Continued focus on service excellence,
disciplined pricing, growth, and efficiency
ArcBest® (Nasdaq: ARCB), a leader in supply chain logistics,
today reported first quarter 2024 revenue from continuing
operations of $1.0 billion, compared to $1.1 billion in the first
quarter of 2023. First quarter 2024 operating income from
continuing operations was $22.4 million, compared to $21.2 million
in the prior year period, and net loss from continuing operations
was $2.9 million, or $0.12 per diluted share, compared to net
income of $18.8 million, or $0.75 per diluted share, in 2023.
Included in the first quarter net loss from continuing operations
is a $21.6 million after-tax, noncash impairment charge associated
with ArcBest’s equity investment in Phantom Auto, which ceased
operations during the first quarter of 2024.
Excluding certain items in both periods as identified in the
attached reconciliation tables, first quarter 2024 non‑GAAP
operating income from continuing operations was $42.6 million,
compared to $51.9 million in the prior‑year period. While the
non-GAAP operating income for the Asset-Based segment was unchanged
versus the prior-year period, Asset-Light non-GAAP operating income
declined $8.9 million compared to the prior-year period, reflecting
the current macro weakness impacting demand combined with excess
capacity serving the full truckload market.
On a non-GAAP basis, net income from continuing operations was
$32.3 million, or $1.34 per diluted share, compared to $39.5
million, or $1.58 per diluted share, in the first quarter of
2023.
“Reflecting on the past quarter, I am proud of our employees for
their commitment to excellence, which resulted in better customer
service and operational efficiency gains,” said Judy R. McReynolds,
ArcBest Chairman, President and CEO. “This commitment was also
evident in our performance in this softer freight environment and
the receipt of numerous customer and industry recognitions,
including ABF’s recent receipt of the prestigious ATA Excellence in
Security Award.”
First Quarter Results of Operations
Comparisons
Asset-Based
First Quarter
2024 Versus First Quarter
2023
- Revenue of $671.5 million compared to $697.8 million, a per-day
decrease of 3.0 percent.
- Total tonnage per day decrease of 16.8 percent.
- Total shipments per day decrease of 6.2 percent.
- Total billed revenue per hundredweight increase of 15.6
percent.
- Core daily shipments increase of 12 percent and tonnage
increase of 9 percent.
- Operating income of $53.5 million and an operating ratio of
92.0 percent, on both a GAAP and non-GAAP basis, compared to
prior-year GAAP operating income of $47.5 million and an operating
ratio of 93.2 percent and prior-year non-GAAP operating income of
$53.5 million and an operating ratio of 92.3 percent.
On a non-GAAP basis, the Asset-Based segment generated the same
operating income as first quarter 2023 on lower revenue levels,
which highlights the Company’s continued focus on serving core
customers well and improving efficiencies in our operations. Total
first quarter daily shipment and tonnage levels were below the
prior year, as we continued to adjust freight mix, which positively
impacted productivity and contributed to an improved operating
ratio.
Pricing momentum continued in the quarter, driven by improved
freight mix, higher pricing on transactional shipments and contract
renewal increases of 5.3 percent. Overall, LTL industry pricing
remains rational.
Compared sequentially to the strong fourth quarter of 2023,
first quarter 2024 was impacted by weather in January and fewer
workdays in March. Revenue per day was down 8.4 percent, tons per
day declined 5.7 percent and shipments per day were down 1.8
percent, sequentially. First quarter billed revenue per
hundredweight decreased 0.9 percent, compared to fourth quarter
2023. Although union benefit costs were higher in first quarter
2024, continued focus on operational efficiency resulted in
improved productivity and lower overall operating expenses. The
operating ratio increased 430 basis points sequentially, which was
generally in-line with seasonal changes seen during previous soft
freight environments.
Asset-Light
First Quarter 2024 Versus First Quarter
2023
- Revenue of $396.4 million compared to $438.1 million, a per-day
decrease of 8.8 percent.
- Operating loss of $15.3 million compared to operating loss of
$14.1 million. On a non‑GAAP basis, operating loss of $4.7 million
compared to operating income of $4.1 million.
- Adjusted earnings before interest, taxes, depreciation and
amortization (“Adjusted EBITDA”) of negative $2.9 million compared
to $6.0 million, as detailed in the attached non-GAAP
reconciliation tables.
Compared to the first quarter of 2023, Asset-Light results were
impacted by lower revenue per shipment and reduced margins
associated with changes in business mix and the soft rate
environment. Shipments per day grew by 13.6 percent, as the managed
transportation solution successfully partnered with more customers
to optimize their logistics spend. Our biggest challenge to
profitability resulted from lower rates and margins for truckload
solutions. However, increased productivity mitigated market
softness as shipments per employee per day and SG&A cost per
shipment both significantly improved on a year-over-year basis.
Compared sequentially to the fourth quarter 2023, first quarter
2024 revenue per day was down 7.1 percent. Weather events in
January resulted in significantly higher purchased transportation
costs as a percentage of revenue. The non-GAAP operating loss in
the first quarter was primarily attributable to performance in the
month of January, as the segment saw improvements throughout the
rest of the quarter. Total shipments per day were flat compared to
fourth quarter 2023, with managed transportation seeing sequential
growth. Operating expenses were slightly lower as employee
productivity and cost per shipment metrics improved from fourth
quarter levels. With a focus on growth and efficiency, the Company
remains well-positioned for an eventual recovery of the full
truckload and ground expedite markets.
Conference Call
ArcBest will host a conference call with company executives to
discuss the first quarter 2024 results. The call will be today,
Tuesday, April 30, 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 April 30, 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 May 15, 2024. To listen to the playback, dial
(800) 770-2030. The conference call ID for the live conference call
and the playback is 6865438. The conference call and playback can
also be accessed through May 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 TIME’s 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 concerning results for the three months ended March 31,
2024 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
March 31
2024
2023
(Unaudited)
($ thousands, except share and
per share data)
REVENUES
$
1,036,419
$
1,106,094
OPERATING EXPENSES
1,013,984
1,084,935
OPERATING INCOME
22,435
21,159
OTHER INCOME (COSTS)
Interest and dividend income
3,315
2,933
Interest and other related financing
costs
(2,228
)
(2,327
)
Other, net
(28,199
)
1,780
(27,112
)
2,386
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES
(4,677
)
23,545
INCOME TAX PROVISION (BENEFIT)
(1,765
)
4,698
NET INCOME (LOSS) FROM CONTINUING
OPERATIONS
(2,912
)
18,847
INCOME FROM DISCONTINUED OPERATIONS,
NET OF TAX(1)
600
52,436
NET INCOME (LOSS)
$
(2,312
)
$
71,283
BASIC EARNINGS PER COMMON
SHARE(2)
Continuing operations
$
(0.12
)
$
0.78
Discontinued operations(1)
0.03
2.16
$
(0.10
)
$
2.93
DILUTED EARNINGS PER COMMON
SHARE(2)
Continuing operations
$
(0.12
)
$
0.75
Discontinued operations(1)
0.03
2.09
$
(0.10
)
$
2.84
AVERAGE COMMON SHARES
OUTSTANDING
Basic
23,561,309
24,288,138
Diluted
23,561,309
25,057,726
_________________________
1)
Represents the discontinued operations of
FleetNet America® (“FleetNet”), which sold on February 28, 2023.
The 2024 period represents adjustments related to the prior year
gain on sale of FleetNet. The 2023 period includes the net gain on
sale of FleetNet of $51.4 million after-tax, or $2.12 basic
earnings per share and $2.05 diluted earnings per share, recognized
in the first quarter of 2023.
2)
Earnings per common share is calculated in
total and may not equal the sum of earnings per common share from
continuing operations and discontinued operations due to
rounding.
ARCBEST CORPORATION
CONSOLIDATED BALANCE SHEETS
March 31
December 31
2024
2023
(Unaudited)
Note
($ thousands, except share
data)
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
172,855
$
262,226
Short-term investments
68,065
67,842
Accounts receivable, less allowances (2024
- $9,184; 2023 - $10,346)
433,717
430,122
Other accounts receivable, less allowances
(2024 - $733; 2023 - $731)
11,389
52,124
Prepaid expenses
39,232
37,034
Prepaid and refundable income taxes
22,084
24,319
Other
11,136
11,116
TOTAL CURRENT ASSETS
758,478
884,783
PROPERTY, PLANT AND EQUIPMENT
Land and structures
491,555
460,068
Revenue equipment
1,119,446
1,126,055
Service, office, and other equipment
318,252
319,466
Software
176,988
173,354
Leasehold improvements
25,173
24,429
2,131,414
2,103,372
Less allowances for depreciation and
amortization
1,193,584
1,188,548
PROPERTY, PLANT AND EQUIPMENT,
NET
937,830
914,824
GOODWILL
304,753
304,753
INTANGIBLE ASSETS, NET
97,940
101,150
OPERATING RIGHT-OF-USE ASSETS
174,987
169,999
DEFERRED INCOME TAXES
10,032
8,140
OTHER LONG-TERM ASSETS
73,123
101,445
TOTAL ASSETS
$
2,357,143
$
2,485,094
LIABILITIES AND STOCKHOLDERS’
EQUITY
CURRENT LIABILITIES
Accounts payable
$
209,908
$
214,004
Income taxes payable
8
10,410
Accrued expenses
313,494
378,029
Current portion of long-term debt
63,179
66,948
Current portion of operating lease
liabilities
31,986
32,172
TOTAL CURRENT LIABILITIES
618,575
701,563
LONG-TERM DEBT, less current
portion
148,992
161,990
OPERATING LEASE LIABILITIES, less
current portion
174,085
176,621
POSTRETIREMENT LIABILITIES, less
current portion
13,318
13,319
CONTINGENT CONSIDERATION
100,220
92,900
OTHER LONG-TERM LIABILITIES
34,422
40,553
DEFERRED INCOME TAXES
44,798
55,785
STOCKHOLDERS’ EQUITY
Common stock, $0.01 par value, authorized
70,000,000 shares; issued 2024: 30,038,556 shares; 2023: 30,024,125
shares
300
300
Additional paid-in capital
343,102
340,961
Retained earnings
1,267,444
1,272,584
Treasury stock, at cost, 2024: 6,580,818
shares; 2023: 6,460,137 shares
(391,458
)
(375,806
)
Accumulated other comprehensive income
3,345
4,324
TOTAL STOCKHOLDERS’ EQUITY
1,222,733
1,242,363
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$
2,357,143
$
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
Three Months Ended
March 31
2024
2023
(Unaudited)
($ thousands)
OPERATING ACTIVITIES
Net income (loss)
$
(2,312
)
$
71,283
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization
33,616
32,187
Amortization of intangibles
3,217
3,203
Share-based compensation expense
2,889
2,235
Provision for losses on accounts
receivable
1,055
1,427
Change in deferred income taxes
(12,548
)
(9,814
)
(Gain) loss on sale of property and
equipment
217
(9
)
Pre-tax gain on sale of discontinued
operations
(806
)
(69,083
)
Change in fair value of contingent
consideration
7,320
15,040
Change in fair value of equity
investment
28,739
—
Changes in operating assets and
liabilities:
Receivables
35,059
43,977
Prepaid expenses
(2,198
)
(1,464
)
Other assets
(1,218
)
3,874
Income taxes
(8,305
)
6,221
Operating right-of-use assets and lease
liabilities, net
(7,710
)
1,570
Accounts payable, accrued expenses, and
other liabilities
(70,548
)
(79,984
)
NET CASH PROVIDED BY OPERATING
ACTIVITIES
6,467
20,663
INVESTING ACTIVITIES
Purchases of property, plant and
equipment, net of financings
(55,049
)
(34,657
)
Proceeds from sale of property and
equipment
1,292
1,833
Proceeds from sale of discontinued
operations
—
101,138
Purchases of short-term investments
(5,236
)
(35,588
)
Proceeds from sale of short-term
investments
5,635
41,865
Capitalization of internally developed
software
(3,635
)
(3,631
)
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES
(56,993
)
70,960
FINANCING ACTIVITIES
Payments on long-term debt
(16,767
)
(17,649
)
Net change in book overdrafts
(2,850
)
(10,493
)
Deferred financing costs
—
63
Payment of common stock dividends
(2,828
)
(2,915
)
Purchases of treasury stock
(15,652
)
(14,092
)
Payments for tax withheld on share-based
compensation
(748
)
(1,590
)
NET CASH USED IN FINANCING
ACTIVITIES
(38,845
)
(46,676
)
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS
(89,371
)
44,947
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
$
172,855
$
203,319
NONCASH INVESTING ACTIVITIES
Equipment financed
$
—
$
3,478
Accruals for equipment received
$
915
$
1,453
Lease liabilities arising from obtaining
right-of-use assets
$
5,694
$
30,581
_________________________
Note: The statements of cash flows for the
three months ended March 31, 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
March 31
2024
2023
(Unaudited)
($ thousands, except
percentages)
REVENUES FROM CONTINUING
OPERATIONS
Asset-Based
$
671,467
$
697,817
Asset-Light
396,363
438,092
Other and eliminations
(31,411
)
(29,815
)
Total consolidated revenues from
continuing operations
$
1,036,419
$
1,106,094
OPERATING EXPENSES FROM CONTINUING
OPERATIONS
Asset-Based
Salaries, wages, and benefits
$
344,999
51.4
%
$
335,605
48.1
%
Fuel, supplies, and expenses
81,044
12.1
94,288
13.5
Operating taxes and licenses
13,529
2.0
13,979
2.0
Insurance
14,482
2.1
13,273
1.9
Communications and utilities
4,799
0.7
5,304
0.8
Depreciation and amortization
27,007
4.0
24,911
3.6
Rents and purchased transportation
65,671
9.8
90,744
13.0
Shared services
64,914
9.7
64,613
9.2
(Gain) loss on sale of property and
equipment
149
—
(51
)
—
Innovative technology costs(1)
—
—
6,068
0.9
Other
1,417
0.2
1,612
0.2
Total Asset-Based
618,011
92.0
%
650,346
93.2
%
Asset-Light
Purchased transportation
$
344,122
86.8
%
$
370,163
84.5
%
Salaries, wages, and benefits(2)
30,304
7.6
34,894
8.0
Supplies and expenses(2)
2,809
0.7
3,629
0.8
Depreciation and amortization(3)
5,078
1.3
5,068
1.2
Shared services(2)
16,274
4.1
16,535
3.8
Contingent consideration(4)
7,320
1.8
15,040
3.4
Other(2)
5,714
1.5
6,854
1.5
Total Asset-Light
411,621
103.8
%
452,183
103.2
%
Other and eliminations(5)
(15,648
)
(17,594
)
Total consolidated operating expenses from
continuing operations
$
1,013,984
97.8
%
$
1,084,935
98.1
%
OPERATING INCOME (LOSS) FROM CONTINUING
OPERATIONS
Asset-Based
$
53,456
$
47,471
Asset-Light
(15,258
)
(14,091
)
Other and eliminations(5)
(15,763
)
(12,221
)
Total consolidated operating income from
continuing operations
$
22,435
$
21,159
_________________________
1)
Represents costs associated with the
freight handling pilot test program at ABF Freight, for which the
decision was made to pause the pilot during third quarter 2023.
2)
For the 2023 period, certain expenses have
been reclassed to conform to the current year presentation,
including amounts previously reported in “Shared services” that
were reclassed to present “Salaries, wages, and benefits” expenses
in a separate line item.
3)
Depreciation and amortization includes
amortization of intangibles associated with acquired
businesses.
4)
Represents the change in fair value of the
contingent earnout consideration recorded for the MoLo acquisition.
The liability for contingent consideration is remeasured at each
quarterly reporting date, and any change in fair value as a result
of the recurring assessments is recognized in operating loss. The
contingent consideration for the MoLo acquisition will be paid
based on achievement of certain targets of adjusted earnings before
interest, taxes, depreciation, and amortization, as adjusted for
certain items pursuant to the merger agreement, for years 2023
through 2025, including catch-up provisions.
5)
“Other and eliminations” includes
corporate costs for certain unallocated shared service costs which
are not attributable to any segment, additional investments to
offer comprehensive transportation and logistics services across
multiple operating segments, costs related to our customer pilot
offering of Vaux, and other investments in ArcBest technology and
innovations.
ARCBEST CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP
FINANCIAL MEASURES
Non-GAAP Financial Measures
We report our financial results in
accordance with U.S. generally accepted accounting principles
(“GAAP”). However, management believes that certain non-GAAP
performance measures and ratios utilized for internal analysis
provide analysts, investors, and others the same information that
we use internally for purposes of assessing our core operating
performance and provides meaningful comparisons between current and
prior period results, as well as important information regarding
performance trends. Accordingly, non-GAAP results are presented on
a continuing operations basis, excluding the discontinued
operations of FleetNet, which sold on February 28, 2023. The use of
certain non-GAAP measures improves comparability in analyzing our
performance because it removes the impact of items from operating
results that, in management's opinion, do not reflect our core
operating performance. Other companies may calculate non-GAAP
measures differently; therefore, our calculation may not be
comparable to similarly titled measures of other companies. Certain
information discussed in the scheduled conference call could be
considered non-GAAP measures. Non-GAAP financial measures should be
viewed in addition to, and not as an alternative for, our reported
results. These financial measures should not be construed as better
measurements than operating income (loss), operating cash flow, net
income (loss) or earnings per share, as determined under GAAP.
Three Months Ended
March 31
2024
2023
ArcBest Corporation -
Consolidated
(Unaudited)
($ thousands, except per share
data)
Operating Income from Continuing
Operations
Amounts on GAAP basis
$
22,435
$
21,159
Innovative technology costs,
pre-tax(1)
9,698
12,478
Purchase accounting amortization,
pre-tax(2)
3,192
3,192
Change in fair value of contingent
consideration, pre-tax(3)
7,320
15,040
Non-GAAP amounts
$
42,645
$
51,869
Net Income (Loss) from Continuing
Operations
Amounts on GAAP basis
$
(2,912
)
$
18,847
Innovative technology costs, after-tax
(includes related financing costs)(1)
7,440
9,480
Purchase accounting amortization,
after-tax(2)
2,401
2,398
Change in fair value of contingent
consideration, after-tax(3)
5,505
11,299
Change in fair value of equity investment,
after-tax(4)
21,603
—
Life insurance proceeds and changes in
cash surrender value
(1,233
)
(1,496
)
Tax benefit from vested RSUs(5)
(487
)
(1,051
)
Non-GAAP amounts
$
32,317
$
39,477
Diluted Earnings Per Share from
Continuing Operations(6)
Amounts on GAAP basis
$
(0.12
)
$
0.75
Innovative technology costs, after-tax
(includes related financing costs)(1)
0.31
0.38
Purchase accounting amortization,
after-tax(2)
0.10
0.10
Change in fair value of contingent
consideration, after-tax(3)
0.23
0.45
Change in fair value of equity investment,
after-tax(4)
0.90
—
Life insurance proceeds and changes in
cash surrender value
(0.05
)
(0.06
)
Tax benefit from vested RSUs(5)
(0.02
)
(0.04
)
Non-GAAP amounts(7)
$
1.34
$
1.58
_________________________
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
March 31
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
$
53,456
92.0
%
$
47,471
93.2
%
Innovative technology costs,
pre-tax(8)
—
—
6,068
(0.9
)
Non-GAAP amounts(7)
$
53,456
92.0
%
$
53,539
92.3
%
Asset-Light Segment
Operating Income (Loss) ($) and
Operating Ratio (% of revenues)
Amounts on GAAP basis
$
(15,258
)
103.8
%
$
(14,091
)
103.2
%
Purchase accounting amortization,
pre-tax(2)
3,192
(0.8
)
3,192
(0.7
)
Change in fair value of contingent
consideration, pre-tax(3)
7,320
(1.8
)
15,040
(3.4
)
Non-GAAP amounts(7)
$
(4,746
)
101.2
%
$
4,141
99.1
%
Other and Eliminations
Operating Income (Loss) ($)
Amounts on GAAP basis
$
(15,763
)
$
(12,221
)
Innovative technology costs,
pre-tax(1)
9,698
6,410
Non-GAAP amounts(7)
$
(6,065
)
$
(5,811
)
_________________________
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 March 31,
2024
Other
Income (Loss)
Income Tax
Net
CONTINUING OPERATIONS
Operating
Income
Before Income
Provision
Income
Income
(Costs)
Taxes
(Benefit)
(Loss)
Tax Rate(9)
Amounts on GAAP basis
$
22,435
$
(27,112
)
$
(4,677
)
$
(1,765
)
$
(2,912
)
(37.7
)%
Innovative technology costs(1)
9,698
195
9,893
2,453
7,440
24.8
Purchase accounting amortization(2)
3,192
—
3,192
791
2,401
24.8
Change in fair value of contingent
consideration(3)
7,320
—
7,320
1,815
5,505
24.8
Change in fair value of equity
investment(4)
—
28,739
28,739
7,136
21,603
24.8
Life insurance proceeds and changes in
cash surrender value
—
(1,233
)
(1,233
)
—
(1,233
)
—
Tax benefit from vested RSUs(5)
—
—
—
487
(487
)
—
Non-GAAP amounts
$
42,645
$
589
$
43,234
$
10,917
$
32,317
25.3
%
Three Months Ended March 31,
2023
Other
Income
Income
CONTINUING OPERATIONS
Operating
Income
Before Income
Tax
Net
Income
(Costs)
Taxes
Provision
Income
Tax Rate(9)
Amounts on GAAP basis
$
21,159
$
2,386
$
23,545
$
4,698
$
18,847
20.0
%
Innovative technology costs(1)
12,478
259
12,737
3,257
9,480
25.6
Purchase accounting amortization(2)
3,192
—
3,192
794
2,398
24.9
Change in fair value of contingent
consideration(3)
15,040
—
15,040
3,741
11,299
24.9
Life insurance proceeds and changes in
cash surrender value
—
(1,496
)
(1,496
)
—
(1,496
)
—
Tax benefit from vested RSUs(5)
—
—
—
1,051
(1,051
)
—
Non-GAAP amounts
$
51,869
$
1,149
$
53,018
$
13,541
$
39,477
25.5
%
_________________________
Note: See “Notes to Non-GAAP Financial
Tables” for footnotes to this Effective Tax Rate Reconciliation
non-GAAP table.
ARCBEST CORPORATION RECONCILIATIONS OF
GAAP TO NON-GAAP FINANCIAL MEASURES – Continued
Adjusted Earnings Before Interest,
Taxes, Depreciation, and Amortization (Adjusted EBITDA)
Management uses Adjusted EBITDA as a key
measure of performance and for business planning. The measure is
particularly meaningful for analysis of operating performance
because it excludes amortization of acquired intangibles and
software of the Asset-Light segment and changes in the fair values
of contingent consideration and our equity investment, which are
significant expenses resulting from strategic decisions or other
factors rather than core daily operations. Additionally, Adjusted
EBITDA is a primary component of the financial covenants contained
in our credit agreement. The calculation of Consolidated Adjusted
EBITDA as presented below begins with net income (loss) 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 (loss) 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
March 31
2024
2023
(Unaudited)
($ thousands)
ArcBest Corporation - Consolidated
Adjusted EBITDA from Continuing Operations
Net Income (Loss) from Continuing
Operations
$
(2,912
)
$
18,847
Interest and other related financing
costs
2,228
2,327
Income tax provision (benefit)
(1,765
)
4,698
Depreciation and amortization(10)
36,833
35,010
Amortization of share-based
compensation
2,889
2,182
Change in fair value of contingent
consideration(3)
7,320
15,040
Change in fair value of equity
investment(4)
28,739
—
Consolidated Adjusted EBITDA from
Continuing Operations
$
73,332
$
78,104
_________________________
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
March 31
2024
2023
(Unaudited)
($ thousands)
Asset-Light Adjusted EBITDA
Operating Income (Loss)
$
(15,258
)
$
(14,091
)
Depreciation and amortization(10)
5,078
5,068
Change in fair value of contingent
consideration(3)
7,320
15,040
Asset-Light Adjusted EBITDA
$
(2,860
)
$
6,017
_________________________
Note: See “Notes to Non-GAAP Financial
Tables” for footnotes to this Asset-Light Adjusted EBITDA non-GAAP
table.
ARCBEST CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP
FINANCIAL MEASURES – Continued
Notes to Non-GAAP Financial
Tables
The following footnotes apply to the
non-GAAP financial tables presented in this press release.
1)
Represents costs related to our customer
pilot offering of Vaux and initiatives to optimize our performance
through technological innovation. The 2023 period also includes
costs associated with the freight handling pilot test program at
ABF Freight, for which the decision was made to pause the pilot
during third quarter 2023.
2)
Represents the amortization of acquired
intangible assets in the Asset-Light segment.
3)
Represents change in fair value of the
contingent earnout consideration recorded for the MoLo acquisition,
as previously described in the footnotes to the Financial Statement
Operating Segment Data and Operating Ratios table.
4)
Represents a noncash impairment charge to
write off our equity investment in Phantom Auto, a provider of
human-centered remote operation software, which ceased operations
during first quarter 2024.
5)
Represents recognition of the tax impact
for the vesting of share-based compensation.
6)
For first quarter 2024, ArcBest reported a
net loss on a GAAP basis and reported net income on a non-GAAP
basis. The average common shares outstanding used to calculate
non-GAAP diluted earnings per share for first quarter 2024 were
adjusted to include unvested restricted stock awards, which were
excluded from the calculation of GAAP diluted earnings per share
due to the net loss.
Three Months Ended
March 31, 2024
Average Common Shares
Outstanding
Diluted shares on GAAP basis
23,561,309
Effect of unvested restricted stock
awards
568,770
Non-GAAP diluted shares
24,130,079
7)
Non-GAAP amounts are calculated in total
and may not equal the sum of the GAAP amounts and the non-GAAP
adjustments due to rounding.
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
March 31
2024
2023
% Change
(Unaudited)
Asset-Based
Workdays
63.5
64.0
Billed Revenue(1) / CWT
$
48.56
$
41.99
15.6
%
Billed Revenue(1) / Shipment
$
542.84
$
529.43
2.5
%
Shipments / Day
19,566
20,856
(6.2
%)
Tons / Day
10,937
13,149
(16.8
%)
Pounds / Shipment
1,118
1,261
(11.3
%)
Average Length of Haul (Miles)
1,110
1,096
1.3
%
_________________________
1)
Revenue for undelivered freight is
deferred for financial statement purposes in accordance with the
Asset-Based segment revenue recognition policy. Billed revenue used
for calculating revenue per hundredweight measurements has not been
adjusted for the portion of revenue deferred for financial
statement purposes.
Year Over Year %
Change
Three Months Ended
March 31, 2024
(Unaudited)
Asset-Light(2)
Revenue / Shipment
(19.7
%)
Shipments / Day
13.6
%
_________________________
2)
Statistical data for the periods presented
include transactions related to managed transportation solutions
which were previously excluded from the presentation of operating
statistics for the Asset-Light segment for the three months ended
March 31, 2023.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240430240510/en/
Investor Relations Contact: David Humphrey Title: Vice President
– Investor Relations Phone: 479-785-6200 Email:
dhumphrey@arcb.com
Media Contact: Autumnn Mahar Title: Director External
Communications and Public Relations Phone: 479-494-8221 Email:
amahar@arcb.com
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