accessed, through September 15, 2017, on ArcBest's website at arcb.com.

About ArcBest

ArcBestSM (Nasdaq: ARCB) is a logistics company with creative problem solvers who have The Skill and the Will® to deliver integrated logistics solutions.  At ArcBest, We'll Find a Way to deliver knowledge, expertise and a can-do attitude with every shipment and supply chain solution, household move or vehicle repair.  For more information, visit arcb.com.

Forward-Looking Statements

Certain statements and information in this press release concerning results for the three months ended June 30, 2017 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 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; not achieving some or all of the expected financial and operating benefits of our corporate restructuring or incurring additional costs or operational inefficiencies as a result of the restructuring; relationships with employees, including unions, and our ability to attract and retain 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; competitive initiatives and pricing pressures; union and nonunion employee wages and benefits, including changes in required contributions to multiemployer plans; the cost, integration, and performance of any recent or future acquisitions; 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; governmental regulations; environmental laws and regulations, including emissions-control regulations; the loss or reduction of business from large customers; litigation or claims asserted against us; the cost, timing, and performance of growth initiatives; the loss of key employees or the inability to execute succession planning strategies; 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; default on covenants of financing arrangements and the availability and terms of future financing arrangements; timing and amount of capital expenditures; 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; potential impairment of goodwill and intangible assets; maintaining our intellectual property rights, brand, and corporate reputation; seasonal fluctuations and adverse weather conditions; regulatory, economic, and other risks arising from our international business;  antiterrorism and safety measures; and other financial, operational, and legal risks and uncertainties detailed from time to time in ArcBest'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 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.

NOTE

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

Financial Data and Operating Statistics

The following tables show financial data and operating statistics on ArcBestSM and its reportable segments.

Restructuring and Operating Segment Restatements. Certain restatements have been made to the prior year's operating segment data to conform to the current year presentation, reflecting the realignment of the Company's organizational structure as announced on November 3, 2016. Under the new structure, the segments previously reported as Premium Logistics (Panther), Transportation Management (ABF Logistics), and Household Goods Moving Services (ABF Moving) are consolidated as a single asset-light logistics operation under ArcBest. Segment revenues and expenses were adjusted to eliminate certain intercompany charges consistent with the manner in which they are reported under the new corporate structure. Certain intercompany charges among the previously reported Panther, ABF Logistics, and ABF Moving segments which were previously eliminated in the "Other and eliminations" line, are now eliminated within the ArcBest segment. There was no impact on the Company's consolidated revenues, operating expenses, operating income or earnings per share as a result of the restatements.

 

ARCBEST CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended 

Six Months Ended 

June 30

June 30

2017

2016

2017

2016

(Unaudited)

($ thousands, except share and per share data)

REVENUES

$

720,368

$

676,627

$

1,371,456

$

1,298,082

OPERATING EXPENSES

695,634

659,973

1,358,975

1,290,693

OPERATING INCOME

24,734

16,654

12,481

7,389

OTHER INCOME (COSTS)

Interest and dividend income

285

387

559

788

Interest and other related financing costs

(1,389)

(1,231)

(2,704)

(2,478)

Other, net

505

571

1,152

937

(599)

(273)

(993)

(753)

INCOME BEFORE INCOME TAXES

24,135

16,381

11,488

6,636

INCOME TAX PROVISION

8,358

6,150

3,118

2,508

NET INCOME

$

15,777

$

10,231

$

8,370

$

4,128

EARNINGS PER COMMON SHARE(1)

Basic

$

0.61

$

0.39

$

0.32

$

0.16

Diluted

$

0.60

$

0.39

$

0.32

$

0.16

AVERAGE COMMON SHARES OUTSTANDING

Basic

25,767,791

25,791,026

25,726,363

25,806,774

Diluted

26,291,641

26,246,868

26,378,436

26,295,683

CASH DIVIDENDS DECLARED PER COMMON SHARE

$

0.08

$

0.08

$

0.16

$

0.16

(1)

ArcBest uses the two-class method for calculating earnings per share. This method 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.

 

ARCBEST CORPORATION

CONSOLIDATED BALANCE SHEETS

June 30

December 31

2017

2016

(Unaudited)

Note

($ thousands, except share data)

ASSETS

CURRENT ASSETS

Cash and cash equivalents

$

102,569

$

114,280

Short-term investments

54,148

56,838

Restricted cash

—

962

   Accounts receivable, less allowances (2017 - $6,046; 2016 - $5,437)

282,856

260,643

   Other accounts receivable, less allowances (2017 - $890; 2016 - $849)             

19,052

22,041

Prepaid expenses

24,668

22,124

Prepaid and refundable income taxes

10,098

9,909

Other

8,293

4,300

 TOTAL CURRENT ASSETS

501,684

491,097

PROPERTY, PLANT AND EQUIPMENT

Land and structures

338,228

324,086

Revenue equipment

763,567

743,860

Service, office, and other equipment

161,555

154,119

Software

124,135

120,877

Leasehold improvements

9,008

8,758

1,396,493

1,351,700

Less allowances for depreciation and amortization

841,245

819,174

555,248

532,526

GOODWILL

108,981

108,875

INTANGIBLE ASSETS, NET

78,237

80,507

DEFERRED INCOME TAXES

2,722

2,978

OTHER LONG-TERM ASSETS

65,389

66,095

$

1,312,261

$

1,282,078

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

Accounts payable

$

142,373

$

133,301

Accrued expenses

200,052

198,731

Current portion of long-term debt

62,588

64,143

 TOTAL CURRENT LIABILITIES

405,013

396,175

LONG-TERM DEBT, less current portion

194,730

179,530

PENSION AND POSTRETIREMENT LIABILITIES

37,028

35,848

OTHER LONG-TERM LIABILITIES

15,185

16,790

DEFERRED INCOME TAXES

58,225

54,680

STOCKHOLDERS' EQUITY

Common stock, $0.01 par value, authorized 70,000,000 shares;issued 2017: 28,450,025 shares; 2016: 28,174,424 shares

285

282

Additional paid-in capital

316,334

315,318

Retained earnings

391,143

386,917

   Treasury stock, at cost, 2017: 2,759,919 shares; 2016: 2,565,399 shares

(83,656)

(80,045)

Accumulated other comprehensive loss

(22,026)

(23,417)

 TOTAL STOCKHOLDERS' EQUITY

602,080

599,055

$

1,312,261

$

1,282,078

Note:  The balance sheet at December 31, 2016 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

2017

2016

Unaudited

($ thousands)

 OPERATING ACTIVITIES

Net income

$

8,370

$

4,128

Adjustments to reconcile net loss

to net cash provided by operating activities:

Depreciation and amortization

48,332

48,913

Amortization of intangibles

2,271

1,986

Pension settlement expense

2,701

1,464

Share-based compensation expense

3,599

4,200

Provision for losses on accounts receivable

1,053

418

Deferred income tax provision

2,687

13,535

Gain on sale of property and equipment

(412)

(2,486)

Changes in operating assets and liabilities:

Receivables

(21,091)

(2,292)

Prepaid expenses

(2,549)

(806)

Other assets

(3,100)

(3,286)

Income taxes

458

(4,262)

Accounts payable, accrued expenses, and other liabilities

9,007

(7,752)

 NET CASH PROVIDED BY OPERATING ACTIVITIES

51,326

53,760

 INVESTING ACTIVITIES

Purchases of property, plant and equipment, net of financings

(27,123)

(26,082)

Proceeds from sale of property and equipment

2,751

6,250

Purchases of short-term investments

(6,223)

(18,685)

Proceeds from sale of short-term investments

9,065

16,415

Business acquisitions, net of cash acquired

—

197

Capitalization of internally developed software

(4,323)

(5,098)

 NET CASH USED IN INVESTING ACTIVITIES

(25,853)

(27,003)

 FINANCING ACTIVITIES

Borrowings under accounts receivable securitization program

10,000

—

Payments on long-term debt

(34,948)

(22,827)

Net change in book overdrafts

(2,478)

(6,489)

Deferred financing costs

(275)

—

Payment of common stock dividends

(4,144)

(4,175)

Purchases of treasury stock

(3,611)

(5,116)

Payments for tax withheld on share-based compensation

(2,690)

(1,310)

 NET CASH USED IN FINANCING ACTIVITIES

(38,146)

(39,917)

 NET DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

(12,673)

(13,160)

Cash and cash equivalents and restricted cash at beginning of period

115,242

166,357

 CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD

$

102,569

$

153,197

 NONCASH INVESTING ACTIVITIES

Equipment financed

$

38,593

$

35,768

Accruals for equipment received

$

3,179

$

10,614

 

ARCBEST CORPORATION

FINANCIAL STATEMENT OPERATING SEGMENT DATA AND OPERATING RATIOS

Three Months Ended 

Six Months Ended 

June 30

June 30

2017

2016

2017

2016

Unaudited

($ thousands, except percentages)

REVENUES

Asset-Based

$

514,537

$

486,251

$

978,893

$

925,314

ArcBest(1)

175,929

154,347

328,805

296,744

FleetNet

36,501

41,780

76,739

85,344

 Total Asset-Light

212,430

196,127

405,544

382,088

Other and eliminations

(6,599)

(5,751)

(12,981)

(9,320)

 Total consolidated revenues

$

720,368

$

676,627

$

1,371,456

$

1,298,082

OPERATING EXPENSES

Asset-Based

Salaries, wages, and benefits

$

314,252

61.1

%

$

303,214

62.3

%

$

619,095

63.2

%

$

599,376

64.8

%

Fuel, supplies, and expenses

75,878

14.7

72,279

14.9

151,310

15.5

138,968

15.0

Operating taxes and licenses

12,252

2.4

12,154

2.5

24,121

2.5

24,134

2.6

Insurance

7,540

1.5

7,660

1.6

14,649

1.5

14,126

1.5

Communications and utilities

4,535

0.9

4,279

0.9

9,357

1.0

8,651

0.9

Depreciation and amortization

21,324

4.1

20,911

4.3

42,307

4.3

41,303

4.5

Rents and purchased transportation

53,346

10.4

47,800

9.8

99,954

10.2

87,496

9.5

(Gain) loss on sale of property and equipment

25

—

(2,197)

(0.5)

(592)

(0.1)

(2,369)

(0.3)

Pension settlement expense(2)

533

0.1

424

0.1

1,934

0.2

1,101

0.1

Other

2,658

0.5

2,355

0.5

4,449

0.5

4,155

0.5

Restructuring costs(3)

33

—

—

—

173

—

—

—

 Total Asset-Based

492,376

95.7

%

468,879

96.4

%

966,757

98.8

%

916,941

99.1

%

ArcBest(1)

Purchased transportation

139,354

79.2

%

121,502

78.7

%

261,273

79.5

%

233,333

78.6

%

Salaries, wages, and benefits

16,762

9.5

17,668

11.4

33,298

10.1

36,249

12.2

Supplies and expenses

6,769

3.9

4,641

3.0

12,055

3.7

9,059

3.1

Depreciation and amortization(4)

3,337

1.9

3,475

2.3

6,703

2.0

6,940

2.4

Other(2)

3,828

2.2

4,888

3.2

7,886

2.4

8,982

3.0

Restructuring costs(3)

65

—

—

—

875

0.3

—

—

170,115

96.7

%

152,174

98.6

%

322,090

98.0

%

294,563

99.3

%

FleetNet(2)

35,771

98.0

%

41,184

98.6

%

75,035

97.8

%

83,764

98.1

%

 Total Asset-Light

205,886

193,358

397,125

378,327

Other and eliminations(2)

(2,628)

(2,264)

(4,907)

(4,575)

 Total consolidated operating expenses

$

695,634

96.6

%

$

659,973

97.5

%

$

1,358,975

99.1

%

$

1,290,693

99.4

%

OPERATING INCOME

Asset-Based

$

22,161

$

17,372

12,136

8,373

ArcBest(1)

5,814

2,173

6,715

2,181

FleetNet

730

596

1,704

1,580

 Total Asset-Light

6,544

2,769

8,419

3,761

Other and eliminations(5)

(3,971)

(3,487)

(8,074)

(4,745)

 Total consolidated operating income

$

24,734

$

16,654

$

12,481

$

7,389

1) 

The 2017 period includes the operations of Logistics & Distribution Services, LLC ("LDS"), which was acquired in September 2016.

2) 

Consolidated and segment operating results for all periods presented were impacted by pension settlement expense. (See ArcBest Corporation - Consolidated and Segment Operating Income Reconciliations of GAAP to Non-GAAP Financial Measures tables.)

3) 

Restructuring charges relate to the realignment of the Company's organizational structure.

4) 

Depreciation and amortization consists primarily of amortization of intangibles, including customer relationships, and software associated with acquired businesses.

5) 

"Other" corporate costs include $0.3 million and $0.9 million of restructuring charges for the three and six months ended June 30, 2017, respectively. (See Segment Operating Income Reconciliations of GAAP to Non-GAAP Financial Measures table.) Other corporate costs also include additional investments to provide an improved platform for revenue growth and for offering ArcBest services across multiple operating segments.

 

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

Three Months Ended 

Six Months Ended 

June 30

June 30

2017

2016

2017

2016

(Unaudited)

($ thousands, except per share data)

ArcBest Corporation - Consolidated

Operating Income

Amounts on GAAP basis

$

24,734

$

16,654

$

12,481

$

7,389

Restructuring charges, pre-tax(1)

363

—

1,994

—

Pension settlement expense, pre-tax

744

564

2,701

1,464

Non-GAAP amounts

$

25,841

$

17,218

$

17,176

$

8,853

Net Income

Amounts on GAAP basis

$

15,777

$

10,231

$

8,370

$

4,128

Restructuring charges, after-tax(1)

220

—

1,209

—

Pension settlement expense, after-tax

454

345

1,650

895

Life insurance proceeds and changes in cash surrender value

(407)

(537)

(987)

(892)

Tax benefit from vested RSUs(2)

(1,170)

—

(1,245)

—

Non-GAAP amounts

$

14,874

$

10,039

$

8,997

$

4,131

Diluted Income Per Share

Amounts on GAAP basis

$

0.60

$

0.39

$

0.32

$

0.16

Restructuring charges, after-tax(1)

0.01

—

0.05

—

Pension settlement expense, after-tax

0.02

0.01

0.06

0.03

Life insurance proceeds and changes in cash surrender value

(0.02)

(0.02)

(0.04)

(0.03)

Tax benefit from vested RSUs(2)

(0.04)

—

(0.05)

—

Non-GAAP amounts

$

0.57

$

0.38

$

0.34

$

0.16

1) 

Restructuring charges relate to the realignment of the Company's organizational structure.

2) 

The Company recognized a tax benefit for the vesting of share-based compensation resulting in excess tax benefits during the three and six months ended June 30, 2017.

 

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, 2017

Income

Before

Income

Operating

Other

Income

Tax

Net

Effective

Income

Income

Taxes

Provision

Income

Tax Rate

Amounts on GAAP basis

$

24,734

$

(599)

$

24,135

$

8,358

$

15,777

34.6

%

Restructuring charges(1)

363

—

363

143

220

39.4

Pension settlement expense

744

—

744

290

454

39.0

Life insurance proceeds and changes in cash surrender value

—

(407)

(407)

—

(407)

—

Tax benefit from vested RSUs(2)

—

—

—

1,170

(1,170)

—

Non-GAAP amounts

$

25,841

$

(1,006)

$

24,835

$

9,961

$

14,874

40.1

%

Three Months Ended June 30, 2016

Income

Before

Income

Operating

Other

Income

Tax

Net

Effective

Income

Income

Taxes

Provision

Income

Tax Rate

Amounts on GAAP basis

$

16,654

$

(273)

$

16,381

$

6,150

$

10,231

37.5

%

Pension settlement expense

564

—

564

219

345

38.8

Life insurance proceeds and changes in cash surrender value

—

(537)

(537)

—

(537)

—

Non-GAAP amounts

$

17,218

$

(810)

$

16,408

$

6,369

$

10,039

38.8

%

Six Months Ended June 30, 2017

Income

Before

Income

Operating

Other

Income

Tax

Net

Effective

Income

Income

Taxes

Provision

Income

Tax Rate

Amounts on GAAP basis

$

12,481

$

(993)

$

11,488

$

3,118

$

8,370

27.1

%

Restructuring charges(1)

1,994

—

1,994

785

1,209

39.4

Pension settlement expense

2,701

—

2,701

1,051

1,650

38.9

Life insurance proceeds and changes in cash surrender value

—

(987)

(987)

—

(987)

—

Tax benefit from vested RSUs(2)

—

—

—

1,245

(1,245)

—

Non-GAAP amounts

$

17,176

$

(1,980)

$

15,196

$

6,199

$

8,997

40.8

%

Six Months Ended June 30, 2016

Income

Before

Income

Operating

Other

Income

Tax

Net

Effective

Income

Income

Taxes

Provision

Income

Tax Rate

Amounts on GAAP basis

$

7,389

$

(753)

$

6,636

$

2,508

$

4,128

37.8

%

Pension settlement expense

1,464

—

1,464

569

895

38.9

Life insurance proceeds and changes in cash surrender value

—

(892)

(892)

—

(892)

—

Non-GAAP amounts

$

8,853

$

(1,645)

$

7,208

$

3,077

$

4,131

42.7

%

1) 

Restructuring charges relate to the realignment of the Company's organizational structure

2) 

The Company recognized a tax benefit for the vesting of share-based compensation resulting in excess tax benefits during the three and six months ended June 30, 2017.

 

ARCBEST CORPORATION

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES – Continued

Three Months Ended 

Six Months Ended 

June 30

June 30

2017

2016

2017

2016

Segment Operating Income Reconciliations

(Unaudited)

($ thousands, except percentages)

Asset-Based

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

Amounts on GAAP basis

$

22,161

95.7

%

$

17,372

96.4

%

$

12,136

98.8

%

$

8,373

99.1

%

Restructuring charges(1)

33

—

—

—

173

—

—

—

Pension settlement expense

533

(0.1)

424

(0.1)

1,934

(0.2)

1,101

(0.1)

Non-GAAP amounts

$

22,727

95.6

%

$

17,796

96.3

%

$

14,243

98.6

%

$

9,474

99.0

%

Asset-Light

ArcBest

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

Amounts on GAAP basis

$

5,814

96.7

%

$

2,173

98.6

%

$

6,715

98.0

%

$

2,181

99.3

%

Restructuring charges(1)

65

—

—

—

875

0.3

—

—

Pension settlement expense

45

—

12

—

160

—

30

—

Non-GAAP amounts

$

5,924

96.7

%

$

2,185

98.6

%

$

7,750

98.3

%

$

2,211

99.3

%

FleetNet

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

Amounts on GAAP basis

$

730

98.0

%

$

596

98.6

%

$

1,704

97.8

%

$

1,580

98.1

%

Pension settlement expense

19

(0.1)

11

—

65

(0.1)

29

—

Non-GAAP amounts

$

749

97.9

%

$

607

98.6

%

$

1,769

97.7

%

$

1,609

98.1

%

Total Asset-Light

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

Amounts on GAAP basis

$

6,544

96.9

%

$

2,769

98.6

%

$

8,419

97.9

%

$

3,761

99.0

%

Restructuring charges(1)

65

—

—

—

875

(0.2)

—

—

Pension settlement expense

64

—

23

—

225

(0.1)

59

—

Non-GAAP amounts

$

6,673

96.9

%

$

2,792

98.6

%

$

9,519

97.6

%

$

3,820

99.0

%

Other and Eliminations

Operating Loss ($)

Amounts on GAAP basis

$

(3,971)

$

(3,487)

$

(8,074)

$

(4,745)

Restructuring charges(1)

265

—

946

—

Pension settlement expense

147

117

542

304

Non-GAAP amounts

$

(3,559)

$

(3,370)

$

(6,586)

$

(4,441)

1) 

Restructuring charges relate to the realignment of the Company's organizational structure.

 

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

2017

2016

2017

2016

(Unaudited)

($ thousands)

ArcBest Corporation - Consolidated

Net income

$

15,777

$

10,231

$

8,370

$

4,128

Interest and other related financing costs

1,389

1,231

2,704

2,478

Income tax provision

8,358

6,150

3,118

2,508

Depreciation and amortization

25,209

25,748

50,603

50,899

Amortization of share-based compensation

1,868

2,491

3,599

4,200

Amortization of net actuarial losses of benefit plans and pension settlement expense

1,695

1,840

4,732

3,909

Restructuring charges(1)

363

—

1,994

—

Consolidated Adjusted EBITDA

$

54,659

$

47,691

$

75,120

$

68,122

1) 

Restructuring charges relate to the realignment of the Company's organizational structure.

 

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

Three Months Ended June 30

2017

2016

Depreciation

Depreciation

Operating

and

Restructuring

Adjusted

Operating

and

Adjusted

Income

Amortization

Charges(2)

EBITDA

Income

Amortization

EBITDA

(Unaudited)

($ thousands)

Asset-Light

ArcBest(3)

$

5,814

$

3,337

$

65

$

9,216

$

2,173

$

3,475

$

5,648

FleetNet

730

272

—

1,002

596

301

897

 Total Asset-Light

$

6,544

$

3,609

$

65

$

10,218

$

2,769

$

3,776

$

6,545

Six Months Ended June 30

2017

2016

Depreciation

Depreciation

Operating

and

Restructuring

Adjusted

Operating

and

Adjusted

Income

Amortization

Charges(2)

EBITDA

Income

Amortization

EBITDA

(Unaudited)

($ thousands)

Asset-Light

ArcBest(3)

$

6,715

$

6,703

$

875

$

14,293

$

2,181

$

6,940

$

9,121

FleetNet

1,704

552

—

2,256

1,580

588

2,168

 Total Asset-Light

$

8,419

$

7,255

$

875

$

16,549

$

3,761

$

7,528

$

11,289

2) 

Restructuring charges relate to the realignment of the Company's organizational structure.

3) 

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

 

ARCBEST CORPORATION

OPERATING STATISTICS

Three Months Ended 

Six Months Ended 

June 30

June 30

2017

2016

% Change

2017

2016

% Change

(Unaudited)

Asset-Based

Workdays

63.5

64.0

127.5

127.5

Billed Revenue(1) CWT

$

30.84

$

29.07

6.1%

$

30.17

$

28.41

6.2%

Billed Revenue(1) / Shipment

$

378.18

$

371.64

1.8%

$

367.24

$

364.20

0.8%

Shipments

1,370,497

1,323,606

3.5%

2,687,415

2,559,929

5.0%

Shipments / Day

21,583

20,681

4.4%

21,078

20,078

5.0%

Tonnage (Tons)

840,275

846,203

(0.7%)

1,635,450

1,640,675

(0.3%)

Tons / Day

13,233

13,222

0.1%

12,827

12,868

(0.3%)

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, 2017

June 30, 2017

(Unaudited)

ArcBest

Expedite(2)

Revenue / Shipment

14.3%

12.2%

Shipments / Day

4.0%

1.1%

Truckload and Truckload - Dedicated(3)

Revenue / Shipment

6.8%

4.7%

Shipments / Day

17.7%

17.1%

2) 

Expedite primarily represents the expedited operations which were previously reported in the Premium Logistics (Panther) segment.

3) 

Truckload represents the brokerage operations and the Truckload – Dedicated represents the dedicated operations of LDS, both of which were previously reported in the Transportation Management (ABF Logistics) segment. Comparisons are impacted by the operations of LDS, which was acquired in September 2016.

 

Investor Relations Contact: David Humphrey

Media Contact: Kathy Fieweger

Title: Vice President – Investor Relations

Phone: 479-719-4358

Phone: 479-785-6200 

Email: [email protected]

Email: [email protected]

 

View original content with multimedia:http://www.prnewswire.com/news-releases/arcbest-announces-second-quarter-2017-results-300495610.html

SOURCE ArcBest Corporation


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