ArcBest Announces Second Quarter 2022 Results

News provided by

ArcBest

Jul 29, 2022, 06:00 ET

Record Quarterly Revenue, Operating Income and Net Income Demonstrate ArcBest's Success Driving Growth and Value Creation

Strategic Growth Initiatives Solidify ArcBest's Position as a Logistics Leader and Partner of Choice

  • Second quarter 2022 revenue of $1.4 billion increased 46.8 percent over second quarter 2021.
  • Net income improved to $102.5 million, or $4.00 per diluted share. On a non-GAAP basis, second quarter 2022 net income was $110.0 million, or $4.30 per diluted share.
  • Innovation investments contributed to revenue growth and improved profitability.

 FORT SMITH, Ark., July 29, 2022 /PRNewswire/ -- ArcBest® (Nasdaq: ARCB), a leader in supply chain logistics, today reported second quarter 2022 revenue of $1.4 billion, an increase of $444.0 million compared to second quarter 2021. Each operating segment achieved at least double-digit percentage revenue growth over the prior year period. Second quarter 2022 results include the impact of the acquisition of MoLo Solutions, LLC ("MoLo"), which was completed in November 2021.

ArcBest's second quarter 2022 operating income was $137.3 million and net income was $102.5 million, or $4.00 per diluted share, compared to operating income of $74.3 million and net income of $61.0 million, or $2.27 per diluted share, in the second quarter of 2021. The recent quarter's revenue, operating income and net income totals were the highest of any quarter in ArcBest's history. 

Excluding certain items in both periods as identified in the attached reconciliation tables, second quarter non-GAAP operating income was $150.5 million, compared to $76.8 million in the prior-year period. On a non-GAAP basis, net income was $110.0 million, or $4.30 per diluted share, compared to $54.6 million, or $2.03 per diluted share, in the second quarter of 2021.

"ArcBest's talented and dedicated team has been successfully executing our strategy, delivering strong financial results and driving value-enhancing growth for the benefit of our shareholders, customers and other stakeholders. The second quarter of 2022 was no exception, as we achieved 47% revenue growth due to increasing demand for our broad offering of transportation and logistics services," said Judy R. McReynolds, ArcBest chairman, president and CEO. "As our customers' supply chains become even more complex and economic pressures increase, our strategic focus on technology, innovation and the development of our people positions us to thrive in all environments. By advancing our strategic plan and investing capital back into the business, we continue to differentiate ArcBest and position our company as a logistics leader, our customers' partner of choice, and a consistent generator of superior value for investors."

Second Quarter Results of Operations Comparisons

Asset-Based

Second Quarter 2022 Versus Second Quarter 2021

  • Revenue of $802.6 million compared to $652.8 million, a per-day increase of 22.9 percent.
  • Total tonnage per day increase of 3.7 percent, including an increase of 0.9 percent in LTL-rated weight per shipment.
  • Total shipments per day increased 2.0 percent.
  • Total billed revenue per hundredweight increased 17.7 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 double digits.
  • Operating income of $116.7 million and an operating ratio of 85.5 percent compared to operating income of $63.9 million and an operating ratio of 90.2 percent. On a non-GAAP basis, operating income of $124.6 million and an operating ratio of 84.5 percent compared to operating income of $71.4 million and an operating ratio of 89.0 percent.

ArcBest's Asset-Based business delivered strong revenue growth in the second quarter versus the prior year period due in part to a healthy pricing environment, higher fuel surcharges and an increase in ABF Freight's average weight per shipment. Customer demand drove increases in this year's freight shipments and tonnage resulting in growth compared to strong, double-digit percent increases in second quarter 2021. Strength in base freight rate pricing continued during the quarter reflecting the value of the logistics solutions ArcBest offers its customers during an ongoing period of supply chain volatility. ArcBest achieved higher second quarter profitability using optimization tools and improved freight data, maintaining more consistent day-to-day business levels while optimizing revenue and managing costs. Hiring initiatives continued at specific service center locations throughout the ABF Freight network and contributed to a net increase in employees. 

Asset-Light‡

Second Quarter 2022 Versus Second Quarter 2021 (including the results of MoLo)

  • Revenue of $631.8 million compared to $330.3 million, a per-day increase of 91.3 percent.
  • Operating income of $29.1 million compared to $16.3 million. Prior year operating income included a $6.9 million gain on the sale of the labor services portion of the Asset-Light moving business. On a non‑GAAP basis, operating income of $31.9 million compared to $10.3 million.
  • Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") of $34.6 million compared to $12.1 million, as detailed in the attached non-GAAP reconciliation tables.

Higher market rates combined with continued customer demand for our services resulted in strong second quarter revenue growth and another quarter of record profitability in the ArcBest Asset-Light segment. Enhanced revenue and shipment totals versus the same period last year reflect the positive impact of additional truckload brokerage business from MoLo, for which the integration is on schedule. The broad range of ArcBest Asset-Light services offered through managed transportation, dedicated, expedite and international continue to be a great benefit to customers.  Each service positively contributed to improved Asset-Light profitability compared to the prior-year period as operating leverage increased due to the revenue growth of the business.

At FleetNet, revenue growth and improved profitability resulted from increases in both total events and revenue per event.

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 second quarter results. The call will be today, Friday, July 29, at 9:30 a.m. EDT (8:30 a.m. CDT). Interested parties are invited to listen by calling (800) 891-8357 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 July 29, 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 September 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 22019591. The conference call and playback can also be accessed, through September 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 June 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.

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]

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 

Six Months Ended 


June 30

June 30


2022

2021

2022

2021


(Unaudited)


($ thousands, except share and per share data)

REVENUES

$

1,392,929

$

948,973

$

2,728,003

$

1,778,186














OPERATING EXPENSES

1,255,583

874,674

2,495,729

1,671,696














OPERATING INCOME

137,346

74,299

232,274

106,490














OTHER INCOME (COSTS)












Interest and dividend income

361

322

467

714

Interest and other related financing costs

(1,863)

(2,274)

(3,802)

(4,702)

Other, net

(2,807)

1,111

(3,633)

2,303



(4,309)

(841)

(6,968)

(1,685)














INCOME BEFORE INCOME TAXES

133,037

73,458

225,306

104,805














INCOME TAX PROVISION

30,576

12,477

53,276

20,463














NET INCOME

$

102,461

$

60,981

$

172,030

$

84,342














EARNINGS PER COMMON SHARE












Basic

$

4.16

$

2.38

$

6.98

$

3.30

Diluted

$

4.00

$

2.27

$

6.68

$

3.13














AVERAGE COMMON SHARES OUTSTANDING












Basic

24,607,362

25,586,353

24,658,739

25,522,453

Diluted

25,596,031

26,910,796

25,756,314

26,926,133

ARCBEST CORPORATION






CONSOLIDATED BALANCE SHEETS
















June 30

December 31


2022

2021


(Unaudited)

Note


($ thousands, except share data)

ASSETS






CURRENT ASSETS






Cash and cash equivalents

$

127,058

$

76,620

Short-term investments

76,802

48,339

Accounts receivable, less allowances (2022 - $15,991; 2021 - $13,226)

659,672

582,344

Other accounts receivable, less allowances (2022 - $703; 2021 - $690)

18,612

13,094

Prepaid expenses

32,353

40,104

Prepaid and refundable income taxes

10,310

9,654

Other

10,750

5,898

TOTAL CURRENT ASSETS

935,557

776,053








PROPERTY, PLANT AND EQUIPMENT






Land and structures

356,149

350,694

Revenue equipment

993,008

980,283

Service, office, and other equipment

276,965

251,085

Software

179,195

175,989

Leasehold improvements

20,189

16,931



1,825,506

1,774,982

Less allowances for depreciation and amortization

1,115,887

1,079,061



709,619

695,921








GOODWILL

299,075

300,337

INTANGIBLE ASSETS, NET

120,145

126,580

OPERATING RIGHT-OF-USE ASSETS

124,086

106,686

DEFERRED INCOME TAXES

5,655

5,470

OTHER LONG-TERM ASSETS

99,569

101,629

TOTAL ASSETS

$

2,293,706

$

2,112,676








LIABILITIES AND STOCKHOLDERS' EQUITY














CURRENT LIABILITIES






Accounts payable

$

346,051

$

311,401

Income taxes payable

17,110

12,087

Accrued expenses

304,425

305,851

Current portion of long-term debt

56,049

50,615

Current portion of operating lease liabilities

24,534

22,740

TOTAL CURRENT LIABILITIES

748,169

702,694








LONG-TERM DEBT, less current portion

169,356

174,917

OPERATING LEASE LIABILITIES, less current portion

104,253

88,835

POSTRETIREMENT LIABILITIES, less current portion

16,694

16,733

OTHER LONG-TERM LIABILITIES

132,930

135,537

DEFERRED INCOME TAXES

59,092

64,893








STOCKHOLDERS' EQUITY






Common stock, $0.01 par value, authorized 70,000,000 shares;
      issued 2022: 29,614,798 shares; 2021: 29,359,597 shares

296

294

Additional paid-in capital

340,035

318,033

Retained earnings

968,417

801,314

   Treasury stock, at cost, 2022: 5,109,030 shares; 2021: 4,492,514 shares

(250,510)

(194,273)

  Accumulated other comprehensive income

4,974

3,699

TOTAL STOCKHOLDERS' EQUITY

1,063,212

929,067

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

2,293,706

$

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
















Six Months Ended 


June 30


2022

2021


Unaudited


($ thousands)

 OPERATING ACTIVITIES






Net income

$

172,030

$

84,342

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






Depreciation and amortization

63,690

58,709

Amortization of intangibles

6,463

1,927

Share-based compensation expense

6,641

5,678

Provision for losses on accounts receivable

3,583

(334)

Change in deferred income taxes

(6,371)

(7,612)

Gain on sale of property and equipment

(4,073)

(8,408)

Gain on sale of subsidiary

(402)

(6,923)

Changes in operating assets and liabilities:






Receivables

(87,092)

(37,745)

Prepaid expenses

7,477

1,419

Other assets

72

25

Income taxes

4,211

12,275

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

114

761

Accounts payable, accrued expenses, and other liabilities

18,280

41,786

NET CASH PROVIDED BY OPERATING ACTIVITIES

184,623

145,900








 INVESTING ACTIVITIES






Purchases of property, plant and equipment, net of financings

(49,682)

(25,395)

Proceeds from sale of property and equipment

9,115

10,864

Proceeds from sale of subsidiary

475

9,013

Purchases of short-term investments

(64,330)

(43,690)

Proceeds from sale of short-term investments

35,840

49,165

Capitalization of internally developed software

(8,541)

(9,477)

Business acquisition, net of cash acquired(1)

2,279

—

NET CASH USED IN INVESTING ACTIVITIES

(74,844)

(9,520)








 FINANCING ACTIVITIES






Borrowings under credit facilities

58,000

—

Proceeds from notes payable

7,280

—

Payments on long-term debt

(84,905)

(54,643)

Net change in book overdrafts

6,085

(922)

Deferred financing costs

—

(189)

Payment of common stock dividends

(4,927)

(4,095)

Purchases of treasury stock

(31,237)

(8,100)

Payments for tax withheld on share-based compensation

(9,637)

(9,766)

NET CASH USED IN FINANCING ACTIVITIES

(59,341)

(77,715)








NET INCREASE IN CASH AND CASH EQUIVALENTS

50,438

58,665

Cash and cash equivalents at beginning of period

76,620

303,954

CASH AND CASH EQUIVALENTS AT END OF PERIOD

$

127,058

$

362,619








 NONCASH INVESTING ACTIVITIES






Equipment financed

$

19,498

$

8,138

Accruals for equipment received

$

7,574

$

5,984

Lease liabilities arising from obtaining right-of-use assets

$

30,210

$

6,051

___________________________

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 

Six Months Ended 


June 30

June 30


2022

2021

2022

2021


Unaudited


($ thousands, except percentages)

REVENUES























Asset-Based

$

802,622



$

652,832



$

1,507,933



$

1,209,124



























ArcBest(1)

549,655




270,748




1,144,939




523,084


FleetNet

82,132




59,547




160,510




118,710


Total Asset-Light



631,787




330,295




1,305,449




641,794



























Other and eliminations

(41,480)




(34,154)




(85,379)




(72,732)


Total consolidated revenues

$

1,392,929



$

948,973



$

2,728,003



$

1,778,186



























OPERATING EXPENSES























Asset-Based























Salaries, wages, and benefits

$

328,068

40.9

%

$

302,370

46.3

%

$

641,565

42.5

%

$

588,064

48.6

%

Fuel, supplies, and expenses

99,296

12.4


64,689

9.9


184,127

12.2


125,530

10.4

Operating taxes and licenses

12,823

1.6


12,303

1.9


25,316

1.7


24,551

2.0

Insurance

12,197

1.5


9,454

1.4


22,628

1.5


18,393

1.5

Communications and utilities

4,648

0.6


4,663

0.7


9,335

0.6


9,633

0.8

Depreciation and amortization

24,463

3.1


23,308

3.6


48,768

3.2


46,792

3.9

Rents and purchased transportation

121,550

15.1


95,082

14.6


224,535

14.9


170,670

14.1

Shared services

75,584

9.4


69,372

10.6


142,734

9.6


125,238

10.4

Gain on sale of property and equipment(2)

(1,370)

(0.2)


71

—


(4,065)

(0.3)


(8,624)

(0.7)

Innovative technology costs(3)

7,954

1.0


7,532

1.2


14,914

1.0


14,400

1.2

Other

753

0.1


77

—


1,386

0.1


511

—

Total Asset-Based

685,966

85.5

%

588,921

90.2

%

1,311,243

87.0

%

1,115,158

92.2

%

























ArcBest(1)























Purchased transportation

$

448,160

81.5

%

$

226,603

83.7

%

$

956,540

83.5

%

$

437,598

83.6

%

Supplies and expenses

4,263

0.8


2,476

0.9


7,529

0.7


5,044

1.0

Depreciation and amortization(4)

5,468

1.0


2,366

0.9


10,648

0.9


4,752

0.9

Shared services

57,986

10.6


29,078

10.7


108,183

9.5


55,150

10.5

Gain on sale of subsidiary(5)

(402)

(0.1)


(6,923)

(2.6)


(402)

—


(6,923)

(1.3)

Other

6,701

1.2


2,021

0.8


13,846

1.2


4,071

0.8



522,176

95.0

%

255,621

94.4

%

1,096,344

95.8

%

499,692

95.5

%

FleetNet

80,540

98.1

%

58,409

98.1

%

157,201

97.9

%

116,549

98.2

%

Total Asset-Light

602,716




314,030




1,253,545




616,241



























Other and eliminations(6)

(33,099)




(28,277)




(69,059)




(59,703)


Total consolidated operating expenses

$

1,255,583

90.1

%

$

874,674

92.2

%

$

2,495,729

91.5

%

$

1,671,696

94.0

%

























OPERATING INCOME























Asset-Based

$

116,656



$

63,911



$

196,690



$

93,966



























ArcBest(1)

27,479




15,127




48,595




23,392


FleetNet

1,592




1,138




3,309




2,161


Total Asset-Light

29,071




16,265




51,904




25,553



























Other and eliminations(6)

(8,381)




(5,877)




(16,320)




(13,029)


Total consolidated operating income

$

137,346



$

74,299



$

232,274



$

106,490


___________________________ 

1)

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

2)

The six months ended June 30, 2021 include an $8.6 million gain on the sale of an unutilized service center property. The 2022 amounts primarily consist of gains on sale of replaced equipment.

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, including innovative technology costs.

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 

Six Months Ended 


June 30

June 30


2022

2021

2022

2021

ArcBest Corporation - Consolidated

(Unaudited)


($ thousands, except per share data)

Operating Income












Amounts on GAAP basis

$

137,346

$

74,299

$

232,274

$

106,490

Innovative technology costs, pre-tax(1)

10,341

8,475

20,027

16,142

Purchase accounting amortization, pre-tax(2)

3,214

937

6,427

1,874

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

—

—

810

—

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

(402)

(6,923)

(402)

(6,923)

Non-GAAP amounts

$

150,499

$

76,788

$

259,136

$

117,583














Net Income












Amounts on GAAP basis

$

102,461

$

60,981

$

172,030

$

84,342

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

7,789

6,417

15,078

12,241

Purchase accounting amortization, after-tax(2)

2,397

702

4,793

1,404

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

—

—

604

—

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

(317)

(5,437)

(317)

(5,437)

Life insurance proceeds and changes in cash surrender value

2,710

(1,248)

3,503

(2,514)

Tax benefit from vested RSUs(5)

(5,059)

(6,796)

(5,929)

(6,931)

Non-GAAP amounts

$

109,981

$

54,619

$

189,762

$

83,105














Diluted Earnings Per Share












Amounts on GAAP basis

$

4.00

$

2.27

$

6.68

$

3.13

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

0.30

0.24

0.59

0.45

Purchase accounting amortization, after-tax(2)

0.09

0.03

0.19

0.05

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

—

—

0.02

—

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

(0.01)

(0.20)

(0.01)

(0.20)

Life insurance proceeds and changes in cash surrender value

0.11

(0.05)

0.14

(0.09)

Tax benefit from vested RSUs(5)

(0.20)

(0.25)

(0.23)

(0.26)

Non-GAAP amounts(6)

$

4.30

$

2.03

$

7.37

$

3.09

__________________________ 

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. As previously disclosed, 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 recognition of the tax impact for the vesting of share-based compensation.

6)

Non-GAAP EPS is calculated in total and may not foot due to rounding.

ARCBEST CORPORATION










RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES – Continued




















Three Months Ended 

Six Months Ended 


June 30

June 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

$

116,656

85.5

%

$

63,911

90.2

%

$

196,690

87.0

%

$

93,966

92.2

%

Innovative technology costs, pre-tax(1)

7,954

(1.0)


7,532

(1.2)


14,914

(1.0)


14,400

(1.2)

Non-GAAP amounts

$

124,610

84.5

%

$

71,443

89.0

%

$

211,604

86.0

%

$

108,366

91.0

%






Asset-Light




ArcBest Segment




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














Amounts on GAAP basis

$

27,479

95.0

%

$

15,127

94.4

%

$

48,595

95.8

%

$

23,392

95.5

%

Purchase accounting amortization, pre-tax(2)

3,214

(0.6)


937

(0.3)


6,427

(0.6)


1,874

(0.4)

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

—

—


—

—


810

(0.1)


—

—

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

(402)

0.1


(6,923)

2.6


(402)

—


(6,923)

1.3

Non-GAAP amounts

$

30,291

94.5

%

$

9,141

96.7

%

$

55,430

95.1

%

$

18,343

96.4

%






FleetNet Segment




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














Amounts on GAAP basis

$

1,592

98.1

%

$

1,138

98.1

%

$

3,309

97.9

%

$

2,161

98.2

%






Total Asset-Light




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














Amounts on GAAP basis

$

29,071

95.4

%

$

16,265

95.1

%

$

51,904

96.0

%

$

25,553

96.0

%

Purchase accounting amortization, pre-tax(2)

3,214

(0.5)


937

(0.3)


6,427

(0.5)


1,874

(0.3)

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

—

—


—

—


810

(0.1)


—

—

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

(402)

0.1


(6,923)

2.1


(402)

—


(6,923)

1.1

Non-GAAP amounts

$

31,883

95.0

%

$

10,279

96.9

%

$

58,739

95.4

%

$

20,504

96.8

%






Other and Eliminations




Operating Loss ($)














Amounts on GAAP basis

$

(8,381)



$

(5,877)



$

(16,320)



$

(13,029)



Innovative technology costs, pre-tax(5)

2,387




943




5,113




1,742



Non-GAAP amounts

$

(5,994)



$

(4,934)



$

(11,207)



$

(11,287)



 __________________________

1)

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

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, as previously described in the footnotes to the ArcBest Corporation – Consolidated non-GAAP table.

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

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 June 30, 2022





Other

Income

Income







Operating

Income

Before Income

Tax

Net



Income

(Costs)

Taxes

Provision

Income

Tax Rate(6)

Amounts on GAAP basis

$

137,346

$

(4,309)

$

133,037

$

30,576

$

102,461

23.0

%

Innovative technology costs(1)

10,341

148

10,489

2,700

7,789

25.7

Purchase accounting amortization(2)

3,214

—

3,214

817

2,397

25.4

Change in fair value of contingent consideration(3)



—

—

—

—

—

—

Gain on sale of subsidiary(4)

(402)

—

(402)

(85)

(317)

(21.1)

Life insurance proceeds and changes in cash surrender
value

—

2,710

2,710

—

2,710

—

Tax benefit from vested RSUs(5)

—

—

—

5,059

(5,059)

—

Non-GAAP amounts

$

150,499

$

(1,451)

$

149,048

$

39,067

$

109,981

26.2

%





















Six Months Ended June 30, 2022




Other

Income

Income







Operating

Income

Before Income

Tax

Net



Income

(Costs)

Taxes

Provision

Income

Tax Rate(6)

Amounts on GAAP basis

$

232,274

$

(6,968)

$

225,306

$

53,276

$

172,030

23.6

%

Innovative technology costs(1)

20,027

277

20,304

5,226

15,078

25.7

Purchase accounting amortization(2)

6,427

—

6,427

1,634

4,793

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)

Life insurance proceeds and changes in cash surrender
value

—

3,503

3,503

—

3,503

—

Tax benefit from vested RSUs(5)

—

—

—

5,929

(5,929)

—

Non-GAAP amounts

$

259,136

$

(3,188)

$

255,948

$

66,186

$

189,762

25.9

%





















Three Months Ended June 30, 2021




Other

Income

Income






Operating

Income

Before Income

Tax

Net



Income

(Costs)

Taxes

Provision

Income

Tax Rate(6)

Amounts on GAAP basis

$

74,299

$

(841)

$

73,458

$

12,477

$

60,981

17.0

%

Innovative technology costs(1)

8,475

166

8,641

2,224

6,417

25.7

Purchase accounting amortization(2)

937

—

937

235

702

25.1

Gain on sale of subsidiary(4)

(6,923)

—

(6,923)

(1,486)

(5,437)

(21.5)

Life insurance proceeds and changes in cash surrender
value

—

(1,248)

(1,248)

—

(1,248)

—

Tax benefit from vested RSUs(5)

—

—

—

6,796

(6,796)

—

Non-GAAP amounts

$

76,788

$

(1,923)

$

74,865

$

20,246

$

54,619

27.0

%





















Six Months Ended June 30, 2021




Other

Income

Income







Operating

Income

Before Income

Tax

Net



Income

(Costs)

Taxes

Provision

Income

Tax Rate(6)

Amounts on GAAP basis

$

106,490

$

(1,685)

$

104,805

$

20,463

$

84,342

19.5

%

Innovative technology costs(1)

16,142

340

16,482

4,241

12,241

25.7

Purchase accounting amortization(2)

1,874

—

1,874

470

1,404

25.1

Gain on sale of subsidiary(4)

(6,923)

—

(6,923)

(1,486)

(5,437)

(21.5)

Life insurance proceeds and changes in cash surrender
value

—

(2,514)

(2,514)

—

(2,514)

—

Tax benefit from vested RSUs(5)

—

—

—

6,931

(6,931)

—

Non-GAAP amounts

$

117,583

$

(3,859)

$

113,724

$

30,619

$

83,105

26.9

%

____________________________ 

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, as previously described in the footnotes to the ArcBest Corporation – Consolidated non-GAAP table.

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

6)

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.

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 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 

Six Months Ended 


June 30

June 30


2022

2021

2022

2021


(Unaudited)

ArcBest Corporation - Consolidated Adjusted EBITDA

($ thousands)



Net Income

$

102,461

$

60,981

$

172,030

$

84,342

Interest and other related financing costs

1,863

2,274

3,802

4,702

Income tax provision

30,576

12,477

53,276

20,463

Depreciation and amortization(1)

35,330

30,282

70,153

60,636

Amortization of share-based compensation

3,878

3,324

6,641

5,678

Change in fair value of contingent consideration(2)

—

—

810

—

Gain on sale of subsidiary(3)

(402)

(6,923)

(402)

(6,923)

Consolidated Adjusted EBITDA

$

173,706

$

102,415

$

306,310

$

168,898
















Three Months Ended 

Six Months Ended 


June 30

June 30


2022

2021

2022

2021

Asset-Light Adjusted EBITDA

(Unaudited)


($ thousands)





ArcBest












Operating Income

$

27,479

$

15,127

$

48,595

$

23,392

Depreciation and amortization(1)

5,468

2,366

10,648

4,752

Change in fair value of contingent consideration(2)

—

—

810

—

Gain on sale of subsidiary(3)

(402)

(6,923)

(402)

(6,923)

Adjusted EBITDA

$

32,545

$

10,570

$

59,651

$

21,221





FleetNet



Operating Income

$

1,592

$

1,138

$

3,309

$

2,161

Depreciation and amortization(1)

446

413

873

828

Adjusted EBITDA

$

2,038

$

1,551

$

4,182

$

2,989





Total Asset-Light












Operating Income

$

29,071

$

16,265

$

51,904

$

25,553

Depreciation and amortization(1)

5,914

2,779

11,521

5,580

Change in fair value of contingent consideration(2)

—

—

810

—

Gain on sale of subsidiary(3)

(402)

(6,923)

(402)

(6,923)

Adjusted EBITDA

$

34,583

$

12,121

$

63,833

$

24,210

 ____________________________

1)

Includes amortization of intangibles associated with acquired businesses.

2)

Represents change in fair value of the contingent consideration recorded for the MoLo acquisition, as previously described in the footnotes to the ArcBest Corporation – Consolidated non-GAAP table.

3)

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.

ARCBEST CORPORATION










OPERATING STATISTICS
























Three Months Ended 

Six Months Ended 


June 30

June 30


2022

2021

% Change

2022

2021

% Change


(Unaudited)

Asset-Based


































Workdays

63.5

63.5



127.0

126.5




















Billed Revenue(1) / CWT

$

45.76

$

38.87

17.7 %

$

44.77

$

37.54

19.3 %


















Billed Revenue(1) / Shipment

$

632.43

$

528.33

19.7 %

$

606.14

$

495.76

22.3 %


















Shipments

1,276,859

1,251,791

2.0 %

2,504,083

2,467,207

1.5 %


















Shipments / Day

20,108

19,713

2.0 %

19,717

19,504

1.1 %


















Tonnage (Tons)

882,367

850,817

3.7 %

1,695,097

1,629,232

4.0 %


















Tons / Day

13,896

13,399

3.7 %

13,347

12,879

3.6 %


















Pounds / Shipment

1,382

1,359

1.7 %

1,354

1,321

2.5 %


















Average Length of Haul (Miles)

1,096

1,107

(1.0 %)

1,088

1,099

(1.0 %)


















________________________

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 

Six Months Ended 


June 30, 2022

June 30, 2022


(Unaudited)

ArcBest(2)












Revenue / Shipment

15.2 %

23.5 %







Shipments / Day

74.8 %

79.2 %

________________________ 

2)

Statistical data for the three and six months ended June 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.

SOURCE ArcBest

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