ArcBest Corporation® Announces Fourth Quarter 2015 And Full Year 2015 Results
- Fourth quarter 2015 net income was $5.0 million, or $0.19 per diluted share. Excluding certain identified items, fourth quarter 2015 net income was $0.21 per diluted share.
- Fourth quarter 2015 ABF Freight® revenue and operating margin were below 2014, due to reduced business levels resulting from a sluggish freight economy and lower fuel surcharge revenue.
- Fourth quarter 2015 revenue at ArcBest's asset-light logistics businesses was $198.3 million, an increase of 6 percent over the previous year.
- Full year 2015 revenue at ArcBest Corporation of $2.7 billion.
- ArcBest's full year 2015 operating income increased 9 percent to $75.5 million.
FORT SMITH, Ark., Feb. 3, 2016 /PRNewswire/ -- ArcBest Corporation (Nasdaq: ARCB) today reported fourth quarter 2015 financial results reflecting a soft freight environment associated with high customer inventory levels and weakness in the manufacturing and industrial sectors of the economy. Fourth quarter and full year revenues were significantly impacted by the effect of lower diesel fuel prices on fuel surcharge revenues.
Fourth Quarter 2015 Results
ArcBest's revenue was $648.1 million compared to revenue of $664.8 million in the fourth quarter of 2014, a decrease of 2.5 percent. Net income was $5.0 million, or $0.19 per diluted share compared to fourth quarter 2014 net income of $14.5 million, or $0.53 per diluted share. As shown in the attached reconciliation tables, both of these periods were impacted by favorable effective tax rates and adjustments for certain other items. On an adjusted basis, ArcBest's fourth quarter 2015 net income was $5.5 million, or $0.21 per diluted share compared to fourth quarter 2014 net income of $11.9 million, or $0.44 per diluted share.
Freight Transportation (ABF Freight)
Results of Operations
Fourth Quarter 2015
- Revenue of $461.5 million compared to $485.9 million in fourth quarter 2014, a decrease of 5.0 percent. ABF Freight's fourth quarter 2015 revenue was impacted by lower fuel surcharges.
- Tonnage per day decrease of 4.9 percent versus fourth quarter 2014.
- Total billed revenue per hundredweight decreased 1.1 percent compared to the prior year which included the impact of lower fuel surcharges in 2015. Excluding fuel surcharge, the percentage increase on ABF Freight's traditional LTL freight was in the mid-single digits.
- Operating income of $8.3 million and operating ratio of 98.2 percent excluding adjustments for pension settlement charges compared to similarly adjusted operating income of $15.8 million and an operating ratio of 96.8 percent in fourth quarter 2014.
ABF Freight's® fourth quarter operating margin was in-line with historical sequential changes from the third quarter. However, operating margins declined versus the prior year due to weak freight levels associated with U.S. manufacturing which in the fourth quarter contracted at levels not seen since 2009. Though the pricing environment has remained positive despite sluggish freight levels, ABF Freight's revenues were impacted by the significant reduction in diesel fuel prices that lowered fuel surcharge revenue and related costs. During the quarter, ABF Freight's continued emphasis on customer service led to challenges in aligning costs with the lower business levels.
Asset-Light Logistics
Results of Operations
Fourth Quarter 2015
- Revenue of $198.3 million compared to $187.1 million in fourth quarter 2014, an increase of 6 percent, which included lower revenue at Panther.
- Asset-light revenue equaled 30 percent of total consolidated revenue, compared to 28 percent during the same period last year.
- Fourth quarter 2015 earnings before interest, taxes, depreciation and amortization ("EBITDA") of $7.1 million compared to EBITDA in fourth quarter 2014 of $9.4 million.
Strategic initiatives continued to generate solid growth in managed shipments and business levels across all the asset-light businesses during fourth quarter 2015. However, Panther Premium Logistics'® fourth quarter 2015 revenue and operating margin were below the same period of 2014. Though Panther's shipment levels increased, their average shipment size declined compared to the historically strong 2014 period when spot truckload market capacity was constrained and fuel surcharges were higher. ArcBest's remaining asset-light logistics companies – ABF Logistics®, FleetNet America® and ABF Moving® – each reported increased fourth quarter revenue resulting from additional new customers and increased business from existing customers.
Full Year 2015 Results
"While weakness in the industrial and manufacturing segments of the economy accelerated toward the end of 2015, we made significant progress throughout the year to improve operations at ABF Freight and also provide the full suite of complementary asset-light logistics services our customers seek from us," said ArcBest President and CEO Judy R. McReynolds. "By the end of 2015, 23 percent of the ABF Freight account base also transacted business with ABF Logistics or Panther. In 2011, that figure was just 6 percent. The 2015 investments we have made in our enterprise services are allowing us greater penetration of these accounts through the single point of contact they desire from ArcBest as a trusted logistics provider."
ArcBest's revenue totaled $2.7 billion, an increase of 2 percent compared to $2.6 billion in 2014. ArcBest's 2015 operating income increased 9 percent versus the previous year to $75.5 million, or $81.0 million on an adjusted basis. Net income was $44.9 million, or $1.67 per diluted share. Excluding adjustments for certain other items in the attached reconciliation table, ArcBest had 2015 net income of $47.9 million, or $1.78 per diluted share compared to similarly adjusted net income of $45.7 million, or $1.67 per diluted share in 2014.
Freight Transportation (ABF Freight)
Results of Operations
Full Year 2015
- Revenue of $1.9 billion, comparable to $1.9 billion in 2014. ABF Freight's 2015 revenue was impacted by lower fuel surcharges
- Tonnage per day decrease of 1.5 percent versus 2014.
- Total billed revenue per hundredweight increased 0.8 percent compared to the prior year reflecting the impact of lower fuel surcharges in 2015. Excluding fuel surcharge, the increase in total billed revenue per hundredweight was in the mid-single digits.
- Operating income excluding adjustments for pension settlement charges increased 17 percent with an operating ratio of 96.6 percent compared to an operating ratio of 97.1 percent in 2014.
Asset-Light Logistics
Results of Operations
Full Year 2015
- Revenue of $798.1 million compared to $722.5 million in 2014, an increase of 10 percent, which was significantly impacted by lower revenue at Panther.
- 2015 earnings before interest, taxes, depreciation and amortization of $39.3 million compared to $40.5 million in 2014.
- ABF Logistics acquired Smart Lines Transportation Group in January 2015 and Bear Transportation Services in December 2015.
Closing Comments
"As we move through 2016 during a period of economic uncertainty, we will closely monitor our cost structure and work to manage our labor levels consistent with business trends. Our goals for this year include accelerating efforts to provide customers with easier access to all of our services, continued improvements in operations and ongoing investments in technology and enterprise solutions among other initiatives," said Ms. McReynolds.
Capital Expenditures
In 2015, total net capital expenditures equaled $152 million, including approximately $106 million of revenue equipment for ABF Freight and Panther. Depreciation and amortization costs on property, plant and equipment were $89 million.
For 2016, total net capital expenditures are estimated to range from $170 million to $200 million. This includes revenue equipment purchases of $95 million primarily at ABF Freight. Expected real estate expenditures totaling approximately $45 million are for expansion opportunities, and include construction costs delayed from 2015 for previously disclosed call center facilities and a needed office building, a portion of which replaces leased space. The remainder of expected capital expenditures includes the costs of other facility and handling equipment at ABF Freight and technology investments across the corporation. ArcBest's depreciation and amortization costs on property, plant and equipment in 2016 are estimated to be in a range of $100 million to $110 million.
The new equipment added during 2015 increased the dependability and consistency of service offered to ArcBest customers. On-going benefits to be fully realized from ArcBest's investment and enhancement of assets include reduced equipment age, improved fuel economy, lower maintenance costs and reduction of rented equipment. The 2016 capital expenditure plan reflects continuation of the accelerated replacement of revenue equipment and alignment with ArcBest's long-term strategy to advance operational efficiencies. For instance, during 2016 upgrades will be made to the data information system ABF Freight utilizes to handle shipments throughout its network.
Conference Call
ArcBest Corporation will host a conference call with company executives to discuss the 2015 fourth quarter and full year results. The call will be today, Wednesday, February 3, at 9:30 a.m. ET (8:30 a.m. CT). Interested parties are invited to listen by calling (800) 682-8593. Following the call, a recorded playback will be available through the end of the day on March 15, 2016. To listen to the playback, dial (800) 633-8284 or (402) 977-9140 (for international callers). The conference call ID for the playback is 21802368. The conference call and playback can also be accessed, through March 15, 2016, on ArcBest's website at arcb.com.
About ArcBest
ArcBest Corporation® (Nasdaq: ARCB) solves complex logistics and transportation challenges. Our companies and brands – ABF Freight®, ABF Logistics®, Panther Premium Logistics®, FleetNet America®, U-Pack® and ArcBest Technologies – apply the skill and the will with every shipment and supply chain solution, household move or vehicle repair. ArcBest finds a way.
For more information, visit arcb.com, abf.com, pantherpremium.com, fleetnetamerica.com and upack.com. ArcBest Corporation®. The Skill & The Will®.
Forward-Looking Statements
Certain statements and information in this press release concerning results for the three and twelve months ended December 31, 2015 may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. 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, which are generally not historical in nature. These forward-looking statements are based on management's current expectations and beliefs concerning future developments and their potential effect on us. Although management believes that these forward-looking statements are reasonable, as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. Our forward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions that could cause actual results to differ materially from our historical experience and management's present expectations or projections. Important factors that could cause our actual results to differ materially from those in the forward-looking statements include, but are not limited to: costs of continuing investments in technology, a failure of our information systems and the impact of cyber incidents; disruptions or failures of services essential to the operation of our business or the use of information technology platforms in our business; governmental regulations and policies; litigation or claims asserted against us; union and nonunion employee wages and benefits, including changes in required contributions to multiemployer pension plans; competitive initiatives, pricing pressures, 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; general economic conditions and related shifts in market demand that impact the performance and needs of industries served by ArcBest Corporation's subsidiaries and/or limit our customers' access to adequate financial resources; 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; relationships with employees, including unions, and our ability to attract and retain employees and/or independent owner operators; availability of fuel; default on covenants of financing arrangements and the availability and terms of future financing arrangements; availability and cost of reliable third-party services; increased competition from freight transportation service providers outside the motor carrier freight transportation industry; timing and amount of capital expenditures, increased prices for and decreased availability of new revenue equipment and decreases in value of used revenue equipment; future costs of operating expenses such as maintenance and fuel and related taxes; self-insurance claims and insurance premium costs; environmental laws and regulations, including emissions-control regulations; potential impairment of goodwill and intangible assets; the impact of our brands and corporate reputation; the cost, timing and performance of growth initiatives; the cost, integration and performance of any future acquisitions; weather conditions; and other financial, operational and legal risks and uncertainties detailed from time to time in ArcBest Corporation's Securities and Exchange Commission public filings.
For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see our filings with 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: Kathy Fieweger |
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| Title: Vice President – Investor Relations |
Phone: 479-719-4358 |
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| Phone: 479-785-6200 |
Email: [email protected] |
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| Email: [email protected] |
Financial Data and Operating Statistics
The following tables show financial data and operating statistics on ArcBest Corporation® and its subsidiary companies.
| ARCBEST CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||||||||||||||||||||
| Three Months Ended December 31 |
Year Ended December 31 |
|||||||||||||||||||||||||||||||
| 2015 |
2014 |
2015 |
2014 |
|||||||||||||||||||||||||||||
| (Unaudited) |
||||||||||||||||||||||||||||||||
| ($ thousands, except share and per share data) |
||||||||||||||||||||||||||||||||
| REVENUES |
$ |
648,134 |
$ |
664,848 |
$ |
2,666,905 |
$ |
2,612,693 |
||||||||||||||||||||||||
| OPERATING EXPENSES |
640,822 |
646,799 |
2,591,409 |
2,543,454 |
||||||||||||||||||||||||||||
| OPERATING INCOME |
7,312 |
18,049 |
75,496 |
69,239 |
||||||||||||||||||||||||||||
| OTHER INCOME (COSTS) |
||||||||||||||||||||||||||||||||
| Interest and dividend income |
402 |
252 |
1,284 |
851 |
||||||||||||||||||||||||||||
| Interest and other related financing costs |
(1,217) |
(822) |
(4,400) |
(3,190) |
||||||||||||||||||||||||||||
| Other, net |
370 |
2,161 |
354 |
3,712 |
||||||||||||||||||||||||||||
| (445) |
1,591 |
(2,762) |
1,373 |
|||||||||||||||||||||||||||||
| INCOME BEFORE INCOME TAXES |
6,867 |
19,640 |
72,734 |
70,612 |
||||||||||||||||||||||||||||
| INCOME TAX PROVISION |
1,878 |
5,097 |
27,880 |
24,435 |
||||||||||||||||||||||||||||
| NET INCOME |
$ |
4,989 |
$ |
14,543 |
$ |
44,854 |
$ |
46,177 |
||||||||||||||||||||||||
| EARNINGS PER COMMON SHARE(1) |
||||||||||||||||||||||||||||||||
| Basic |
$ |
0.19 |
$ |
0.53 |
$ |
1.71 |
$ |
1.69 |
||||||||||||||||||||||||
| Diluted |
$ |
0.19 |
$ |
0.53 |
$ |
1.67 |
$ |
1.69 |
||||||||||||||||||||||||
| AVERAGE COMMON SHARES OUTSTANDING |
||||||||||||||||||||||||||||||||
| Basic |
25,936,709 |
26,073,256 |
26,013,716 |
25,993,255 |
||||||||||||||||||||||||||||
| Diluted |
26,415,839 |
26,073,256 |
26,530,127 |
25,993,612 |
||||||||||||||||||||||||||||
| CASH DIVIDENDS DECLARED |
$ |
0.08 |
$ |
0.06 |
$ |
0.26 |
$ |
0.15 |
||||||||||||||||||||||||
| (1) ArcBest uses the two-class method for calculating earnings per share. This method, as calculated below, requires an allocation of dividends paid and a portion of undistributed net income to unvested restricted stock for calculating per share amounts. |
||||||||||||||||||||||||||||||||
| NET INCOME |
$ |
4,989 |
$ |
14,543 |
$ |
44,854 |
$ |
46,177 |
||||||||||||||||||||||||
| EFFECT OF UNVESTED RESTRICTED STOCK AWARDS |
(45) |
(703) |
(443) |
(2,300) |
||||||||||||||||||||||||||||
| ADJUSTED NET INCOME FOR CALCULATING EARNINGS PER COMMON SHARE |
$ |
4,944 |
$ |
13,840 |
$ |
44,411 |
$ |
43,877 |
||||||||||||||||||||||||
| ARCBEST CORPORATION CONSOLIDATED BALANCE SHEETS |
|||||
| December 31 2015 |
December 31 2014 |
||||
| (Unaudited) |
Note |
||||
| ($ thousands, except share data) |
|||||
| ASSETS |
|||||
| CURRENT ASSETS |
|||||
| Cash and cash equivalents |
$ |
164,973 |
$ |
157,042 |
|
| Short-term investments |
61,597 |
45,909 |
|||
| Restricted cash |
1,384 |
1,386 |
|||
| Accounts receivable, less allowances (2015 – $4,825; 2014 – $5,731) |
236,097 |
228,056 |
|||
| Other accounts receivable, less allowances (2015 – $1,029; 2014 – $1,701) |
6,718 |
6,582 |
|||
| Prepaid expenses |
20,801 |
20,906 |
|||
| Deferred income taxes |
38,443 |
40,220 |
|||
| Prepaid and refundable income taxes |
18,134 |
9,920 |
|||
| Other |
3,936 |
4,968 |
|||
| TOTAL CURRENT ASSETS |
552,083 |
514,989 |
|||
| PROPERTY, PLANT AND EQUIPMENT |
|||||
| Land and structures |
273,839 |
251,836 |
|||
| Revenue equipment |
699,844 |
633,455 |
|||
| Service, office, and other equipment |
145,286 |
136,145 |
|||
| Software |
127,010 |
116,112 |
|||
| Leasehold improvements |
25,419 |
24,377 |
|||
| 1,271,398 |
1,161,925 |
||||
| Less allowances for depreciation and amortization |
788,351 |
752,075 |
|||
| 483,047 |
409,850 |
||||
| GOODWILL |
96,465 |
77,078 |
|||
| INTANGIBLE ASSETS, net |
76,787 |
72,809 |
|||
| OTHER ASSETS |
54,527 |
52,896 |
|||
| $ |
1,262,909 |
$ |
1,127,622 |
||
| LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||
| CURRENT LIABILITIES |
|||||
| Accounts payable |
$ |
130,869 |
$ |
120,325 |
|
| Income taxes payable |
91 |
527 |
|||
| Accrued expenses |
188,727 |
194,674 |
|||
| Current portion of long-term debt |
44,910 |
25,256 |
|||
| TOTAL CURRENT LIABILITIES |
364,597 |
340,782 |
|||
| LONG-TERM DEBT, less current portion |
167,599 |
102,474 |
|||
| PENSION AND POSTRETIREMENT LIABILITIES |
51,241 |
42,418 |
|||
| OTHER LIABILITIES |
12,689 |
16,667 |
|||
| DEFERRED INCOME TAXES |
78,055 |
64,398 |
|||
| STOCKHOLDERS' EQUITY |
|||||
| Common stock, $0.01 par value, authorized 70,000,000 shares; issued 2015: 27,938,319 shares; 2014: 27,722,010 shares |
279 |
277 |
|||
| Additional paid-in capital |
309,653 |
303,045 |
|||
| Retained earnings |
376,827 |
338,810 |
|||
| Treasury stock, at cost, 2015: 2,080,187 shares; 2014: 1,677,932 shares |
(70,535) |
(57,770) |
|||
| Accumulated other comprehensive loss |
(27,496) |
(23,479) |
|||
| TOTAL STOCKHOLDERS' EQUITY |
588,728 |
560,883 |
|||
| $ |
1,262,909 |
$ |
1,127,622 |
||
| Note: The balance sheet at December 31, 2014 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 |
|||||
| Year Ended December 31 |
|||||
| 2015 |
2014 |
||||
| (Unaudited) |
|||||
| ($ thousands) |
|||||
| OPERATING ACTIVITIES |
|||||
| Net income |
$ |
44,854 |
$ |
46,177 |
|
| Adjustments to reconcile net income to net cash |
|||||
| Depreciation and amortization |
89,040 |
81,870 |
|||
| Amortization of intangibles |
4,002 |
4,352 |
|||
| Pension settlement expense |
3,202 |
6,595 |
|||
| Share-based compensation expense |
8,029 |
6,998 |
|||
| Provision for losses on accounts receivable |
998 |
1,942 |
|||
| Deferred income tax provision |
16,435 |
4,692 |
|||
| Gain on sale of property and equipment |
(2,225) |
(1,461) |
|||
| Changes in operating assets and liabilities: |
|||||
| Receivables |
4,242 |
(26,892) |
|||
| Prepaid expenses |
362 |
(1,888) |
|||
| Other assets |
1,090 |
889 |
|||
| Income taxes |
(8,918) |
(11,972) |
|||
| Accounts payable, accrued expenses, and other liabilities |
(15,092) |
32,464 |
|||
| NET CASH PROVIDED BY OPERATING ACTIVITIES |
146,019 |
143,766 |
|||
| INVESTING ACTIVITIES |
|||||
| Purchases of property, plant and equipment, net of financings |
(78,425) |
(35,483) |
|||
| Proceeds from sale of property and equipment |
6,639 |
4,928 |
|||
| Purchases of short-term investments |
(61,363) |
(45,831) |
|||
| Proceeds from sale of short-term investments |
45,831 |
35,853 |
|||
| Business acquisitions, net of cash acquired |
(29,813) |
(2,647) |
|||
| Capitalization of internally developed software |
(8,512) |
(8,418) |
|||
| NET CASH USED IN INVESTING ACTIVITIES |
(125,643) |
(51,598) |
|||
| FINANCING ACTIVITIES |
|||||
| Borrowings under credit facilities |
70,000 |
– |
|||
| Borrowings under accounts receivable securitization program |
35,000 |
– |
|||
| Payments on long-term debt |
(100,813) |
(40,440) |
|||
| Net change in book overdrafts |
3,843 |
2,486 |
|||
| Net change in restricted cash |
2 |
516 |
|||
| Deferred financing costs |
(875) |
(76) |
|||
| Payment of common stock dividends |
(6,837) |
(4,102) |
|||
| Purchases of treasury stock |
(12,765) |
– |
|||
| Proceeds from the exercise of stock options |
– |
1,136 |
|||
| NET CASH USED IN FINANCING ACTIVITIES |
(12,445) |
(40,480) |
|||
| NET INCREASE IN CASH AND CASH EQUIVALENTS |
7,931 |
51,688 |
|||
| Cash and cash equivalents at beginning of period |
157,042 |
105,354 |
|||
| CASH AND CASH EQUIVALENTS AT END OF PERIOD |
$ |
164,973 |
$ |
157,042 |
|
| NONCASH INVESTING ACTIVITIES |
|||||
| Equipment financed |
$ |
80,592 |
$ |
55,325 |
|
| Accruals for equipment received |
$ |
748 |
$ |
928 |
|
| ARCBEST CORPORATION RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES |
||||||||||||||||||
| Three Months Ended |
Year Ended |
|||||||||||||||||
| December 31 |
December 31 |
|||||||||||||||||
| 2015 |
2014 |
2015 |
2014 |
|||||||||||||||
| (Unaudited) |
||||||||||||||||||
| ($ thousands) |
||||||||||||||||||
| FREIGHT TRANSPORTATION (ABF FREIGHT) |
||||||||||||||||||
| Operating Income ($) Operating Ratio (% of revenues) |
|
|||||||||||||||||
| Amounts on a GAAP basis |
$ |
7,725 |
98.3% |
$ |
14,704 |
97.0% |
$ |
62,436 |
96.7% |
$ |
50,093 |
97.4% |
||||||
| Pension settlement expense |
544 |
(0.1)% |
1,085 |
(0.2)% |
2,404 |
(0.1)% |
5,309 |
(0.3)% |
||||||||||
| Non-GAAP amounts |
$ |
8,269 |
98.2% |
$ |
15,789 |
96.8% |
$ |
64,840 |
96.6% |
$ |
55,402 |
97.1% |
||||||
| Three Months Ended |
Year Ended |
|||||||||||||||||
| December 31 |
December 31 |
|||||||||||||||||
| 2015 |
2014 |
2015 |
2014 |
|||||||||||||||
| (Unaudited) |
||||||||||||||||||
| ($ thousands, except per share data) |
||||||||||||||||||
| ARCBEST CORPORATION – CONSOLIDATED |
||||||||||||||||||
| Operating Income |
||||||||||||||||||
| Amounts on a GAAP basis |
$ |
7,312 |
$ |
18,049 |
$ |
75,496 |
$ |
69,239 |
||||||||||
| Transaction costs, pre-tax(1) |
1,379 |
– |
1,408 |
– |
||||||||||||||
| Third-party casualty expense at FleetNet, pre-tax(3) |
847 |
– |
932 |
– |
||||||||||||||
| Pension settlement expense, pre-tax |
724 |
1,190 |
3,202 |
6,595 |
||||||||||||||
| Non-GAAP amounts |
$ |
10,262 |
$ |
19,239 |
$ |
81,038 |
$ |
75,834 |
||||||||||
| Net Income |
||||||||||||||||||
| Amounts on a GAAP basis |
$ |
4,989 |
$ |
14,543 |
$ |
44,854 |
$ |
46,177 |
||||||||||
| Life insurance proceeds and changes in cash surrender value |
(401) |
(2,462) |
(316) |
(3,799) |
||||||||||||||
| Transaction costs, after-tax(1) |
838 |
– |
856 |
– |
||||||||||||||
| Tax benefits (credits)(2) |
(847) |
(861) |
22 |
(696) |
||||||||||||||
| Third-party casualty expense at FleetNet, after-tax(3) |
515 |
– |
566 |
– |
||||||||||||||
| Pension settlement expense, after-tax |
443 |
727 |
1,956 |
4,030 |
||||||||||||||
| Non-GAAP amounts |
$ |
5,537 |
$ |
11,947 |
$ |
47,938 |
$ |
45,712 |
||||||||||
| Diluted Earnings Per Share |
||||||||||||||||||
| Amounts on a GAAP basis |
$ |
0.19 |
$ |
0.53 |
$ |
1.67 |
$ |
1.69 |
||||||||||
| Life insurance proceeds and changes in cash surrender value |
(0.02) |
(0.09) |
(0.01) |
(0.15) |
||||||||||||||
| Transaction costs, after-tax(1) |
0.03 |
– |
0.03 |
– |
||||||||||||||
| Tax benefits (credits)(2) |
(0.03) |
(0.03) |
– |
(0.03) |
||||||||||||||
| Third-party casualty expense at FleetNet, after-tax(3) |
0.02 |
– |
0.02 |
– |
||||||||||||||
| Pension settlement expense, after-tax |
0.02 |
0.03 |
0.07 |
0.16 |
||||||||||||||
| Non-GAAP amounts |
$ |
0.21 |
$ |
0.44 |
$ |
1.78 |
$ |
1.67 |
||||||||||
| (1) |
Transaction costs for the three months ended December 31, 2015 are associated with the December 1, 2015 acquisition of Bear Transportation Services, L.P. ("Bear"). Transaction costs for the three months and year ended December 31, 2015 are associated with the Bear acquisition and the January 2, 2015 acquisition of Smart Lines Transportation Group, LLC. |
| (2) |
Tax credits for the three months ended December 31, 2015 and 2014 include the amount of the alternative fuel tax credit related to the first nine months of each year which was recorded in the fourth quarter due to the December reinstatement of the alternative fuel tax credit to January 1. Tax benefits (credits) also include a net decrease in deferred tax asset valuation allowances for the year ended December 31, 2014 and net increases in deferred tax asset valuation allowances for the other periods presented. |
| (3) |
Unfavorable third-party casualty claim associated with a bankrupt FleetNet customer. |
| ARCBEST CORPORATION RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES |
|||||||||||||
| Three Months Ended |
Year Ended December 31 |
||||||||||||
| Adjusted Earnings Before Interest, Taxes, Depreciation |
2015 |
2014 |
2015 |
2014 |
|||||||||
| (Unaudited) |
|||||||||||||
| ($ thousands) |
|||||||||||||
| ARCBEST CORPORATION – CONSOLIDATED |
|||||||||||||
| Net income |
$ |
4,989 |
$ |
14,543 |
$ |
44,854 |
$ |
46,177 |
|||||
| Interest and other related financing costs |
1,217 |
822 |
4,400 |
3,190 |
|||||||||
| Income tax provision |
1,878 |
5,097 |
27,880 |
24,435 |
|||||||||
| Depreciation and amortization |
24,821 |
22,367 |
93,042 |
86,222 |
|||||||||
| Amortization of share-based compensation |
1,686 |
1,636 |
8,029 |
6,998 |
|||||||||
| Amortization of actuarial losses of benefit plans and pension settlement expense(1) |
1,919 |
1,927 |
7,432 |
9,300 |
|||||||||
| $ |
36,510 |
$ |
46,392 |
$ |
185,637 |
$ |
176,322 |
||||||
| (1) |
Consolidated pension settlement expense totaled $0.7 million (pre-tax) and $1.2 million (pre-tax) for the three months ended December 31, 2015 and 2014, respectively, and $3.2 million (pre-tax) and $6.6 million (pre-tax) for the year ended December 31, 2015 and 2014, respectively. |
| Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) |
Three Months Ended |
Three Months Ended |
|||||||||||
| (Unaudited) |
|||||||||||||
| ($ thousands) |
|||||||||||||
| ASSET-LIGHT LOGISTICS |
Operating Income |
Depreciation |
EBITDA |
Operating |
Depreciation and |
EBITDA |
|||||||
| Premium Logistics (Panther)(2) |
$ |
2,032 |
$ |
2,801 |
$ |
4,833 |
$ |
3,801 |
$ |
2,897 |
$ |
6,698 |
|
| Transportation Management (ABF Logistics) |
1,486 |
349 |
1,835 |
1,386 |
282 |
1,668 |
|||||||
| Emergency & Preventative Maintenance (FleetNet)(3) |
(189) |
281 |
92 |
282 |
284 |
566 |
|||||||
| Household Goods Moving Services (ABF Moving) |
173 |
211 |
384 |
88 |
340 |
428 |
|||||||
| Total asset-light logistics |
$ |
3,502 |
$ |
3,642 |
$ |
7,144 |
$ |
5,557 |
$ |
3,803 |
$ |
9,360 |
|
| Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) |
Year Ended |
Year Ended |
|||||||||||
| (Unaudited) |
|||||||||||||
| ($ thousands) |
|||||||||||||
| ASSET-LIGHT LOGISTICS |
Operating Income |
Depreciation |
EBITDA |
Operating |
Depreciation and |
EBITDA |
|||||||
| Premium Logistics (Panther)(2) |
$ |
10,798 |
$ |
11,436 |
$ |
22,234 |
$ |
15,640 |
$ |
11,362 |
$ |
27,002 |
|
| Transportation Management (ABF Logistics) |
5,861 |
1,138 |
6,999 |
3,835 |
1,006 |
4,841 |
|||||||
| Emergency & Preventative Maintenance (FleetNet)(3) |
2,954 |
1,119 |
4,073 |
3,122 |
961 |
4,083 |
|||||||
| Household Goods Moving Services (ABF Moving) |
4,836 |
1,186 |
6,022 |
3,179 |
1,384 |
4,563 |
|||||||
| Total asset-light logistics |
$ |
24,449 |
$ |
14,879 |
$ |
39,328 |
$ |
25,776 |
$ |
14,713 |
$ |
40,489 |
|
| (2) |
Depreciation and amortization consists primarily of amortization of intangibles, including customer relationships and software associated with the June 15, 2012 acquisition of Panther. |
| (3) |
For the three months and year ended December 31, 2015, FleetNet's operating income was impacted by a $0.9 million unfavorable third-party casualty claim associated with a bankrupt FleetNet customer. |
| Non-GAAP Financial Measures. ArcBest Corporation ("ArcBest") reports its financial results in accordance with generally accepted accounting principles ("GAAP"). However, management believes that certain non-GAAP performance measures and ratios utilized for internal analysis provide financial statement users meaningful comparisons between current and prior period results, as well as important information regarding performance trends. Accordingly, using these measures improves comparability in analyzing ArcBest's performance because it removes the impact of items from operating results that, in management's opinion, do not reflect ArcBest's core operating performance. Certain information discussed in the scheduled conference call could be considered non-GAAP measures. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, ArcBest's reported results. Management believes EBITDA and Adjusted EBITDA to be relevant and useful information as EBITDA is a standard measure commonly reported and widely used by analysts, investors and others to measure financial performance and ability to service debt obligations. However, these financial measures should not be construed as better measurements than operating income, operating cash flow, net income or earnings per share, as defined by GAAP. Other companies may calculate EBITDA differently and, therefore, ArcBest's EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures of other companies. |
|
| ARCBEST CORPORATION FINANCIAL STATEMENT OPERATING SEGMENT DATA AND OPERATING RATIOS |
|||||||||||||||
| Three Months Ended December 31 |
Year Ended December 31 |
||||||||||||||
| 2015 |
2014 |
2015 |
2014 |
||||||||||||
| (Unaudited) ($ thousands) |
|||||||||||||||
| REVENUES |
|||||||||||||||
| Freight Transportation (ABF Freight) |
$ |
461,526 |
$ |
485,911 |
$ |
1,918,450 |
$ |
1,930,990 |
|||||||
| Premium Logistics (Panther) |
71,222 |
80,234 |
300,368 |
316,668 |
|||||||||||
| Transportation Management (ABF Logistics) |
56,468 |
46,750 |
203,529 |
152,632 |
|||||||||||
| Emergency & Preventative Maintenance (FleetNet) |
45,267 |
38,458 |
174,952 |
158,581 |
|||||||||||
| Household Goods Moving Services (ABF Moving) |
25,382 |
21,685 |
119,252 |
94,628 |
|||||||||||
| Total asset-light logistics |
198,339 |
187,127 |
798,101 |
722,509 |
|||||||||||
| Other and eliminations |
(11,731) |
(8,190) |
(49,646) |
(40,806) |
|||||||||||
| Total consolidated revenues |
$ |
648,134 |
$ |
664,848 |
$ |
2,666,905 |
$ |
2,612,693 |
|||||||
| OPERATING EXPENSES |
|||||||||||||||
| Freight Transportation (ABF Freight) |
|||||||||||||||
| Salaries, wages, and benefits |
$ |
289,482 |
62.7% |
$ |
285,824 |
58.8% |
$ |
1,174,357 |
61.2% |
$ |
1,121,177 |
58.1% |
|||
| Fuel, supplies, and expenses |
70,967 |
15.4 |
85,377 |
17.6 |
307,348 |
16.0 |
360,850 |
18.7 |
|||||||
| Operating taxes and licenses |
12,230 |
2.6 |
12,430 |
2.6 |
48,992 |
2.6 |
46,955 |
2.4 |
|||||||
| Insurance |
8,507 |
1.8 |
7,101 |
1.5 |
28,847 |
1.5 |
24,960 |
1.3 |
|||||||
| Communications and utilities |
4,570 |
1.0 |
3,657 |
0.8 |
16,129 |
0.8 |
15,398 |
0.8 |
|||||||
| Depreciation and amortization |
20,238 |
4.4 |
17,828 |
3.7 |
74,765 |
3.9 |
68,752 |
3.6 |
|||||||
| Rents and purchased transportation |
45,929 |
10.0 |
56,488 |
11.6 |
197,073 |
10.3 |
229,443 |
11.9 |
|||||||
| Gain on sale of property and equipment |
(332) |
(0.1) |
(895) |
(0.2) |
(1,734) |
(0.1) |
(1,471) |
(0.1) |
|||||||
| Pension settlement expense(1) |
544 |
0.1 |
1,085 |
0.2 |
2,404 |
0.1 |
5,309 |
0.3 |
|||||||
| Other |
1,666 |
0.4 |
2,312 |
0.4 |
7,833 |
0.4 |
9,524 |
0.4 |
|||||||
| 453,801 |
98.3% |
471,207 |
97.0% |
1,856,014 |
96.7% |
1,880,897 |
97.4% |
||||||||
| Premium Logistics (Panther) |
|||||||||||||||
| Purchased transportation |
52,425 |
73.6% |
58,950 |
73.5% |
220,994 |
73.6% |
235,006 |
74.2% |
|||||||
| Depreciation and amortization(2) |
2,801 |
3.9 |
2,897 |
3.6 |
11,436 |
3.8 |
11,362 |
3.6 |
|||||||
| Salaries, benefits, insurance, and other |
13,964 |
19.6 |
14,586 |
18.2 |
57,140 |
19.0 |
54,660 |
17.3 |
|||||||
| 69,190 |
97.1% |
76,433 |
95.3% |
289,570 |
96.4% |
301,028 |
95.1% |
||||||||
| Transportation Management (ABF Logistics) |
54,982 |
45,364 |
197,668 |
148,797 |
|||||||||||
| Emergency & Preventative Maintenance (FleetNet) |
45,456 |
38,176 |
171,998 |
155,459 |
|||||||||||
| Household Goods Moving Services (ABF Moving) |
25,209 |
21,597 |
114,416 |
91,449 |
|||||||||||
| Total asset-light logistics(1) |
194,837 |
181,570 |
773,652 |
696,733 |
|||||||||||
| Other and eliminations(1) |
(7,816) |
(5,978) |
(38,257) |
(34,176) |
|||||||||||
| Total consolidated operating expenses(1) |
$ |
640,822 |
$ |
646,799 |
$ |
2,591,409 |
$ |
2,543,454 |
|||||||
| (1) |
Pension settlement expense totaled $0.7 million (pre-tax) and $1.2 million (pre-tax) on a consolidated basis for the three months ended December 31, 2015 and 2014, respectively, and $3.2 million (pre-tax) and $6.6 million (pre-tax) for the year ended December 31, 2015 and 2014, respectively. For the three months ended December 31, 2015 and 2014, pre-tax pension settlement expense of $0.5 million and $1.1 million, respectively, was reported by ABF Freight; $0.2 million and $0.1 million, respectively, was reported in Other and eliminations; and less than $0.1 million was reported by the asset-light logistics segments. For the year ended December 31, 2015 and 2014, pre-tax pension settlement expense of $2.4 million and $5.3 million, respectively, was reported by ABF Freight; $0.7 million and $1.1 million, respectively, was reported in Other and eliminations; and $0.1 million and $0.2 million , respectively, was reported by the asset-light logistics segments. |
| (2) |
Depreciation and amortization consists primarily of amortization of intangibles, including customer relationships and software associated with the June 15, 2012 acquisition of Panther. |
| ARCBEST CORPORATION FINANCIAL STATEMENT OPERATING SEGMENT DATA AND OPERATING RATIOS – Continued |
||||||||||||||
| Three Months Ended December 31 |
Year Ended December 31 |
|||||||||||||
| 2015 |
2014 |
2015 |
2014 |
|||||||||||
| (Unaudited) ($ thousands) |
||||||||||||||
| OPERATING INCOME |
||||||||||||||
| Freight Transportation (ABF Freight)(1) |
$ |
7,725 |
$ |
14,704 |
$ |
62,436 |
$ |
50,093 |
||||||
| Premium Logistics (Panther) |
2,032 |
3,801 |
10,798 |
15,640 |
||||||||||
| Transportation Management (ABF Logistics) |
1,486 |
1,386 |
5,861 |
3,835 |
||||||||||
| Emergency & Preventative Maintenance (FleetNet)(2) |
(189) |
282 |
2,954 |
3,122 |
||||||||||
| Household Goods Moving Services (ABF Moving) |
173 |
88 |
4,836 |
3,179 |
||||||||||
| Total asset-light logistics |
3,502 |
5,557 |
24,449 |
25,776 |
||||||||||
| Other and eliminations(3) |
(3,915) |
(2,212) |
(11,389) |
(6,630) |
||||||||||
| Total consolidated operating income |
$ |
7,312 |
$ |
18,049 |
$ |
75,496 |
$ |
69,239 |
||||||
| (1) |
ABF Freight's operating income for all periods presented was impacted by pension settlement expense. (See reconciliation of GAAP operating income to non-GAAP operating income in the Freight Transportation table previously presented.) |
| (2) |
For the three months and year ended December 31, 2015, FleetNet's operating income was impacted by a $0.9 million unfavorable third-party casualty claim associated with a bankrupt FleetNet customer. |
| (3) |
For the three months and year ended December 31, 2015, "Other" corporate costs include acquisition transaction costs and additional investments in enterprise solutions to provide an improved platform for revenue growth and for offering ArcBest services across multiple operating segments. |
| ARCBEST CORPORATION OPERATING STATISTICS |
|||||||||||
| Three Months Ended |
Year Ended |
||||||||||
| December 31 |
December 31 |
||||||||||
| 2015 |
2014 |
% Change |
2015 |
2014 |
% Change |
||||||
| (Unaudited) |
|||||||||||
| Freight Transportation (ABF Freight) |
|||||||||||
| Workdays |
61.5 |
61.0 |
251.5 |
251.5 |
|||||||
| Billed Revenue(1) / CWT |
$ |
29.02 |
$ |
29.34 |
(1.1)% |
$ |
28.96 |
$ |
28.74 |
0.8% |
|
| Billed Revenue(1) / Shipment |
$ |
367.69 |
385.02 |
(4.5)% |
376.05 |
387.60 |
(3.0)% |
||||
| Shipments |
1,246,876 |
1,255,272 |
(0.7)% |
5,098,322 |
4,980,365 |
2.4% |
|||||
| Shipments / Day |
20,274 |
20,578 |
(1.5)% |
20,272 |
19,803 |
2.4% |
|||||
| Tonnage (Tons) |
789,960 |
823,675 |
(4.1)% |
3,309,573 |
3,358,910 |
(1.5)% |
|||||
| Tons / Day |
12,845 |
13,503 |
(4.9)% |
13,159 |
13,356 |
(1.5)% |
|||||
| (1) |
Revenue for undelivered freight is deferred for financial statement purposes in accordance with ABF Freight's 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. Billed revenue has been adjusted to exclude intercompany revenue that is not related to freight transportation services. |
SOURCE ArcBest Corporation
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