ArcBest Corporation Announces Improved Fourth Quarter 2014 Results And Full Year 2014 Results
- Fourth quarter 2014 net income increased 41 percent to $14.5 million, or $0.53 per share. Excluding certain identified items, fourth quarter 2014 net income increased 71 percent.
- Solid fourth quarter business growth at ABF Freight(SM) resulted in an 11 percent increase in revenue and improved operating margins.
- Fourth quarter revenue at ArcBest's emerging businesses increased by 25 percent from the previous year and EBITDA increased by 14 percent.
- Full year 2014 revenue at ArcBest Corporation increased 14 percent to $2.6 billion with 27 percent of the total revenue generated by the emerging businesses.
- Full year 2014 net income was $46.2 million, nearly three times full year 2013 net income of $15.8 million.
FORT SMITH, Ark., Feb. 4, 2015 /PRNewswire/ -- ArcBest Corporation (Nasdaq: ARCB) today reported improved fourth quarter 2014 results reflecting improvements at ABF Freight and continued strong revenue growth at its emerging businesses – ABF LogisticsSM, Panther Premium LogisticsSM, FleetNet America® and ABF MovingSM.
Fourth Quarter 2014 Results
ArcBest's revenue was $664.8 million compared to revenue of $578.5 million in the fourth quarter of 2013, an increase of 15 percent. Net income increased 41 percent to $14.5 million, or $0.53 per share compared to fourth quarter 2013 net income of $10.3 million, or $0.38 per 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 2014 net income increased 71 percent compared to fourth quarter 2013 net income of $8.4 million, or $0.31 per share.
ABF Freight's revenue was $485.9 million, an 11 percent increase over fourth quarter 2013 revenue of $436.7 million. Operating income increased to $14.7 million from $9.9 million in fourth quarter 2013. ABF Freight's operating ratio was 97.0 percent versus 97.7 percent in 2013. Excluding adjustments for certain other items in the attached reconciliation table, operating income increased to $15.8 million from $7.7 million in fourth quarter 2013, and ABF Freight's fourth quarter 2014 operating ratio was 96.8 percent versus 98.2 percent in the year-ago period.
Revenue for ArcBest's emerging, non-asset-based businesses increased 25 percent over the same period of 2013. Earnings before interest, taxes, depreciation and amortization ("EBITDA") at the non-asset-based businesses increased 14 percent to $9.4 million compared to EBITDA of $8.2 million in fourth quarter 2013. The percentage of year-over-year EBITDA improvement is below that of the first three quarters of 2014. This is related to personnel and IT investments made to enhance continued growth in these businesses and due to a particularly strong fourth quarter result last year at Panther.
Full Year 2014 Results
"We made significant progress this year getting ABF Freight on a firmer path toward sustained, historical profitability and communicating with our customers about the full array of transportation and logistics solutions we offer through all of the ArcBest companies," said ArcBest President and CEO Judy R. McReynolds. "Changing our company name, embracing "The Skill & The Will" positioning, and integrating customer offerings at ABF Freight, ABF Logistics and Panther through our Enterprise Customer Solutions group are all examples of how we serve customers better today than ever before."
ArcBest's revenue totaled $2.6 billion, an increase of 14 percent compared to $2.3 billion in 2013. Net income was $46.2 million, or $1.69 per share, approximately three times net income of $15.8 million, or $0.59 per share in 2013. Excluding adjustments for certain other items in the attached reconciliation table, ArcBest had 2014 net income of $49.5 million, or $1.82 per share compared to net income of $14.7 million, or $0.55 per share in 2013.
ABF Freight's revenue was $1.9 billion, a 10 percent increase over $1.8 billion in 2013. As expected, ABF Freight's profitability improved as a result of its November 2013 union labor contract that reduced expenses and allowed ABF Freight to be more cost competitive with its LTL industry peers. As outlined in the attached reconciliation table, ABF Freight's 2014 adjusted operating income increased to $55.4 million versus $11.9 million in 2013, and its adjusted operating ratio improved by over two percentage points to 97.1 percent.
On a combined basis, ArcBest's emerging businesses had strong revenue growth and margin improvement while positively contributing to ArcBest's total results. These businesses have grown to be 27 percent of ArcBest's revenue, nearly four times the percentage of total corporate revenue just five years ago. Combined EBITDA for the emerging businesses in 2014 increased 45 percent to $40.5 million.
Capital Expenditures
In 2014, total net capital expenditures equaled $86 million, including approximately $65 million of revenue equipment for ABF Freight and Panther. Depreciation and amortization costs on fixed assets equaled $82 million.
For 2015, total net capital expenditures are estimated to be approximately $200 million. This includes revenue equipment purchases of $110 million at ABF Freight and Panther. Expected real estate expenditures, totaling approximately $55 million, are for previously disclosed growth initiatives at ArcBest and its operating subsidiaries. These include freight service center construction, call center facilities and needed office buildings, a portion of which replaces leased space. The remainder of expected capital expenditures includes the costs of other terminal and handling equipment at ABF Freight and technology investments across the corporation. ArcBest's depreciation and amortization costs on fixed assets in 2015 are estimated to be in a range of $95 million to $100 million.
The majority of the revenue equipment purchases are for road and city tractors and trailers at ABF Freight needed to replace both existing equipment and local rentals. In order to more rapidly replace used equipment and to reduce maintenance costs, ABF Freight is increasing the number of tractor and trailer replacements in 2015. In addition, the majority of road tractors ABF Freight is purchasing this year will be equipped with automated manual transmissions. In conjunction with the transportation industry's move toward this technology, ABF Freight expects that these tractors will contribute to better fuel economy, reduced maintenance costs and an improved ability to attract new employees to what is already one of the best driver jobs in the industry.
Closing Comments
"In addition to seeing improvements at ABF Freight, we are truly excited about the growth opportunities before us in 2015 in many areas, including truckload brokerage, expansion of premium logistics offerings and ongoing collaboration across all of the ArcBest companies," said McReynolds. "This past year was one of marked change for our company, and we now have many of the strategies and tools in place necessary to unlock the innovation and market share growth required for the next level of success at ArcBest. Our improved operational and financial performance, along with ArcBest's 2014 stock appreciation and previously announced dividend increase, benefit our employees, our customers and our shareholders."
Conference Call
ArcBest Corporation will host a conference call with company executives to discuss the 2014 fourth quarter and full year results. The call will be today, Wednesday, February 4, at 9:30 a.m. ET (8:30 a.m. CT). Interested parties are invited to listen by calling (800) 896-0105. Following the call, a recorded playback will be available through the end of the day on March 7, 2015. To listen to the playback, dial (800) 633-8284 or (402) 977-9140 (for international callers). The conference call ID for the playback is 21758654. The conference call and playback can also be accessed, through March 7, 2015, on ArcBest's website at arcb.com.
About ArcBest
ArcBest Corporationsm (Nasdaq: ARCB) solves complex logistics and transportation challenges. Our companies and brands – ABF Freightsm, ABF Logisticssm, Panther Premium Logisticssm, 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 Corporationsm. The Skill & The Willsm.
Forward-Looking Statements
Certain statements and information in this press release concerning results for the three and twelve months ended December 31, 2014 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: 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; 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; 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; disruptions or failures of services essential to the operation of our business or the use of information technology platforms in our business; 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; governmental regulations and policies, including environmental laws and 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; the costs of continuing investments in technology, a failure of our information systems and the impact of cyber incidents; 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.
Financial Data and Operating Statistics
The following tables show financial data and operating statistics on ArcBest Corporationsm and its subsidiary companies.
| Investor Relations Contact: David Humphrey |
Media Contact: Kathy Fieweger |
| Title: Vice President – Investor Relations |
Title: Chief Marketing Officer |
| Phone: 479-785-6200 |
Phone: 479-719-4358 |
| Email: [email protected] |
Email: [email protected] |
| ARCBEST CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||||||||||||||||||||||||||
| Three Months Ended December 31 |
Year Ended December 31 |
|||||||||||||||||||||||||||||||||||||
| 2014 |
2013 |
2014 |
2013 |
|||||||||||||||||||||||||||||||||||
| (Unaudited) |
||||||||||||||||||||||||||||||||||||||
| ($ thousands, except share and per share data) |
||||||||||||||||||||||||||||||||||||||
| REVENUES |
$ |
664,848 |
$ |
578,549 |
$ |
2,612,693 |
$ |
2,299,549 |
||||||||||||||||||||||||||||||
| OPERATING EXPENSES |
646,799 |
565,047 |
2,543,454 |
2,280,479 |
||||||||||||||||||||||||||||||||||
| OPERATING INCOME |
18,049 |
13,502 |
69,239 |
19,070 |
||||||||||||||||||||||||||||||||||
| OTHER INCOME (COSTS) |
||||||||||||||||||||||||||||||||||||||
| Interest and dividend income |
252 |
182 |
851 |
681 |
||||||||||||||||||||||||||||||||||
| Interest and other related financing costs |
(822) |
(903) |
(3,190) |
(4,183) |
||||||||||||||||||||||||||||||||||
| Other, net |
2,161 |
1,114 |
3,712 |
3,893 |
||||||||||||||||||||||||||||||||||
| 1,591 |
393 |
1,373 |
391 |
|||||||||||||||||||||||||||||||||||
| INCOME BEFORE INCOME TAXES |
19,640 |
13,895 |
70,612 |
19,461 |
||||||||||||||||||||||||||||||||||
| INCOME TAX PROVISION |
5,097 |
3,549 |
24,435 |
3,650 |
||||||||||||||||||||||||||||||||||
| NET INCOME |
$ |
14,543 |
$ |
10,346 |
$ |
46,177 |
$ |
15,811 |
||||||||||||||||||||||||||||||
| EARNINGS PER COMMON SHARE(1) |
||||||||||||||||||||||||||||||||||||||
| Basic |
$ |
0.53 |
$ |
0.38 |
$ |
1.69 |
$ |
0.59 |
||||||||||||||||||||||||||||||
| Diluted |
$ |
0.53 |
$ |
0.38 |
$ |
1.69 |
$ |
0.59 |
||||||||||||||||||||||||||||||
| AVERAGE COMMON SHARES OUTSTANDING |
||||||||||||||||||||||||||||||||||||||
| Basic |
26,073,256 |
25,785,485 |
25,993,255 |
25,714,205 |
||||||||||||||||||||||||||||||||||
| Diluted |
26,073,256 |
25,793,366 |
25,993,612 |
25,714,205 |
||||||||||||||||||||||||||||||||||
| CASH DIVIDENDS DECLARED |
$ |
0.06 |
$ |
0.03 |
$ |
0.15 |
$ |
0.12 |
||||||||||||||||||||||||||||||
| (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 |
$ |
14,543 |
$ |
10,346 |
$ |
46,177 |
$ |
15,811 |
||||||||||||||||||||||||||||||
| EFFECT OF UNVESTED RESTRICTED |
(703) |
(505) |
(2,300) |
(720) |
||||||||||||||||||||||||||||||||||
| ADJUSTED NET INCOME FOR CALCULATING EARNINGS PER COMMON SHARE |
$ |
13,840 |
$ |
9,841 |
$ |
43,877 |
$ |
15,091 |
||||||||||||||||||||||||||||||
| ARCBEST CORPORATION CONSOLIDATED BALANCE SHEETS |
|||||||||||||||||||||||||||||||||||||
| December 31 2014 |
December 31 2013 |
||||||||||||||||||||||||||||||||||||
| (Unaudited) |
Note |
||||||||||||||||||||||||||||||||||||
| ($ thousands, except share data) |
|||||||||||||||||||||||||||||||||||||
| ASSETS |
|||||||||||||||||||||||||||||||||||||
| CURRENT ASSETS |
|||||||||||||||||||||||||||||||||||||
| Cash and cash equivalents |
$ |
157,042 |
$ |
105,354 |
|||||||||||||||||||||||||||||||||
| Short-term investments |
45,909 |
35,906 |
|||||||||||||||||||||||||||||||||||
| Restricted cash, cash equivalents, and short-term investments |
1,386 |
1,902 |
|||||||||||||||||||||||||||||||||||
| Accounts receivable, less allowances (2014 – $5,731; 2013 – $4,533) |
228,056 |
202,540 |
|||||||||||||||||||||||||||||||||||
| Other accounts receivable, less allowances (2014 – $1,701; 2013 – $1,422) |
6,582 |
7,272 |
|||||||||||||||||||||||||||||||||||
| Prepaid expenses |
20,906 |
19,016 |
|||||||||||||||||||||||||||||||||||
| Deferred income taxes |
40,220 |
37,482 |
|||||||||||||||||||||||||||||||||||
| Prepaid and refundable income taxes |
9,920 |
2,061 |
|||||||||||||||||||||||||||||||||||
| Other |
4,968 |
6,952 |
|||||||||||||||||||||||||||||||||||
| TOTAL CURRENT ASSETS |
514,989 |
418,485 |
|||||||||||||||||||||||||||||||||||
| PROPERTY, PLANT AND EQUIPMENT |
|||||||||||||||||||||||||||||||||||||
| Land and structures |
251,836 |
245,805 |
|||||||||||||||||||||||||||||||||||
| Revenue equipment |
633,455 |
589,902 |
|||||||||||||||||||||||||||||||||||
| Service, office, and other equipment |
136,145 |
124,303 |
|||||||||||||||||||||||||||||||||||
| Software |
116,112 |
110,998 |
|||||||||||||||||||||||||||||||||||
| Leasehold improvements |
24,377 |
23,582 |
|||||||||||||||||||||||||||||||||||
| 1,161,925 |
1,094,590 |
||||||||||||||||||||||||||||||||||||
| Less allowances for depreciation and amortization |
752,075 |
700,193 |
|||||||||||||||||||||||||||||||||||
| 409,850 |
394,397 |
||||||||||||||||||||||||||||||||||||
| GOODWILL |
77,078 |
76,448 |
|||||||||||||||||||||||||||||||||||
| INTANGIBLE ASSETS, net |
72,809 |
75,387 |
|||||||||||||||||||||||||||||||||||
| OTHER ASSETS |
52,896 |
52,609 |
|||||||||||||||||||||||||||||||||||
| $ |
1,127,622 |
$ |
1,017,326 |
||||||||||||||||||||||||||||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||||||||||||||||||||||||||||||||||
| CURRENT LIABILITIES |
|||||||||||||||||||||||||||||||||||||
| Bank overdraft and drafts payable |
$ |
16,095 |
$ |
13,609 |
|||||||||||||||||||||||||||||||||
| Accounts payable |
104,230 |
89,091 |
|||||||||||||||||||||||||||||||||||
| Income taxes payable |
527 |
1,782 |
|||||||||||||||||||||||||||||||||||
| Accrued expenses |
194,674 |
173,622 |
|||||||||||||||||||||||||||||||||||
| Current portion of long-term debt |
25,256 |
31,513 |
|||||||||||||||||||||||||||||||||||
| TOTAL CURRENT LIABILITIES |
340,782 |
309,617 |
|||||||||||||||||||||||||||||||||||
| LONG-TERM DEBT, less current portion |
102,474 |
81,332 |
|||||||||||||||||||||||||||||||||||
| PENSION AND POSTRETIREMENT LIABILITIES |
42,418 |
26,847 |
|||||||||||||||||||||||||||||||||||
| OTHER LIABILITIES |
16,667 |
15,041 |
|||||||||||||||||||||||||||||||||||
| DEFERRED INCOME TAXES |
64,398 |
64,028 |
|||||||||||||||||||||||||||||||||||
| STOCKHOLDERS' EQUITY |
|||||||||||||||||||||||||||||||||||||
| Common stock, $0.01 par value, authorized 70,000,000 shares; issued 2014: 27,722,010 shares; 2013: 27,507,241 shares |
277 |
275 |
|||||||||||||||||||||||||||||||||||
| Additional paid-in capital |
303,045 |
296,133 |
|||||||||||||||||||||||||||||||||||
| Retained earnings |
338,810 |
296,735 |
|||||||||||||||||||||||||||||||||||
| Treasury stock, at cost, 1,677,932 shares |
(57,770) |
(57,770) |
|||||||||||||||||||||||||||||||||||
| Accumulated other comprehensive loss |
(23,479) |
(14,912) |
|||||||||||||||||||||||||||||||||||
| TOTAL STOCKHOLDERS' EQUITY |
560,883 |
520,461 |
|||||||||||||||||||||||||||||||||||
| $ |
1,127,622 |
$ |
1,017,326 |
||||||||||||||||||||||||||||||||||
| Note: The balance sheet at December 31, 2013 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 |
||||||||||||||||||||||||||||||||||||||
| 2014 |
2013 |
|||||||||||||||||||||||||||||||||||||
| (Unaudited) |
||||||||||||||||||||||||||||||||||||||
| ($ thousands) |
||||||||||||||||||||||||||||||||||||||
| OPERATING ACTIVITIES |
||||||||||||||||||||||||||||||||||||||
| Net income |
$ |
46,177 |
$ |
15,811 |
||||||||||||||||||||||||||||||||||
| Adjustments to reconcile net income to net cash |
||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization |
81,870 |
84,215 |
||||||||||||||||||||||||||||||||||||
| Amortization of intangibles |
4,352 |
4,174 |
||||||||||||||||||||||||||||||||||||
| Pension settlement expense |
6,595 |
2,111 |
||||||||||||||||||||||||||||||||||||
| Share-based compensation expense |
6,998 |
5,494 |
||||||||||||||||||||||||||||||||||||
| Provision for losses on accounts receivable |
1,942 |
2,065 |
||||||||||||||||||||||||||||||||||||
| Deferred income tax provision (benefit) |
4,692 |
(10,367) |
||||||||||||||||||||||||||||||||||||
| Gain on sale of property and equipment |
(1,461) |
(153) |
||||||||||||||||||||||||||||||||||||
| Changes in operating assets and liabilities: |
||||||||||||||||||||||||||||||||||||||
| Receivables |
(26,892) |
(24,200) |
||||||||||||||||||||||||||||||||||||
| Prepaid expenses |
(1,888) |
(1,670) |
||||||||||||||||||||||||||||||||||||
| Other assets |
889 |
(1,015) |
||||||||||||||||||||||||||||||||||||
| Income taxes |
(11,972) |
8,468 |
||||||||||||||||||||||||||||||||||||
| Accounts payable, accrued expenses, and other liabilities(1) |
32,464 |
8,571 |
||||||||||||||||||||||||||||||||||||
| NET CASH PROVIDED BY OPERATING ACTIVITIES |
143,766 |
93,504 |
||||||||||||||||||||||||||||||||||||
| INVESTING ACTIVITIES |
||||||||||||||||||||||||||||||||||||||
| Purchases of property, plant and equipment, net of financings |
(35,483) |
(26,369) |
||||||||||||||||||||||||||||||||||||
| Proceeds from sale of property and equipment |
4,928 |
2,194 |
||||||||||||||||||||||||||||||||||||
| Purchases of short-term investments |
(45,831) |
(39,605) |
||||||||||||||||||||||||||||||||||||
| Proceeds from sale of short-term investments |
35,853 |
32,718 |
||||||||||||||||||||||||||||||||||||
| Business acquisition, net of cash acquired |
(2,647) |
(4,146) |
||||||||||||||||||||||||||||||||||||
| Capitalization of internally developed software |
(8,418) |
(7,668) |
||||||||||||||||||||||||||||||||||||
| NET CASH USED IN INVESTING ACTIVITIES |
(51,598) |
(42,876) |
||||||||||||||||||||||||||||||||||||
| FINANCING ACTIVITIES |
||||||||||||||||||||||||||||||||||||||
| Payments on long-term debt |
(40,440) |
(43,176) |
||||||||||||||||||||||||||||||||||||
| Net change in bank overdraft and drafts payable |
2,486 |
(37) |
||||||||||||||||||||||||||||||||||||
| Net change in restricted cash, cash equivalents, and short-term investments |
516 |
7,756 |
||||||||||||||||||||||||||||||||||||
| Deferred financing costs |
(76) |
(71) |
||||||||||||||||||||||||||||||||||||
| Payment of common stock dividends |
(4,102) |
(3,233) |
||||||||||||||||||||||||||||||||||||
| Proceeds from the exercise of stock options |
1,136 |
2,785 |
||||||||||||||||||||||||||||||||||||
| NET CASH USED IN FINANCING ACTIVITIES |
(40,480) |
(35,976) |
||||||||||||||||||||||||||||||||||||
| NET INCREASE IN CASH AND CASH EQUIVALENTS |
51,688 |
14,652 |
||||||||||||||||||||||||||||||||||||
| Cash and cash equivalents at beginning of period |
105,354 |
90,702 |
||||||||||||||||||||||||||||||||||||
| CASH AND CASH EQUIVALENTS AT END OF PERIOD |
$ |
157,042 |
$ |
105,354 |
||||||||||||||||||||||||||||||||||
| NONCASH INVESTING ACTIVITIES |
||||||||||||||||||||||||||||||||||||||
| Accruals for equipment received |
$ |
928 |
$ |
324 |
||||||||||||||||||||||||||||||||||
| Equipment financed |
$ |
55,325 |
$ |
36 |
||||||||||||||||||||||||||||||||||
| (1) |
2013 includes $17.8 million of cash contributions to the Company's nonunion defined benefit pension plan. |
||||||||||||||||||||||||||||||||||||||
| ARCBEST CORPORATION RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES |
|||||||||||||||||||||
| Three Months Ended December 31 |
Year Ended December 31 |
||||||||||||||||||||
| 2014 |
2013 |
2014 |
2013 |
||||||||||||||||||
| (Unaudited) |
|||||||||||||||||||||
| ($ thousands, except per share data) |
|||||||||||||||||||||
| ARCBEST CORPORATION – CONSOLIDATED |
|||||||||||||||||||||
| Net Income |
|||||||||||||||||||||
| Amounts on a GAAP basis |
$ |
14,543 |
$ |
10,346 |
$ |
46,177 |
$ |
15,811 |
|||||||||||||
| Collective bargaining agreement adjustments, after tax(1) |
– |
(1,435) |
– |
– |
|||||||||||||||||
| Tax benefits and credits(2) |
(861) |
(670) |
(696) |
(2,352) |
|||||||||||||||||
| Pension settlement expense, after-tax(3) |
727 |
169 |
4,030 |
1,290 |
|||||||||||||||||
| Non-GAAP amounts |
$ |
14,409 |
$ |
8,410 |
$ |
49,511 |
$ |
14,749 |
|||||||||||||
| Diluted Earnings Per Share |
|||||||||||||||||||||
| Amounts on a GAAP basis |
$ |
0.53 |
$ |
0.38 |
$ |
1.69 |
$ |
0.59 |
|||||||||||||
| Collective bargaining agreement adjustments, after tax(1) |
– |
(0.06) |
– |
– |
|||||||||||||||||
| Tax benefits and credits(2) |
(0.03) |
(0.02) |
(0.03) |
(0.09) |
|||||||||||||||||
| Pension settlement expense, after-tax(3) |
0.03 |
0.01 |
0.16 |
0.05 |
|||||||||||||||||
| Non-GAAP amounts |
$ |
0.53 |
$ |
0.31 |
$ |
1.82 |
$ |
0.55 |
|||||||||||||
| Income Tax Rate Reconciliation |
|||||||||||||||||||||
| Statutory federal income tax rate: |
35.0% |
35.0% |
35.0% |
35.0% |
|||||||||||||||||
| State income taxes, net of federal benefit |
2.4 |
3.7 |
3.1 |
3.4 |
|||||||||||||||||
| Federal income tax effects of: |
|||||||||||||||||||||
| Alternative fuel tax credit |
(5.8) |
(1.6) |
(1.6) |
(9.9) |
|||||||||||||||||
| Life insurance proceeds and changes in cash surrender value |
(4.4) |
(2.7) |
(1.9) |
(6.8) |
|||||||||||||||||
| Decrease in valuation allowances |
– |
(4.8) |
(1.0) |
(7.4) |
|||||||||||||||||
| Nondeductible expenses and other |
(1.2) |
(4.1) |
1.0 |
4.5 |
|||||||||||||||||
| Effective tax rate |
26.0% |
25.5% |
34.6% |
18.8% |
|||||||||||||||||
| Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA) |
|||||||||||||||||||||
| Net income |
$ |
14,543 |
$ |
10,346 |
$ |
46,177 |
$ |
15,811 |
|||||||||||||
| Interest and other related financing costs |
822 |
903 |
3,190 |
4,183 |
|||||||||||||||||
| Income tax provision |
5,097 |
3,549 |
24,435 |
3,650 |
|||||||||||||||||
| Depreciation and amortization |
22,367 |
20,820 |
86,222 |
88,389 |
|||||||||||||||||
| Amortization of share-based compensation |
1,636 |
1,915 |
6,998 |
5,494 |
|||||||||||||||||
| Amortization of actuarial losses of benefit plans and pension settlement expense(3) |
1,927 |
1,228 |
9,300 |
10,046 |
|||||||||||||||||
| $ |
46,392 |
$ |
38,761 |
$ |
176,322 |
$ |
127,573 |
||||||||||||||
| (1) |
The ABF Freight collective bargaining agreement, which was implemented November 3, 2013, provided for certain reductions in annual compensated vacation that impacted amounts expensed but not paid in periods prior to fourth quarter 2013. |
||||||||||||||||||||
| (2) |
Tax benefits are related to decreases in deferred tax asset valuation allowances. The three-month period ended December 31, 2014 also includes the amount of the alternative fuel tax credit related to the first nine months of 2014 which was recorded in fourth quarter 2014 due to the December 2014 retroactive reinstatement of the alternative fuel tax credit to January 1, 2014. The year ended December 31, 2013 also includes the amount of the 2012 alternative fuel tax credit which was recorded in first quarter 2013 due to the January 2013 retroactive reinstatement of the alternative fuel tax credit to January 1, 2012. |
||||||||||||||||||||
| (3) |
Pension settlement expense totaled $1.2 million (pre-tax) and $6.6 million (pre-tax) for the three months and year ended December 31, 2014, respectively, and $0.3 million (pre-tax) and $2.1 million (pre-tax) for the three months and year ended December 31, 2013, respectively. |
||||||||||||||||||||
| ARCBEST CORPORATION RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES |
|||||||||||||||||||||||||||||||||||||
| Three Months Ended |
Three Months Ended |
||||||||||||||||||||||||||||||||||||
| (Unaudited) |
|||||||||||||||||||||||||||||||||||||
| ($ thousands) |
|||||||||||||||||||||||||||||||||||||
| NON-ASSET-BASED SEGMENTS |
|||||||||||||||||||||||||||||||||||||
| Operating Income |
Depreciation |
EBITDA |
Operating Income |
Depreciation |
EBITDA |
||||||||||||||||||||||||||||||||
| Premium Logistics (Panther)(1) |
$ |
3,801 |
$ |
2,897 |
$ |
6,698 |
$ |
3,211 |
$ |
2,707 |
$ |
5,918 |
|||||||||||||||||||||||||
| Emergency & Preventative Maintenance (FleetNet) |
282 |
284 |
566 |
907 |
141 |
1,048 |
|||||||||||||||||||||||||||||||
| Transportation Management (ABF Logistics) |
1,386 |
282 |
1,668 |
1,409 |
191 |
1,600 |
|||||||||||||||||||||||||||||||
| Household Goods Moving Services (ABF Moving) |
88 |
340 |
428 |
(702) |
367 |
(335) |
|||||||||||||||||||||||||||||||
| Total non-asset-based segments |
$ |
5,557 |
$ |
3,803 |
$ |
9,360 |
$ |
4,825 |
$ |
3,406 |
$ |
8,231 |
|||||||||||||||||||||||||
| Year Ended |
Year Ended |
||||||||||||||||||||||||||||||||||||
| (Unaudited) |
|||||||||||||||||||||||||||||||||||||
| ($ thousands) |
|||||||||||||||||||||||||||||||||||||
| NON-ASSET-BASED SEGMENTS |
|||||||||||||||||||||||||||||||||||||
| Operating Income |
Depreciation |
EBITDA |
Operating Income |
Depreciation |
EBITDA |
||||||||||||||||||||||||||||||||
| Premium Logistics (Panther)(1) |
$ |
15,640 |
$ |
11,362 |
$ |
27,002 |
$ |
6,956 |
$ |
10,516 |
$ |
17,472 |
|||||||||||||||||||||||||
| Emergency & Preventative Maintenance (FleetNet) |
3,122 |
961 |
4,083 |
3,274 |
540 |
3,814 |
|||||||||||||||||||||||||||||||
| Transportation Management (ABF Logistics) |
3,835 |
1,006 |
4,841 |
2,973 |
640 |
3,613 |
|||||||||||||||||||||||||||||||
| Household Goods Moving Services (ABF Moving) |
3,179 |
1,384 |
4,563 |
1,850 |
1,247 |
3,097 |
|||||||||||||||||||||||||||||||
| Total non-asset-based segments |
$ |
25,776 |
$ |
14,713 |
$ |
40,489 |
$ |
15,053 |
$ |
12,943 |
$ |
27,996 |
|||||||||||||||||||||||||
| (1) |
Depreciation and amortization consists primarily of amortization of intangibles, including customer relationships and software associated with the June 15, 2012 acquisition of Panther. |
||||||||||||||||||||||||||||||||||||||
| Three Months Ended |
Year Ended |
||||||||||||||||||||||||||||||||||||||
| December 31 |
December 31 |
||||||||||||||||||||||||||||||||||||||
| 2014 |
2013 |
2014 |
2013 |
||||||||||||||||||||||||||||||||||||
| (Unaudited) |
|||||||||||||||||||||||||||||||||||||||
| ($ thousands) |
|||||||||||||||||||||||||||||||||||||||
| FREIGHT TRANSPORTATION (ABF FREIGHT) |
|||||||||||||||||||||||||||||||||||||||
| Operating Income ($) Ratio (%) |
|||||||||||||||||||||||||||||||||||||||
| Amounts on a GAAP basis |
$ |
14,704 |
97.0% |
$ |
9,869 |
97.7% |
$ |
50,093 |
97.4% |
$ |
10,033 |
99.4% |
|||||||||||||||||||||||||||
| Collective bargaining agreement adjustments(2) |
– |
– |
(2,361) |
0.6% |
– |
– |
– |
– |
|||||||||||||||||||||||||||||||
| Pension settlement expense |
1,085 |
(0.2)% |
219 |
(0.1)% |
5,309 |
(0.3)% |
1,831 |
(0.1)% |
|||||||||||||||||||||||||||||||
| Non-GAAP amounts |
$ |
15,789 |
96.8% |
$ |
7,727 |
98.2% |
$ |
55,402 |
97.1% |
$ |
11,864 |
99.3% |
|||||||||||||||||||||||||||
| (2) |
The ABF Freight collective bargaining agreement, which was implemented November 3, 2013, provided for certain reductions in annual compensated vacation that impacted amounts expensed but not paid in periods prior to fourth quarter 2013. |
||||||||||||||||||||||||||||||||||||||
| Non-GAAP Financial Measures. 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. 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 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 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 |
Year Ended |
||||||||||||||||||||||||||||||||
| 2014 |
2013 |
2014 |
2013 |
||||||||||||||||||||||||||||||
| (Unaudited) ($ thousands, except percentages) |
|||||||||||||||||||||||||||||||||
| REVENUES |
|||||||||||||||||||||||||||||||||
| Freight Transportation (ABF Freight) |
$ |
485,911 |
$ |
436,654 |
$ |
1,930,990 |
$ |
1,761,716 |
|||||||||||||||||||||||||
| Premium Logistics (Panther) |
80,234 |
67,316 |
316,668 |
246,849 |
|||||||||||||||||||||||||||||
| Emergency & Preventative Maintenance (FleetNet) |
38,458 |
35,042 |
158,581 |
137,546 |
|||||||||||||||||||||||||||||
| Transportation Management (ABF Logistics) |
46,750 |
30,668 |
152,632 |
105,223 |
|||||||||||||||||||||||||||||
| Household Goods Moving Services (ABF Moving) |
21,685 |
16,811 |
94,628 |
82,169 |
|||||||||||||||||||||||||||||
| Total non-asset-based segments |
187,127 |
149,837 |
722,509 |
571,787 |
|||||||||||||||||||||||||||||
| Other and eliminations |
(8,190) |
(7,942) |
(40,806) |
(33,954) |
|||||||||||||||||||||||||||||
| Total consolidated revenues |
$ |
664,848 |
$ |
578,549 |
$ |
2,612,693 |
$ |
2,299,549 |
|||||||||||||||||||||||||
| OPERATING EXPENSES |
|||||||||||||||||||||||||||||||||
| Freight Transportation (ABF Freight) |
|||||||||||||||||||||||||||||||||
Salaries, wages, and benefits |
$ |
285,824 |
58.8% |
$ |
258,757 |
59.3% |
$ |
1,121,177 |
58.1% |
$ |
1,075,259 |
61.0% |
|||||||||||||||||||||
| Fuel, supplies, and expenses |
85,377 |
17.6 |
81,946 |
18.8 |
360,850 |
18.7 |
332,433 |
18.9 |
|||||||||||||||||||||||||
| Operating taxes and licenses |
12,430 |
2.6 |
11,072 |
2.5 |
46,955 |
2.4 |
43,865 |
2.5 |
|||||||||||||||||||||||||
| Insurance |
7,101 |
1.5 |
4,413 |
1.0 |
24,960 |
1.3 |
21,823 |
1.2 |
|||||||||||||||||||||||||
| Communications and utilities |
3,657 |
0.8 |
3,492 |
0.8 |
15,398 |
0.8 |
15,027 |
0.9 |
|||||||||||||||||||||||||
| Depreciation and amortization |
17,828 |
3.7 |
16,810 |
3.8 |
68,752 |
3.6 |
72,971 |
4.1 |
|||||||||||||||||||||||||
| Rents and purchased transportation |
56,488 |
11.6 |
47,453 |
10.9 |
229,443 |
11.9 |
180,689 |
10.3 |
|||||||||||||||||||||||||
| Gain on sale of property and equipment |
(895) |
(0.2) |
(90) |
– |
(1,471) |
(0.1) |
(576) |
– |
|||||||||||||||||||||||||
| Pension settlement expense(1) |
1,085 |
0.2 |
219 |
0.1 |
5,309 |
0.3 |
1,831 |
0.1 |
|||||||||||||||||||||||||
| Other |
2,312 |
0.4 |
2,713 |
0.5 |
9,524 |
0.4 |
8,361 |
0.4 |
|||||||||||||||||||||||||
| 471,207 |
97.0% |
426,785 |
97.7% |
1,880,897 |
97.4% |
1,751,683 |
99.4% |
||||||||||||||||||||||||||
| Premium Logistics (Panther) |
|||||||||||||||||||||||||||||||||
Purchased transportation |
$ |
58,950 |
73.9% |
$ |
51,072 |
75.9% |
$ |
235,006 |
74.6% |
$ |
188,561 |
76.4% |
|||||||||||||||||||||
| Depreciation and amortization(2) |
2,897 |
3.6 |
2,707 |
4.0 |
11,362 |
3.6 |
10,516 |
4.3 |
|||||||||||||||||||||||||
| Salaries, benefits, insurance, and other |
14,586 |
17.7 |
10,326 |
15.3 |
54,660 |
16.8 |
40,816 |
16.5 |
|||||||||||||||||||||||||
| 76,433 |
95.3% |
64,105 |
95.2% |
301,028 |
95.1% |
239,893 |
97.2% |
||||||||||||||||||||||||||
| Emergency & Preventative Maintenance (FleetNet) |
$ |
38,176 |
$ |
34,135 |
$ |
155,459 |
$ |
134,272 |
|||||||||||||||||||||||||
| Transportation Management (ABF Logistics) |
45,364 |
29,259 |
148,797 |
102,250 |
|||||||||||||||||||||||||||||
| Household Goods Moving Services (ABF Moving) |
21,597 |
17,513 |
91,449 |
80,319 |
|||||||||||||||||||||||||||||
| Total non-asset-based segments(1) |
181,570 |
145,012 |
696,733 |
556,734 |
|||||||||||||||||||||||||||||
| Other and eliminations(1) |
(5,978) |
(6,750) |
(34,176) |
(27,938) |
|||||||||||||||||||||||||||||
| Total consolidated operating expenses and costs(1) |
$ |
646,799 |
$ |
565,047 |
$ |
2,543,454 |
$ |
2,280,479 |
|||||||||||||||||||||||||
| (1) |
Pension settlement expense totaled $1.2 million (pre-tax) and $6.6 million (pre-tax) on a consolidated basis for the three months and year ended December 31, 2014, respectively, and $0.3 million (pre-tax) and $2.1 million (pre-tax) for the three months and year ended December 31, 2013, respectively. Of the total $6.6 million (pre-tax) pension settlement expense for the twelve months ended December 31, 2014, $5.3 million was reported by ABF Freight, $1.1 million was reported in Other and eliminations, and $0.2 million was reported by the non-asset-based segments. Of the total $2.1 million (pre-tax) pension settlement expense for the year ended December 31, 2013, $1.8 million was reported by ABF Freight and $0.3 million was reported in Other and eliminations. |
||||||||||||||||||||||||||||||||
| (2) |
Depreciation and amortization consists primarily of amortization of intangibles, including customer relationships and software associated with the June 15, 2012 acquisition of Panther. |
||||||||||||||||||||||||||||||||
| ARCBEST CORPORATION FINANCIAL STATEMENT OPERATING SEGMENT DATA AND OPERATING RATIOS – Continued |
|||||||||||||||||||||||||||||||||
| Three Months Ended |
Year Ended |
||||||||||||||||||||||||||||||||
| 2014 |
2013 |
2014 |
2013 |
||||||||||||||||||||||||||||||
| (Unaudited) ($ thousands) |
|||||||||||||||||||||||||||||||||
| OPERATING INCOME |
|||||||||||||||||||||||||||||||||
| Freight Transportation (ABF Freight) |
$ |
14,704 |
$ |
9,869 |
$ |
50,093 |
$ |
10,033 |
|||||||||||||||||||||||||
| Premium Logistics (Panther) |
3,801 |
3,211 |
15,640 |
6,956 |
|||||||||||||||||||||||||||||
| Emergency & Preventative Maintenance (FleetNet) |
282 |
907 |
3,122 |
3,274 |
|||||||||||||||||||||||||||||
| Transportation Management (ABF Logistics) |
1,386 |
1,409 |
3,835 |
2,973 |
|||||||||||||||||||||||||||||
| Household Goods Moving Services (ABF Moving) |
88 |
(702) |
3,179 |
1,850 |
|||||||||||||||||||||||||||||
| Total non-asset-based segments |
5,557 |
4,825 |
25,776 |
15,053 |
|||||||||||||||||||||||||||||
| Other and eliminations |
(2,212) |
(1,192) |
(6,630) |
(6,016) |
|||||||||||||||||||||||||||||
| Total consolidated operating income |
$ |
18,049 |
$ |
13,502 |
$ |
69,239 |
$ |
19,070 |
|||||||||||||||||||||||||
| ARCBEST CORPORATION OPERATING STATISTICS |
|||||||||||||||||
| Three Months Ended |
Year Ended |
||||||||||||||||
| December 31 |
December 31 |
||||||||||||||||
| 2014 |
2013 |
% Change |
2014 |
2013 |
% Change |
||||||||||||
| (Unaudited) |
|||||||||||||||||
| Freight Transportation (ABF Freight) |
|||||||||||||||||
| Workdays |
61.0 |
61.5 |
251.5 |
251.5 |
|||||||||||||
| Billed Revenue(1) / CWT |
$ |
29.34 |
$ |
28.46 |
3.1% |
$ |
28.74 |
$ |
27.94 |
2.9% |
|||||||
| Billed Revenue(1) / Shipment |
$ |
385.02 |
$ |
377.65 |
2.0% |
$ |
387.60 |
$ |
380.25 |
1.9% |
|||||||
| Shipments |
1,255,272 |
1,143,813 |
9.7% |
4,980,365 |
4,632,150 |
7.5% |
|||||||||||
| Shipments / Day |
20,578 |
18,599 |
10.6% |
19,803 |
18,418 |
7.5% |
|||||||||||
| Tonnage (tons) |
823,675 |
758,987 |
8.5% |
3,358,910 |
3,152,042 |
6.6% |
|||||||||||
| Tons / Day |
13,503 |
12,341 |
9.4% |
13,356 |
12,533 |
6.6% |
|||||||||||
| (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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