ArcBest Corporation(SM) Announces First Quarter 2014 Results

ARCBEST CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended

March 31

2014

2013

(Unaudited)

($ thousands, except share and per share data)

OPERATING REVENUES

$

577,904

$

520,687

OPERATING EXPENSES

586,606

544,037

OPERATING LOSS

(8,702)

(23,350)

OTHER INCOME (EXPENSE)

Interest and dividend income

190

171

Interest expense and other related financing costs

(808)

(1,207)

Other, net

365

1,083

(253)

47

LOSS BEFORE INCOME TAXES

(8,955)

(23,303)

INCOME TAX BENEFIT

(3,762)

(9,908)

NET LOSS

$

(5,193)

$

(13,395)

LOSS PER COMMON SHARE⁽¹⁾

Basic

$

(0.20)

$

(0.52)

Diluted

$

(0.20)

$

(0.52)

AVERAGE COMMON SHARES OUTSTANDING

Basic

25,876,928

25,638,333

Diluted

25,876,928

25,638,333

CASH DIVIDENDS DECLARED PER COMMON SHARE

$

0.03

$

0.03

(1)   The Company 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 (but not losses) to

        unvested restricted stock for calculating per share amounts.

NET LOSS

$

(5,193)

$

(13,395)

EFFECT OF UNVESTED RESTRICTED STOCK AWARDS⁽¹⁾

(39)

(38)

ADJUSTED NET LOSS FOR  CALCULATING

    LOSS PER COMMON SHARE

$

(5,232)

$

(13,433)

ARCBEST CORPORATION

CONSOLIDATED BALANCE SHEETS

March 31

2014

December 31

2013

(Unaudited)

Note

($ thousands, except share data)

ASSETS

CURRENT ASSETS

Cash and cash equivalents

$

95,728

$

105,354

Short-term investments

35,960

35,906

Restricted cash, cash equivalents, and short-term investments

1,903

1,902

Accounts receivable, less allowances (2014 – $4,516; 2013 – $4,533)

221,870

202,540

Other accounts receivable, less allowances (2014 – $1,441; 2013 – $1,422)

6,940

7,272

Prepaid expenses

22,178

19,016

Deferred income taxes

36,018

37,482

Prepaid and refundable income taxes

4,205

2,061

Other

8,144

6,952

        TOTAL CURRENT ASSETS

432,946

418,485

PROPERTY, PLANT AND EQUIPMENT

<span class="prnews_span">Land and structures

248,310

245,805

Revenue equipment

588,935

589,902

Service, office, and other equipment

124,273

124,303

Software

112,896

110,998

Leasehold improvements

23,637

23,582

1,098,051

1,094,590

Less allowances for depreciation and amortization

713,493

700,193

384,558

394,397

GOODWILL

76,448

76,448

INTANGIBLE ASSETS, NET

74,344

75,387

OTHER ASSETS

53,349

52,609

$

1,021,645

$

1,017,326

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

Bank overdraft and drafts payable

$

15,009

$

13,609

Accounts payable

110,364

89,091

Income taxes payable

162

1,782

Accrued expenses

171,433

173,622

Current portion of long-term debt

30,725

31,513

TOTAL CURRENT LIABILITIES

327,693

309,617

LONG-TERM DEBT, less current portion

74,355

81,332

PENSION AND POSTRETIREMENT LIABILITIES

34,587

26,847

OTHER LIABILITIES

13,217

15,041

DEFERRED INCOME TAXES

57,596

64,028

STOCKHOLDERS' EQUITY

Common stock, $0.01 par value, authorized 70,000,000 shares; issued 2014: 27,547,487 shares; 2013: 27,507,241 shares

275

275

Additional paid-in-capital

298,635

296,133

Retained earnings

290,723

296,735

Treasury stock, at cost, 1,677,932 shares

(57,770)

(57,770)

Accumulated other comprehensive loss

(17,666)

(14,912)

TOTAL STOCKHOLDERS' EQUITY

514,197

520,461

$

1,021,645

$

1,017,326

ARCBEST CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

March 31

2014

2013

(Unaudited)

($ thousands)

OPERATING ACTIVITIES

Net loss

$

(5,193)

$

(13,395)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization

19,410

22,150

Amortization of intangibles

1,043

1,043

Pension settlement expense

3,691

–

Share-based compensation expense

1,568

1,303

Provision for losses on accounts receivable

84

969

Deferred income tax benefit

(3,493)

(8,756)

Gain on sale of property and equipment

(214)

(212)

Changes in operating assets and liabilities:

Receivables

(19,268)

(9,886)

Prepaid expenses

(3,163)

(2,042)

Other assets

(1,710)

(964)

Income taxes

(3,610)

(1,548)

Accounts payable, accrued expenses, and other liabilities

17,065

11,124

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

6,210

(214)

INVESTING ACTIVITIES

Purchases of property, plant and equipment, net of financings

(8,654)

(3,440)

Proceeds from sales of property and equipment

746

842

Purchases of short-term investments

–

(3,752)

Proceeds from sales of short-term investments

–

2,940

Capitalization of internally developed software and other

(1,879)

(2,090)

NET CASH USED IN INVESTING ACTIVITIES

(9,787)

(5,500)

FINANCING ACTIVITIES

Payments on long-term debt

(7,765)

(10,955)

Net changes in bank overdraft and other

1,400

(1,909)

Net change in restricted cash, cash equivalents, and short-term investments

(1)

3,754

Payment of common stock dividends

(819)

(807)

Proceeds from the exercise of stock options

1,136

–

(6,049)

(9,917)

NET DECREASE IN CASH AND CASH EQUIVALENTS  

(9,626)

(15,631)

Cash and cash equivalents at beginning of period

105,354

90,702

CASH AND CASH EQUIVALENTS AT END OF PERIOD

$

95,728

$

75,071

NONCASH INVESTING ACTIVITIES

Accruals for equipment received

$

102

$

173

ARCBEST CORPORATION

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES

Three Months Ended

March 31

2014

2013

(Unaudited)

($ thousands)

ArcBest Corporation – Consolidated

Net Loss

Amounts on a GAAP basis

$

(5,193)

$

(13,395)

Pension settlement expense, after-tax⁽¹⁾

2,255

–

Non-GAAP amounts

$

(2,938)

$

(13,395)

Diluted Loss Per Share

Amounts on a GAAP basis

$

(0.20)

$

(0.52)

Pension settlement expense, after-tax⁽¹⁾

0.09

–

Non-GAAP amounts

$

(0.11)

$

(0.52)

ArcBest Corporation – Consolidated

Earnings Before Interest, Taxes, Depreciation, and Amortization

Net loss

$

(5,193)

$

(13,395)

Interest expense

808

1,207

Income tax benefit

(3,762)

(9,908)

Depreciation and amortization

20,453

23,193

Amortization of share-based compensation

1,568

1,303

Amortization of actuarial losses and pension settlement expense⁽¹⁾

4,268

2,912

EBITDA

$

18,142

</td>

$

5,312

The three months ended March 31, 2014 includes pension settlement expense of $3.7 million (pre-tax) related to lump-sum distributions from the Company's nonunion defined benefit pension plan and the purchase by the plan of a nonparticipating annuity contract to settle vested benefits of participants and beneficiaries who were receiving monthly benefit payments as of the January 2014 contract purchase date.

Three Months Ended

March 31

2014

Three Months Ended

March 31

2013

Operating

Income

(Loss)

Depreciation and Amortization

EBITDA

Operating Income

(Loss)

Depreciation and Amortization

EBITDA

(Unaudited)

Non-Asset-Based Segments

($ thousands)

Premium Logistics (Panther)⁽²⁾

$

3,364

$

<span class="prnews_span">2,737

$

6,101

$

(864)

$

2,550

$

1,686

Emergency & Preventative Maintenance (FleetNet)

1,401

174

1,575

711

132

843

Transportation Management (ABF Logistics)

535

216

751

518

118

636

Household Goods Moving Services (ABF Moving)

(841)

349

(492)

(231)

241

10

Total non-asset-based segments

$

4,459

</td>

$

3,476

$

7,935

$

134

$

3,041

$

3,175

(2)

Depreciation and amortization consists primarily of amortization of intangibles, including customer relationships and software associated with the June 15, 2012 acquisition of Panther.

Non-GAAP Financial Measures. The Company 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, the Company's reported results. Management believes 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 generally accepted accounting principles. Other companies may calculate EBITDA differently, and therefore the Company's 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

March 31

2014

2013

(Unaudited)

($ thousands)

OPERATING REVENUES

Freight Transportation (ABF Freight)

</td>

$

428,871

$

407,281

Premium Logistics (Panther)

72,226

53,252

Emergency & Preventative Maintenance (FleetNet)

41,699

32,522

Transportation Management (ABF Logistics)

29,717

21,618

Household Goods Moving Services (ABF Moving)

14,750

13,576

Total non-asset-based segments

158,392

120,968

Other revenues and eliminations

(9,359)

(7,562)

Total consolidated operating revenues

$

577,904

$

520,687

OPERATING EXPENSES

Freight Transportation (ABF Freight)

Salaries, wages, and benefits

$

261,154

60.9%

$

267,178

65.6%

Fuel, supplies, and expenses

90,791

21.2

83,332

20.5

Operating taxes and licenses

11,493

2.7

10,990

2.7

Insurance

5,395

1.2

4,484

1.1

Communications and utilities

4,242

1.0

3,933

1.0

Depreciation and amortization

16,338

3.8

19,574

4.8

Rents and purchased transportation

47,420

11.0

38,469

9.4

Gain on sale of property and equipment

(203)

–

(212)

(0.1)

Pension settlement expense⁽¹⁾

2,890

0.7

–

–

Other

1,535

0.3

2,082

0.5

441,055

102.8%

429,830

105.5%

Premium Logistics (Panther)

Purchased transportation

$

54,573

75.5%

$

41,036

77.1%

Depreciation and amortization⁽²⁾

2,737

3.8

2,550

4.8

Salaries, benefits, insurance, and other

11,552

16.0

10,530

19.7

68,862

95.3%

54,116

101.6%

Emergency & Preventative Maintenance (FleetNet)⁽¹⁾

40,298

31,811

Transportation Management (ABF Logistics) ⁽¹⁾

29,182

21,100

Household Goods Moving Services (ABF Moving) ⁽¹⁾

15,591

13,807

Total non-asset-based segments

153,933

120,834

Other expenses and eliminations⁽¹⁾

(8,382)

(6,627)

Total consolidated operating expenses

$

586,606

$

544,037

(1)

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

March 31

2014

2013

(Unaudited)

($ thousands)

OPERATING INCOME (LOSS)

Freight Transportation (ABF Freight)

$

(12,184)

$

(22,549)

Premium Logistics (Panther)

3,364

(864)

Emergency & Preventative Maintenance (FleetNet)

1,401

711

Transportation Management (ABF Logistics)

535

518

Household Goods Moving Services (ABF Moving)

(841)

(231)

Total non-asset-based segments

4,459

134

Other loss and eliminations

(977)

(935)

  Total consolidated operating loss

$

(8,702)

$

(23,350)

As disclosed in the Company's 2013 Annual Report on Form 10-K, certain reclassifications have been made to the prior year's operating segment data to conform to the current year presentation. The operating results of the Company's businesses which provide ocean container transport and warehousing services have been reclassified from the "Other and eliminations" to the Transportation Management segment. There was no impact on consolidated amounts as a result of these reclassifications.

ARCBEST CORPORATION

OPERATING STATISTICS

Three Months Ended

March 31

2014

2013

% Change

(Unaudited)

Freight Transportation (ABF Freight)

Workdays

63.0

62.5

Billed Revenue⁽¹⁾ / CWT        

$

27.05

$

26.85

0.7%

Billed Revenue⁽¹⁾ / Shipment           

$

381.84

$

371.99

2.6%

Shipments                               

1,133,332

1,095,678

3.4%

Shipments / Day

17,989

17,531

2.6%

Tonnage (tons)                       

799,811

758,889

5.4%

Tons / Day

12,695

12,142

4.6%

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.

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]