Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 01, 2019 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 000-19969 | |
Entity Registrant Name | ARCBEST CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 71-0673405 | |
Entity Address, Address Line One | 8401 McClure Drive | |
Entity Address, City or Town | Fort Smith | |
Entity Address, State or Province | AR | |
Entity Address, Postal Zip Code | 72916 | |
City Area Code | 479 | |
Local Phone Number | 785-6000 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | ARCB | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 25,520,304 | |
Entity Central Index Key | 0000894405 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 181,731 | $ 190,186 |
Short-term investments | 117,657 | 106,806 |
Accounts receivable, less allowances (2019 - $6,238; 2018 - $7,380) | 296,090 | 297,051 |
Other accounts receivable, less allowances (2019 - $463; 2018 - $806) | 17,207 | 19,146 |
Prepaid expenses | 28,546 | 25,304 |
Prepaid and refundable income taxes | 5,237 | 1,726 |
Other | 4,982 | 9,007 |
TOTAL CURRENT ASSETS | 651,450 | 649,226 |
PROPERTY, PLANT AND EQUIPMENT | ||
Land and structures | 339,255 | 339,640 |
Revenue equipment | 888,588 | 858,251 |
Service, office, and other equipment | 218,131 | 199,230 |
Software | 143,181 | 138,517 |
Leasehold improvements | 10,058 | 9,365 |
TOTAL PROPERTY, PLANT AND EQUIPMENT, GROSS | 1,599,213 | 1,545,003 |
Less allowances for depreciation and amortization | 947,264 | 913,815 |
PROPERTY, PLANT AND EQUIPMENT, net | 651,949 | 631,188 |
GOODWILL | 108,320 | 108,320 |
INTANGIBLE ASSETS, net | 66,700 | 68,949 |
OPERATING RIGHT-OF-USE ASSETS | 68,810 | |
DEFERRED INCOME TAXES | 6,296 | 7,468 |
OTHER LONG-TERM ASSETS | 80,402 | 74,080 |
TOTAL ASSETS | 1,633,927 | 1,539,231 |
CURRENT LIABILITIES | ||
Accounts payable | 166,829 | 143,785 |
Income taxes payable | 1,942 | 1,688 |
Accrued expenses | 228,994 | 243,111 |
Current portion of long-term debt | 47,205 | 54,075 |
Current portion of operating lease liabilities | 18,273 | |
Current portion of pension and postretirement liabilities | 8,231 | 8,659 |
TOTAL CURRENT LIABILITIES | 471,474 | 451,318 |
LONG-TERM DEBT, less current portion | 235,001 | 237,600 |
OPERATING LEASE LIABILITIES, less current portion | 54,040 | |
PENSION AND POSTRETIREMENT LIABILITIES, less current portion | 31,874 | 31,504 |
OTHER LONG-TERM LIABILITIES | 37,268 | 44,686 |
DEFERRED INCOME TAXES | 61,111 | 56,441 |
STOCKHOLDERS' EQUITY | ||
Common stock, $0.01 par value, authorized 70,000,000 shares; issued 2019: 28,786,473 shares, 2018: 28,684,779 shares | 288 | 287 |
Additional paid-in capital | 329,388 | 325,712 |
Retained earnings | 526,551 | 501,389 |
Treasury stock, at cost, 2019: 3,266,169 shares; 2018: 3,097,634 shares | (100,639) | (95,468) |
Accumulated other comprehensive loss | (12,429) | (14,238) |
TOTAL STOCKHOLDERS' EQUITY | 743,159 | 717,682 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 1,633,927 | $ 1,539,231 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowances (in dollars) | $ 6,238 | $ 7,380 |
Other accounts receivable, allowances (in dollars) | $ 463 | $ 806 |
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 | 28,786,473 | 28,684,779 |
Treasury stock, at cost, shares | 3,266,169 | 3,097,634 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
REVENUES | $ 771,490 | $ 793,350 | $ 1,483,329 | $ 1,493,351 |
OPERATING EXPENSES | 736,290 | 790,194 | 1,439,538 | 1,477,470 |
OPERATING INCOME | 35,200 | 3,156 | 43,791 | 15,881 |
OTHER INCOME (COSTS) | ||||
Interest and dividend income | 1,616 | 714 | 3,094 | 1,240 |
Interest and other related financing costs | (2,811) | (2,013) | (5,693) | (4,072) |
Other, net | (445) | (1,123) | (1,036) | (3,324) |
TOTAL OTHER INCOME (COSTS) | (1,640) | (2,422) | (3,635) | (6,156) |
INCOME BEFORE INCOME TAXES | 33,560 | 734 | 40,156 | 9,725 |
INCOME TAX PROVISION (BENEFIT) | 9,184 | (499) | 10,892 | (1,462) |
NET INCOME | $ 24,376 | $ 1,233 | $ 29,264 | $ 11,187 |
EARNINGS PER COMMON SHARE | ||||
Basic (in dollars per share) | $ 0.95 | $ 0.05 | $ 1.14 | $ 0.43 |
Diluted (in dollars per share) | $ 0.92 | $ 0.05 | $ 1.10 | $ 0.42 |
AVERAGE COMMON SHARES OUTSTANDING | ||||
Basic (in shares) | 25,554,286 | 25,670,325 | 25,562,306 | 25,656,674 |
Diluted (in shares) | 26,431,592 | 26,699,549 | 26,483,011 | 26,653,282 |
CASH DIVIDENDS DECLARED PER COMMON SHARE (in dollars per share) | $ 0.08 | $ 0.08 | $ 0.16 | $ 0.16 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
NET INCOME | $ 24,376 | $ 1,233 | $ 29,264 | $ 11,187 |
Pension and other postretirement benefit plans: | ||||
Net actuarial loss, net of tax of: (2019 - Three-month period $20, Six-month period $210; 2018 - Three-month period $450, Six-month period $1,349) | (58) | 1,300 | 603 | 3,890 |
Pension settlement expense, net of tax of: (2019 - Three-month period $72, Six-month period $421; 2018 - Three-month period $111, Six-month period $279) | 206 | 320 | 1,213 | 806 |
Amortization of unrecognized net periodic benefit costs, net of tax of: (2019 - Three-month period $77, Six-month period $177; 2018 - Three-month period $171, Six-month period $390) | ||||
Net actuarial loss | 229 | 511 | 524 | 1,160 |
Prior service credit | (6) | (18) | (12) | (35) |
Interest rate swap and foreign currency translation: | ||||
Change in unrealized income (loss) on interest rate swap, net of tax of: (2019 - Three-month period $187, Six-month period $305) | (528) | (860) | ||
Change in unrealized income (loss) on interest rate swap, net of tax of: (2018 - Three-month period $7, Six-month period $275) | 343 | 779 | ||
Change in foreign currency translation, net of tax of: (2019 - Three-month period $41, Six-month period $120; 2018 - Three-month period $78, Six-month period $103) | 116 | (220) | 341 | (292) |
OTHER COMPREHENSIVE INCOME, net of tax | (41) | 2,236 | 1,809 | 6,308 |
TOTAL COMPREHENSIVE INCOME | $ 24,335 | $ 3,469 | $ 31,073 | $ 17,495 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net actuarial loss, tax expense (benefit) | $ (20) | $ 450 | $ 210 | $ 1,349 |
Pension settlement expense, tax | 72 | 111 | 421 | 279 |
Amortization of unrecognized net periodic benefit costs, tax | 77 | 171 | 177 | 390 |
Change in unrealized income (loss) on interest rate swap, tax (benefit) | (187) | (305) | ||
Change in unrealized income (loss) on interest rate swap, tax expense | 7 | 275 | ||
Change in foreign currency translation, tax expense (benefit) | $ 41 | $ (78) | $ 120 | $ (103) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | Total |
Increase (Decrease) in Stockholders' Equity | ||||||
Adjustments to beginning retained earnings for adoption of accounting standards | $ 3,992 | $ (3,576) | $ 416 | |||
Adjusted Balances | $ 285 | $ 319,436 | 442,371 | $ (86,064) | (24,150) | 651,878 |
Balances at Dec. 31, 2017 | $ 285 | 319,436 | 438,379 | $ (86,064) | (20,574) | 651,462 |
Balances (in shares) at Dec. 31, 2017 | 28,496 | 2,852 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 9,954 | 9,954 | ||||
Other comprehensive income, net of tax | 4,072 | 4,072 | ||||
Issuance of common stock under share-based compensation plans (in shares) | 3 | |||||
Tax effect of share-based compensation plans | (41) | (41) | ||||
Share-based compensation expense | 1,870 | 1,870 | ||||
Purchase of treasury stock | $ (201) | (201) | ||||
Purchase of treasury stock (in shares) | 5 | |||||
Dividends declared on common stock | (2,058) | (2,058) | ||||
Balances at Mar. 31, 2018 | $ 285 | 321,265 | 450,267 | $ (86,265) | (20,078) | 665,474 |
Balances (in shares) at Mar. 31, 2018 | 28,499 | 2,857 | ||||
Balances at Dec. 31, 2017 | $ 285 | 319,436 | 438,379 | $ (86,064) | (20,574) | 651,462 |
Balances (in shares) at Dec. 31, 2017 | 28,496 | 2,852 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 11,187 | |||||
Other comprehensive income, net of tax | 6,308 | 6,308 | ||||
Balances at Jun. 30, 2018 | $ 285 | 322,895 | 449,442 | $ (86,265) | (17,842) | 668,515 |
Balances (in shares) at Jun. 30, 2018 | 28,542 | 2,857 | ||||
Balances at Mar. 31, 2018 | $ 285 | 321,265 | 450,267 | $ (86,265) | (20,078) | 665,474 |
Balances (in shares) at Mar. 31, 2018 | 28,499 | 2,857 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 1,233 | 1,233 | ||||
Other comprehensive income, net of tax | 2,236 | 2,236 | ||||
Issuance of common stock under share-based compensation plans (in shares) | 43 | |||||
Tax effect of share-based compensation plans | (44) | (44) | ||||
Share-based compensation expense | 1,674 | 1,674 | ||||
Dividends declared on common stock | (2,058) | (2,058) | ||||
Balances at Jun. 30, 2018 | $ 285 | 322,895 | 449,442 | $ (86,265) | (17,842) | 668,515 |
Balances (in shares) at Jun. 30, 2018 | 28,542 | 2,857 | ||||
Balances at Dec. 31, 2018 | $ 287 | 325,712 | 501,389 | $ (95,468) | (14,238) | 717,682 |
Balances (in shares) at Dec. 31, 2018 | 28,685 | 3,098 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 4,888 | 4,888 | ||||
Other comprehensive income, net of tax | 1,850 | 1,850 | ||||
Tax effect of share-based compensation plans | (8) | (8) | ||||
Share-based compensation expense | 2,058 | 2,058 | ||||
Purchase of treasury stock | $ (2,663) | (2,663) | ||||
Purchase of treasury stock (in shares) | 74 | |||||
Dividends declared on common stock | (2,052) | (2,052) | ||||
Balances at Mar. 31, 2019 | $ 287 | 327,762 | 504,225 | $ (98,131) | (12,388) | 721,755 |
Balances (in shares) at Mar. 31, 2019 | 28,685 | 3,172 | ||||
Balances at Dec. 31, 2018 | $ 287 | 325,712 | 501,389 | $ (95,468) | (14,238) | 717,682 |
Balances (in shares) at Dec. 31, 2018 | 28,685 | 3,098 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 29,264 | |||||
Other comprehensive income, net of tax | 1,809 | 1,809 | ||||
Balances at Jun. 30, 2019 | $ 288 | 329,388 | 526,551 | $ (100,639) | (12,429) | 743,159 |
Balances (in shares) at Jun. 30, 2019 | 28,786 | 3,266 | ||||
Balances at Mar. 31, 2019 | $ 287 | 327,762 | 504,225 | $ (98,131) | (12,388) | 721,755 |
Balances (in shares) at Mar. 31, 2019 | 28,685 | 3,172 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 24,376 | 24,376 | ||||
Other comprehensive income, net of tax | (41) | (41) | ||||
Issuance of common stock under share-based compensation plans | $ 1 | (1) | ||||
Issuance of common stock under share-based compensation plans (in shares) | 101 | |||||
Tax effect of share-based compensation plans | (1,174) | (1,174) | ||||
Share-based compensation expense | 2,801 | 2,801 | ||||
Purchase of treasury stock | $ (2,508) | (2,508) | ||||
Purchase of treasury stock (in shares) | 94 | |||||
Dividends declared on common stock | (2,050) | (2,050) | ||||
Balances at Jun. 30, 2019 | $ 288 | $ 329,388 | $ 526,551 | $ (100,639) | $ (12,429) | $ 743,159 |
Balances (in shares) at Jun. 30, 2019 | 28,786 | 3,266 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
OPERATING ACTIVITIES | ||
Net income | $ 29,264 | $ 11,187 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 51,722 | 51,409 |
Amortization of intangibles | 2,249 | 2,264 |
Pension settlement expense | 1,634 | 1,085 |
Share-based compensation expense | 4,859 | 3,544 |
Provision for losses on accounts receivable | 621 | 1,069 |
Change in deferred income taxes | 5,124 | (10,818) |
Gain on sale of property and equipment | (1,469) | (166) |
Changes in operating assets and liabilities: | ||
Receivables | 1,781 | (31,281) |
Prepaid expenses | (3,323) | 2,393 |
Other assets | (2,798) | 2,018 |
Income taxes | (3,042) | 8,024 |
Operating right-of-use assets and lease liabilities, net | 159 | |
Multiemployer pension fund withdrawal liability | (289) | 37,922 |
Accounts payable, accrued expenses, and other liabilities | (6,021) | 40,914 |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 80,471 | 119,564 |
INVESTING ACTIVITIES | ||
Purchases of property, plant and equipment, net of financings | (41,909) | (24,763) |
Proceeds from sale of property and equipment | 3,798 | 2,074 |
Purchases of short-term investments | (43,327) | (26,006) |
Proceeds from sale of short-term investments | 33,332 | 14,647 |
Capitalization of internally developed software | (5,535) | (5,997) |
NET CASH USED IN INVESTING ACTIVITIES | (53,641) | (40,045) |
FINANCING ACTIVITIES | ||
Payments on long-term debt | (29,984) | (33,694) |
Proceeds from notes payable | 9,552 | |
Net change in book overdrafts | (4,398) | (2,888) |
Payment of common stock dividends | (4,102) | (4,116) |
Purchases of treasury stock | (5,171) | (201) |
Payments for tax withheld on share-based compensation | (1,182) | (85) |
NET CASH USED IN FINANCING ACTIVITIES | (35,285) | (40,984) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (8,455) | 38,535 |
Cash and cash equivalents at beginning of period | 190,186 | 120,772 |
CASH AND CASH EQUIVALENTS CASH AT END OF PERIOD | 181,731 | 159,307 |
NONCASH INVESTING ACTIVITIES | ||
Equipment financed | 10,964 | 14,407 |
Accruals for equipment received | 19,402 | $ 8,649 |
Lease liabilities arising from obtaining right-of-use assets | $ 23,049 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION | 6 Months Ended |
Jun. 30, 2019 | |
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION | |
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION | NOTE A – ORGANIZATIO N AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION ArcBest Corporation TM ® ® The Asset-Based segment represented approximately 71% of the Company’s total revenues before other revenues and intercompany eliminations for the six months ended June 30, 2019. As of June 2019, approximately 82% of the Asset-Based segment’s employees were covered under a collective bargaining agreement, the ABF National Master Freight Agreement (the “2018 ABF NMFA”), with the International Brotherhood of Teamsters (the “IBT”), which will remain in effect through June 30, 2023. 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 “SEC”) 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 2018 Annual Report on Form 10-K and other current filings with the SEC. In the opinion of management, all adjustments (which are of a normal and recurring nature) considered necessary for a fair presentation have been included. 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 consolidated 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 2018 Annual Report on Form 10-K. The following policies have been updated during the six months ended June 30, 2019 for the adoption of accounting standard updates disclosed within this Note. Interest Rate Swap Derivative Instruments Leases: Leases, the lease term in operating expenses. Included in lease expense are any variable lease payments incurred in the period that were not included in the initial lease liability. For financial reporting purposes, right-of-use assets held under finance leases are amortized over their estimated useful lives on the same basis as owned assets, and leasehold improvements associated with assets utilized under finance or operating leases are amortized by the straight-line method over the shorter of the remaining lease term or the asset’s useful life. Amortization of assets under finance leases is included in depreciation expense. Obligations under the finance lease arrangements are included in long-term debt. The short-term lease exemption was elected under ASC Topic 842 for all classes of assets to include real property, revenue equipment, and service, office, and other equipment. The Company adopted the policy election as a lessee for all classes of assets to account for each lease component and its related non-lease component(s) as a single lease component. In determining the discount rate, the Company uses the rate implicit in the lease if that rate is readily determinable when entering into a lease as a lessee. If the rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate, determined by the price of a fully collateralized loan with similar terms based on current market rates. For contracts entered into on or after the effective date, an assessment is made as to whether the contract is, or contains, a lease at the inception of a contract. The assessment is based on: (1) whether the contract involves the use of a distinct identified asset; (2) whether the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the period; and (3) whether the Company has the right to direct the use of the asset. For all operating leases that meet the scope of ASC Topic 842, a right-of-use asset and a lease liability are recognized. The right-of-use asset is measured as the initial amount of the lease liability, plus any initial direct costs incurred, less any prepayments prior to commencement or lease incentives received. The lease liability is initially measured at the present value of the lease payments, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s secured incremental borrowing rate for the same term as the underlying lease. Lease payments included in the measurement of the lease liability are comprised of the following: (1) the fixed noncancelable lease payments, (2) payments for optional renewal periods where it is reasonably certain the renewal period will be exercised, and (3) payments for early termination options unless it is reasonably certain the lease will not be terminated early. Variable lease payments based on an index or rate are initially measured using the index or rate in effect at lease commencement and included in the measurement of the initial lease liability. Additional payments based on the change in an index or rate are recorded as a period expense when incurred. Lease modifications result in remeasurement of the lease liability. Adopted Accounting Pronouncements ASC Topic 842, which was adopted by the Company effective January 1, 2019, requires lessees to recognize right-of-use assets and lease liabilities for operating leases with terms greater than 12 months on the balance sheet. The standard also requires additional qualitative and quantitative disclosures designed to assess the amount, timing, and uncertainty of cash flows arising from leases. The Company elected the modified retrospective method of applying the transition provisions at the beginning of the period of adoption and, as a result, has not adjusted comparative period financial information and has not included the new lease disclosures for periods before the effective date. Prior period amounts continue to be reported under the Company’s historical accounting in accordance with the previous lease guidance included in ASC Topic 840. The Company has excluded short-term leases from accounting under ASC Topic 842 and has elected the package of practical expedients as permitted under the transition guidance, which allowed the Company to not reassess: (1) whether contracts are, or contain, leases; (2) lease classification; and (3) capitalization of initial direct costs. For contracts entered into on or after the effective date, an assessment is made as to whether the contract is, or contains, a lease at the inception of a contract. Consistent with the package of practical expedients elected, leases entered into prior to January 1, 2019, are accounted for under ASC Topic 840 and were not reassessed. For all classes of assets, the policy election was made to account for each lease component and its related non-lease component(s) as a single lease component. The election to not recognize right-of-use assets and lease liabilities for short-term leases that have a term of 12 months or less did not have a material effect on the right-of-use assets and lease liabilities. The majority of the Company’s lease portfolio consists of real property operating leases related to facilities used in the Asset-Based segment service center operations. The lease portfolio also includes operating leases related to certain revenue equipment used in the ArcBest segment operations as well as a small number of office equipment finance leases. Management has recorded the right-of-use assets and associated lease liabilities for operating leases on the consolidated balance sheet as of June 30, 2019 in accordance with ASC Topic 842. Finance leases are not material to the consolidated financial statements. The most significant impact of adopting ASC Topic 842 was the recognition of right-of-use assets and lease liabilities on the balance sheet for operating leases of $58.7 million as of January 1, 2019. The accounting for finance leases (formerly referred to as capital leases prior to the adoption of ASC Topic 842) remained substantially unchanged. The expense recognition for operating leases and finance leases under ASC Topic 842 is substantially consistent with ASC Topic 840 and the impact of the new standard is non-cash in nature. As a result, there is no significant impact on the Company’s results of operations or cash flows presented in the Company’s consolidated financial statements. ASC Topic 815, Derivatives and Hedging The U.S. Securities and Exchange Commission (the “SEC”) issued Final Rule 33-10618, FAST Act Modernization and Simplification of Regulation S-K Accounting Pronouncements Not Yet Adopted Final Rule 33-10618 includes certain provisions to simplify certain annual disclosure requirements within the Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), Risk Factors, and Properties sections of Form 10-K. These provisions, which the Company will adopt for its 2019 Annual Report on Form 10-K, are not expected to have a significant impact on the Company’s consolidated financial statement disclosures. ASC Subtopic 350-40, Intangibles – Goodwill and Other – Internal-Use Software: Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement Internal-Use Software ASC Topic 820, Fair Value Measurement ASC Topic 326, Financial Instruments – Credit Losses Management believes 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 | 6 Months Ended |
Jun. 30, 2019 | |
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 and short-term investments: June 30 December 31 2019 2018 (in thousands) Cash and cash equivalents Cash deposits (1) $ 145,629 $ 124,938 Variable rate demand notes (1)(2) 14,536 19,786 Money market funds (3) 21,566 42,470 U.S. Treasury securities (4) — 2,992 Total cash and cash equivalents $ 181,731 $ 190,186 Short-term investments Certificates of deposit (1) $ 81,685 $ 82,949 U.S. Treasury securities (4) 35,972 23,857 Total short-term investments $ 117,657 $ 106,806 (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) Recorded at amortized cost plus accrued interest, which approximates fair value. U.S. Treasury securities with a maturity date within 90 days of the purchase date are classified as cash equivalents. U.S. Treasury securities included in short-term investments are held-to-maturity investments with maturity dates of less than one year. The Company’s long-term 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 short-term investments primarily in FDIC-insured certificates of deposit. However, certain cash deposits and certificates of deposit may exceed federally insured limits. At June 30, 2019 and December 31, 2018, cash, cash equivalents, and short-term investments totaling $68.9 million and $94.7 million, respectively, were neither FDIC insured nor direct obligations of the U.S. government. 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: June 30 December 31 2019 2018 (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) 40,000 40,000 40,000 40,000 Notes payable (3) 172,054 175,456 181,409 181,560 $ 282,054 $ 285,456 $ 291,409 $ 291,560 (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 a Recurring Basis The following table presents the assets and liabilities that are measured at fair value on a recurring basis: June 30, 2019 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) $ 21,566 $ 21,566 $ — $ — Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan (2) 3,004 3,004 — — Interest rate swaps (3) 52 — 52 — $ 24,622 $ 24,570 $ 52 $ — Liabilities: Interest rate swaps (3) $ 548 $ — $ 548 $ — December 31, 2018 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) $ 42,470 $ 42,470 $ — $ — Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan (2) 2,342 2,342 — — Interest rate swaps (3) 801 — 801 — $ 45,613 $ 44,812 $ 801 $ — Liabilities: Contingent consideration (4) $ 4,472 $ — $ — $ 4,472 (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 other long-term assets or other long-term liabilities. The fair values of the interest rate swaps were 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 June 30, 2019 and December 31, 2018 and considers the interest rate swap valuations in Level 2 of the fair value hierarchy. (4) Included in accrued expenses. At December 31, 2018, the fair value of the contingent consideration for an earn-out agreement related to the September 2016 acquisition of LDS represents the final accrued payment and was based on calculations performed for the earn-out period which ended August 31, 2018. In January 2019, final payment of the contingent consideration was released from an escrow account reported in other current assets in the consolidated balance sheets. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2019 | |
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 $107.7 million and $0.6 million reported in the ArcBest and FleetNet segments, respectively, for both June 30, 2019 and December 31, 2018. Intangible assets consisted of the following: June 30, 2019 December 31, 2018 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 14 $ 60,431 $ 26,318 $ 34,113 $ 60,431 $ 24,130 $ 36,301 Other 9 1,032 745 287 1,032 684 348 14 61,463 27,063 34,400 61,463 24,814 36,649 Indefinite-lived intangible assets Trade name N/A 32,300 N/A 32,300 32,300 N/A 32,300 Total intangible assets N/A $ 93,763 $ 27,063 $ 66,700 $ 93,763 $ 24,814 $ 68,949 The future amortization for intangible assets acquired through business acquisitions as of June 30, 2019 was as follows: Amortization of Intangible Assets (in thousands) Remainder of 2019 $ 2,233 2020 4,454 2021 4,412 2022 4,385 2023 4,287 Thereafter 14,629 Total amortization $ 34,400 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2019 | |
INCOME TAXES | |
INCOME TAXES | NOTE D – INCOME TAXES On December 22, 2017, H.R. 1/Public Law 115-97 which includes tax legislation titled Tax Cuts and Jobs Act Income Taxes In addition to the provisional effect on net deferred tax liabilities, the Company recorded a provisional reduction in current income tax expense of $1.3 million and $0.1 million at December 31, 2017 and June 30, 2018, respectively, as a result of the Tax Reform Act, to reflect the Company’s use of a fiscal year rather than a calendar year for U.S. income tax filing. Due to the fact that the Company’s fiscal tax year included the effective date of the rate change under the Tax Reform Act, taxes were required to be calculated by applying a blended rate to the taxable income for the taxable year ended February 28, 2018. The blended rate is calculated based on the ratio of days in the fiscal year prior to and after the effective date of the rate change. In computing total tax expense for the three and six months ended June 30, 2018, a 32.74% blended federal statutory rate was applied to the two months ended February 28, 2018, and a 21.0% federal statutory rate was applied to the months of March 2018 through June 2018. A federal statutory rate of 21.0% was applied to the three and six months ended June 30, 2019. The accounting for the income tax effects of the Tax Reform Act was completed as of December 31, 2018, and all amounts recorded were considered final. For the three and six months ended June 30, 2019, the difference between the Company’s effective tax rate and the federal statutory rate primarily resulted from state income taxes, nondeductible expenses, changes in the cash surrender value of life insurance, and tax expense from the vesting of stock awards. For the six months ended June 30, 2018, the difference between the Company’s effective tax rate and the federal statutory rate primarily resulted from the $2.6 million provisional reduction of net deferred income tax liabilities, as previously discussed, and the $1.2 million alternative fuel tax credit related to the year ended December 31, 2017 which was recognized in first quarter 2018 due to the February 2018 passage of the Bipartisan Budget Act of 2018 As of June 30, 2019, 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 June 30, 2019 and concluded that, other than for certain deferred tax assets related to 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, future taxable income, and tax planning strategies. Valuation allowances for deferred tax assets totaled $0.1 million at June 30, 2019 and December 31, 2018. The Company had reserves for uncertain tax positions of $1.0 million at June 30, 2019 and December 31, 2018. In first quarter of 2019, the Company recorded a deferred tax asset of approximately $19.0 million related to operating lease liabilities and recorded a deferred tax liability of approximately $19.0 million related to operating lease right-of-use assets due to the adoption of ASC Topic 842. The Company paid federal, state, and foreign income taxes of $8.9 million during the six months ended June 30, 2019, and paid $2.5 million of foreign and state income taxes during the six months ended June 30, 2018. The Company received refunds of less than $0.1 million of state income taxes and refunds of $1.1 million of federal and state income taxes that were paid in prior years during the six months ended June 30, 2019 and 2018, respectively. |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2019 | |
Leases | |
Leases | NOTE E – LEASES The Company leases, under finance and operating lease arrangements, certain facilities used primarily in the Asset-Based segment service center operations, certain revenue equipment used in the ArcBest segment operations, and certain other office equipment. Operating leases have remaining terms of less than 10 years, some of which include one or more options to renew, with renewal option terms up to five years, and some of which include options to terminate the leases within the next three years. The right-of-use assets and lease liabilities as of June 30, 2019 do not assume the option to early terminate any of the Company’s leases, and all renewal options that have been exercised or are reasonably certain to be exercised as of June 30, 2019 are included in the right-of-use assets and lease liabilities. Variable lease cost for operating leases consists of subsequent changes in CPI index, rent payments that are based on usage, and other lease related payments subject to change and not considered fixed payments. All fixed lease and non-lease component payments are combined in determining the right-of-use asset and lease liability. The Company has a small number of finance leases recorded in property, plant and equipment and long-term debt related to structures and office equipment that are immaterial to the consolidated financial statements. The components of operating lease expense were as follows: Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 (in thousands) Operating lease expense $ 5,642 $ 10,981 Variable lease expense 774 1,613 Sublease income (69) (136) Total operating lease expense $ 6,347 $ 12,458 Rental expense for operating leases, excluding expenses related to leases with initial terms of less than one year, totaled approximately $5.0 The operating cash flows from operating lease activity were as follows: Six Months Ended June 30, 2019 (in thousands) Noncash change in operating right-of-use assets $ 9,784 Change in operating lease liabilities (9,625) Operating right-use-of-assets and lease liabilities, net $ 159 Cash paid for amounts included in the measurement of operating lease liabilities $ (10,815) Supplemental balance sheet information related to operating lease liabilities was as follows: June 30, 2019 (in thousands, except lease term and discount rate) Land and Equipment Operating leases Total Structures and Others Operating right-of-use assets (long-term) $ 68,810 $ 67,029 $ 1,781 Operating lease liabilities (current) $ 18,273 $ 17,250 $ 1,023 Operating lease liabilities (long-term) 54,040 53,293 747 Total operating lease liabilities $ 72,313 $ 70,543 $ 1,770 Weighted-average remaining lease term (in years) 5.4 Weighted-average discount rate 3.93% Maturities of operating lease liabilities at June 30, 2019 were as follows: Equipment Land and and Total Structures Other Remainder of 2019 $ 10,668 $ 10,126 $ 542 2020 19,152 18,142 1,010 2021 14,716 14,442 274 2022 10,372 10,372 — 2023 7,550 7,550 — Thereafter 18,109 18,109 — Total lease payments 80,567 78,741 1,826 Less imputed interest (8,254) (8,198) (56) Total $ 72,313 $ 70,543 $ 1,770 The future minimum rental commitments, net of minimum rentals to be received under noncancelable subleases, as of December 31, 2018 for all noncancelable operating leases were as follows: Equipment Land and and Total Structures Other 2019 $ 19,130 $ 18,067 $ 1,063 2020 14,620 13,676 944 2021 10,972 10,716 256 2022 7,125 7,125 — 2023 4,477 4,477 — Thereafter 5,850 5,850 — Total $ 62,174 $ 59,911 $ 2,263 |
LONG-TERM DEBT AND FINANCING AR
LONG-TERM DEBT AND FINANCING ARRANGEMENTS | 6 Months Ended |
Jun. 30, 2019 | |
LONG-TERM DEBT AND FINANCING ARRANGEMENTS | |
LONG-TERM DEBT AND FINANCING ARRANGEMENTS | NOTE F – 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 finance 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: June 30 December 31 2019 2018 (in thousands) Credit Facility (interest rate of 3.7% (1) $ 70,000 $ 70,000 Accounts receivable securitization borrowings (interest rate of 3.3% at June 30, 2019) 40,000 40,000 Notes payable (weighted-average interest rate of 3.5% at June 30, 2019) 172,054 181,409 Finance lease obligations (weighted-average interest rate of 5.5% at June 30, 2019) 152 266 282,206 291,675 Less current portion 47,205 54,075 Long-term debt, less current portion $ 235,001 $ 237,600 (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 3.10% based on the margin of the Credit Facility as of June 30, 2019 and December 31, 2018. Scheduled maturities of long-term debt obligations as of were as follows: Accounts Receivable Credit Securitization Notes Finance Lease Total Facility (1) Program (1) Payable Obligations (2) (in thousands) Due in one year or less $ 55,808 $ 2,230 $ 1,132 $ 52,306 $ 140 Due after one year through two years 50,379 1,942 968 47,462 7 Due after two years through three years 85,385 1,965 40,243 43,172 5 Due after three years through four years 98,514 70,033 — 28,481 — Due after four years through five years 13,035 — — 13,035 — Due after five years 152 — — 152 — Total payments 303,273 76,170 42,343 184,608 152 Less amounts representing interest 21,067 6,170 2,343 12,554 — Long-term debt $ 282,206 $ 70,000 $ 40,000 $ 172,054 $ 152 (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 finance lease obligations include maximum amounts due under rental adjustment clauses contained in the finance lease agreements. Assets securing notes payable or held under finance leases were included in property, plant and equipment as follows: June 30 December 31 2019 2018 (in thousands) Revenue equipment $ 245,703 $ 264,396 Land and structures (service centers) 1,794 1,794 Software 1,508 1,484 Service, office, and other equipment 15,492 5,941 Total assets securing notes payable or held under finance leases 264,497 273,615 Less accumulated depreciation and amortization (1) 78,113 79,961 Net assets securing notes payable or held under finance leases $ 186,384 $ 193,654 (1) Amortization of assets under held finance 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 Second Amended and Restated Credit Agreement (the “Credit Agreement”) with an initial maximum credit amount of $200.0 million, including a swing line facility in an aggregate amount of up to $20.0 million 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 Company may request additional revolving commitments or incremental term loans thereunder up to an aggregate additional amount of $100.0 million, subject to certain additional conditions as provided in the Credit Agreement. As of June 30, 2019, the Company had available borrowing capacity of $130.0 million under the Credit Facility. Principal payments under the Credit Facility are due upon maturity of the facility on July 7, 2022; 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 Credit Agreement can either be, at the Company’s election: (i) at an alternate base rate (as defined in the Credit Agreement) plus a spread; or (ii) at a Eurodollar rate (as defined in the Credit Agreement) plus a spread. The applicable spread is dependent upon the Company’s Adjusted Leverage Ratio (as defined in the Credit Agreement). The 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 Credit Agreement at June 30, 2019. Interest Rate Swaps The Company has a five-year 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 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 3.10% based on the margin of the Credit Facility as of June 30, 2019. The fair value of the interest rate swap of $0.1 million and $0.3 million was recorded in other long-term assets in the consolidated balance sheet at June 30, 2019 and December 31, 2018, respectively. In June 2017, the Company entered into a forward-starting interest rate swap agreement with a $50.0 million notional amount which will start on January 2, 2020 upon maturity of the current interest rate swap agreement, and mature on June 30, 2022. The Company will receive floating-rate interest amounts based on one-month LIBOR in exchange for fixed-rate interest payments of 1.99% over the life of the 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 3.24% based on the margin of the Credit Facility as of June 30, 2019. The fair value of the interest rate swap of $0.5 million was recorded in other long-term liabilities and $0.5 million was recorded in other long-term assets in the consolidated balance sheet at June 30, 2019 and December 31, 2018, respectively. The unrealized gain on the interest rate swap instruments was reported as a component of accumulated other comprehensive loss, net of tax, in stockholders’ equity at June 30, 2019 and December 31, 2018, and the change in the unrealized income on the interest rate swaps for the three months and six months ended June 30, 2019 and 2018 was reported in other comprehensive loss, net of tax, in the consolidated statements of comprehensive income. The interest rate swaps are subject to certain customary provisions that could allow the counterparty to request immediate settlement of the fair value liability or asset upon violation of any or all of the provisions. The Company was in compliance with all provisions of the interest rate swap agreements at June 30, 2019. Accounts Receivable Securitization Program The Company’s accounts receivable securitization program, which matures on October 1, 2021, allows for cash proceeds of $125.0 million to be provided under the program and has 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 June 30, 2019, $40.0 million was borrowed under the program. The Company was in compliance with the covenants under the accounts receivable securitization program at June 30, 2019. 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 June 30, 2019, standby letters of credit of $14.9 million have been issued under the program, which reduced the available borrowing capacity to $70.1 million. Letter of Credit Agreements and Surety Bond Programs As of June 30, 2019, the Company had letters of credit outstanding of $15.5 million (including $14.9 million issued under the accounts receivable securitization program). 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 June 30, 2019, surety bonds outstanding related to the self-insurance program totaled $48.6 million. Notes Payable The Company has financed the purchase of certain revenue equipment, other equipment, and software through promissory note arrangements, including $20.5 million for revenue equipment and other equipment during the three months ended June 30, 2019. Subsequent to June 30, 2019, the Company financed the purchase of an additional $17.2 million of revenue equipment through promissory note arrangements as of August 1, 2019. |
PENSION AND OTHER POSTRETIREMEN
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS | 6 Months Ended |
Jun. 30, 2019 | |
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS | |
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS | NOTE G – 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 June 30 Nonunion Defined Supplemental Postretirement Benefit Pension Plan Benefit Plan Health Benefit Plan 2019 2018 2019 2018 2019 2018 (in thousands) Service cost $ — $ — $ — $ — $ 80 $ 91 Interest cost 168 1,108 10 27 303 210 Expected return on plan assets 1 (378) — — — — Amortization of prior service credit — — — — (8) (24) Pension settlement expense 278 431 — — — — Amortization of net actuarial loss (1) 61 592 23 20 224 76 Net periodic benefit cost $ 508 $ 1,753 $ 33 $ 47 $ 599 $ 353 Six Months Ended June 30 Nonunion Defined Supplemental Postretirement Benefit Pension Plan Benefit Plan Health Benefit Plan 2019 2018 2019 2018 2019 2018 (in thousands) Service cost $ — $ — $ — $ — $ 160 $ 183 Interest cost 486 2,123 20 54 606 419 Expected return on plan assets (89) (779) — — — — Amortization of prior service credit — — — — (17) (47) Pension settlement expense 1,634 1,085 — — — — Amortization of net actuarial loss (1) 210 1,370 47 40 449 152 Net periodic benefit cost $ 2,241 $ 3,799 $ 67 $ 94 $ 1,198 $ 707 (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 In November 2017, an amendment was executed to terminate the nonunion defined benefit pension plan with a termination date of December 31, 2017. In September 2018, the plan received a favorable determination letter from the IRS regarding qualification of the plan termination. Benefit election forms were provided to plan participants during the fourth quarter of 2018 and participants could elect any form of payment allowed by the plan for immediate commencement of payment or defer payment until a later date. The plan began distributing immediate lump sum benefit payments related to the plan termination in fourth quarter 2018 and continued making these distributions during 2019. The plan received an extension from the Pension Benefit Guaranty Corporation (the “PBGC”) to allow additional time for the plan to administer the settlement of the remaining obligation for deferred benefits through the purchase of a nonparticipating annuity contract from an insurance company. The Company will make a cash contribution to the plan for the amount, if any, required to fund benefit distributions and annuity contract purchases in excess of plan assets. The Company recognized pension settlement expense as a component of net periodic benefit cost of the nonunion defined benefit pension plan for the three and six months ended June 30, 2019 of $0.3 million (pre-tax), or $0.2 million (after-tax), and $1.6 million (pre-tax), or $1.2 million (after-tax), respectively, related to $3.0 million and $17.9 million of lump-sum benefit distributions from the plan for the three and six months ended June 30, 2019, respectively. For the three and six months ended June 30, 2018, pension settlement expense of $0.4 million (pre-tax), or $0.3 million (after-tax), and $1.1 million (pre-tax), or $0.8 million (after-tax), respectively, was recognized related to $3.7 million and $8.5 million of lump-sum distributions from the plan for the three and six months ended June 30, 2018, respectively. Pension settlement charges related to the plan termination, including those related to an annuity contract purchase are expected to occur in 2019. In August 2019, the nonunion defined benefit pension plan received a preliminary bid for a nonparticipating annuity contract from an insurance company to settle the pension obligation related to the vested benefits of the remaining participants who were receiving monthly benefit payments from the plan or who did not elect to receive a lump sum benefit upon plan termination. Based on the most recently available actuarial information, including the preliminary bid received in August, nonunion pension settlement expense for the second half of 2019 is estimated to be approximately $2.0 million, or $1.5 million after-tax, and the Company could expect to make a cash contribution to the plan of approximately $7.0 million, which would be deductible for income tax purposes, to fund an annuity contract purchase and the remaining benefit distributions expected to be made from the plan in excess of plan assets. However, there can be no assurances in regards to the required cash funding or pension settlement charges, as the actual amounts are dependent on various factors and will be determined using updated actuarial data. Liquidation of plan assets and settlement of plan obligations for the nonunion defined benefit pension plan is expected to be completed in 2019. The Company’s short-term rate of return assumption, net of estimated expenses expected to be paid from plan assets, utilized in determining nonunion defined benefit pension expense was lowered from 1.4% for first quarter 2019 to 0.0% for the second and third quarters of 2019, as estimated expenses expected to be paid from plan assets are expected to offset investment returns on plan assets which were held in money market mutual funds as of June 30, 2019. The following table discloses the changes in benefit obligations and plan assets of the nonunion defined benefit pension plan for the six months ended June 30, 2019: Nonunion Defined Benefit Pension Plan (in thousands) Change in benefit obligations Benefit obligations at December 31, 2018 $ 33,373 Interest cost 486 Actuarial gain (1) (661) Benefits paid (18,125) Benefit obligations at June 30, 2019 15,073 Change in plan assets Fair value of plan assets at December 31, 2018 26,646 Actual return on plan assets 241 Benefits paid (18,125) Fair value of plan assets at June 30, 2019 8,762 Funded status at period end (2) $ (6,311) Accumulated benefit obligation $ 15,073 (1) The plan recognized an actuarial gain on lump-sum distributions related to benefit elections for plan termination which had been included in the actuarial estimate for the annuity contract purchase as of the December 31, 2018 measurement date. (2) Recognized within current portion of pension and postretirement liabilities in the accompanying consolidated balance sheet at June 30, 2019. 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 2018 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 generally specified in the 2018 ABF NMFA, which will remain in effect through June 30, 2023. The funding obligations to the pension plans are intended to satisfy the requirements imposed by the Pension Protection Act of 2006, 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 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”). As set forth in the 2018 Annual Funding Notice for the Central States Pension Plan, the funded percentage of the plan was 27.2% as of January 1, 2018. ABF Freight received a Notice of Critical and Declining Status for the Central States Pension Plan dated March 29, 2019, in which the plan’s actuary certified that, as of January 1, 2019, the plan is in critical and declining status, as defined by the Reform Act. 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 more fully described in Note I to the consolidated financial statements in Item 8 of the Company’s 2018 Annual Report on Form 10-K, ABF Freight’s multiemployer pension plan obligation with the New England Teamsters and Trucking Industry Pension Fund (the “New England Pension Fund”) was restructured under a transition agreement effective on August 1, 2018, which resulted in a related withdrawal liability for which ABF Freight recognized a one-time charge of $37.9 million (pre-tax) as of June 30, 2018. In accordance with the transition agreement, ABF Freight made an initial lump sum cash payment of $15.1 million in third quarter 2018 and the remainder of the withdrawal liability, which had an initial aggregate present value of $22.8 million, will be settled with monthly payments to the New England Pension Fund over a period of 23 years. In accordance with current tax law, these payments are deductible for income taxes when paid. As of June 30, 2019, the outstanding withdrawal liability totaled $22.3 million, of which $0.6 million and $21.7 million was recorded in accrued expenses and other long-term liabilities, respectively. The fair value of the obligation was $24.4 million at June 30, 2019, which is equal to the present value of the future withdrawal liability payments, discounted at a 3.6% interest rate determined using the 20-year U.S. Treasury rate plus a spread (Level 2 of the fair value hierarchy). 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 2018 Annual Report on Form 10-K. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2019 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | NOTE H – STOCKHOLDERS’ EQUITY Accumulated Other Comprehensive Loss Components of accumulated other comprehensive loss were as follows: June 30 December 31 2019 2018 (in thousands) Pre-tax amounts: Unrecognized net periodic benefit costs $ (8,685) $ (11,821) Interest rate swap (364) 801 Foreign currency translation (2,355) (2,816) Total $ (11,404) $ (13,836) After-tax amounts: Unrecognized net periodic benefit costs (1) $ (10,421) $ (12,749) Interest rate swap (269) 591 Foreign currency translation (1,739) (2,080) Total $ (12,429) $ (14,238) (1) Includes $4.0 million related to a previous valuation allowance on deferred tax assets for nonunion defined benefit pension liabilities which will be reversed to retained earnings upon extinguishment of the nonunion defined benefit pension plan expected to occur in 2019. The reclassification of stranded income tax effects related to this item is not permitted by ASC Topic 220 which the Company adopted as of January 1, 2018. The following is a summary of the changes in accumulated other comprehensive loss, net of tax, by component for the six months ended June 30, 2019 and 2018: Unrecognized Interest Foreign Net Periodic Rate Currency Total Benefit Costs Swap Translation (in thousands) Balances at December 31, 2018 $ (14,238) $ (12,749) $ 591 $ (2,080) Other comprehensive income (loss) before reclassifications 84 603 (860) 341 Amounts reclassified from accumulated other comprehensive loss 1,725 1,725 — — Net current-period other comprehensive income (loss) 1,809 2,328 (860) 341 Balances at June 30, 2019 $ (12,429) $ (10,421) $ (269) $ (1,739) Balances at December 31, 2017 $ (20,574) $ (19,715) $ 292 $ (1,151) Adjustment to beginning balance of accumulated other comprehensive loss for adoption of accounting standard (1) (3,576) (3,391) 63 (248) Balances at January 1, 2018 (24,150) (23,106) 355 (1,399) Other comprehensive income (loss) before reclassifications 4,377 3,890 779 (292) Amounts reclassified from accumulated other comprehensive loss 1,931 1,931 — — Net current-period other comprehensive income (loss) 6,308 5,821 779 (292) Balances at June 30, 2018 $ (17,842) $ (17,285) $ 1,134 $ (1,691) (1) The Company elected to reclassify the stranded income tax effects in accumulated other comprehensive loss to retained earnings as of January 1, 2018 as a result of adopting an amendment to ASC Topic 220 . The following is a summary of the significant reclassifications out of accumulated other comprehensive loss by component: Unrecognized Net Periodic Benefit Costs (1)(2) Six Months Ended June 30 2019 2018 (in thousands) Amortization of net actuarial loss $ (706) $ (1,562) Amortization of prior service credit 17 47 Pension settlement expense (1,634) (1,085) Total, pre-tax (2,323) (2,600) Tax benefit 598 669 Total, net of tax $ (1,725) $ (1,931) (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 G). Dividends on Common Stock The following table is a summary of dividends declared during the applicable quarter: 2019 2018 Per Share Amount Per Share Amount (in thousands, except per share data) First quarter $ 0.08 $ 2,052 $ 0.08 $ 2,058 Second quarter $ 0.08 $ 2,050 $ 0.08 $ 2,058 On July 25, 2019, the Company’s Board of Directors declared a dividend of $0.08 per share to stockholders of record as of August 9, 2019. 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, 2018, the Company had $22.3 million remaining under the program for repurchases of its common stock. During the six months ended June 30, 2019, the Company purchased 168,535 shares for an aggregate cost of $5.2 million, leaving $17.1 million available for repurchase of common stock under the program. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2019 | |
SHARE-BASED COMPENSATION | |
SHARE-BASED COMPENSATION | NOTE I – SHARE-BASED COMPENSATION Stock Awards As of December 31, 2018, the Company had outstanding restricted stock units (“RSUs”) granted under the 2005 Ownership Incentive Plan (the “2005 Plan”). On April 30, 2019, the Company’s stockholders approved the ArcBest Ownership Incentive Plan (the “Ownership Incentive Plan”) to amend and restate the 2005 Plan. The Ownership Incentive Plan provides for the granting of 4.0 million shares, which may be awarded as incentive and nonqualified stock options, stock appreciation rights, restricted stock, RSUs, or performance award units. The Company had outstanding RSUs granted under the Ownership Incentive Plan as of June 30, 2019. Restricted Stock Units A summary of the Company’s restricted stock unit award program is presented below: Weighted-Average Grant Date Units Fair Value Outstanding – January 1, 2019 1,436,983 $ 25.81 Granted 386,520 $ 27.75 Vested (142,594) $ 39.87 Forfeited (1) (18,456) $ 26.56 Outstanding – June 30, 2019 1,662,453 $ 25.05 (1) Forfeitures are recognized as they occur. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2019 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE J – EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended Six Months Ended June 30 June 30 2019 2018 2019 2018 (in thousands, except share and per share data) Basic Numerator: Net income $ 24,376 $ 1,233 $ 29,264 $ 11,187 Effect of unvested restricted stock awards (11) (4) (26) (31) Adjusted net income $ 24,365 $ 1,229 $ 29,238 $ 11,156 Denominator: Weighted-average shares 25,554,286 25,670,325 25,562,306 25,656,674 Earnings per common share $ 0.95 $ 0.05 $ 1.14 $ 0.43 Diluted Numerator: Net income $ 24,376 $ 1,233 $ 29,264 $ 11,187 Effect of unvested restricted stock awards (11) (4) (25) (30) Adjusted net income $ 24,365 $ 1,229 $ 29,239 $ 11,157 Denominator: Weighted-average shares 25,554,286 25,670,325 25,562,306 25,656,674 Effect of dilutive securities 877,306 1,029,224 920,705 996,608 Adjusted weighted-average shares and assumed conversions 26,431,592 26,699,549 26,483,011 26,653,282 Earnings per common share $ 0.92 $ 0.05 $ 1.10 $ 0.42 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. For the three- and six-month periods ended June 30, 2019 and 2018, outstanding stock awards of 0.2 million and 0.1 million, respectively, were not included in the diluted earnings per share calculation because their inclusion would have the effect of increasing the earnings per share. |
OPERATING SEGMENT DATA
OPERATING SEGMENT DATA | 6 Months Ended |
Jun. 30, 2019 | |
OPERATING SEGMENT DATA | |
OPERATING SEGMENT DATA | NOTE K – 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. Shared services represent costs incurred to support all segments, including sales, pricing, customer service, marketing, capacity sourcing functions, human resources, financial services, information technology, legal, and other company-wide services. Certain overhead costs are not attributable to any segment and remain unallocated in “Other and eliminations.” Included in unallocated costs are expenses related to investor relations, legal, the ArcBest Board of Directors, and certain technology investments. Shared services costs attributable to the operating segments are predominantly allocated based upon estimated and planned resource utilization-related metrics such as estimated shipment levels, number of pricing proposals, or number of personnel supported. The bases for such charges are modified and adjusted by management when necessary or appropriate to reflect fairly and equitably the actual incidence of cost incurred by the operating segments. Management believes the methods used to allocate expenses are reasonable. The Company’s reportable operating segments are impacted by seasonal fluctuations which affect tonnage, shipment or service event 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: ● The Asset-Based segment includes the results of operations of ABF Freight System, Inc. and certain other subsidiaries. The segment 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 service offerings in ground expedite, truckload, truckload-dedicated, intermodal, household goods moving, managed transportation, warehousing and distribution, and international freight transportation for air, ocean, and ground. ArcBest segment operations are influenced by seasonal fluctuations that impact customers’ supply chains. 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 and available capacity in the market, may impact quarterly business levels. Shipments of the ArcBest segment may decline during winter months because of post-holiday slowdowns, but expedite shipments 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. 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. ● 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. Approximately 19% and 16% of FleetNet’s revenues for the three and six months ended June 30, 2019, respectively, are for services provided to the Asset-Based and ArcBest segments compared to approximately 3% for the same periods of 2018. Emergency roadside service events of the FleetNet segment are favorably impacted by extreme 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 Six Months Ended June 30 June 30 2019 2018 2019 2018 (in thousands) REVENUES Asset-Based $ 559,648 $ 559,239 $ 1,065,727 $ 1,041,354 ArcBest 181,173 199,987 354,377 381,920 FleetNet 51,722 46,792 104,981 94,551 Other and eliminations (21,053) (12,668) (41,756) (24,474) Total consolidated revenues $ 771,490 $ 793,350 $ 1,483,329 $ 1,493,351 OPERATING EXPENSES Asset-Based Salaries, wages, and benefits $ 297,016 $ 286,750 $ 577,292 $ 556,529 Fuel, supplies, and expenses 66,853 65,040 131,580 127,233 Operating taxes and licenses 12,214 11,910 24,612 23,666 Insurance 7,598 7,979 15,589 14,607 Communications and utilities 4,529 4,135 9,149 8,656 Depreciation and amortization 21,743 21,362 42,723 42,292 Rents and purchased transportation 57,687 63,253 107,599 109,386 Shared services 56,013 56,825 106,725 102,432 Multiemployer pension fund withdrawal liability charge (1) — 37,922 — 37,922 Gain on sale of property and equipment (1,587) (266) (1,621) (399) Other 1,404 948 2,286 2,247 Total Asset-Based 523,470 555,858 1,015,934 1,024,571 ArcBest Purchased transportation 147,552 162,920 287,657 311,292 Supplies and expenses 2,858 3,538 5,632 6,768 Depreciation and amortization 3,055 3,597 6,206 7,005 Shared services 23,141 23,536 46,172 45,404 Other 2,445 2,546 4,858 4,427 Restructuring costs (2) — 143 — 152 Total ArcBest 179,051 196,280 350,525 375,048 FleetNet 50,696 45,763 102,467 92,001 Other and eliminations (16,927) (7,707) (29,388) (14,150) Total consolidated operating expenses $ 736,290 $ 790,194 $ 1,439,538 $ 1,477,470 (1) ABF Freight recorded a one-time charge in second quarter 2018 for the multiemployer pension plan withdrawal liability resulting from the transition agreement with the New England Teamsters and Trucking Industry Pension Fund (2) Restructuring costs relate to the realignment of the Company’s corporate structure as further described in Note N to the consolidated financial statements in Item 8 of the Company’s 2018 Annual Report on Form 10-K. Three Months Ended Six Months Ended June 30 June 30 2019 2018 2019 2018 (in thousands) OPERATING INCOME Asset-Based $ 36,178 $ 3,381 $ 49,793 $ 16,783 ArcBest 2,122 3,707 3,852 6,872 FleetNet 1,026 1,029 2,514 2,550 Other and eliminations (4,126) (4,961) (12,368) (10,324) Total consolidated operating income $ 35,200 $ 3,156 $ 43,791 $ 15,881 OTHER INCOME (COSTS) Interest and dividend income $ 1,616 $ 714 $ 3,094 $ 1,240 Interest and other related financing costs (2,811) (2,013) (5,693) (4,072) Other, net (1) (445) (1,123) (1,036) (3,324) Total other income (costs) (1,640) (2,422) (3,635) (6,156) INCOME BEFORE INCOME TAXES $ 33,560 $ 734 $ 40,156 $ 9,725 (1) Includes the components of net periodic benefit cost other than service cost related to the Company’s nonunion pension, SBP, and postretirement plans (see Note G) and 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 Six Months Ended June 30 June 30 2019 2018 2019 2018 (in thousands) OPERATING EXPENSES Salaries, wages, and benefits $ 361,116 $ 355,913 $ 704,784 $ 684,670 Rents, purchased transportation, and other costs of services 236,053 253,540 457,078 477,296 Fuel, supplies, and expenses 80,700 84,884 160,036 163,530 Depreciation and amortization (1) 27,434 27,187 53,971 53,673 Other 30,987 30,408 63,669 59,663 Multiemployer pension fund withdrawal liability charge (2) — 37,922 — 37,922 Restructuring costs (3) — 340 — 716 $ 736,290 $ 790,194 $ 1,439,538 $ 1,477,470 (1) Includes amortization of intangible assets. (2) ABF Freight recorded a one-time charge in second quarter 2018 for the multiemployer pension plan withdrawal liability resulting from the transition agreement with the New England Teamsters and Trucking Industry Pension Fund. (3) Restructuring costs relate to the realignment of the Company’s corporate structure as further described in Note N to the consolidated financial statements in Item 8 of the Company’s 2018 Annual Report on Form 10-K. |
LEGAL PROCEEDINGS, ENVIRONMENTA
LEGAL PROCEEDINGS, ENVIRONMENTAL MATTERS, AND OTHER EVENTS | 6 Months Ended |
Jun. 30, 2019 | |
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 61 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 June 30, 2019 and December 31, 2018, 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 $0.6 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 _2
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION | |
Financial Statement Presentation | 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 “SEC”) 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 2018 Annual Report on Form 10-K and other current filings with the SEC. In the opinion of management, all adjustments (which are of a normal and recurring nature) considered necessary for a fair presentation have been included. 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 consolidated financial statements and accompanying notes. Actual amounts may differ from those estimates. |
Interest Rate Swap Derivative Instruments | Interest Rate Swap Derivative Instruments |
Leases | Leases: Leases, the lease term in operating expenses. Included in lease expense are any variable lease payments incurred in the period that were not included in the initial lease liability. For financial reporting purposes, right-of-use assets held under finance leases are amortized over their estimated useful lives on the same basis as owned assets, and leasehold improvements associated with assets utilized under finance or operating leases are amortized by the straight-line method over the shorter of the remaining lease term or the asset’s useful life. Amortization of assets under finance leases is included in depreciation expense. Obligations under the finance lease arrangements are included in long-term debt. The short-term lease exemption was elected under ASC Topic 842 for all classes of assets to include real property, revenue equipment, and service, office, and other equipment. The Company adopted the policy election as a lessee for all classes of assets to account for each lease component and its related non-lease component(s) as a single lease component. In determining the discount rate, the Company uses the rate implicit in the lease if that rate is readily determinable when entering into a lease as a lessee. If the rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate, determined by the price of a fully collateralized loan with similar terms based on current market rates. For contracts entered into on or after the effective date, an assessment is made as to whether the contract is, or contains, a lease at the inception of a contract. The assessment is based on: (1) whether the contract involves the use of a distinct identified asset; (2) whether the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the period; and (3) whether the Company has the right to direct the use of the asset. For all operating leases that meet the scope of ASC Topic 842, a right-of-use asset and a lease liability are recognized. The right-of-use asset is measured as the initial amount of the lease liability, plus any initial direct costs incurred, less any prepayments prior to commencement or lease incentives received. The lease liability is initially measured at the present value of the lease payments, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s secured incremental borrowing rate for the same term as the underlying lease. Lease payments included in the measurement of the lease liability are comprised of the following: (1) the fixed noncancelable lease payments, (2) payments for optional renewal periods where it is reasonably certain the renewal period will be exercised, and (3) payments for early termination options unless it is reasonably certain the lease will not be terminated early. Variable lease payments based on an index or rate are initially measured using the index or rate in effect at lease commencement and included in the measurement of the initial lease liability. Additional payments based on the change in an index or rate are recorded as a period expense when incurred. Lease modifications result in remeasurement of the lease liability. |
Accounting Pronouncements | Adopted Accounting Pronouncements ASC Topic 842, which was adopted by the Company effective January 1, 2019, requires lessees to recognize right-of-use assets and lease liabilities for operating leases with terms greater than 12 months on the balance sheet. The standard also requires additional qualitative and quantitative disclosures designed to assess the amount, timing, and uncertainty of cash flows arising from leases. The Company elected the modified retrospective method of applying the transition provisions at the beginning of the period of adoption and, as a result, has not adjusted comparative period financial information and has not included the new lease disclosures for periods before the effective date. Prior period amounts continue to be reported under the Company’s historical accounting in accordance with the previous lease guidance included in ASC Topic 840. The Company has excluded short-term leases from accounting under ASC Topic 842 and has elected the package of practical expedients as permitted under the transition guidance, which allowed the Company to not reassess: (1) whether contracts are, or contain, leases; (2) lease classification; and (3) capitalization of initial direct costs. For contracts entered into on or after the effective date, an assessment is made as to whether the contract is, or contains, a lease at the inception of a contract. Consistent with the package of practical expedients elected, leases entered into prior to January 1, 2019, are accounted for under ASC Topic 840 and were not reassessed. For all classes of assets, the policy election was made to account for each lease component and its related non-lease component(s) as a single lease component. The election to not recognize right-of-use assets and lease liabilities for short-term leases that have a term of 12 months or less did not have a material effect on the right-of-use assets and lease liabilities. The majority of the Company’s lease portfolio consists of real property operating leases related to facilities used in the Asset-Based segment service center operations. The lease portfolio also includes operating leases related to certain revenue equipment used in the ArcBest segment operations as well as a small number of office equipment finance leases. Management has recorded the right-of-use assets and associated lease liabilities for operating leases on the consolidated balance sheet as of June 30, 2019 in accordance with ASC Topic 842. Finance leases are not material to the consolidated financial statements. The most significant impact of adopting ASC Topic 842 was the recognition of right-of-use assets and lease liabilities on the balance sheet for operating leases of $58.7 million as of January 1, 2019. The accounting for finance leases (formerly referred to as capital leases prior to the adoption of ASC Topic 842) remained substantially unchanged. The expense recognition for operating leases and finance leases under ASC Topic 842 is substantially consistent with ASC Topic 840 and the impact of the new standard is non-cash in nature. As a result, there is no significant impact on the Company’s results of operations or cash flows presented in the Company’s consolidated financial statements. ASC Topic 815, Derivatives and Hedging The U.S. Securities and Exchange Commission (the “SEC”) issued Final Rule 33-10618, FAST Act Modernization and Simplification of Regulation S-K Accounting Pronouncements Not Yet Adopted Final Rule 33-10618 includes certain provisions to simplify certain annual disclosure requirements within the Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), Risk Factors, and Properties sections of Form 10-K. These provisions, which the Company will adopt for its 2019 Annual Report on Form 10-K, are not expected to have a significant impact on the Company’s consolidated financial statement disclosures. ASC Subtopic 350-40, Intangibles – Goodwill and Other – Internal-Use Software: Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement Internal-Use Software ASC Topic 820, Fair Value Measurement ASC Topic 326, Financial Instruments – Credit Losses Management believes 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 FAI_2
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | |
Schedule components of cash and cash equivalents, short term investments, and restricted funds | June 30 December 31 2019 2018 (in thousands) Cash and cash equivalents Cash deposits (1) $ 145,629 $ 124,938 Variable rate demand notes (1)(2) 14,536 19,786 Money market funds (3) 21,566 42,470 U.S. Treasury securities (4) — 2,992 Total cash and cash equivalents $ 181,731 $ 190,186 Short-term investments Certificates of deposit (1) $ 81,685 $ 82,949 U.S. Treasury securities (4) 35,972 23,857 Total short-term investments $ 117,657 $ 106,806 (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) Recorded at amortized cost plus accrued interest, which approximates fair value. U.S. Treasury securities with a maturity date within 90 days of the purchase date are classified as cash equivalents. U.S. Treasury securities included in short-term investments are held-to-maturity investments with maturity dates of less than one year. |
Schedule of fair value and carrying value disclosures of financial instruments | June 30 December 31 2019 2018 (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) 40,000 40,000 40,000 40,000 Notes payable (3) 172,054 175,456 181,409 181,560 $ 282,054 $ 285,456 $ 291,409 $ 291,560 (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 | June 30, 2019 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) $ 21,566 $ 21,566 $ — $ — Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan (2) 3,004 3,004 — — Interest rate swaps (3) 52 — 52 — $ 24,622 $ 24,570 $ 52 $ — Liabilities: Interest rate swaps (3) $ 548 $ — $ 548 $ — December 31, 2018 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) $ 42,470 $ 42,470 $ — $ — Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan (2) 2,342 2,342 — — Interest rate swaps (3) 801 — 801 — $ 45,613 $ 44,812 $ 801 $ — Liabilities: Contingent consideration (4) $ 4,472 $ — $ — $ 4,472 (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 other long-term assets or other long-term liabilities. The fair values of the interest rate swaps were 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 June 30, 2019 and December 31, 2018 and considers the interest rate swap valuations in Level 2 of the fair value hierarchy. (4) Included in accrued expenses. At December 31, 2018, the fair value of the contingent consideration for an earn-out agreement related to the September 2016 acquisition of LDS represents the final accrued payment and was based on calculations performed for the earn-out period which ended August 31, 2018. In January 2019, final payment of the contingent consideration was released from an escrow account reported in other current assets in the consolidated balance sheets. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of intangible assets | June 30, 2019 December 31, 2018 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 14 $ 60,431 $ 26,318 $ 34,113 $ 60,431 $ 24,130 $ 36,301 Other 9 1,032 745 287 1,032 684 348 14 61,463 27,063 34,400 61,463 24,814 36,649 Indefinite-lived intangible assets Trade name N/A 32,300 N/A 32,300 32,300 N/A 32,300 Total intangible assets N/A $ 93,763 $ 27,063 $ 66,700 $ 93,763 $ 24,814 $ 68,949 |
Schedule of future amortization for intangible assets | Amortization of Intangible Assets (in thousands) Remainder of 2019 $ 2,233 2020 4,454 2021 4,412 2022 4,385 2023 4,287 Thereafter 14,629 Total amortization $ 34,400 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases | |
Schedule of components of lease expense | Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 (in thousands) Operating lease expense $ 5,642 $ 10,981 Variable lease expense 774 1,613 Sublease income (69) (136) Total operating lease expense $ 6,347 $ 12,458 |
Schedule of operating cash flows from operating lease activity | Six Months Ended June 30, 2019 (in thousands) Noncash change in operating right-of-use assets $ 9,784 Change in operating lease liabilities (9,625) Operating right-use-of-assets and lease liabilities, net $ 159 Cash paid for amounts included in the measurement of operating lease liabilities $ (10,815) |
Schedule of supplemental balance sheet information related to lease liabilities | June 30, 2019 (in thousands, except lease term and discount rate) Land and Equipment Operating leases Total Structures and Others Operating right-of-use assets (long-term) $ 68,810 $ 67,029 $ 1,781 Operating lease liabilities (current) $ 18,273 $ 17,250 $ 1,023 Operating lease liabilities (long-term) 54,040 53,293 747 Total operating lease liabilities $ 72,313 $ 70,543 $ 1,770 Weighted-average remaining lease term (in years) 5.4 Weighted-average discount rate 3.93% |
Schedule of maturities of operating lease liabilities | Maturities of operating lease liabilities at June 30, 2019 were as follows: Equipment Land and and Total Structures Other Remainder of 2019 $ 10,668 $ 10,126 $ 542 2020 19,152 18,142 1,010 2021 14,716 14,442 274 2022 10,372 10,372 — 2023 7,550 7,550 — Thereafter 18,109 18,109 — Total lease payments 80,567 78,741 1,826 Less imputed interest (8,254) (8,198) (56) Total $ 72,313 $ 70,543 $ 1,770 |
Schedule of maturities of operating lease liabilities at December 31, 2018 | The future minimum rental commitments, net of minimum rentals to be received under noncancelable subleases, as of December 31, 2018 for all noncancelable operating leases were as follows: Equipment Land and and Total Structures Other 2019 $ 19,130 $ 18,067 $ 1,063 2020 14,620 13,676 944 2021 10,972 10,716 256 2022 7,125 7,125 — 2023 4,477 4,477 — Thereafter 5,850 5,850 — Total $ 62,174 $ 59,911 $ 2,263 |
LONG-TERM DEBT AND FINANCING _2
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
LONG-TERM DEBT AND FINANCING ARRANGEMENTS | |
Schedule of long-term debt | June 30 December 31 2019 2018 (in thousands) Credit Facility (interest rate of 3.7% (1) $ 70,000 $ 70,000 Accounts receivable securitization borrowings (interest rate of 3.3% at June 30, 2019) 40,000 40,000 Notes payable (weighted-average interest rate of 3.5% at June 30, 2019) 172,054 181,409 Finance lease obligations (weighted-average interest rate of 5.5% at June 30, 2019) 152 266 282,206 291,675 Less current portion 47,205 54,075 Long-term debt, less current portion $ 235,001 $ 237,600 (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 3.10% based on the margin of the Credit Facility as of June 30, 2019 and December 31, 2018. |
Scheduled maturities of long-term debt obligations | Accounts Receivable Credit Securitization Notes Finance Lease Total Facility (1) Program (1) Payable Obligations (2) (in thousands) Due in one year or less $ 55,808 $ 2,230 $ 1,132 $ 52,306 $ 140 Due after one year through two years 50,379 1,942 968 47,462 7 Due after two years through three years 85,385 1,965 40,243 43,172 5 Due after three years through four years 98,514 70,033 — 28,481 — Due after four years through five years 13,035 — — 13,035 — Due after five years 152 — — 152 — Total payments 303,273 76,170 42,343 184,608 152 Less amounts representing interest 21,067 6,170 2,343 12,554 — Long-term debt $ 282,206 $ 70,000 $ 40,000 $ 172,054 $ 152 (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 finance lease obligations include maximum amounts due under rental adjustment clauses contained in the finance lease agreements. |
Schedule of assets securing notes payable or held under capital leases | June 30 December 31 2019 2018 (in thousands) Revenue equipment $ 245,703 $ 264,396 Land and structures (service centers) 1,794 1,794 Software 1,508 1,484 Service, office, and other equipment 15,492 5,941 Total assets securing notes payable or held under finance leases 264,497 273,615 Less accumulated depreciation and amortization (1) 78,113 79,961 Net assets securing notes payable or held under finance leases $ 186,384 $ 193,654 (1) Amortization of assets under held finance leases and depreciation of assets securing notes payable are included in depreciation expense. |
PENSION AND OTHER POSTRETIREM_2
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS | |
Summary of the components of net periodic benefit cost | The following is a summary of the components of net periodic benefit cost: Three Months Ended June 30 Nonunion Defined Supplemental Postretirement Benefit Pension Plan Benefit Plan Health Benefit Plan 2019 2018 2019 2018 2019 2018 (in thousands) Service cost $ — $ — $ — $ — $ 80 $ 91 Interest cost 168 1,108 10 27 303 210 Expected return on plan assets 1 (378) — — — — Amortization of prior service credit — — — — (8) (24) Pension settlement expense 278 431 — — — — Amortization of net actuarial loss (1) 61 592 23 20 224 76 Net periodic benefit cost $ 508 $ 1,753 $ 33 $ 47 $ 599 $ 353 Six Months Ended June 30 Nonunion Defined Supplemental Postretirement Benefit Pension Plan Benefit Plan Health Benefit Plan 2019 2018 2019 2018 2019 2018 (in thousands) Service cost $ — $ — $ — $ — $ 160 $ 183 Interest cost 486 2,123 20 54 606 419 Expected return on plan assets (89) (779) — — — — Amortization of prior service credit — — — — (17) (47) Pension settlement expense 1,634 1,085 — — — — Amortization of net actuarial loss (1) 210 1,370 47 40 449 152 Net periodic benefit cost $ 2,241 $ 3,799 $ 67 $ 94 $ 1,198 $ 707 (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 | The following table discloses the changes in benefit obligations and plan assets of the nonunion defined benefit pension plan for the six months ended June 30, 2019: Nonunion Defined Benefit Pension Plan (in thousands) Change in benefit obligations Benefit obligations at December 31, 2018 $ 33,373 Interest cost 486 Actuarial gain (1) (661) Benefits paid (18,125) Benefit obligations at June 30, 2019 15,073 Change in plan assets Fair value of plan assets at December 31, 2018 26,646 Actual return on plan assets 241 Benefits paid (18,125) Fair value of plan assets at June 30, 2019 8,762 Funded status at period end (2) $ (6,311) Accumulated benefit obligation $ 15,073 (1) The plan recognized an actuarial gain on lump-sum distributions related to benefit elections for plan termination which had been included in the actuarial estimate for the annuity contract purchase as of the December 31, 2018 measurement date. (2) Recognized within current portion of pension and postretirement liabilities in the accompanying consolidated balance sheet at June 30, 2019. |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
STOCKHOLDERS' EQUITY | |
Components of accumulated other comprehensive loss | Components of accumulated other comprehensive loss were as follows: June 30 December 31 2019 2018 (in thousands) Pre-tax amounts: Unrecognized net periodic benefit costs $ (8,685) $ (11,821) Interest rate swap (364) 801 Foreign currency translation (2,355) (2,816) Total $ (11,404) $ (13,836) After-tax amounts: Unrecognized net periodic benefit costs (1) $ (10,421) $ (12,749) Interest rate swap (269) 591 Foreign currency translation (1,739) (2,080) Total $ (12,429) $ (14,238) (1) Includes $4.0 million related to a previous valuation allowance on deferred tax assets for nonunion defined benefit pension liabilities which will be reversed to retained earnings upon extinguishment of the nonunion defined benefit pension plan expected to occur in 2019. The reclassification of stranded income tax effects related to this item is not permitted by ASC Topic 220 which the Company adopted as of January 1, 2018. |
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, 2018 $ (14,238) $ (12,749) $ 591 $ (2,080) Other comprehensive income (loss) before reclassifications 84 603 (860) 341 Amounts reclassified from accumulated other comprehensive loss 1,725 1,725 — — Net current-period other comprehensive income (loss) 1,809 2,328 (860) 341 Balances at June 30, 2019 $ (12,429) $ (10,421) $ (269) $ (1,739) Balances at December 31, 2017 $ (20,574) $ (19,715) $ 292 $ (1,151) Adjustment to beginning balance of accumulated other comprehensive loss for adoption of accounting standard (1) (3,576) (3,391) 63 (248) Balances at January 1, 2018 (24,150) (23,106) 355 (1,399) Other comprehensive income (loss) before reclassifications 4,377 3,890 779 (292) Amounts reclassified from accumulated other comprehensive loss 1,931 1,931 — — Net current-period other comprehensive income (loss) 6,308 5,821 779 (292) Balances at June 30, 2018 $ (17,842) $ (17,285) $ 1,134 $ (1,691) (1) The Company elected to reclassify the stranded income tax effects in accumulated other comprehensive loss to retained earnings as of January 1, 2018 as a result of adopting an amendment to ASC Topic 220 . |
Summary of the significant reclassifications out of accumulated other comprehensive loss by component | The following is a summary of the significant reclassifications out of accumulated other comprehensive loss by component: Unrecognized Net Periodic Benefit Costs (1)(2) Six Months Ended June 30 2019 2018 (in thousands) Amortization of net actuarial loss $ (706) $ (1,562) Amortization of prior service credit 17 47 Pension settlement expense (1,634) (1,085) Total, pre-tax (2,323) (2,600) Tax benefit 598 669 Total, net of tax $ (1,725) $ (1,931) (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 G). |
Summary of dividends declared | 2019 2018 Per Share Amount Per Share Amount (in thousands, except per share data) First quarter $ 0.08 $ 2,052 $ 0.08 $ 2,058 Second quarter $ 0.08 $ 2,050 $ 0.08 $ 2,058 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
SHARE-BASED COMPENSATION | |
Summary of the Company's restricted stock unit award program | Weighted-Average Grant Date Units Fair Value Outstanding – January 1, 2019 1,436,983 $ 25.81 Granted 386,520 $ 27.75 Vested (142,594) $ 39.87 Forfeited (1) (18,456) $ 26.56 Outstanding – June 30, 2019 1,662,453 $ 25.05 (1) Forfeitures are recognized as they occur. |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
EARNINGS PER SHARE | |
Schedule of computation of basic and diluted earnings (loss) per share | The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended Six Months Ended June 30 June 30 2019 2018 2019 2018 (in thousands, except share and per share data) Basic Numerator: Net income $ 24,376 $ 1,233 $ 29,264 $ 11,187 Effect of unvested restricted stock awards (11) (4) (26) (31) Adjusted net income $ 24,365 $ 1,229 $ 29,238 $ 11,156 Denominator: Weighted-average shares 25,554,286 25,670,325 25,562,306 25,656,674 Earnings per common share $ 0.95 $ 0.05 $ 1.14 $ 0.43 Diluted Numerator: Net income $ 24,376 $ 1,233 $ 29,264 $ 11,187 Effect of unvested restricted stock awards (11) (4) (25) (30) Adjusted net income $ 24,365 $ 1,229 $ 29,239 $ 11,157 Denominator: Weighted-average shares 25,554,286 25,670,325 25,562,306 25,656,674 Effect of dilutive securities 877,306 1,029,224 920,705 996,608 Adjusted weighted-average shares and assumed conversions 26,431,592 26,699,549 26,483,011 26,653,282 Earnings per common share $ 0.92 $ 0.05 $ 1.10 $ 0.42 |
OPERATING SEGMENT DATA (Tables)
OPERATING SEGMENT DATA (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
OPERATING SEGMENT DATA | |
Schedule of reportable operating segment information | Three Months Ended Six Months Ended June 30 June 30 2019 2018 2019 2018 (in thousands) REVENUES Asset-Based $ 559,648 $ 559,239 $ 1,065,727 $ 1,041,354 ArcBest 181,173 199,987 354,377 381,920 FleetNet 51,722 46,792 104,981 94,551 Other and eliminations (21,053) (12,668) (41,756) (24,474) Total consolidated revenues $ 771,490 $ 793,350 $ 1,483,329 $ 1,493,351 OPERATING EXPENSES Asset-Based Salaries, wages, and benefits $ 297,016 $ 286,750 $ 577,292 $ 556,529 Fuel, supplies, and expenses 66,853 65,040 131,580 127,233 Operating taxes and licenses 12,214 11,910 24,612 23,666 Insurance 7,598 7,979 15,589 14,607 Communications and utilities 4,529 4,135 9,149 8,656 Depreciation and amortization 21,743 21,362 42,723 42,292 Rents and purchased transportation 57,687 63,253 107,599 109,386 Shared services 56,013 56,825 106,725 102,432 Multiemployer pension fund withdrawal liability charge (1) — 37,922 — 37,922 Gain on sale of property and equipment (1,587) (266) (1,621) (399) Other 1,404 948 2,286 2,247 Total Asset-Based 523,470 555,858 1,015,934 1,024,571 ArcBest Purchased transportation 147,552 162,920 287,657 311,292 Supplies and expenses 2,858 3,538 5,632 6,768 Depreciation and amortization 3,055 3,597 6,206 7,005 Shared services 23,141 23,536 46,172 45,404 Other 2,445 2,546 4,858 4,427 Restructuring costs (2) — 143 — 152 Total ArcBest 179,051 196,280 350,525 375,048 FleetNet 50,696 45,763 102,467 92,001 Other and eliminations (16,927) (7,707) (29,388) (14,150) Total consolidated operating expenses $ 736,290 $ 790,194 $ 1,439,538 $ 1,477,470 (1) ABF Freight recorded a one-time charge in second quarter 2018 for the multiemployer pension plan withdrawal liability resulting from the transition agreement with the New England Teamsters and Trucking Industry Pension Fund (2) Restructuring costs relate to the realignment of the Company’s corporate structure as further described in Note N to the consolidated financial statements in Item 8 of the Company’s 2018 Annual Report on Form 10-K. Three Months Ended Six Months Ended June 30 June 30 2019 2018 2019 2018 (in thousands) OPERATING INCOME Asset-Based $ 36,178 $ 3,381 $ 49,793 $ 16,783 ArcBest 2,122 3,707 3,852 6,872 FleetNet 1,026 1,029 2,514 2,550 Other and eliminations (4,126) (4,961) (12,368) (10,324) Total consolidated operating income $ 35,200 $ 3,156 $ 43,791 $ 15,881 OTHER INCOME (COSTS) Interest and dividend income $ 1,616 $ 714 $ 3,094 $ 1,240 Interest and other related financing costs (2,811) (2,013) (5,693) (4,072) Other, net (1) (445) (1,123) (1,036) (3,324) Total other income (costs) (1,640) (2,422) (3,635) (6,156) INCOME BEFORE INCOME TAXES $ 33,560 $ 734 $ 40,156 $ 9,725 (1) Includes the components of net periodic benefit cost other than service cost related to the Company’s nonunion pension, SBP, and postretirement plans (see Note G) and 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 Six Months Ended June 30 June 30 2019 2018 2019 2018 (in thousands) OPERATING EXPENSES Salaries, wages, and benefits $ 361,116 $ 355,913 $ 704,784 $ 684,670 Rents, purchased transportation, and other costs of services 236,053 253,540 457,078 477,296 Fuel, supplies, and expenses 80,700 84,884 160,036 163,530 Depreciation and amortization (1) 27,434 27,187 53,971 53,673 Other 30,987 30,408 63,669 59,663 Multiemployer pension fund withdrawal liability charge (2) — 37,922 — 37,922 Restructuring costs (3) — 340 — 716 $ 736,290 $ 790,194 $ 1,439,538 $ 1,477,470 (1) Includes amortization of intangible assets. (2) ABF Freight recorded a one-time charge in second quarter 2018 for the multiemployer pension plan withdrawal liability resulting from the transition agreement with the New England Teamsters and Trucking Industry Pension Fund. (3) Restructuring costs relate to the realignment of the Company’s corporate structure as further described in Note N to the consolidated financial statements in Item 8 of the Company’s 2018 Annual Report on Form 10-K. |
ORGANIZATION AND DESCRIPTION _3
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION (Organization) (Details) | 6 Months Ended |
Jun. 30, 2019segment | |
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% |
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 | 82.00% |
ORGANIZATION AND DESCRIPTION _4
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION (Leases) (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Jun. 30, 2019 |
Adopted Accounting Pronouncements | ||
Operating right-of-use assets | $ 68,810 | |
Lease liability | $ 72,313 | |
Lease, Practical Expedients, Package | true | |
ASC Topic 842, Leases | ||
Adopted Accounting Pronouncements | ||
Change in Accounting Principle, Accounting Standards Update, Adopted | true | |
Change in Accounting Principle, Accounting Standards Update, Transition Option Elected | Modified Retrospective | |
ASC Topic 842, Leases | Adjustment | ||
Adopted Accounting Pronouncements | ||
Operating right-of-use assets | $ 58,700 | |
Lease liability | $ 58,700 |
FINANCIAL INSTRUMENTS AND FAI_3
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Cash and Cash Equivalents and Short-term Investments) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Fair value disclosure | ||
Cash and cash equivalents | $ 181,731 | $ 190,186 |
Short-term investments | 117,657 | 106,806 |
Concentrations of Credit Risk of Financial Instruments | ||
Cash, cash equivalents and short-term investments not FDIC-insured | 68,900 | 94,700 |
Cash deposits | ||
Fair value disclosure | ||
Cash and cash equivalents | 145,629 | 124,938 |
Variable rate demand notes | ||
Fair value disclosure | ||
Cash and cash equivalents | 14,536 | 19,786 |
Money market funds | ||
Fair value disclosure | ||
Cash and cash equivalents | 21,566 | 42,470 |
Certificates of deposit | ||
Fair value disclosure | ||
Short-term investments | 81,685 | 82,949 |
U.S. Treasury securities | ||
Fair value disclosure | ||
Cash and cash equivalents | 2,992 | |
Short-term investments | $ 35,972 | $ 23,857 |
FINANCIAL INSTRUMENTS AND FAI_4
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Debt) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Carrying Value | ||
Fair value disclosure | ||
Debt obligations | $ 282,054 | $ 291,409 |
Fair Value | ||
Fair value disclosure | ||
Debt obligations | 285,456 | 291,560 |
Credit Facility | Level 2 | Carrying Value | ||
Fair value disclosure | ||
Debt obligations | 70,000 | 70,000 |
Credit Facility | Level 2 | Fair Value | ||
Fair value disclosure | ||
Debt obligations | 70,000 | 70,000 |
Accounts receivable securitization borrowings | Level 2 | Carrying Value | ||
Fair value disclosure | ||
Debt obligations | 40,000 | 40,000 |
Accounts receivable securitization borrowings | Level 2 | Fair Value | ||
Fair value disclosure | ||
Debt obligations | 40,000 | 40,000 |
Notes payable | Level 2 | Carrying Value | ||
Fair value disclosure | ||
Debt obligations | 172,054 | 181,409 |
Notes payable | Level 2 | Fair Value | ||
Fair value disclosure | ||
Debt obligations | $ 175,456 | $ 181,560 |
FINANCIAL INSTRUMENTS AND FAI_5
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Assets and Liabilities) (Details) - Recurring basis - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Assets: | ||
Assets | $ 24,622 | $ 45,613 |
Cash and cash equivalents | ||
Assets: | ||
Money market funds | 21,566 | 42,470 |
Other long-term assets | ||
Assets: | ||
Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan | 3,004 | 2,342 |
Interest rate swaps | 52 | 801 |
Accrued expenses | ||
Liabilities: | ||
Contingent consideration | 4,472 | |
Other long-term liabilities | ||
Liabilities: | ||
Interest rate swap | 548 | |
Level 1 | ||
Assets: | ||
Assets | 24,570 | 44,812 |
Level 1 | Cash and cash equivalents | ||
Assets: | ||
Money market funds | 21,566 | 42,470 |
Level 1 | Other long-term assets | ||
Assets: | ||
Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan | 3,004 | 2,342 |
Level 2 | ||
Assets: | ||
Assets | 52 | 801 |
Level 2 | Other long-term assets | ||
Assets: | ||
Interest rate swaps | 52 | 801 |
Level 2 | Other long-term liabilities | ||
Liabilities: | ||
Interest rate swap | $ 548 | |
Level 3 | Accrued expenses | ||
Liabilities: | ||
Contingent consideration | $ 4,472 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Goodwill) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Goodwill by reportable operating segment | ||
Goodwill | $ 108,320 | $ 108,320 |
ArcBest | ||
Goodwill by reportable operating segment | ||
Goodwill | 107,700 | 107,700 |
FleetNet | ||
Goodwill by reportable operating segment | ||
Goodwill | $ 600 | $ 600 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS (Intangible) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Finite-lived intangible assets | ||
Weighted Average Amortization Period | 14 years | |
Cost | $ 61,463 | $ 61,463 |
Accumulated Amortization | 27,063 | 24,814 |
Net Value | 34,400 | 36,649 |
Total intangible assets | ||
Cost | 93,763 | 93,763 |
Net Value | 66,700 | 68,949 |
Trade name | ||
Indefinite-lived intangible assets | ||
Net Value | $ 32,300 | 32,300 |
Customer relationships | ||
Finite-lived intangible assets | ||
Weighted Average Amortization Period | 14 years | |
Cost | $ 60,431 | 60,431 |
Accumulated Amortization | 26,318 | 24,130 |
Net Value | $ 34,113 | 36,301 |
Other intangible assets | ||
Finite-lived intangible assets | ||
Weighted Average Amortization Period | 9 years | |
Cost | $ 1,032 | 1,032 |
Accumulated Amortization | 745 | 684 |
Net Value | $ 287 | $ 348 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS (Amortization) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Future amortization for intangible assets | ||
Remainder of 2019 | $ 2,233 | |
2020 | 4,454 | |
2021 | 4,412 | |
2022 | 4,385 | |
2023 | 4,287 | |
Thereafter | 14,629 | |
Net Value | $ 34,400 | $ 36,649 |
INCOME TAXES (Tax Reform Act) (
INCOME TAXES (Tax Reform Act) (Details) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 4 Months Ended | 6 Months Ended | 12 Months Ended | |||
Feb. 28, 2018 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2017 | |
Impact of Tax Reform Act | ||||||||
Statutory federal rate (as a percent) | 32.74% | 21.00% | 21.00% | 21.00% | 21.00% | 35.00% | ||
Reduction of deferred tax liabilities due to Tax Reform Act | $ 0.1 | $ 2.6 | $ 24.5 | |||||
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) | 27.40% | (68.00%) | 27.10% | (15.00%) | ||||
Provisional reduction in current income tax expense due Tax Reform Act reflecting use of fiscal year rather than calendar year federal income tax filing | $ 0.1 | 1.3 | ||||||
Alternative fuel tax credit | $ 1.2 |
INCOME TAXES (Allowance) (Detai
INCOME TAXES (Allowance) (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Valuation allowance | $ 0.1 | $ 0.1 |
INCOME TAXES (Uncertain Tax Pos
INCOME TAXES (Uncertain Tax Positions) (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
INCOME TAXES | ||
Reserve for uncertain tax positions | $ 1 | $ 1 |
INCOME TAXES (Deferred taxes) (
INCOME TAXES (Deferred taxes) (Details) - ASC Topic 842, Leases - Adjustment $ in Millions | Mar. 31, 2019USD ($) |
Deferred tax assets: | |
Deferred tax assets | $ 19 |
Deferred tax liabilities | $ 19 |
INCOME TAXES (Taxes Paid) (Deta
INCOME TAXES (Taxes Paid) (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Income taxes | ||
Income taxes paid (in dollars) | $ 8.9 | $ 2.5 |
Income tax refunds received (in dollars) | $ 1.1 | |
Maximum | ||
Income taxes | ||
Income tax refunds received (in dollars) | $ 0.1 |
LEASES (Lease terms) (Details)
LEASES (Lease terms) (Details) - Maximum | 6 Months Ended |
Jun. 30, 2019 | |
Operating leases | |
Remaining lease term | 10 years |
Operating lease, renewal term | 5 years |
Option to terminate lease, period | 3 years |
LEASES (Components of Lease Exp
LEASES (Components of Lease Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Leases | ||||
Operating lease expense | $ 5,642 | $ 10,981 | ||
Variable lease expense | 774 | 1,613 | ||
Sublease income | (69) | (136) | ||
Total operating lease expense | $ 6,347 | $ 12,458 | ||
Rental expense for operating leases | $ 5,000 | $ 9,500 |
LEASES (Cash flows) (Details)
LEASES (Cash flows) (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Operating leases | |
Noncash change in operating right-of-use assets | $ 9,784 |
Change in operating lease liabilities | (9,625) |
Operating right-use-of-assets and lease liabilities, net | 159 |
Cash paid for amounts included in the measurement of operating lease liabilities | $ (10,815) |
LEASES (Supplemental Balance Sh
LEASES (Supplemental Balance Sheet Information) (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Operating leases | |
Operating right-of-use assets (long-term) | $ 68,810 |
Operating lease liabilities (current) | 18,273 |
Operating lease liabilities (long-term) | 54,040 |
Total operating lease liabilities | $ 72,313 |
Weighted average remaining lease term (in years) | 5 years 4 months 24 days |
Weighted average discount rate | 3.93% |
Land and Structures | |
Operating leases | |
Operating right-of-use assets (long-term) | $ 67,029 |
Operating lease liabilities (current) | 17,250 |
Operating lease liabilities (long-term) | 53,293 |
Total operating lease liabilities | 70,543 |
Equipment and Others | |
Operating leases | |
Operating right-of-use assets (long-term) | 1,781 |
Operating lease liabilities (current) | 1,023 |
Operating lease liabilities (long-term) | 747 |
Total operating lease liabilities | $ 1,770 |
LEASES (Maturities of Operating
LEASES (Maturities of Operating Lease Liabilities - 2019) (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Maturities of operating lease liabilities | |
Remainder of 2019 | $ 10,668 |
2020 | 19,152 |
2021 | 14,716 |
2022 | 10,372 |
2023 | 7,550 |
Thereafter | 18,109 |
Total lease payments | 80,567 |
Less imputed interest | (8,254) |
Total operating lease liabilities | 72,313 |
Land and Structures | |
Maturities of operating lease liabilities | |
Remainder of 2019 | 10,126 |
2020 | 18,142 |
2021 | 14,442 |
2022 | 10,372 |
2023 | 7,550 |
Thereafter | 18,109 |
Total lease payments | 78,741 |
Less imputed interest | (8,198) |
Total operating lease liabilities | 70,543 |
Equipment and Others | |
Maturities of operating lease liabilities | |
Remainder of 2019 | 542 |
2020 | 1,010 |
2021 | 274 |
Total lease payments | 1,826 |
Less imputed interest | (56) |
Total operating lease liabilities | $ 1,770 |
LEASES (Maturities of Operati_2
LEASES (Maturities of Operating Lease Liabilities - 2018) (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Maturities of operating lease liabilities | |
2019 | $ 19,130 |
2020 | 14,620 |
2021 | 10,972 |
2022 | 7,125 |
2023 | 4,477 |
Thereafter | 5,850 |
Total | 62,174 |
Land and Structures | |
Maturities of operating lease liabilities | |
2019 | 18,067 |
2020 | 13,676 |
2021 | 10,716 |
2022 | 7,125 |
2023 | 4,477 |
Thereafter | 5,850 |
Total | 59,911 |
Equipment and Others | |
Maturities of operating lease liabilities | |
2019 | 1,063 |
2020 | 944 |
2021 | 256 |
Total | $ 2,263 |
LONG-TERM DEBT AND FINANCING _3
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Summary) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Long-term debt obligations | ||
Long-term debt | $ 282,206 | $ 291,675 |
Less current portion | 47,205 | 54,075 |
Long-term debt, less current portion | 235,001 | 237,600 |
Payments under long-term debt obligations | ||
Due in one year or less | 55,808 | |
Due after one year through two years | 50,379 | |
Due after two years through three years | 85,385 | |
Due after three years through four years | 98,514 | |
Due after four years through five years | 13,035 | |
Due after five years | 152 | |
Total payments | 303,273 | |
Less amounts representing interest | 21,067 | |
Long-term debt | 282,206 | 291,675 |
Credit Facility | ||
Long-term debt obligations | ||
Long-term debt | $ 70,000 | 70,000 |
Interest rate (as a percent) | 3.70% | |
Payments under long-term debt obligations | ||
Due in one year or less | $ 2,230 | |
Due after one year through two years | 1,942 | |
Due after two years through three years | 1,965 | |
Due after three years through four years | 70,033 | |
Total payments | 76,170 | |
Less amounts representing interest | 6,170 | |
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) | 3.10% | 3.10% |
Accounts receivable securitization borrowings | ||
Long-term debt obligations | ||
Long-term debt | $ 40,000 | $ 40,000 |
Interest rate (as a percent) | 3.30% | |
Payments under long-term debt obligations | ||
Due in one year or less | $ 1,132 | |
Due after one year through two years | 968 | |
Due after two years through three years | 40,243 | |
Total payments | 42,343 | |
Less amounts representing interest | 2,343 | |
Long-term debt | 40,000 | 40,000 |
Notes payable | ||
Long-term debt obligations | ||
Long-term debt | $ 172,054 | 181,409 |
Weighted-average interest rate (as a percent) | 3.50% | |
Payments under long-term debt obligations | ||
Due in one year or less | $ 52,306 | |
Due after one year through two years | 47,462 | |
Due after two years through three years | 43,172 | |
Due after three years through four years | 28,481 | |
Due after four years through five years | 13,035 | |
Due after five years | 152 | |
Total payments | 184,608 | |
Less amounts representing interest | 12,554 | |
Long-term debt | 172,054 | 181,409 |
Finance lease obligations | ||
Long-term debt obligations | ||
Long-term debt | $ 152 | 266 |
Weighted-average interest rate (as a percent) | 5.50% | |
Payments under long-term debt obligations | ||
Due in one year or less | $ 140 | |
Due after one year through two years | 7 | |
Due after two years through three years | 5 | |
Total payments | 152 | |
Long-term debt | $ 152 | $ 266 |
LONG-TERM DEBT AND FINANCING _4
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Assets Sec) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Financing Arrangements | ||
Total assets securing notes payable or held under finance leases | $ 264,497 | $ 273,615 |
Less accumulated depreciation and amortization | 78,113 | 79,961 |
Net assets securing notes payable or held under finance leases | 186,384 | 193,654 |
Revenue equipment | ||
Financing Arrangements | ||
Total assets securing notes payable or held under finance leases | 245,703 | 264,396 |
Land and structures (service centers) | ||
Financing Arrangements | ||
Total assets securing notes payable or held under finance leases | 1,794 | 1,794 |
Software | ||
Financing Arrangements | ||
Total assets securing notes payable or held under finance leases | 1,508 | 1,484 |
Service, office, and other equipment | ||
Financing Arrangements | ||
Total assets securing notes payable or held under finance leases | $ 15,492 | $ 5,941 |
LONG-TERM DEBT AND FINANCING _5
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Financing arrangements - Credit Facility) (Details) $ in Millions | Jun. 30, 2019USD ($) |
Credit Facility | |
Financing Arrangements | |
Maximum borrowing capacity | $ 200 |
Additional borrowing capacity that may be requested | 100 |
Remaining borrowing capacity | 130 |
Swing Line Facility | |
Financing Arrangements | |
Maximum borrowing capacity | 20 |
Letters of Credit, Sub-Facility | |
Financing Arrangements | |
Maximum borrowing capacity | $ 20 |
LONG-TERM DEBT AND FINANCING _6
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Financing arrangements - Interest rate swaps) (Details) - USD ($) $ in Millions | 1 Months Ended | |||
Nov. 30, 2014 | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2017 | |
Interest rate swap agreement | ||||
Financing Arrangements | ||||
Term of swap agreement | 5 years | |||
Notional amount | $ 50 | |||
Fixed interest rate payments (as a percent) | 1.85% | |||
Interest rate swap agreement | Other long-term assets | ||||
Financing Arrangements | ||||
Fair value of interest rate swap, asset | $ 0.1 | $ 0.3 | ||
Interest rate swap agreement | Credit Facility | ||||
Financing Arrangements | ||||
Amount of borrowings covered by the interest rate swap | $ 50 | |||
Effective fixed interest rate on hedged borrowings (as a percent) | 3.10% | 3.10% | ||
Forward-starting interest rate swap agreement | ||||
Financing Arrangements | ||||
Notional amount | $ 50 | |||
Fixed interest rate payments (as a percent) | 1.99% | |||
Forward-starting interest rate swap agreement | Other long-term liabilities | ||||
Financing Arrangements | ||||
Fair value of interest rate swap, liability | $ 0.5 | |||
Forward-starting interest rate swap agreement | Other long-term assets | ||||
Financing Arrangements | ||||
Fair value of interest rate swap, asset | $ 0.5 | |||
Forward-starting interest rate swap agreement | Credit Facility | ||||
Financing Arrangements | ||||
Amount of borrowings covered by the interest rate swap | $ 50 | |||
Effective fixed interest rate on hedged borrowings (as a percent) | 3.24% |
LONG-TERM DEBT AND FINANCING _7
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Financing arrangements - Securitization program) (Details) - Accounts receivable securitization borrowings $ in Millions | Jun. 30, 2019USD ($) |
Financing Arrangements | |
Maximum borrowing capacity | $ 125 |
Additional borrowing capacity that may be requested | 25 |
Amount outstanding | 40 |
Outstanding letters of credit | 14.9 |
Remaining borrowing capacity | $ 70.1 |
LONG-TERM DEBT AND FINANCING _8
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Financing arrangements - Letters of credit & Surety bonds (Details) $ in Millions | Jun. 30, 2019USD ($) |
Accounts receivable securitization borrowings | |
Financing Arrangements | |
Outstanding letters of credit | $ 14.9 |
Letter of Credit Agreements | |
Financing Arrangements | |
Outstanding letters of credit | 15.5 |
Surety bonds | |
Financing Arrangements | |
Outstanding surety bonds under uncollateralized bond programs | $ 48.6 |
LONG-TERM DEBT AND FINANCING _9
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Financing arrangements - Notes payable) (Details) - Promissory note arrangements - USD ($) $ in Millions | Aug. 01, 2019 | Jun. 30, 2019 |
Revenue equipment and other equipment | ||
Financing Arrangements | ||
Assets financed during the period under promissory note arrangements | $ 20.5 | |
Subsequent Event | Revenue equipment | ||
Financing Arrangements | ||
Assets financed during the period under promissory note arrangements | $ 17.2 |
PENSION AND OTHER POSTRETIREM_3
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Components of cost) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Components of net periodic benefit cost | ||||
Pension settlement expense | $ 1,634 | $ 1,085 | ||
Nonunion Defined Benefit Pension Plan | ||||
Components of net periodic benefit cost | ||||
Interest cost | $ 168 | $ 1,108 | 486 | 2,123 |
Expected return on plan assets | 1 | (378) | (89) | (779) |
Pension settlement expense | 278 | 431 | 1,634 | 1,085 |
Amortization of net actuarial loss | 61 | 592 | 210 | 1,370 |
Net periodic benefit cost | 508 | 1,753 | 2,241 | 3,799 |
Supplemental Benefit Plan | ||||
Components of net periodic benefit cost | ||||
Interest cost | 10 | 27 | 20 | 54 |
Amortization of net actuarial loss | 23 | 20 | 47 | 40 |
Net periodic benefit cost | 33 | 47 | 67 | 94 |
Postretirement Health Benefit Plan | ||||
Components of net periodic benefit cost | ||||
Service cost | 80 | 91 | 160 | 183 |
Interest cost | 303 | 210 | 606 | 419 |
Amortization of prior service credit | (8) | (24) | (17) | (47) |
Amortization of net actuarial loss | 224 | 76 | 449 | 152 |
Net periodic benefit cost | $ 599 | $ 353 | $ 1,198 | $ 707 |
PENSION AND OTHER POSTRETIREM_4
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Nonunion) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Dec. 31, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | |
Pension and other postretirement benefit plans | |||||||
Pension settlement expense | $ 1,634 | $ 1,085 | |||||
Pension settlement expense, net of tax | $ 206 | $ 320 | 1,213 | 806 | |||
Nonunion Defined Benefit Pension Plan | |||||||
Pension and other postretirement benefit plans | |||||||
Pension settlement expense | 278 | 431 | 1,634 | 1,085 | |||
Pension settlement expense, net of tax | 200 | 300 | 1,200 | 800 | |||
Lump-sum distributions | $ 3,000 | $ 3,700 | $ 17,900 | $ 8,500 | |||
Expected return on plan assets (as a percent) | 0.00% | 1.40% | |||||
Nonunion Defined Benefit Pension Plan | Forecast | |||||||
Pension and other postretirement benefit plans | |||||||
Pension settlement expense | $ 2,000 | ||||||
Pension settlement expense, net of tax | 1,500 | ||||||
Employer contributions | $ 7,000 | ||||||
Expected return on plan assets (as a percent) | 0.00% |
PENSION AND OTHER POSTRETIREM_5
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Funded status) (Details) - Nonunion Defined Benefit Pension Plan - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Change in benefit obligations | ||||
Benefit obligations at beginning of period | $ 33,373 | |||
Interest cost | $ 168 | $ 1,108 | 486 | $ 2,123 |
Actuarial gain | (661) | |||
Benefits paid | (18,125) | |||
Benefit obligations at end of period | 15,073 | 15,073 | ||
Change in plan assets | ||||
Fair value of plan assets at beginning of period | 26,646 | |||
Actual return on plan assets | 241 | |||
Benefits paid | (18,125) | |||
Fair value of plan assets at end of period | 8,762 | 8,762 | ||
Funded status at period end | (6,311) | (6,311) | ||
Accumulated benefit obligation | $ 15,073 | $ 15,073 |
PENSION AND OTHER POSTRETIREM_6
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Multiemployer Plans) (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)plan | Jun. 30, 2018USD ($) | Jan. 01, 2018 | |
Multiemployer Plans | ||||||
Multiemployer pension fund withdrawal liability charge (pre-tax) | $ 37,922 | $ 37,922 | ||||
Multiemployer pension plans | Asset-Based | ||||||
Multiemployer Plans | ||||||
Number of multiemployer plans to which ABF Freight currently contributes | plan | 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% | |||||
Multiemployer pension plans | Central States Pension Plan | Asset-Based | ||||||
Multiemployer Plans | ||||||
Approximate proportion of multiemployer pension plan contributions (as a percent) | 50.00% | |||||
Actuarially certified projected funded percentage of multiemployer pension plan | 27.20% | |||||
Multiemployer pension plans | New England Pension Fund | Asset-Based | ||||||
Multiemployer Plans | ||||||
Multiemployer pension fund withdrawal liability charge (pre-tax) | $ 37,900 | |||||
Initial lump sum payment of withdrawal liability | $ 15,100 | |||||
Aggregate present value of monthly payments | $ 22,800 | $ 22,800 | $ 22,800 | |||
Withdrawal liability monthly payments period (in years) | 23 years | |||||
Outstanding withdrawal liability | $ 22,300 | |||||
Fair value of withdrawal obligation | $ 24,400 | |||||
Discount rate using 20-year U.S. Treasury (as a percent) | 3.60% | |||||
Multiemployer pension plans | New England Pension Fund | Asset-Based | Accrued expenses | ||||||
Multiemployer Plans | ||||||
Outstanding withdrawal liability | $ 600 | |||||
Multiemployer pension plans | New England Pension Fund | Asset-Based | Other long-term liabilities | ||||||
Multiemployer Plans | ||||||
Outstanding withdrawal liability | $ 21,700 |
STOCKHOLDERS' EQUITY (AOCI) (De
STOCKHOLDERS' EQUITY (AOCI) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Accumulated Other Comprehensive Loss | ||||||
Total after-tax amount | $ 743,159 | $ 721,755 | $ 717,682 | $ 668,515 | $ 665,474 | $ 651,462 |
Amount remaining in unrecognized net periodic benefit costs portion of accumulated other comprehensive income for previous valuation allowance on deferred tax assets | 4,000 | |||||
Accumulated Other Comprehensive Loss | ||||||
Accumulated Other Comprehensive Loss | ||||||
Total pre-tax amount | (11,404) | (13,836) | ||||
Total after-tax amount | (12,429) | $ (12,388) | (14,238) | (17,842) | $ (20,078) | (20,574) |
Unrecognized Net Periodic Benefit Costs | ||||||
Accumulated Other Comprehensive Loss | ||||||
Total pre-tax amount | (8,685) | (11,821) | ||||
Total after-tax amount | (10,421) | (12,749) | (17,285) | (19,715) | ||
Interest Rate Swap, 2019 | ||||||
Accumulated Other Comprehensive Loss | ||||||
Total pre-tax amount | (364) | |||||
Total after-tax amount | (269) | 591 | ||||
Interest Rate Swap, 2018 | ||||||
Accumulated Other Comprehensive Loss | ||||||
Total pre-tax amount | 801 | |||||
Total after-tax amount | 591 | 1,134 | 292 | |||
Foreign Currency Translation | ||||||
Accumulated Other Comprehensive Loss | ||||||
Total pre-tax amount | (2,355) | (2,816) | ||||
Total after-tax amount | $ (1,739) | $ (2,080) | $ (1,691) | $ (1,151) |
STOCKHOLDERS' EQUITY (AOCI comp
STOCKHOLDERS' EQUITY (AOCI comp) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2017 | |
Changes in accumulated other comprehensive loss, net of tax, by component | |||||||
Balances | $ 721,755 | $ 717,682 | $ 665,474 | $ 651,462 | $ 717,682 | $ 651,462 | |
Adjustment to beginning balance of accumulated other comprehensive loss for adoption of accounting standard | $ 416 | ||||||
Adjusted Balances | 651,878 | ||||||
OTHER COMPREHENSIVE INCOME, net of tax | (41) | 1,850 | 2,236 | 4,072 | 1,809 | 6,308 | |
Balances | 743,159 | 721,755 | 668,515 | 665,474 | 743,159 | 668,515 | |
Accumulated Other Comprehensive Loss | |||||||
Changes in accumulated other comprehensive loss, net of tax, by component | |||||||
Balances | (12,388) | (14,238) | (20,078) | (20,574) | (14,238) | (20,574) | |
Adjustment to beginning balance of accumulated other comprehensive loss for adoption of accounting standard | (3,576) | ||||||
Adjusted Balances | (24,150) | ||||||
Other comprehensive income (loss) before reclassifications | 84 | 4,377 | |||||
Amounts reclassified from accumulated other comprehensive loss | 1,725 | 1,931 | |||||
OTHER COMPREHENSIVE INCOME, net of tax | (41) | 1,850 | 2,236 | 4,072 | 1,809 | 6,308 | |
Balances | (12,429) | (12,388) | (17,842) | (20,078) | (12,429) | (17,842) | |
Unrecognized Net Periodic Benefit Costs | |||||||
Changes in accumulated other comprehensive loss, net of tax, by component | |||||||
Balances | (12,749) | (19,715) | (12,749) | (19,715) | |||
Adjustment to beginning balance of accumulated other comprehensive loss for adoption of accounting standard | (3,391) | ||||||
Adjusted Balances | (23,106) | ||||||
Other comprehensive income (loss) before reclassifications | 603 | 3,890 | |||||
Amounts reclassified from accumulated other comprehensive loss | 1,725 | 1,931 | |||||
OTHER COMPREHENSIVE INCOME, net of tax | 2,328 | 5,821 | |||||
Balances | (10,421) | (17,285) | (10,421) | (17,285) | |||
Interest Rate Swap, 2019 | |||||||
Changes in accumulated other comprehensive loss, net of tax, by component | |||||||
Balances | 591 | 591 | |||||
Other comprehensive income (loss) before reclassifications | (860) | ||||||
OTHER COMPREHENSIVE INCOME, net of tax | (860) | ||||||
Balances | (269) | (269) | |||||
Interest Rate Swap, 2018 | |||||||
Changes in accumulated other comprehensive loss, net of tax, by component | |||||||
Balances | 591 | 292 | 591 | 292 | |||
Adjustment to beginning balance of accumulated other comprehensive loss for adoption of accounting standard | 63 | ||||||
Adjusted Balances | 355 | ||||||
Other comprehensive income (loss) before reclassifications | 779 | ||||||
OTHER COMPREHENSIVE INCOME, net of tax | 779 | ||||||
Balances | 1,134 | 1,134 | |||||
Foreign Currency Translation | |||||||
Changes in accumulated other comprehensive loss, net of tax, by component | |||||||
Balances | $ (2,080) | $ (1,151) | (2,080) | (1,151) | |||
Adjustment to beginning balance of accumulated other comprehensive loss for adoption of accounting standard | (248) | ||||||
Adjusted Balances | $ (1,399) | ||||||
Other comprehensive income (loss) before reclassifications | 341 | (292) | |||||
OTHER COMPREHENSIVE INCOME, net of tax | 341 | (292) | |||||
Balances | $ (1,739) | $ (1,691) | $ (1,739) | $ (1,691) |
STOCKHOLDERS' EQUITY (Reclass)
STOCKHOLDERS' EQUITY (Reclass) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Unrecognized Net Periodic Benefit Costs | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | $ (2,323) | $ (2,600) |
Tax benefit | 598 | 669 |
Total, net of tax | (1,725) | (1,931) |
Amortization of net actuarial loss | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | (706) | (1,562) |
Amortization of prior service credit | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | 17 | 47 |
Pension settlement expense | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | $ (1,634) | $ (1,085) |
STOCKHOLDERS' EQUITY (Dividends
STOCKHOLDERS' EQUITY (Dividends) (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 25, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 |
Dividends on Common Stock | |||||||
Dividends declared (in dollars per share) | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.16 | $ 0.16 | |
Dividend Amount | $ 2,050 | $ 2,052 | $ 2,058 | $ 2,058 | |||
Subsequent Event | |||||||
Dividends on Common Stock | |||||||
Dividends declared (in dollars per share) | $ 0.08 |
STOCKHOLDERS' EQUITY (Treasury
STOCKHOLDERS' EQUITY (Treasury Stock) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Treasury Stock | ||||
Aggregate cost of shares repurchased during the period | $ 5,171 | $ 201 | ||
Treasury stock (in shares) | 3,266,169 | 3,266,169 | 3,097,634 | |
Stock Repurchase Program | ||||
Treasury Stock | ||||
Number of shares repurchased during the period | 168,535 | |||
Aggregate cost of shares repurchased during the period | $ 5,200 | |||
Amount available for repurchase | $ 17,100 | $ 17,100 | $ 22,300 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - $ / shares | 6 Months Ended | |
Jun. 30, 2019 | Apr. 30, 2019 | |
Share-based compensation | ||
Number of shares authorized | 4,000,000 | |
Restricted Stock Units | ||
Award activity | ||
Outstanding at the beginning of the period (in shares) | 1,436,983 | |
Granted (in shares) | 386,520 | |
Vested (in shares) | (142,594) | |
Forfeited (in shares) | (18,456) | |
Outstanding at the end of the period (in shares) | 1,662,453 | |
Weighted-Average Grant Date Fair Value | ||
Outstanding at the beginning of the period (in dollars per share) | $ 25.81 | |
Granted (in dollars per share) | 27.75 | |
Vested (in dollars per share) | 39.87 | |
Forfeited (in dollars per share) | 26.56 | |
Outstanding at the end of the period (in dollars per share) | $ 25.05 |
EARNINGS PER SHARE (Basic and D
EARNINGS PER SHARE (Basic and Diluted) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Basic, numerator: | ||||||
Net income | $ 24,376 | $ 4,888 | $ 1,233 | $ 9,954 | $ 29,264 | $ 11,187 |
Effect of unvested restricted stock unit awards | (11) | (4) | (26) | (31) | ||
Adjusted net income | $ 24,365 | $ 1,229 | $ 29,238 | $ 11,156 | ||
Basic, denominator: | ||||||
Weighted-average shares | 25,554,286 | 25,670,325 | 25,562,306 | 25,656,674 | ||
Earnings per common share (in dollars per share) | $ 0.95 | $ 0.05 | $ 1.14 | $ 0.43 | ||
Diluted, numerator: | ||||||
Net income | $ 24,376 | $ 4,888 | $ 1,233 | $ 9,954 | $ 29,264 | $ 11,187 |
Effect of unvested restricted stock unit awards | (11) | (4) | (25) | (30) | ||
Adjusted net income | $ 24,365 | $ 1,229 | $ 29,239 | $ 11,157 | ||
Diluted, denominator: | ||||||
Weighted-average shares | 25,554,286 | 25,670,325 | 25,562,306 | 25,656,674 | ||
Effect of dilutive securities | 877,306 | 1,029,224 | 920,705 | 996,608 | ||
Adjusted weighted-average shares and assumed conversions | 26,431,592 | 26,699,549 | 26,483,011 | 26,653,282 | ||
Earnings per common share (in dollars per share) | $ 0.92 | $ 0.05 | $ 1.10 | $ 0.42 |
EARNINGS PER SHARE (AntiDil) (D
EARNINGS PER SHARE (AntiDil) (Details) - shares shares in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Stock awards | ||
Antidilutive securities | ||
Outstanding stock awards not included in calculation of diluted earnings (loss) per share (in shares) | 0.2 | 0.1 |
OPERATING SEGMENT DATA - (Conce
OPERATING SEGMENT DATA - (Concentrations) (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues | Customer concentration risk | Asset-Based and ArcBest segments | FleetNet | ||||
Concentrations | ||||
Concentration Risk, Percentage | 19.00% | 3.00% | 16.00% | 3.00% |
OPERATING SEGMENT DATA - (Rev a
OPERATING SEGMENT DATA - (Rev and Expenses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
REVENUES | ||||
Revenues | $ 771,490 | $ 793,350 | $ 1,483,329 | $ 1,493,351 |
OPERATING EXPENSES | ||||
Salaries, wages, and benefits | 361,116 | 355,913 | 704,784 | 684,670 |
Fuel, supplies, and expenses | 80,700 | 84,884 | 160,036 | 163,530 |
Depreciation and amortization | 27,434 | 27,187 | 53,971 | 53,673 |
Multiemployer pension fund withdrawal liability charge | 37,922 | 37,922 | ||
Gain on sale of property and equipment | (1,469) | (166) | ||
Other | 30,987 | 30,408 | 63,669 | 59,663 |
Restructuring costs | 340 | 716 | ||
Total consolidated operating expenses | 736,290 | 790,194 | 1,439,538 | 1,477,470 |
OPERATING INCOME | ||||
OPERATING INCOME | 35,200 | 3,156 | 43,791 | 15,881 |
OTHER INCOME (COSTS) | ||||
Interest and dividend income | 1,616 | 714 | 3,094 | 1,240 |
Interest and other related financing costs | (2,811) | (2,013) | (5,693) | (4,072) |
Other, net | (445) | (1,123) | (1,036) | (3,324) |
TOTAL OTHER INCOME (COSTS) | (1,640) | (2,422) | (3,635) | (6,156) |
INCOME BEFORE INCOME TAXES | 33,560 | 734 | 40,156 | 9,725 |
Operating Segments | Asset-Based | ||||
REVENUES | ||||
Revenues | 559,648 | 559,239 | 1,065,727 | 1,041,354 |
OPERATING EXPENSES | ||||
Salaries, wages, and benefits | 297,016 | 286,750 | 577,292 | 556,529 |
Fuel, supplies, and expenses | 66,853 | 65,040 | 131,580 | 127,233 |
Operating taxes and licenses | 12,214 | 11,910 | 24,612 | 23,666 |
Insurance | 7,598 | 7,979 | 15,589 | 14,607 |
Communications and utilities | 4,529 | 4,135 | 9,149 | 8,656 |
Depreciation and amortization | 21,743 | 21,362 | 42,723 | 42,292 |
Rents and purchased transportation | 57,687 | 63,253 | 107,599 | 109,386 |
Shared services | 56,013 | 56,825 | 106,725 | 102,432 |
Multiemployer pension fund withdrawal liability charge | 37,922 | 37,922 | ||
Gain on sale of property and equipment | (1,587) | (266) | (1,621) | (399) |
Other | 1,404 | 948 | 2,286 | 2,247 |
Total consolidated operating expenses | 523,470 | 555,858 | 1,015,934 | 1,024,571 |
OPERATING INCOME | ||||
OPERATING INCOME | 36,178 | 3,381 | 49,793 | 16,783 |
Operating Segments | ArcBest | ||||
REVENUES | ||||
Revenues | 181,173 | 199,987 | 354,377 | 381,920 |
OPERATING EXPENSES | ||||
Purchased transportation | 147,552 | 162,920 | 287,657 | 311,292 |
Supplies and expenses | 2,858 | 3,538 | 5,632 | 6,768 |
Depreciation and amortization | 3,055 | 3,597 | 6,206 | 7,005 |
Shared services | 23,141 | 23,536 | 46,172 | 45,404 |
Other | 2,445 | 2,546 | 4,858 | 4,427 |
Restructuring costs | 143 | 152 | ||
Total consolidated operating expenses | 179,051 | 196,280 | 350,525 | 375,048 |
OPERATING INCOME | ||||
OPERATING INCOME | 2,122 | 3,707 | 3,852 | 6,872 |
Operating Segments | FleetNet | ||||
REVENUES | ||||
Revenues | 51,722 | 46,792 | 104,981 | 94,551 |
OPERATING EXPENSES | ||||
Total consolidated operating expenses | 50,696 | 45,763 | 102,467 | 92,001 |
OPERATING INCOME | ||||
OPERATING INCOME | 1,026 | 1,029 | 2,514 | 2,550 |
Other and eliminations | ||||
REVENUES | ||||
Revenues | (21,053) | (12,668) | (41,756) | (24,474) |
OPERATING EXPENSES | ||||
Total consolidated operating expenses | (16,927) | (7,707) | (29,388) | (14,150) |
OPERATING INCOME | ||||
OPERATING INCOME | $ (4,126) | $ (4,961) | $ (12,368) | $ (10,324) |
OPERATING SEGMENT DATA - (Opera
OPERATING SEGMENT DATA - (Operating Expenses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
OPERATING EXPENSES | ||||
Salaries, wages, and benefits | $ 361,116 | $ 355,913 | $ 704,784 | $ 684,670 |
Rents, purchased transportation, and other costs of services | 236,053 | 253,540 | 457,078 | 477,296 |
Fuel, supplies, and expenses | 80,700 | 84,884 | 160,036 | 163,530 |
Depreciation and amortization | 27,434 | 27,187 | 53,971 | 53,673 |
Other | 30,987 | 30,408 | 63,669 | 59,663 |
Multiemployer pension fund withdrawal liability charge | 37,922 | 37,922 | ||
Restructuring costs | 340 | 716 | ||
Total consolidated operating expenses | $ 736,290 | $ 790,194 | $ 1,439,538 | $ 1,477,470 |
LEGAL PROCEEDINGS, ENVIRONMEN_2
LEGAL PROCEEDINGS, ENVIRONMENTAL MATTERS, AND OTHER EVENTS (Environmental Matters) (Details) $ in Millions | 6 Months Ended | |
Jun. 30, 2019USD ($)statetank | Dec. 31, 2018USD ($) | |
Underground fuel storage tanks | ||
Environmental Matters | ||
Number of underground tanks where the company's subsidiaries store fuel for use in tractors and trucks | tank | 61 | |
Number of states in which underground tanks are located | state | 18 | |
Environmental cleanup costs | Accrued expenses | ||
Environmental Matters | ||
Reserve for environmental contingencies | $ | $ 0.6 | $ 0.6 |