Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 04, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | ARCBEST CORP /DE/ | |
Entity Central Index Key | 894,405 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 25,835,826 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 82,253 | $ 114,280 |
Short-term investments | 56,984 | 56,838 |
Restricted cash | 962 | 962 |
Accounts receivable, less allowances (2017 – $5,283; 2016 – $5,437) | 258,931 | 260,643 |
Other accounts receivable, less allowances (2017 – $875; 2016 – $849) | 18,687 | 22,041 |
Prepaid expenses | 27,012 | 22,124 |
Prepaid and refundable income taxes | 11,008 | 9,909 |
Other | 8,226 | 4,300 |
TOTAL CURRENT ASSETS | 464,063 | 491,097 |
PROPERTY, PLANT AND EQUIPMENT | ||
Land and structures | 330,909 | 324,086 |
Revenue equipment | 742,394 | 743,860 |
Service, office, and other equipment | 155,618 | 154,119 |
Software | 123,857 | 120,877 |
Leasehold improvements | 8,993 | 8,758 |
TOTAL PROPERTY, PLANT AND EQUIPMENT, GROSS | 1,361,771 | 1,351,700 |
Less allowances for depreciation and amortization | 838,147 | 819,174 |
PROPERTY, PLANT AND EQUIPMENT, net | 523,624 | 532,526 |
GOODWILL | 108,981 | 108,875 |
INTANGIBLE ASSETS, net | 79,371 | 80,507 |
DEFERRED INCOME TAXES | 3,064 | 2,978 |
OTHER LONG-TERM ASSETS | 65,380 | 66,095 |
TOTAL ASSETS | 1,244,483 | 1,282,078 |
CURRENT LIABILITIES | ||
Accounts payable | 130,750 | 133,301 |
Accrued expenses | 190,829 | 198,731 |
Current portion of long-term debt | 59,995 | 64,143 |
TOTAL CURRENT LIABILITIES | 381,574 | 396,175 |
LONG-TERM DEBT, less current portion | 167,075 | 179,530 |
PENSION AND POSTRETIREMENT LIABILITIES | 37,541 | 35,848 |
OTHER LONG-TERM LIABILITIES | 15,844 | 16,790 |
DEFERRED INCOME TAXES | 50,773 | 54,680 |
STOCKHOLDERS' EQUITY | ||
Common stock, $0.01 par value, authorized 70,000,000 shares; issued 2017: 28,193,117 shares; 2016: 28,174,424 shares | 282 | 282 |
Additional paid-in capital | 316,802 | 315,318 |
Retained earnings | 377,444 | 386,917 |
Treasury stock, at cost, 2017: 2,565,399 shares | (80,045) | (80,045) |
Accumulated other comprehensive loss | (22,807) | (23,417) |
TOTAL STOCKHOLDERS' EQUITY | 591,676 | 599,055 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 1,244,483 | $ 1,282,078 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowances (in dollars) | $ 5,283 | $ 5,437 |
Other accounts receivable, allowances (in dollars) | $ 875 | $ 849 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares | 70,000,000 | 70,000,000 |
Common stock, issued shares | 28,193,117 | 28,174,424 |
Treasury stock, at cost, shares | 2,565,399 | 2,565,399 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||
REVENUES | $ 651,088 | $ 621,455 |
OPERATING EXPENSES | 663,341 | 630,720 |
OPERATING LOSS | (12,253) | (9,265) |
OTHER INCOME (COSTS) | ||
Interest and dividend income | 274 | 401 |
Interest and other related financing costs | (1,315) | (1,247) |
Other, net | 647 | 366 |
TOTAL OTHER INCOME (COSTS) | (394) | (480) |
LOSS BEFORE INCOME TAXES | (12,647) | (9,745) |
INCOME TAX BENEFIT | (5,240) | (3,642) |
NET LOSS | $ (7,407) | $ (6,103) |
LOSS PER COMMON SHARE | ||
Basic (in dollars per share) | $ (0.29) | $ (0.24) |
Diluted (in dollars per share) | $ (0.29) | $ (0.24) |
AVERAGE COMMON SHARES OUTSTANDING | ||
Basic (in shares) | 25,684,475 | 25,822,522 |
Diluted (in shares) | 25,684,475 | 25,822,522 |
CASH DIVIDENDS DECLARED PER COMMON SHARE (in dollars per share) | $ 0.08 | $ 0.08 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||
NET LOSS | $ (7,407) | $ (6,103) |
Pension and other postretirement benefit plans: | ||
Net actuarial loss, net of tax of: (2017 – $935; 2016 – $2,230) | (1,471) | (3,504) |
Pension settlement expense, net of tax of: (2017 – $761; 2016 – $350) | 1,196 | 550 |
Amortization of unrecognized net periodic benefit costs, net of tax of: (2017 – $401; 2016 – $437) | ||
Net actuarial loss | 660 | 714 |
Prior service credit | (29) | (29) |
Interest rate swap and foreign currency translation: | ||
Change in unrealized income (loss) on interest rate swap, net of tax of: (2017 – $88; 2016 – $353) | 135 | (546) |
Change in foreign currency translation, net of tax of: (2017 – $76 ; 2016 – $371) | 119 | 584 |
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | 610 | (2,231) |
TOTAL COMPREHENSIVE LOSS | $ (6,797) | $ (8,334) |
CONSOLIDATED STATEMENTS OF COM6
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||
Net actuarial loss, tax expense (benefit) | $ (935) | $ (2,230) |
Pension settlement expense, tax | 761 | 350 |
Amortization of unrecognized net periodic benefit costs, tax | 401 | 437 |
Change in unrealized income (loss) on interest rate swap, tax expense (benefit) | 88 | (353) |
Change in foreign currency translation, tax expense (benefit) | $ 76 | $ 371 |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | Total |
Balances at Dec. 31, 2015 | $ (27,496) | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net loss | $ (6,103) | |||||
Other comprehensive income, net of tax | (2,231) | (2,231) | ||||
Dividends declared on common stock | (2,088) | |||||
Balances at Mar. 31, 2016 | (29,727) | |||||
Balances at Dec. 31, 2016 | $ 282 | $ 315,318 | $ 386,917 | $ (80,045) | (23,417) | 599,055 |
Balances (in shares) at Dec. 31, 2016 | 28,174 | 2,565 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net loss | (7,407) | (7,407) | ||||
Other comprehensive income, net of tax | 610 | 610 | ||||
Issuance of common stock under share-based compensation plans (in shares) | 19 | |||||
Tax effect of share-based compensation plans | (247) | (247) | ||||
Share-based compensation expense | 1,731 | 1,731 | ||||
Dividends declared on common stock | (2,066) | (2,066) | ||||
Balances at Mar. 31, 2017 | $ 282 | $ 316,802 | $ 377,444 | $ (80,045) | $ (22,807) | $ 591,676 |
Balances (in shares) at Mar. 31, 2017 | 28,193 | 2,565 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
OPERATING ACTIVITIES | ||
Net loss | $ (7,407) | $ (6,103) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 24,258 | 24,164 |
Amortization of intangibles | 1,136 | 987 |
Pension settlement expense | 1,957 | 900 |
Share-based compensation expense | 1,731 | 1,709 |
Provision for losses on accounts receivable | 442 | 82 |
Deferred income tax provision (benefit) | (4,197) | 5,212 |
Gain on sale of property and equipment | (613) | (311) |
Changes in operating assets and liabilities: | ||
Receivables | 3,345 | 9,569 |
Prepaid expenses | (5,174) | (3,998) |
Other assets | (3,357) | (2,954) |
Income taxes | (1,205) | (10,211) |
Accounts payable, accrued expenses, and other liabilities | (9,155) | (6,706) |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 1,761 | 12,340 |
INVESTING ACTIVITIES | ||
Purchases of property, plant and equipment, net of financings | (12,273) | (13,357) |
Proceeds from sale of property and equipment | 1,692 | 2,435 |
Purchases of short-term investments | (6,223) | (15,745) |
Proceeds from sale of short-term investments | 6,125 | 7,840 |
Capitalization of internally developed software | (2,440) | (2,668) |
NET CASH USED IN INVESTING ACTIVITIES | (13,119) | (21,495) |
FINANCING ACTIVITIES | ||
Payments on long-term debt | (17,297) | (11,066) |
Net change in book overdrafts | (981) | (5,095) |
Payment of common stock dividends | (2,066) | (2,088) |
Purchases of treasury stock | (2,602) | |
Payments for tax withheld on share-based compensation | (325) | (178) |
NET CASH USED IN FINANCING ACTIVITIES | (20,669) | (21,029) |
NET DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | (32,027) | (30,184) |
Cash and cash equivalents and restricted cash at beginning of period | 115,242 | 166,357 |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD | 83,215 | 136,173 |
NONCASH INVESTING ACTIVITIES | ||
Equipment financed | 694 | 1,947 |
Accruals for equipment received | $ 440 | $ 8,486 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION | 3 Months Ended |
Mar. 31, 2017 | |
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION | |
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION | NOTE A – ORGANIZATIO ArcBest Corporation ® (the “Company”) is the parent holding company of businesses providing integrated logistics solutions. The Company’s operations are conducted through its three reportable operating segments: Asset-Based, which consists of ABF Freight System, Inc. and certain other subsidiaries; ArcBest, the Company’s asset-light logistics operation; and FleetNet. References to the Company in this Quarterly Report on Form 10-Q are primarily to the Company and its subsidiaries on a consolidated basis. The Asset-Based segment represented approximately 71% of the Company’s total revenues before other revenues and intercompany eliminations for the three months ended March 31, 2017. As of March 2017, approximately 83% of the Asset-Based segment’s employees were covered under a collective bargaining agreement, the ABF National Master Freight Agreement (the “ABF NMFA”), with the International Brotherhood of Teamsters (the “IBT”), which extends through March 31, 2018. The ABF NMFA included a 7% wage rate reduction upon the November 3, 2013 implementation date, followed by wage rate increases of 2% on July 1 in each of the next three years, which began in 2014, and a 2.5% increase on July 1, 2017; a one-week reduction in annual compensated vacation effective for employee anniversary dates on or after April 1, 2013; the option to expand the use of purchased transportation; and increased flexibility in labor work rules. The ABF NMFA and the related supplemental agreements provide for continued contributions to various multiemployer health, welfare, and pension plans maintained for the benefit of the Asset-Based segment’s employees who are members of the IBT. The estimated net effect of the November 3, 2013 wage rate reduction and the benefit rate increase which was applied retroactively to August 1, 2013 was an initial reduction of approximately 4% to the combined total contractual wage and benefit rate under the ABF NMFA. Following the initial reduction, the combined contractual wage and benefit contribution rate under the ABF NMFA is estimated to increase approximately 2.5% on a compounded annual basis throughout the contract period which extends through March 31, 2018. On September 2, 2016, the ArcBest segment acquired Logistics & Distribution Services, LLC (“LDS”), a private logistics and distribution company, in a transaction valued at $25.0 million (subject to post-closing adjustments), reflecting net cash consideration of $17.0 million paid at closing and an additional $8.0 million of contingent consideration to be paid over the two years following the acquisition upon the achievement of certain financial targets. As the LDS acquisition is not significant to the Company’s consolidated operating results and financial condition, pro forma financial information and the purchase price allocations of acquired assets and liabilities have not been presented. The results of the acquired operations subsequent to the acquisition date have been included in the accompanying consolidated financial statements. The Company is in the process of making a final determination of the value of acquired assets and liabilities for the LDS transaction and the provisional measurements are subject to change during the measurement period. Financial Statement Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and applicable rules and regulations of the Securities and Exchange Commission (the “Commission”) pertaining to interim financial information. Accordingly, these interim financial statements do not include all information or footnote disclosures required by accounting principles generally accepted in the United States for complete financial statements and, therefore, should be read in conjunction with the audited financial statements and accompanying notes included in the Company’s 2016 Annual Report on Form 10-K and other current filings with the Commission. In the opinion of management, all adjustments (which are of a normal and recurring nature) -considered necessary for a fair presentation have been included. Certain restatements have been made to the prior year’s operating segment data to conform to the current year presentation, reflecting the realignment of the Company’s organizational structure as announced on November 3, 2016. Under the new structure, the segments previously reported as Premium Logistics (Panther), Transportation Management (ABF Logistics), and Household Goods Moving Services (ABF Moving) are consolidated as a single Asset-Light logistics operation under ArcBest. Segment revenues and expenses were adjusted to eliminate certain intercompany charges consistent with the manner in which they are reported under the new corporate structure. Certain intercompany charges among the previously reported Panther, ABF Logistics, and ABF Moving segments which were previously eliminated in the “Other and eliminations” line, are now eliminated within the ArcBest segment. There was no impact on the Company’s consolidated revenues, operating expenses, operating income, or earnings per share as a result of the restatements. Certain reclassifications have been made to the prior year’s consolidated financial statements to conform to the current year presentation. The insurance receivable for the amount of workers’ compensation and third-party casualty claims in excess of self-insurance retention limits, which was previously offset against the reserve included in accrued expenses, has been reclassed to other accounts receivable, resulting in an $8.7 million increase in other accounts receivable and a corresponding increase in accrued expenses in the consolidated balance sheet at December 31, 2016. Amounts totaling $18.6 million related to certain service centers of the Company’s Asset-Based operations previously recorded in leasehold improvements were reclassed to land and structures in the consolidated balance sheet at December 31, 2016. Other reclassifications were made to the consolidated financial statements to apply the provisions of accounting pronouncements adopted during the first quarter of 2017 related to deferred income taxes, share-based compensation, and cash flow classification (see Adopted Accounting Pronouncements within this Note). The Company’s deferred tax assets were reclassed, by jurisdiction, from current to long-term in the consolidated balance sheets. The net change in restricted cash previously presented in financing activities of the Company’s consolidated statements of cash flows was removed and restricted cash was included in the reconciliation of beginning- and end-of-period totals of cash and cash equivalents and restricted cash. Cash paid by the Company when directly withholding shares from an employee’s share-based compensation award for tax-withholding purposes was reclassified from an operating activity within changes in income taxes to a financing activity in the consolidated statements of cash flows. There was no impact on the Company’s consolidated revenues, operating expenses, operating income, or earnings per share as a result of the reclassifications. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual amounts may differ from those estimates. Accounting Policies The Company’s accounting policies are described in Note B to the consolidated financial statements included in Part II, Item 8 of the Company’s 2016 Annual Report on Form 10-K. The following policy became effective for the Company during the three months ended March 31, 2017. Share-Based Compensation: The fair value of restricted stock awards is determined based upon the closing market price of the Company’s common stock on the date of grant. The restricted stock units generally vest at the end of a five‑year period following the date of grant, except for certain awards granted to non-employee directors that typically vest at the end of a one-year period for awards granted on or after January 1, 2016 and at the end of a three-year period for previous grants, subject to accelerated vesting due to death, disability, retirement, or change in control provisions. When restricted stock units become vested, the Company issues new shares which are subsequently distributed. Dividends or dividend equivalents are paid on certain restricted stock units during the vesting period. The Company recognizes the income tax benefits of dividends on share-based payment awards as income tax expense or benefit in the consolidated statements of operations when awards vest or are settled. Share based awards are amortized to compensation expense on a straight line basis over the vesting period of awards or over the period to which the recipient first becomes eligible for retirement, whichever is shorter, with vesting accelerated upon death or disability. The Company recognizes forfeitures as they occur. Adopted Accounting Pronouncements In the first quarter of 2017, the Company adopted guidance issued by the Financial Accounting Standards Board (the “FASB”) which amended Accounting Standards Codification (“ASC”) ASC Topic 740 with the addition of Balance Sheet Classification of Deferred Taxes . The amendment was retrospectively adopted and resulted in reclassifications to the consolidated balance sheets to present all deferred tax assets and liabilities as noncurrent by jurisdiction. An amendment to ASC Topic 718, Compensation – Stock Compensation , was issued to simplify the accounting for share-based compensation, which requires the income tax effects of awards to be recognized in the statement of operations when awards vest or are settled and allows employers to make a policy election to account for forfeitures as they occur. The Company adopted the amendment in the first quarter of 2017. As a result of applying the provisions of the amendment, the Company recognized a $0.2 million cumulative effect adjustment to the opening balance of retained earnings for the three months ended March 31, 2017. The Company also made a policy election to account for forfeitures as they occur. The Company may experience volatility in its income tax provision as a result of recording all excess tax benefits and tax deficiencies in the income statement upon settlement of awards, which is primarily during the second quarter of each year. This provision of the amendment related to recognition of excess tax benefits and tax deficiencies was adopted prospectively; therefore, the prior period has not been adjusted for this provision. Cash paid by the Company to taxing authorities on the employee’s behalf for withheld shares was reclassified from an operating activity within changes in accounts payable, accrued expenses, and other liabilities to a financing activity in the consolidated statements of cash flows. The other provisions of the adopted amendment did not have a significant impact on the Company’s consolidated financial statements. In the first quarter of 2017, the Company also adopted amendments to ASC Topic 230, Statement of Cash Flows , which provide classification guidance for restricted cash and certain cash receipts and cash payments presented in the statement of cash flows. The retrospective adoption of the amendments resulted in reclassification to the consolidated statement of cash flows to include restricted cash in the reconciliation of beginning- and end-of-period totals of cash and cash equivalents. Proceeds from the settlement of corporate-owned life insurance policies will be classified as cash provided by investing activities, and cash payments for premiums on such insurance policies will be classified as cash used in operating activities in the consolidated statements of cash flows. Accounting Pronouncements Not Yet Adopted ASC Topic 606, which amends the guidance in former ASC Topic 605, Revenue Recognition , provides a single comprehensive revenue recognition model for all contracts with customers and contains principles to apply to determine the measurement of revenue and timing of when it is recognized. The standard is effective for the Company on January 1, 2018. The Company plans to adopt this standard on the modified retrospective basis and does not expect a significant impact on the consolidated financial statements. An amendment to ASC Topic 715, Compensation – Retirement Benefits will require the service cost component of net benefit cost related to benefit plans accounted for under ASC Topic 715 to be included in the same line item or items as other compensation costs arising from services rendered by the related employees and will allow only the service cost component of the net benefit cost to be eligible for capitalization of internal costs. The amendment will also require the other components of net benefit cost, including pension settlement expense, to be presented in other income (costs) rather than in operating income. The amendment is effective for the Company beginning January 1, 2018. The Company is currently assessing the impact this update will have on the consolidated financial statements and disclosures. ASC Topic 842, Leases , which is effective for the Company beginning January 1, 2019, will require leases with a term greater than twelve months to be reflected as liabilities with associated right-of-use assets in the Company’s consolidated balance sheet. The Company is evaluating the impact of the new standard on the consolidated financial statements and disclosures. An amendment to ASC Topic 326, Measurement of Credit Losses on Financial Instruments , which changes the impairment model for most financial assets and certain other instruments, is effective for the Company beginning January 1, 2020. The Company is currently assessing the impact this update will have on the consolidated financial statements or disclosures. Management believes that there is no other new accounting guidance issued but not yet effective that is relevant to the Company’s current financial statements. |
FINANCIAL INSTRUMENTS AND FAIR
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2017 | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | NOTE B – FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS Financial Instruments The following table presents the components of cash and cash equivalents, short-term investments, and restricted funds: March 31 December 31 2017 2016 (in thousands) Cash and cash equivalents Cash deposits (1) $ 61,067 $ 92,520 Variable rate demand notes (1)(2) 578 16,057 Money market funds (3) 20,608 5,703 Total cash and cash equivalents $ 82,253 $ 114,280 Short-term investments Certificates of deposit (1) $ 56,984 $ 56,838 Restricted cash (4) Cash deposits (1) $ 962 $ 962 (1) Recorded at cost plus accrued interest, which approximates fair value. (2) Amounts may be redeemed on a daily basis with the original issuer. (3) Recorded at fair value as determined by quoted market prices (see amounts presented in the table of financial assets and liabilities measured at fair value within this Note). (4) Amounts restricted for use are subject to change based on the requirements of the Company’s collateralized facilities (see Note E). The Company’s long-term investment financial instruments are presented in the table of financial assets and liabilities measured at fair value within this Note. Concentrations of Credit Risk of Financial Instruments The Company is potentially subject to concentrations of credit risk related to its cash, cash equivalents, and short-term investments. The Company reduces credit risk by maintaining its cash deposits primarily in FDIC-insured accounts and placing its unrestricted short-term investments primarily in FDIC-insured certificates of deposit. However, certain cash deposits and certificates of deposit may exceed federally insured limits. At March 31, 2017 and December 31, 2016, cash and cash equivalents totaling $32.6 million and $39.9 million, respectively, were not FDIC insured. Fair Value Disclosure of Financial Instruments Fair value disclosures are made in accordance with the following hierarchy of valuation techniques based on whether the inputs of market data and market assumptions used to measure fair value are observable or unobservable: · Level 1 — Quoted prices for identical assets and liabilities in active markets. · Level 2 — Quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. · Level 3 — Unobservable inputs (Company’s market assumptions) that are significant to the valuation model. Fair value and carrying value disclosures of financial instruments are presented in the following table: March 31 December 31 2017 2016 (in thousands) Carrying Fair Carrying Fair Value Value Value Value Credit Facility (1) $ 70,000 $ 70,000 $ 70,000 $ 70,000 Accounts receivable securitization borrowings (2) 35,000 35,000 35,000 35,000 Notes payable (3) 121,444 120,775 138,032 137,503 $ 226,444 $ 225,775 $ 243,032 $ 242,503 (1) The revolving credit facility (the “Credit Facility”) carries a variable interest rate based on LIBOR, plus a margin, that is considered to be priced at market for debt instruments having similar terms and collateral requirements (Level 2 of the fair value hierarchy). (2) Borrowings under the Company’s accounts receivable securitization program carry a variable interest rate based on LIBOR, plus a margin. The borrowings are considered to be priced at market for debt instruments having similar terms and collateral requirements (Level 2 of the fair value hierarchy). (3) Fair value of the notes payable was determined using a present value income approach based on quoted interest rates from lending institutions with which the Company would enter into similar transactions (Level 2 of the fair value hierarchy). Assets and Liabilities Measured at Fair Value on Recurring Basis The following table presents the assets and liabilities that are measured at fair value on a recurring basis. March 31, 2017 Fair Value Measurements Using Quoted Prices Significant Significant In Active Observable Unobservable Markets Inputs Inputs Total (Level 1) (Level 2) (Level 3) (in thousands) Assets: Money market funds (1) $ 20,608 $ 20,608 $ — $ — Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan (2) 2,271 2,271 — — $ 22,879 $ 22,879 $ — $ — Liabilities: Contingent consideration (3) $ 6,790 $ — $ — $ 6,790 Interest rate swap (4) 319 — 319 — $ 7,109 $ — $ 319 $ 6,790 December 31, 2016 Fair Value Measurements Using Quoted Prices Significant Significant In Active Observable Unobservable Markets Inputs Inputs Total (Level 1) (Level 2) (Level 3) (in thousands) Assets: Money market funds (1) $ 5,703 $ 5,703 $ — $ — Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan (2) 2,220 2,220 — — $ 7,923 $ 7,923 $ — $ — Liabilities: Contingent consideration (3) $ 6,775 $ — $ — $ 6,775 Interest rate swap (4) 542 — 542 — $ 7,317 $ — $ 542 $ 6,775 (1) Included in cash and cash equivalents. (2) Nonqualified deferred compensation plan investments consist of U.S. and international equity mutual funds, government and corporate bond mutual funds, and money market funds which are held in a trust with a third-party brokerage firm. Included in other long-term assets, with a corresponding liability reported within other long-term liabilities. (3) Included in accrued expenses and other long-term liabilities, based on when expected payouts become due. The estimated fair value of contingent consideration for an earn-out agreement related to the September 2016 acquisition of LDS was determined by assessing Level 3 inputs with a discounted cash flow approach using various probability-weighted scenarios. The Level 3 assessments utilize a Monte Carlo simulation with inputs including scenarios of estimated revenues and gross margins to be achieved for the applicable performance periods, probability weightings assigned to the performance scenarios, and the discount rate applied, which was 12.3% as of March 31, 2017. Subsequent changes to the fair value as a result of recurring assessments will be recognized in operating income. (4) Included in other long-term liabilities. The interest rate swap fair value was determined by discounting future cash flows and receipts based on expected interest rates observed in market interest rate curves adjusted for estimated credit valuation considerations reflecting nonperformance risk of the Company and the counterparty, which are considered to be in Level 3 of the fair value hierarchy. The Company assessed Level 3 inputs as insignificant to the valuation at March 31, 2017 and December 31, 2016 and considers the interest rate swap valuation in Level 2 of the fair value hierarchy. The following table provides the changes in fair value of the liabilities measured at fair value using inputs categorized in Level 3 of the fair value hierarchy: Contingent Consideration (in thousands) Balances at December 31, 2016 $ 6,775 Change in fair value included in operating expenses 15 Balances at March 31, 2017 $ 6,790 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2017 | |
GOODWILL AND INTANGIBLE ASSETS | |
GOODWILL AND INTANGIBLE ASSETS | NOTE C – GOODWILL AND INTANGIBLE ASSETS Goodwill represents the excess of cost over the fair value of net identifiable tangible and intangible assets acquired. Goodwill by reportable operating segment consisted of the following: Total ArcBest FleetNet (in thousands) Balances at December 31, 2016 $ 108,875 $ 108,245 $ 630 Purchase accounting adjustments (1) 106 106 — Balances at March 31, 2017 $ 108,981 $ 108,351 $ 630 (1) Goodwill related to the September 2, 2016 acquisition of LDS is based on preliminary information as of March 31, 2017. Intangible assets consisted of the following: March 31, 2017 December 31, 2016 Weighted-Average Accumulated Net Accumulated Net Amortization Period Cost Amortization Value Cost Amortization Value (in years) (in thousands) (in thousands) Finite-lived intangible assets Customer relationships (1) 14 $ 60,431 $ 16,450 $ 43,981 $ 60,431 $ 15,350 $ 45,081 Driver network 3 3,200 3,200 — 3,200 3,200 — Other 9 1,032 442 590 1,032 406 626 13 64,663 20,092 44,571 64,663 18,956 45,707 Indefinite-lived intangible assets Trade name N/A 32,300 N/A 32,300 32,300 N/A 32,300 Other N/A 2,500 N/A 2,500 2,500 N/A 2,500 34,800 34,800 34,800 34,800 Total intangible assets N/A $ 99,463 $ 20,092 $ 79,371 $ 99,463 $ 18,956 $ 80,507 (1) Customer relationships of $7.7 million related to the September 2, 2016 acquisition of LDS is based on preliminary information as of March 31, 2017. The future amortization for intangible assets and acquired software as of March 31, 2017 were as follows: Intangible Acquired Total Assets Software (1) (in thousands) 2017 $ 5,284 $ 3,402 $ 1,882 2018 6,654 4,520 2,134 2019 5,469 4,482 987 2020 4,471 4,454 17 2021 4,418 4,412 6 Thereafter 23,301 23,301 — Total amortization $ 49,597 $ 44,571 $ 5,026 (1) Acquired software is reported in property, plant and equipment. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2017 | |
INCOME TAXES | |
INCOME TAXES | NOTE D – INCOME TAXES The Company’s statutory federal tax rate is 35%. State tax rates vary among states and average approximately 6.0% to 6.5%, although some state rates are higher and a small number of states do not impose an income tax. The effective tax benefit rate was 41.4% and 37.4% for the three months ended March 31, 2017 and 2016, respectively. For the three months ended March 31, 2017 and 2016, the difference between the Company’s effective tax rate and the federal statutory rate primarily results from state income taxes, nondeductible expenses, changes in deferred tax valuation allowances, and changes in the cash surrender value of life insurance. The three-month period ended March 31, 2016 reflects a benefit of 2.9% related to the alternative fuel tax credit which expired December 31, 2016. An amendment to ASC Topic 718, Compensation – Stock Compensation became effective in the first quarter of 2017. The amendment was issued to simplify the accounting for share-based compensation by requiring the income tax effects of awards to be recognized in the statement of operations when awards vest or are settled. As a result of applying the provisions of the amendment in the first quarter of 2017, the tax rate for the three months ended March 31, 2017 reflects a benefit of 0.6%. The Company may experience volatility in its income tax provision as a result of recording all excess tax benefits and tax deficiencies in the income statement upon settlement of awards, which is primarily during the second quarter of each year. As of March 31, 2017, the Company’s deferred tax liabilities, which will reverse in future years, exceeded the deferred tax assets. The Company evaluated the total deferred tax assets at March 31, 2017 and concluded that, other than for certain deferred tax assets related to foreign net operating loss and state contribution carryforwards, the assets did not exceed the amount for which realization is more likely than not. In making this determination, the Company considered the future reversal of existing taxable temporary differences, taxable income in carryback years, future taxable income, and tax planning strategies. The Company paid state income taxes of less than $0.1 million and paid state and foreign income taxes of $1.6 million during the three months ended March 31, 2017 and 2016, respectively. During the three months ended March 31, 2017 and 2016 the Company received refunds of less than $0.1 million and $0.7 million, respectively, of federal and state income taxes that were paid in prior years. |
LONG-TERM DEBT AND FINANCING AR
LONG-TERM DEBT AND FINANCING ARRANGEMENTS | 3 Months Ended |
Mar. 31, 2017 | |
LONG-TERM DEBT AND FINANCING ARRANGEMENTS | |
LONG-TERM DEBT AND FINANCING ARRANGEMENTS | NOTE E – LONG-TERM DEBT AND FINANCING ARRANGEMENTS Long-Term Debt Obligations Long-term debt consisted of borrowings outstanding under the Company’s revolving credit facility and accounts receivable securitization program, both of which are further described in Financing Arrangements within this Note, and notes payable and capital lease obligations related to the financing of revenue equipment (tractors and trailers used primarily in Asset-Based segment operations), real estate, and certain other equipment as follows: March 31 December 31 2017 2016 (in thousands) Credit Facility (interest rate of 2.5% (1) at March 31, 2017) $ 70,000 $ 70,000 Accounts receivable securitization borrowings (interest rate of 1.7% at March 31, 2017) 35,000 35,000 Notes payable (weighted-average interest rate of 2.2% at March 31, 2017) 121,444 138,032 Capital lease obligations (weighted-average interest rate of 5.7% at March 31, 2017) 626 641 227,070 243,673 Less current portion 59,995 64,143 Long-term debt, less current portion $ 167,075 $ 179,530 (1) The interest rate swap mitigates interest rate risk by effectively converting $50.0 million of borrowings under the Credit Facility from variable-rate interest to fixed-rate interest with a per annum rate of 3.35% based on the margin of the Credit Facility as of March 31, 2017. Scheduled maturities of long-term debt obligations as of March 31, 2017 were as follows: Accounts Receivable Credit Securitization Notes Capital Lease Total Facility (1) Program (1) Payable Obligations (2) (in thousands) Due in one year or less $ 64,735 $ 1,944 $ 759 $ 61,802 $ 230 Due after one year through two years 44,207 2,275 925 40,772 235 Due after two years through three years 122,755 71,886 36,047 14,621 201 Due after three years through four years 5,310 — — 5,303 7 Due after four years through five years 2,338 — — 2,331 7 Due after five years — — — — — Total payments 239,345 76,105 37,731 124,829 680 Less amounts representing interest 12,275 6,105 2,731 3,385 54 Long-term debt $ 227,070 $ 70,000 $ 35,000 $ 121,444 $ 626 (1) The future interest payments included in the scheduled maturities due are calculated using variable interest rates based on the LIBOR swap curve, plus the anticipated applicable margin. (2) Minimum payments of capital lease obligations include maximum amounts due under rental adjustment clauses contained in the capital lease agreements. Assets securing notes payable or held under capital leases were included in property, plant and equipment as follows: March 31 December 31 2017 2016 (in thousands) Revenue equipment $ 220,381 $ 220,566 Land and structures (service centers) 1,794 1,794 Software 671 — Service, office, and other equipment 7 7 Total assets securing notes payable or held under capital leases 222,853 222,367 Less accumulated depreciation and amortization (1) 72,430 61,643 Net assets securing notes payable or held under capital leases $ 150,423 $ 160,724 (1) Amortization of assets under capital leases and depreciation of assets securing notes payable are included in depreciation expense. Financing Arrangements Credit Facility The Company has a revolving credit facility (the “Credit Facility”) under its credit agreement which was amended and restated on January 2, 2015 (“the Amended and Restated Credit Agreement”). The Credit Facility, which matures on January 2, 2020, has an initial maximum credit amount of $150.0 million, including a swing line facility and a letter of credit sub-facility providing for the issuance of letters of credit up to an aggregate amount of $20.0 million. The Credit Facility allows the Company to request additional revolving commitments or incremental term loans thereunder up to an aggregate additional amount of $75.0 million, subject to certain additional conditions as provided in the Amended and Restated Credit Agreement. Principal payments under the Credit Facility are due upon maturity; however, borrowings may be repaid, at the Company’s discretion, in whole or in part at any time, without penalty, subject to required notice periods and compliance with minimum prepayment amounts. Borrowings under the Amended and Restated Credit Agreement can either be, at the Company’s election: (i) at an alternate base rate (as defined in the Amended and Restated Credit Agreement) plus a spread; or (ii) at a Eurodollar rate (as defined in the Amended and Restated Credit Agreement) plus a spread. The applicable spread is dependent upon the Company’s adjusted leverage ratio (as defined in the Amended and Restated Credit Agreement). The Amended and Restated Credit Agreement contains conditions, representations and warranties, events of default, and indemnification provisions that are customary for financings of this type, including, but not limited to, a minimum interest coverage ratio, a maximum adjusted leverage ratio, and limitations on incurrence of debt, investments, liens on assets, certain sale and leaseback transactions, transactions with affiliates, mergers, consolidations, purchases and sales of assets, and certain restricted payments. The Company was in compliance with the covenants under the Amended and Restated Credit Agreement at March 31, 2017. Interest Rate Swap The Company has an interest rate swap agreement with a $50.0 million notional amount maturing on January 2, 2020. The Company receives floating-rate interest amounts based on one-month LIBOR in exchange for fixed-rate interest payments of 1.85% over the life of the interest rate swap agreement. The interest rate swap mitigates interest rate risk by effectively converting $50.0 million of borrowings under the Credit Facility from variable-rate interest to fixed-rate interest with a per annum rate of 3.35% based on the margin of the Credit Facility as of March 31, 2017. The fair value of the interest rate swap of $0.3 million and $0.5 million was recorded in other long-term liabilities in the consolidated balance sheet at March 31, 2017 and December 31, 2016, respectively. The unrealized loss on the interest rate swap instrument was reported as a component of accumulated other comprehensive loss, net of tax, in stockholders’ equity at March 31, 2017 and December 31, 2016, and the change in the unrealized loss on the interest rate swap for the three months ended March 31, 2017 and 2016 was reported in other comprehensive loss, net of tax, in the consolidated statement of comprehensive income. The interest rate swap is subject to certain customary provisions that could allow the counterparty to request immediate payment of the fair value liability upon violation of any or all of the provisions. The Company was in compliance with all provisions of the interest rate swap agreement at March 31, 2017. Accounts Receivable Securitization Program On March 20, 2017, the Company entered into a second amendment to extend the maturity date of its accounts receivable securitization program until April 1, 2020 and increase the amount of cash proceeds provided under the facility from $100.0 million to $125.0 million, with an accordion feature allowing the Company to request additional borrowings up to $25.0 million, subject to certain conditions. Under this program, certain subsidiaries of the Company continuously sell a designated pool of trade accounts receivables to a wholly owned subsidiary which, in turn, may borrow funds on a revolving basis. This wholly owned consolidated subsidiary is a separate bankruptcy-remote entity, and its assets would be available only to satisfy the claims related to the lender’s interest in the trade accounts receivables. Borrowings under the accounts receivable securitization program bear interest based upon LIBOR, plus a margin, and an annual facility fee. The securitization agreement contains representations and warranties, affirmative and negative covenants, and events of default that are customary for financings of this type, including a maximum adjusted leverage ratio covenant. As of March 31, 2017, $35.0 million was borrowed under the accounts receivable securitization program. The Company was in compliance with the covenants under the accounts receivable securitization program as of March 31, 2017. The accounts receivable securitization program includes a provision under which the Company may request and the letter of credit issuer may issue standby letters of credit, primarily in support of workers’ compensation and third-party casualty claims liabilities in various states in which the Company is self-insured. The outstanding standby letters of credit reduce the availability of borrowings under the program. As of March 31, 2017, standby letters of credit of $18.0 million have been issued under the program, which reduced the available borrowing capacity to $72.0 million. In April 2017, the Company borrowed an additional $10.0 million under the accounts receivable securitization program further reducing its available borrowing capacity to $62.0 million. Letter of Credit Agreements and Surety Bond Programs As of March 31, 2017, the Company had letters of credit outstanding of $19.6 million (including $18.0 million issued under the accounts receivable securitization program), of which $1.0 million were collateralized by restricted cash. The Company has programs in place with multiple surety companies for the issuance of surety bonds in support of its self-insurance program. As of March 31, 2017, surety bonds outstanding related to the self-insurance program totaled $54.4 million. Notes Payable and Capital Leases The Company has financed the purchase of certain revenue equipment, other equipment, and software through promissory note arrangements, including $0.7 million for software during the three months ended March 31, 2017. |
PENSION AND OTHER POSTRETIREMEN
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS | 3 Months Ended |
Mar. 31, 2017 | |
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS | |
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS | NOTE F – PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS Nonunion Defined Benefit Pension, Supplemental Benefit, and Postretirement Health Benefit Plans The following is a summary of the components of net periodic benefit cost: Three Months Ended March 31 Nonunion Defined Supplemental Postretirement Benefit Pension Plan Benefit Plan Health Benefit Plan 2017 2016 2017 2016 2017 2016 (in thousands) Service cost $ — $ — $ — $ — $ 122 $ 107 Interest cost 1,240 1,305 26 32 265 254 Expected return on plan assets (2,167) (1,946) — — — — Amortization of prior service credit — — — — (47) (47) Pension settlement expense 1,957 900 — — — — Amortization of net actuarial loss (1) 886 955 20 38 173 176 Net periodic benefit cost $ 1,916 $ 1,214 $ 46 $ 70 $ 513 $ 490 (1) The Company amortizes actuarial losses over the average remaining active service period of the plan participants and does not use a corridor approach. Nonunion Defined Benefit Pension Plan The Company’s nonunion defined benefit pension plan covers substantially all noncontractual employees hired before January 1, 2006. In June 2013, the Company amended the nonunion defined benefit pension plan to freeze the participants’ final average compensation and years of credited service as of July 1, 2013. The plan amendment did not impact the vested benefits of retirees or former employees whose benefits have not yet been paid from the plan. Effective July 1, 2013, participants of the nonunion defined benefit pension plan who were active employees of the Company became eligible for the discretionary defined contribution feature of the Company’s nonunion 401(k) and defined contribution plan in which all eligible noncontractual employees hired subsequent to December 31, 2005 also participate. In first quarter 2017, the nonunion defined benefit pension plan purchased a nonparticipating annuity contract from an insurance company to settle the pension obligation related to the vested benefits of approximately 50 plan participants and beneficiaries receiving monthly benefit payments at the time of the contract purchase. The Company recognized pension settlement expense as a component of net periodic benefit cost for the three months ended March 31, 2017 of $2.0 million (pre-tax), or $1.2 million (after-tax), related to the $7.6 million premium paid by the plan for the annuity contract and $4.8 million of lump-sum benefit distributions from the plan. For the three months ended March 31, 2016, pension settlement expense of $0.9 million (pre-tax), or $0.6 million (after-tax), was recognized related to $4.5 million of lump-sum distributions from the plan. Upon recognition of pension settlement expense, a corresponding reduction in the unrecognized net actuarial loss of the plan is recorded. The remaining pre-tax unrecognized net actuarial loss will continue to be amortized over the average remaining future years of service of the active plan participants. The Company will incur additional quarterly settlement expense related to lump-sum distributions from the nonunion defined benefit pension plan during the remainder of 2017. The following table discloses the changes in benefit obligations and plan assets of the nonunion defined benefit pension plan for the three months ended March 31, 2017: Nonunion Defined Benefit Pension Plan (in thousands) Change in benefit obligations Benefit obligations at December 31, 2016 $ 152,006 Interest cost 1,240 Actuarial loss (1) 4,290 Benefits paid (12,532) Benefit obligations at March 31, 2017 145,004 Change in plan assets Fair value of plan assets at December 31, 2016 144,805 Actual return on plan assets 4,050 Benefits paid (12,532) Fair value of plan assets at March 31, 2017 136,323 Funded status at March 31, 2017 (2) $ (8,681) Accumulated benefit obligation $ 145,004 (1) Primarily impacted by actuarial increases in the valuation of participant data as of January 1, 2017. The actuarial loss from remeasurement upon settlement was also impacted by a decrease in the discount rate at March 31, 2017 compared to the previous remeasurement at December 31, 2016. (2) Noncurrent liability recognized within pension and postretirement liabilities in the accompanying consolidated balance sheet at March 31, 2017. Based upon current actuarial information, the Company does not have a minimum cash contribution requirement to its nonunion defined benefit pension plan for 2017; however, depending on relevant factors, the Company could make a contribution to the plan during 2017. The plan’s preliminary adjusted funding target attainment percentage (“AFTAP”) is projected to be 107.8% as of the January 1, 2017 valuation date. The AFTAP is determined by measurements prescribed by the Internal Revenue Code, which differ from the funding measurements for financial statement reporting purposes. Multiemployer Plans ABF Freight System, Inc. and certain other subsidiaries reported in the Company’s Asset-Based operating segment (“ABF Freight”) contribute to multiemployer pension and health and welfare plans, which have been established pursuant to the Taft-Hartley Act, to provide benefits for its contractual employees. ABF Freight’s contributions generally are based on the time worked by its contractual employees, in accordance with the ABF NMFA and other related supplemental agreements. ABF Freight recognizes as expense the contractually required contributions for each period and recognizes as a liability any contributions due and unpaid. The 25 multiemployer pension plans to which ABF Freight contributes vary greatly in size and in funded status. Contribution obligations to these plans are specified in the ABF NMFA, which will remain in effect through March 31, 2018. The funding obligations to the pension plans are intended to satisfy the requirements imposed by the Pension Protection Act of 2006 (the “PPA”), which was permanently extended by the Multiemployer Pension Reform Act (the “Reform Act”) included in the Consolidated and Further Continuing Appropriations Act of 2015. Provisions of the Reform Act include, among others, providing qualifying plans the ability to self-correct funding issues, subject to various requirements and restrictions, including applying to the U.S. Department of the Treasury (the “Treasury Department”) for the reduction of certain accrued benefits. Through the term of its current collective bargaining agreement, ABF Freight’s contribution obligations generally will be satisfied by making the specified contributions when due. However, the Company cannot determine with any certainty the contributions that will be required under future collective bargaining agreements for ABF Freight’s contractual employees. If ABF Freight was to completely withdraw from certain multiemployer pension plans, under current law, ABF Freight would have material liabilities for its share of the unfunded vested liabilities of each such plan. Approximately one half of ABF Freight’s total contributions to multiemployer pension plans are made to the Central States, Southeast and Southwest Areas Pension Plan (the “Central States Pension Plan”). ABF Freight received an Actuarial Certification of Plan Status for the Central States Pension Plan dated March 31, 2017, in which the plan’s actuary certified that, as of January 1, 2017, the plan is in critical and declining status, as defined by the Reform Act, with the funded percentage projected to be 40.0% as of the January 1, 2017 valuation date. Critical and declining status is applicable to critical status plans that are projected to become insolvent anytime within the next 14 plan years, or if the plan is projected to become insolvent within the next 19 plan years and either the plan’s ratio of inactive participants to active participants exceeds two to one or the plan’s funded percentage is less than 80%. As previously disclosed in the Company’s 2016 Form 10-K, ABF Freight received a Notice of Insolvency from the Road Carriers Local 707 Pension Fund (the “707 Pension Fund”) for the plan year beginning February 1, 2016. On March 1, 2017, the Pension Benefit Guaranty Corporation (“PBGC”) announced that beginning February 1, 2017 benefits to retirees were reduced to PBGC guarantee limits for insolvent multiemployer plans. The PBGC provides financial assistance to insolvent multiemployer plans to pay retiree benefits not to exceed guaranteed limits. The 707 Pension Fund will continue to administer the fund as the PBGC provides financial assistance. Approximately 1% of ABF Freight’s total multiemployer pension contributions are made to the 707 Pension Fund. Based on currently available information, it is the Company’s understanding that if the 707 Pension Fund becomes insolvent, ABF Freight’s benefit contribution rates under the ABF NMFA will be frozen and ABF Freight will be required to continue making contributions at the frozen rate throughout and after the current ABF NMFA contract period, which extends to March 31, 2018; however, there can be no assurance in this regard. The multiemployer plan administrators have provided to the Company no other significant changes in information related to multiemployer plans from the information disclosed in the Company’s 2016 Annual Report on Form 10-K. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2017 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | NOTE G – STOCKHOLDERS’ EQUITY Accumulated Other Comprehensive Loss Components of accumulated other comprehensive loss were as follows: March 31 December 31 2017 2016 (in thousands) Pre-tax amounts: Unrecognized net periodic benefit costs $ (28,737) $ (29,320) Interest rate swap (319) (542) Foreign currency translation (1,783) (1,978) Total $ (30,839) $ (31,840) After-tax amounts: Unrecognized net periodic benefit costs $ (21,530) $ (21,886) Interest rate swap (194) (329) Foreign currency translation (1,083) (1,202) Total $ (22,807) $ (23,417) The following is a summary of the changes in accumulated other comprehensive loss, net of tax, by component for the three months ended March 31, 2017 and 2016: Unrecognized Interest Foreign Net Periodic Rate Currency Total Benefit Costs Swap Translation (in thousands) Balances at December 31, 2016 $ (23,417) $ (21,886) $ (329) $ (1,202) Other comprehensive income (loss) before reclassifications (1,217) (1,471) 135 119 Amounts reclassified from accumulated other comprehensive loss 1,827 1,827 — — Net current-period other comprehensive income 610 356 135 119 Balances at March 31, 2017 $ (22,807) $ (21,530) $ (194) $ (1,083) Balances at December 31, 2015 $ (27,496) $ (25,497) $ (545) $ (1,454) Other comprehensive income (loss) before reclassifications (3,466) (3,504) (546) 584 Amounts reclassified from accumulated other comprehensive loss 1,235 1,235 — — Net current-period other comprehensive income (loss) (2,231) (2,269) (546) 584 Balances at March 31, 2016 $ (29,727) $ (27,766) $ (1,091) $ (870) The following is a summary of the significant reclassifications out of accumulated other comprehensive loss by component: Unrecognized Net Periodic Benefit Costs (1)(2) Three Months Ended March 31 2017 2016 (in thousands) Amortization of net actuarial loss $ (1,079) $ (1,169) Amortization of prior service credit 47 47 Pension settlement expense (1,957) (900) Total, pre-tax (2,989) (2,022) Tax benefit 1,162 787 Total, net of tax $ (1,827) $ (1,235) (1) Amounts in parentheses indicate increases in expense or loss. (2) These components of accumulated other comprehensive loss are included in the computation of net periodic benefit cost (see Note F). Dividends on Common Stock The following table is a summary of dividends declared during the applicable quarter: 2017 2016 Per Share Amount Per Share Amount (in thousands, except per share data) First quarter $ $ $ 0.08 $ 2,088 On May 2, 2017, the Company’s Board of Directors declared a dividend of $0.08 per share to stockholders of record as of May 16, 2017, payable on May 30, 2017. Treasury Stock The Company has a program to repurchase its common stock in the open market or in privately negotiated transactions. The program has no expiration date but may be terminated at any time at the Board of Directors’ discretion. Repurchases may be made using the Company’s cash reserves or other available sources. As of December 31, 2016, the Company had $37.7 million remaining under the program for repurchases of its common stock. The Company did not make share repurchases during the three months ended March 31, 2017. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2017 | |
SHARE-BASED COMPENSATION | |
SHARE-BASED COMPENSATION | NOTE H – SHARE-BASED COMPENSATION Stock Awards As of March 31, 2017 and December 31, 2016, the Company had outstanding restricted stock units granted under the 2005 Ownership Incentive Plan (“the 2005 Plan”). The 2005 Plan, as amended, provides for the granting of 3.1 million shares, which may be awarded as incentive and nonqualified stock options, stock appreciation rights, restricted stock, or restricted stock units (“RSUs”). Restricted Stock Units A summary of the Company’s restricted stock unit award program is presented below: Units Outstanding – January 1, 2017 1,477,537 Granted 2,500 Vested (26,998) Forfeited (1) (18,759) Outstanding – March 31, 2017 1,434,280 (1) Forfeitures are recognized as they occur. The RSUs granted during the period had a weighted-average grant date fair value of $30.18 per share. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2017 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE I – EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended March 31 2017 2016 (in thousands, except share and per share data) Basic Numerator: Net loss $ (7,407) $ (6,103) Effect of unvested restricted stock awards (17) (18) Adjusted net loss $ (7,424) $ (6,121) Denominator: Weighted-average shares 25,684,475 25,822,522 Loss per common share $ (0.29) $ (0.24) Diluted Numerator: Net loss $ (7,407) $ (6,103) Effect of unvested restricted stock awards (17) (18) Adjusted net loss $ (7,424) $ (6,121) Denominator: Weighted-average shares 25,684,475 25,822,522 Effect of dilutive securities — — Adjusted weighted-average shares and assumed conversions 25,684,475 25,822,522 Loss per common share $ (0.29) $ (0.24) Under the two-class method of calculating earnings per share, dividends paid and a portion of undistributed net income, but not losses, are allocated to unvested RSUs that receive dividends, which are considered participating securities. Beginning with 2015 grants, the RSU agreements were modified to remove dividend rights; therefore, the RSUs granted subsequent to 2015 are not participating securities. Outstanding stock awards of 0.8 million and 0.9 million for the three months ended March 31, 2017 and 2016, respectively, were not included in the diluted earnings per share calculation because their inclusion would have the effect of decreasing the loss per share. |
OPERATING SEGMENT DATA
OPERATING SEGMENT DATA | 3 Months Ended |
Mar. 31, 2017 | |
OPERATING SEGMENT DATA | |
OPERATING SEGMENT DATA | NOTE J – OPERATING SEGMENT DATA The Company uses the “management approach” to determine its reportable operating segments, as well as to determine the basis of reporting the operating segment information. The management approach focuses on financial information that the Company’s management uses to make operating decisions. Management uses revenues, operating expense categories, operating ratios, operating income, and key operating statistics to evaluate performance and allocate resources to the Company’s operations. On November 3, 2016, the Company announced its plan to implement a new corporate structure which unified the Company’s sales, pricing, customer service, marketing, and capacity sourcing functions effective January 1, 2017. As previously reported in the Company’s 2016 Annual Report on Form 10‑K, the operating segments previously reported as Premium Logistics (Panther), Transportation Management (ABF Logistics), and Household Goods Moving Services (ABF Moving) were combined into a single asset‑light logistics operation reported under the ArcBest segment for the quarter and year ended December 31, 2016. The Company has restated certain prior year operating segment data in this Quarterly Report on Form 10-Q to conform to the current year presentation. Segment revenues and expenses were adjusted to eliminate certain intercompany charges consistent with the manner in which they are reported under the new corporate structure. Certain intercompany charges among the previously reported Panther, ABF Logistics, and ABF Moving segments which were previously eliminated in the “Other and eliminations” line, are now eliminated within the ArcBest segment. There was no impact on the Company’s consolidated revenues, operating expenses, operating income, or earnings per share as a result of the restatements. The Company’s reportable operating segments are impacted by seasonal fluctuations which affect tonnage, shipment levels, and demand for services, as described below; therefore, operating results for the interim periods presented may not necessarily be indicative of the results for the fiscal year. The Company’s reportable operating segments are as follows: · Asset-Based, which includes the results of operations of ABF Freight System, Inc. and certain other subsidiaries. The operations include national, inter-regional, and regional transportation of general commodities through standard, expedited, and guaranteed LTL services. In addition, the segment operations include freight transportation related to certain consumer household goods self-move services. Freight shipments and operating costs of the Asset-Based segment can be adversely affected by inclement weather conditions. The second and third calendar quarters of each year usually have the highest tonnage levels while the first quarter generally has the lowest, although other factors, including the state of the U.S. and global economies, may influence quarterly freight tonnage levels. · The ArcBest segment includes the results of operations of the Company’s Expedite, Truckload, and Truckload-Dedicated businesses as well as its premium logistics services; international freight transportation with air, ocean, and ground service offerings; household goods moving services to consumer, commercial, and government customers; warehousing management and distribution services; and managed transportation solutions. ArcBest segment operations are influenced by seasonal fluctuations that impact customers’ supply chains and the resulting demand for expedite services. The second and third calendar quarters of each year usually have the highest shipment levels while the first quarter generally has the lowest, although other factors, including the state of the U.S. and global economies, may impact quarterly business levels. Expedite shipments of the ArcBest segment may decline during winter months because of post-holiday slowdowns but can be subject to short-term increases depending on the impact of weather disruptions to customers’ supply chains. Plant shutdowns during summer months may affect shipments for automotive and manufacturing customers of the ArcBest segment, but severe weather events can result in higher demand for expedite services. The household goods moving services of the ArcBest segment are impacted by seasonal fluctuations, generally resulting in higher business levels in the second and third quarters as the demand for moving services is typically stronger in the summer months. Seasonal fluctuations are less apparent in the operating results of the Truckload and Truckload-Dedicated services of the ArcBest segment than in the industry as a whole because of business growth, including acquisitions, in this service offering of the segment. · FleetNet includes the results of operations of FleetNet America, Inc. and certain other subsidiaries that provide roadside assistance and maintenance management services for commercial vehicles through a network of third-party service providers. FleetNet also provides services to the Asset-Based and ArcBest segments. Emergency roadside service events of the FleetNet segment are favorably impacted by adverse weather conditions that affect commercial vehicle operations and the segment’s results of operations will be influenced by seasonal variations in service event volume. The Company’s other business activities and operating segments that are not reportable include ArcBest Corporation and certain other subsidiaries. Certain costs incurred by the parent holding company and the Company’s shared services subsidiary are allocated to the reporting segments. The Company eliminates intercompany transactions in consolidation. However, the information used by the Company’s management with respect to its reportable segments is before intersegment eliminations of revenues and expenses. Further classifications of operations or revenues by geographic location are impracticable and, therefore, are not provided. The Company’s foreign operations are not significant. The following tables reflect reportable operating segment information: Three Months Ended March 31 2017 2016 (1) (in thousands) REVENUES Asset-Based $ 464,356 $ 439,063 ArcBest (2) 152,876 142,397 FleetNet 40,238 43,564 Other and eliminations (6,382) (3,569) Total consolidated revenues $ 651,088 $ 621,455 OPERATING EXPENSES Asset-Based Salaries, wages, and benefits $ 304,843 $ 296,162 Fuel, supplies, and expenses 75,432 66,689 Operating taxes and licenses 11,869 11,980 Insurance 7,109 6,466 Communications and utilities 4,822 4,372 Depreciation and amortization 20,983 20,392 Rents and purchased transportation 46,608 39,696 Gain on sale of property and equipment (617) (172) Pension settlement expense (3) 1,401 677 Other 1,791 1,800 Restructuring costs (4) 140 — Total Asset-Based 474,381 448,062 ArcBest (2) Purchased transportation 121,919 111,831 Salaries, wages, and benefits 16,536 18,581 Supplies and expenses 5,286 4,418 Depreciation and amortization 3,366 3,465 Other 4,058 4,094 Restructuring costs (4) 810 — Total ArcBest 151,975 142,389 FleetNet 39,264 42,580 Other and eliminations (4) (2,279) (2,311) Total consolidated operating expenses (3) $ 663,341 $ 630,720 (1) Certain restatements have been made to the prior year’s operating segment data to conform to the current year presentation, reflecting the realignment of the Company’s corporate structure as previously discussed in this Note. (2) The 2017 period includes the operations of LDS, which was acquired in September 2016. (3) For the three months ended March 31, 2017 and 2016, pre-tax pension settlement expense on a consolidated basis totaled $2.0 million and $0.9 million, respectively, of which $1.4 million and $0.7 million, respectively, was reported by the Asset-Based segment. (4) Restructuring costs relate to the realignment of the Company’s corporate structure (see Note K). Other and eliminations includes $0.7 million of restructuring costs. Three Months Ended March 31 2017 2016 (1) (in thousands) OPERATING INCOME (LOSS) Asset-Based $ (10,025) $ (8,999) ArcBest (2) 901 8 FleetNet 974 984 Other and eliminations (4,103) (1,258) Total consolidated operating loss $ (12,253) $ (9,265) OTHER INCOME (COSTS) Interest and dividend income $ 274 $ 401 Interest and other related financing costs (1,315) (1,247) Other, net (3) 647 366 Total other costs (394) (480) LOSS BEFORE INCOME TAXES $ (12,647) $ (9,745) (1) Certain restatements have been made to the prior year’s operating segment data to conform to the current year presentation, reflecting the realignment of the Company’s corporate structure as previously discussed in this Note. (2) The 2017 periods include the operations of LDS, which was acquired in September 2016. (3) Includes proceeds and changes in cash surrender value of life insurance policies. The following table presents operating expenses by category on a consolidated basis: Three Months Ended March 31 2017 2016 (1) (in thousands) OPERATING EXPENSES Salaries, wages, and benefits $ 334,829 $ 331,137 Rents, purchased transportation, and other costs of services 199,871 184,699 Fuel, supplies, and expenses 72,662 63,135 Depreciation and amortization (2) 25,394 25,151 Other 28,954 26,598 Restructuring (3) 1,631 — $ 663,341 $ 630,720 (1) Certain restatements have been made to the prior year’s operating expense data to conform to the current year presentation, reflecting the realignment of the Company’s corporate structure as previously discussed in this Note. (2) Includes amortization of intangible assets. (3) Restructuring costs relate to the realignment of the Company’s corporate structure. |
RESTRUCTURING CHARGES
RESTRUCTURING CHARGES | 3 Months Ended |
Mar. 31, 2017 | |
RESTRUCTURING CHARGES | |
RESTRUCTURING CHARGES AND IMPAIRMENT | NOTE K – RESTRUCTURING CHARGES On November 3, 2016, the Company announced its plan to implement a new corporate structure to better serve its customers. The new corporate structure unified the Company’s sales, pricing, customer service, marketing, and capacity sourcing functions effective January 1, 2017, and allows the Company to operate as one logistics provider under the ArcBest brand. As a result of the restructuring, the Company recorded $1.6 million of restructuring charges in operating expenses during the three months ended March 31, 2017, primarily for employee-related costs. The Company estimates it will incur restructuring charges of approximately $1.0 million during the remainder of 2017 primarily for employee-related costs associated with the plan announced during 2016. |
LEGAL PROCEEDINGS, ENVIRONMENTA
LEGAL PROCEEDINGS, ENVIRONMENTAL MATTERS, AND OTHER EVENTS | 3 Months Ended |
Mar. 31, 2017 | |
LEGAL PROCEEDINGS, ENVIRONMENTAL MATTERS, AND OTHER EVENTS | |
LEGAL PROCEEDINGS, ENVIRONMENTAL MATTERS, AND OTHER EVENTS | NOTE L – LEGAL PROCEEDINGS, ENVIRONMENTAL MATTERS, AND OTHER EVENTS The Company is involved in various legal actions arising in the ordinary course of business. The Company maintains liability insurance against certain risks arising out of the normal course of its business, subject to certain self-insured retention limits. The Company routinely establishes and reviews the adequacy of reserves for estimated legal, environmental, and self-insurance exposures. While management believes that amounts accrued in the consolidated financial statements are adequate, estimates of these liabilities may change as circumstances develop. Considering amounts recorded, routine legal matters are not expected to have a material adverse effect on the Company’s financial condition, results of operations, or cash flows. Environmental Matters The Company’s subsidiaries store fuel for use in tractors and trucks in 62 underground tanks located in 18 states. Maintenance of such tanks is regulated at the federal and, in most cases, state levels. The Company believes it is in substantial compliance with all such regulations. The Company’s underground storage tanks are required to have leak detection systems. The Company is not aware of any leaks from such tanks that could reasonably be expected to have a material adverse effect on the Company. The Company has received notices from the Environmental Protection Agency and others that it has been identified as a potentially responsible party under the Comprehensive Environmental Response Compensation and Liability Act, or other federal or state environmental statutes, at several hazardous waste sites. After investigating the Company’s involvement in waste disposal or waste generation at such sites, the Company has either agreed to de minimis settlements or determined that its obligations, other than those specifically accrued with respect to such sites, would involve immaterial monetary liability, although there can be no assurances in this regard. At March 31, 2017 and December 31, 2016, the Company’s reserve, which was reported in accrued expenses, for estimated environmental cleanup costs of properties currently or previously operated by the Company totaled $0.5 million. Amounts accrued reflect management’s best estimate of the future undiscounted exposure related to identified properties based on current environmental regulations, management’s experience with similar environmental matters, and testing performed at certain sites. |
ORGANIZATION AND DESCRIPTION 21
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION | |
Financial Statement Presentation - Basis of accounting | The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and applicable rules and regulations of the Securities and Exchange Commission (the “Commission”) pertaining to interim financial information. Accordingly, these interim financial statements do not include all information or footnote disclosures required by accounting principles generally accepted in the United States for complete financial statements and, therefore, should be read in conjunction with the audited financial statements and accompanying notes included in the Company’s 2016 Annual Report on Form 10-K and other current filings with the Commission. In the opinion of management, all adjustments (which are of a normal and recurring nature) -considered necessary for a fair presentation have been included. |
Financial Statement Presentation - Restatements and reclassifications | Certain restatements have been made to the prior year’s operating segment data to conform to the current year presentation, reflecting the realignment of the Company’s organizational structure as announced on November 3, 2016. Under the new structure, the segments previously reported as Premium Logistics (Panther), Transportation Management (ABF Logistics), and Household Goods Moving Services (ABF Moving) are consolidated as a single Asset-Light logistics operation under ArcBest. Segment revenues and expenses were adjusted to eliminate certain intercompany charges consistent with the manner in which they are reported under the new corporate structure. Certain intercompany charges among the previously reported Panther, ABF Logistics, and ABF Moving segments which were previously eliminated in the “Other and eliminations” line, are now eliminated within the ArcBest segment. There was no impact on the Company’s consolidated revenues, operating expenses, operating income, or earnings per share as a result of the restatements. Certain reclassifications have been made to the prior year’s consolidated financial statements to conform to the current year presentation. The insurance receivable for the amount of workers’ compensation and third-party casualty claims in excess of self-insurance retention limits, which was previously offset against the reserve included in accrued expenses, has been reclassed to other accounts receivable, resulting in an $8.7 million increase in other accounts receivable and a corresponding increase in accrued expenses in the consolidated balance sheet at December 31, 2016. Amounts totaling $18.6 million related to certain service centers of the Company’s Asset-Based operations previously recorded in leasehold improvements were reclassed to land and structures in the consolidated balance sheet at December 31, 2016. Other reclassifications were made to the consolidated financial statements to apply the provisions of accounting pronouncements adopted during the first quarter of 2017 related to deferred income taxes, share-based compensation, and cash flow classification (see Adopted Accounting Pronouncements within this Note). The Company’s deferred tax assets were reclassed, by jurisdiction, from current to long-term in the consolidated balance sheets. The net change in restricted cash previously presented in financing activities of the Company’s consolidated statements of cash flows was removed and restricted cash was included in the reconciliation of beginning- and end-of-period totals of cash and cash equivalents and restricted cash. Cash paid by the Company when directly withholding shares from an employee’s share-based compensation award for tax-withholding purposes was reclassified from an operating activity within changes in income taxes to a financing activity in the consolidated statements of cash flows. There was no impact on the Company’s consolidated revenues, operating expenses, operating income, or earnings per share as a result of the reclassifications. |
Financial Statement Presentation - Estimates | The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual amounts may differ from those estimates. |
Share-Based Compensation | Share-Based Compensation: The fair value of restricted stock awards is determined based upon the closing market price of the Company’s common stock on the date of grant. The restricted stock units generally vest at the end of a five‑year period following the date of grant, except for certain awards granted to non-employee directors that typically vest at the end of a one-year period for awards granted on or after January 1, 2016 and at the end of a three-year period for previous grants, subject to accelerated vesting due to death, disability, retirement, or change in control provisions. When restricted stock units become vested, the Company issues new shares which are subsequently distributed. Dividends or dividend equivalents are paid on certain restricted stock units during the vesting period. The Company recognizes the income tax benefits of dividends on share-based payment awards as income tax expense or benefit in the consolidated statements of operations when awards vest or are settled. Share based awards are amortized to compensation expense on a straight line basis over the vesting period of awards or over the period to which the recipient first becomes eligible for retirement, whichever is shorter, with vesting accelerated upon death or disability. The Company recognizes forfeitures as they occur. |
Adopted Accounting Pronouncements and Accounting Pronouncements Not Yet Adopted | Adopted Accounting Pronouncements In the first quarter of 2017, the Company adopted guidance issued by the Financial Accounting Standards Board (the “FASB”) which amended Accounting Standards Codification (“ASC”) ASC Topic 740 with the addition of Balance Sheet Classification of Deferred Taxes . The amendment was retrospectively adopted and resulted in reclassifications to the consolidated balance sheets to present all deferred tax assets and liabilities as noncurrent by jurisdiction. An amendment to ASC Topic 718, Compensation – Stock Compensation , was issued to simplify the accounting for share-based compensation, which requires the income tax effects of awards to be recognized in the statement of operations when awards vest or are settled and allows employers to make a policy election to account for forfeitures as they occur. The Company adopted the amendment in the first quarter of 2017. As a result of applying the provisions of the amendment, the Company recognized a $0.2 million cumulative effect adjustment to the opening balance of retained earnings for the three months ended March 31, 2017. The Company also made a policy election to account for forfeitures as they occur. The Company may experience volatility in its income tax provision as a result of recording all excess tax benefits and tax deficiencies in the income statement upon settlement of awards, which is primarily during the second quarter of each year. This provision of the amendment related to recognition of excess tax benefits and tax deficiencies was adopted prospectively; therefore, the prior period has not been adjusted for this provision. Cash paid by the Company to taxing authorities on the employee’s behalf for withheld shares was reclassified from an operating activity within changes in accounts payable, accrued expenses, and other liabilities to a financing activity in the consolidated statements of cash flows. The other provisions of the adopted amendment did not have a significant impact on the Company’s consolidated financial statements. In the first quarter of 2017, the Company also adopted amendments to ASC Topic 230, Statement of Cash Flows , which provide classification guidance for restricted cash and certain cash receipts and cash payments presented in the statement of cash flows. The retrospective adoption of the amendments resulted in reclassification to the consolidated statement of cash flows to include restricted cash in the reconciliation of beginning- and end-of-period totals of cash and cash equivalents. Proceeds from the settlement of corporate-owned life insurance policies will be classified as cash provided by investing activities, and cash payments for premiums on such insurance policies will be classified as cash used in operating activities in the consolidated statements of cash flows. Accounting Pronouncements Not Yet Adopted ASC Topic 606, which amends the guidance in former ASC Topic 605, Revenue Recognition , provides a single comprehensive revenue recognition model for all contracts with customers and contains principles to apply to determine the measurement of revenue and timing of when it is recognized. The standard is effective for the Company on January 1, 2018. The Company plans to adopt this standard on the modified retrospective basis and does not expect a significant impact on the consolidated financial statements. An amendment to ASC Topic 715, Compensation – Retirement Benefits will require the service cost component of net benefit cost related to benefit plans accounted for under ASC Topic 715 to be included in the same line item or items as other compensation costs arising from services rendered by the related employees and will allow only the service cost component of the net benefit cost to be eligible for capitalization of internal costs. The amendment will also require the other components of net benefit cost, including pension settlement expense, to be presented in other income (costs) rather than in operating income. The amendment is effective for the Company beginning January 1, 2018. The Company is currently assessing the impact this update will have on the consolidated financial statements and disclosures. ASC Topic 842, Leases , which is effective for the Company beginning January 1, 2019, will require leases with a term greater than twelve months to be reflected as liabilities with associated right-of-use assets in the Company’s consolidated balance sheet. The Company is evaluating the impact of the new standard on the consolidated financial statements and disclosures. An amendment to ASC Topic 326, Measurement of Credit Losses on Financial Instruments , which changes the impairment model for most financial assets and certain other instruments, is effective for the Company beginning January 1, 2020. The Company is currently assessing the impact this update will have on the consolidated financial statements or disclosures. Management believes that there is no other new accounting guidance issued but not yet effective that is relevant to the Company’s current financial statements. |
FINANCIAL INSTRUMENTS AND FAI22
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | |
Schedule components of cash and cash equivalents, short term investments, and restricted funds | March 31 December 31 2017 2016 (in thousands) Cash and cash equivalents Cash deposits (1) $ 61,067 $ 92,520 Variable rate demand notes (1)(2) 578 16,057 Money market funds (3) 20,608 5,703 Total cash and cash equivalents $ 82,253 $ 114,280 Short-term investments Certificates of deposit (1) $ 56,984 $ 56,838 Restricted cash (4) Cash deposits (1) $ 962 $ 962 (1) Recorded at cost plus accrued interest, which approximates fair value. (2) Amounts may be redeemed on a daily basis with the original issuer. (3) Recorded at fair value as determined by quoted market prices (see amounts presented in the table of financial assets and liabilities measured at fair value within this Note). (4) Amounts restricted for use are subject to change based on the requirements of the Company’s collateralized facilities (see Note E). |
Schedule of fair value and carrying value disclosures of financial instruments | March 31 December 31 2017 2016 (in thousands) Carrying Fair Carrying Fair Value Value Value Value Credit Facility (1) $ 70,000 $ 70,000 $ 70,000 $ 70,000 Accounts receivable securitization borrowings (2) 35,000 35,000 35,000 35,000 Notes payable (3) 121,444 120,775 138,032 137,503 $ 226,444 $ 225,775 $ 243,032 $ 242,503 (1) The revolving credit facility (the “Credit Facility”) carries a variable interest rate based on LIBOR, plus a margin, that is considered to be priced at market for debt instruments having similar terms and collateral requirements (Level 2 of the fair value hierarchy). (2) Borrowings under the Company’s accounts receivable securitization program carry a variable interest rate based on LIBOR, plus a margin. The borrowings are considered to be priced at market for debt instruments having similar terms and collateral requirements (Level 2 of the fair value hierarchy). (3) Fair value of the notes payable was determined using a present value income approach based on quoted interest rates from lending institutions with which the Company would enter into similar transactions (Level 2 of the fair value hierarchy). |
Schedule of financial assets and liabilities measured at fair value on a recurring basis | March 31, 2017 Fair Value Measurements Using Quoted Prices Significant Significant In Active Observable Unobservable Markets Inputs Inputs Total (Level 1) (Level 2) (Level 3) (in thousands) Assets: Money market funds (1) $ 20,608 $ 20,608 $ — $ — Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan (2) 2,271 2,271 — — $ 22,879 $ 22,879 $ — $ — Liabilities: Contingent consideration (3) $ 6,790 $ — $ — $ 6,790 Interest rate swap (4) 319 — 319 — $ 7,109 $ — $ 319 $ 6,790 December 31, 2016 Fair Value Measurements Using Quoted Prices Significant Significant In Active Observable Unobservable Markets Inputs Inputs Total (Level 1) (Level 2) (Level 3) (in thousands) Assets: Money market funds (1) $ 5,703 $ 5,703 $ — $ — Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan (2) 2,220 2,220 — — $ 7,923 $ 7,923 $ — $ — Liabilities: Contingent consideration (3) $ 6,775 $ — $ — $ 6,775 Interest rate swap (4) 542 — 542 — $ 7,317 $ — $ 542 $ 6,775 (1) Included in cash and cash equivalents. (2) Nonqualified deferred compensation plan investments consist of U.S. and international equity mutual funds, government and corporate bond mutual funds, and money market funds which are held in a trust with a third-party brokerage firm. Included in other long-term assets, with a corresponding liability reported within other long-term liabilities. (3) Included in accrued expenses and other long-term liabilities, based on when expected payouts become due. The estimated fair value of contingent consideration for an earn-out agreement related to the September 2016 acquisition of LDS was determined by assessing Level 3 inputs with a discounted cash flow approach using various probability-weighted scenarios. The Level 3 assessments utilize a Monte Carlo simulation with inputs including scenarios of estimated revenues and gross margins to be achieved for the applicable performance periods, probability weightings assigned to the performance scenarios, and the discount rate applied, which was 12.3% as of March 31, 2017. Subsequent changes to the fair value as a result of recurring assessments will be recognized in operating income. (4) Included in other long-term liabilities. The interest rate swap fair value was determined by discounting future cash flows and receipts based on expected interest rates observed in market interest rate curves adjusted for estimated credit valuation considerations reflecting nonperformance risk of the Company and the counterparty, which are considered to be in Level 3 of the fair value hierarchy. The Company assessed Level 3 inputs as insignificant to the valuation at March 31, 2017 and December 31, 2016 and considers the interest rate swap valuation in Level 2 of the fair value hierarchy. |
Schedule of changes in fair value of the liabilities | Contingent Consideration (in thousands) Balances at December 31, 2016 $ 6,775 Change in fair value included in operating expenses 15 Balances at March 31, 2017 $ 6,790 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of goodwill by reportable operating segment | Total ArcBest FleetNet (in thousands) Balances at December 31, 2016 $ 108,875 $ 108,245 $ 630 Purchase accounting adjustments (1) 106 106 — Balances at March 31, 2017 $ 108,981 $ 108,351 $ 630 (1) Goodwill related to the September 2, 2016 acquisition of LDS is based on preliminary information as of March 31, 2017. |
Schedule of intangible assets | March 31, 2017 December 31, 2016 Weighted-Average Accumulated Net Accumulated Net Amortization Period Cost Amortization Value Cost Amortization Value (in years) (in thousands) (in thousands) Finite-lived intangible assets Customer relationships (1) 14 $ 60,431 $ 16,450 $ 43,981 $ 60,431 $ 15,350 $ 45,081 Driver network 3 3,200 3,200 — 3,200 3,200 — Other 9 1,032 442 590 1,032 406 626 13 64,663 20,092 44,571 64,663 18,956 45,707 Indefinite-lived intangible assets Trade name N/A 32,300 N/A 32,300 32,300 N/A 32,300 Other N/A 2,500 N/A 2,500 2,500 N/A 2,500 34,800 34,800 34,800 34,800 Total intangible assets N/A $ 99,463 $ 20,092 $ 79,371 $ 99,463 $ 18,956 $ 80,507 (1) Customer relationships of $7.7 million related to the September 2, 2016 acquisition of LDS is based on preliminary information as of March 31, 2017. |
Schedule of future amortization for intangible assets and acquired software | Intangible Acquired Total Assets Software (1) (in thousands) 2017 $ 5,284 $ 3,402 $ 1,882 2018 6,654 4,520 2,134 2019 5,469 4,482 987 2020 4,471 4,454 17 2021 4,418 4,412 6 Thereafter 23,301 23,301 — Total amortization $ 49,597 $ 44,571 $ 5,026 (1) Acquired software is reported in property, plant and equipment. |
LONG-TERM DEBT AND FINANCING 24
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
LONG-TERM DEBT AND FINANCING ARRANGEMENTS | |
Schedule of long-term debt | March 31 December 31 2017 2016 (in thousands) Credit Facility (interest rate of 2.5% (1) at March 31, 2017) $ 70,000 $ 70,000 Accounts receivable securitization borrowings (interest rate of 1.7% at March 31, 2017) 35,000 35,000 Notes payable (weighted-average interest rate of 2.2% at March 31, 2017) 121,444 138,032 Capital lease obligations (weighted-average interest rate of 5.7% at March 31, 2017) 626 641 227,070 243,673 Less current portion 59,995 64,143 Long-term debt, less current portion $ 167,075 $ 179,530 (1) The interest rate swap mitigates interest rate risk by effectively converting $50.0 million of borrowings under the Credit Facility from variable-rate interest to fixed-rate interest with a per annum rate of 3.35% based on the margin of the Credit Facility as of March 31, 2017. |
Scheduled maturities of long-term debt obligations | Accounts Receivable Credit Securitization Notes Capital Lease Total Facility (1) Program (1) Payable Obligations (2) (in thousands) Due in one year or less $ 64,735 $ 1,944 $ 759 $ 61,802 $ 230 Due after one year through two years 44,207 2,275 925 40,772 235 Due after two years through three years 122,755 71,886 36,047 14,621 201 Due after three years through four years 5,310 — — 5,303 7 Due after four years through five years 2,338 — — 2,331 7 Due after five years — — — — — Total payments 239,345 76,105 37,731 124,829 680 Less amounts representing interest 12,275 6,105 2,731 3,385 54 Long-term debt $ 227,070 $ 70,000 $ 35,000 $ 121,444 $ 626 (1) The future interest payments included in the scheduled maturities due are calculated using variable interest rates based on the LIBOR swap curve, plus the anticipated applicable margin. (2) Minimum payments of capital lease obligations include maximum amounts due under rental adjustment clauses contained in the capital lease agreements. |
Schedule of assets securing notes payable or held under capital leases | March 31 December 31 2017 2016 (in thousands) Revenue equipment $ 220,381 $ 220,566 Land and structures (service centers) 1,794 1,794 Software 671 — Service, office, and other equipment 7 7 Total assets securing notes payable or held under capital leases 222,853 222,367 Less accumulated depreciation and amortization (1) 72,430 61,643 Net assets securing notes payable or held under capital leases $ 150,423 $ 160,724 (1) Amortization of assets under capital leases and depreciation of assets securing notes payable are included in depreciation expense. |
PENSION AND OTHER POSTRETIREM25
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS | |
Summary of the components of net periodic benefit cost | Three Months Ended March 31 Nonunion Defined Supplemental Postretirement Benefit Pension Plan Benefit Plan Health Benefit Plan 2017 2016 2017 2016 2017 2016 (in thousands) Service cost $ — $ — $ — $ — $ 122 $ 107 Interest cost 1,240 1,305 26 32 265 254 Expected return on plan assets (2,167) (1,946) — — — — Amortization of prior service credit — — — — (47) (47) Pension settlement expense 1,957 900 — — — — Amortization of net actuarial loss (1) 886 955 20 38 173 176 Net periodic benefit cost $ 1,916 $ 1,214 $ 46 $ 70 $ 513 $ 490 (1) The Company amortizes actuarial losses over the average remaining active service period of the plan participants and does not use a corridor approach. |
Schedule of changes in the projected benefit obligation and plan assets of the nonunion defined benefit pension plan | Nonunion Defined Benefit Pension Plan (in thousands) Change in benefit obligations Benefit obligations at December 31, 2016 $ 152,006 Interest cost 1,240 Actuarial loss (1) 4,290 Benefits paid (12,532) Benefit obligations at March 31, 2017 145,004 Change in plan assets Fair value of plan assets at December 31, 2016 144,805 Actual return on plan assets 4,050 Benefits paid (12,532) Fair value of plan assets at March 31, 2017 136,323 Funded status at March 31, 2017 (2) $ (8,681) Accumulated benefit obligation $ 145,004 (1) Primarily impacted by actuarial increases in the valuation of participant data as of January 1, 2017. The actuarial loss from remeasurement upon settlement was also impacted by a decrease in the discount rate at March 31, 2017 compared to the previous remeasurement at December 31, 2016. (2) Noncurrent liability recognized within pension and postretirement liabilities in the accompanying consolidated balance sheet at March 31, 2017. |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
STOCKHOLDERS' EQUITY | |
Components of accumulated other comprehensive loss | March 31 December 31 2017 2016 (in thousands) Pre-tax amounts: Unrecognized net periodic benefit costs $ (28,737) $ (29,320) Interest rate swap (319) (542) Foreign currency translation (1,783) (1,978) Total $ (30,839) $ (31,840) After-tax amounts: Unrecognized net periodic benefit costs $ (21,530) $ (21,886) Interest rate swap (194) (329) Foreign currency translation (1,083) (1,202) Total $ (22,807) $ (23,417) |
Summary of changes in accumulated other comprehensive loss, net of tax, by component | Unrecognized Interest Foreign Net Periodic Rate Currency Total Benefit Costs Swap Translation (in thousands) Balances at December 31, 2016 $ (23,417) $ (21,886) $ (329) $ (1,202) Other comprehensive income (loss) before reclassifications (1,217) (1,471) 135 119 Amounts reclassified from accumulated other comprehensive loss 1,827 1,827 — — Net current-period other comprehensive income 610 356 135 119 Balances at March 31, 2017 $ (22,807) $ (21,530) $ (194) $ (1,083) Balances at December 31, 2015 $ (27,496) $ (25,497) $ (545) $ (1,454) Other comprehensive income (loss) before reclassifications (3,466) (3,504) (546) 584 Amounts reclassified from accumulated other comprehensive loss 1,235 1,235 — — Net current-period other comprehensive income (loss) (2,231) (2,269) (546) 584 Balances at March 31, 2016 $ (29,727) $ (27,766) $ (1,091) $ (870) |
Summary of the significant reclassifications out of accumulated other comprehensive loss by component | Unrecognized Net Periodic Benefit Costs (1)(2) Three Months Ended March 31 2017 2016 (in thousands) Amortization of net actuarial loss $ (1,079) $ (1,169) Amortization of prior service credit 47 47 Pension settlement expense (1,957) (900) Total, pre-tax (2,989) (2,022) Tax benefit 1,162 787 Total, net of tax $ (1,827) $ (1,235) (1) Amounts in parentheses indicate increases in expense or loss. (2) These components of accumulated other comprehensive loss are included in the computation of net periodic benefit cost (see Note F). |
Summary of dividends declared | 2017 2016 Per Share Amount Per Share Amount (in thousands, except per share data) First quarter $ $ $ 0.08 $ 2,088 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
SHARE-BASED COMPENSATION | |
Summary of the Company's restricted stock unit award program | Units Outstanding – January 1, 2017 1,477,537 Granted 2,500 Vested (26,998) Forfeited (1) (18,759) Outstanding – March 31, 2017 1,434,280 (1) Forfeitures are recognized as they occur. |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
EARNINGS PER SHARE | |
Schedule of computation of basic and diluted earnings (loss) per share | Three Months Ended March 31 2017 2016 (in thousands, except share and per share data) Basic Numerator: Net loss $ (7,407) $ (6,103) Effect of unvested restricted stock awards (17) (18) Adjusted net loss $ (7,424) $ (6,121) Denominator: Weighted-average shares 25,684,475 25,822,522 Loss per common share $ (0.29) $ (0.24) Diluted Numerator: Net loss $ (7,407) $ (6,103) Effect of unvested restricted stock awards (17) (18) Adjusted net loss $ (7,424) $ (6,121) Denominator: Weighted-average shares 25,684,475 25,822,522 Effect of dilutive securities — — Adjusted weighted-average shares and assumed conversions 25,684,475 25,822,522 Loss per common share $ (0.29) $ (0.24) |
ORGANIZATION AND DESCRIPTION 29
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION (Organization) (Details) - segment | Nov. 03, 2013 | Mar. 31, 2017 |
Organization and description of business | ||
Number of reportable operating segments | 3 | |
Asset-Based | ||
Organization and description of business | ||
Percentage of the Company's revenues, before other revenues and intercompany eliminations, represented by the Asset-Based segment | 71.00% | |
Wage rate reduction under collective bargaining agreement upon implementation date (as a percent) | 7.00% | |
Wage rate increase for next three years of collective bargaining agreement (as a percent) | 2.00% | |
Wage rate increase in fifth year of collective bargaining agreement (as a percent) | 2.50% | |
Reduction in compensated vacation under collective bargaining agreement | 5 days | |
Approximate initial reduction in combined total contractual wage and benefit rate under collective bargaining agreement (as a percent) | 4.00% | |
Estimated increase in compounded annual contractual wage and benefit contribution rates in second through fifth years (as a percent) | 2.50% | |
Asset-Based | Unionized employees concentration risk | Number of employees | ||
Organization and description of business | ||
Percentage of Asset-Based segment employees covered under collective bargaining agreement with the IBT | 83.00% |
ORGANIZATION AND DESCRIPTION 30
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION (Acquisitions) (Details) - LDS - ArcBest $ in Millions | Sep. 02, 2016USD ($) |
Acquisitions | |
Total consideration | $ 25 |
Cash consideration | 17 |
Contingent consideration | $ 8 |
Contingent consideration period | 2 years |
ORGANIZATION AND DESCRIPTION 31
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION (Adopted Pronouncements) (Details) $ in Millions | Jan. 01, 2017USD ($) |
ASC Topic 718, Compensation – Stock Compensation | Retained Earnings | |
Cumulative effect adjustment to the opening balance of retained earnings | $ 0.2 |
ORGANIZATION AND DESCRIPTION 32
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION (Reclassifications) (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Other accounts receivable | $ 18,687 | $ 22,041 |
Accrued expenses | 190,829 | 198,731 |
Leasehold improvements | 8,993 | 8,758 |
Land and structures | 330,909 | 324,086 |
Other assets | 65,380 | 66,095 |
Other liabilities | $ 15,844 | 16,790 |
Reclassification adjustment | ||
Other accounts receivable | 8,700 | |
Accrued expenses | 8,700 | |
Leasehold improvements | (18,600) | |
Land and structures | $ 18,600 |
ORGANIZATION AND DESCRIPTION 33
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION (Share-Based Compensation) (Details) - Restricted Stock Units | 3 Months Ended | 12 Months Ended | 15 Months Ended |
Mar. 31, 2017 | Dec. 31, 2015 | Mar. 31, 2017 | |
Share-Based Compensation | |||
Vesting period | 5 years | ||
Nonemployee director | |||
Share-Based Compensation | |||
Vesting period | 3 years | 1 year |
FINANCIAL INSTRUMENTS AND FAI34
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Cash, Investments and Restricted Funds) (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Fair value disclosure | ||
Cash and cash equivalents | $ 82,253 | $ 114,280 |
Short-term investments | 56,984 | 56,838 |
Restricted cash | 962 | 962 |
Concentrations of Credit Risk of Financial Instruments | ||
Cash and cash equivalents which are not FDIC-insured | 32,600 | 39,900 |
Cash deposits | ||
Fair value disclosure | ||
Cash and cash equivalents | 61,067 | 92,520 |
Restricted cash | 962 | 962 |
Variable rate demand notes | ||
Fair value disclosure | ||
Cash and cash equivalents | 578 | 16,057 |
Money market funds | ||
Fair value disclosure | ||
Cash and cash equivalents | 20,608 | 5,703 |
Certificates of deposit | ||
Fair value disclosure | ||
Short-term investments | $ 56,984 | $ 56,838 |
FINANCIAL INSTRUMENTS AND FAI35
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Debt) (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Carrying Value | ||
Fair value disclosure | ||
Debt obligations | $ 226,444 | $ 243,032 |
Fair Value | ||
Fair value disclosure | ||
Debt obligations | 225,775 | 242,503 |
Level 2 | Credit Facility | Carrying Value | ||
Fair value disclosure | ||
Debt obligations | 70,000 | 70,000 |
Level 2 | Credit Facility | Fair Value | ||
Fair value disclosure | ||
Debt obligations | 70,000 | 70,000 |
Level 2 | Accounts receivable securitization program | Carrying Value | ||
Fair value disclosure | ||
Debt obligations | 35,000 | 35,000 |
Level 2 | Accounts receivable securitization program | Fair Value | ||
Fair value disclosure | ||
Debt obligations | 35,000 | 35,000 |
Level 2 | Notes payable | Carrying Value | ||
Fair value disclosure | ||
Debt obligations | 121,444 | 138,032 |
Level 2 | Notes payable | Fair Value | ||
Fair value disclosure | ||
Debt obligations | $ 120,775 | $ 137,503 |
FINANCIAL INSTRUMENTS AND FAI36
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Assets and Liabilities) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Interest rate swap agreement | Other long-term liabilities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Interest rate swap | $ 300 | $ 500 |
Recurring basis | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Assets | 22,879 | 7,923 |
Liabilities | 7,109 | 7,317 |
Recurring basis | Accrued and other long term liabilities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Contingent consideration | 6,790 | 6,775 |
Recurring basis | Interest rate swap agreement | Other long-term liabilities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Interest rate swap | 319 | 542 |
Recurring basis | Money market funds | Cash and cash equivalents | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Assets | 20,608 | 5,703 |
Recurring basis | Voluntary Savings Plan - mutual funds held in trust | Other long-term assets | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Assets | 2,271 | 2,220 |
Recurring basis | Level 1 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Assets | 22,879 | 7,923 |
Recurring basis | Level 1 | Money market funds | Cash and cash equivalents | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Assets | 20,608 | 5,703 |
Recurring basis | Level 1 | Voluntary Savings Plan - mutual funds held in trust | Other long-term assets | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Assets | 2,271 | 2,220 |
Recurring basis | Level 2 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Liabilities | 319 | 542 |
Recurring basis | Level 2 | Interest rate swap agreement | Other long-term liabilities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Interest rate swap | 319 | 542 |
Recurring basis | Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Liabilities | $ 6,790 | 6,775 |
Recurring basis | Level 3 | LDS | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Discount rate (as a percent) | 12.30% | |
Recurring basis | Level 3 | Accrued and other long term liabilities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Contingent consideration | $ 6,790 | $ 6,775 |
FINANCIAL INSTRUMENTS AND FAI37
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (FV - Level 3) (Details) - Contingent Consideration $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Fair Value of liabilities level 3 hierarchy | |
Balance beginning of period | $ 6,775 |
Change in fair value included in operating expenses | 15 |
Balance at end of period | $ 6,790 |
GOODWILL AND INTANGIBLE ASSET38
GOODWILL AND INTANGIBLE ASSETS (Goodwill) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Goodwill by reportable operating segment | |
Balance at the beginning of the period | $ 108,875 |
Purchase accounting adjustments | 106 |
Balance at the end of the period | 108,981 |
ArcBest | |
Goodwill by reportable operating segment | |
Balance at the beginning of the period | 108,245 |
Purchase accounting adjustments | 106 |
Balance at the end of the period | 108,351 |
FleetNet | |
Goodwill by reportable operating segment | |
Balance at the beginning of the period | 630 |
Balance at the end of the period | $ 630 |
GOODWILL AND INTANGIBLE ASSET39
GOODWILL AND INTANGIBLE ASSETS (Intangible) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Finite-lived intangible assets | ||
Weighted Average Amortization Period | 13 years | |
Cost | $ 64,663 | $ 64,663 |
Accumulated Amortization | 20,092 | 18,956 |
Net Value | 44,571 | 45,707 |
Indefinite-lived intangible assets | ||
Net Value | 34,800 | 34,800 |
Total intangible assets | ||
Cost | 99,463 | 99,463 |
Net Value | 79,371 | 80,507 |
Trade name | ||
Indefinite-lived intangible assets | ||
Net Value | 32,300 | 32,300 |
Other | ||
Indefinite-lived intangible assets | ||
Net Value | $ 2,500 | 2,500 |
Customer relationships | ||
Finite-lived intangible assets | ||
Weighted Average Amortization Period | 14 years | |
Cost | $ 60,431 | 60,431 |
Accumulated Amortization | 16,450 | 15,350 |
Net Value | 43,981 | 45,081 |
Customer relationships | LDS | ||
Finite-lived intangible assets | ||
Cost | $ 7,700 | |
Driver network | ||
Finite-lived intangible assets | ||
Weighted Average Amortization Period | 3 years | |
Cost | $ 3,200 | 3,200 |
Accumulated Amortization | $ 3,200 | 3,200 |
Other | ||
Finite-lived intangible assets | ||
Weighted Average Amortization Period | 9 years | |
Cost | $ 1,032 | 1,032 |
Accumulated Amortization | 442 | 406 |
Net Value | $ 590 | $ 626 |
GOODWILL AND INTANGIBLE ASSET40
GOODWILL AND INTANGIBLE ASSETS (Amortization) (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Future amortization for intangible assets and acquired software | ||
2,017 | $ 5,284 | |
2,018 | 6,654 | |
2,019 | 5,469 | |
2,020 | 4,471 | |
2,021 | 4,418 | |
Thereafter | 23,301 | |
Total amortization | 49,597 | |
Future amortization for intangible assets | ||
2,017 | 3,402 | |
2,018 | 4,520 | |
2,019 | 4,482 | |
2,020 | 4,454 | |
2,021 | 4,412 | |
Thereafter | 23,301 | |
Net Value | 44,571 | $ 45,707 |
Future amortization for acquired software | ||
2,017 | 1,882 | |
2,018 | 2,134 | |
2,019 | 987 | |
2,020 | 17 | |
2,021 | 6 | |
Total amortization, Acquired software | $ 5,026 |
INCOME TAXES (Tax rate) (Detail
INCOME TAXES (Tax rate) (Details) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
INCOME TAXES | ||
Statutory federal tax rate (as a percent) | 35.00% | |
State tax, low end of range of rate (as a percent) | 6.00% | |
State tax, high end of range of rate (as a percent) | 6.50% | |
Effective tax rate (as a percent) | 41.40% | 37.40% |
Alternative fuel tax credit (as a percent) | 2.90% |
INCOME TAXES (New Accounting Pr
INCOME TAXES (New Accounting Pronouncements) (Details) | 3 Months Ended |
Mar. 31, 2017 | |
ASC Topic 718, Compensation – Stock Compensation | |
New Accounting Pronouncements | |
Tax benefit as a result of applying provisions of new accounting policy | 0.60% |
INCOME TAXES (Taxes Paid) (Deta
INCOME TAXES (Taxes Paid) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income taxes | ||
Income taxes paid (in dollars) | $ 1.6 | |
Income tax refunds received (in dollars) | $ 0.7 | |
Maximum | ||
Income taxes | ||
Income taxes paid (in dollars) | $ 0.1 | |
Income tax refunds received (in dollars) | $ 0.1 |
LONG-TERM DEBT AND FINANCING 44
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Summary) (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Long-term debt obligations | ||
Long-term debt | $ 227,070 | $ 243,673 |
Less current portion | 59,995 | 64,143 |
Long-term debt, less current portion | 167,075 | 179,530 |
Payments under long-term debt obligations | ||
Due in one year or less | 64,735 | |
Due after one year through two years | 44,207 | |
Due after two years through three years | 122,755 | |
Due after three years through four years | 5,310 | |
Due after four years through five years | 2,338 | |
Total payments | 239,345 | |
Less amounts representing interest | 12,275 | |
Long-term debt | 227,070 | 243,673 |
Credit Facility | ||
Long-term debt obligations | ||
Long-term debt | $ 70,000 | 70,000 |
Interest rate (as a percent) | 2.50% | |
Payments under long-term debt obligations | ||
Due in one year or less | $ 1,944 | |
Due after one year through two years | 2,275 | |
Due after two years through three years | 71,886 | |
Total payments | 76,105 | |
Less amounts representing interest | 6,105 | |
Long-term debt | 70,000 | 70,000 |
Credit Facility | Interest rate swap agreement | ||
Long-term debt obligations | ||
Amount of borrowings covered by the interest rate swap | $ 50,000 | |
Effective fixed interest rate on hedged borrowings (as a percent) | 3.35% | |
Accounts receivable securitization program | ||
Long-term debt obligations | ||
Long-term debt | $ 35,000 | 35,000 |
Interest rate (as a percent) | 1.70% | |
Payments under long-term debt obligations | ||
Due in one year or less | $ 759 | |
Due after one year through two years | 925 | |
Due after two years through three years | 36,047 | |
Total payments | 37,731 | |
Less amounts representing interest | 2,731 | |
Long-term debt | 35,000 | 35,000 |
Notes payable | ||
Long-term debt obligations | ||
Long-term debt | $ 121,444 | 138,032 |
Weighted-average interest rate (as a percent) | 2.20% | |
Payments under long-term debt obligations | ||
Due in one year or less | $ 61,802 | |
Due after one year through two years | 40,772 | |
Due after two years through three years | 14,621 | |
Due after three years through four years | 5,303 | |
Due after four years through five years | 2,331 | |
Total payments | 124,829 | |
Less amounts representing interest | 3,385 | |
Long-term debt | 121,444 | 138,032 |
Capital lease obligations | ||
Long-term debt obligations | ||
Long-term debt | $ 626 | 641 |
Weighted-average interest rate (as a percent) | 5.70% | |
Payments under long-term debt obligations | ||
Due in one year or less | $ 230 | |
Due after one year through two years | 235 | |
Due after two years through three years | 201 | |
Due after three years through four years | 7 | |
Due after four years through five years | 7 | |
Total payments | 680 | |
Less amounts representing interest | 54 | |
Long-term debt | $ 626 | $ 641 |
LONG-TERM DEBT AND FINANCING 45
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Assets Sec) (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Financing Arrangements | ||
Total assets securing notes payable or held under capital leases | $ 222,853 | $ 222,367 |
Less accumulated depreciation and amortization | 72,430 | 61,643 |
Net assets securing notes payable or held under capital leases | 150,423 | 160,724 |
Revenue equipment | ||
Financing Arrangements | ||
Total assets securing notes payable or held under capital leases | 220,381 | 220,566 |
Land and structures (service centers) | ||
Financing Arrangements | ||
Total assets securing notes payable or held under capital leases | 1,794 | 1,794 |
Software | ||
Financing Arrangements | ||
Total assets securing notes payable or held under capital leases | 671 | |
Service, office, and other equipment | ||
Financing Arrangements | ||
Total assets securing notes payable or held under capital leases | $ 7 | $ 7 |
LONG-TERM DEBT AND FINANCING 46
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Financing arrangements - Credit Facility) (Details) $ in Millions | Mar. 31, 2017USD ($) |
Credit Facility | |
Financing Arrangements | |
Maximum borrowing capacity | $ 150 |
Additional borrowing capacity that may be requested | 75 |
Letters of Credit, Sub-Facility | |
Financing Arrangements | |
Maximum borrowing capacity | $ 20 |
LONG-TERM DEBT AND FINANCING 47
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Financing arrangements - Interest rate swap) (Details) - Interest rate swap agreement - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Financing Arrangements | ||
Notional amount | $ 50 | |
Fixed interest rate payments (as a percent) | 1.85% | |
Other long-term liabilities | ||
Financing Arrangements | ||
Fair value | $ 0.3 | $ 0.5 |
Credit Facility | ||
Financing Arrangements | ||
Amount of borrowings covered by the interest rate swap | $ 50 | |
Effective fixed interest rate on hedged borrowings (as a percent) | 3.35% |
LONG-TERM DEBT AND FINANCING 48
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Financing arrangements - Securitization program) (Details) - Accounts receivable securitization program - USD ($) $ in Millions | 1 Months Ended | |||
Apr. 30, 2017 | Mar. 31, 2017 | Mar. 20, 2017 | Dec. 31, 2016 | |
Financing Arrangements | ||||
Maximum borrowing capacity | $ 125 | $ 100 | ||
Additional borrowing capacity that may be requested | $ 25 | |||
Amount outstanding | $ 35 | |||
Outstanding letters of credit | 18 | |||
Remaining borrowing capacity | $ 72 | |||
Subsequent Event | ||||
Financing Arrangements | ||||
Remaining borrowing capacity | $ 62 | |||
Borrowings under accounts receivable securitization program | $ 10 |
LONG-TERM DEBT AND FINANCING 49
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Financing arrangements - Leterrs of credit & Surety bonds (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Financing Arrangements | ||
Amounts collateralized by restricted funds | $ 962 | $ 962 |
Accounts receivable securitization program | ||
Financing Arrangements | ||
Outstanding letters of credit | 18,000 | |
Letter of Credit Agreements | ||
Financing Arrangements | ||
Outstanding letters of credit | 19,600 | |
Amounts collateralized by restricted funds | 1,000 | |
Surety bonds | ||
Financing Arrangements | ||
Outstanding surety bonds under uncollateralized bond programs | $ 54,400 |
LONG-TERM DEBT AND FINANCING 50
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Financing arrangements - Notes payable & Capital leases) (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Software | Notes payable | |
Financing Arrangements | |
Equipment financed during the period under notes payable | $ 0.7 |
PENSION AND OTHER POSTRETIREM51
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Components of cost) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Components of net periodic benefit cost | ||
Pension settlement expense | $ 1,957 | $ 900 |
Nonunion Defined Benefit Pension Plan | ||
Components of net periodic benefit cost | ||
Interest cost | 1,240 | 1,305 |
Expected return on plan assets | (2,167) | (1,946) |
Pension settlement expense | 1,957 | 900 |
Amortization of net actuarial loss | 886 | 955 |
Net periodic benefit cost | 1,916 | 1,214 |
Supplemental Benefit Plan | ||
Components of net periodic benefit cost | ||
Interest cost | 26 | 32 |
Amortization of net actuarial loss | 20 | 38 |
Net periodic benefit cost | 46 | 70 |
Postretirement Health Benefit Plan | ||
Components of net periodic benefit cost | ||
Service cost | 122 | 107 |
Interest cost | 265 | 254 |
Amortization of prior service credit | (47) | (47) |
Amortization of net actuarial loss | 173 | 176 |
Net periodic benefit cost | $ 513 | $ 490 |
PENSION AND OTHER POSTRETIREM52
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Nonunion) (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017USD ($)person | Mar. 31, 2016USD ($) | |
Pension and other postretirement benefit plans | ||
Pension settlement expense, pre-tax | $ 1,957 | $ 900 |
Pension settlement expense, net of tax | $ 1,196 | 550 |
Nonunion Defined Benefit Pension Plan | ||
Pension and other postretirement benefit plans | ||
Number of plan participants for which vested pension benefits were settled | person | 50 | |
Pension settlement expense, pre-tax | $ 1,957 | 900 |
Pension settlement expense, net of tax | 1,200 | 600 |
Premium paid to purchase nonparticipating annuity contract | 7,600 | |
Lump-sum distributions | $ 4,800 | $ 4,500 |
PENSION AND OTHER POSTRETIREM53
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Funded status) (Details) - Nonunion Defined Benefit Pension Plan - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Jan. 01, 2017 | |
Change in benefit obligations | |||
Benefit obligations at beginning of period | $ 152,006 | ||
Interest cost | 1,240 | $ 1,305 | |
Actuarial (gain) loss | 4,290 | ||
Benefits paid | (12,532) | ||
Benefit obligations at end of period | 145,004 | ||
Change in plan assets | |||
Fair value of plan assets at beginning of period | 144,805 | ||
Actual return on plan assets | 4,050 | ||
Benefits paid | (12,532) | ||
Fair value of plan assets at end of period | 136,323 | ||
Funded status | (8,681) | ||
Accumulated benefit obligation | $ 145,004 | ||
Adjusted funding target attainment percentage | 107.80% |
PENSION AND OTHER POSTRETIREM54
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Multiemployer Plans) (Details) - Multiemployer pension plans - Asset-Based - plan | 3 Months Ended | |
Mar. 31, 2017 | Jan. 01, 2017 | |
Multiemployer Plans | ||
Number of multiemployer plans to which ABF Freight currently contributes | 25 | |
Maximum projected time to insolvency for plans in "critical and declining" status | 14 years | |
Maximum projected time to insolvency for plans in "critical and declining" status if additional criteria apply | 19 years | |
Threshold ratio of inactive to active participants for greater insolvency period to determine "critical and declining" status | 2 | |
Threshold funded percentage for greater insolvency period to determine "critical and declining" status | 80.00% | |
Central States Pension Plan | ||
Multiemployer Plans | ||
Approximate proportion of multiemployer pension plan contributions (as a percent) | 50.00% | |
Actuarially certified projected funded percentage of multiemployer pension plan | 40.00% | |
707 Pension Fund | ||
Multiemployer Plans | ||
Approximate proportion of multiemployer pension plan contributions (as a percent) | 1.00% |
STOCKHOLDERS' EQUITY (AOCI) (De
STOCKHOLDERS' EQUITY (AOCI) (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accumulated Other Comprehensive Loss | ||||
Total after-tax amount | $ 591,676 | $ 599,055 | ||
Impact on unrecognized net actuarial loss | ||||
Change in the unrecognized net actuarial loss, after tax | (1,471) | $ (3,504) | ||
Accumulated Other Comprehensive Loss | ||||
Accumulated Other Comprehensive Loss | ||||
Total pre-tax amount | (30,839) | (31,840) | ||
Total after-tax amount | (22,807) | (29,727) | (23,417) | $ (27,496) |
Unrecognized Net Periodic Benefit Costs | ||||
Accumulated Other Comprehensive Loss | ||||
Total pre-tax amount | (28,737) | (29,320) | ||
Total after-tax amount | (21,530) | (27,766) | (21,886) | (25,497) |
Interest Rate Swap | ||||
Accumulated Other Comprehensive Loss | ||||
Total pre-tax amount | (319) | (542) | ||
Total after-tax amount | (194) | (1,091) | (329) | (545) |
Foreign Currency Translation | ||||
Accumulated Other Comprehensive Loss | ||||
Total pre-tax amount | (1,783) | (1,978) | ||
Total after-tax amount | $ (1,083) | $ (870) | $ (1,202) | $ (1,454) |
STOCKHOLDERS' EQUITY (AOCI comp
STOCKHOLDERS' EQUITY (AOCI comp) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Changes in accumulated other comprehensive loss, net of tax, by component | ||
Balances | $ 599,055 | |
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | 610 | $ (2,231) |
Balances | 591,676 | |
Accumulated Other Comprehensive Loss | ||
Changes in accumulated other comprehensive loss, net of tax, by component | ||
Balances | (23,417) | (27,496) |
Other comprehensive income (loss) before reclassifications | (1,217) | (3,466) |
Amounts reclassified from accumulated other comprehensive loss | 1,827 | 1,235 |
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | 610 | (2,231) |
Balances | (22,807) | (29,727) |
Unrecognized Net Periodic Benefit Costs | ||
Changes in accumulated other comprehensive loss, net of tax, by component | ||
Balances | (21,886) | (25,497) |
Other comprehensive income (loss) before reclassifications | (1,471) | (3,504) |
Amounts reclassified from accumulated other comprehensive loss | 1,827 | 1,235 |
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | 356 | (2,269) |
Balances | (21,530) | (27,766) |
Interest Rate Swap | ||
Changes in accumulated other comprehensive loss, net of tax, by component | ||
Balances | (329) | (545) |
Other comprehensive income (loss) before reclassifications | 135 | (546) |
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | 135 | (546) |
Balances | (194) | (1,091) |
Foreign Currency Translation | ||
Changes in accumulated other comprehensive loss, net of tax, by component | ||
Balances | (1,202) | (1,454) |
Other comprehensive income (loss) before reclassifications | 119 | 584 |
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | 119 | 584 |
Balances | $ (1,083) | $ (870) |
STOCKHOLDERS' EQUITY (Reclass)
STOCKHOLDERS' EQUITY (Reclass) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Unrecognized Net Periodic Benefit Costs | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | $ (2,989) | $ (2,022) |
Tax benefit | 1,162 | 787 |
Total, net of tax | (1,827) | (1,235) |
Amortization of net actuarial loss | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | (1,079) | (1,169) |
Amortization of prior service credit | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | 47 | 47 |
Pension settlement expense | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | $ (1,957) | $ (900) |
STOCKHOLDERS' EQUITY (Dividends
STOCKHOLDERS' EQUITY (Dividends) (Details) - USD ($) $ / shares in Units, $ in Thousands | May 02, 2017 | Mar. 31, 2017 | Mar. 31, 2016 |
Dividends on Common Stock | |||
Dividends declared (in dollars per share) | $ 0.08 | $ 0.08 | |
Dividend Amount | $ 2,066 | $ 2,088 | |
Subsequent Event | |||
Dividends on Common Stock | |||
Dividends declared (in dollars per share) | $ 0.08 |
STOCKHOLDERS' EQUITY (Treasury
STOCKHOLDERS' EQUITY (Treasury Stock) (Details) - Stock Repurchase Program - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Treasury Stock | ||
Amount available for repurchase | $ 37.7 | |
Number of shares repurchased during the period | 0 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) | 3 Months Ended |
Mar. 31, 2017$ / sharesshares | |
Share-based compensation | |
Number of shares authorized | 3,100,000 |
Restricted Stock Units | |
Award activity | |
Outstanding at the beginning of the period (in shares) | 1,477,537 |
Granted (in shares) | 2,500 |
Vested (in shares) | (26,998) |
Forfeited (in shares) | (18,759) |
Outstanding at the end of the period (in shares) | 1,434,280 |
Weighted-Average Grant Date Fair Value | |
Granted (in dollars per share) | $ / shares | $ 30.18 |
EARNINGS PER SHARE (Basic and D
EARNINGS PER SHARE (Basic and Diluted) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Basic, numerator: | ||
Net loss | $ (7,407) | $ (6,103) |
Effect of unvested restricted stock unit awards | (17) | (18) |
Adjusted net loss | $ (7,424) | $ (6,121) |
Basic, denominator: | ||
Weighted-average shares | 25,684,475 | 25,822,522 |
Loss per common share (in dollars per share) | $ (0.29) | $ (0.24) |
Diluted, numerator: | ||
Net loss | $ (7,407) | $ (6,103) |
Effect of unvested restricted stock unit awards | (17) | (18) |
Adjusted net loss | $ (7,424) | $ (6,121) |
Diluted, denominator: | ||
Weighted-average shares | 25,684,475 | 25,822,522 |
Adjusted weighted-average shares and assumed conversions | 25,684,475 | 25,822,522 |
Loss per common share (in dollars per share) | $ (0.29) | $ (0.24) |
EARNINGS PER SHARE (AntiDil) (D
EARNINGS PER SHARE (AntiDil) (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Stock awards | ||
Antidilutive securities | ||
Outstanding stock awards not included in calculation of diluted earnings (loss) per share (in shares) | 0.8 | 0.9 |
OPERATING SEGMENT DATA - (Rev a
OPERATING SEGMENT DATA - (Rev and Expenses) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
REVENUES | ||
Revenues | $ 651,088 | $ 621,455 |
OPERATING EXPENSES | ||
Salaries, wages, and benefits | 334,829 | 331,137 |
Fuel, supplies, and expenses | 72,662 | 63,135 |
Depreciation and amortization | 25,394 | 25,151 |
Gain on sale of property and equipment | (613) | (311) |
Pension settlement expense | 1,957 | 900 |
Other | 28,954 | 26,598 |
Restructuring costs | 1,631 | |
Total consolidated operating expenses | 663,341 | 630,720 |
OPERATING INCOME | ||
OPERATING LOSS | (12,253) | (9,265) |
OTHER INCOME (COSTS) | ||
Interest and dividend income | 274 | 401 |
Interest and other related financing costs | (1,315) | (1,247) |
Other, net | 647 | 366 |
TOTAL OTHER INCOME (COSTS) | (394) | (480) |
LOSS BEFORE INCOME TAXES | (12,647) | (9,745) |
Operating Segments | Asset-Based | ||
REVENUES | ||
Revenues | 464,356 | 439,063 |
OPERATING EXPENSES | ||
Salaries, wages, and benefits | 304,843 | 296,162 |
Fuel, supplies, and expenses | 75,432 | 66,689 |
Operating taxes and licenses | 11,869 | 11,980 |
Insurance | 7,109 | 6,466 |
Communications and utilities | 4,822 | 4,372 |
Depreciation and amortization | 20,983 | 20,392 |
Rents and purchased transportation | 46,608 | 39,696 |
Gain on sale of property and equipment | (617) | (172) |
Pension settlement expense | 1,401 | 677 |
Other | 1,791 | 1,800 |
Restructuring costs | 140 | |
Total consolidated operating expenses | 474,381 | 448,062 |
OPERATING INCOME | ||
OPERATING LOSS | (10,025) | (8,999) |
Operating Segments | ArcBest | ||
REVENUES | ||
Revenues | 152,876 | 142,397 |
OPERATING EXPENSES | ||
Purchased transportation | 121,919 | 111,831 |
Salaries, wages, and benefits | 16,536 | 18,581 |
Supplies and expenses | 5,286 | 4,418 |
Depreciation and amortization | 3,366 | 3,465 |
Other | 4,058 | 4,094 |
Restructuring costs | 810 | |
Total consolidated operating expenses | 151,975 | 142,389 |
OPERATING INCOME | ||
OPERATING LOSS | 901 | 8 |
Operating Segments | FleetNet | ||
REVENUES | ||
Revenues | 40,238 | 43,564 |
OPERATING EXPENSES | ||
Total consolidated operating expenses | 39,264 | 42,580 |
OPERATING INCOME | ||
OPERATING LOSS | 974 | 984 |
Other and eliminations | ||
REVENUES | ||
Revenues | (6,382) | (3,569) |
OPERATING EXPENSES | ||
Restructuring costs | (700) | |
Total consolidated operating expenses | (2,279) | (2,311) |
OPERATING INCOME | ||
OPERATING LOSS | $ (4,103) | $ (1,258) |
OPERATING SEGMENT DATA - (Opera
OPERATING SEGMENT DATA - (Operating Expenses) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
OPERATING EXPENSES | ||
Salaries, wages, and benefits | $ 334,829 | $ 331,137 |
Rents, purchased transportation, and other costs of services | 199,871 | 184,699 |
Fuel, supplies, and expenses | 72,662 | 63,135 |
Depreciation and amortization | 25,394 | 25,151 |
Other | 28,954 | 26,598 |
Restructuring costs | 1,631 | |
Total consolidated operating expenses | $ 663,341 | $ 630,720 |
RESTRUCTURING CHARGES (Details)
RESTRUCTURING CHARGES (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
RESTRUCTURING CHARGES | |
Restructuring charges | $ 1,631 |
Expected restructuring charges during remainder of 2017 | $ 1,000 |
LEGAL PROCEEDINGS, ENVIRONMEN66
LEGAL PROCEEDINGS, ENVIRONMENTAL MATTERS, AND OTHER EVENTS (Environmental Matters) (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($)tankstate | |
Underground fuel storage tanks | |
Environmental Matters | |
Number of underground tanks where the company's subsidiaries store fuel for use in tractors and trucks | tank | 62 |
Number of states in which underground tanks are located | state | 18 |
Environmental cleanup costs | Accrued expenses | |
Environmental Matters | |
Reserve for environmental contingencies | $ | $ 0.5 |