ArcBest Announces Solid Third Quarter 2022 Results

Rhea-AI Summary

ArcBest (Nasdaq: ARCB) reported Q3 2022 revenue of $1.4 billion, up 33% from Q3 2021. Net income rose to $88.8 million, or $3.50 per diluted share. On a non-GAAP basis, net income was $96.4 million, or $3.80 per diluted share. Each operating segment saw double-digit revenue growth. The Asset-Based segment had revenue of $791.5 million, a 16.2% increase, while the Asset-Light segment rose 62.6% to $604.5 million. ArcBest aims to surpass $5 billion in annual revenue for the first time. The strong performance reflects strategic growth despite economic challenges.

Positive

• Q3 2022 revenue increased by 33% year-over-year, reaching $1.4 billion.
• Net income improved to $88.8 million, or $3.50 per diluted share, compared to $63.7 million in Q3 2021.
• The acquisition of MoLo Solutions positively impacted revenue and operational metrics.
• Each operating segment experienced double-digit percentage revenue growth.

Negative

• Asset-Light segment profitability decreased due to sequential margin compression and lower average revenue per shipment.
• Higher costs impacted profitability in the FleetNet segment despite revenue growth.

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: dhumphrey@arcb.com	Email: amahar@arcb.com

 

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SOURCE ArcBest

FAQ

What were ArcBest's Q3 2022 revenue and profit figures?

ArcBest reported Q3 2022 revenue of $1.4 billion and net income of $88.8 million.

How much did ArcBest's revenue increase compared to Q3 2021?

ArcBest's revenue increased by 33% compared to Q3 2021.

What is the significance of the MoLo acquisition for ArcBest?

The MoLo acquisition contributed to revenue growth and improved operational metrics in Q3 2022.

Did ArcBest achieve growth in all its operating segments in Q3 2022?

Yes, each operating segment of ArcBest achieved double-digit percentage revenue growth in Q3 2022.

What are ArcBest's future revenue expectations?

ArcBest is on track to surpass $5 billion in annual revenue for the first time in its history.