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


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