ArcBest Announces Solid Third Quarter 2022 Results

Delivers Double-Digit Percentage Revenue Growth In Each Operating Segment; On Track To Deliver Record Annual Revenues in 2022

  • Third quarter 2022 revenue of $1.4 billion increased 33.0 percent over third quarter 2021.
  • Net income improved to $88.8 million, or $3.50 per diluted share. On a non-GAAP basis, third quarter 2022 net income was $96.4 million, or $3.80 per diluted share.

FORT SMITH, Ark., Nov. 1, 2022 /PRNewswire/ — ArcBest® (Nasdaq: ARCB), a leader in supply chain logistics, today reported third quarter 2022 revenue of $1.4 billion, an increase of $335.2 million compared to third quarter 2021. Each operating segment achieved double-digit percentage revenue growth over the prior year period. Third quarter 2022 results include the impact of the acquisition of MoLo Solutions, LLC (“MoLo”), which was completed in November 2021.

ArcBest’s third quarter 2022 operating income was $115.8 million and net income was $88.8 million, or $3.50 per diluted share, compared to operating income of $87.6 million and net income of $63.7 million, or $2.38 per diluted share, in the third quarter of 2021. 

Excluding certain items in both periods as identified in the attached reconciliation tables, third quarter non-GAAP operating income was $131.1 million, compared to $98.4 million in the prior-year period. On a non-GAAP basis, net income was $96.4 million, or $3.80 per diluted share, compared to $70.9 million, or $2.65 per diluted share, in the third quarter of 2021.

“Our third quarter results reflect the benefits of our growth strategy and continue a track record of impressive performances as we bring our best-in-class approach to customers more efficiently and effectively every single day,” said Judy R. McReynolds, ArcBest chairman, president and CEO. “Despite a more challenging economic environment, we continue to invest in our team, solutions and facilities. We remain focused on delivering for our customers to provide them the reliability, flexibility and sustainability they need in their supply chains. This year we are on track to deliver more than $5 billion in annual revenue for the first time in our hundred-year history. We are confident that future growth opportunities remain bright as we work to achieve our long-term financial targets.”

Third Quarter Results of Operations Comparisons

Asset-Based

Third Quarter 2022 Versus Third Quarter 2021

  • Revenue of $791.5 million compared to $681.2 million, a per-day increase of 16.2 percent.
  • Total tonnage per day increase of 4.4 percent, including an increase of 1.9 percent in LTL-rated weight per shipment.
  • Total shipments per day increased 2.8 percent.
  • Total billed revenue per hundredweight increased 11.1 percent and was positively impacted by higher fuel surcharges. Revenue per hundredweight on LTL-rated business, excluding fuel surcharge, improved by a percentage in the high single digits.
  • Operating income of $109.3 million and an operating ratio of 86.2 percent compared to operating income of $83.6 million and an operating ratio of 87.7 percent. On a non-GAAP basis, operating income of $116.6 million and an operating ratio of 85.3 percent compared to operating income of $90.5 million and an operating ratio of 86.7 percent.

ArcBest’s Asset-Based business continued its recent pattern of revenue growth as customer demand softened some but remained at a good level. Higher third quarter shipments and tonnage, combined with an increase in average weight per shipment, resulted in a revenue increase versus the same period last year.  Following the robust year-over-year increase in third quarter 2021, current pricing levels remain solid and were enhanced by higher fuel surcharges. To facilitate continued growth, ABF Freight continues its successful actions to add personnel in key locations. Despite experiencing cost pressures across the network, ArcBest’s Asset-Based business improved its third quarter profitability due to the collaborative efforts of all employees and the careful management of resources. Shippers are currently navigating a more challenging economic environment while seeking to return consistency to their supply chains. The equipment and network resources offered by ABF Freight, as part of a comprehensive set of ArcBest logistics solutions, are valued by customers which positions ArcBest for growth. 

Asset-Light
      Third Quarter 2022 Versus Third Quarter 2021 (including the results of MoLo)

  • Revenue of $604.5 million compared to $371.7 million, a per-day increase of 62.6 percent.
  • Operating income of $16.3 million compared to $11.5 million. On a non‑GAAP basis, operating income of $19.9 million compared to $12.4 million.
  • Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) of $21.8 million compared to $14.2 million, as detailed in the attached non-GAAP reconciliation tables.

Compared to the previous year, revenue growth in the ArcBest Asset-Light segment moderated throughout the third quarter as a result of a softer economic environment, which led to lower average revenue per shipment, and changes in business mix. The positive impact of additional truckload business from MoLo was the main contributor to increased third quarter revenue and shipment totals versus last year. Further progress was made on the MoLo integration and all of ArcBest’s Asset-Light truckload shipments are now being managed in one operating platform. In addition to truckload, third quarter revenue growth was positively impacted by managed transportation and dedicated services. In the third quarter, overall rates charged for customer shipments decreased sequentially at a more rapid pace than the cost reductions associated with securing carrier partner equipment capacity in the marketplace. The resulting sequential margin compression contributed to reduced profitability in the Asset-Light business compared to earlier quarters this year.

At FleetNet, despite revenue growth resulting from increases in both total events and revenue per event, higher costs contributed to a decrease in profitability versus the prior year period.

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

Conference Call

ArcBest will host a conference call with company executives to discuss the 2022 third quarter results. The call will be today, Tuesday, November 1, at 9:30 a.m. EDT (8:30 a.m. CDT). Interested parties are invited to listen by calling (800) 916-9049 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, 2022, 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 December 15, 2022. To listen to the playback, dial (800) 633‑8284 or (402) 977‑9140 (for international callers). The conference call ID for the playback is 22020814. The conference call and playback can also be accessed, through December 15, 2022, 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 over 15,000 employees across more than 250 campuses and service centers, the company is a logistics powerhouse, fueled by the simple notion of finding a way to get the job done. Through innovative thinking, agility and trust, ArcBest leverages their full suite of shipping and logistics solutions to meet customers’ critical needs, each and every day. 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 September 30, 2022 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 widespread outbreak of an illness or disease, including the COVID-19 pandemic, 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 acts of war or terrorism or military conflicts; 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; interruption or failure of third-party software or information technology systems or licenses; untimely or ineffective development and implementation of, or failure to realize potential benefits associated with, new or enhanced technology or processes, including the pilot test program at ABF Freight; the loss or reduction of business from large customers; the ability to manage our cost structure, and the timing and performance of growth initiatives; the cost, integration, and performance of any recent or future acquisitions, including the acquisition of MoLo Solutions, LLC, and the inability to realize the anticipated benefits of the acquisition within the expected time period or at all; market fluctuations and interruptions affecting the price of our stock or the price or timing of our share repurchase programs; maintaining our corporate reputation and intellectual property rights; nationwide or global disruption in the supply chain increasing volatility in freight volumes; competitive initiatives and pricing pressures; 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, 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 develop 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; self-insurance claims and insurance premium costs; potential impairment of 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; seasonal fluctuations and adverse weather conditions; 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 (the “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 the 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.

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




2022


2021


2022


2021




(Unaudited)




($ thousands, except share and per share data)


REVENUES


$

1,351,831


$

1,016,657


$

4,079,834


$

2,794,843
















OPERATING EXPENSES



1,236,070



929,096



3,731,799



2,600,792
















OPERATING INCOME



115,761



87,561



348,035



194,051
















OTHER INCOME (COSTS)














Interest and dividend income



1,147



323



1,614



1,037


Interest and other related financing costs



(1,749)



(2,072)



(5,551)



(6,774)


Other, net



(189)



338



(3,822)



2,641





(791)



(1,411)



(7,759)



(3,096)
















INCOME BEFORE INCOME TAXES



114,970



86,150



340,276



190,955
















INCOME TAX PROVISION



26,128



22,459



79,404



42,922
















NET INCOME


$

88,842


$

63,691


$

260,872


$

148,033
















EARNINGS PER COMMON SHARE














Basic


$

3.61


$

2.48


$

10.59


$

5.79


Diluted


$

3.50


$

2.38


$

10.18


$

5.51
















AVERAGE COMMON SHARES OUTSTANDING














Basic



24,605,228



25,632,805



24,640,706



25,559,642


Diluted



25,372,755



26,770,146



25,626,225



26,872,381


ARCBEST CORPORATION

CONSOLIDATED BALANCE SHEETS











September 30


December 31




2022


2021




(Unaudited)


Note




($ thousands, except share data)


ASSETS








CURRENT ASSETS








Cash and cash equivalents


$

155,531


$

76,620


Short-term investments



145,758



48,339


Accounts receivable, less allowances (2022 – $15,441; 2021 – $13,226)



627,092



582,344


Other accounts receivable, less allowances (2022 – $709; 2021 – $690)



11,472



13,094


Prepaid expenses



32,280



40,104


Prepaid and refundable income taxes



16,010



9,654


Other



9,885



5,898


TOTAL CURRENT ASSETS



998,028



776,053










PROPERTY, PLANT AND EQUIPMENT








Land and structures



361,705



350,694


Revenue equipment



1,014,369



980,283


Service, office, and other equipment



291,595



251,085


Software



178,145



175,989


Leasehold improvements



20,865



16,931





1,866,679



1,774,982


Less allowances for depreciation and amortization



1,120,962



1,079,061





745,717



695,921










GOODWILL



307,252



300,337


INTANGIBLE ASSETS, NET



116,922



126,580


OPERATING RIGHT-OF-USE ASSETS



164,654



106,686


DEFERRED INCOME TAXES



5,563



5,470


OTHER LONG-TERM ASSETS



101,978



101,629


TOTAL ASSETS


$

2,440,114


$

2,112,676










LIABILITIES AND STOCKHOLDERS’ EQUITY
















CURRENT LIABILITIES








Accounts payable


$

329,887


$

311,401


Income taxes payable



7,668



12,087


Accrued expenses



331,610



305,851


Current portion of long-term debt



63,521



50,615


Current portion of operating lease liabilities



24,686



22,740


TOTAL CURRENT LIABILITIES



757,372



702,694










LONG-TERM DEBT, less current portion



189,798



174,917


OPERATING LEASE LIABILITIES, less current portion



146,134



88,835


POSTRETIREMENT LIABILITIES, less current portion



16,681



16,733


OTHER LONG-TERM LIABILITIES



134,701



135,537


DEFERRED INCOME TAXES



69,136



64,893










STOCKHOLDERS’ EQUITY








Common stock, $0.01 par value, authorized 70,000,000 shares;

      issued 2022: 29,747,867 shares; 2021: 29,359,597 shares



297



294


Additional paid-in capital



337,113



318,033


Retained earnings



1,054,294



801,314


   Treasury stock, at cost, 2022: 5,340,836 shares; 2021: 4,492,514 shares



(269,390)



(194,273)


Accumulated other comprehensive income



3,978



3,699


TOTAL STOCKHOLDERS’ EQUITY



1,126,292



929,067


TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY


$

2,440,114


$

2,112,676



Note: The balance sheet at December 31, 2021 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




2022


2021




Unaudited




($ thousands)


 OPERATING ACTIVITIES








Net income


$

260,872


$

148,033


Adjustments to reconcile net income to net cash provided by operating activities:








Depreciation and amortization



95,169



88,113


Amortization of intangibles



9,691



2,882


Share-based compensation expense



9,816



8,567


Provision for losses on accounts receivable



5,065



(57)


Change in deferred income taxes



3,745



(8,593)


Gain on sale of property and equipment



(9,759)



(8,389)


Gain on sale of subsidiary



(402)



(6,923)


Changes in operating assets and liabilities:








Receivables



(54,889)



(103,886)


Prepaid expenses



7,550



7,655


Other assets



287



539


Income taxes



(11,068)



8,174


Operating right-of-use assets and lease liabilities, net



1,579



650


Accounts payable, accrued expenses, and other liabilities



32,793



101,577


NET CASH PROVIDED BY OPERATING ACTIVITIES



350,449



238,342










 INVESTING ACTIVITIES








Purchases of property, plant and equipment, net of financings



(76,068)



(43,506)


Proceeds from sale of property and equipment



13,938



11,509


Proceeds from sale of subsidiary



475



9,013


Purchases of short-term investments



(145,254)



(56,011)


Proceeds from sale of short-term investments



48,161



61,174


Capitalization of internally developed software



(13,922)



(14,308)


Business acquisition, net of cash acquired(1)



2,279




NET CASH USED IN INVESTING ACTIVITIES



(170,391)



(32,129)










 FINANCING ACTIVITIES








Borrowings under credit facilities



58,000




Proceeds from notes payable



12,113




Payments on long-term debt



(99,567)



(76,513)


Net change in book overdrafts



2,102



(305)


Deferred financing costs



(53)



(295)


Payment of common stock dividends



(7,892)



(6,145)


Purchases of treasury stock



(50,117)



(8,100)


Payments for tax withheld on share-based compensation



(15,733)



(10,602)


NET CASH USED IN FINANCING ACTIVITIES



(101,147)



(101,960)










NET INCREASE IN CASH AND CASH EQUIVALENTS



78,911



104,253


Cash and cash equivalents at beginning of period



76,620



303,954


CASH AND CASH EQUIVALENTS AT END OF PERIOD


$

155,531


$

408,207










 NONCASH INVESTING ACTIVITIES








Equipment financed


$

57,241


$

36,731


Accruals for equipment received


$

5,587


$

3,158


Lease liabilities arising from obtaining right-of-use assets


$

78,324


$

7,280


__________________________

1)

Represents cash received from escrow for post-closing adjustments related to the acquisition of MoLo.

ARCBEST CORPORATION

FINANCIAL STATEMENT OPERATING SEGMENT DATA AND OPERATING RATIOS




























Three Months Ended 



Nine Months Ended 




September 30



September 30




2022



2021



2022



2021




Unaudited




($ thousands, except percentages)


REVENUES

























Asset-Based


$

791,531





$

681,164





$

2,299,464





$

1,890,288





























ArcBest(1)



515,235






305,207






1,660,174






828,291




FleetNet



89,276






66,514






249,786






185,224




Total Asset-Light



604,511






371,721






1,909,960






1,013,515





























Other and eliminations



(44,211)






(36,228)






(129,590)






(108,960)




Total consolidated revenues


$

1,351,831





$

1,016,657





$

4,079,834





$

2,794,843





























OPERATING EXPENSES

























Asset-Based

























Salaries, wages, and benefits


$

332,359


42.0

%


$

305,839


44.9

%


$

973,924


42.4

%


$

893,903


47.3

%

Fuel, supplies, and expenses



97,279


12.3




66,947


9.8




281,406


12.2




192,477


10.2


Operating taxes and licenses



13,089


1.6




12,426


1.8




38,405


1.7




36,977


2.0


Insurance



13,180


1.7




10,175


1.5




35,808


1.5




28,568


1.5


Communications and utilities



4,794


0.6




4,559


0.7




14,129


0.6




14,192


0.7


Depreciation and amortization



24,117


3.0




23,233


3.4




72,885


3.2




70,025


3.7


Rents and purchased transportation



123,714


15.6




95,855


14.1




348,249


15.1




266,525


14.1


Shared services



72,286


9.1




71,017


10.4




215,020


9.4




196,255


10.4


Gain on sale of property and equipment(2)



(5,910)


(0.7)








(9,975)


(0.4)




(8,624)


(0.5)


Innovative technology costs(3)



6,068


0.8




6,903


1.0




20,982


0.9




21,303


1.1


Other



1,243


0.2




592


0.1




2,629


0.1




1,103


0.1


Total Asset-Based



682,219


86.2

%



597,546


87.7

%



1,993,462


86.7

%



1,712,704


90.6

%


























ArcBest(1)

























Purchased transportation


$

425,567


82.6

%


$

256,900


84.2

%


$

1,382,107


83.3

%


$

694,498


83.8

%

Supplies and expenses



4,378


0.9




2,741


0.9




11,907


0.7




7,785


0.9


Depreciation and amortization(4)



5,072


1.0




2,352


0.8




15,720


0.9




7,104


0.9


Shared services



56,371


10.9




31,048


10.2




164,554


9.9




86,198


10.4


Gain on sale of subsidiary(5)











(402)





(6,923)


(0.8)


Other



8,463


1.6




1,984


0.6




22,309


1.3




6,055


0.7





499,851


97.0

%



295,025


96.7

%



1,596,195


96.1

%



794,717


95.9

%

FleetNet



88,395


99.0

%



65,245


98.1

%



245,596


98.3

%



181,794


98.1

%

Total Asset-Light



588,246






360,270






1,841,791






976,511





























Other and eliminations(6)



(34,395)






(28,720)






(103,454)






(88,423)




Total consolidated operating expenses


$

1,236,070


91.4

%


$

929,096


91.4

%


$

3,731,799


91.5

%


$

2,600,792


93.1

%


























OPERATING INCOME

























Asset-Based


$

109,312





$

83,618





$

306,002





$

177,584





























ArcBest(1)



15,384






10,182






63,979






33,574




FleetNet



881






1,269






4,190






3,430




Total Asset-Light



16,265






11,451






68,169






37,004





























Other and eliminations(6)



(9,816)






(7,508)






(26,136)






(20,537)




Total consolidated operating income


$

115,761





$

87,561





$

348,035





$

194,051




__________________________

1)

The 2022 periods include the operations of MoLo, which was acquired on November 1, 2021.

2)

The three and nine months ended September 30, 2022 include a $4.3 million noncash gain on a like-kind property exchange of a service center. The nine months ended September 30, 2021 include an $8.6 million gain on the sale of an unutilized service center property.

3)

Represents costs associated with the freight handling pilot test program at ABF Freight.

4)

Depreciation and amortization includes amortization of intangibles associated with acquired businesses.

5)

Gain relates to the sale of the labor services portion of the ArcBest segment’s moving business in May 2021, including the contingent amount recognized in second quarter 2022 when the funds were released from escrow.

6)

“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, 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. 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 


Nine Months Ended 



September 30



September 30




2022


2021



2022



2021


ArcBest Corporation – Consolidated


(Unaudited)




($ thousands, except per share data)


Operating Income














Amounts on GAAP basis


$

115,761


$

87,561


$

348,035


$

194,051


Innovative technology costs, pre-tax(1)



10,056



8,250



30,083



24,392


Purchase accounting amortization, pre-tax(2)



3,213



938



9,640



2,812


Change in fair value of contingent consideration, pre-tax(3)







810




Gain on sale of subsidiary, pre-tax(4)







(402)



(6,923)


Nonunion vacation policy enhancement, pre-tax(5)



2,080





2,080




Transaction costs, pre-tax(6)





1,607





1,607


Non-GAAP amounts


$

131,110


$

98,356


$

390,246


$

215,939
















Net Income














Amounts on GAAP basis


$

88,842


$

63,691


$

260,872


$

148,033


Innovative technology costs, after-tax (includes related financing costs)(1)



7,608



6,243



22,686



18,484


Purchase accounting amortization, after-tax(2)



2,396



702



7,189



2,106


Change in fair value of contingent consideration, after-tax(3)







604




Gain on sale of subsidiary, after-tax(4)







(317)



(5,437)


Nonunion vacation policy enhancement, after-tax(5)



1,546





1,546




Transaction costs, after-tax(6)





1,187





1,187


Life insurance proceeds and changes in cash surrender value



176



(394)



3,679



(2,908)


Tax benefit from vested RSUs(7)



(2,381)



(480)



(8,310)



(7,411)


Tax credits(8)



(1,831)





(1,190)




Non-GAAP amounts


$

96,356


$

70,949


$

286,759


$

154,054
















Diluted Earnings Per Share














Amounts on GAAP basis


$

3.50


$

2.38


$

10.18


$

5.51


Innovative technology costs, after-tax (includes related financing costs)(1)



0.30



0.23



0.89



0.69


Purchase accounting amortization, after-tax(2)



0.09



0.03



0.28



0.08


Change in fair value of contingent consideration, after-tax(3)







0.02




Gain on sale of subsidiary, after-tax(4)







(0.01)



(0.20)


Nonunion vacation policy enhancement, after-tax(5)



0.06





0.06




Transaction costs, after-tax(6)





0.04





0.04


Life insurance proceeds and changes in cash surrender value



0.01



(0.01)



0.14



(0.11)


Tax benefit from vested RSUs(7)



(0.09)



(0.02)



(0.32)



(0.28)


Tax credits(8)



(0.07)





(0.05)




Non-GAAP amounts(9)


$

3.80


$

2.65


$

11.19


$

5.73


__________________________

Note: See “Notes to Non-GAAP Financial Tables” for the footnotes to this ArcBest Corporation – Consolidated non-GAAP table.





























Three Months Ended 


Nine Months Ended 




September 30


September 30




2022


2021


2022


2021


Segment Operating Income Reconciliations


(Unaudited)




($ thousands, except percentages)


Asset-Based Segment






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
















Amounts on GAAP basis


$

109,312


86.2

%


$

83,618


87.7

%


$

306,002


86.7

%


$

177,584


90.6

%


Innovative technology costs, pre-tax(10)



6,068


(0.8)




6,903


(1.0)




20,982


(0.9)




21,303


(1.1)



Nonunion vacation policy enhancement, pre-tax(5)



1,245


(0.2)








1,245


(0.1)







Non-GAAP amounts(9)


$

116,625


85.3

%


$

90,521


86.7

%


$

328,229


85.7

%


$

198,887


89.5

%








Asset-Light






ArcBest Segment






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
















Amounts on GAAP basis


$

15,384


97.0

%


$

10,182


96.7

%


$

63,979


96.1

%


$

33,574


95.9

%


Purchase accounting amortization, pre-tax(2)



3,213


(0.6)




938


(0.3)




9,640


(0.6)




2,812


(0.3)



Change in fair value of contingent consideration, pre-tax(3)











810








Gain on sale of subsidiary, pre-tax(4)











(402)





(6,923)


0.8



Nonunion vacation policy enhancement, pre-tax(5)



318


(0.1)








318








Non-GAAP amounts(9)


$

18,915


96.3

%


$

11,120


96.4

%


$

74,345


95.5

%


$

29,463


96.4

%








FleetNet Segment






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
















Amounts on GAAP basis


$

881


99.0

%


$

1,269


98.1

%


$

4,190


98.3

%


$

3,430


98.1

%


Nonunion vacation policy enhancement, pre-tax(5)



90


(0.1)








90








Non-GAAP amounts(9)


$

971


98.9

%


$

1,269


98.1

%


$

4,280


98.3

%


$

3,430


98.1

%








Total Asset-Light






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
















Amounts on GAAP basis


$

16,265


97.3

%


$

11,451


96.9

%


$

68,169


96.4

%


$

37,004


96.3

%


Purchase accounting amortization, pre-tax(2)



3,213


(0.5)




938


(0.3)




9,640


(0.5)




2,812


(0.3)



Change in fair value of contingent consideration, pre-tax(3)











810








Gain on sale of subsidiary, pre-tax(4)











(402)





(6,923)


0.7



Nonunion vacation policy enhancement, pre-tax(5)



408


(0.1)








408








Non-GAAP amounts(9)


$

19,886


96.7

%


$

12,389


96.7

%


$

78,625


95.9

%


$

32,893


96.8

%








Other and Eliminations






Operating Loss ($)
















Amounts on GAAP basis


$

(9,816)





$

(7,508)





$

(26,136)





$

(20,537)





Innovative technology costs, pre-tax(1)



3,988






1,347






9,101






3,089





Nonunion vacation policy enhancement, pre-tax(5)



427











427










Transaction costs, pre-tax(6)








1,607











1,607





Non-GAAP amounts(9)


$

(5,401)





$

(4,554)





$

(16,608)





$

(15,841)





__________________________

Note: See “Notes to Non-GAAP Financial Tables” for the footnotes to this Segment Operating Income Reconciliations non-GAAP table.




















Effective Tax Rate Reconciliation















ArcBest Corporation – Consolidated






































(Unaudited)



















($ thousands, except percentages)


Three Months Ended September 30, 2022






Other


Income


Income









Operating


Income


Before Income


Tax


Net





Income


(Costs)


Taxes


Provision


Income


Tax Rate(11)

Amounts on GAAP basis


$

115,761


$

(791)


$

114,970


$

26,128


$

88,842


22.7

%

Innovative technology costs(1)



10,056



189



10,245



2,637



7,608


25.7


Purchase accounting amortization(2)



3,213





3,213



817



2,396


25.4


Nonunion vacation policy enhancement(5)



2,080





2,080



534



1,546


25.7


Life insurance proceeds and changes in cash surrender value





176



176





176



Tax benefit from vested RSUs(7)









2,381



(2,381)



Tax credits(8)









1,831



(1,831)



Non-GAAP amounts


$

131,110


$

(426)


$

130,684


$

34,328


$

96,356


26.3

%






















Nine Months Ended September 30, 2022





Other


Income


Income









Operating


Income


Before Income


Tax


Net





Income


(Costs)


Taxes


Provision


Income


Tax Rate(11)

Amounts on GAAP basis


$

348,035


$

(7,759)


$

340,276


$

79,404


$

260,872


23.3

%

Innovative technology costs(1)



30,083



466



30,549



7,863



22,686


25.7


Purchase accounting amortization(2)



9,640





9,640



2,451



7,189


25.4


Change in fair value of contingent consideration(3)



810





810



206



604


25.4


Gain on sale of subsidiary(4)



(402)





(402)



(85)



(317)


(21.1)


Nonunion vacation policy enhancement(5)



2,080





2,080



534



1,546


25.7


Life insurance proceeds and changes in cash surrender value





3,679



3,679





3,679



Tax benefit from vested RSUs(7)









8,310



(8,310)



Tax credits(8)









1,190



(1,190)



Non-GAAP amounts


$

390,246


$

(3,614)


$

386,632


$

99,873


$

286,759


25.8

%






















Three Months Ended September 30, 2021





Other


Income


Income








Operating


Income


Before Income


Tax


Net





Income


(Costs)


Taxes


Provision


Income


Tax Rate(11)

Amounts on GAAP basis


$

87,561


$

(1,411)


$

86,150


$

22,459


$

63,691


26.1

%

Innovative technology costs(1)



8,250



157



8,407



2,164



6,243


25.7


Purchase accounting amortization(2)



938





938



236



702


25.2


Transaction costs(6)



1,607





1,607



420



1,187


26.1


Life insurance proceeds and changes in cash surrender value





(394)



(394)





(394)



Tax benefit from vested RSUs(7)









480



(480)



Non-GAAP amounts


$

98,356


$

(1,648)


$

96,708


$

25,759


$

70,949


26.6

%






















Nine Months Ended September 30, 2021





Other


Income


Income









Operating


Income


Before Income


Tax


Net





Income


(Costs)


Taxes


Provision


Income


Tax Rate(11)

Amounts on GAAP basis


$

194,051


$

(3,096)


$

190,955


$

42,922


$

148,033


22.5

%

Innovative technology costs(1)



24,392



498



24,890



6,406



18,484


25.7


Purchase accounting amortization(2)



2,812





2,812



706



2,106


25.1


Gain on sale of subsidiary(4)



(6,923)





(6,923)



(1,486)



(5,437)


(21.5)


Transaction costs(6)



1,607





1,607



420



1,187


26.1


Life insurance proceeds and changes in cash surrender value





(2,908)



(2,908)





(2,908)



Tax benefit from vested RSUs(7)









7,411



(7,411)



Non-GAAP amounts


$

215,939


$

(5,506)


$

210,433


$

56,379


$

154,054


26.8

%

__________________________

Note: See “Notes to Non-GAAP Financial Tables” for the footnotes to this Effective Tax Rate Reconciliation non-GAAP table.

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 and changes in the fair value of contingent consideration, 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. The calculation of Consolidated Adjusted EBITDA as presented below begins with net income, which is the most directly comparable GAAP measure. The calculation of Asset-Light Adjusted EBITDA as presented below begins with operating income, as other income (costs), income taxes, and net income 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




2022


2021


2022


2021




(Unaudited)


ArcBest Corporation – Consolidated Adjusted EBITDA


($ thousands)





Net Income


$

88,842


$

63,691


$

260,872


$

148,033


Interest and other related financing costs



1,749



2,072



5,551



6,774


Income tax provision



26,128



22,459



79,404



42,922


Depreciation and amortization(12)



34,707



30,359



104,860



90,995


Amortization of share-based compensation



3,175



2,889



9,816



8,567


Change in fair value of contingent consideration(3)







810




Gain on sale of subsidiary(4)







(402)



(6,923)


Transaction costs(6)





1,607





1,607


Consolidated Adjusted EBITDA


$

154,601


$

123,077


$

460,911


$

291,975


__________________________

Note: See “Notes to Non-GAAP Financial Tables” for the footnotes to this ArcBest Corporation – Consolidated Adjusted EBITDA non-GAAP table.

















Three Months Ended 


Nine Months Ended 




September 30


September 30




2022


2021


2022


2021


Asset-Light Adjusted EBITDA


(Unaudited)




($ thousands)


ArcBest














Operating Income


$

15,384


$

10,182


$

63,979


$

33,574


Depreciation and amortization(12)



5,072



2,352



15,720



7,104


Change in fair value of contingent consideration(3)







810




Gain on sale of subsidiary(4)







(402)



(6,923)


Adjusted EBITDA


$

20,456


$

12,534


$

80,107


$

33,755







FleetNet





Operating Income


$

881


$

1,269


$

4,190


$

3,430


Depreciation and amortization(12)



477



413



1,350



1,241


Adjusted EBITDA


$

1,358


$

1,682


$

5,540


$

4,671







Total Asset-Light














Operating Income


$

16,265


$

11,451


$

68,169


$

37,004


Depreciation and amortization(12)



5,549



2,765



17,070



8,345


Change in fair value of contingent consideration(3)







810




Gain on sale of subsidiary(4)







(402)



(6,923)


Adjusted EBITDA


$

21,814


$

14,216


$

85,647


$

38,426


__________________________

Note: See “Notes to Non-GAAP Financial Tables” for the footnotes to this Asset-Light Adjusted EBITDA non-GAAP table.

Notes to Non-GAAP Financial Tables

The following footnotes apply to the non-GAAP financial tables presented in this press release.

1)

Represents costs associated with the freight handling pilot test program at ABF Freight and initiatives to optimize our performance through technological innovation, including costs related to our investment in human-centered remote operation software.

2)

Represents the amortization of acquired intangible assets related to the November 1, 2021 acquisition of MoLo and previously acquired businesses in the ArcBest segment.

3)

Represents change in fair value of the contingent 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. 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.

4)

Gain relates to the sale of the labor services portion of the ArcBest segment’s moving business in May 2021, including the contingent amount recognized in second quarter 2022 when the funds were released from escrow.

5)

Represents a one-time, noncash charge for enhancements to our nonunion vacation policy which were effective third quarter 2022.

6)

Represents costs associated with the acquisition of MoLo.

7)

Represents recognition of the tax impact for the vesting of share-based compensation.

8)

Represents the amounts recorded in third quarter 2022 related to prior periods due to the August 2022 retroactive reinstatement of the alternative fuel tax credit. The amount for the nine months ended September 30, 2022 relates to the tax credit for the year ended December 31, 2021. The amount for the three months ended September 30, 2022 relates to the tax credit for 2021 and the six months ended June 30, 2022.

9)

Non-GAAP amounts are calculated in total and may not foot due to rounding.

10)

Represents costs associated with the freight handling pilot test program at ABF Freight.

11)

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.

12)

Includes amortization of intangibles associated with acquired businesses.

ARCBEST CORPORATION

OPERATING STATISTICS





















Three Months Ended 


Nine Months Ended 




September 30


September 30




2022


2021


% Change


2022


2021


% Change




(Unaudited)


Asset-Based




































Workdays



64.0



64.0





191.0



190.5






















Billed Revenue(1) / CWT


$

46.42


$

41.79


11.1 %


$

45.32


$

38.95


16.4 %




















Billed Revenue(1) / Shipment


$

611.70


$

542.38


12.8 %


$

608.03


$

511.43


18.9 %




















Shipments



1,284,991



1,249,645


2.8 %



3,789,074



3,716,852


1.9 %




















Shipments / Day



20,078



19,526


2.8 %



19,838



19,511


1.7 %




















Tonnage (Tons)



846,613



810,982


4.4 %



2,541,710



2,440,214


4.2 %




















Tons / Day



13,228



12,672


4.4 %



13,307



12,810


3.9 %




















Pounds / Shipment



1,318



1,298


1.5 %



1,342



1,313


2.2 %




















Average Length of Haul (Miles)



1,100



1,098


0.2 %



1,092



1,099


(0.6 %)




















__________________________

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, 2022

September 30, 2022



(Unaudited)

ArcBest(2)














Revenue / Shipment



(2.0 %)



14.3 %








Shipments / Day



73.2 %



77.1 %

__________________________

2)

Statistical data for the three and nine months ended September 30, 2022 includes the operations of MoLo, which was acquired on November 1, 2021. Statistical data related to managed transportation solutions transactions is not included in the presentation of operating statistics for the ArcBest segment for the periods presented.



Investor Relations Contact: David Humphrey

Media Contact: Autumnn Mahar

Title: Vice President – Investor Relations

Title: Senior Manager, PR and Social

Phone: 479-785-6200 

Phone: 479-494-8221

Email: [email protected]

Email: [email protected]

SOURCE ArcBest


Go to Source