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ArcBest® Announces Second Quarter 2018 Results
FORT SMITH, Ark., July 31, 2018 /PRNewswire/ -- ArcBest® (Nasdaq: ARCB), a leading logistics company with creative problem solvers who deliver integrated solutions, today reported second quarter 2018 revenue of $793.4 million compared to second quarter 2017 revenue of $720.4 million. This represented a record level of quarterly consolidated revenue in ArcBest's history. Second quarter 2018 operating income, including the $37.9 million multiemployer pension charge described in the following paragraph, was $3.2 million compared to operating income of $25.8 million in the same quarter last year. Net income was $1.2 million, or $0.05 per diluted share compared to second quarter 2017 net income of $15.8 million, or $0.60 per diluted share.
Excluding certain items in both periods, as identified in the attached reconciliation tables, non-GAAP operating income was $41.4 million in second quarter 2018 compared to second quarter 2017 operating income of $26.1 million. On a non-GAAP basis, net income was $29.8 million, or $1.12 per diluted share, in second quarter 2018 compared to second quarter 2017 net income of $14.8 million, or $0.56 per diluted share. Adjustments in the second quarter 2018 period include a one-time, withdrawal liability charge of $37.9 million impacting operating income ($28.2 million, or $1.05 per diluted share after-tax) related to a previously announced agreement regarding the restructure of ABF Freight's obligation with one multiemployer pension plan2.
"We were pleased to report a very solid second quarter, once again recording growth in revenue and operating income, particularly in our Asset-Based business," said Chairman, President and Chief Executive Judy R. McReynolds. "While shipment levels were down amid slightly lower freight tonnage in our Asset-Based business, our pricing remained strong and we were pleased to see continued growth in revenue per hundredweight. Our Asset-Light business also experienced strong revenue growth on higher pricing, with operating results impacted by higher purchased transportation costs reflecting tight capacity conditions."
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1.
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U.S. Generally Accepted Accounting Principles
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2.
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As disclosed in Form 8-K filed July 11, 2018, ABF Freight's multiemployer pension plan obligation with the New England Teamsters and Trucking Industry Pension Fund (the "Fund") will be restructured, which results in ABF Freight withdrawing as a participating employer in the Fund and the one-time withdrawal liability charge recorded in second quarter 2018.
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Asset-Based
Results of Operations
Second Quarter 2018 Versus Second Quarter 2017
- Revenue of $559.2 million compared to $514.5 million, a per-day increase of 7.8 percent.
- Tonnage per day decrease of 0.9 percent.
- Shipments per day decrease 6.1 percent.
- Total billed revenue per hundredweight increased 9.4 percent and was positively impacted by Asset-Based pricing initiatives and higher fuel surcharges. Excluding fuel surcharge, the percentage increase on ArcBest's Asset-Based LTL freight was in the high-single digits.
- Operating income of $3.4 million and an operating ratio of 99.4 percent, including the $37.9 million impact of a multiemployer pension withdrawal liability charge, compared to second quarter 2017 operating income of $22.9 million and an operating ratio of 95.6 percent. On a non-GAAP basis, operating income of $41.3 million and an operating ratio of 92.6 percent compared to operating income of $22.9 million and an operating ratio of 95.6 percent.
ArcBest's Asset-Based business continued to benefit from a solid freight environment, the on-going benefits of yield management initiatives and cost controls throughout its freight handling network. Strength in account pricing and higher fuel surcharges contributed to strong growth in both revenue per hundredweight and billed revenue per shipment. Average shipment size increased reflecting positive changes in freight mix and shipment profile. Though tonnage and shipment totals continued to be below prior year levels, trends in these business metrics improved in each month of the quarter. Increases in larger transactional shipments, resulting from current market conditions, were another positive factor in the quarter.
Asset-Light‡
Results of Operations
Second Quarter 2018 Versus Second Quarter 2017
- Revenue of $246.8 million compared to $212.4 million, a per-day increase of 15.3 percent.
- Operating income of $4.7 million compared to operating income of $6.7 million. On a non-GAAP basis, operating income of $4.9 million compared to $6.7 million.
- Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") of $8.7 million compared to Adjusted EBITDA of $10.2 million.
ArcBest's second quarter revenue growth was driven by higher market rates resulting from continued tightness in available truckload capacity. Total daily ArcBest shipments were below the prior year's second quarter. As experienced in recent periods, market conditions contributed to reductions in net revenue margins related to the challenges of adequately matching shipper rates with the costs of purchased transportation. The decline in second quarter ArcBest operating income was the result of net revenue margin compression and the impact of the previously announced sale of the military moving business in December 2017. Quarterly results were also affected by higher purchase accounting expense and investments in technology and personnel associated with managed transportation solutions and maintaining customer service. Revenue and profitability growth at FleetNet were driven by increased event count combined with labor and cost control versus last year's second quarter.
Closing Comments
"The general economic environment remained favorable in the second quarter, lending a strong foundation for us to continue executing on our various initiatives to enable an exceptional customer experience across all of our service offerings," said McReynolds. "By offering integrated solutions and helping our customers source capacity through our owned assets and trusted carrier partners, we are providing them great value in this tight market. Our expertise across the entire supply chain has also enabled us to win more business in managed transportation as we solve the increasingly complex supply chain problems our customers encounter."
Conference Call
ArcBest will host a conference call with company executives to discuss the 2018 second quarter results. The call will be on Wednesday, August 1st at 9:30 a.m. EDT (8:30 a.m. CDT). Interested parties are invited to listen by calling (888) 612-1052. Following the call, a recorded playback will be available through the end of the day on September 15, 2018. To listen to the playback, dial (800) 633-8284 or (402) 977-9140 (for international callers). The conference call ID for the playback is 21892256. The conference call and playback can also be accessed, through September 15, 2018, on ArcBest's website at arcb.com.
Call participants can submit questions this afternoon prior to the conference call by emailing them to [email protected]. On the call, we will respond to as many questions as possible in the time available.
About ArcBest
ArcBest® (Nasdaq: ARCB) is a leading logistics company with creative problem solvers who deliver integrated solutions. 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. At ArcBest, we're More Than LogisticsSM. 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, 2018 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; 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; the loss or reduction of business from large customers; the cost, timing, and performance of growth initiatives; competitive initiatives and pricing pressures; 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; greater than expected funding requirements for our nonunion defined benefit pension plan; 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; governmental regulations; environmental laws and regulations, including emissions-control regulations; the cost, integration, and performance of any recent or future acquisitions; 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; union and nonunion employee wages and benefits, including changes in required contributions to multiemployer plans; litigation or claims asserted against us; the loss of key employees or the inability to execute succession planning strategies; 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 ArcBest® and its reportable segments.
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ARCBEST CORPORATION
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CONSOLIDATED STATEMENTS OF OPERATIONS
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Three Months Ended
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Six Months Ended
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June 30
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June 30
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2018
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2017
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2018
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2017
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(Unaudited)
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($ thousands, except share and per share data)
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REVENUES
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$
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793,350
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$
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720,368
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$
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1,493,351
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$
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1,371,456
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OPERATING EXPENSES (includes one-time charge)(1)(2)
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790,194
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694,601
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1,477,470
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1,355,589
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|
|
|
|
|
|
|
|
|
|
|
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OPERATING INCOME(2)
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3,156
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|
|
25,767
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15,881
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15,867
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|
|
|
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OTHER INCOME (COSTS)
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Interest and dividend income
|
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714
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|
|
285
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|
|
1,240
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|
|
559
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Interest and other related financing costs
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(2,013)
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(1,389)
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(4,072)
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(2,704)
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Other, net(2)
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(1,123)
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|
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(528)
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|
|
(3,324)
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|
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(2,234)
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(2,422)
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|
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(1,632)
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|
|
(6,156)
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|
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(4,379)
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|
|
|
|
|
|
|
|
|
|
|
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INCOME BEFORE INCOME TAXES
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|
734
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|
|
24,135
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|
|
9,725
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|
|
11,488
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INCOME TAX PROVISION (BENEFIT)
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(499)
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8,358
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(1,462)
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3,118
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|
|
|
|
|
|
|
|
|
|
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NET INCOME
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$
|
1,233
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|
$
|
15,777
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|
$
|
11,187
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|
$
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8,370
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|
|
|
|
|
|
|
|
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EARNINGS PER COMMON SHARE(3)
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Basic
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$
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0.05
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$
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0.61
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$
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0.43
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$
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0.32
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Diluted
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$
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0.05
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$
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0.60
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$
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0.42
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$
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0.32
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AVERAGE COMMON SHARES OUTSTANDING
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Basic
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25,670,325
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25,767,791
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25,656,674
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25,726,363
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Diluted
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26,699,549
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26,291,641
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26,653,282
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26,378,436
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CASH DIVIDENDS DECLARED PER COMMON SHARE
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$
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0.08
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|
$
|
0.08
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|
$
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0.16
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|
$
|
0.16
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______________________
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1)
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Includes a $37.9 million multiemployer pension fund withdrawal liability charge for the three and six months ended June 30, 2018.
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2)
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Effective January 1, 2018, the Company retrospectively adopted an amendment to ASC Topic 715, Compensation – Retirement Benefits, which requires changes to the financial statement presentation of certain components of net periodic benefit cost related to pension and other postretirement benefits accounted for under ASC Topic 715. As a result of adopting this amendment, the service cost component of net periodic benefit cost continues to be included in Operating Expenses, but the other components of net periodic benefit cost, including pension settlement expense, are presented in Other Income (Costs) for the three and six months ended June 30, 2018 and 2017.
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3)
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ArcBest uses the two-class method for calculating earnings per share. This method requires an allocation of dividends paid and a portion of undistributed net income (but not losses) to unvested restricted stock for calculating per share amounts.
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ARCBEST CORPORATION
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CONSOLIDATED BALANCE SHEETS
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June 30
|
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December 31
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2018
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2017
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(Unaudited)
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|
Note
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($ thousands, except share data)
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ASSETS
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|
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CURRENT ASSETS
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|
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Cash and cash equivalents
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$
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159,307
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$
|
120,772
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Short-term investments
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|
68,013
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|
56,401
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Accounts receivable, less allowances (2018 - $8,057; 2017 - $7,657)
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|
309,112
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279,074
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Other accounts receivable, less allowances (2018 - $952; 2017 - $921)
|
|
19,548
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|
|
19,491
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Prepaid expenses
|
|
19,912
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|
|
22,183
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|
Prepaid and refundable income taxes
|
|
4,665
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|
|
12,296
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Other
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|
9,509
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|
|
12,132
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TOTAL CURRENT ASSETS
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|
590,066
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|
|
522,349
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|
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PROPERTY, PLANT AND EQUIPMENT
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Land and structures
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338,902
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344,224
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Revenue equipment
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|
818,674
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|
793,523
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Service, office, and other equipment
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190,109
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179,950
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Software
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131,139
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129,589
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Leasehold improvements
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9,131
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|
|
8,888
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|
|
1,487,955
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|
|
1,456,174
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Less allowances for depreciation and amortization
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|
896,738
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|
|
865,010
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|
|
591,217
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|
|
591,164
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|
|
|
|
|
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GOODWILL
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|
108,320
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|
|
108,320
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INTANGIBLE ASSETS, NET
|
|
71,206
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|
|
73,469
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DEFERRED INCOME TAXES
|
|
6,226
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|
|
5,965
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OTHER LONG-TERM ASSETS
|
|
65,261
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|
|
64,374
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|
$
|
1,432,296
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|
$
|
1,365,641
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LIABILITIES AND STOCKHOLDERS' EQUITY
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|
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|
|
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CURRENT LIABILITIES
|
|
|
|
|
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Accounts payable
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$
|
176,034
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|
$
|
129,099
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Income taxes payable
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|
511
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|
|
324
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Accrued expenses
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221,880
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|
211,237
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Current portion of long-term debt
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51,562
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61,930
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TOTAL CURRENT LIABILITIES
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449,987
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|
402,590
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LONG-TERM DEBT, less current portion
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198,070
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206,989
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PENSION AND POSTRETIREMENT LIABILITIES
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|
36,169
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|
|
39,827
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OTHER LONG-TERM LIABILITIES
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|
38,456
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|
|
15,616
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DEFERRED INCOME TAXES
|
|
41,099
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|
|
49,157
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STOCKHOLDERS' EQUITY
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|
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Common stock, $0.01 par value, authorized 70,000,000 shares; issued 2018: 28,541,578 shares; 2017: 28,495,628 shares
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|
285
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|
|
285
|
|
Additional paid-in capital
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|
322,895
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|
|
319,436
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Retained earnings
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449,442
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438,379
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Treasury stock, at cost, 2018: 2,857,460 shares; 2017: 2,851,578 shares
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|
(86,265)
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(86,064)
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Accumulated other comprehensive loss
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(17,842)
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|
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(20,574)
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TOTAL STOCKHOLDERS' EQUITY
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|
668,515
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|
|
651,462
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|
$
|
1,432,296
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|
$
|
1,365,641
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|
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Note: The balance sheet at December 31, 2017 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.
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ARCBEST CORPORATION
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CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
Six Months Ended
|
|
June 30
|
|
2018
|
|
2017
|
|
Unaudited
|
|
($ thousands)
|
|
OPERATING ACTIVITIES
|
|
|
|
|
|
|
Net income
|
$
|
11,187
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|
$
|
8,370
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|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
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|
|
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Depreciation and amortization
|
|
51,409
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|
|
48,332
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|
Amortization of intangibles
|
|
2,264
|
|
|
2,271
|
|
Pension settlement expense
|
|
1,085
|
|
|
2,701
|
|
Share-based compensation expense
|
|
3,544
|
|
|
3,599
|
|
Provision for losses on accounts receivable
|
|
1,069
|
|
|
1,053
|
|
Deferred income tax provision (benefit)
|
|
(10,818)
|
|
|
2,687
|
|
Gain on sale of property and equipment
|
|
(166)
|
|
|
(412)
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
Receivables
|
|
(31,281)
|
|
|
(21,091)
|
|
Prepaid expenses
|
|
2,393
|
|
|
(2,549)
|
|
Other assets
|
|
2,018
|
|
|
(3,100)
|
|
Income taxes
|
|
8,024
|
|
|
458
|
|
Multiemployer pension fund withdrawal liability(1)
|
|
37,922
|
|
|
—
|
|
Accounts payable, accrued expenses, and other liabilities
|
|
40,914
|
|
|
9,007
|
|
NET CASH PROVIDED BY OPERATING ACTIVITIES
|
|
119,564
|
|
|
51,326
|
|
|
|
|
|
|
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INVESTING ACTIVITIES
|
|
|
|
|
|
|
Purchases of property, plant and equipment, net of financings
|
|
(24,763)
|
|
|
(27,123)
|
|
Proceeds from sale of property and equipment
|
|
2,074
|
|
|
2,751
|
|
Purchases of short-term investments
|
|
(26,006)
|
|
|
(6,223)
|
|
Proceeds from sale of short-term investments
|
|
14,647
|
|
|
9,065
|
|
Capitalization of internally developed software
|
|
(5,997)
|
|
|
(4,323)
|
|
NET CASH USED IN INVESTING ACTIVITIES
|
|
(40,045)
|
|
|
(25,853)
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES
|
|
|
|
|
|
|
Borrowings under accounts receivable securitization program
|
|
—
|
|
|
10,000
|
|
Payments on long-term debt
|
|
(33,694)
|
|
|
(34,948)
|
|
Net change in book overdrafts
|
|
(2,888)
|
|
|
(2,478)
|
|
Deferred financing costs
|
|
—
|
|
|
(275)
|
|
Payment of common stock dividends
|
|
(4,116)
|
|
|
(4,144)
|
|
Purchases of treasury stock
|
|
(201)
|
|
|
(3,611)
|
|
Payments for tax withheld on share-based compensation
|
|
(85)
|
|
|
(2,690)
|
|
NET CASH USED IN FINANCING ACTIVITIES
|
|
(40,984)
|
|
|
(38,146)
|
|
|
|
|
|
|
|
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
|
|
38,535
|
|
|
(12,673)
|
|
Cash and cash equivalents and restricted cash at beginning of period
|
|
120,772
|
|
|
115,242
|
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD
|
$
|
159,307
|
|
$
|
102,569
|
|
|
|
|
|
|
|
NONCASH INVESTING ACTIVITIES
|
|
|
|
|
|
|
Equipment financed
|
$
|
14,407
|
|
$
|
38,593
|
|
Accruals for equipment received
|
$
|
8,649
|
|
$
|
3,179
|
|
_________________________
|
|
1)
|
As previously discussed in this press release, ABF Freight, Inc. recorded a one-time charge in June 2018 for the multiemployer pension plan withdrawal liability resulting from the transition agreement it entered into with the New England Teamsters and Trucking Industry Pension Fund.
|
|
ARCBEST CORPORATION
|
|
FINANCIAL STATEMENT OPERATING SEGMENT DATA AND OPERATING RATIOS
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
June 30
|
|
|
June 30
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
Unaudited
|
|
|
($ thousands, except percentages)
|
|
|
REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset-Based
|
$
|
559,239
|
|
|
|
|
$
|
514,537
|
|
|
|
|
$
|
1,041,354
|
|
|
|
|
$
|
978,893
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ArcBest
|
|
199,987
|
|
|
|
|
|
175,929
|
|
|
|
|
|
381,920
|
|
|
|
|
|
328,805
|
|
|
|
|
FleetNet
|
|
46,792
|
|
|
|
|
|
36,501
|
|
|
|
|
|
94,551
|
|
|
|
|
|
76,739
|
|
|
|
|
Total Asset-Light
|
|
246,779
|
|
|
|
|
|
212,430
|
|
|
|
|
|
476,471
|
|
|
|
|
|
405,544
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other and eliminations
|
|
(12,668)
|
|
|
|
|
|
(6,599)
|
|
|
|
|
|
(24,474)
|
|
|
|
|
|
(12,981)
|
|
|
|
|
Total consolidated revenues
|
$
|
793,350
|
|
|
|
|
$
|
720,368
|
|
|
|
|
$
|
1,493,351
|
|
|
|
|
$
|
1,371,456
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset-Based(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries, wages, and benefits
|
$
|
286,750
|
|
51.3
|
%
|
|
$
|
286,904
|
|
55.8
|
%
|
|
$
|
556,529
|
|
53.5
|
%
|
|
$
|
566,284
|
|
57.9
|
%
|
|
Fuel, supplies, and expenses
|
|
65,040
|
|
11.6
|
|
|
|
58,541
|
|
11.4
|
|
|
|
127,233
|
|
12.2
|
|
|
|
116,931
|
|
11.9
|
|
|
Operating taxes and licenses
|
|
11,910
|
|
2.1
|
|
|
|
12,191
|
|
2.4
|
|
|
|
23,666
|
|
2.3
|
|
|
|
24,014
|
|
2.5
|
|
|
Insurance
|
|
7,979
|
|
1.4
|
|
|
|
7,602
|
|
1.5
|
|
|
|
14,607
|
|
1.4
|
|
|
|
14,720
|
|
1.5
|
|
|
Communications and utilities
|
|
4,135
|
|
0.7
|
|
|
|
4,168
|
|
0.8
|
|
|
|
8,656
|
|
0.8
|
|
|
|
8,685
|
|
0.9
|
|
|
Depreciation and amortization
|
|
21,362
|
|
3.8
|
|
|
|
20,716
|
|
4.0
|
|
|
|
42,292
|
|
4.1
|
|
|
|
41,234
|
|
4.2
|
|
|
Rents and purchased transportation
|
|
63,253
|
|
11.3
|
|
|
|
53,189
|
|
10.3
|
|
|
|
109,386
|
|
10.5
|
|
|
|
99,615
|
|
10.2
|
|
|
Shared services(2)
|
|
56,825
|
|
10.2
|
|
|
|
46,600
|
|
9.1
|
|
|
|
102,432
|
|
9.8
|
|
|
|
90,104
|
|
9.2
|
|
|
Multiemployer pension fund withdrawal liability charge(3)
|
|
37,922
|
|
6.8
|
|
|
|
—
|
|
—
|
|
|
|
37,922
|
|
3.6
|
|
|
|
—
|
|
—
|
|
|
(Gain) loss on sale of property and equipment
|
|
(266)
|
|
—
|
|
|
|
25
|
|
—
|
|
|
|
(399)
|
|
—
|
|
|
|
(592)
|
|
(0.1)
|
|
|
Other
|
|
948
|
|
0.2
|
|
|
|
1,673
|
|
0.3
|
|
|
|
2,247
|
|
0.2
|
|
|
|
3,178
|
|
0.3
|
|
|
Restructuring costs(4)
|
|
—
|
|
—
|
|
|
|
33
|
|
—
|
|
|
|
—
|
|
—
|
|
|
|
173
|
|
—
|
|
|
Total Asset-Based
|
|
555,858
|
|
99.4
|
%
|
|
|
491,642
|
|
95.6
|
%
|
|
|
1,024,571
|
|
98.4
|
%
|
|
|
964,346
|
|
98.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ArcBest(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchased transportation
|
|
162,920
|
|
81.5
|
%
|
|
|
139,432
|
|
79.3
|
%
|
|
|
311,292
|
|
81.5
|
%
|
|
|
261,419
|
|
79.5
|
%
|
|
Supplies and expenses
|
|
3,538
|
|
1.7
|
|
|
|
3,742
|
|
2.1
|
|
|
|
6,768
|
|
1.8
|
|
|
|
7,412
|
|
2.3
|
|
|
Depreciation and amortization(5)
|
|
3,597
|
|
1.8
|
|
|
|
3,230
|
|
1.8
|
|
|
|
7,005
|
|
1.8
|
|
|
|
6,496
|
|
2.0
|
|
|
Shared services(2)
|
|
23,536
|
|
11.7
|
|
|
|
20,658
|
|
11.7
|
|
|
|
45,404
|
|
11.9
|
|
|
|
40,244
|
|
12.2
|
|
|
Other
|
|
2,546
|
|
1.3
|
|
|
|
2,873
|
|
1.7
|
|
|
|
4,427
|
|
1.2
|
|
|
|
5,338
|
|
1.6
|
|
|
Restructuring costs(4)
|
|
143
|
|
0.1
|
|
|
|
65
|
|
—
|
|
|
|
152
|
|
—
|
|
|
|
875
|
|
0.3
|
|
|
|
196,280
|
|
98.1
|
%
|
|
|
170,000
|
|
96.6
|
%
|
|
|
375,048
|
|
98.2
|
%
|
|
|
321,784
|
|
97.9
|
%
|
|
FleetNet
|
|
45,763
|
|
97.8
|
%
|
|
|
35,754
|
|
98.0
|
%
|
|
|
92,001
|
|
97.3
|
%
|
|
|
74,971
|
|
97.7
|
%
|
|
Total Asset-Light
|
|
242,043
|
|
|
|
|
|
205,754
|
|
|
|
|
|
467,049
|
|
|
|
|
|
396,755
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other and eliminations(6)
|
|
(7,707)
|
|
|
|
|
|
(2,795)
|
|
|
|
|
|
(14,150)
|
|
|
|
|
|
(5,512)
|
|
|
|
|
Total consolidated operating expenses
|
$
|
790,194
|
|
99.6
|
%
|
|
$
|
694,601
|
|
96.4
|
%
|
|
$
|
1,477,470
|
|
98.9
|
%
|
|
$
|
1,355,589
|
|
98.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING INCOME(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset-Based
|
$
|
3,381
|
|
|
|
|
$
|
22,895
|
|
|
|
|
|
16,783
|
|
|
|
|
|
14,547
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ArcBest
|
|
3,707
|
|
|
|
|
|
5,929
|
|
|
|
|
|
6,872
|
|
|
|
|
|
7,021
|
|
|
|
|
FleetNet
|
|
1,029
|
|
|
|
|
|
747
|
|
|
|
|
|
2,550
|
|
|
|
|
|
1,768
|
|
|
|
|
Total Asset-Light
|
|
4,736
|
|
|
|
|
|
6,676
|
|
|
|
|
|
9,422
|
|
|
|
|
|
8,789
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other and eliminations(6)
|
|
(4,961)
|
|
|
|
|
|
(3,804)
|
|
|
|
|
|
(10,324)
|
|
|
|
|
|
(7,469)
|
|
|
|
|
Total consolidated operating income
|
$
|
3,156
|
|
|
|
|
$
|
25,767
|
|
|
|
|
$
|
15,881
|
|
|
|
|
$
|
15,867
|
|
|
|
|
___________________________
|
|
1)
|
In accordance with an amendment to ASC Topic 715, Compensation – Retirement Benefits, which the Company retrospectively adopted effective January 1, 2018, the components of net periodic benefit cost other than service cost are presented within Other Income (Costs) in the consolidated financial statements for all periods presented and, therefore, excluded from the presentation of operating segment data within this table. The detail of the Company's net periodic benefit costs are presented in Note F to the consolidated financial statements included in Part I, Item I of the Company's second quarter 2018 Quarterly Report on Form 10-Q.
|
|
2)
|
The presentation of segment expenses allocated from shared services was modified during third quarter 2017 and reclassifications have been made to the prior period operating segment expenses to conform to the current year presentation. Previously, expenses allocated from company-wide functions were categorized in individual segment expense line items by type of expense. Allocated expense is now presented on a single "Shared services" line within the Company's operating segment disclosures. There was no impact on each segment's total expenses as a result of the reclassifications.
|
|
3)
|
As previously discussed in this press release, ABF Freight, Inc. recorded a one-time charge in June 2018 for the multiemployer pension plan withdrawal liability resulting from the transition agreement it entered into with the New England Teamsters and Trucking Industry Pension Fund.
|
|
4)
|
Restructuring charges relate to the realignment of the Company's organizational structure as announced on November 3, 2016.
|
|
5)
|
Depreciation and amortization consists primarily of amortization of intangibles, including customer relationships, and software associated with acquired businesses.
|
|
6)
|
"Other" corporate costs include restructuring charges of $0.2 million and $0.3 million for the three months ended June 30, 2018 and 2017, respectively, and $0.6 million and $0.9 million for the six months ended June 30, 2018 and 2017, respectively. (See Segment Operating Income Reconciliations of GAAP to Non-GAAP Financial Measures table.) Other corporate costs also include additional investments to provide an improved platform for revenue growth and for offering ArcBest services across multiple operating segments.
|
ARCBEST CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES
Non-GAAP Financial Measures
We report our financial results in accordance with generally accepted accounting principles ("GAAP"). However, management believes that certain non-GAAP performance measures and ratios utilized for internal analysis provide analysts, investors, and others the same information that we use internally for purposes of assessing our core operating performance and provides meaningful comparisons between current and prior period results, as well as important information regarding performance trends. The use of certain non-GAAP measures improves comparability in analyzing our performance because it removes the impact of items from operating results that, in management's opinion, do not reflect our core operating performance. Other companies may calculate non-GAAP measures differently; therefore, our calculation may not be comparable to similarly titled measures of other companies. Certain information discussed in the scheduled conference call could be considered non-GAAP measures. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, our reported results. These financial measures should not be construed as better measurements than operating income, operating cash flow, net income or earnings per share, as determined under GAAP.
|
Three Months Ended
|
|
Six Months Ended
|
|
June 30
|
|
|
June 30
|
|
2018
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
(Unaudited)
|
|
($ thousands, except per share data)
|
|
ArcBest Corporation - Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts on GAAP basis
|
$
|
3,156
|
|
$
|
25,767
|
|
$
|
15,881
|
|
$
|
15,867
|
|
Multiemployer pension fund withdrawal liability charge, pre-tax(1)
|
|
37,922
|
|
|
—
|
|
|
37,922
|
|
|
—
|
|
Restructuring charges, pre-tax(2)
|
|
340
|
|
|
363
|
|
|
716
|
|
|
1,994
|
|
Non-GAAP amounts
|
$
|
41,418
|
|
$
|
26,130
|
|
$
|
54,519
|
|
$
|
17,861
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts on GAAP basis
|
$
|
1,233
|
|
$
|
15,777
|
|
$
|
11,187
|
|
$
|
8,370
|
|
Multiemployer pension fund withdrawal liability charge, after-tax(1)
|
|
28,161
|
|
|
—
|
|
|
28,161
|
|
|
—
|
|
Restructuring charges, after-tax(2)
|
|
252
|
|
|
220
|
|
|
529
|
|
|
1,209
|
|
Deferred tax adjustment for 2017 Tax Reform Act(3)
|
|
(50)
|
|
|
—
|
|
|
(2,641)
|
|
|
—
|
|
Impact of 2017 Tax Reform Act on current tax expense(3)
|
|
(9)
|
|
|
—
|
|
|
(69)
|
|
|
—
|
|
Nonunion pension expense, including settlement, after-tax(4)
|
|
1,301
|
|
|
364
|
|
|
2,821
|
|
|
1,535
|
|
Life insurance proceeds and changes in cash surrender value
|
|
(819)
|
|
|
(407)
|
|
|
(934)
|
|
|
(987)
|
|
Tax benefit from vested RSUs(5)
|
|
(282)
|
|
|
(1,170)
|
|
|
(301)
|
|
|
(1,245)
|
|
Alternative fuel tax credit(6)
|
|
—
|
|
|
—
|
|
|
(1,203)
|
|
|
—
|
|
Non-GAAP amounts
|
$
|
29,787
|
|
$
|
14,784
|
|
$
|
37,550
|
|
$
|
8,882
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts on GAAP basis
|
$
|
0.05
|
|
$
|
0.60
|
|
$
|
0.42
|
|
$
|
0.32
|
|
Multiemployer pension fund withdrawal liability charge, after-tax(1)
|
|
1.05
|
|
|
—
|
|
|
1.06
|
|
|
—
|
|
Restructuring charges, after-tax(2)
|
|
0.01
|
|
|
0.01
|
|
|
0.02
|
|
|
0.05
|
|
Deferred tax adjustment for 2017 Tax Reform Act(3)
|
|
—
|
|
|
—
|
|
|
(0.10)
|
|
|
—
|
|
Impact of 2017 Tax Reform Act on current tax expense(3)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Nonunion pension expense, including settlement, after-tax(4)
|
|
0.05
|
|
|
0.01
|
|
|
0.11
|
|
|
0.06
|
|
Life insurance proceeds and changes in cash surrender value
|
|
(0.03)
|
|
|
(0.02)
|
|
|
(0.04)
|
|
|
(0.04)
|
|
Tax benefit from vested RSUs(5)
|
|
(0.01)
|
|
|
(0.04)
|
|
|
(0.01)
|
|
|
(0.05)
|
|
Alternative fuel tax credit(6)
|
|
—
|
|
|
—
|
|
|
(0.05)
|
|
|
—
|
|
Non-GAAP amounts
|
$
|
1.12
|
|
$
|
0.56
|
|
$
|
1.41
|
|
$
|
0.34
|
|
_________________________
|
|
1)
|
As previously discussed in this press release, ABF Freight, Inc. recorded a one-time charge in June 2018 for the multiemployer pension plan withdrawal liability resulting from the transition agreement it entered into with the New England Teamsters and Trucking Industry Pension Fund.
|
|
2)
|
Restructuring charges relate to the realignment of the Company's organizational structure as announced on November 3, 2016.
|
|
3)
|
Impact on current or deferred income tax expense as a result of recognizing a reasonable estimate of the tax effects of the Tax Cuts and Jobs Act ("2017 Tax Reform Act") that was signed into law on December 22, 2017.
|
|
4)
|
Nonunion pension expense is presented as a non-GAAP adjustment with pension settlement expense, for all periods presented, because expenses related to the plan have been excluded from the financial information management uses to make operating decisions, as an amendment to terminate the nonunion defined benefit pension plan with a termination date of December 31, 2017 was executed in November 2017. Plan participants will have an election window in which they can choose any form of payment allowed by the plan for immediate commencement of payment or defer payment until a later date with pension settlements related to the plan termination which may occur in 2018.
|
|
5)
|
The Company recognized the tax impact for the vesting of share-based compensation resulting in excess tax benefit during the three and six months ended June 30, 2018 and 2017.
|
|
6)
|
Represents the amount of the alternative fuel tax credit related to the year ended December 31, 2017 which was recorded in first quarter 2018 due to the February 2018 retroactive reinstatement.
|
|
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, 2018
|
|
|
|
|
|
|
|
Income
|
|
Income
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
Before
|
|
Tax
|
|
|
|
|
|
|
|
Operating
|
|
Income
|
|
Income
|
|
Provision
|
|
Net
|
|
Effective Tax
|
|
Income
|
|
(Costs)
|
|
Taxes
|
|
(Benefit)
|
|
Income
|
|
(Benefit) Rate
|
|
Amounts on GAAP basis
|
$
|
3,156
|
|
$
|
(2,422)
|
|
$
|
734
|
|
$
|
(499)
|
|
$
|
1,233
|
|
(68.0)
|
%
|
|
Multiemployer pension fund withdrawal liability charge(1)
|
|
37,922
|
|
|
—
|
|
|
37,922
|
|
|
9,761
|
|
|
28,161
|
|
25.7
|
|
|
Restructuring charges(2)
|
|
340
|
|
|
—
|
|
|
340
|
|
|
88
|
|
|
252
|
|
25.9
|
|
|
Deferred tax adjustment for 2017 Tax Reform Act(3)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50
|
|
|
(50)
|
|
—
|
|
|
Impact of 2017 Tax Reform Act on current tax expense(3)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
(9)
|
|
—
|
|
|
Nonunion pension expense, including settlement(4)
|
|
—
|
|
|
1,752
|
|
|
1,752
|
|
|
451
|
|
|
1,301
|
|
25.7
|
|
|
Life insurance proceeds and changes in cash surrender value
|
|
—
|
|
|
(819)
|
|
|
(819)
|
|
|
—
|
|
|
(819)
|
|
—
|
|
|
Tax benefit from vested RSUs(5)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
282
|
|
|
(282)
|
|
—
|
|
|
Non-GAAP amounts
|
$
|
41,418
|
|
$
|
(1,489)
|
|
$
|
39,929
|
|
$
|
10,142
|
|
$
|
29,787
|
|
25.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2017
|
|
|
|
|
|
|
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
Before
|
|
Income
|
|
|
|
|
|
|
|
Operating
|
|
Income
|
|
Income
|
|
Tax
|
|
Net
|
|
Effective Tax
|
|
Income
|
|
(Costs)
|
|
Taxes
|
|
Provision
|
|
Income
|
|
(Benefit) Rate
|
|
Amounts on GAAP basis
|
$
|
25,767
|
|
$
|
(1,632)
|
|
$
|
24,135
|
|
$
|
8,358
|
|
$
|
15,777
|
|
34.6
|
%
|
|
Restructuring charges(2)
|
|
363
|
|
|
—
|
|
|
363
|
|
|
143
|
|
|
220
|
|
39.4
|
|
|
Nonunion pension expense, including settlement(4)
|
|
—
|
|
|
596
|
|
|
596
|
|
|
232
|
|
|
364
|
|
38.9
|
|
|
Life insurance proceeds and changes in cash surrender value
|
|
—
|
|
|
(407)
|
|
|
(407)
|
|
|
—
|
|
|
(407)
|
|
—
|
|
|
Tax benefit from vested RSUs(5)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,170
|
|
|
(1,170)
|
|
—
|
|
|
Non-GAAP amounts
|
$
|
26,130
|
|
$
|
(1,443)
|
|
$
|
24,687
|
|
$
|
9,903
|
|
$
|
14,784
|
|
40.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2018
|
|
|
|
|
|
|
Income
|
|
Income
|
|
|
|
|
|
|
|
|
|
Other
|
|
Before
|
|
Tax
|
|
|
|
|
|
|
|
Operating
|
|
Income
|
|
Income
|
|
Provision
|
|
Net
|
|
Effective
|
|
Income
|
|
(Costs)
|
|
Taxes
|
|
(Benefit)
|
|
Income
|
|
Tax Rate
|
|
Amounts on GAAP basis
|
$
|
15,881
|
|
$
|
(6,156)
|
|
$
|
9,725
|
|
$
|
(1,462)
|
|
$
|
11,187
|
|
(15.0)
|
%
|
|
Multiemployer pension fund withdrawal liability charge(1)
|
|
37,922
|
|
|
—
|
|
|
37,922
|
|
|
9,761
|
|
|
28,161
|
|
25.7
|
|
|
Restructuring charges(2)
|
|
716
|
|
|
—
|
|
|
716
|
|
|
187
|
|
|
529
|
|
26.1
|
|
|
Deferred tax adjustment for 2017 Tax Reform Act(3)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,641
|
|
|
(2,641)
|
|
—
|
|
|
Impact of 2017 Tax Reform Act on current tax expense(3)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
69
|
|
|
(69)
|
|
—
|
|
|
Nonunion pension expense, including settlement(4)
|
|
—
|
|
|
3,798
|
|
|
3,798
|
|
|
977
|
|
|
2,821
|
|
25.7
|
|
|
Life insurance proceeds and changes in cash surrender value
|
|
—
|
|
|
(934)
|
|
|
(934)
|
|
|
—
|
|
|
(934)
|
|
—
|
|
|
Tax benefit from vested RSUs(5)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
301
|
|
|
(301)
|
|
—
|
|
|
Alternative fuel tax credit(6)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,203
|
|
|
(1,203)
|
|
—
|
|
|
Non-GAAP amounts
|
$
|
54,519
|
|
$
|
(3,292)
|
|
$
|
51,227
|
|
$
|
13,677
|
|
$
|
37,550
|
|
26.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2017
|
|
|
|
|
|
Income
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
Before
|
|
Income
|
|
|
|
|
|
|
|
Operating
|
|
Income
|
|
Income
|
|
Tax
|
|
Net
|
|
Effective
|
|
Income
|
|
(Costs)
|
|
Taxes
|
|
Provision
|
|
Income
|
|
Tax Rate
|
|
Amounts on GAAP basis
|
$
|
15,867
|
|
$
|
(4,379)
|
|
$
|
11,488
|
|
$
|
3,118
|
|
$
|
8,370
|
|
27.1
|
%
|
|
Restructuring charges(2)
|
|
1,994
|
|
|
—
|
|
|
1,994
|
|
|
785
|
|
|
1,209
|
|
39.4
|
|
|
Nonunion pension expense, including settlement(4)
|
|
—
|
|
|
2,512
|
|
|
2,512
|
|
|
977
|
|
|
1,535
|
|
38.9
|
|
|
Life insurance proceeds and changes in cash surrender value
|
|
—
|
|
|
(987)
|
|
|
(987)
|
|
|
—
|
|
|
(987)
|
|
—
|
|
|
Tax benefit from vested RSUs(5)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,245
|
|
|
(1,245)
|
|
—
|
|
|
Non-GAAP amounts
|
$
|
17,861
|
|
$
|
(2,854)
|
|
$
|
15,007
|
|
$
|
6,125
|
|
$
|
8,882
|
|
40.8
|
%
|
|
_________________________
|
|
1)
|
As previously discussed in this press release, ABF Freight, Inc. recorded a one-time charge in June 2018 for the multiemployer pension plan withdrawal liability resulting from the transition agreement it entered into with the New England Teamsters and Trucking Industry Pension Fund.
|
|
2)
|
Restructuring charges relate to the realignment of the Company's organizational structure as announced on November 3, 2016.
|
|
3)
|
Impact on current or deferred income tax expense as a result of recognizing a reasonable estimate of the tax effects of the Tax Cuts and Jobs Act ("2017 Tax Reform Act") that was signed into law on December 22, 2017.
|
|
4)
|
Nonunion pension expense is presented as a non-GAAP adjustment with pension settlement expense, for all periods presented, because expenses related to the plan have been excluded from the financial information management uses to make operating decisions, as an amendment to terminate the nonunion defined benefit pension plan with a termination date of December 31, 2017 was executed in November 2017.
|
|
5)
|
The Company recognized the tax impact for the vesting of share-based compensation resulting in excess tax benefit during the three and six months ended June 30, 2018 and 2017.
|
|
6)
|
Represents the amount of the alternative fuel tax credit related to the year ended December 31, 2017 which was recorded in first quarter 2018 due to the February 2018 retroactive reinstatement.
|
|
ARCBEST CORPORATION
|
|
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES – Continued
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
June 30
|
|
June 30
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Segment Operating Income Reconciliations
|
(Unaudited)
|
|
($ thousands, except percentages)
|
|
Asset-Based
|
|
|
|
|
Operating Income ($) and Operating Ratio (% of revenues)
|
|
Amounts on GAAP basis
|
$
|
3,381
|
|
99.4
|
%
|
|
$
|
22,895
|
|
95.6
|
%
|
|
$
|
16,783
|
|
98.4
|
%
|
|
$
|
14,547
|
|
98.5
|
%
|
|
Multiemployer pension fund withdrawal liability charge, pre-tax(1)
|
|
37,922
|
|
(6.8)
|
|
|
|
—
|
|
—
|
|
|
|
37,922
|
|
(3.6)
|
|
|
|
—
|
|
—
|
|
|
Restructuring charges, pre-tax(2)
|
|
—
|
|
—
|
|
|
|
33
|
|
—
|
|
|
|
—
|
|
—
|
|
|
|
173
|
|
—
|
|
|
Non-GAAP amounts
|
$
|
41,303
|
|
92.6
|
%
|
|
$
|
22,928
|
|
95.6
|
%
|
|
$
|
54,705
|
|
94.8
|
%
|
|
$
|
14,720
|
|
98.5
|
%
|
|
|
|
|
|
Asset-Light
|
|
|
|
|
|
|
|
|
ArcBest
|
|
|
|
|
Operating Income ($) and Operating Ratio (% of revenues)
|
|
Amounts on GAAP basis
|
$
|
3,707
|
|
98.1
|
%
|
|
$
|
5,929
|
|
96.6
|
%
|
|
$
|
6,872
|
|
98.2
|
%
|
|
$
|
7,021
|
|
97.9
|
%
|
|
Restructuring charges, pre-tax(2)
|
|
143
|
|
(0.1)
|
|
|
|
65
|
|
—
|
|
|
|
152
|
|
—
|
|
|
|
875
|
|
(0.3)
|
|
|
Non-GAAP amounts
|
$
|
3,850
|
|
98.0
|
%
|
|
$
|
5,994
|
|
96.6
|
%
|
|
$
|
7,024
|
|
98.2
|
%
|
|
$
|
7,896
|
|
97.6
|
%
|
|
|
|
|
|
FleetNet
|
|
|
|
|
Operating Income ($) and Operating Ratio (% of revenues)
|
|
Amounts on GAAP basis
|
$
|
1,029
|
|
97.8
|
%
|
|
$
|
747
|
|
98.0
|
%
|
|
$
|
2,550
|
|
97.3
|
%
|
|
$
|
1,768
|
|
97.7
|
%
|
|
Restructuring charges, pre-tax(2)
|
|
—
|
|
—
|
|
|
|
—
|
|
—
|
|
|
|
—
|
|
—
|
|
|
|
—
|
|
—
|
|
|
Non-GAAP amounts
|
$
|
1,029
|
|
97.8
|
%
|
|
$
|
747
|
|
98.0
|
%
|
|
$
|
2,550
|
|
97.3
|
%
|
|
$
|
1,768
|
|
97.7
|
%
|
|
|
|
|
|
Total Asset-Light
|
|
|
|
|
Operating Income ($) and Operating Ratio (% of revenues)
|
|
Amounts on GAAP basis
|
$
|
4,736
|
|
98.1
|
%
|
|
$
|
6,676
|
|
96.9
|
%
|
|
$
|
9,422
|
|
98.0
|
%
|
|
$
|
8,789
|
|
97.8
|
%
|
|
Restructuring charges, pre-tax(2)
|
|
143
|
|
(0.1)
|
|
|
|
65
|
|
—
|
|
|
|
152
|
|
—
|
|
|
|
875
|
|
(0.2)
|
|
|
Non-GAAP amounts
|
$
|
4,879
|
|
98.0
|
%
|
|
$
|
6,741
|
|
96.9
|
%
|
|
$
|
9,574
|
|
98.0
|
%
|
|
$
|
9,664
|
|
97.6
|
%
|
|
|
|
|
|
Other and Eliminations
|
|
|
|
|
Operating Loss ($)
|
|
Amounts on GAAP basis
|
$
|
(4,961)
|
|
|
|
|
$
|
(3,804)
|
|
|
|
|
$
|
(10,324)
|
|
|
|
|
$
|
(7,469)
|
|
|
|
|
Restructuring charges, pre-tax(2)
|
|
197
|
|
|
|
|
|
265
|
|
|
|
|
|
564
|
|
|
|
|
|
946
|
|
|
|
|
Non-GAAP amounts
|
$
|
(4,764)
|
|
|
|
|
$
|
(3,539)
|
|
|
|
|
$
|
(9,760)
|
|
|
|
|
$
|
(6,523)
|
|
|
|
|
_________________________
|
|
1)
|
As previously discussed in this press release, ABF Freight, Inc. recorded a one-time charge in June 2018 for the multiemployer pension plan withdrawal liability resulting from the transition agreement it entered into with the New England Teamsters and Trucking Industry Pension Fund.
|
|
2)
|
Restructuring charges relate to the realignment of the Company's organizational structure as announced on November 3, 2016.
|
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 businesses, which are significant expenses resulting from strategic decisions rather than core daily operations. Additionally, Adjusted EBITDA is a primary component of the financial covenants contained in our credit agreement.
|
Three Months Ended
|
|
Six Months Ended
|
|
June 30
|
|
|
June 30
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
(Unaudited)
|
|
ArcBest Corporation - Consolidated
|
($ thousands)
|
|
|
|
Net Income
|
$
|
1,233
|
|
$
|
15,777
|
|
$
|
11,187
|
|
$
|
8,370
|
|
Interest and other related financing costs
|
|
2,013
|
|
|
1,389
|
|
|
4,072
|
|
|
2,704
|
|
Income tax benefit
|
|
(499)
|
|
|
8,358
|
|
|
(1,462)
|
|
|
3,118
|
|
Depreciation and amortization
|
|
27,187
|
|
|
25,209
|
|
|
53,673
|
|
|
50,603
|
|
Amortization of share-based compensation
|
|
1,674
|
|
|
1,868
|
|
|
3,544
|
|
|
3,599
|
|
Amortization of net actuarial losses of benefit plans and pension settlement expense
|
|
1,119
|
|
|
1,695
|
|
|
2,647
|
|
|
4,732
|
|
Multiemployer pension fund withdrawal liability charge(1)
|
|
37,922
|
|
|
—
|
|
|
37,922
|
|
|
—
|
|
Restructuring charges(2)
|
|
340
|
|
|
363
|
|
|
716
|
|
|
1,994
|
|
Consolidated Adjusted EBITDA
|
$
|
70,989
|
|
$
|
54,659
|
|
$
|
112,299
|
|
$
|
75,120
|
|
_________________________
|
|
1)
|
As previously discussed in this press release, ABF Freight, Inc. recorded a one-time charge in June 2018 for the multiemployer pension plan withdrawal liability resulting from the transition agreement it entered into with the New England Teamsters and Trucking Industry Pension Fund.
|
|
2)
|
Restructuring charges relate to the realignment of the Company's organizational structure as announced on November 3, 2016.
|
|
Three Months Ended June 30
|
|
2018
|
|
2017
|
|
|
|
Depreciation
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
|
|
|
|
Operating
|
|
and
|
|
Restructuring
|
|
Adjusted
|
|
Operating
|
|
and
|
|
Restructuring
|
Adjusted
|
|
Income
|
|
Amortization
|
|
Charges(2)
|
|
EBITDA
|
|
Income
|
|
Amortization
|
|
Charges(2)
|
EBITDA
|
|
(Unaudited)
|
|
Asset-Light
|
($ thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ArcBest(3)
|
$
|
3,707
|
|
$
|
3,597
|
|
$
|
143
|
|
$
|
7,447
|
|
$
|
5,929
|
|
$
|
3,230
|
|
$
|
65
|
|
$
|
9,224
|
|
FleetNet
|
|
1,029
|
|
|
264
|
|
|
—
|
|
|
1,293
|
|
|
747
|
|
|
272
|
|
|
—
|
|
|
1,019
|
|
Total Asset-Light
|
$
|
4,736
|
|
$
|
3,861
|
|
$
|
143
|
|
$
|
8,740
|
|
$
|
6,676
|
|
$
|
3,502
|
|
$
|
65
|
|
$
|
10,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30
|
|
2018
|
|
2017
|
|
|
|
Depreciation
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
|
|
|
|
Operating
|
|
and
|
|
Restructuring
|
|
Adjusted
|
|
Operating
|
|
and
|
|
Restructuring
|
Adjusted
|
|
Income
|
|
Amortization
|
|
Charges(2)
|
|
EBITDA
|
|
Income
|
|
Amortization
|
|
Charges(2)
|
EBITDA
|
|
(Unaudited)
|
|
Asset-Light
|
($ thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ArcBest(3)
|
$
|
6,872
|
|
$
|
7,005
|
|
$
|
152
|
|
$
|
14,029
|
|
$
|
7,021
|
|
$
|
6,496
|
|
$
|
875
|
|
$
|
14,392
|
|
FleetNet
|
|
2,550
|
|
|
543
|
|
|
—
|
|
|
3,093
|
|
|
1,768
|
|
|
552
|
|
|
—
|
|
|
2,320
|
|
Total Asset-Light
|
$
|
9,422
|
|
$
|
7,548
|
|
$
|
152
|
|
$
|
17,122
|
|
$
|
8,789
|
|
$
|
7,048
|
|
$
|
875
|
|
$
|
16,712
|
|
______________________
|
|
3)
|
Restructuring charges relate to the realignment of the Company's organizational structure as announced on November 3, 2016.
|
|
4)
|
Depreciation and amortization consists primarily of amortization of intangibles and software associated with acquired businesses.
|
ARCBEST CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES – Continued
Non-GAAP Net Revenue
Management uses net revenue, defined as revenues less purchased transportation costs, as a key performance measure of our ArcBest segment which primarily sources transportation services from third-party providers. Non-GAAP net revenue margin for the ArcBest segment is calculated as net revenue divided by revenues.
|
Three Months Ended
|
|
Six Months Ended
|
|
June 30
|
|
June 30
|
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
|
(Unaudited)
|
|
ArcBest Segment
|
($ thousands)
|
|
|
|
Revenues
|
$
|
199,987
|
|
$
|
175,929
|
|
13.7%
|
|
$
|
381,920
|
|
$
|
328,805
|
|
16.2%
|
|
Purchased transportation
|
|
162,920
|
|
|
139,432
|
|
16.8%
|
|
|
311,292
|
|
|
261,419
|
|
19.1%
|
|
Non-GAAP net revenue
|
$
|
37,067
|
|
$
|
36,497
|
|
1.6%
|
|
$
|
70,628
|
|
$
|
67,386
|
|
4.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Net Revenue Margin
|
|
18.5%
|
|
|
20.7%
|
|
|
|
|
18.5%
|
|
|
20.5%
|
|
|
|
ARCBEST CORPORATION
|
|
OPERATING STATISTICS
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
June 30
|
|
June 30
|
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
|
(Unaudited)
|
|
Asset-Based
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Workdays
|
|
64.0
|
|
|
63.5
|
|
|
|
|
127.5
|
|
|
127.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Billed Revenue(1) / CWT
|
$
|
33.73
|
|
$
|
30.84
|
|
9.4%
|
|
$
|
32.96
|
|
$
|
30.17
|
|
9.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Billed Revenue(1) / Shipment
|
$
|
436.52
|
|
$
|
378.18
|
|
15.4%
|
|
$
|
424.89
|
|
$
|
367.24
|
|
15.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shipments
|
|
1,297,399
|
|
|
1,370,497
|
|
(5.3%)
|
|
|
2,480,655
|
|
|
2,687,415
|
|
(7.7%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shipments / Day
|
|
20,272
|
|
|
21,583
|
|
(6.1%)
|
|
|
19,456
|
|
|
21,078
|
|
(7.7%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tonnage (Tons)
|
|
839,583
|
|
|
840,275
|
|
(0.1%)
|
|
|
1,599,139
|
|
|
1,635,450
|
|
(2.2%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tons / Day
|
|
13,118
|
|
|
13,233
|
|
(0.9%)
|
|
|
12,542
|
|
|
12,827
|
|
(2.2%)
|
|
_____________________
|
|
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, 2018
|
|
June 30, 2018
|
|
(Unaudited)
|
|
ArcBest(2)
|
|
|
|
|
|
|
|
|
Revenue / Shipment
|
16.2%
|
|
19.7%
|
|
|
|
|
|
Shipments / Day
|
(6.0%)
|
|
(5.8%)
|
|
______________________
|
|
2)
|
Presentation of operating statistics for the ArcBest segment has been revised to reflect the segment's combined operations, including the expedite, truckload, and truckload-dedicated operations for which statistics were previously reported, as well as other service offerings of the segment.
|
|
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-2018-results-300689367.html
SOURCE ArcBest
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