- Continued focus on cost control initiatives to mitigate
headwinds from challenging freight environment
- Productivity gains from technology, training, and network
design
- Service improvements, including Mastio recognizing ABF for
exceeding the industry benchmark on service
ArcBest® (Nasdaq: ARCB), a leader in supply chain logistics,
today reported third quarter 2024 revenue of $1.06 billion,
compared to $1.13 billion in third quarter 2023. Net income was
$100.3 million, or $4.23 per diluted share, including a $69.1
million after-tax benefit from the reduction in the fair value of
contingent consideration related to a 2021 acquisition, compared to
$34.9 million, or $1.42 per diluted share in the prior year. On a
non-GAAP basis, third quarter 2024 net income was $38.8 million, or
$1.64 per diluted share, compared to $56.7 million, or $2.31 per
diluted share in the prior year.
“Over the past year, we have made substantial strides in
controlling costs, improving productivity, and enhancing our
service quality. These efforts contributed to ABF once again being
recognized by Mastio for exceeding the industry benchmark for
service,” said Judy R. McReynolds, ArcBest Chairman and CEO. “This
achievement is a testament to our unwavering commitment to
excellence and our strategic investments in technology, training,
and network design. Thank you to our customers for this recognition
and to our team for their hard work and dedication.”
A 2021 truckload brokerage acquisition included a potential
additional payout based on an earnout provision contingent on
meeting specific targets through 2025. Due to the prolonged soft
truckload market, no payments were made in 2023, and none are
expected in 2024. With industry forecasts now suggesting a market
recovery later in 2025, the likelihood of an earnout payment has
been reduced. Consequently, in the third quarter, the estimated
contingent consideration liability was reduced by $91.9 million
pre-tax, or $69.1 million after-tax. This benefit is recorded as a
reduction to expense in the Company’s GAAP results but has been
excluded from non-GAAP results to better represent normal
operations.
Results of Operations
Comparisons
Asset-Based
Third
Quarter 2024 Versus
Third Quarter 2023
- Revenue of $709.7 million compared to $741.2 million, a per-day
decrease of 5.8 percent
- Total tonnage per day decrease of 11.3 percent
- Total shipments per day decrease of 0.7 percent
- Total billed revenue per hundredweight increase of 7.4
percent
- Operating income of $64.0 million and an operating ratio of
91.0 percent, compared to $74.8 million and an operating ratio of
89.9 percent
- On a non-GAAP basis, operating income of $64.0 million and an
operating ratio of 91.0 percent, compared to $82.8 million and an
operating ratio of 88.8 percent
On a non-GAAP basis, the Asset-Based segment generated $18.8
million less operating income than third quarter 2023. Third
quarter tonnage declines were driven by a 10.7 percent decrease in
weight per shipment, while daily shipments were down only slightly.
Prolonged manufacturing sector weakness continues to negatively
impact weight per shipment metrics. Productivity improvements of
5.7 percent and other cost initiatives helped mitigate the impact
of the softer market environment, higher insurance costs, and
higher labor cost increases related to an annual union contract
rate increase, which went into effect during the third quarter of
2024.
Pricing momentum continued in the quarter, driven by a 5.9
percent general rate increase put in place on September 9, 2024,
and contract renewal increases of 4.6 percent. Overall, LTL
industry pricing remains rational.
Compared sequentially to the second quarter of 2024, third
quarter 2024 revenue per day was flat, shipments per day improved
by 1.4 percent, and billed revenue per hundredweight was 1.3
percent higher. However, weight per shipment deteriorated 3.2
percent and tonnage per day decreased 1.8 percent. Lower tonnage
combined with higher labor and insurance costs resulted in the
operating ratio deterioration of 120 basis points sequentially,
which was below the average sequential quarterly changes achieved
in recent years.
Asset-Light
Third Quarter 2024 Versus Third Quarter
2023
- Revenue of $385.3 million compared to $419.3 million, a per-day
decrease of 9.6 percent
- Operating income of $84.8 million, including the $91.9 million
pre-tax reduction in the fair value of contingent consideration
related to an earnout, compared to operating loss of $3.7
million
- On a non‑GAAP basis, operating loss of $3.9 million in both
periods
- Adjusted earnings before interest, taxes, depreciation and
amortization (“Adjusted EBITDA”), as defined in the attached
non-GAAP reconciliation tables, of negative $2.1 million compared
to negative $2.0 million
Compared to the third quarter of 2023, Asset-Light revenues were
impacted by lower revenue per shipment associated with the soft
rate environment and a higher mix of managed transportation
business, which has smaller shipment sizes and lower revenue per
shipment metrics. Shipments per day were slightly lower by 0.7
percent. Non-GAAP operating results were comparable to the third
quarter prior year. The segment continues to benefit from
productivity initiatives, as shipments per employee per day
improved 19.5 percent, on a year-over-year basis, but the soft
freight environment and excess truckload capacity continues to
impact results.
Compared sequentially to second quarter 2024, third quarter 2024
shipments per day were flat, yet daily revenue was down by 1.9
percent as revenue per shipment decreased 2.3 percent. Shipments
per employee per day, improved by 3.3 percent, and total operating
costs were managed lower. The $1.5 million sequential increase in
non-GAAP operating loss was due primarily to the current truckload
brokerage pricing environment.
Conference Call
ArcBest will host a conference call with company executives to
discuss the quarterly results. The call will be today, Friday,
November 1, 2024 at 9:30 a.m. EDT (8:30 a.m. CDT). Interested
parties are invited to listen by calling (800) 715‑9871 or by
joining the webcast which can be found on ArcBest’s website at
arcb.com. Slides to accompany this call are included in Exhibit
99.3 of the Form 8-K filed on November 1, 2024, will be posted and
available to download on the company’s website prior to the
scheduled conference time, and will be included in the webcast.
Following the call, a recorded playback will be available through
the end of the day on November 15, 2024. To listen to the playback,
dial (800) 770-2030. The conference call ID for the live conference
call and the playback is 2815802. The conference call and playback
can also be accessed through November 15, 2024 on ArcBest’s website
at arcb.com.
About ArcBest
ArcBest® (Nasdaq: ARCB) is a multibillion-dollar integrated
logistics company that helps keep the global supply chain moving.
Founded in 1923 and now with 15,000 employees across 250 campuses
and service centers, the company is a logistics powerhouse, using
its technology, expertise and scale to connect shippers with the
solutions they need — from ground, air and ocean transportation to
fully managed supply chains. ArcBest has a long history of
innovation that is enriched by deep customer relationships. With a
commitment to helping customers navigate supply chain challenges
now and in the future, the company is developing ground-breaking
technology like Vaux™, one of the TIME Best Inventions of 2023. For
more information, visit arcb.com.
The following is a “safe harbor”
statement under the Private Securities Litigation Reform Act of
1995: Certain statements and information in this press
release may constitute “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995,
including, among others, statements regarding (i) our expectations
about our intrinsic value or our prospects for growth and value
creation and (ii) our financial outlook, position, strategies,
goals, and expectations. Terms such as “anticipate,” “believe,”
“could,” “estimate,” “expect,” “forecast,” “foresee,” “intend,”
“may,” “plan,” “predict,” “project,” “scheduled,” “should,”
“would,” and similar expressions and the negatives of such terms
are intended to identify forward-looking statements. These
statements are based on management’s beliefs, assumptions, and
expectations based on currently available information, are not
guarantees of future performance, and involve certain risks and
uncertainties (some of which are beyond our control). Although we
believe that the expectations reflected in these forward-looking
statements are reasonable as and when made, we cannot provide
assurance that our expectations will prove to be correct. Actual
outcomes and results could materially differ from what is
expressed, implied, or forecasted in these statements due to a
number of factors, including, but not limited to: the effects of a
widespread outbreak of an illness or disease or any other public
health crisis, as well as regulatory measures implemented in
response to such events; external events which may adversely affect
us or the third parties who provide services for us, for which our
business continuity plans may not adequately prepare us, including,
but not limited to, acts of war or terrorism, or military
conflicts; data privacy breaches, cybersecurity incidents, and/or
failures of our information systems, including disruptions or
failures of services essential to our operations or upon which our
information technology platforms rely; interruption or failure of
third-party software or information technology systems or licenses;
untimely or ineffective development and implementation of, or
failure to realize the potential benefits associated with, new or
enhanced technology or processes, including our customer pilot
offering of Vaux; the loss or reduction of business from large
customers or an overall reduction in our customer base; the timing
and performance of growth initiatives and the ability to manage our
cost structure; the cost, integration, and performance of any
recent or future acquisitions and the inability to realize the
anticipated benefits of the acquisition within the expected time
period or at all; unsolicited takeover proposals, proxy contests,
and other proposals/actions by activist investors; maintaining our
corporate reputation and intellectual property rights; nationwide
or global disruption in the supply chain resulting in increased
volatility in freight volumes; competitive initiatives and pricing
pressures; increased prices for and decreased availability of
equipment, including new revenue equipment, decreases in value of
used revenue equipment, and higher costs of equipment-related
operating expenses such as maintenance, fuel, and related taxes;
availability of fuel, the effect of volatility in fuel prices and
the associated changes in fuel surcharges on securing increases in
base freight rates, and the inability to collect fuel surcharges;
relationships with employees, including unions, and our ability to
attract, retain, and upskill employees; unfavorable terms of, or
the inability to reach agreement on, future collective bargaining
agreements or a workforce stoppage by our employees covered under
ABF Freight’s collective bargaining agreement; union employee wages
and benefits, including changes in required contributions to
multiemployer plans; availability and cost of reliable third-party
services; our ability to secure independent owner-operators and/or
operational or regulatory issues related to our use of their
services; litigation or claims asserted against us; governmental
regulations; environmental laws and regulations, including
emissions-control regulations; default on covenants of financing
arrangements and the availability and terms of future financing
arrangements; our ability to generate sufficient cash from
operations to support significant ongoing capital expenditure
requirements and other business initiatives; self-insurance claims,
insurance premium costs, and loss of our ability to self-insure;
potential impairment of long-lived assets and goodwill and
intangible assets; general economic conditions and related shifts
in market demand that impact the performance and needs of
industries we serve and/or limit our customers’ access to adequate
financial resources; increasing costs due to inflation and higher
interest rates; seasonal fluctuations, adverse weather conditions,
natural disasters, and climate change; and other financial,
operational, and legal risks and uncertainties detailed from time
to time in ArcBest Corporation’s public filings with the Securities
and Exchange Commission (“SEC”).
For additional information regarding known material factors that
could cause our actual results to differ from those expressed in
these forward-looking statements, please see our filings with the
SEC, including our Annual Report on Form 10-K, Quarterly Reports on
Form 10-Q, and Current Reports on Form 8K.
Readers are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date hereof.
We undertake no obligation to publicly update or revise any
forward-looking statements after the date they are made, whether as
a result of new information, future events, or otherwise.
Financial Data and Operating
Statistics
The following tables show financial data and operating
statistics on ArcBest® and its reportable segments.
ARCBEST CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
Three Months Ended
Nine Months Ended
September 30
September 30
2024
2023
2024
2023
(Unaudited)
($ thousands, except share and
per share data)
REVENUES
$
1,063,124
$
1,128,350
$
3,177,374
$
3,337,908
OPERATING EXPENSES
928,131
1,083,259
2,971,101
3,229,542
OPERATING INCOME
134,993
45,091
206,273
108,366
OTHER INCOME (COSTS)
Interest and dividend income
3,130
3,946
9,686
10,604
Interest and other related financing
costs
(2,281
)
(2,236
)
(6,587
)
(6,768
)
Other, net
862
89
(28,118
)
6,907
1,711
1,799
(25,019
)
10,743
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES
136,704
46,890
181,254
119,109
INCOME TAX PROVISION
36,390
11,963
36,928
25,735
NET INCOME FROM CONTINUING
OPERATIONS
100,314
34,927
144,326
93,374
INCOME (LOSS) FROM DISCONTINUED
OPERATIONS, net of tax(1)
—
(10
)
600
53,269
NET INCOME
$
100,314
$
34,917
$
144,926
$
146,643
BASIC EARNINGS PER COMMON
SHARE(2)
Continuing operations
$
4.25
$
1.46
$
6.12
$
3.87
Discontinued operations(1)
—
—
0.03
2.21
$
4.25
$
1.45
$
6.14
$
6.08
DILUTED EARNINGS PER COMMON
SHARE(2)
Continuing operations
$
4.23
$
1.42
$
6.03
$
3.77
Discontinued operations(1)
—
—
0.03
2.15
$
4.23
$
1.42
$
6.06
$
5.92
AVERAGE COMMON SHARES
OUTSTANDING
Basic
23,624,761
24,004,255
23,601,548
24,119,449
Diluted
23,690,120
24,525,258
23,923,047
24,756,993
_________________________ 1)
Represents the discontinued operations of
FleetNet America® (“FleetNet”), which sold on February 28, 2023.
The nine months ended September 30, 2024 represents adjustments
related to the prior year gain on sale of FleetNet. The nine months
ended September 30, 2023 includes the net gain on sale of FleetNet
of $52.3 million after-tax, or $2.17 basic earnings per share and
$2.11 diluted earnings per share.
2)
Earnings per common share is calculated in
total and may not equal the sum of earnings per common share from
continuing operations and discontinued operations due to
rounding.
ARCBEST CORPORATION
CONSOLIDATED BALANCE SHEETS
September 30
December 31
2024
2023
(Unaudited)
Note
($ thousands, except share
data)
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
150,461
$
262,226
Short-term investments
40,639
67,842
Accounts receivable, less allowances (2024
- $9,010; 2023 - $10,346)
422,861
430,122
Other accounts receivable, less allowances
(2024 - $650; 2023 - $731)
13,247
52,124
Prepaid expenses
32,400
37,034
Prepaid and refundable income taxes
21,421
24,319
Other
10,880
11,116
TOTAL CURRENT ASSETS
691,909
884,783
PROPERTY, PLANT AND EQUIPMENT
Land and structures
520,894
460,068
Revenue equipment
1,170,045
1,126,055
Service, office, and other equipment
353,880
319,466
Software
182,035
173,354
Leasehold improvements
29,648
24,429
2,256,502
2,103,372
Less allowances for depreciation and
amortization
1,207,110
1,188,548
PROPERTY, PLANT AND EQUIPMENT,
net
1,049,392
914,824
GOODWILL
304,753
304,753
INTANGIBLE ASSETS, net
91,627
101,150
OPERATING RIGHT-OF-USE ASSETS
193,467
169,999
DEFERRED INCOME TAXES
8,293
8,140
OTHER LONG-TERM ASSETS
74,739
101,445
TOTAL ASSETS
$
2,414,180
$
2,485,094
LIABILITIES AND STOCKHOLDERS’
EQUITY
CURRENT LIABILITIES
Accounts payable
$
204,696
$
214,004
Income taxes payable
4,808
10,410
Accrued expenses
360,738
378,029
Current portion of long-term debt
62,199
66,948
Current portion of operating lease
liabilities
33,127
32,172
TOTAL CURRENT LIABILITIES
665,568
701,563
LONG-TERM DEBT, less current
portion
118,312
161,990
OPERATING LEASE LIABILITIES, less
current portion
192,046
176,621
POSTRETIREMENT LIABILITIES, less
current portion
13,269
13,319
CONTINGENT CONSIDERATION
12,160
92,900
DEFERRED INCOME TAXES
65,738
55,785
OTHER LONG-TERM LIABILITIES
39,991
40,553
STOCKHOLDERS’ EQUITY
Common stock, $0.01 par value, authorized
70,000,000 shares; issued 2024: 30,400,558 shares; 2023: 30,024,125
shares
304
300
Additional paid-in capital
327,335
340,961
Retained earnings
1,409,025
1,272,584
Treasury stock, at cost, 2024: 6,938,452
shares; 2023: 6,460,137 shares
(431,914
)
(375,806
)
Accumulated other comprehensive income
2,346
4,324
TOTAL STOCKHOLDERS’ EQUITY
1,307,096
1,242,363
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$
2,414,180
$
2,485,094
_________________________
Note: The balance sheet at December 31,
2023 has been derived from the audited financial statements at that
date but does not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements.
ARCBEST CORPORATION
CONSOLIDATED STATEMENTS OF CASH
FLOWS
Nine Months Ended
September 30
2024
2023
(Unaudited)
($ thousands)
OPERATING ACTIVITIES
Net income
$
144,926
$
146,643
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
100,104
98,711
Amortization of intangibles
9,616
9,631
Share-based compensation expense
9,040
8,590
Provision for losses on accounts
receivable
2,038
2,621
Change in deferred income taxes
10,547
(10,880
)
(Gain) loss on sale of property and
equipment
(1,063
)
1,134
Pre-tax gain on sale of discontinued
operations
(806
)
(70,201
)
Lease impairment charges
—
30,162
Change in fair value of contingent
consideration
(80,740
)
(12,800
)
Change in fair value of equity
investment
28,739
(3,739
)
Changes in operating assets and
liabilities:
Receivables
44,344
43,478
Prepaid expenses
4,634
8,640
Other assets
(3,364
)
2,393
Income taxes
(2,870
)
(22,051
)
Operating right-of-use assets and lease
liabilities, net
(7,088
)
3,286
Accounts payable, accrued expenses, and
other liabilities
(29,009
)
(40,863
)
NET CASH PROVIDED BY OPERATING
ACTIVITIES
229,048
194,755
INVESTING ACTIVITIES
Purchases of property, plant and
equipment, net of financings
(169,839
)
(129,779
)
Proceeds from sale of property and
equipment
6,187
5,972
Proceeds from sale of discontinued
operations
—
100,949
Purchases of short-term investments
(29,236
)
(80,353
)
Proceeds from sale of short-term
investments
55,874
160,570
Capitalization of internally developed
software
(12,437
)
(9,424
)
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES
(149,451
)
47,935
FINANCING ACTIVITIES
Payments on long-term debt
(102,366
)
(52,489
)
Net change in book overdrafts
(1,676
)
(12,489
)
Deferred financing costs
(65
)
57
Payment of common stock dividends
(8,485
)
(8,696
)
Purchases of treasury stock
(56,108
)
(65,886
)
Payments for tax withheld on share-based
compensation
(22,662
)
(10,056
)
NET CASH USED IN FINANCING
ACTIVITIES
(191,362
)
(149,559
)
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS
(111,765
)
93,131
Cash and cash equivalents of continuing
operations at beginning of period
262,226
158,264
Cash and cash equivalents of discontinued
operations at beginning of period
—
108
CASH AND CASH EQUIVALENTS AT END OF
PERIOD
$
150,461
$
251,503
NONCASH INVESTING ACTIVITIES
Equipment financed
$
53,939
$
31,024
Accruals for equipment received
$
5,114
$
5,743
Lease liabilities arising from obtaining
right-of-use assets
$
40,872
$
49,033
_________________________
Note: The statements of cash flows for the
nine months ended September 30, 2024 and 2023 include cash flows
from continuing operations and cash flows from discontinued
operations of FleetNet, which sold on February 28, 2023.
ARCBEST CORPORATION
FINANCIAL STATEMENT OPERATING SEGMENT
DATA AND OPERATING RATIOS
Three Months Ended
Nine Months Ended
September 30
September 30
2024
2023
2024
2023
(Unaudited)
($ thousands, except
percentages)
REVENUES FROM CONTINUING
OPERATIONS
Asset-Based
$
709,722
$
741,186
$
2,093,914
$
2,161,018
Asset-Light
385,324
419,312
1,177,504
1,267,220
Other and eliminations
(31,922
)
(32,148
)
(94,044
)
(90,330
)
Total consolidated revenues from
continuing operations
$
1,063,124
$
1,128,350
$
3,177,374
$
3,337,908
OPERATING EXPENSES FROM CONTINUING
OPERATIONS
Asset-Based
Salaries, wages, and benefits
$
358,469
50.5
%
$
357,582
48.2
%
$
1,056,146
50.4
%
$
1,037,725
48.0
%
Fuel, supplies, and expenses
79,170
11.2
91,493
12.4
243,152
11.6
276,678
12.8
Operating taxes and licenses
13,538
1.9
13,865
1.9
40,624
1.9
41,938
1.9
Insurance
19,819
2.8
13,654
1.8
51,265
2.4
39,816
1.8
Communications and utilities
4,793
0.6
4,729
0.6
14,004
0.7
14,586
0.7
Depreciation and amortization
26,967
3.8
26,537
3.6
80,620
3.9
76,721
3.6
Rents and purchased transportation
73,600
10.4
79,233
10.7
209,586
10.0
271,899
12.6
Shared services
69,463
9.8
70,699
9.5
206,622
9.9
209,780
9.7
(Gain) loss on sale of property and
equipment and lease impairment charges(1)
(1,688
)
(0.2
)
540
0.1
(1,630
)
(0.1
)
905
—
Innovative technology costs(2)
—
—
7,300
1.0
—
—
21,711
1.0
Other
1,571
0.2
731
0.1
3,257
0.2
3,640
0.2
Total Asset-Based
645,702
91.0
%
666,363
89.9
%
1,903,646
90.9
%
1,995,399
92.3
%
Asset-Light
Purchased transportation
$
331,107
85.9
%
$
365,217
87.1
%
$
1,014,476
86.2
%
$
1,078,482
85.1
%
Salaries, wages, and benefits(3)
30,150
7.8
31,193
7.4
91,490
7.8
98,688
7.8
Supplies and expenses(3)
2,702
0.7
2,625
0.6
8,279
0.7
9,159
0.7
Depreciation and amortization(4)
5,037
1.3
5,097
1.2
15,154
1.3
15,250
1.2
Shared services(3)
17,547
4.6
16,218
4.0
51,118
4.3
49,232
3.9
Contingent consideration(5)
(91,910
)
(23.9
)
(17,840
)
(4.3
)
(80,740
)
(6.9
)
(12,800
)
(1.0
)
Lease impairment charges(6)
—
—
14,407
3.4
—
—
14,407
1.1
Other(3)
5,912
1.6
6,099
1.5
17,704
1.5
19,417
1.6
Total Asset-Light
300,545
78.0
%
423,016
100.9
%
1,117,481
94.9
%
1,271,835
100.4
%
Other and eliminations(7)
(18,116
)
(6,120
)
(50,026
)
(37,692
)
Total consolidated operating expenses from
continuing operations
$
928,131
87.3
%
$
1,083,259
96.0
%
$
2,971,101
93.5
%
$
3,229,542
96.8
%
OPERATING INCOME (LOSS) FROM CONTINUING
OPERATIONS
Asset-Based
$
64,020
$
74,823
$
190,268
$
165,619
Asset-Light
84,779
(3,704
)
60,023
(4,615
)
Other and eliminations(7)
(13,806
)
(26,028
)
(44,018
)
(52,638
)
Total consolidated operating income from
continuing operations
$
134,993
$
45,091
$
206,273
$
108,366
_________________________
1)
The three and nine months ended September
30, 2023 include $0.7 million of noncash lease-related impairment
charges for a service center.
2)
Represents costs associated with the
freight handling pilot test program at ABF Freight, for which the
decision was made to pause the pilot during third quarter 2023.
3)
For the 2023 period, certain expenses have
been reclassed to conform to the current year presentation,
including amounts previously reported in “Shared services” that
were reclassed to present “Salaries, wages, and benefits” expenses
in a separate line item.
4)
Includes amortization of intangibles
associated with acquired businesses.
5)
Represents the change in fair value of the
contingent earnout consideration recorded for the MoLo acquisition.
The liability for contingent consideration is remeasured at each
quarterly reporting date, and any change in fair value as a result
of the recurring assessments is recognized in operating income
(loss). The contingent consideration for the MoLo acquisition will
be paid based on achievement of certain targets of adjusted
earnings before interest, taxes, depreciation, and amortization, as
adjusted for certain items pursuant to the merger agreement, for
years 2023 through 2025, including catch-up provisions.
6)
The 2023 period represents noncash
lease-related impairment charges for certain office spaces that
were made available for sublease.
7)
“Other and eliminations” includes
corporate costs for certain unallocated shared service costs which
are not attributable to any segment, additional investments to
offer comprehensive transportation and logistics services across
multiple operating segments, costs related to our customer pilot
offering of Vaux, and other investments in ArcBest technology and
innovations. The 2023 period also includes $15.1 million of noncash
lease-related impairment charges for a freight handling pilot
facility.
ARCBEST CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP
FINANCIAL MEASURES
Non-GAAP Financial Measures
We report our financial results in
accordance with U.S. generally accepted accounting principles
(“GAAP”). However, management believes that certain non-GAAP
performance measures and ratios utilized for internal analysis
provide analysts, investors, and others the same information that
we use internally for purposes of assessing our core operating
performance and provides meaningful comparisons between current and
prior period results, as well as important information regarding
performance trends. Accordingly, non-GAAP results are presented on
a continuing operations basis, excluding the discontinued
operations of FleetNet, which sold on February 28, 2023. The use of
certain non-GAAP measures improves comparability in analyzing our
performance because it removes the impact of items from operating
results that, in management's opinion, do not reflect our core
operating performance. Other companies may calculate non-GAAP
measures differently; therefore, our calculation may not be
comparable to similarly titled measures of other companies. Certain
information discussed in the scheduled conference call could be
considered non-GAAP measures. Non-GAAP financial measures should be
viewed in addition to, and not as an alternative for, our reported
results. These financial measures should not be construed as better
measurements than operating income, net income or earnings per
share, as determined under GAAP.
Three Months Ended
Nine Months Ended
September 30
September 30
2024
2023
2024
2023
ArcBest Corporation -
Consolidated
(Unaudited)
($ thousands, except per share
data)
Operating Income from Continuing
Operations
Amounts on GAAP basis
$
134,993
$
45,091
$
206,273
$
108,366
Innovative technology costs,
pre-tax(1)
8,512
14,059
26,521
41,358
Purchase accounting amortization,
pre-tax(2)
3,192
3,192
9,576
9,576
Change in fair value of contingent
consideration, pre-tax(3)
(91,910
)
(17,840
)
(80,740
)
(12,800
)
Lease impairment charges, pre-tax(4)
—
30,162
—
30,162
Non-GAAP amounts
$
54,787
$
74,664
$
161,630
$
176,662
Net Income from Continuing
Operations
Amounts on GAAP basis
$
100,314
$
34,927
$
144,326
$
93,374
Innovative technology costs, after-tax
(includes related financing costs)(1)
6,511
10,630
20,331
31,316
Purchase accounting amortization,
after-tax(2)
2,401
2,398
7,202
7,194
Change in fair value of contingent
consideration, after-tax(3)
(69,124
)
(13,404
)
(60,723
)
(9,617
)
Lease impairment charges, after-tax(4)
—
22,571
—
22,571
Change in fair value of equity investment,
after-tax(5)
—
—
21,603
(2,786
)
Life insurance proceeds and changes in
cash surrender value
(1,333
)
(212
)
(3,006
)
(2,794
)
Tax benefit from vested RSUs(6)
(9
)
(188
)
(11,273
)
(5,103
)
Non-GAAP amounts
$
38,760
$
56,722
$
118,460
$
134,155
Diluted Earnings Per Share from
Continuing Operations
Amounts on GAAP basis
$
4.23
$
1.42
$
6.03
$
3.77
Innovative technology costs, after-tax
(includes related financing costs)(1)
0.27
0.43
0.85
1.26
Purchase accounting amortization,
after-tax(2)
0.10
0.10
0.30
0.29
Change in fair value of contingent
consideration, after-tax(3)
(2.92
)
(0.55
)
(2.54
)
(0.39
)
Lease impairment charges, after-tax(4)
—
0.92
—
0.91
Change in fair value of equity investment,
after-tax(5)
—
—
0.90
(0.11
)
Life insurance proceeds and changes in
cash surrender value
(0.06
)
(0.01
)
(0.13
)
(0.11
)
Tax benefit from vested RSUs(6)
—
(0.01
)
(0.47
)
(0.21
)
Non-GAAP amounts(7)
$
1.64
$
2.31
$
4.95
$
5.42
_________________________
See “Notes to Non-GAAP Financial Tables”
for footnotes to this ArcBest Corporation – Consolidated non-GAAP
table.
ARCBEST CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP
FINANCIAL MEASURES – Continued
Three Months Ended
Nine Months Ended
September 30
September 30
2024
2023
2024
2023
Segment Operating Income (Loss)
Reconciliations
(Unaudited)
($ thousands, except
percentages)
Asset-Based Segment
Operating Income ($) and Operating
Ratio (% of revenues)
Amounts on GAAP basis
$
64,020
91.0
%
$
74,823
89.9
%
$
190,268
90.9
%
$
165,619
92.3
%
Innovative technology costs,
pre-tax(8)
—
—
7,300
(1.0
)
—
—
21,711
(1.0
)
Lease impairment charges, pre-tax(4)
—
684
(0.1
)
—
—
684
—
Non-GAAP amounts(7)
$
64,020
91.0
%
$
82,807
88.8
%
$
190,268
90.9
%
$
188,014
91.3
%
Asset-Light Segment
Operating Income (Loss) ($) and
Operating Ratio (% of revenues)
Amounts on GAAP basis
$
84,779
78.0
%
$
(3,704
)
100.9
%
$
60,023
94.9
%
$
(4,615
)
100.4
%
Purchase accounting amortization,
pre-tax(2)
3,192
(0.8
)
3,192
(0.8
)
9,576
(0.8
)
9,576
(0.8
)
Change in fair value of contingent
consideration, pre-tax(3)
(91,910
)
23.9
(17,840
)
4.3
(80,740
)
6.9
(12,800
)
1.0
Lease impairment charges, pre-tax(4)
—
—
14,407
(3.4
)
—
—
14,407
(1.1
)
Non-GAAP amounts(7)
$
(3,939
)
101.0
%
$
(3,945
)
100.9
%
$
(11,141
)
100.9
%
$
6,568
99.5
%
Other and Eliminations
Operating Income (Loss) ($)
Amounts on GAAP basis
$
(13,806
)
$
(26,028
)
$
(44,018
)
$
(52,638
)
Innovative technology costs,
pre-tax(1)
8,512
6,759
26,521
19,647
Lease impairment charges, pre-tax(4)
—
15,071
—
15,071
Non-GAAP amounts(7)
$
(5,294
)
$
(4,198
)
$
(17,497
)
$
(17,920
)
_________________________
Note: See “Notes to Non-GAAP Financial
Tables” for footnotes to this Segment Operating Income (Loss)
Reconciliations non-GAAP table.
ARCBEST CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP
FINANCIAL MEASURES – Continued
Effective Tax Rate
Reconciliation
ArcBest Corporation -
Consolidated
(Unaudited)
($ thousands, except percentages)
Three Months Ended September
30, 2024
Other
Income
Income
CONTINUING OPERATIONS
Operating
Income
Before Income
Tax
Net
Income
(Costs)
Taxes
Provision
Income
Tax Rate(9)
Amounts on GAAP basis
$
134,993
$
1,711
$
136,704
$
36,390
$
100,314
26.6
%
Innovative technology costs(1)
8,512
145
8,657
2,146
6,511
24.8
Purchase accounting amortization(2)
3,192
—
3,192
791
2,401
24.8
Change in fair value of contingent
consideration(3)
(91,910
)
—
(91,910
)
(22,786
)
(69,124
)
(24.8
)
Life insurance proceeds and changes in
cash surrender value
—
(1,333
)
(1,333
)
—
(1,333
)
—
Tax benefit from vested RSUs(6)
—
—
—
9
(9
)
—
Non-GAAP amounts
$
54,787
$
523
$
55,310
$
16,550
$
38,760
29.9
%
Nine Months Ended September
30, 2024
Other
Income
Income
Operating
Income
Before Income
Tax
Net
Income
(Costs)
Taxes
Provision
Income
Tax Rate(9)
Amounts on GAAP basis
$
206,273
$
(25,019
)
$
181,254
$
36,928
$
144,326
20.4
%
Innovative technology costs(1)
26,521
512
27,033
6,702
20,331
24.8
Purchase accounting amortization(2)
9,576
—
9,576
2,374
7,202
24.8
Change in fair value of contingent
consideration(3)
(80,740
)
—
(80,740
)
(20,017
)
(60,723
)
(24.8
)
Change in fair value of equity
investment(5)
—
28,739
28,739
7,136
21,603
24.8
Life insurance proceeds and changes in
cash surrender value
—
(3,006
)
(3,006
)
—
(3,006
)
—
Tax benefit from vested RSUs(6)
—
—
—
11,273
(11,273
)
—
Non-GAAP amounts
$
161,630
$
1,226
$
162,856
$
44,396
$
118,460
27.3
%
Three Months Ended September
30, 2023
Other
Income
Income
CONTINUING OPERATIONS
Operating
Income
Before Income
Tax
Net
Income
(Costs)
Taxes
Provision
Income
Tax Rate(9)
Amounts on GAAP basis
$
45,091
$
1,799
$
46,890
$
11,963
$
34,927
25.5
%
Innovative technology costs(1)
14,059
226
14,285
3,655
10,630
25.6
Purchase accounting amortization(2)
3,192
—
3,192
794
2,398
24.9
Change in fair value of contingent
consideration(3)
(17,840
)
—
(17,840
)
(4,436
)
(13,404
)
(24.9
)
Lease impairment charges(4)
30,162
—
30,162
7,591
22,571
25.2
Life insurance proceeds and changes in
cash surrender value
—
(212
)
(212
)
—
(212
)
—
Tax benefit from vested RSUs(6)
—
—
—
188
(188
)
—
Non-GAAP amounts
$
74,664
$
1,813
$
76,477
$
19,755
$
56,722
25.8
%
Nine Months Ended September
30, 2023
Other
Income
Income
Operating
Income
Before Income
Tax
Net
Income
(Costs)
Taxes
Provision
Income
Tax Rate(9)
Amounts on GAAP basis
$
108,366
$
10,743
$
119,109
$
25,735
$
93,374
21.6
%
Innovative technology costs(1)
41,358
726
42,084
10,768
31,316
25.6
Purchase accounting amortization(2)
9,576
—
9,576
2,382
7,194
24.9
Change in fair value of contingent
consideration(3)
(12,800
)
—
(12,800
)
(3,183
)
(9,617
)
(24.9
)
Lease impairment charges(4)
30,162
—
30,162
7,591
22,571
25.2
Change in fair value of equity
investment(5)
—
(3,739
)
(3,739
)
(953
)
(2,786
)
(25.5
)
Life insurance proceeds and changes in
cash surrender value
—
(2,794
)
(2,794
)
—
(2,794
)
—
Tax benefit from vested RSUs(6)
—
—
—
5,103
(5,103
)
—
Non-GAAP amounts
$
176,662
$
4,936
$
181,598
$
47,443
$
134,155
26.1
%
_________________________
Note: See “Notes to Non-GAAP Financial
Tables” for footnotes to this Effective Tax Rate Reconciliation
non-GAAP table.
ARCBEST CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP
FINANCIAL MEASURES – Continued
Adjusted Earnings Before Interest,
Taxes, Depreciation, and Amortization (Adjusted EBITDA)
Management uses Adjusted EBITDA as a key
measure of performance and for business planning. The measure is
particularly meaningful for analysis of operating performance
because it excludes amortization of acquired intangibles and
software of the Asset-Light segment, changes in the fair values of
contingent consideration and equity investment, and lease
impairment charges, which are significant expenses or gains
resulting from strategic decisions or other factors rather than
core daily operations. Additionally, Adjusted EBITDA is a primary
component of the financial covenants contained in our credit
agreement. The calculation of Consolidated Adjusted EBITDA as
presented below begins with net income from continuing operations,
which is the most directly comparable GAAP measure. The calculation
of Asset-Light Adjusted EBITDA as presented below begins with
operating income (loss), as other income (costs), income taxes, and
net income from continuing operations are reported at the
consolidated level and not included in the operating segment
financial information evaluated by management to make operating
decisions.
Three Months Ended
Nine Months Ended
September 30
September 30
2024
2023
2024
2023
(Unaudited)
($ thousands)
ArcBest Corporation - Consolidated
Adjusted EBITDA from Continuing Operations
Net Income from Continuing
Operations
$
100,314
$
34,927
$
144,326
$
93,374
Interest and other related financing
costs
2,281
2,236
6,587
6,768
Income tax provision
36,390
11,963
36,928
25,735
Depreciation and amortization(10)
36,611
37,141
109,720
107,962
Amortization of share-based
compensation
2,718
3,005
9,040
8,537
Change in fair value of contingent
consideration(3)
(91,910
)
(17,840
)
(80,740
)
(12,800
)
Lease impairment charges(4)
—
30,162
—
30,162
Change in fair value of equity
investment(5)
—
—
28,739
(3,739
)
Consolidated Adjusted EBITDA from
Continuing Operations
$
86,404
$
101,594
$
254,600
$
255,999
_________________________
Note: See “Notes to Non-GAAP Financial
Tables” for footnotes to this ArcBest Corporation – Consolidated
Adjusted EBITDA from Continuing Operations non-GAAP table.
Three Months Ended
Nine Months Ended
September 30
September 30
2024
2023
2024
2023
(Unaudited)
($ thousands)
Asset-Light Adjusted EBITDA
Operating Income (Loss)
$
84,779
$
(3,704
)
$
60,023
$
(4,615
)
Depreciation and amortization(10)
5,037
5,097
15,154
15,250
Change in fair value of contingent
consideration(3)
(91,910
)
(17,840
)
(80,740
)
(12,800
)
Lease impairment charges(4)
—
14,407
—
14,407
Asset-Light Adjusted EBITDA
$
(2,094
)
$
(2,040
)
$
(5,563
)
$
12,242
_________________________
Note: See “Notes to Non-GAAP Financial
Tables” for footnotes to this Asset-Light Adjusted EBITDA non-GAAP
table.
ARCBEST CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP
FINANCIAL MEASURES – Continued
Notes to Non-GAAP Financial Tables
The following footnotes apply to the non-GAAP financial tables
presented in this press release.
1)
Represents costs related to our customer
pilot offering of Vaux and initiatives to optimize our performance
through technological innovation. The 2023 period also includes
costs associated with the freight handling pilot test program at
ABF Freight, for which the decision was made to pause the pilot
during third quarter 2023.
2)
Represents the amortization of acquired
intangible assets in the Asset-Light segment.
3)
Represents change in fair value of the
contingent earnout consideration recorded for the MoLo acquisition,
as previously described in the footnotes to the Financial Statement
Operating Segment Data and Operating Ratios table. As of September
30, 2024, the decrease in fair value reflects the reduction in
payout assumptions projected for the earnout in 2025, due to the
continued soft truckload environment and the latest industry
expectations for a truckload market recovery being pushed further
into 2025 than previously estimated.
4)
Represents noncash lease-related
impairment charges for a freight handling pilot facility reported
in “Other”, an Asset‑Based service center, and Asset-Light office
spaces that were made available for sublease.
5)
For the nine months ended September 30,
2024, represents a noncash impairment charge to write off an equity
investment in Phantom Auto, a provider of human-centered remote
operation software, which ceased operations during first quarter
2024. For the nine months ended September 30, 2023, represents the
increase in fair value of an investment in Phantom Auto based on
observable price changes during second quarter 2023.
6)
Represents recognition of the tax impact
for the vesting of share-based compensation.
7)
Non-GAAP amounts are calculated in total
and may not equal the sum of GAAP amounts and non-GAAP adjustments
due to rounding.
8)
Represents costs associated with the
freight handling pilot test program at ABF Freight, for which the
decision was made to pause the pilot during third quarter 2023.
9)
Tax rate for total “Amounts on GAAP basis”
represents the effective tax rate. The tax effects of non-GAAP
adjustments are calculated based on the statutory rate applicable
to each item based on tax jurisdiction unless the nature of the
item requires the tax effect to be estimated by applying a specific
tax treatment.
10)
Includes amortization of intangibles
associated with acquired businesses.
ARCBEST CORPORATION
OPERATING STATISTICS
Three Months Ended
Nine Months Ended
September 30
September 30
2024
2023
% Change
2024
2023
% Change
(Unaudited)
Asset-Based
Workdays
63.5
62.5
191.0
190.0
Billed Revenue(1) / CWT
$
50.76
$
47.28
7.4
%
$
49.81
$
43.17
15.4
%
Billed Revenue(1) / Shipment
$
551.34
$
574.95
(4.1
%)
$
552.20
$
549.53
0.5
%
Tonnage / Day
10,983
12,389
(11.3
%)
11,035
13,192
(16.4
%)
Shipments / Day
20,221
20,373
(0.7
%)
19,907
20,727
(4.0
%)
Shipments / DSY hour
0.445
0.421
5.7
%
0.445
0.423
5.2
%
Weight / Shipment
1,086
1,216
(10.7
%)
1,109
1,273
(12.9
%)
Average Length of Haul (Miles)
1,143
1,065
7.3
%
1,130
1,096
3.1
%
_________________________ 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
Nine Months Ended
September 30, 2024
September 30, 2024
(Unaudited)
Asset-Light(2)
Revenue / Shipment
(8.9%)
(14.5%)
Shipments / Day
(0.7%)
8.2%
_________________________ 2)
Statistical data for the periods presented
includes transactions related to managed transportation solutions
which were previously excluded from the presentation of operating
statistics for the Asset-Light segment for the three and nine
months ended September 30, 2023.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241101572831/en/
Investor Relations Contact: Amy Mendenhall Phone: 479-785-6200
Email: invrel@arcb.com
Media Contact: Autumnn Mahar Phone: 479-494-8221 Email:
amahar@arcb.com
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