Strong execution helping customers navigate
market disruption combined with continued cost discipline
Strategic capital allocation with returns to
shareholders and investments in growth
- Delivered fourth quarter 2023 net income of $48.8 million, or
$2.01 per diluted share, with non-GAAP fourth quarter 2023 net
income of $60.0 million, or $2.47 per diluted share.
- Achieved full year 2023 net income from continuing operations
of $142.2 million, or $5.77 per diluted share. On a non-GAAP basis,
full year 2023 net income was $194.1 million, or $7.88 per diluted
share.
- Returned $103 million to shareholders in 2023 through share
repurchases and quarterly cash dividends.
- ArcBest’s board has increased the company’s share repurchase
program authorization to $125 million.
ArcBest® (Nasdaq: ARCB), a leader in supply chain logistics,
today reported fourth quarter 2023 revenue from continuing
operations of $1.1 billion, compared to $1.2 billion in the fourth
quarter of 2022. ArcBest’s fourth quarter 2023 operating income
from continuing operations was $64.3 million, compared to $50.2
million in the fourth quarter of 2022, and net income from
continuing operations was $48.8 million, or $2.01 per diluted
share, compared to $36.5 million, or $1.45 per diluted share, in
the prior-year period.
Excluding certain items in both periods as identified in the
attached reconciliation tables, fourth quarter 2023 non‑GAAP
operating income from continuing operations was $81.7 million,
compared to $81.6 million in the prior‑year period. On a non-GAAP
basis, net income from continuing operations was $60.0 million, or
$2.47 per diluted share, compared to $60.8 million, or $2.42 per
diluted share, in fourth quarter 2022.
ArcBest’s full year 2023 revenue from continuing operations
totaled $4.4 billion compared to $5.0 billion in 2022. Net income
from continuing operations was $142.2 million, or $5.77 per diluted
share, compared to net income of $294.6 million, or $11.55 per
diluted share in 2022. On a non-GAAP basis, ArcBest’s 2023 net
income from continuing operations was $194.1 million, or $7.88 per
diluted share, compared to net income of $344.7 million, or $13.52
per diluted share, in 2022.
“2023 was a milestone year for ArcBest as we celebrated our
100-year anniversary and again delivered solid financial results,”
said Judy R. McReynolds, ArcBest chairman, president and CEO. “In a
year marked by market disruptions and increased supply chain
complexity, our people remained a critical driver of our success,
helping us achieve the second best revenue performance in ArcBest’s
history. In addition to significant operational and efficiency
improvements in 2023, we are proud to have renewed our five-year
labor agreement and received recognition for our innovation efforts
and commitment to service excellence. These achievements are
supported by our customer-led growth strategy and focus on
shareholder value. We look forward to accelerating growth,
increasing efficiency and fostering innovation as we look ahead to
even greater success in our next hundred years.”
Fourth Quarter Results of Operations
Comparisons
Asset-Based
Fourth Quarter 2023
Versus Fourth
Quarter 2022
- Revenue of $710.0 million compared to $711.4 million, a per-day
decrease of 1.0 percent.
- Total tonnage per day decrease of 7.2 percent, including a
decrease of 6.5 percent in LTL-rated weight per shipment.
- Total shipments per day decrease of 0.8 percent.
- Total billed revenue per hundredweight increased 6.8 percent.
Revenue per hundredweight on LTL-rated business, excluding fuel
surcharge, increased by a percentage in the double digits.
- Operating income of $87.5 million and an operating ratio of
87.7 percent. This compares to prior-period operating income of
$75.1 million and an operating ratio of 89.4 percent, and to
prior-period non-GAAP operating income of $81.4 million and a
non-GAAP operating ratio of 88.6 percent.
Despite a softer freight environment leading to reduced customer
demand, fourth quarter Asset-Based daily revenue was only slightly
below the prior-year period. This resilience is largely
attributable to ArcBest’s effective strategies in helping customers
navigate market disruptions, coupled with a disciplined pricing
approach. Total fourth quarter daily shipment and tonnage levels
were below the prior-year period. A shift in freight mix toward
core, LTL-rated shipments positively impacted Asset-Based
freight-handling metrics and operating results. Cost control
actions, initiated in the third quarter of 2023 also positively
contributed to the fourth quarter Asset-Based operating ratio. On a
non-GAAP basis, Asset-Based operating income was the second best
for a fourth quarter in ArcBest’s history.
Fourth quarter Asset-Based billed revenue per hundredweight
increased approximately seven percent over the prior year driven by
growth in core, LTL-rated shipments and the resulting improvement
in freight mix. On a sequential basis compared to the third
quarter, total billed revenue per hundredweight increased by nearly
four percent. Overall, LTL industry pricing remains rational, and
the improving trends associated with recent market changes have
continued.
Asset-Light‡
Fourth Quarter 2023 Versus Fourth Quarter
2022
- Revenue of $413.4 million compared to $479.1 million, a per-day
decrease of 14.4 percent.
- Operating loss of $7.7 million compared to operating loss of
$11.3 million. On a non‑GAAP basis, operating loss of $1.3 million
compared to operating income of $9.4 million.
- Adjusted earnings before interest, taxes, depreciation and
amortization (“Adjusted EBITDA”) of $0.7 million compared to $11.2
million, as detailed in the attached non-GAAP reconciliation
tables.
Compared to the fourth quarter of 2022, Asset-Light results were
impacted by lower revenue per shipment and reduced margins
associated with changes in business mix and the soft rate
environment. Total shipments grew by 12.4% per day, as the managed
transportation solution helped customers navigate recent LTL market
disruption. However, lower rates and margins for the truckload
solution were the biggest drivers of reduced profitability. ArcBest
continued its efforts to effectively match costs with business
levels, which reduced fourth quarter Asset-Light operating
expenses.
Full Year Results of Operations
Comparisons
Asset-Based
Full Year 2023 Versus Full Year
2022
- Revenue of $2.9 billion, compared to $3.0 billion, a per-day
decrease of 4.5 percent.
- Tonnage per day decrease of 2.4 percent.
- Shipments per day increase of 3.2 percent.
- Total billed revenue per hundredweight decrease of 2.2 percent,
negatively impacted by lower fuel surcharges and freight mix
changes throughout the year.
- Operating income of $253.2 million compared to $381.1 million.
On a non-GAAP basis, operating income of $275.5 million compared to
$409.6 million.
Asset-Light‡
Full Year 2023 Versus Full Year
2022
- Revenue of $1.7 billion compared to $2.1 billion, a per-day
decrease of 21.3 percent.
- Operating loss of $12.3 million, compared to operating income
of $52.7 million. On a non-GAAP basis, operating income of $5.3
million compared to $83.8 million.
- Adjusted EBITDA of $12.9 million compared to $91.4
million.
Capital Expenditures
In 2023, total net capital expenditures, including equipment
financed, were $245 million. Net capital expenditures in 2023
included $144 million of revenue equipment, the majority of which
was for ArcBest’s Asset-Based operation. Capital expenditures in
2023 were lower than expected because of delays in some real estate
facility projects and supply chain-related manufacturing delays and
cancellations, primarily on new city tractors and trailers. These
delayed expenditures are expected to occur in 2024. Depreciation
and amortization costs on property, plant and equipment were $133
million in 2023.
Share Repurchase and Quarterly Dividend
Programs
ArcBest generated solid cash from operations in 2023 and
returned $103 million to shareholders through its share repurchase
and dividend programs. During 2023, ArcBest settled repurchases of
930,754 shares of common stock for an aggregate cost of $91.5
million and paid dividends to shareholders totaling $11.5
million.
In addition, on February 5, 2024, ArcBest’s board of directors
increased the total amount available under the company’s common
stock repurchase program to $125 million.
NOTE ‡ - Asset-Light represents the reportable segment
previously named ArcBest. Asset-Light financial results previously
included the ArcBest segment and FleetNet, which was sold on
February 28, 2023.
Conference Call
ArcBest will host a conference call with company executives to
discuss the fourth quarter and full year 2023 results. The call
will be today, Tuesday, February 6 at 9:30 a.m. EST (8:30 a.m.
CST). Interested parties are invited to listen by calling (800)
599-2055 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 February 6, 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 March 15, 2024. To listen to the playback,
dial (800) 770-2030. The conference call ID for the live conference
call and the playback is 6835093. The conference call and playback
can also be accessed through March 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 and twelve months ended
December 31, 2023, 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 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
Year Ended
December 31
December 31
2023
2022
2023
2022
(Unaudited)
($ thousands, except share and
per share data)
REVENUES
$
1,089,535
$
1,163,495
$
4,427,443
$
5,029,008
OPERATING EXPENSES
1,025,282
1,113,286
4,254,824
4,634,482
OPERATING INCOME
64,253
50,209
172,619
394,526
OTHER INCOME (COSTS)
Interest and dividend income
4,124
2,294
14,728
3,873
Interest and other related financing
costs
(2,326
)
(2,168
)
(9,094
)
(7,726
)
Other, net
1,755
1,452
8,662
(2,370
)
3,553
1,578
14,296
(6,223
)
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES
67,806
51,787
186,915
388,303
INCOME TAX PROVISION
19,016
15,302
44,751
93,655
NET INCOME FROM CONTINUING
OPERATIONS
48,790
36,485
142,164
294,648
INCOME FROM DISCONTINUED OPERATIONS,
NET OF TAX(1)
—
852
53,269
3,561
NET INCOME
$
48,790
$
37,337
$
195,433
$
298,209
BASIC EARNINGS PER COMMON
SHARE(2)
Continuing operations
$
2.06
$
1.49
$
5.92
$
11.98
Discontinued operations(1)
—
0.03
2.22
0.14
$
2.06
$
1.53
$
8.14
$
12.13
DILUTED EARNINGS PER COMMON
SHARE(2)
Continuing operations
$
2.01
$
1.45
$
5.77
$
11.55
Discontinued operations(1)
—
0.03
2.16
0.14
$
2.01
$
1.48
$
7.93
$
11.69
AVERAGE COMMON SHARES
OUTSTANDING
Basic
23,713,434
24,420,325
24,018,801
24,585,205
Diluted
24,248,584
25,146,664
24,634,617
25,504,508
____________________
1)
Represents the discontinued operations of
FleetNet America® (“FleetNet”), which sold on February 28, 2023.
The year ended December 31, 2023 includes the net gain on sale of
FleetNet of $52.3 million after-tax, or $2.18 basic earnings per
share and $2.12 diluted earnings per share.
2)
Earnings per common share is calculated in
total and may not equal the sum of earnings per common share from
continuing operations and discontinued operations due to
rounding.
ARCBEST CORPORATION
CONSOLIDATED BALANCE SHEETS
December 31
December 31
2023
2022
(Unaudited)
($ thousands, except share
data)
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
262,226
$
158,264
Short-term investments
67,842
167,662
Accounts receivable, less allowances (2023
- $10,346; 2022 - $13,892)
430,122
517,494
Other accounts receivable, less allowances
(2023 - $731; 2022 - $713)
52,124
11,016
Prepaid expenses
37,034
39,484
Prepaid and refundable income taxes
24,319
19,239
Current assets of discontinued
operations
—
64,736
Other
11,116
11,888
TOTAL CURRENT ASSETS
884,783
989,783
PROPERTY, PLANT AND EQUIPMENT
Land and structures
460,068
401,840
Revenue equipment
1,126,055
1,038,832
Service, office, and other equipment
319,466
298,234
Software
173,354
167,164
Leasehold improvements
24,429
23,466
2,103,372
1,929,536
Less allowances for depreciation and
amortization
1,188,548
1,129,366
PROPERTY, PLANT AND EQUIPMENT,
NET
914,824
800,170
GOODWILL
304,753
304,753
INTANGIBLE ASSETS, NET
101,150
113,733
OPERATING RIGHT-OF-USE ASSETS
169,999
166,515
DEFERRED INCOME TAXES
8,140
6,342
LONG-TERM ASSETS OF DISCONTINUED
OPERATIONS
—
11,097
OTHER LONG-TERM ASSETS
101,445
101,893
TOTAL ASSETS
$
2,485,094
$
2,494,286
LIABILITIES AND STOCKHOLDERS’
EQUITY
CURRENT LIABILITIES
Accounts payable
$
214,004
$
269,854
Income taxes payable
10,410
16,017
Accrued expenses
378,029
338,457
Current portion of long-term debt
66,948
66,252
Current portion of operating lease
liabilities
32,172
26,225
Current liabilities of discontinued
operations
—
51,665
TOTAL CURRENT LIABILITIES
701,563
768,470
LONG-TERM DEBT, less current
portion
161,990
198,371
OPERATING LEASE LIABILITIES, less
current portion
176,621
147,828
POSTRETIREMENT LIABILITIES, less
current portion
13,319
12,196
LONG-TERM LIABILITIES OF DISCONTINUED
OPERATIONS
—
781
CONTINGENT CONSIDERATION
92,900
112,000
OTHER LONG-TERM LIABILITIES
40,553
42,745
DEFERRED INCOME TAXES
55,785
60,494
STOCKHOLDERS’ EQUITY
Common stock, $0.01 par value, authorized
70,000,000 shares; issued 2023: 30,024,125 shares; 2022: 29,758,716
shares
300
298
Additional paid-in capital
340,961
339,582
Retained earnings
1,272,584
1,088,693
Treasury stock, at cost, 2023: 6,460,137
shares; 2022: 5,529,383 shares
(375,806
)
(284,275
)
Accumulated other comprehensive income
4,324
7,103
TOTAL STOCKHOLDERS’ EQUITY
1,242,363
1,151,401
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$
2,485,094
$
2,494,286
ARCBEST CORPORATION
CONSOLIDATED STATEMENTS OF CASH
FLOWS
Year Ended
December 31
2023
2022
(Unaudited)
($ thousands)
OPERATING ACTIVITIES
Net income
$
195,433
$
298,209
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
132,900
127,119
Amortization of intangibles
12,829
12,920
Share-based compensation expense
11,438
12,775
Provision for losses on accounts
receivable
3,630
6,955
Change in deferred income taxes
(5,566
)
(6,250
)
(Gain) loss on sale of property and
equipment
4,797
(11,650
)
Gain on sale of subsidiary
—
(402
)
Pre-tax gain on sale of discontinued
operations
(70,201
)
—
Lease impairment charges
30,162
—
Change in fair value of contingent
consideration
(19,100
)
18,300
Change in fair value of equity
investment
(3,739
)
—
Changes in operating assets and
liabilities:
Receivables
41,189
(10,349
)
Prepaid expenses
2,563
(410
)
Other assets
3,830
(2,941
)
Income taxes
(10,657
)
(5,041
)
Operating right-of-use assets and lease
liabilities, net
2,920
2,952
Accounts payable, accrued expenses, and
other liabilities
(10,261
)
28,632
NET CASH PROVIDED BY OPERATING
ACTIVITIES
322,167
470,819
INVESTING ACTIVITIES
Purchases of property, plant and
equipment, net of financings
(219,021
)
(148,223
)
Proceeds from sale of property and
equipment
7,763
19,691
Proceeds from sale of discontinued
operations
100,949
—
Business acquisition, net of cash
acquired(1)
—
2,279
Proceeds from sale of subsidiary
—
475
Purchases of short-term investments
(96,537
)
(182,352
)
Proceeds from sale of short-term
investments
198,120
64,329
Capitalization of internally developed
software
(12,977
)
(17,282
)
NET CASH USED IN INVESTING
ACTIVITIES
(21,703
)
(261,083
)
FINANCING ACTIVITIES
Borrowings under credit facilities
—
58,000
Proceeds from notes payable
—
14,206
Payments on long-term debt
(69,180
)
(115,540
)
Net change in book overdrafts
(14,101
)
8,356
Deferred financing costs
55
(952
)
Payment of common stock dividends
(11,542
)
(10,830
)
Purchases of treasury stock
(91,531
)
(65,002
)
Payments for tax withheld on share-based
compensation
(10,311
)
(16,222
)
NET CASH USED IN FINANCING
ACTIVITIES
(196,610
)
(127,984
)
NET INCREASE IN CASH AND CASH
EQUIVALENTS
103,854
81,752
Cash and cash equivalents of continuing
operations at beginning of period
158,264
76,568
Cash and cash equivalents of discontinued
operations at beginning of period
108
52
CASH AND CASH EQUIVALENTS AT END OF
PERIOD
$
262,226
$
158,372
NONCASH INVESTING ACTIVITIES
Equipment financed
$
33,495
$
82,425
Accruals for equipment received
$
1,727
$
4,337
Lease liabilities arising from obtaining
right-of-use assets
$
62,425
$
87,294
____________________
1)
Represents cash received from escrow for
post-closing adjustments related to the acquisition of MoLo.
Note: The statements of cash flows for the
year ended December 31, 2023 and 2022 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
Year Ended
December 31
December 31
2023
2022
2023
2022
(Unaudited)
($ thousands, except
percentages)
REVENUES FROM CONTINUING
OPERATIONS
Asset-Based
$
709,986
$
711,436
$
2,871,004
$
3,010,900
Asset-Light(1)
413,425
479,098
1,680,645
2,139,272
Other and eliminations
(33,876
)
(27,039
)
(124,206
)
(121,164
)
Total consolidated revenues from
continuing operations
$
1,089,535
$
1,163,495
$
4,427,443
$
5,029,008
OPERATING EXPENSES FROM CONTINUING
OPERATIONS
Asset-Based
Salaries, wages, and benefits
$
342,031
48.2
%
$
319,563
44.9
%
$
1,379,756
48.1
%
$
1,293,487
43.0
%
Fuel, supplies, and expenses
84,677
11.9
97,152
13.7
361,355
12.6
378,558
12.6
Operating taxes and licenses
13,980
2.0
13,885
1.9
55,918
1.9
52,290
1.7
Insurance
12,209
1.7
11,574
1.6
52,025
1.8
47,382
1.6
Communications and utilities
4,702
0.6
4,820
0.7
19,288
0.7
18,949
0.6
Depreciation and amortization
27,444
3.9
24,437
3.4
104,165
3.6
97,322
3.2
Rents and purchased transportation
66,676
9.4
92,918
13.1
338,575
11.8
441,167
14.6
Shared services
69,468
9.8
66,678
9.4
279,248
9.7
281,698
9.4
(Gain) loss on sale of property and
equipment and lease impairment charges(2)
77
—
(2,493
)
(0.4
)
982
—
(12,468
)
(0.4
)
Innovative technology costs(3)
—
—
6,225
0.9
21,711
0.8
27,207
0.9
Other
1,189
0.2
1,546
0.2
4,829
0.2
4,175
0.1
Total Asset-Based
622,453
87.7
%
636,305
89.4
%
2,617,852
91.2
%
2,629,767
87.3
%
Asset-Light(1)
Purchased transportation
$
357,122
86.4
%
$
402,561
84.0
%
$
1,435,604
85.4
%
$
1,784,668
83.4
%
Supplies and expenses
2,934
0.7
3,451
0.7
12,094
0.7
13,955
0.6
Depreciation and amortization(4)
5,120
1.2
5,010
1.0
20,370
1.2
20,730
1.0
Shared services
46,471
11.3
53,579
11.2
194,296
11.6
218,133
10.2
Contingent consideration(5)
(6,300
)
(1.5
)
17,490
3.7
(19,100
)
(1.1
)
18,300
0.9
Lease impairment charges(6)
—
—
—
—
14,407
0.9
—
—
Legal settlement(7)
9,500
2.3
—
—
9,500
0.6
—
—
Gain on sale of subsidiary(8)
—
—
—
—
—
—
(402
)
—
Other
6,234
1.5
8,261
1.7
25,745
1.4
31,163
1.4
Total Asset-Light
421,081
101.9
%
490,352
102.3
%
1,692,916
100.7
%
2,086,547
97.5
%
Other and eliminations(9)
(18,252
)
(13,371
)
(55,944
)
(81,832
)
Total consolidated operating expenses from
continuing operations
$
1,025,282
94.1
%
$
1,113,286
95.7
%
$
4,254,824
96.1
%
$
4,634,482
92.2
%
OPERATING INCOME (LOSS) FROM CONTINUING
OPERATIONS
Asset-Based
$
87,533
$
75,131
$
253,152
$
381,133
Asset-Light(1)
(7,656
)
(11,254
)
(12,271
)
52,725
Other and eliminations(9)
(15,624
)
(13,668
)
(68,262
)
(39,332
)
Total consolidated operating income from
continuing operations
$
64,253
$
50,209
$
172,619
$
394,526
____________________
1)
Asset-Light represents the reportable
segment previously named ArcBest. Asset-Light financial results
previously included the ArcBest segment and FleetNet, which sold on
February 28, 2023.
2)
The year ended December 31, 2023 includes
$0.7 million of noncash lease-related impairment charges for a
service center. The year ended December 31, 2022 includes a $4.3
million noncash gain on a like-kind property exchange of a service
center.
3)
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.
4)
Depreciation and amortization includes
amortization of intangibles associated with acquired
businesses.
5)
Represents the change in fair value of the
contingent earnout consideration recorded for the MoLo acquisition.
The liability for contingent consideration is remeasured at each
quarterly reporting date, and any change in fair value as a result
of the recurring assessments is recognized in operating income
(loss). The contingent consideration for the MoLo acquisition will
be paid based on achievement of certain targets of adjusted
earnings before interest, taxes, depreciation, and amortization, as
adjusted for certain items pursuant to the merger agreement, for
years 2023 through 2025.
6)
Represents noncash lease-related
impairment charges for certain office spaces that were made
available for sublease.
7)
Represents estimated settlement expenses
related to the classification of certain Asset-Light employees
under the Fair Labor Standards Act.
8)
Gain relates to the contingent amount
recognized in second quarter 2022 when funds from the May 2021 sale
of the labor services portion of the Asset-Light segment’s moving
business were released from escrow.
9)
“Other and eliminations” includes $15.1
million of noncash lease-related impairment charges for a freight
handling pilot facility, 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. 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, operating cash flow, net income
or earnings per share, as determined under GAAP.
Three Months Ended
Year Ended
December 31
December 31
2023
2022
2023
2022
ArcBest Corporation -
Consolidated
(Unaudited)
($ thousands, except per share
data)
Operating Income from Continuing
Operations
Amounts on GAAP basis
$
64,253
$
50,209
$
172,619
$
394,526
Innovative technology costs,
pre-tax(1)
11,005
10,713
52,363
40,796
Purchase accounting amortization,
pre-tax(2)
3,192
3,213
12,768
12,853
Change in fair value of contingent
consideration, pre-tax(3)
(6,300
)
17,490
(19,100
)
18,300
Lease impairment charges, pre-tax(4)
—
—
30,162
—
Legal settlement, pre-tax(5)
9,500
—
9,500
—
Gain on sale of subsidiary, pre-tax(6)
—
—
—
(402
)
Nonunion vacation policy enhancement,
pre-tax(7)
—
—
—
1,990
Non-GAAP amounts
$
81,650
$
81,625
$
258,312
$
468,063
Net Income from Continuing
Operations
Amounts on GAAP basis
$
48,790
$
36,485
$
142,164
$
294,648
Innovative technology costs, after-tax
(includes related financing costs)(1)
8,364
8,136
39,680
30,822
Purchase accounting amortization,
after-tax(2)
2,399
2,396
9,593
9,585
Change in fair value of contingent
consideration, after-tax(3)
(4,733
)
13,043
(14,350
)
13,647
Lease impairment charges, after-tax(4)
—
—
22,571
—
Legal settlement, after-tax(5)
7,137
—
7,137
—
Gain on sale of subsidiary,
after-tax(6)
—
—
—
(317
)
Nonunion vacation policy enhancement,
after-tax(7)
—
—
—
1,479
Change in fair value of equity investment,
after-tax(8)
—
—
(2,786
)
—
Life insurance proceeds and changes in
cash surrender value
(1,787
)
(942
)
(4,581
)
2,737
Tax expense (benefit) from vested
RSUs(9)
(187
)
223
(5,290
)
(8,087
)
Tax credits(10)
—
1,424
—
234
Non-GAAP amounts
$
59,983
$
60,765
$
194,138
$
344,748
Diluted Earnings Per Share from
Continuing Operations
Amounts on GAAP basis
$
2.01
$
1.45
$
5.77
$
11.55
Innovative technology costs, after-tax
(includes related financing costs)(1)
0.34
0.32
1.61
1.21
Purchase accounting amortization,
after-tax(2)
0.10
0.10
0.39
0.38
Change in fair value of contingent
consideration, after-tax(3)
(0.20
)
0.52
(0.58
)
0.54
Lease impairment charges, after-tax(4)
—
—
0.92
—
Legal settlement, after-tax(5)
0.29
—
0.29
—
Gain on sale of subsidiary,
after-tax(6)
—
—
—
(0.01
)
Nonunion vacation policy enhancement,
after-tax(7)
—
—
—
0.06
Change in fair value of equity investment,
after-tax(8)
—
—
(0.11
)
—
Life insurance proceeds and changes in
cash surrender value
(0.07
)
(0.04
)
(0.19
)
0.11
Tax expense (benefit) from vested
RSUs(9)
(0.01
)
0.01
(0.21
)
(0.32
)
Tax credits(10)
—
0.06
—
0.01
Non-GAAP amounts(11)
$
2.47
$
2.42
$
7.88
$
13.52
____________________
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
Year Ended
December 31
December 31
2023
2022
2023
2022
Segment Operating Income (Loss)
Reconciliations
(Unaudited)
($ thousands, except
percentages)
Asset-Based Segment
Operating Income ($) and Operating
Ratio (% of revenues)
Amounts on GAAP basis
$
87,533
87.7
%
$
75,131
89.4
%
$
253,152
91.2
%
$
381,133
87.3
%
Innovative technology costs,
pre-tax(12)
—
—
6,225
(0.9
)
21,711
(0.8
)
27,207
(0.9
)
Lease impairment charges, pre-tax(4)
—
—
—
—
684
—
—
—
Nonunion vacation policy enhancement,
pre-tax(7)
—
—
—
—
—
—
1,245
—
Non-GAAP amounts(11)
$
87,533
87.7
%
$
81,356
88.6
%
$
275,547
90.4
%
$
409,585
86.4
%
Asset-Light Segment(13)
Operating Income (Loss) ($) and
Operating Ratio (% of revenues)
Amounts on GAAP basis
$
(7,656
)
101.9
%
$
(11,254
)
102.3
%
$
(12,271
)
100.7
%
$
52,725
97.5
%
Purchase accounting amortization,
pre-tax(2)
3,192
(0.8
)
3,213
(0.7
)
12,768
(0.8
)
12,853
(0.6
)
Change in fair value of contingent
consideration, pre-tax(3)
(6,300
)
1.5
17,490
(3.7
)
(19,100
)
1.1
18,300
(0.9
)
Lease impairment charges, pre-tax(4)
—
—
—
—
14,407
(0.9
)
—
—
Legal settlement, pre-tax(5)
9,500
(2.3
)
—
—
9,500
(0.6
)
—
—
Gain on sale of subsidiary, pre-tax(6)
—
—
—
—
—
—
(402
)
—
Nonunion vacation policy enhancement,
pre-tax(7)
—
—
—
—
—
—
318
—
Non-GAAP amounts(11)
$
(1,264
)
100.3
%
$
9,449
98.0
%
$
5,304
99.7
%
$
83,794
96.1
%
Other and Eliminations
Operating Income (Loss) ($)
Amounts on GAAP basis
$
(15,624
)
$
(13,668
)
$
(68,262
)
$
(39,332
)
Innovative technology costs,
pre-tax(1)
11,005
4,488
30,652
13,589
Lease impairment charges, pre-tax(4)
—
—
15,071
—
Nonunion vacation policy enhancement,
pre-tax(7)
—
—
—
427
Non-GAAP amounts(11)
$
(4,619
)
$
(9,180
)
$
(22,539
)
$
(25,316
)
____________________
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 December
31, 2023
Other
Income
Income
CONTINUING OPERATIONS
Operating
Income
Before Income
Tax
Net
Income
(Costs)
Taxes
Provision
Income
Tax Rate(14)
Amounts on GAAP basis
$
64,253
$
3,553
$
67,806
$
19,016
$
48,790
28.0
%
Innovative technology costs(1)
11,005
211
11,216
2,852
8,364
25.4
Purchase accounting amortization(2)
3,192
—
3,192
793
2,399
24.8
Change in fair value of contingent
consideration(3)
(6,300
)
—
(6,300
)
(1,567
)
(4,733
)
(24.9
)
Legal settlement(5)
9,500
—
9,500
2,363
7,137
24.9
Life insurance proceeds and changes in
cash surrender value
—
(1,787
)
(1,787
)
—
(1,787
)
—
Tax benefit from vested RSUs(9)
—
—
—
187
(187
)
—
Non-GAAP amounts
$
81,650
$
1,977
$
83,627
$
23,644
$
59,983
28.3
%
Year Ended December 31,
2023
Other
Income
Income
Operating
Income
Before Income
Tax
Net
Income
(Costs)
Taxes
Provision
Income
Tax Rate(14)
Amounts on GAAP basis
$
172,619
$
14,296
$
186,915
$
44,751
$
142,164
23.9
%
Innovative technology costs(1)
52,363
937
53,300
13,620
39,680
25.6
Purchase accounting amortization(2)
12,768
—
12,768
3,175
9,593
24.9
Change in fair value of contingent
consideration(3)
(19,100
)
—
(19,100
)
(4,750
)
(14,350
)
(24.9
)
Lease impairment charges(4)
30,162
—
30,162
7,591
22,571
25.2
Legal settlement(5)
9,500
—
9,500
2,363
7,137
24.9
Change in fair value of equity
investment(8)
—
(3,739
)
(3,739
)
(953
)
(2,786
)
(25.5
)
Life insurance proceeds and changes in
cash surrender value
—
(4,581
)
(4,581
)
—
(4,581
)
—
Tax benefit from vested RSUs(9)
—
—
—
5,290
(5,290
)
—
Non-GAAP amounts
$
258,312
$
6,913
$
265,225
$
71,087
$
194,138
26.8
%
Three Months Ended December
31, 2022
Other
Income
Income
CONTINUING OPERATIONS
Operating
Income
Before Income
Tax
Net
Income
(Costs)
Taxes
Provision
Income
Tax Rate(14)
Amounts on GAAP basis
$
50,209
$
1,578
$
51,787
$
15,302
$
36,485
29.5
%
Innovative technology costs(1)
10,713
244
10,957
2,821
8,136
25.7
Purchase accounting amortization(2)
3,213
—
3,213
817
2,396
25.4
Change in fair value of contingent
consideration(3)
17,490
—
17,490
4,447
13,043
25.4
Life insurance proceeds and changes in
cash surrender value
—
(942
)
(942
)
—
(942
)
—
Tax expense from vested RSUs(9)
—
—
—
(223
)
223
—
Tax credits(10)
—
—
—
(1,424
)
1,424
—
Non-GAAP amounts
$
81,625
$
880
$
82,505
$
21,740
$
60,765
26.3
%
Year Ended December 31,
2022
Other
Income
Income
Operating
Income
Before Income
Tax
Net
Income
(Costs)
Taxes
Provision
Income
Tax Rate(14)
Amounts on GAAP basis
$
394,526
$
(6,223
)
$
388,303
$
93,655
$
294,648
24.1
%
Innovative technology costs(1)
40,796
710
41,506
10,684
30,822
25.7
Purchase accounting amortization(2)
12,853
—
12,853
3,268
9,585
25.4
Change in fair value of contingent
consideration(3)
18,300
—
18,300
4,653
13,647
25.4
Gain on sale of subsidiary(6)
(402
)
—
(402
)
(85
)
(317
)
(21.1
)
Nonunion vacation policy
enhancement(7)
1,990
—
1,990
511
1,479
25.7
Life insurance proceeds and changes in
cash surrender value
—
2,737
2,737
—
2,737
—
Tax benefit from vested RSUs(9)
—
—
—
8,087
(8,087
)
—
Tax credits(10)
—
—
—
(234
)
234
—
Non-GAAP amounts
$
468,063
$
(2,776
)
$
465,287
$
120,539
$
344,748
25.9
%
____________________
Note: See “Notes to Non-GAAP Financial
Tables” for footnotes to this Effective Tax Rate Reconciliation
non-GAAP table.
ARCBEST CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP
FINANCIAL MEASURES – Continued
Adjusted Earnings Before Interest,
Taxes, Depreciation, and Amortization (Adjusted EBITDA)
Management uses Adjusted EBITDA as a key
measure of performance and for business planning. The measure is
particularly meaningful for analysis of operating performance
because it excludes amortization of acquired intangibles and
software of the Asset-Light segment, changes in the fair value of
contingent consideration and equity investment, lease impairment
charges, and estimated legal settlement expenses of the Asset-Light
segment, which are significant expenses or gains resulting from
strategic decisions or other factors rather than core daily
operations. Additionally, Adjusted EBITDA is a primary component of
the financial covenants contained in our credit agreement. The
calculation of Consolidated Adjusted EBITDA as presented below
begins with net income from continuing operations, which is the
most directly comparable GAAP measure. The calculation of
Asset-Light Adjusted EBITDA as presented below begins with
operating income (loss), as other income (costs), income taxes, and
net income from continuing operations are reported at the
consolidated level and not included in the operating segment
financial information evaluated by management to make operating
decisions.
Three Months Ended
Year Ended
December 31
December 31
2023
2022
2023
2022
(Unaudited)
($ thousands)
ArcBest Corporation - Consolidated
Adjusted EBITDA from Continuing Operations
Net Income from Continuing
Operations
$
48,790
$
36,485
$
142,164
$
294,648
Interest and other related financing
costs
2,326
2,168
9,094
7,726
Income tax provision
19,016
15,302
44,751
93,655
Depreciation and amortization(15)
37,387
34,650
145,349
138,159
Amortization of share-based
compensation
2,848
2,879
11,385
12,470
Change in fair value of contingent
consideration(3)
(6,300
)
17,490
(19,100
)
18,300
Lease impairment charges(4)
—
—
30,162
—
Legal settlement(5)
9,500
—
9,500
—
Change in fair value of equity
investment(8)
—
—
(3,739
)
—
Gain on sale of subsidiary(6)
—
—
—
(402
)
Consolidated Adjusted EBITDA from
Continuing Operations
$
113,567
$
108,974
$
369,566
$
564,556
____________________
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
Year Ended
December 31
December 31
2023
2022
2023
2022
(Unaudited)
($ thousands)
Asset-Light Adjusted EBITDA(13)
Operating Income (Loss)
$
(7,656
)
$
(11,254
)
$
(12,271
)
$
52,725
Depreciation and amortization(15)
5,120
5,010
20,370
20,730
Change in fair value of contingent
consideration(3)
(6,300
)
17,490
(19,100
)
18,300
Lease impairment charges(4)
—
—
14,407
—
Legal settlement(5)
9,500
—
9,500
—
Gain on sale of subsidiary(6)
—
—
—
(402
)
Asset-Light Adjusted EBITDA
$
664
$
11,246
$
12,906
$
91,353
____________________
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 associated with the
freight handling pilot test program at ABF Freight, costs related
to our customer pilot offering of Vaux, and initiatives to optimize
our performance through technological innovation.
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 noncash lease-related
impairment charges for a freight handling pilot facility reported
in “Other,” an Asset-Based service center, and Asset-Light office
spaces that were made available for sublease.
5)
Represents estimated settlement expenses
related to the classification of certain Asset-Light employees
under the Fair Labor Standards Act.
6)
Gain relates to the contingent amount
recognized in second quarter 2022 when funds from the May 2021 sale
of the labor services portion of the Asset-Light segment’s moving
business were released from escrow.
7)
Represents a one-time, noncash charge for
enhancements to our nonunion vacation policy which were effective
third quarter 2022.
8)
Represents increase in fair value of our
investment in Phantom Auto, a provider of human-centered remote
operation software, based on an observable price change during
second quarter 2023.
9)
Represents recognition of the tax impact
for the vesting of share-based compensation.
10)
Represents the amount recognized in the
tax provision during fourth quarter 2022 to adjust estimated
amounts recognized during 2022 for the research and development tax
credit related to the tax year ended February 28, 2022. The year
ended December 31, 2022 also includes amounts recorded in third
quarter 2022 related to prior periods due to the August 2022
retroactive reinstatement of the alternative fuel tax credit for
the year ended December 31, 2021.
11)
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.
12)
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.
13)
Asset-Light represents the reportable
segment previously named ArcBest. Asset-Light financial results
previously included the ArcBest segment and FleetNet, which was
sold on February 28, 2023.
14)
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.
15)
Includes amortization of intangibles
associated with acquired businesses.
ARCBEST CORPORATION
OPERATING STATISTICS
Three Months Ended
Year Ended
December 31
December 31
2023
2022
% Change
2023
2022
% Change
(Unaudited)
Asset-Based
Workdays
61.5
61.0
251.5
252.0
Billed Revenue(1) / CWT
$
48.98
$
45.86
6.8
%
$
44.46
$
45.45
(2.2
%)
Billed Revenue(1) / Shipment
$
570.64
$
571.21
(0.1
%)
$
554.53
$
599.04
(7.4
%)
Shipments
1,224,772
1,224,541
0.0
%
5,162,929
5,013,615
3.0
%
Shipments / Day
19,915
20,074
(0.8
%)
20,529
19,895
3.2
%
Tonnage (Tons)
713,518
762,642
(6.4
%)
3,220,013
3,304,352
(2.6
%)
Tons / Day
11,602
12,502
(7.2
%)
12,803
13,113
(2.4
%)
Pounds / Shipment
1,165
1,246
(6.5
%)
1,247
1,318
(5.4
%)
Average Length of Haul (Miles)
1,078
1,082
(0.4
%)
1,092
1,090
0.2
%
____________________
1)
Revenue for undelivered freight is
deferred for financial statement purposes in accordance with the
Asset-Based segment revenue recognition policy. Billed revenue used
for calculating revenue per hundredweight measurements has not been
adjusted for the portion of revenue deferred for financial
statement purposes.
Year Over Year %
Change
Three Months Ended
Year Ended
December 31, 2023
December 31, 2023
(Unaudited)
Asset-Light(2)(3)
Revenue / Shipment
(23.9%)
(25.3%)
Shipments / Day
12.4%
5.3%
____________________
2)
Asset-Light represents the reportable
segment previously named ArcBest.
3)
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240206968120/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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