June 30
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
FORM
CURRENT REPORT
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ITEM 2.02 – RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On April 29, 2022, ArcBest® (Nasdaq: ARCB) (the “Company”) issued a press release announcing its unaudited first quarter 2022 results. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference. Additional supplemental information and presentation slides to be used in connection with the scheduled conference call to discuss the first quarter results are furnished as Exhibit 99.2 and Exhibit 99.3 to this Current Report on Form 8-K and incorporated herein by reference.
The Company reports its financial results in accordance with generally accepted accounting principles (“GAAP”). However, management believes that certain non-GAAP financial measures and ratios and other information utilized for internal analysis provide analysts, investors, and others the same information that we use internally for purposes of assessing the Company’s core operating performance and provide 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 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.
The press release in Exhibit 99.1, the supplemental information in Exhibit 99.2, and the presentation slides in Exhibit 99.3 include certain non-GAAP information. Certain information discussed in the scheduled conference call could also be considered non-GAAP measures. Reconciliations of the non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are included in Exhibit 99.1 herein, including reconciliations of GAAP earnings and earnings per share to non-GAAP financial measures, reconciliations of GAAP to non-GAAP effective tax rates, and calculations of adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”). Reconciliations of non-GAAP measures included in the presentation slides to the most directly comparable GAAP financial measures are also included within Exhibit 99.3 herein.
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. Additionally, Adjusted EBITDA is a primary component of the financial covenants contained in ArcBest’s credit agreement. Other companies may calculate EBITDA and Adjusted EBITDA differently; therefore, ArcBest’s calculation of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures of other companies. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, ArcBest’s 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.
ITEM 9.01 – FINANCIAL STATEMENTS AND EXHIBITS
Exhibit No. | Description of Exhibit | |
99.1 | ||
99.2 | ||
99.3 | ||
104 | Cover Page Interactive Data File – The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ARCBEST CORPORATION | |||
(Registrant) | |||
Date: | April 29, 2022 | /s/ Michael R. Johns | |
Michael R. Johns | |||
Vice President – General Counsel | |||
and Corporate Secretary | |||
Exhibit 99.1
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] |
ArcBest® Announces First Quarter 2022 Results
Solidifies Position as Leading Integrated Logistics Company and Delivers Record Profitability
| ● | First quarter 2022 revenue of $1.3 billion increased 61.0 percent over first quarter 2021. |
| ● | Net income improved to $69.6 million, or $2.68 per diluted share. On a non-GAAP basis, first quarter 2022 net income was $79.8 million, or $3.08 per diluted share. |
| ● | Continued significant investments in technology, customer solutions and people to drive revenue growth. |
FORT SMITH, Arkansas, April 29, 2022 — ArcBest® (Nasdaq: ARCB), a leader in supply chain logistics, today reported first quarter 2022 revenue of $1.3 billion, reflecting an increase of $505.9 million compared to first quarter 2021. Each of ArcBest’s operating segments achieved double-digit percentage revenue growth over the prior year period. First quarter 2022 results include the impact of the acquisition of MoLo Solutions, LLC (“MoLo”), which was completed in November 2021.
ArcBest’s first quarter 2022 operating income was $94.9 million and net income was $69.6 million, or $2.68 per diluted share, compared to operating income of $32.2 million and net income of $23.4 million, or $0.87 per diluted share, in the first quarter of 2021.
Excluding certain items in both periods as identified in the attached reconciliation tables, first quarter non-GAAP operating income was $108.6 million, compared to $40.8 million in the prior-year period. On a non-GAAP basis, net income was $79.8 million, or $3.08 per diluted share, compared to $28.5 million, or $1.06 per diluted share, in the first quarter of 2021.
“Our outstanding first quarter results, including record profitability, demonstrate our success in transforming ArcBest and positioning it as one of the country’s leading integrated logistics companies,” said Judy R. McReynolds, ArcBest chairman, president and CEO. “Our strategy is working, underscored by improved operating margins across the business, and we are aggressively investing in our vision to ensure we continue innovating, developing our talent, enhancing our ability to serve customers and driving incremental revenue growth. As announced yesterday, our strong cash flow allows us to return more capital to shareholders by increasing both our share repurchase program and our dividend. We are confident our talented team is poised to execute on our clearly defined strategy, which will accelerate our growth trajectory while positioning ArcBest to operate even more efficiently and consistently for years to come.”
First Quarter Results of Operations Comparisons
Asset-Based
First Quarter 2022 Versus First Quarter 2021
| ● | Revenue of $705.3 million compared to $556.3 million, a per-day increase of 25.8 percent. |
| ● | Total tonnage per day increase of 3.6 percent, including an increase of 0.9 percent in LTL-rated weight per shipment. |
| ● | Total shipments per day increased 0.2 percent. |
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| ● | Total billed revenue per hundredweight increased 21.1 percent and was positively impacted by higher fuel surcharges. Revenue per hundredweight on LTL-rated business, excluding fuel surcharge, improved by a percentage in the double digits. |
| ● | Operating income of $80.0 million compared to $30.1 million. On a non-GAAP basis, operating income of $87.0 million compared to $36.9 million. |
Strength in the pricing environment and an increase in ABF Freight’s average weight per shipment both contributed to strong first quarter revenue growth in ArcBest’s Asset-Based business versus the prior year period. Despite inflationary pressures, customer demand and market rates remained solid and ArcBest continued to deliver on the increasing supply chain needs of its customers through customized logistics solutions. Freight trends with ArcBest’s core LTL customers were also positive throughout the quarter while activities designed to optimize revenue, network balance, freight mix and shipments resulted in more efficient utilization of labor and network resources, and improved profitability. Asset-Based hiring initiatives were successful, contributing to ABF Freight adding over 600 new employees across key locations during the quarter.
Asset-Light‡
First Quarter 2022 Versus First Quarter 2021 (including the results of MoLo)
| ● | Revenue of $673.7 million compared to $311.5 million, a per-day increase of 114.6 percent. |
| ● | Operating income of $22.8 million compared to $9.3 million. On a non-GAAP basis, operating income of $26.9 million compared to $10.2 million. |
| ● | Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) of $29.3 million compared to $12.1 million, as detailed in the attached non-GAAP reconciliation tables. |
Enhanced customer demand and higher market rates drove strong first quarter revenue growth and record profitability in the ArcBest Asset-Light segment. The integration of MoLo and related synergy realization remains on schedule and is progressing as expected, contributing to increases in truckload brokerage revenue and business levels over the same period last year. In addition, supply chain solutions offered through managed transportation, expedite and international services were meaningful contributors to the enhanced financial results of the Asset-Light business. The higher operating income reflects increased revenue and effective cost management, which also resulted in greater operating leverage.
At FleetNet, increases in total events and revenue per event contributed to growth in total revenue and profitability compared to the prior year period.
NOTE
‡ - The ArcBest and FleetNet reportable segments, combined, represent Asset-Light operations.
Conference Call
ArcBest will host a conference call with company executives to discuss the 2022 first quarter results. The call will be today, Friday, April 29, at 9:30 a.m. EDT (8:30 a.m. CDT). Interested parties are invited to listen by calling (800) 891-9945 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 April 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 June 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 22017045. The conference call and playback can also be accessed, through June 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 nearly 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.
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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 March 31, 2022 may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others, statements regarding (i) our expectations about our intrinsic value or our prospects for growth and value creation and (ii) our financial outlook, position, strategies, goals, and expectations. Terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “foresee,” “intend,” “may,” “plan,” “predict,” “project,” “scheduled,” “should,” “would,” and similar expressions and the negatives of such terms are intended to identify forward-looking statements. These statements are based on management’s beliefs, assumptions, and expectations based on currently available information, are not guarantees of future performance, and involve certain risks and uncertainties (some of which are beyond our control). Although we believe that the expectations reflected in these forward-looking statements are reasonable as and when made, we cannot provide assurance that our expectations will prove to be correct. Actual outcomes and results could materially differ from what is expressed, implied, or forecasted in these statements due to a number of factors, including, but not limited to: the effects of widespread outbreak of an illness or disease, including the COVID-19 pandemic, or any other public health crisis, as well as regulatory measures implemented in response to such events; external events which may adversely affect us or the third parties who provide services for us, for which our business continuity plans may not adequately prepare us, including acts of war or terrorism or military conflicts; a failure of our information systems, including disruptions or failures of services essential to our operations or upon which our information technology platforms rely, data breach, and/or cybersecurity incidents; interruption or failure of third-party software or information technology systems or licenses; untimely or ineffective development and implementation of, or failure to realize potential benefits associated with, new or enhanced technology or processes, including the pilot test program at ABF Freight; the loss or reduction of business from large customers; the ability to manage our cost structure, and the timing and performance of growth initiatives; the cost, integration, and performance of any recent or future acquisitions, including the acquisition of MoLo Solutions, LLC, and the inability to realize the anticipated benefits of the acquisition within the expected time period or at all; market fluctuations and interruptions affecting the price of our stock or the price or timing of our share repurchase programs; maintaining our corporate reputation and intellectual property rights; nationwide or global disruption in the supply chain increasing volatility in freight volumes; competitive initiatives and pricing pressures; increased prices for and decreased availability of new revenue equipment, decreases in value of used revenue equipment, and higher costs of equipment-related operating expenses such as maintenance, fuel, and related taxes; availability of fuel, the effect of volatility in fuel prices and the associated changes in fuel surcharges on securing increases in base freight rates, and the inability to collect fuel surcharges; relationships with employees, including unions, and our ability to attract, retain, and develop employees; unfavorable terms of, or the inability to reach agreement on, future collective bargaining agreements or a workforce stoppage by our employees covered under ABF Freight’s collective bargaining agreement; union employee wages and benefits, including changes in required contributions to multiemployer plans; availability and cost of reliable third-party services; our ability to secure independent owner operators and/or operational or regulatory issues related to our use of their services; litigation or claims asserted against us; governmental regulations; environmental laws and regulations, including emissions-control regulations; default on covenants of financing arrangements and the availability and terms of future financing arrangements; self-insurance claims and insurance premium costs; potential impairment of goodwill and intangible assets; general economic conditions and related shifts in market demand that impact the performance and needs of industries we serve and/or limit our customers’ access to adequate financial resources; increasing costs due to inflation; seasonal fluctuations and adverse weather conditions; and other financial, operational, and legal risks and uncertainties detailed from time to time in ArcBest Corporation’s public filings with the Securities and Exchange Commission (the “SEC”).
For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see our filings with the SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K.
Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events, or otherwise.
Financial Data and Operating Statistics
The following tables show financial data and operating statistics on ArcBest® and its reportable segments.
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ARCBEST CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
| | Three Months Ended | | ||||
| | March 31 | | ||||
|
| 2022 |
| 2021 |
| ||
| | (Unaudited) | | ||||
| | ($ thousands, except share and per share data) | | ||||
REVENUES | | $ | 1,335,074 | | $ | 829,213 | |
| | | | | | | |
OPERATING EXPENSES | |
| 1,240,146 | | | 797,022 | |
| | | | | | | |
OPERATING INCOME | |
| 94,928 | |
| 32,191 | |
| | | | | | | |
OTHER INCOME (COSTS) | | | | | | | |
Interest and dividend income | |
| 106 | |
| 392 | |
Interest and other related financing costs | |
| (1,939) | |
| (2,428) | |
Other, net | |
| (826) | |
| 1,192 | |
| |
| (2,659) | |
| (844) | |
| | | | | | | |
INCOME BEFORE INCOME TAXES | |
| 92,269 | |
| 31,347 | |
| | | | | | | |
INCOME TAX PROVISION | |
| 22,700 | |
| 7,986 | |
| | | | | | | |
NET INCOME | | $ | 69,569 | | $ | 23,361 | |
| | | | | | | |
EARNINGS PER COMMON SHARE | | | | | | | |
Basic | | $ | 2.82 | | $ | 0.92 | |
Diluted | | $ | 2.68 | | $ | 0.87 | |
| | | | | | | |
AVERAGE COMMON SHARES OUTSTANDING | | | | | | | |
Basic | |
| 24,710,685 | |
| 25,454,921 | |
Diluted | |
| 25,911,200 | |
| 26,930,402 | |
| | | | | | | |
CASH DIVIDENDS DECLARED PER COMMON SHARE | | $ | 0.08 | | $ | 0.08 | |
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ARCBEST CORPORATION
| | March 31 | | December 31 | | ||
|
| 2022 |
| 2021 |
| ||
| | (Unaudited) | | Note | | ||
| | ($ thousands, except share data) | | ||||
ASSETS | | | | | | | |
CURRENT ASSETS | | | | | | | |
Cash and cash equivalents | | $ | 64,108 | | $ | 76,620 | |
Short-term investments | |
| 37,024 | |
| 48,339 | |
Accounts receivable, less allowances (2022 - $15,737; 2021 - $13,226) | |
| 676,200 | |
| 582,344 | |
Other accounts receivable, less allowances (2022 - $697; 2021 - $690) | |
| 22,109 | |
| 13,094 | |
Prepaid expenses | |
| 42,688 | |
| 40,104 | |
Prepaid and refundable income taxes | |
| 9,010 | |
| 9,654 | |
Other | |
| 9,440 | |
| 5,898 | |
TOTAL CURRENT ASSETS | |
| 860,579 | |
| 776,053 | |
| | | | | | | |
PROPERTY, PLANT AND EQUIPMENT | | | | | | | |
Land and structures | |
| 352,420 | |
| 350,694 | |
Revenue equipment | |
| 981,317 | |
| 980,283 | |
Service, office, and other equipment | |
| 259,201 | |
| 251,085 | |
Software | |
| 180,641 | |
| 175,989 | |
Leasehold improvements | |
| 17,226 | |
| 16,931 | |
| | | 1,790,805 | | | 1,774,982 | |
Less allowances for depreciation and amortization | |
| 1,098,431 | |
| 1,079,061 | |
| |
| 692,374 | |
| 695,921 | |
| | | | | | | |
GOODWILL | |
| 299,008 | |
| 300,337 | |
INTANGIBLE ASSETS, NET | |
| 123,363 | |
| 126,580 | |
OPERATING RIGHT-OF-USE ASSETS | | | 125,988 | | | 106,686 | |
DEFERRED INCOME TAXES | |
| 5,324 | |
| 5,470 | |
OTHER LONG-TERM ASSETS | | | 103,063 | | | 101,629 | |
TOTAL ASSETS | | $ | 2,209,699 | | $ | 2,112,676 | |
| | | | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | |
| | | | | | | |
CURRENT LIABILITIES | | | | | | | |
Accounts payable | | $ | 340,966 | | $ | 311,401 | |
Income taxes payable | |
| 8,364 | |
| 12,087 | |
Accrued expenses | |
| 276,888 | |
| 305,851 | |
Current portion of long-term debt | |
| 89,766 | |
| 50,615 | |
Current portion of operating lease liabilities | | | 24,127 | | | 22,740 | |
TOTAL CURRENT LIABILITIES | |
| 740,111 | |
| 702,694 | |
| | | | | | | |
LONG-TERM DEBT, less current portion | |
| 168,912 | |
| 174,917 | |
OPERATING LEASE LIABILITIES, less current portion | | | 106,463 | | | 88,835 | |
POSTRETIREMENT LIABILITIES, less current portion | |
| 16,710 | |
| 16,733 | |
OTHER LONG-TERM LIABILITIES | |
| 130,471 | |
| 135,537 | |
DEFERRED INCOME TAXES | |
| 63,860 | |
| 64,893 | |
| | | | | | | |
STOCKHOLDERS’ EQUITY | | | | | | | |
Common stock, $0.01 par value, authorized 70,000,000 shares; | |
| 294 | |
| 294 | |
Additional paid-in capital | |
| 344,429 | |
| 318,033 | |
Retained earnings | |
| 868,905 | |
| 801,314 | |
Treasury stock, at cost, 2022: 4,900,512 shares; 2021: 4,492,514 shares | |
| (235,779) | |
| (194,273) | |
Accumulated other comprehensive income | |
| 5,323 | |
| 3,699 | |
TOTAL STOCKHOLDERS’ EQUITY | |
| 983,172 | |
| 929,067 | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | | $ | 2,209,699 | | $ | 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.
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ARCBEST CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
| | Three Months Ended | | ||||
| | March 31 | | ||||
|
| 2022 |
| 2021 |
| ||
| | Unaudited | | ||||
| | ($ thousands) | | ||||
OPERATING ACTIVITIES | | | | | | | |
Net income | | $ | 69,569 | | $ | 23,361 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | |
Depreciation and amortization | |
| 31,591 | |
| 29,387 | |
Amortization of intangibles | |
| 3,232 | |
| 967 | |
Share-based compensation expense | |
| 2,763 | |
| 2,354 | |
Provision for losses on accounts receivable | |
| 1,628 | |
| (96) | |
Change in deferred income taxes | |
| (1,417) | |
| (4,998) | |
Gain on sale of property and equipment and lease termination | |
| (3,002) | |
| (8,635) | |
Changes in operating assets and liabilities: | | | | | | | |
Receivables | |
| (103,677) | |
| (22,568) | |
Prepaid expenses | |
| (2,858) | |
| (2,582) | |
Other assets | |
| (2,781) | |
| (164) | |
Income taxes | |
| (3,017) | |
| 6,376 | |
Operating right-of-use assets and lease liabilities, net | |
| 14 | |
| 567 | |
Accounts payable, accrued expenses, and other liabilities | |
| (3,298) | |
| (1,435) | |
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | |
| (11,253) | |
| 22,534 | |
| | | | | | | |
INVESTING ACTIVITIES | | | | | | | |
Purchases of property, plant and equipment, net of financings | |
| (19,471) | |
| (9,588) | |
Proceeds from sale of property and equipment | |
| 5,334 | |
| 10,079 | |
Purchases of short-term investments | |
| (12,339) | |
| (18,130) | |
Proceeds from sale of short-term investments | |
| 23,590 | |
| 24,418 | |
Capitalization of internally developed software | |
| (4,510) | |
| (5,705) | |
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | |
| (7,396) | |
| 1,074 | |
| | | | | | | |
FINANCING ACTIVITIES | | | | | | | |
Borrowings under credit facilities | |
| 58,000 | |
| — | |
Payments on long-term debt | |
| (32,967) | |
| (17,387) | |
Net change in book overdrafts | |
| 955 | |
| (5,434) | |
Payment of common stock dividends | |
| (1,978) | |
| (2,037) | |
Purchases of treasury stock | | | (16,506) | | | (1,001) | |
Payments for tax withheld on share-based compensation | |
| (1,367) | |
| (161) | |
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | |
| 6,137 | |
| (26,020) | |
| | | | | | | |
NET DECREASE IN CASH AND CASH EQUIVALENTS | |
| (12,512) | |
| (2,412) | |
Cash and cash equivalents at beginning of period | |
| 76,620 | |
| 303,954 | |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | | $ | 64,108 | | $ | 301,542 | |
| | | | | | | |
NONCASH INVESTING ACTIVITIES | | | | | | | |
Equipment financed | | $ | 8,113 | | $ | — | |
Accruals for equipment received | | $ | 712 | | $ | 233 | |
Lease liabilities arising from obtaining right-of-use assets | | $ | 25,473 | | $ | 1,959 | |
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ARCBEST CORPORATION
FINANCIAL STATEMENT OPERATING SEGMENT DATA AND OPERATING RATIOS
| | Three Months Ended | | |||||||||
| | March 31 | | |||||||||
|
| 2022 |
| | 2021 |
| ||||||
| | Unaudited | | |||||||||
| | ($ thousands, except percentages) | | |||||||||
REVENUES | | | | | | | | | | | | |
Asset-Based |
| $ | 705,311 |
| |
|
| $ | 556,292 |
| |
|
| | | | | | | | | | | | |
ArcBest(1) | |
| 595,284 | | | | |
| 252,336 | | | |
FleetNet | |
| 78,378 | | | | |
| 59,163 | | | |
Total Asset-Light | | | 673,662 | | | | | | 311,499 | | | |
| | | | | | | | | | | | |
Other and eliminations | |
| (43,899) | | | | |
| (38,578) | | | |
Total consolidated revenues |
| $ | 1,335,074 |
| |
|
| $ | 829,213 |
| |
|
| | | | | | | | | | | | |
OPERATING EXPENSES | | | | | | | | | | | | |
Asset-Based | | | | | | | | | | | | |
Salaries, wages, and benefits |
| $ | 313,497 |
| 44.5 | % |
| $ | 285,694 |
| 51.4 | % |
Fuel, supplies, and expenses | |
| 84,831 | | 12.0 | | |
| 60,841 | | 10.9 | |
Operating taxes and licenses | |
| 12,493 | | 1.8 | | |
| 12,248 | | 2.2 | |
Insurance | |
| 10,431 | | 1.5 | | |
| 8,939 | | 1.6 | |
Communications and utilities | |
| 4,687 | | 0.7 | | |
| 4,970 | | 0.9 | |
Depreciation and amortization | |
| 24,305 | | 3.4 | | |
| 23,484 | | 4.2 | |
Rents and purchased transportation | |
| 102,985 | | 14.6 | | |
| 75,588 | | 13.6 | |
Shared services | | | 67,150 | | 9.5 | | | | 55,866 | | 10.1 | |
Gain on sale of property and equipment(2) | |
| (2,695) | | (0.4) | | |
| (8,695) | | (1.6) | |
Innovative technology costs(3) | | | 6,960 | | 1.0 | | |
| 6,868 | | 1.2 | |
Other | |
| 633 | | 0.1 | | |
| 434 | | 0.1 | |
Total Asset-Based | |
| 625,277 | | 88.7 | % | |
| 526,237 | | 94.6 | % |
| | | | | | | | | | | | |
ArcBest(1) | | | | | | | | | | | | |
Purchased transportation | | $ | 508,380 | | 85.4 | % | | $ | 210,995 | | 83.6 | % |
Supplies and expenses | | | 3,266 | | 0.6 | | |
| 2,568 | | 1.0 | |
Depreciation and amortization(4) | |
| 5,180 | | 0.9 | | |
| 2,386 | | 1.0 | |
Shared services | | | 50,197 | | 8.4 | | | | 26,072 | | 10.3 | |
Other | |
| 7,145 | | 1.2 | | |
| 2,050 | | 0.8 | |
| |
| 574,168 | | 96.5 | % | |
| 244,071 | | 96.7 | % |
FleetNet | |
| 76,661 | | 97.8 | % | |
| 58,140 | | 98.3 | % |
Total Asset-Light | | | 650,829 | | | | | | 302,211 | | | |
| | | | | | | | | | | | |
Other and eliminations(5) | |
| (35,960) | | | | |
| (31,426) | | | |
Total consolidated operating expenses |
| $ | 1,240,146 |
| 92.9 | % |
| $ | 797,022 |
| 96.1 | % |
| | | | | | | | | | | | |
OPERATING INCOME | | | | | | | | | | | | |
Asset-Based | | $ | 80,034 | | | | | $ | 30,055 | | | |
| | | | | | | | | | | | |
ArcBest(1) | |
| 21,116 | | | | |
| 8,265 | | | |
FleetNet | |
| 1,717 | | | | |
| 1,023 | | | |
Total Asset-Light | | | 22,833 | | | | | | 9,288 | | | |
| | | | | | | | | | | | |
Other and eliminations(5) | |
| (7,939) | | | | |
| (7,152) | | | |
Total consolidated operating income | | $ | 94,928 | | | | | $ | 32,191 | | | |
| 1) | The 2022 period includes the operations of MoLo, which was acquired on November 1, 2021. |
| 2) | The 2021 period includes an $8.6 million gain on the sale of an unutilized service center property. |
| 3) | Represents costs associated with the freight handling pilot test program at ABF Freight. |
| 4) | Depreciation and amortization includes amortization of intangibles associated with acquired businesses. |
| 5) | “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. |
7
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 | | ||||
| | March 31 | | ||||
|
| 2022 | | 2021 |
| ||
ArcBest Corporation - Consolidated | | (Unaudited) | | ||||
| | ($ thousands, except per share data) | | ||||
Operating Income | | | | | | | |
Amounts on GAAP basis | | $ | 94,928 | | $ | 32,191 | |
Innovative technology costs, pre-tax(1) | | | 9,686 | | | 7,667 | |
Purchase accounting amortization(2) | | | 3,213 | | | 937 | |
Change in fair value of contingent consideration(3) | | | 810 | | | — | |
Non-GAAP amounts | | $ | 108,637 | | $ | 40,795 | |
| | | | | | | |
Net Income | | | | | | | |
Amounts on GAAP basis | | $ | 69,569 | | $ | 23,361 | |
Innovative technology costs, after-tax (includes related financing costs)(1) | | | 7,289 | | | 5,824 | |
Purchase accounting amortization(2) | | | 2,396 | | | 702 | |
Change in fair value of contingent consideration(3) | | | 604 | | | — | |
Life insurance proceeds and changes in cash surrender value | | | 793 | | | (1,266) | |
Tax benefit from vested RSUs(4) | | | (870) | | | (135) | |
Non-GAAP amounts | | $ | 79,781 | | $ | 28,486 | |
| | | | | | | |
Diluted Earnings Per Share | | | | | | | |
Amounts on GAAP basis | | $ | 2.68 | | $ | 0.87 | |
Innovative technology costs, after-tax (includes related financing costs)(1) | | | 0.28 | | | 0.22 | |
Purchase accounting amortization(2) | | | 0.09 | | | 0.03 | |
Change in fair value of contingent consideration(3) | | | 0.02 | | | — | |
Life insurance proceeds and changes in cash surrender value | | | 0.03 | | | (0.05) | |
Tax benefit from vested RSUs(4) | | | (0.03) | | | (0.01) | |
Non-GAAP amounts(5) | | $ | 3.08 | | $ | 1.06 | |
| 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) | The Company recognizes the tax impact for the vesting of share-based compensation resulting in excess tax expense (benefit). |
| 5) | Non-GAAP EPS is calculated in total and may not foot due to rounding. |
8
ARCBEST CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES – Continued
| | Three Months Ended | | ||||||||||
| | March 31 | | ||||||||||
|
| 2022 | | 2021 | | ||||||||
Segment Operating Income Reconciliations | | (Unaudited) | | ||||||||||
| | ($ thousands, except percentages) | | ||||||||||
Asset-Based Segment | | | | ||||||||||
Operating Income ($) and Operating Ratio (% of revenues) | | | | ||||||||||
Amounts on GAAP basis | | $ | 80,034 | | 88.7 | % | | $ | 30,055 | | 94.6 | % | |
Innovative technology costs, pre-tax(1) | | | 6,960 | | (1.0) | | | | 6,868 | | (1.2) | | |
Non-GAAP amounts | | $ | 86,994 | | 87.7 | % | | $ | 36,923 | | 93.4 | % | |
| | | | ||||||||||
Asset-Light | | | | ||||||||||
ArcBest Segment | | | | ||||||||||
Operating Income ($) and Operating Ratio (% of revenues) | | | | ||||||||||
Amounts on GAAP basis | | $ | 21,116 | | 96.5 | % | | $ | 8,265 | | 96.7 | % | |
Purchase accounting amortization(2) | | | 3,213 | | (0.5) | | | | 937 | | (0.4) | | |
Change in fair value of contingent consideration(3) | | | 810 | | (0.1) | | | | — | | — | | |
Non-GAAP amounts | | $ | 25,139 | | 95.9 | % | | $ | 9,202 | | 96.3 | % | |
| | | | ||||||||||
FleetNet Segment | | | | ||||||||||
Operating Income ($) and Operating Ratio (% of revenues) | | | | ||||||||||
Amounts on GAAP basis | | $ | 1,717 | | 97.8 | % | | $ | 1,023 | | 98.3 | % | |
| | | | ||||||||||
Total Asset-Light | | | | ||||||||||
Operating Income ($) and Operating Ratio (% of revenues) | | | | ||||||||||
Amounts on GAAP basis | | $ | 22,833 | | 96.6 | % | | $ | 9,288 | | 97.0 | % | |
Purchase accounting amortization(2) | | | 3,213 | | (0.5) | | | | 937 | | (0.3) | | |
Change in fair value of contingent consideration(3) | | | 810 | | (0.1) | | | | — | | — | | |
Non-GAAP amounts | | $ | 26,856 | | 96.0 | % | | $ | 10,225 | | 96.7 | % | |
| | | | ||||||||||
Other and Eliminations | | | | ||||||||||
Operating Loss ($) | | | | ||||||||||
Amounts on GAAP basis | | $ | (7,939) | | | | | $ | (7,152) | | | | |
Innovative technology costs, pre-tax(4) | | | 2,726 | | | | | | 799 | | | | |
Non-GAAP amounts | | $ | (5,213) | | | | | $ | (6,353) | | | | |
| 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) | 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. |
9
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 March 31, 2022 | ||||||||||||||||
| | | | | Other | | Income | | Income | | | | | | | |||
| | Operating | | Income | | Before Income | | Tax | | Net | | | ||||||
| | Income | | (Costs) | | Taxes | | Provision | | Income | | Tax Rate(5) | ||||||
Amounts on GAAP basis | | $ | 94,928 | | $ | (2,659) | | $ | 92,269 | | $ | 22,700 | | $ | 69,569 | | 24.6 | % |
Innovative technology costs(1) | | | 9,686 | | | 129 | | | 9,815 | | | 2,526 | | | 7,289 | | 25.7 | |
Purchase accounting amortization(2) | | | 3,213 | | | — | | | 3,213 | | | 817 | | | 2,396 | | 25.4 | |
Change in fair value of contingent consideration(3) | | | 810 | | | — | | | 810 | | | 206 | | | 604 | | 25.4 | |
Life insurance proceeds and changes in cash surrender value | | | — | | | 793 | | | 793 | | | — | | | 793 | | — | |
Tax benefit from vested RSUs(4) | | | — | | | — | | | — | | | 870 | | | (870) | | — | |
Non-GAAP amounts | | $ | 108,637 | | $ | (1,737) | | $ | 106,900 | | $ | 27,119 | | $ | 79,781 | | 25.4 | % |
| | Three Months Ended March 31, 2021 | ||||||||||||||||
| | | | Other | | Income | | Income | | | | | | |||||
| | Operating | | Income | | Before Income | | Tax | | Net | | | ||||||
| | Income | | (Costs) | | Taxes | | Provision | | Income | | Tax Rate(5) | ||||||
Amounts on GAAP basis | | $ | 32,191 | | $ | (844) | | $ | 31,347 | | $ | 7,986 | | $ | 23,361 | | 25.5 | % |
Innovative technology costs(1) | | | 7,667 | | | 174 | | | 7,841 | | | 2,017 | | | 5,824 | | 25.7 | |
Purchase accounting amortization(2) | | | 937 | | | — | | | 937 | | | 235 | | | 702 | | 25.1 | |
Life insurance proceeds and changes in cash surrender value | | | — | | | (1,266) | | | (1,266) | | | — | | | (1,266) | | — | |
Tax benefit from vested RSUs(4) | | | — | | | — | | | — | | | 135 | | | (135) | | — | |
Non-GAAP amounts | | $ | 40,795 | | $ | (1,936) | | $ | 38,859 | | $ | 10,373 | | $ | 28,486 | | 26.7 | % |
| 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) | The Company recognizes the tax impact for the vesting of share-based compensation resulting in excess tax expense (benefit). |
| 5) | 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. |
10
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 | | ||||
| | March 31 | | ||||
|
| 2022 |
| 2021 |
| ||
| | (Unaudited) | | ||||
ArcBest Corporation - Consolidated Adjusted EBITDA | | ($ thousands) | | ||||
| | | |||||
Net Income | | $ | 69,569 | | $ | 23,361 | |
Interest and other related financing costs | |
| 1,939 | |
| 2,428 | |
Income tax provision | |
| 22,700 | |
| 7,986 | |
Depreciation and amortization(1) | |
| 34,823 | |
| 30,354 | |
Amortization of share-based compensation | |
| 2,763 | |
| 2,354 | |
Change in fair value of contingent consideration(2) | |
| 810 | |
| — | |
Consolidated Adjusted EBITDA | | $ | 132,604 | | $ | 66,483 | |
| 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. |
| | Three Months Ended | | ||||
| | March 31 | | ||||
|
| 2022 | | 2021 | | ||
Asset-Light Adjusted EBITDA | | (Unaudited) | | ||||
| | ($ thousands) | | ||||
| | | | ||||
ArcBest | | | | | | | |
Operating Income | | $ | 21,116 | | $ | 8,265 | |
Depreciation and amortization(3) | | | 5,180 | | | 2,386 | |
Change in fair value of contingent consideration(4) | | | 810 | | | — | |
Adjusted EBITDA | | $ | 27,106 | | $ | 10,651 | |
| | | | ||||
FleetNet | | | | ||||
Operating Income | | $ | 1,717 | | $ | 1,023 | |
Depreciation and amortization(3) | | | 427 | | | 415 | |
Adjusted EBITDA | | $ | 2,144 | | $ | 1,438 | |
| | | | ||||
Total Asset-Light | | | | | | | |
Operating Income | | $ | 22,833 | | $ | 9,288 | |
Depreciation and amortization(3) | | | 5,607 | | | 2,801 | |
Change in fair value of contingent consideration(4) | | | 810 | | | — | |
Adjusted EBITDA | | $ | 29,250 | | $ | 12,089 | |
| 3) | Includes amortization of intangibles associated with acquired businesses. |
| 4) | 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. |
11
ARCBEST CORPORATION
OPERATING STATISTICS
| | Three Months Ended | | | ||||||
| | March 31 | | | ||||||
|
| 2022 |
| 2021 |
| % Change |
| | ||
| | (Unaudited) | | | ||||||
Asset-Based | | | | | | | | | | |
| | | | | | | | | | |
Workdays |
| | 63.5 |
| | 63.0 | | |
| |
| | | | | | | | | | |
Billed Revenue(1) / CWT | | $ | 43.70 | | $ | 36.09 |
| 21.1% | | |
| | | | | | | | | | |
Billed Revenue(1) / Shipment | | $ | 578.80 | | $ | 462.22 |
| 25.2% | | |
| | | | | | | | | | |
Shipments | |
| 1,227,224 | |
| 1,215,416 |
| 1.0% | | |
| | | | | | | | | | |
Shipments / Day | |
| 19,326 | |
| 19,292 |
| 0.2% | | |
| | | | | | | | | | |
Tonnage (Tons) | |
| 812,730 | |
| 778,415 |
| 4.4% | | |
| | | | | | | | | | |
Tons / Day | |
| 12,799 | |
| 12,356 |
| 3.6% | | |
| | | | | | | | | | |
Pounds / Shipment | |
| 1,325 | |
| 1,281 | | 3.4% | | |
| | | | | | | | | | |
Average Length of Haul (Miles) | |
| 1,079 | |
| 1,091 |
| (1.1%) | | |
| | | | | | | | | | |
| 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 | ||
|
| March 31, 2022 | ||
| | (Unaudited) | ||
ArcBest(2) | | | | |
| | | | |
Revenue / Shipment | | | 32.3% | |
| | | | |
Shipments / Day | | | 83.8% | |
| 2) | Statistical data for the three months ended March 31, 2022 include the operations of MoLo, which was acquired on November 1, 2021. Statistical data related to managed transportation solutions transactions are not included in the presentation of operating statistics for the ArcBest segment for the periods presented. |
###
12
Exhibit 99.2
ArcBest® is providing this exhibit as supplemental information to its scheduled conference call and the press release announcing the Company’s unaudited first quarter 2022 results filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K. Certain statements and information in this exhibit may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Refer to the “Forward-Looking Statements” disclosure at the end of this exhibit.
Non-GAAP Financial Measures
ArcBest reports its financial results in accordance with generally accepted accounting principles (“GAAP”); however, this exhibit includes certain non-GAAP information. Refer to the discussion of non-GAAP information included in Item 2.02 of the Current Report on Form 8-K to which this exhibit is included for further information, including reference to reconciliations of GAAP to non-GAAP financial measures provided by the Company.
Summary Operating and Financial Impacts
ArcBest Consolidated
On a preliminary basis, April 2022 consolidated revenues grew approximately 54% on a per day basis compared to April 2021, reflecting continued customer demand for our logistics solutions and growth in all three operating segments. The consolidated revenue growth in April 2022 benefited from the acquisition of MoLo Solutions, LLC (“MoLo”).
Asset-Based Segment
1Q’22 Year-over-Year Yield Metrics
| ● | Billed Rev/Cwt on LTL-rated freight, excluding fuel surcharges, increased by a percentage in the double digits. |
| ● | Average increase on Contract renewals and Deferred Pricing agreements negotiated during 1Q’22: +9.0%. |
Year-over-Year Monthly Total Daily Business Trends
|
| January 2022 |
| February 2022 |
| March 2022 |
| April 2022(1)(2) |
| ||||
| | | | | | | | | | | | | |
Billed Revenue/Day(3) | | | +22.4 | % | | +24.6 | % | | +28.7 | % | | +23 | % |
Total Tons/Day | |
| +2.1 | % |
| +4.6 | % |
| +4.0 | % |
| +2 | % |
Total Shipments/Day | |
| -0.8 | % |
| -0.9 | % |
| +2.0 | % |
| +1 | % |
| 1) | Statistics for the full month of April 2022 have not been finalized and are preliminary. |
| 2) | There will be 20.5 workdays in April 2022 and there were 21.5 workdays in April 2021. |
| 3) | Revenue for undelivered freight is deferred for financial statement purposes in accordance with the Asset-Based segment revenue recognition policy. Billed revenue per day has not been adjusted for the portion of revenue deferred for financial statement purposes. |
1
See tables above for April 2022 revenue, tonnage and shipment metric comparisons.
Statistics for April 2022 have not been finalized. Preliminary Asset-Based financial metrics and business trends for April 2022, compared to the same period last year, are as follows:
| ● | Total Billed Revenue/CWT increased approximately 21% including higher fuel surcharge. |
| ● | Total Billed Revenue/Shipment increased approximately 22%. |
| ● | Total Weight/Shipment increased approximately 1%. |
The April 2022 Asset-Based tonnage and shipment trends have been impacted by changes in freight profile and business mix as the ABF Freight network continues to be managed to optimize revenue while serving customers with available resources. As a reminder, April 2021 total tonnage increased 29.1% versus April 2020, which was impacted by the pandemic. Excluding comparisons to the last two pandemic years, the year-over-year and sequential changes in total tonnage in April 2022 were some of the best in the last eleven years.
In the most recent five years, the average sequential change in ArcBest’s Asset-Based operating ratio, in the second quarter versus the first quarter, has been an average improvement of approximately 400 basis points.
2Q’22 Other Items
| ● | 63.5 Working Days in both 2Q’22 and 2Q’21. |
| ● | Projected Innovative Technology Costs in our Asset-Based business associated with the freight handling pilot test program at ABF Freight (non-GAAP reconciling item): $7 million vs. $7.5 million in 2Q’21. |
2
Asset-Light ArcBest Operating Segment [Excluding FleetNet]
1Q’22 and April 2022 Year-over-Year Monthly Total Daily Business Trends
|
| January 2022(1) |
| February 2022(1) |
| March 2022(1) |
| April 2022(1)(2)(3) |
| ||||
| | | | | | | | | | | | | |
Revenue/Day | | | +135.5 | % | | +142.0 | % | | +126.7 | % | | +124 | % |
Purchased Transportation Expense as a % of Revenue | |
| 86.1 | % |
| 84.7 | % |
| 85.4 | % |
| 83 | % |
| 1) | Includes revenue of the acquired MoLo business which was effective on November 1, 2021. |
| 2) | Statistics for the full month of April 2022 have not been finalized and are preliminary. |
| 3) | There will be 20.5 workdays in April 2022 and there were 21.5 workdays in April 2021. |
| ● | Customer demand for our Asset-Light services drove year-over-year revenue per day growth in all service lines. |
| ● | Comparisons to prior year metrics continue to be affected by the acquired operations of MoLo. |
2Q’22 – Projected
| ● | Projected Innovative Technology Costs in “Other and eliminations” related to our freight handling pilot program and human-centered remote and automated operations, in connection with our investment in Phantom Auto (non-GAAP reconciling item): $3 million vs. $1 million in 2Q’21. |
| ● | Loss in “Other and eliminations” (non-GAAP basis which adjusts for Innovative Technology Costs): $5 million vs. $5 million in 2Q’21. |
| ● | Interest Expense, net of Interest Income: $2 million vs. $2 million in 2Q’21. |
FY’22 – Projected
| ● | Projected Innovative Technology Costs in “Other and eliminations” related to our freight handling pilot program and human-centered remote and automated operations, as recently announced in connection with our investment in Phantom Auto (non-GAAP reconciling item): $12 million vs. $5 million in 2021. |
| ● | Loss in “Other and eliminations” (non-GAAP basis which adjusts for Innovative Technology Costs): $19 million vs. $19 million in 2021. |
| ● | Interest Expense, net of Interest Income: $8 million vs. $7.6 million in 2021. |
ArcBest Consolidated Capital Expenditures
FY’22 – Projected
| ● | Total Net Capital Expenditures, including financed equipment: $270 million to $290 million. |
| ● | Includes revenue equipment purchases (majority for Asset-Based) of $160 million. |
| ● | Includes real estate expenditures (majority for Asset-Based) of $45 million to $55 million. |
| ● | The remaining amount of capital expenditures includes items related to technology and miscellaneous dock equipment upgrades and enhancements. |
| ● | Depreciation and amortization costs on property, plant and equipment: $125 million to $130 million. |
| ● | Intangible asset amortization, primarily reflecting purchase accounting amortization related to the MoLo acquisition: $13 million. |
3
Additional Detailed Information
Asset-Based Segment
Annual Union Profit-Sharing Bonus
As provided in ABF Freight’s current Teamster labor contract, for the full years of 2019 through 2022, ABF Freight’s Teamster employees are eligible for an annual profit-sharing bonus, as shown in the following table. The operating ratio (“OR”) used to calculate the bonus amount is on a GAAP basis. The potential bonus would be based on full-year union employee earnings. While impacted by business and associated labor levels which are subject to change, the estimate of one percent of the annual earnings for the ABF Freight union employees who are eligible for this benefit approximates $5.5 million - $6 million of union bonus expense.
During years in which ArcBest’s internal forecasts indicate an expectation of paying the union bonus, we will accrue for this expense throughout the year, generally in proportion of the quarterly results as a percentage of the annual projection. As we do not provide public updates on our projected operating ratio or our expectations for paying the union bonus, any details of amounts accrued will not be provided. If financial models reflect an operating ratio that meets the payout thresholds shown below, ArcBest encourages analysts to include expenses for the union bonus in quarterly and annual earnings per share projections for the company.
ABF Freight Published Annual OR (GAAP basis) | Bonus Amount |
95.1 to 96.0 | 1% |
93.1 to 95.0 | 2% |
93.0 and below | 3% |
ArcBest Consolidated
ArcBest’s first quarter 2022 effective GAAP tax rate was 24.6%. The “Effective Tax Rate Reconciliation” table of ArcBest’s first quarter 2022 earnings press release in Exhibit 99.1 shows the reconciliation of GAAP to non-GAAP effective tax rates. The tax rate used to calculate non-GAAP EPS was 25.4% for first quarter 2022. Under the current tax laws, we expect our full year 2022 non-GAAP tax rate to be in a range of 26% to 27%. The effective GAAP tax rate may be impacted by discrete items that could occur during the remainder of the year.
4
“Other and eliminations” within Operating Income on the Operating Segment Data and Operating Ratios statement
The “Other and eliminations” line includes expenses related to shared services for the delivery of comprehensive transportation and logistics services to ArcBest’s customers, as well as investments in ArcBest technology and innovation. Shared services represent costs incurred to support all segments including sales, yield, customer service, marketing, capacity sourcing functions, human resources, financial services, information technology, legal and other company-wide services. Shared services are primarily allocated to the reporting segments based upon resource utilization-related metrics, such as shipment levels, and therefore fluctuate with business levels. As a result, the loss in “Other and eliminations” tends to be higher in periods when business levels are lower and, consequently, allocations to operating segments are lower, which is typically during the first and fourth quarters of the year; however, our quarterly shipment levels have not been following historical patterns in recent years. Other factors, including the state of the U.S. and global economies, the impact of adverse events or conditions, available capacity in the market, and the impact of yield initiatives may influence quarterly business levels. Furthermore, the acquisition of MoLo resulted in increased shipment levels for the ArcBest Asset-Light segment for first quarter 2022, compared to first quarter 2021. Increases in previously announced investments in innovative technology costs reported in the “Other and eliminations” line were partially offset by the impact of these higher first quarter business levels on shared service allocations.
“Other, net” line within Other Income (Costs) on the Consolidated Statements of Operations
The “Other, net” line of ArcBest’s income statement primarily includes the costs associated with postretirement plans and changes in cash surrender value of life insurance. After excluding non-GAAP reconciling items detailed in the table below, ArcBest expects the 2022 non-GAAP “Other, net” expense to approximate the 2021 expense.
Changes in cash surrender value of life insurance included a decrease of $0.8 million in first quarter 2022 compared to an increase of $1.3 million in first quarter 2021. The assets underlying the cash surrender value are invested much like pension plan assets and are impacted by market changes. ArcBest excludes changes in cash surrender value when presenting non-GAAP net income and EPS.
|
| Three Months Ended | | ||||
| | March 31 | | ||||
|
| 2022 |
| 2021 |
| ||
|
| (in millions) | | ||||
Other, net | | | | | | | |
Amounts on GAAP basis - income (costs) | | $ | (0.8) | | $ | 1.2 | |
Non-GAAP Adjustments: | | | | | | | |
Life insurance proceeds and gains in cash surrender value(1) | |
| 0.8 | |
| (1.3) | |
Non-GAAP amounts - income (costs) | | $ | — | | $ | (0.1) | |
| 1) | Amounts in parentheses indicate gains. |
5
Forward-Looking Statements
The following is a “safe harbor” statement under the Private Securities Litigation Reform Act of 1995: Certain statements and information in this exhibit 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.
6
1Q’22 Earnings Presentation |
Forward Looking Statements 2 Certain statements and information in this presentation may constitute “forward - looking statements” within the meaning of the Pr ivate 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, p osi tion, strategies, goals, and expectations. Terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “foresee,” “intend,” “may,” “plan,” “predict,” “project,” “scheduled,” “should,” “ wou ld,” 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 avai lab le 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 for ward - 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 ex pre ssed, 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 p ublic 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 busines s c ontinuity 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 oper ati ons 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 ineffectiv e 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 f rom 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 ac quisition 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 volume s; 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 su ch 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 ina bility 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 colle cti ve 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 mul tiemployer 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 o r c laims 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 pe rformance 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 ot her 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 res ults, 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. |
3 Accelerating growth through a customer focus and investment in people, solutions and technology – generating enhanced shareholder value 1 2 3 More Balanced Business Mix Accelerate Asset - Light growth Continue to grow Asset - Based business Optimize Cost Structure Advance adoption of innovative technologies Expand Revenue Opportunities Deepen customer relationships Secure new customers ✓ ✓ ✓ ArcBest Announces Record First Quarter 2022 Results – Supporting a Solid Three - Point Strategy |
STRONG PERFORMANCE ENABLES INVESTMENT FOR GROWTH 4 INVESTMENT IN: People Solutions Technology Future Growth Double - Digit Revenue Growth YOY daily revenue growth in Asset - Based 26% and Asset - Light 115% segments High Demand From customers for all solutions MoLo integration progressing well and on track for previously shared financial goals Integration Innovation Partnership with Phantom Auto progressing well with 2H22 customer pilots scheduled |
$1.3B Revenue 60% per day YOY (1) $108.6M Non - GAAP Operating Income (2) 166% YOY (1) $3.08/diluted share Non - GAAP Net Income (2) 191% YOY (1) Key Metrics Q1 2022 5 ARCBEST CONSOLIDATED 1) First quarter 2022 comparisons are to first quarter 2021. 2) See non - GAAP reconciliation in the Additional Information section of this presentation. |
$705M Revenue 26% per day YOY (1) $87.0M Non - GAAP Operating Income (1) 136% YOY (1) 87.7% Non - GAAP Operating Ratio (2) 570 bps YOY improvement (1) Daily Tonnage 3.6% YOY (1) Daily Shipments 0.2% YOY (1) Total Billed Rev/Cwt 21.1% YOY (1) 9.0% Average Increase on Contract Renewals and Deferred Pricing Agreements 340 bps (1) Key Metrics Q1 2022 6 ASSET - BASED 1) First quarter 2022 comparisons are to first quarter 2021. 2) See non - GAAP reconciliation in the Additional Information section of this presentation. |
Key Metrics APRIL 2022 7 Daily Billed Revenue Total Billed Rev/CWT ASSET - BASED Daily Tonnage Daily Shipments 23% YOY (1) 2% YOY (1) 1% YOY (1) 21% YOY (1) Total Billed Rev/Shipment 22% YOY (1) Total Weight/Shipment 1% YOY (1) APRIL 2022 PRELIMINARY 1) April 2022 comparisons are to April 2021. |
Key Metrics Q1 2022 8 ASSET - LIGHT (1) APRIL 2022 PRELIMINARY YOY (4) Daily Revenue 1) The ArcBest and FleetNet reportable segments, combined, represent Asset - Light operations. 2) First quarter 2022 comparisons are to first quarter 2021. 3) See non - GAAP reconciliation in the Additional Information section of this presentation. 4) Asset - Light ArcBest Operating Segment, excluding FleetNet .. April 2022 comparisons are to April 2021. 124% YOY $674M Revenue 115% per day YOY (2) $26.9M Non - GAAP Operating Income (3) 163% YOY (2) $29.3M Adjusted EBITDA (3) 142% YOY (2) |
9 INVESTMENTS IN GROWTH AND OPERATING INITIATIVES • Capital investments consistent with organic growth strategy 2022 Projected Net Capital Expenditures: $270M - $290M • Revenue equipment (tractors and trailers), dock equipment and technology to maintain optimal total cost of ownership and to increase growth capacity • Asset - Based network and facility upgrades, expansion and additions. Multi - year investment plan to increase growth capacity, improve energy efficiency and enhance work environment for employees • I nnovation and technology investments, partnerships and pilots for revenue growth and cost optimization • Continual evaluation of M&A Opportunities BALANCED CAPITAL ALLOCATION RETURN OF CAPITAL TO SHAREHOLDERS • Share Repurchase Program: o Completed $100M ASR in Jan. 2022 o Repurchased an additional $17M during 1 st Quarter 2022 o Increased repurchase amount to $75M – 4/28/22 • Dividend Program: $0.48 per share (annual) – As of 4/28/22 1) Trailing 12 months ending March 31, 2022. 2) As of March 31, 2022. MAINTAIN SOLID FINANCIAL POSITION • TTM EBITDA: $494M (1) • Liquidity: $303M (2) • Net Debt: $158M (2) • Debt Maintenance: 0.3X Debt (2) (net) to EBITDA (1) Strong balance sheet and free cash flow provide flexibility to invest in the business and increase returns for shareholders |
ARCBEST’S CUSTOMER - LED STRATEGY YIELDS RESULTS 10 5x Revenue per account is over 5X higher on cross - sold accounts 4x Profit per account is over 4X higher on cross - sold accounts 9% Retention rates are 9 percentage points higher on cross - sold accounts >60% Over 60% of our customers who use asset - light services also utilize our asset - based services >75% Over 75% of revenue came from digitally connected customers |
Three - Point Strategy Continues to Deliver Shareholder Value & Drive Business Growth 11 1 2 3 More Balanced Business Mix Accelerate Asset - Light growth Continue to grow Asset - Based business Optimize Cost Structure Advance adoption of innovative technologies Expand Revenue Opportunities Deepen customer relationships Secure new customers ✓ ✓ ✓ ENHANCED SHAREHOLDER VALUE |
Q & A 12 |
13 Note: ArcBest Corporation reports its financial results in accordance with generally accepted accounting principles (“GAAP”) .. H owever, management believes that certain non - GAAP performance measures utilized for internal analysis provides analysts, investors, and others the same information that we use internally for purposes of assessing our core operating performance and provides meaningful comp ari sons between current and prior period results, as well as important information regarding performance trends. Accordingly, using t hes e measures improves comparability in analyzing our performance because it removes the impact of items from operating results that, in ma nag ement's opinion, do not reflect our core operating performance. 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, ope rat ing cash flow, net income or earnings per share, as determined under GAAP. Reconciliations of GAAP to Non - GAAP Financial Measures (Unaudited) ADDITIONAL INFORMATION |
Reconciliations of GAAP to Non - GAAP Financial Measures (Unaudited) 14 Three Months Ended March 31 Millions ($000,000), except per share data 2022 2021 Operating Income Amounts on a GAAP basis $ 94.9 $ 32.2 Innovative technology costs, pre - tax (1) 9.7 7.7 Purchase accounting amortization (2) 3.2 0.9 Change in fair value of contingent consideration (3) 0.8 - Non - GAAP amounts $ 108.6 $ 40.8 Net Income Amounts on a GAAP basis $ 69.6 $ 23.4 Innovative technology costs, after - tax (includes related financing costs) (1) 7.3 5.8 Purchase accounting amortization (2) 2.4 0.7 Change in fair value of contingent consideration (3) 0.6 - Life insurance proceeds and changes in cash surrender value 0.8 (1.3) Tax benefit from vested RSUs (4) (0.9) (0.1) Non - GAAP amounts $ 79.8 $ 28.5 Diluted Earnings Per Share Amounts on a GAAP basis $ 2.68 $ 0.87 Innovative technology costs, after - tax (includes related financing costs) (1) 0.28 0.22 Purchase accounting amortization (2) 0.09 0.03 Change in fair value of contingent consideration (3) 0.02 - Life insurance proceeds and changes in cash surrender value 0.03 (0.05) Tax benefit from vested RSUs (4) (0.03) (0.01) Non - GAAP amounts (5) $ 3.08 $ 1.06 1) Represents costs associated with the freight handling pilot test program at ABF Freight and initiatives to optimize our perfo rma nce 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, con tin gent 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 c ert ain items pursuant to the merger agreement, for years 2023 through 2025. 4) The Company recognizes the tax impact for the vesting of share - based compensation resulting in excess tax expense (benefit). 5) Non - GAAP amounts are calculated in total and may not foot due to rounding. ARCBEST CORPORATION - CONSOLIDATED |
Reconciliations of GAAP to Non - GAAP Financial Measures (Unaudited) 15 1) Adjusted EBITDA is a primary component of the financial covenants contained in ArcBest Corporation’s Amended and Restated Cre dit Agreement. Management believes Adjusted EBITDA to be relevant and useful information, as EBITDA is a standard measure commonly reported and widely used by analysts, investors, an d o thers to measure financial performance ability to service debt obligations. Furthermore, management uses Adjusted EBITDA as a key measure of performance and for business planning. However, th is non - GAAP measure should be viewed in addition to, and not as an alternative for, our reported results. Other companies may calculate EBITDA differently; therefore, our Adjusted EBITDA ma y not be comparable to similarly titled measures of other companies. 2) Includes amortization of intangibles associated with acquired businesses. 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, con tin gent 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 c ert ain items pursuant to the merger agreement, for years 2023 through 2025. 4) Adjusted EBITDA is calculated in total and may not foot due to rounding. 5) Transaction costs are associated with the acquisition of MoLo .. ASSET - LIGHT ADJUSTED EBITDA (1) Three Months Ended March 31 2022 2021 Total Asset - Light ($ millions) Operating Income $ 22.8 $ 9.3 Depreciation and amortization (2) 5.6 2.8 Change in fair value of contingent consideration (3) 0.8 - Adjusted EBITDA (4) $ 29.3 $ 12.1 CONSOLIDATED ADJUSTED EBITDA (1) Twelve Months Ended March 31, 2022 ($ millions) Net Income $ 259.7 Interest and other related financing costs 8.4 Income tax provision 78.3 Depreciation and amortization (2) 128.7 Amortization of share - based compensation 11.8 Change in fair value of contingent consideration (3) 0.8 Transaction costs (5) 6.0 Consolidated Adjusted EBITDA $ 493.7 |
Reconciliations of GAAP to Non - GAAP Financial Measures (Unaudited) 16 Three Months Ended March 31 Millions ($000,000) 2022 2021 ASSET - BASED SEGMENT Operating Income Amounts on a GAAP basis $ 80.0 88.7% $ 30.1 94.6% Innovative technology costs, pre - tax (1) 7.0 (1.0) 6.9 (1.2) Non - GAAP amounts (2) $ 87.0 87.7% $ 36.9 93.4% TOTAL ASSET - LIGHT Operating Income Amounts on a GAAP basis $ 22.8 96.6% $ 9.3 97.0% Purchase accounting amortization (3) 3.2 (0.5) 0.9 (0.3) Change in fair value of contingent consideration (4) 0.8 (0.1) - - Non - GAAP amounts (2) $ 26.9 96.0% $ 10.2 96.7% 1) Represents costs associated with the freight handling pilot test program at ABF Freight. 2) Non - GAAP amounts are calculated in total and may not foot due to rounding. 3) Represents the amortization of acquired intangible assets related to the November 1, 2021 acquisition of MoLo and previously acquired businesses in the ArcBest segment. 4) 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 p rev iously disclosed, contingent consideration for the MoLo acquisition will be paid based on achievement of certain targets of adjusted earnings before interest, taxes, depreciation, a nd amortization, as adjusted for certain items pursuant to the merger agreement, for years 2023 through 2025. |