Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 28, 2022 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
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 | 24,417,880 | |
Entity Central Index Key | 0000894405 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 155,531 | $ 76,620 |
Short-term investments | 145,758 | 48,339 |
Accounts receivable, less allowances (2022 - $15,441; 2021 - $13,226) | 627,092 | 582,344 |
Other accounts receivable, less allowances (2022 - $709; 2021 - $690) | 11,472 | 13,094 |
Prepaid expenses | 32,280 | 40,104 |
Prepaid and refundable income taxes | 16,010 | 9,654 |
Other | 9,885 | 5,898 |
TOTAL CURRENT ASSETS | 998,028 | 776,053 |
PROPERTY, PLANT AND EQUIPMENT | ||
Land and structures | 361,705 | 350,694 |
Revenue equipment | 1,014,369 | 980,283 |
Service, office, and other equipment | 291,595 | 251,085 |
Software | 178,145 | 175,989 |
Leasehold improvements | 20,865 | 16,931 |
TOTAL PROPERTY, PLANT AND EQUIPMENT, Gross | 1,866,679 | 1,774,982 |
Less allowances for depreciation and amortization | 1,120,962 | 1,079,061 |
PROPERTY, PLANT AND EQUIPMENT, net | 745,717 | 695,921 |
GOODWILL | 307,252 | 300,337 |
INTANGIBLE ASSETS, net | 116,922 | 126,580 |
OPERATING RIGHT-OF-USE ASSETS | 164,654 | 106,686 |
DEFERRED INCOME TAXES | 5,563 | 5,470 |
OTHER LONG-TERM ASSETS | 101,978 | 101,629 |
TOTAL ASSETS | 2,440,114 | 2,112,676 |
CURRENT LIABILITIES | ||
Accounts payable | 329,887 | 311,401 |
Income taxes payable | 7,668 | 12,087 |
Accrued expenses | 331,610 | 305,851 |
Current portion of long-term debt | 63,521 | 50,615 |
Current portion of operating lease liabilities | 24,686 | 22,740 |
TOTAL CURRENT LIABILITIES | 757,372 | 702,694 |
LONG-TERM DEBT, less current portion | 189,798 | 174,917 |
OPERATING LEASE LIABILITIES, less current portion | 146,134 | 88,835 |
POSTRETIREMENT LIABILITIES, less current portion | 16,681 | 16,733 |
OTHER LONG-TERM LIABILITIES | 134,701 | 135,537 |
DEFERRED INCOME TAXES | 69,136 | 64,893 |
STOCKHOLDERS' EQUITY | ||
Common stock, $0.01 par value, authorized 70,000,000 shares; issued 2022: 29,747,867 shares, 2021: 29,359,597 shares | 297 | 294 |
Additional paid-in capital | 337,113 | 318,033 |
Retained earnings | 1,054,294 | 801,314 |
Treasury stock, at cost, 2022: 5,340,836 shares; 2021: 4,492,514 shares | (269,390) | (194,273) |
Accumulated other comprehensive income | 3,978 | 3,699 |
TOTAL STOCKHOLDERS' EQUITY | 1,126,292 | 929,067 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 2,440,114 | $ 2,112,676 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowances (in dollars) | $ 15,441 | $ 13,226 |
Other accounts receivable, allowances (in dollars) | $ 709 | $ 690 |
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 | 29,747,867 | 29,359,597 |
Treasury stock, at cost, shares | 5,340,836 | 4,492,514 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
REVENUES | $ 1,351,831 | $ 1,016,657 | $ 4,079,834 | $ 2,794,843 |
OPERATING EXPENSES | 1,236,070 | 929,096 | 3,731,799 | 2,600,792 |
OPERATING INCOME | 115,761 | 87,561 | 348,035 | 194,051 |
OTHER INCOME (COSTS) | ||||
Interest and dividend income | 1,147 | 323 | 1,614 | 1,037 |
Interest and other related financing costs | (1,749) | (2,072) | (5,551) | (6,774) |
Other, net | (189) | 338 | (3,822) | 2,641 |
TOTAL OTHER INCOME (COSTS) | (791) | (1,411) | (7,759) | (3,096) |
INCOME BEFORE INCOME TAXES | 114,970 | 86,150 | 340,276 | 190,955 |
INCOME TAX PROVISION | 26,128 | 22,459 | 79,404 | 42,922 |
NET INCOME | $ 88,842 | $ 63,691 | $ 260,872 | $ 148,033 |
EARNINGS PER COMMON SHARE | ||||
Basic | $ 3.61 | $ 2.48 | $ 10.59 | $ 5.79 |
Diluted | $ 3.50 | $ 2.38 | $ 10.18 | $ 5.51 |
AVERAGE COMMON SHARES OUTSTANDING | ||||
Basic | 24,605,228 | 25,632,805 | 24,640,706 | 25,559,642 |
Diluted | 25,372,755 | 26,770,146 | 25,626,225 | 26,872,381 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
NET INCOME | $ 88,842 | $ 63,691 | $ 260,872 | $ 148,033 |
Amortization of unrecognized net periodic benefit costs, net of tax of: (2022 - Three-month period $49, Nine-month period $146; 2021 - Three-month period $35, Nine-month period $104) | ||||
Net actuarial gain | (141) | (100) | (422) | (300) |
Interest rate swap and foreign currency translation: | ||||
Change in unrealized income on interest rate swap, net of tax of: (2022 - Three-month period $206, Nine-month period $844; 2021 - Three-month period $46, Nine-month period $309) | 581 | 128 | 2,383 | 869 |
Change in foreign currency translation, net of tax of: (2022 - Three-month period $509, Nine-month period $595; 2021 - Three-month period $288, Nine-month period $45) | (1,436) | (813) | (1,682) | 128 |
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | (996) | (785) | 279 | 697 |
TOTAL COMPREHENSIVE INCOME | $ 87,846 | $ 62,906 | $ 261,151 | $ 148,730 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Amortization of unrecognized net periodic benefit credit, tax | $ (49) | $ (35) | $ (146) | $ (104) |
Change in unrealized income on interest rate swap, tax | 206 | 46 | 844 | 309 |
Change in foreign currency translation, tax | $ (509) | $ (288) | $ (595) | $ 45 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital Accelerated Share Repurchase Agreement ("ASR") | Additional Paid-In Capital | Retained Earnings | Treasury Stock Existing Share Repurchase Program | Treasury Stock Accelerated Share Repurchase Agreement ("ASR") | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Existing Share Repurchase Program | Accelerated Share Repurchase Agreement ("ASR") | Total |
Balances at Dec. 31, 2020 | $ 290 | $ 342,354 | $ 595,932 | $ (111,173) | $ 1,190 | $ 828,593 | |||||
Balances (in shares) at Dec. 31, 2020 | 29,045,000 | ||||||||||
Balances, Treasury stock (in shares) at Dec. 31, 2020 | 3,657,000 | ||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Net income | 23,361 | 23,361 | |||||||||
Other comprehensive income (loss), net of tax | 804 | 804 | |||||||||
Issuance of common stock under share-based compensation plans | $ 1 | (1) | |||||||||
Issuance of common stock under share-based compensation plans (in shares) | 12,000 | ||||||||||
Shares withheld for employee tax remittance on share-based compensation | (165) | (165) | |||||||||
Share-based compensation expense | 2,354 | 2,354 | |||||||||
Purchase of treasury stock | $ (1,001) | (1,001) | |||||||||
Purchase of treasury stock (in shares) | 15,000 | ||||||||||
Dividends declared on common stock | (2,037) | (2,037) | |||||||||
Balances at Mar. 31, 2021 | $ 291 | 344,542 | 617,256 | $ (112,174) | 1,994 | 851,909 | |||||
Balances (in shares) at Mar. 31, 2021 | 29,057,000 | ||||||||||
Balances, Treasury stock (in shares) at Mar. 31, 2021 | 3,672,000 | ||||||||||
Balances at Dec. 31, 2020 | $ 290 | 342,354 | 595,932 | $ (111,173) | 1,190 | 828,593 | |||||
Balances (in shares) at Dec. 31, 2020 | 29,045,000 | ||||||||||
Balances, Treasury stock (in shares) at Dec. 31, 2020 | 3,657,000 | ||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Net income | 148,033 | ||||||||||
Other comprehensive income (loss), net of tax | 697 | 697 | |||||||||
Balances at Sep. 30, 2021 | $ 294 | 340,315 | 737,820 | $ (119,273) | 1,887 | 961,043 | |||||
Balances (in shares) at Sep. 30, 2021 | 29,352,000 | ||||||||||
Balances, Treasury stock (in shares) at Sep. 30, 2021 | 3,783,000 | ||||||||||
Balances at Dec. 31, 2020 | $ 290 | 342,354 | 595,932 | $ (111,173) | 1,190 | 828,593 | |||||
Balances (in shares) at Dec. 31, 2020 | 29,045,000 | ||||||||||
Balances, Treasury stock (in shares) at Dec. 31, 2020 | 3,657,000 | ||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Purchase of treasury stock | $ (75,000) | ||||||||||
Balances at Dec. 31, 2021 | $ 294 | 318,033 | 801,314 | $ (194,273) | 3,699 | $ 929,067 | |||||
Balances (in shares) at Dec. 31, 2021 | 29,360,000 | ||||||||||
Balances, Treasury stock (in shares) at Dec. 31, 2021 | 4,493,000 | 4,492,514 | |||||||||
Balances at Mar. 31, 2021 | $ 291 | 344,542 | 617,256 | $ (112,174) | 1,994 | $ 851,909 | |||||
Balances (in shares) at Mar. 31, 2021 | 29,057,000 | ||||||||||
Balances, Treasury stock (in shares) at Mar. 31, 2021 | 3,672,000 | ||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Net income | 60,981 | 60,981 | |||||||||
Other comprehensive income (loss), net of tax | 678 | 678 | |||||||||
Issuance of common stock under share-based compensation plans | $ 2 | (2) | |||||||||
Issuance of common stock under share-based compensation plans (in shares) | 261,000 | ||||||||||
Shares withheld for employee tax remittance on share-based compensation | (9,601) | (9,601) | |||||||||
Share-based compensation expense | 3,324 | 3,324 | |||||||||
Purchase of treasury stock | $ (7,099) | (7,099) | |||||||||
Purchase of treasury stock (in shares) | 111,000 | ||||||||||
Dividends declared on common stock | (2,058) | (2,058) | |||||||||
Balances at Jun. 30, 2021 | $ 293 | 338,263 | 676,179 | $ (119,273) | 2,672 | 898,134 | |||||
Balances (in shares) at Jun. 30, 2021 | 29,318,000 | ||||||||||
Balances, Treasury stock (in shares) at Jun. 30, 2021 | 3,783,000 | ||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Net income | 63,691 | 63,691 | |||||||||
Other comprehensive income (loss), net of tax | (785) | (785) | |||||||||
Issuance of common stock under share-based compensation plans | $ 1 | (1) | |||||||||
Issuance of common stock under share-based compensation plans (in shares) | 34,000 | ||||||||||
Shares withheld for employee tax remittance on share-based compensation | (836) | (836) | |||||||||
Share-based compensation expense | 2,889 | 2,889 | |||||||||
Dividends declared on common stock | (2,050) | (2,050) | |||||||||
Balances at Sep. 30, 2021 | $ 294 | 340,315 | 737,820 | $ (119,273) | 1,887 | 961,043 | |||||
Balances (in shares) at Sep. 30, 2021 | 29,352,000 | ||||||||||
Balances, Treasury stock (in shares) at Sep. 30, 2021 | 3,783,000 | ||||||||||
Balances at Dec. 31, 2021 | $ 294 | 318,033 | 801,314 | $ (194,273) | 3,699 | $ 929,067 | |||||
Balances (in shares) at Dec. 31, 2021 | 29,360,000 | ||||||||||
Balances, Treasury stock (in shares) at Dec. 31, 2021 | 4,493,000 | 4,492,514 | |||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Net income | 69,569 | $ 69,569 | |||||||||
Other comprehensive income (loss), net of tax | 1,624 | 1,624 | |||||||||
Issuance of common stock under share-based compensation plans (in shares) | 25,000 | ||||||||||
Shares withheld for employee tax remittance on share-based compensation | (1,367) | (1,367) | |||||||||
Share-based compensation expense | 2,763 | 2,763 | |||||||||
Purchase of treasury stock | $ (16,506) | $ (16,506) | |||||||||
Purchase of treasury stock (in shares) | 194,000 | ||||||||||
Forward contract for accelerated share repurchase | $ 25,000 | $ (25,000) | |||||||||
Forward contract for accelerated share repurchase (in shares) | 214,000 | ||||||||||
Dividends declared on common stock | (1,978) | (1,978) | |||||||||
Balances at Mar. 31, 2022 | $ 294 | 344,429 | 868,905 | $ (235,779) | 5,323 | 983,172 | |||||
Balances (in shares) at Mar. 31, 2022 | 29,385,000 | ||||||||||
Balances, Treasury stock (in shares) at Mar. 31, 2022 | 4,901,000 | ||||||||||
Balances at Dec. 31, 2021 | $ 294 | 318,033 | 801,314 | $ (194,273) | 3,699 | $ 929,067 | |||||
Balances (in shares) at Dec. 31, 2021 | 29,360,000 | ||||||||||
Balances, Treasury stock (in shares) at Dec. 31, 2021 | 4,493,000 | 4,492,514 | |||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Net income | $ 260,872 | ||||||||||
Other comprehensive income (loss), net of tax | 279 | 279 | |||||||||
Purchase of treasury stock | $ (25,000) | ||||||||||
Purchase of treasury stock (in shares) | 214,763 | ||||||||||
Balances at Sep. 30, 2022 | $ 297 | 337,113 | 1,054,294 | $ (269,390) | 3,978 | $ 1,126,292 | |||||
Balances (in shares) at Sep. 30, 2022 | 29,748,000 | ||||||||||
Balances, Treasury stock (in shares) at Sep. 30, 2022 | 5,341,000 | 5,340,836 | |||||||||
Balances at Mar. 31, 2022 | $ 294 | 344,429 | 868,905 | $ (235,779) | 5,323 | $ 983,172 | |||||
Balances (in shares) at Mar. 31, 2022 | 29,385,000 | ||||||||||
Balances, Treasury stock (in shares) at Mar. 31, 2022 | 4,901,000 | ||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Net income | 102,461 | 102,461 | |||||||||
Other comprehensive income (loss), net of tax | (349) | (349) | |||||||||
Issuance of common stock under share-based compensation plans | $ 2 | (2) | |||||||||
Issuance of common stock under share-based compensation plans (in shares) | 230,000 | ||||||||||
Shares withheld for employee tax remittance on share-based compensation | (8,270) | (8,270) | |||||||||
Share-based compensation expense | 3,878 | 3,878 | |||||||||
Purchase of treasury stock | $ (14,731) | (14,731) | |||||||||
Purchase of treasury stock (in shares) | 208,000 | ||||||||||
Dividends declared on common stock | (2,949) | (2,949) | |||||||||
Balances at Jun. 30, 2022 | $ 296 | 340,035 | 968,417 | $ (250,510) | 4,974 | 1,063,212 | |||||
Balances (in shares) at Jun. 30, 2022 | 29,615,000 | ||||||||||
Balances, Treasury stock (in shares) at Jun. 30, 2022 | 5,109,000 | ||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Net income | 88,842 | 88,842 | |||||||||
Other comprehensive income (loss), net of tax | (996) | (996) | |||||||||
Issuance of common stock under share-based compensation plans | $ 1 | (1) | |||||||||
Issuance of common stock under share-based compensation plans (in shares) | 133,000 | ||||||||||
Shares withheld for employee tax remittance on share-based compensation | (6,096) | (6,096) | |||||||||
Share-based compensation expense | 3,175 | 3,175 | |||||||||
Purchase of treasury stock | $ (18,880) | (18,880) | |||||||||
Purchase of treasury stock (in shares) | 232,000 | ||||||||||
Dividends declared on common stock | (2,965) | (2,965) | |||||||||
Balances at Sep. 30, 2022 | $ 297 | $ 337,113 | $ 1,054,294 | $ (269,390) | $ 3,978 | $ 1,126,292 | |||||
Balances (in shares) at Sep. 30, 2022 | 29,748,000 | ||||||||||
Balances, Treasury stock (in shares) at Sep. 30, 2022 | 5,341,000 | 5,340,836 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
OPERATING ACTIVITIES | ||
Net income | $ 260,872 | $ 148,033 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 95,169 | 88,113 |
Amortization of intangibles | 9,691 | 2,882 |
Share-based compensation expense | 9,816 | 8,567 |
Provision for losses on accounts receivable | 5,065 | (57) |
Change in deferred income taxes | 3,745 | (8,593) |
Gain on sale of property and equipment | (9,759) | (8,389) |
Gain on sale of subsidiary | (402) | (6,923) |
Changes in operating assets and liabilities: | ||
Receivables | (54,889) | (103,886) |
Prepaid expenses | 7,550 | 7,655 |
Other assets | 287 | 539 |
Income taxes | (11,068) | 8,174 |
Operating right-of-use assets and lease liabilities, net | 1,579 | 650 |
Accounts payable, accrued expenses, and other liabilities | 32,793 | 101,577 |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 350,449 | 238,342 |
INVESTING ACTIVITIES | ||
Purchases of property, plant and equipment, net of financings | (76,068) | (43,506) |
Proceeds from sale of property and equipment | 13,938 | 11,509 |
Proceeds from sale of subsidiary | 475 | 9,013 |
Purchases of short-term investments | (145,254) | (56,011) |
Proceeds from sale of short-term investments | 48,161 | 61,174 |
Capitalization of internally developed software | (13,922) | (14,308) |
Business acquisition, net of cash acquired | 2,279 | |
NET CASH USED IN INVESTING ACTIVITIES | (170,391) | (32,129) |
FINANCING ACTIVITIES | ||
Borrowings under credit facilities | 58,000 | |
Proceeds from notes payable | 12,113 | |
Payments on long-term debt | (99,567) | (76,513) |
Net change in book overdrafts | 2,102 | (305) |
Deferred financing costs | (53) | (295) |
Payment of common stock dividends | (7,892) | (6,145) |
Purchases of treasury stock | (50,117) | (8,100) |
Payments for tax withheld on share-based compensation | (15,733) | (10,602) |
NET CASH USED IN FINANCING ACTIVITIES | (101,147) | (101,960) |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 78,911 | 104,253 |
Cash and cash equivalents at beginning of period | 76,620 | 303,954 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 155,531 | 408,207 |
NONCASH INVESTING ACTIVITIES | ||
Equipment financed | 57,241 | 36,731 |
Accruals for equipment received | 5,587 | 3,158 |
Lease liabilities arising from obtaining right-of-use assets | $ 78,324 | $ 7,280 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION | 9 Months Ended |
Sep. 30, 2022 | |
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 ™ The Asset-Based segment represented approximately 55% of the Company’s total revenues before other revenues and intercompany eliminations for the nine months ended September 30, 2022. As of September 2022, 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. On November 1, 2021, the Company acquired MoLo Solutions, LLC (“MoLo”). As a result of the acquisition, MoLo ® 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 2021 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 Pronouncements Not Yet Adopted Management believes there is no new accounting guidance issued but not yet effective that would have a material impact to the Company’s current financial statements. |
FINANCIAL INSTRUMENTS AND FAIR
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2022 | |
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: September 30 December 31 2022 2021 (in thousands) Cash and cash equivalents Cash deposits (1) $ 123,612 $ 72,790 Variable rate demand notes (1)(2) 19,150 230 Money market funds (3) 12,769 3,600 Total cash and cash equivalents $ 155,531 $ 76,620 Short-term investments Certificates of deposit (1) $ 76,652 $ 48,339 U.S. Treasury securities (4) 69,106 — Total short-term investments $ 145,758 $ 48,339 (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 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 and short-term investments in accounts and certificates of deposit which are primarily FDIC-insured, or in direct obligations of the U.S. government. However, certain cash deposits and certificates of deposit may exceed federally insured limits. At September 30, 2022 and December 31, 2021, cash, cash equivalents, and short-term investments totaling $121.9 million and $42.6 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: September 30 December 31 2022 2021 (in thousands) Carrying Fair Carrying Fair Value Value Value Value Credit Facility (1) $ 50,000 $ 50,000 $ 50,000 $ 50,000 Notes payable (2) 203,319 194,138 175,530 175,937 New England Pension Fund withdrawal liability (3) 20,270 19,149 20,769 23,521 $ 273,589 $ 263,287 $ 246,299 $ 249,458 (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) 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). (3) 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. The fair value of the outstanding withdrawal liability is equal to the present value of the future withdrawal liability payments, discounted at an interest rate of 5.2% and 3.1% at September 30, 2022 and December 31, 2021, respectively, determined using the 20-year U.S. Treasury rate plus a spread (Level 2 of the fair value hierarchy). As of September 30, 2022, the outstanding withdrawal liability totaled $20.3 million, of which $0.7 million and $19.6 million was recorded in accrued expenses and the other long-term liabilities, respectively. 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: September 30, 2022 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) $ 12,769 $ 12,769 $ — $ — Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan (2) 3,620 3,620 — — Interest rate swaps (3) 3,646 — 3,646 — $ 20,035 $ 16,389 $ 3,646 $ — Liabilities: Contingent consideration (4) 94,510 — — 94,510 $ 94,510 $ — $ — $ 94,510 December 31, 2021 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) $ 3,600 $ 3,600 $ — $ — Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan (2) 3,848 3,848 — — Interest rate swaps (3) 874 — 874 — $ 8,322 $ 7,448 $ 874 $ — Liabilities: Interest rate swaps (3) $ 455 $ — $ 455 $ — Contingent consideration (4) 93,700 — — 93,700 $ 94,155 $ — $ 455 $ 93,700 (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 generally considered to be in Level 3 of the fair value hierarchy. However, the Company assessed Level 3 inputs as insignificant to the valuation at September 30, 2022 and December 31, 2021 and considers the interest rate swap valuations in Level 2 of the fair value hierarchy. (4) Included in other long-term liabilities, based on when expected payouts become due. The estimated fair value of contingent consideration for the earn-out agreement related to the November 2021 acquisition of MoLo was determined by assessing Level 3 inputs. The Level 3 assessments utilize a Monte Carlo simulation with inputs including scenarios of estimated revenues and earnings before interest, taxes, depreciation and amortization to be achieved for the applicable performance periods, volatility factors applied to the simulations, and the discount rate applied, which was 10.6% and 9.0% as of September 30, 2022 and December 31, 2021, respectively. Changes in the significant unobservable inputs might result in a significantly higher or lower fair value at the reporting date. The following table provides the changes in fair value of the liabilities measured at fair value using inputs categorized in Level 3 of the fair value hierarchy: Contingent Consideration (in thousands) Balances at December 31, 2021 $ 93,700 Change in fair value included in operating income 810 Balances at September 30, 2022 $ 94,510 |
ACQUISITION
ACQUISITION | 9 Months Ended |
Sep. 30, 2022 | |
ACQUISITION. | |
ACQUISITION | NOTE C – ACQUISITION On November 1, 2021 (the “acquisition date”), the Company acquired MoLo Solutions, LLC (“MoLo”), a Chicago-based truckload freight brokerage company, pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), dated September 29, 2021. As of September 30, 2022, net cash consideration related to the transaction totaled $235.8 million, which is subject to certain post-closing adjustments. The Company funded the initial purchase price with cash on hand on November 1, 2021, and received $2.3 million from escrow related to certain post-closing adjustments during the nine months ended September 30, 2022, which is reported in the accompanying consolidated statements of cash flows as business acquisition, net of cash acquired. The Merger Agreement provides for certain additional cash consideration to be paid by the Company based on the achievement of certain incremental targets of adjusted earnings before interest, taxes, depreciation and amortization for each of the years ended December 31, 2023, 2024, and 2025. At 100% of the target, the cumulative additional consideration for years 2023 through 2025 would be $215.0 million, with the possible undiscounted cash consideration due ranging from a total of $95.0 million at 80% of target to $455.0 million at 300% of target, as outlined in the Merger Agreement. The following table represents the components of the total purchase consideration for the acquisition of MoLo. The Company recorded the estimated fair value of the contingent consideration at the acquisition date as a part of the purchase price consideration for the acquisition. The purchase consideration is preliminary and is dependent on final post-closing adjustments and finalization of working capital balances. Purchase Consideration (in thousands) Net cash consideration, including estimated post-closing adjustments $ 235,751 Contingent consideration 93,700 Total purchase consideration $ 329,451 The results of MoLo’s operations subsequent to the acquisition date have been included in the accompanying consolidated financial statements, with the acquired operations included within the ArcBest operating segment (see Note K). The acquisition of MoLo enhances the scale of the Company’s truckload brokerage services by providing additional truckload capacity, support, and expertise in the Company’s Asset-Light operations and increasing cross-selling potential. The following table summarizes the estimated fair values of the acquired assets and liabilities assumed at the acquisition date, including measurement period adjustments related to working capital. The Company is in the process of making a final determination of acquired assets and liabilities, with remaining matters primarily related to finalization of working capital balances, and thus, the provisional measurements are subject to change. Purchase Allocation (in thousands) Accounts receivable $ 130,206 Prepaid expenses 468 Property and equipment 2,309 Operating lease right-of-use assets 844 Intangible assets 76,900 Other assets 170 Total identifiable assets acquired 210,897 Accounts payable 97,199 Accrued expenses and other current liabilities 4,148 Operating lease liabilities 983 Total liabilities 102,330 Total identifiable net assets 108,567 Goodwill 220,884 Net assets acquired $ 329,451 The MoLo acquisition has been accounted for as a business combination using the acquisition method of accounting. The total purchase consideration to acquire MoLo has been allocated to the assets acquired and liabilities assumed as of November 1, 2021, with the excess purchase price recorded as goodwill. See Note D for further discussion of acquired goodwill and intangible assets. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2022 | |
GOODWILL AND INTANGIBLE ASSETS | |
GOODWILL AND INTANGIBLE ASSETS | NOTE D – 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 segment consisted of the following: Total ArcBest FleetNet (in thousands) Balances at December 31, 2021 $ 300,337 $ 299,707 $ 630 Purchase accounting adjustments (1) 6,915 6,915 — Balances at September 30, 2022 $ 307,252 $ 306,622 $ 630 (1) As noted in Note C, purchase accounting adjustments related to the MoLo acquisition represent adjustments to the acquired balance of working capital, and goodwill related to the November 1, 2021 acquisition of MoLo is based on preliminary information as of September 30, 2022. Intangible assets consisted of the following: September 30, 2022 December 31, 2021 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 12 $ 100,321 $ 41,489 $ 58,832 $ 100,321 $ 35,072 $ 65,249 Other 8 30,368 4,578 25,790 30,335 1,304 29,031 11 130,689 46,067 84,622 130,656 36,376 94,280 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 $ 162,989 $ 46,067 $ 116,922 $ 162,956 $ 36,376 $ 126,580 The future amortization for intangible assets acquired through business acquisitions as of September 30, 2022 was as follows: Amortization of Intangible Assets (in thousands) Remainder of 2022 $ 3,229 2023 12,826 2024 12,793 2025 12,778 2026 8,671 Thereafter 34,325 Total amortization $ 84,622 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2022 | |
INCOME TAXES | |
INCOME TAXES | NOTE E – INCOME TAXES The effective tax rate was 22.7% and 23.3% for the three and nine months ended September 30, 2022, respectively, compared to 26.1% and 22.5% for the same periods of 2021. State tax rates vary among states and average approximately 6.0% to 6.5%, although some state rates are higher and a small number of states do not impose an income tax. For the three and nine months ended September 30, 2022 and 2021, 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, federal research and development tax credits, changes in tax valuation allowances, and tax benefit from the vesting of stock awards. The Company’s effective tax rate for the three and nine months ended September 30, 2022 was also impacted by the reinstatement of the federal alternative fuel tax credit. As of September 30, 2022, 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 September 30, 2022 and concluded that, other than for certain deferred tax assets related to foreign and state tax credit carryforwards and state net operating losses, 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 $2.4 million and $2.2 million at September 30, 2022 and December 31, 2021, respectively. The Company paid federal, state, and foreign income taxes of $87.5 million and $43.0 million during the nine months ended September 30, 2022 and 2021, respectively. The Company received refunds of federal and state income taxes that were paid in prior years of $1.2 million and less than $0.1 million during the nine months ended September 30, 2022 and 2021, respectively. |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2022 | |
LEASES | |
LEASES | NOTE F – 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. The components of operating lease expense were as follows: Three Months Ended Nine Months Ended September 30 September 30 2022 2021 2022 2021 (in thousands) Operating lease expense $ 8,666 $ 6,575 $ 23,116 $ 19,801 Variable lease expense 1,176 957 3,220 3,252 Sublease income (286) (157) (544) (468) Total operating lease expense (1) $ 9,556 $ 7,375 $ 25,792 $ 22,585 (1) Operating lease expense excludes short-term leases with a term of 12 months or less. The operating cash flows from operating lease activity were as follows: Nine Months Ended September 30 2022 2021 (in thousands) Noncash change in operating right-of-use assets $ 20,356 $ 17,256 Change in operating lease liabilities (18,777) (16,606) Operating right-of-use-assets and lease liabilities, net $ 1,579 $ 650 Cash paid for amounts included in the measurement of operating lease liabilities $ (21,526) $ (19,128) Maturities of operating lease liabilities at September 30, 2022 were as follows: Equipment Land and and Total Structures (1) Other (in thousands) Remainder of 2022 $ 7,277 $ 7,178 $ 99 2023 30,182 29,760 422 2024 28,601 28,302 299 2025 24,856 24,856 — 2026 22,616 22,616 — Thereafter 83,884 83,884 — Total lease payments 197,416 196,596 820 Less imputed interest (26,596) (26,563) (33) Total $ 170,820 $ 170,033 $ 787 (1) Excludes future minimum lease payments for leases which were executed but had not yet commenced as of September 30, 2022 totaling $41.1 million which will be paid over approximately 10 years . |
LONG-TERM DEBT AND FINANCING AR
LONG-TERM DEBT AND FINANCING ARRANGEMENTS | 9 Months Ended |
Sep. 30, 2022 | |
LONG-TERM DEBT AND FINANCING ARRANGEMENTS | |
LONG-TERM DEBT AND FINANCING ARRANGEMENTS | NOTE G – LONG-TERM DEBT AND FINANCING ARRANGEMENTS Long-Term Debt Obligations Long-term debt consisted of borrowings outstanding under the Company’s revolving credit facility which is 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), certain other equipment, and software as follows: September 30 December 31 2022 2021 (in thousands) Credit Facility (interest rate of 4.2% (1) $ 50,000 $ 50,000 Notes payable (weighted-average interest rate of 3.0% at September 30, 2022) 203,319 175,530 Finance lease obligations — 2 253,319 225,532 Less current portion 63,521 50,615 Long-term debt, less current portion $ 189,798 $ 174,917 (1) The interest rate swap mitigates interest rate risk by effectively converting the $50.0 million of borrowings under the Credit Facility from variable-rate interest to fixed-rate interest with a per annum rate of 1.56% and 3.12% based on the margin of the Credit Facility as of September 30, 2022 and December 31, 2021, respectively. Scheduled maturities of long-term debt obligations as of September 30, 2022 were as follows: Credit Notes Total Facility (1) Payable (in thousands) Due in one year or less $ 71,428 $ 2,754 $ 68,674 Due after one year through two years 62,723 2,638 60,085 Due after two years through three years 94,012 50,000 44,012 Due after three years through four years 27,888 — 27,888 Due after four years through five years 14,421 — 14,421 Due after five years 379 — 379 Total payments 270,851 55,392 215,459 Less amounts representing interest 17,532 5,392 12,140 Long-term debt $ 253,319 $ 50,000 $ 203,319 (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. Assets securing notes payable or held under finance leases were included in property, plant and equipment as follows: September 30 December 31 2022 2021 (in thousands) Revenue equipment $ 274,540 $ 241,892 Service, office, and other equipment 39,428 29,773 Total assets securing notes payable or held under finance leases 313,968 271,665 Less accumulated depreciation and amortization (1) 106,769 88,696 Net assets securing notes payable or held under finance leases $ 207,199 $ 182,969 (1) Amortization of assets held under finance leases and depreciation of assets securing notes payable are included in depreciation expense. Financing Arrangements Credit Facility As of September 30, 2022, the Company had a revolving credit facility (the “Credit Facility”) under its Third Amended and Restated Credit Agreement (the “Credit Agreement”) with a scheduled maturity date of October 1, 2024. The Credit Facility had an initial maximum credit amount of $250.0 million, including a swing line facility in an aggregate amount of up to $25.0 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 could request additional revolving commitments or incremental term loans thereunder up to an aggregate amount of $125.0 million, subject to certain additional conditions as provided in the Credit Agreement. The Company borrowed $58.0 million under the Credit Facility in the first quarter of 2022, and repaid $20.0 million and $38.0 million of the borrowings during the three months ended March 31, 2022 and June 30, 2022, respectively. As of September 30, 2022, the Company had available borrowing capacity of $200.0 million under the initial maximum credit amount of the Credit Facility. Principal payments under the Credit Facility are due upon maturity of the facility; 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. 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 September 30, 2022. On October 7, 2022, the Company amended and restated the Credit Facility under the Fourth Amended and Restated Credit Agreement to, among other things, increase the aggregate amount of the swing line facility from $25.0 million to $40.0 million, extend the maturity of the Credit Facility to October 7, 2027, replace LIBOR-based interest pricing conventions with interest pricing based on the Secured Overnight Financing Rate (“SOFR”), release the liens on the assets of the Company and certain subsidiaries, and release pledges of equity interests in certain subsidiaries. Interest Rate Swaps The Company has an interest rate swap agreement with a $50.0 million notional amount, which started on June 30, 2022 and will end on October 1, 2024. The Company received floating-rate interest amounts based on one-month LIBOR in exchange for fixed-rate interest payments of 0.43% beginning on June 30, 2022 throughout the term of the agreement. The interest rate swap agreement effectively converted $50.0 million of borrowings under the Credit Facility from variable-rate interest to fixed-rate interest with a per annum rate of 1.56% based on the margin of the Credit Facility as of September 30, 2022. The fair value of the interest rate swap of $3.6 million and $0.9 million was recorded in other long-term assets at September 30, 2022 and December 31, 2021, respectively. On October 18, 2022, the Company amended its $50.0 million notional amount interest rate swap agreement to replace LIBOR-based interest pricing conventions with interest pricing based on the SOFR. Under the amended interest rate swap agreement, the Company will receive a variable floating rate based on one-month SOFR in exchange for fixed-rate interest payments of 0.33% throughout the remaining term of the agreement. The amendment effectively converts the first $50.0 million borrowed under the Credit Facility to fixed-rate debt with a fixed-rate per annum of 1.55% based on the margin of our Credit Facility as of September 30, 2022. The Company had an interest rate swap agreement with a $50.0 million notional amount which started on January 2, 2020 and matured on June 30, 2022. The fair value of the interest rate swap of $0.5 million was recorded in other long-term liabilities at December 31, 2021. The unrealized gain on the interest rate swap instruments in effect at the balance sheet date was reported as a component of accumulated other comprehensive income, net of tax, in stockholders’ equity at September 30, 2022 and December 31, 2021, and the change in the unrealized gain on the interest rate swaps for the three and nine months ended September 30, 2022 and 2021 was reported in other comprehensive income (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 agreement at September 30, 2022. Accounts Receivable Securitization Program The Company’s accounts receivable securitization program, which matures on July 1, 2024, provides available cash proceeds of $50.0 million to be provided under the program and has an accordion feature allowing the Company to request additional borrowings up to $100.0 million, subject to certain conditions. In May 2022, the Company amended its accounts receivable securitization program to, among other things, increase certain ratios, including the delinquency, default, and accounts receivable turnover ratios, as defined in the agreement; add language addressing the potential inclusion of receivables originated by MoLo; and replace LIBOR-based interest pricing conventions with interest pricing based on the SOFR. The program ratios were adjusted to accommodate revenue growth and customer demand for integrated logistics solutions, which has resulted in an increased proportion of total revenues generated by the Company’s Asset-Light operations and, as a result, longer collection periods on the Company’s accounts receivable, as are typical for Asset-Light businesses. 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 lenders’ interest in the trade accounts receivables. Borrowings under the amended accounts receivable securitization program bear interest based upon SOFR, 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. The Company was in compliance with the covenants under the accounts receivable securitization program at September 30, 2022. 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 September 30, 2022, standby letters of credit of $10.0 million have been issued under the program, which reduced the available borrowing capacity to $40.0 million. Letter of Credit Agreements and Surety Bond Programs As of September 30, 2022, the Company had letters of credit outstanding of $10.6 million (including $10.0 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 September 30, 2022, surety bonds outstanding related to the self-insurance program totaled $62.6 million. Notes Payable The Company has financed the purchase of certain revenue equipment, other equipment, and software through promissory note arrangements. During the three and nine months ended September 30, 2022, the Company entered into notes payable arrangements, primarily for revenue equipment, totaling $42.6 million and $69.4 million, respectively. |
POSTRETIREMENT BENEFIT PLANS
POSTRETIREMENT BENEFIT PLANS | 9 Months Ended |
Sep. 30, 2022 | |
POSTRETIREMENT BENEFIT PLANS | |
POSTRETIREMENT BENEFIT PLANS | NOTE H – POSTRETIREMENT BENEFIT PLANS Supplemental Benefit and Postretirement Health Benefit Plans The following is a summary of the components of net periodic benefit cost (credit): Three Months Ended September 30 Supplemental Postretirement Benefit Plan Health Benefit Plan 2022 2021 2022 2021 (in thousands) Service cost $ — $ — $ 39 $ 48 Interest cost 2 1 111 107 Amortization of net actuarial (gain) loss (1) 2 2 (192) (137) Net periodic benefit cost (credit) (2) $ 4 $ 3 $ (42) $ 18 Nine Months Ended September 30 Supplemental Postretirement Benefit Plan Health Benefit Plan 2022 2021 2022 2021 (in thousands) Service cost $ — $ — $ 117 $ 144 Interest cost 5 3 331 321 Amortization of net actuarial (gain) loss (1) 6 7 (574) (411) Net periodic benefit cost (credit) (2) $ 11 $ 10 $ (126) $ 54 (1) The Company amortizes actuarial gains and losses over the average remaining active service period of the plan participants and does not use a corridor approach. (2) Service cost is reported within operating expenses and the other components of net periodic benefit cost are reported within the other line item of other income (costs). 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. The 25 multiemployer pension plans to which ABF Freight contributes vary greatly in size and in funded status. Contributions to these plans are based generally on the time worked by ABF Freight’s contractual employees at rates specified in 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 funding obligations to the multiemployer 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. On March 11, 2021, H.R.1319, the American Rescue Plan Act of 2021 Butch Lewis Emergency Pension Plan Relief Act of 2021 On July 9, 2021, the PBGC announced an interim final rule implementing a Special Financial Assistance Program due. Future contribution rates will be determined through the negotiation process for contract periods following the term of the current collective bargaining agreement. While the Company cannot determine with any certainty the contributions that will be required under future collective bargaining agreements for ABF Freight’s contractual employees, management believes future contribution rates to multiemployer pension plans may be less likely to increase as a result of the provisions of the Pension Relief Act. If ABF Freight were 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. The multiemployer plan administrators have provided to the Company no significant changes in information related to multiemployer plans from the information disclosed in the Company’s 2021 Annual Report on Form 10-K. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2022 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | NOTE I – STOCKHOLDERS’ EQUITY Accumulated Other Comprehensive Income Components of accumulated other comprehensive income were as follows: September 30 December 31 2022 2021 (in thousands) Pre-tax amounts: Unrecognized net periodic benefit credit $ 5,034 $ 5,602 Interest rate swap 3,646 419 Foreign currency translation (3,321) (1,044) Total $ 5,359 $ 4,977 After-tax amounts: Unrecognized net periodic benefit credit $ 3,738 $ 4,160 Interest rate swap 2,692 309 Foreign currency translation (2,452) (770) Total $ 3,978 $ 3,699 The following is a summary of the changes in accumulated other comprehensive income, net of tax, by component for the nine months ended September 30, 2022 and 2021: Unrecognized Interest Foreign Net Periodic Rate Currency Total Benefit Credit Swap Translation (in thousands) Balances at December 31, 2021 $ 3,699 $ 4,160 $ 309 $ (770) Other comprehensive income (loss) before reclassifications 701 — 2,383 (1,682) Amounts reclassified from accumulated other comprehensive income (422) (422) — — Net current-period other comprehensive income (loss) 279 (422) 2,383 (1,682) Balances at September 30, 2022 $ 3,978 $ 3,738 $ 2,692 $ (2,452) Balances at December 31, 2020 $ 1,190 $ 3,260 $ (1,198) $ (872) Other comprehensive income before reclassifications 997 — 869 128 Amounts reclassified from accumulated other comprehensive income (300) (300) — — Net current-period other comprehensive income (loss) 697 (300) 869 128 Balances at September 30, 2021 $ 1,887 $ 2,960 $ (329) $ (744) The following is a summary of the significant reclassifications out of accumulated other comprehensive income by component: Unrecognized Net Periodic Benefit Credit (1)(2) Nine Months Ended September 30 2022 2021 (in thousands) Amortization of net actuarial gain, pre-tax $ 568 $ 404 Tax expense (146) (104) Total, net of tax $ 422 $ 300 (1) Amounts in parentheses indicate increases in expense or loss. (2) These components of accumulated other comprehensive income are included in the computation of net periodic benefit cost as disclosed in Note H. Dividends on Common Stock The following table is a summary of dividends declared during the applicable quarter: 2022 2021 Per Share Amount Per Share Amount (in thousands, except per share data) First quarter $ 0.08 $ 1,978 $ 0.08 $ 2,037 Second quarter $ 0.12 $ 2,949 $ 0.08 $ 2,058 Third quarter $ 0.12 $ 2,965 $ 0.08 $ 2,050 On October 28, 2022, the Company announced its Board of Directors declared a dividend of $0.12 per share to stockholders of record as of November 11, 2022. Treasury Stock The Company has a program to repurchase its common stock in the open market or in privately negotiated transactions (the “share repurchase program”). The share repurchase 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. On November 2, 2021, the Company entered into a fixed dollar accelerated share repurchase program (“ASR”) with a third-party financial institution to effect an accelerated repurchase of $100.0 million of the Company’s common stock, of which $75.0 million was repurchased during 2021. The remaining $25.0 million available under the ASR was recorded as an unsettled forward contract within stockholders’ equity as additional paid-in capital as of December 31, 2021. The Company had $66.9 million available for repurchases of its common stock in total under the share repurchase program and the ASR as of December 31, 2021. During the nine months ended September 30, 2022, the Company purchased 848,322 shares for an aggregate cost of $75.1 million, including the purchase of 214,763 shares to settle the remaining $25.0 million under the ASR. In April 2022, the Board of Directors reauthorized the share repurchase program and increased the total amount available for purchases of the Company’s common stock under the program to $75.0 million. The Company had $41.4 million remaining under its share repurchase programs as of September 30, 2022. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2022 | |
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 Nine Months Ended September 30 September 30 2022 2021 2022 2021 (in thousands, except share and per share data) Basic Numerator: Net income $ 88,842 $ 63,691 $ 260,872 $ 148,033 Denominator: Weighted-average shares 24,605,228 25,632,805 24,640,706 25,559,642 Earnings per common share $ 3.61 $ 2.48 $ 10.59 $ 5.79 Diluted Numerator: Net income $ 88,842 $ 63,691 $ 260,872 $ 148,033 Denominator: Weighted-average shares 24,605,228 25,632,805 24,640,706 25,559,642 Effect of dilutive securities 767,527 1,137,341 985,519 1,312,739 Adjusted weighted-average shares and assumed conversions 25,372,755 26,770,146 25,626,225 26,872,381 Earnings per common share $ 3.50 $ 2.38 $ 10.18 $ 5.51 |
OPERATING SEGMENT DATA
OPERATING SEGMENT DATA | 9 Months Ended |
Sep. 30, 2022 | |
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. 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. In recent periods, including the three and nine months ended September 30, 2022, the Company’s operations have not been as heavily impacted by seasonal fluctuations, due in part to strategic initiatives undertaken to enable profitable growth through seasons and cycles. The acquired operations of MoLo on November 1, 2021 resulted in increased business levels for the ArcBest segment for the three and nine months ended September 30, 2022, compared to the same periods of 2021. 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. The Asset-Based segment provides services to the ArcBest segment, including 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. Historically, 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; available capacity in the market; the impact of yield initiatives; and the impact of adverse external events or conditions, may influence quarterly freight tonnage levels. ● The ArcBest segment includes the results of operations of the Company’s service offerings in ground expedite, truckload, dedicated, intermodal, household goods moving, managed transportation, warehousing and distribution, and international freight transportation for air, ocean, and ground. The ArcBest segment provides services to the Asset-Based segment. ArcBest segment operations are influenced by seasonal fluctuations that impact customers’ supply chains. Historically, 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; available capacity in the market; and the impact of adverse external events or conditions, 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 or other disruptions to customers’ supply chains. Plant shutdowns during summer months may affect shipments for automotive and manufacturing customers of the ArcBest segment, but disruptive 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 provides services to the Asset-Based and ArcBest segments. 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 are influenced by seasonal variations in service event volume and the impact of other external events or conditions. The Company’s other business activities and operations that are not reportable segments include ArcBest Corporation (the parent holding company) and certain 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 operating segments is before intersegment eliminations of revenues and expenses. Shared services represent costs incurred to support all segments, including sales, pricing, customer service, marketing, capacity sourcing functions, human resources, financial services, information technology, 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 Company’s Board of Directors, and certain technology investments. Shared services costs attributable to the reportable 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 reportable operating segments. Management believes the methods used to allocate expenses are reasonable. 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 the Company’s reportable operating segment information: Three Months Ended Nine Months Ended September 30 September 30 2022 2021 2022 2021 (in thousands) REVENUES Asset-Based $ 791,531 $ 681,164 $ 2,299,464 $ 1,890,288 ArcBest (1) 515,235 305,207 1,660,174 828,291 FleetNet 89,276 66,514 249,786 185,224 Other and eliminations (44,211) (36,228) (129,590) (108,960) Total consolidated revenues $ 1,351,831 $ 1,016,657 $ 4,079,834 $ 2,794,843 OPERATING EXPENSES Asset-Based Salaries, wages, and benefits $ 332,359 $ 305,839 $ 973,924 $ 893,903 Fuel, supplies, and expenses 97,279 66,947 281,406 192,477 Operating taxes and licenses 13,089 12,426 38,405 36,977 Insurance 13,180 10,175 35,808 28,568 Communications and utilities 4,794 4,559 14,129 14,192 Depreciation and amortization 24,117 23,233 72,885 70,025 Rents and purchased transportation 123,714 95,855 348,249 266,525 Shared services 72,286 71,017 215,020 196,255 Gain on sale of property and equipment (2) (5,910) — (9,975) (8,624) Innovative technology costs (3) 6,068 6,903 20,982 21,303 Other 1,243 592 2,629 1,103 Total Asset-Based 682,219 597,546 1,993,462 1,712,704 ArcBest (1) Purchased transportation 425,567 256,900 1,382,107 694,498 Supplies and expenses 4,378 2,741 11,907 7,785 Depreciation and amortization (4) 5,072 2,352 15,720 7,104 Shared services 56,371 31,048 164,554 86,198 Gain on sale of subsidiary (5) — — (402) (6,923) Other 8,463 1,984 22,309 6,055 Total ArcBest 499,851 295,025 1,596,195 794,717 FleetNet 88,395 65,245 245,596 181,794 Other and eliminations (34,395) (28,720) (103,454) (88,423) Total consolidated operating expenses $ 1,236,070 $ 929,096 $ 3,731,799 $ 2,600,792 (1) The 2022 periods include the operations of MoLo, which was acquired on November 1, 2021. (2) The three and nine months ended September 30, 2022 include a $4.3 million noncash gain on a like-kind property exchange of a service center, with the remaining gains related primarily to sales of replaced equipment. The nine months ended September 30, 2021 include an $8.6 million gain on the sale of an unutilized service center property. (3) Represents costs associated with the freight handling pilot test program at ABF Freight. (4) Depreciation and amortization includes amortization of intangibles associated with acquired businesses. (5) Gain recognized relates to the sale of the labor services portion of the ArcBest segment’s moving business in May 2021, including the contingent amount recognized in second quarter 2022 when the funds were released from escrow. Three Months Ended Nine Months Ended September 30 September 30 2022 2021 2022 2021 (in thousands) OPERATING INCOME Asset-Based $ 109,312 $ 83,618 $ 306,002 $ 177,584 ArcBest (1) 15,384 10,182 63,979 33,574 FleetNet 881 1,269 4,190 3,430 Other and eliminations (9,816) (7,508) (26,136) (20,537) Total consolidated operating income $ 115,761 $ 87,561 $ 348,035 $ 194,051 OTHER INCOME (COSTS) Interest and dividend income $ 1,147 $ 323 $ 1,614 $ 1,037 Interest and other related financing costs (1,749) (2,072) (5,551) (6,774) Other, net (2) (189) 338 (3,822) 2,641 Total other income (costs) (791) (1,411) (7,759) (3,096) INCOME BEFORE INCOME TAXES $ 114,970 $ 86,150 $ 340,276 $ 190,955 (1) The 2022 periods include the operations of MoLo which was acquired on November 1, 2021. (2) Includes the components of net periodic benefit cost other than service cost related to the Company’s SBP and postretirement plans (see Note H) and proceeds and changes in cash surrender value of life insurance policies. The following table reflects information about revenues from customers and intersegment revenues: Three Months Ended Nine Months Ended September 30 September 30 2022 2021 2022 2021 (in thousands) Revenues from customers Asset-Based $ 778,473 $ 655,737 $ 2,242,964 $ 1,815,606 ArcBest (1) 503,182 303,076 1,633,684 821,355 FleetNet 72,318 56,656 207,505 155,041 Other (2,142) 1,188 (4,319) 2,841 Total consolidated revenues (1) $ 1,351,831 $ 1,016,657 $ 4,079,834 $ 2,794,843 Intersegment revenues Asset-Based $ 13,058 $ 25,427 $ 56,500 $ 74,682 ArcBest 12,053 2,131 26,490 6,936 FleetNet 16,958 9,858 42,281 30,183 Other and eliminations (42,069) (37,416) (125,271) (111,801) Total intersegment revenues $ — $ — $ — $ — Total segment revenues Asset-Based $ 791,531 $ 681,164 $ 2,299,464 $ 1,890,288 ArcBest (1) 515,235 305,207 1,660,174 828,291 FleetNet 89,276 66,514 249,786 185,224 Other and eliminations (44,211) (36,228) (129,590) (108,960) Total consolidated revenues (1) $ 1,351,831 $ 1,016,657 $ 4,079,834 $ 2,794,843 (1) The 2022 periods include the operations of MoLo, which was acquired on November 1, 2021. The following table presents operating expenses by category on a consolidated basis: Three Months Ended Nine Months Ended September 30 September 30 2022 (1) 2021 2022 (1) 2021 (in thousands) OPERATING EXPENSES Salaries, wages, and benefits $ 451,824 $ 397,116 $ 1,321,871 $ 1,145,657 Rents, purchased transportation, and other costs of services 596,631 382,759 1,854,387 1,039,857 Fuel, supplies, and expenses 112,834 82,051 331,759 235,221 Depreciation and amortization (2) 34,707 30,359 104,860 90,995 Other (3) 40,074 36,811 118,922 89,062 $ 1,236,070 $ 929,096 $ 3,731,799 $ 2,600,792 (1) The 2022 periods include the operations of MoLo, which was acquired on November 1, 2021. (2) Includes amortization of intangible assets. (3) The nine months ended September 30, 2021 include a $6.9 million gain related to the sale of a subsidiary within the ArcBest segment. |
LEGAL PROCEEDINGS, ENVIRONMENTA
LEGAL PROCEEDINGS, ENVIRONMENTAL MATTERS, AND OTHER EVENTS | 9 Months Ended |
Sep. 30, 2022 | |
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 underground tanks at certain facilities. 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 (the “EPA”) 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. The Company maintains an accrual, which is included in accrued expenses, for estimated environmental cleanup costs of properties currently or previously operated by the Company. 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. Certain Asset-Based service center facilities operate with no exposure certifications or stormwater permits under the federal Clean Water Act (“the CWA”). The no exposure certification and stormwater permits may require periodic facility inspections and monitoring and reporting of stormwater sampling results. The Company determined that certain procedures regarding sampling, documentation, and reporting were not appropriately being performed in accordance with the CWA. As such, the Company self-reported the matter to the EPA. An estimated settlement expense for this matter is accrued within accrued expenses in the consolidated balance sheet as of September 30, 2022. Resolution of this matter is not expected to have a material adverse effect on the Company’s financial condition, results of operations, or cash flows. Other Events In February 2021, the Company received a Notice of Assessment from a state pertaining to uncollected sales and use tax, including interest and penalties, for the period September 1, 2016 to November 30, 2018. The Company does not agree with the basis of the assessment and filed an appeal in May 2021. The Company has previously accrued an amount related to this assessment consistent with applicable accounting guidance, but if the state prevails in its position, the Company may owe additional tax. Management does not believe the resolution of this matter will have a material adverse effect on the Company’s financial condition, results of operations, or cash flows. |
ORGANIZATION AND DESCRIPTION _2
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
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 2021 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 Pronouncements Not Yet Adopted | Accounting Pronouncements Not Yet Adopted Management believes there is no new accounting guidance issued but not yet effective that would have a material impact to the Company’s current financial statements. |
FINANCIAL INSTRUMENTS AND FAI_2
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | |
Schedule components of cash and cash equivalents, short term investments, and restricted funds | September 30 December 31 2022 2021 (in thousands) Cash and cash equivalents Cash deposits (1) $ 123,612 $ 72,790 Variable rate demand notes (1)(2) 19,150 230 Money market funds (3) 12,769 3,600 Total cash and cash equivalents $ 155,531 $ 76,620 Short-term investments Certificates of deposit (1) $ 76,652 $ 48,339 U.S. Treasury securities (4) 69,106 — Total short-term investments $ 145,758 $ 48,339 (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 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 | September 30 December 31 2022 2021 (in thousands) Carrying Fair Carrying Fair Value Value Value Value Credit Facility (1) $ 50,000 $ 50,000 $ 50,000 $ 50,000 Notes payable (2) 203,319 194,138 175,530 175,937 New England Pension Fund withdrawal liability (3) 20,270 19,149 20,769 23,521 $ 273,589 $ 263,287 $ 246,299 $ 249,458 (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) 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). (3) 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. The fair value of the outstanding withdrawal liability is equal to the present value of the future withdrawal liability payments, discounted at an interest rate of 5.2% and 3.1% at September 30, 2022 and December 31, 2021, respectively, determined using the 20-year U.S. Treasury rate plus a spread (Level 2 of the fair value hierarchy). As of September 30, 2022, the outstanding withdrawal liability totaled $20.3 million, of which $0.7 million and $19.6 million was recorded in accrued expenses and the other long-term liabilities, respectively. |
Schedule of financial assets and liabilities measured at fair value on a recurring basis | September 30, 2022 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) $ 12,769 $ 12,769 $ — $ — Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan (2) 3,620 3,620 — — Interest rate swaps (3) 3,646 — 3,646 — $ 20,035 $ 16,389 $ 3,646 $ — Liabilities: Contingent consideration (4) 94,510 — — 94,510 $ 94,510 $ — $ — $ 94,510 December 31, 2021 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) $ 3,600 $ 3,600 $ — $ — Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan (2) 3,848 3,848 — — Interest rate swaps (3) 874 — 874 — $ 8,322 $ 7,448 $ 874 $ — Liabilities: Interest rate swaps (3) $ 455 $ — $ 455 $ — Contingent consideration (4) 93,700 — — 93,700 $ 94,155 $ — $ 455 $ 93,700 (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 generally considered to be in Level 3 of the fair value hierarchy. However, the Company assessed Level 3 inputs as insignificant to the valuation at September 30, 2022 and December 31, 2021 and considers the interest rate swap valuations in Level 2 of the fair value hierarchy. (4) Included in other long-term liabilities, based on when expected payouts become due. The estimated fair value of contingent consideration for the earn-out agreement related to the November 2021 acquisition of MoLo was determined by assessing Level 3 inputs. The Level 3 assessments utilize a Monte Carlo simulation with inputs including scenarios of estimated revenues and earnings before interest, taxes, depreciation and amortization to be achieved for the applicable performance periods, volatility factors applied to the simulations, and the discount rate applied, which was 10.6% and 9.0% as of September 30, 2022 and December 31, 2021, respectively. Changes in the significant unobservable inputs might result in a significantly higher or lower fair value at the reporting date. |
Schedule of changes in fair value of liabilities measured at fair value using inputs categorized in Level 3 | Contingent Consideration (in thousands) Balances at December 31, 2021 $ 93,700 Change in fair value included in operating income 810 Balances at September 30, 2022 $ 94,510 |
ACQUISITION (Tables)
ACQUISITION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
ACQUISITION. | |
Schedule of purchase consideration and estimated fair values of the acquired assets and liabilities | Purchase Consideration (in thousands) Net cash consideration, including estimated post-closing adjustments $ 235,751 Contingent consideration 93,700 Total purchase consideration $ 329,451 Purchase Allocation (in thousands) Accounts receivable $ 130,206 Prepaid expenses 468 Property and equipment 2,309 Operating lease right-of-use assets 844 Intangible assets 76,900 Other assets 170 Total identifiable assets acquired 210,897 Accounts payable 97,199 Accrued expenses and other current liabilities 4,148 Operating lease liabilities 983 Total liabilities 102,330 Total identifiable net assets 108,567 Goodwill 220,884 Net assets acquired $ 329,451 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of goodwill by reportable operating segment | Total ArcBest FleetNet (in thousands) Balances at December 31, 2021 $ 300,337 $ 299,707 $ 630 Purchase accounting adjustments (1) 6,915 6,915 — Balances at September 30, 2022 $ 307,252 $ 306,622 $ 630 (1) As noted in Note C, purchase accounting adjustments related to the MoLo acquisition represent adjustments to the acquired balance of working capital, and goodwill related to the November 1, 2021 acquisition of MoLo is based on preliminary information as of September 30, 2022. |
Schedule of intangible assets | September 30, 2022 December 31, 2021 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 12 $ 100,321 $ 41,489 $ 58,832 $ 100,321 $ 35,072 $ 65,249 Other 8 30,368 4,578 25,790 30,335 1,304 29,031 11 130,689 46,067 84,622 130,656 36,376 94,280 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 $ 162,989 $ 46,067 $ 116,922 $ 162,956 $ 36,376 $ 126,580 |
Schedule of future amortization for intangible assets | Amortization of Intangible Assets (in thousands) Remainder of 2022 $ 3,229 2023 12,826 2024 12,793 2025 12,778 2026 8,671 Thereafter 34,325 Total amortization $ 84,622 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
LEASES | |
Schedule of components of lease expense | Three Months Ended Nine Months Ended September 30 September 30 2022 2021 2022 2021 (in thousands) Operating lease expense $ 8,666 $ 6,575 $ 23,116 $ 19,801 Variable lease expense 1,176 957 3,220 3,252 Sublease income (286) (157) (544) (468) Total operating lease expense (1) $ 9,556 $ 7,375 $ 25,792 $ 22,585 (1) Operating lease expense excludes short-term leases with a term of 12 months or less. |
Schedule of operating cash flows from operating lease activity | Nine Months Ended September 30 2022 2021 (in thousands) Noncash change in operating right-of-use assets $ 20,356 $ 17,256 Change in operating lease liabilities (18,777) (16,606) Operating right-of-use-assets and lease liabilities, net $ 1,579 $ 650 Cash paid for amounts included in the measurement of operating lease liabilities $ (21,526) $ (19,128) |
Schedule of maturities of operating lease liabilities | Equipment Land and and Total Structures (1) Other (in thousands) Remainder of 2022 $ 7,277 $ 7,178 $ 99 2023 30,182 29,760 422 2024 28,601 28,302 299 2025 24,856 24,856 — 2026 22,616 22,616 — Thereafter 83,884 83,884 — Total lease payments 197,416 196,596 820 Less imputed interest (26,596) (26,563) (33) Total $ 170,820 $ 170,033 $ 787 (1) Excludes future minimum lease payments for leases which were executed but had not yet commenced as of September 30, 2022 totaling $41.1 million which will be paid over approximately 10 years . |
LONG-TERM DEBT AND FINANCING _2
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
LONG-TERM DEBT AND FINANCING ARRANGEMENTS | |
Schedule of long-term debt | September 30 December 31 2022 2021 (in thousands) Credit Facility (interest rate of 4.2% (1) $ 50,000 $ 50,000 Notes payable (weighted-average interest rate of 3.0% at September 30, 2022) 203,319 175,530 Finance lease obligations — 2 253,319 225,532 Less current portion 63,521 50,615 Long-term debt, less current portion $ 189,798 $ 174,917 (1) The interest rate swap mitigates interest rate risk by effectively converting the $50.0 million of borrowings under the Credit Facility from variable-rate interest to fixed-rate interest with a per annum rate of 1.56% and 3.12% based on the margin of the Credit Facility as of September 30, 2022 and December 31, 2021, respectively. |
Scheduled maturities of long-term debt obligations | Scheduled maturities of long-term debt obligations as of September 30, 2022 were as follows: Credit Notes Total Facility (1) Payable (in thousands) Due in one year or less $ 71,428 $ 2,754 $ 68,674 Due after one year through two years 62,723 2,638 60,085 Due after two years through three years 94,012 50,000 44,012 Due after three years through four years 27,888 — 27,888 Due after four years through five years 14,421 — 14,421 Due after five years 379 — 379 Total payments 270,851 55,392 215,459 Less amounts representing interest 17,532 5,392 12,140 Long-term debt $ 253,319 $ 50,000 $ 203,319 (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. |
Schedule of assets securing notes payable or held under capital leases | September 30 December 31 2022 2021 (in thousands) Revenue equipment $ 274,540 $ 241,892 Service, office, and other equipment 39,428 29,773 Total assets securing notes payable or held under finance leases 313,968 271,665 Less accumulated depreciation and amortization (1) 106,769 88,696 Net assets securing notes payable or held under finance leases $ 207,199 $ 182,969 (1) Amortization of assets held under finance leases and depreciation of assets securing notes payable are included in depreciation expense. |
POSTRETIREMENT BENEFIT PLANS (T
POSTRETIREMENT BENEFIT PLANS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
POSTRETIREMENT BENEFIT PLANS | |
Summary of the components of net periodic benefit cost (credit) | Three Months Ended September 30 Supplemental Postretirement Benefit Plan Health Benefit Plan 2022 2021 2022 2021 (in thousands) Service cost $ — $ — $ 39 $ 48 Interest cost 2 1 111 107 Amortization of net actuarial (gain) loss (1) 2 2 (192) (137) Net periodic benefit cost (credit) (2) $ 4 $ 3 $ (42) $ 18 Nine Months Ended September 30 Supplemental Postretirement Benefit Plan Health Benefit Plan 2022 2021 2022 2021 (in thousands) Service cost $ — $ — $ 117 $ 144 Interest cost 5 3 331 321 Amortization of net actuarial (gain) loss (1) 6 7 (574) (411) Net periodic benefit cost (credit) (2) $ 11 $ 10 $ (126) $ 54 (1) The Company amortizes actuarial gains and losses over the average remaining active service period of the plan participants and does not use a corridor approach. (2) Service cost is reported within operating expenses and the other components of net periodic benefit cost are reported within the other line item of other income (costs). |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
STOCKHOLDERS' EQUITY | |
Components of accumulated other comprehensive income | September 30 December 31 2022 2021 (in thousands) Pre-tax amounts: Unrecognized net periodic benefit credit $ 5,034 $ 5,602 Interest rate swap 3,646 419 Foreign currency translation (3,321) (1,044) Total $ 5,359 $ 4,977 After-tax amounts: Unrecognized net periodic benefit credit $ 3,738 $ 4,160 Interest rate swap 2,692 309 Foreign currency translation (2,452) (770) Total $ 3,978 $ 3,699 |
Summary of changes in accumulated other comprehensive income, net of tax, by component | Unrecognized Interest Foreign Net Periodic Rate Currency Total Benefit Credit Swap Translation (in thousands) Balances at December 31, 2021 $ 3,699 $ 4,160 $ 309 $ (770) Other comprehensive income (loss) before reclassifications 701 — 2,383 (1,682) Amounts reclassified from accumulated other comprehensive income (422) (422) — — Net current-period other comprehensive income (loss) 279 (422) 2,383 (1,682) Balances at September 30, 2022 $ 3,978 $ 3,738 $ 2,692 $ (2,452) Balances at December 31, 2020 $ 1,190 $ 3,260 $ (1,198) $ (872) Other comprehensive income before reclassifications 997 — 869 128 Amounts reclassified from accumulated other comprehensive income (300) (300) — — Net current-period other comprehensive income (loss) 697 (300) 869 128 Balances at September 30, 2021 $ 1,887 $ 2,960 $ (329) $ (744) |
Summary of the significant reclassifications out of accumulated other comprehensive income (loss) by component | Unrecognized Net Periodic Benefit Credit (1)(2) Nine Months Ended September 30 2022 2021 (in thousands) Amortization of net actuarial gain, pre-tax $ 568 $ 404 Tax expense (146) (104) Total, net of tax $ 422 $ 300 (1) Amounts in parentheses indicate increases in expense or loss. (2) These components of accumulated other comprehensive income are included in the computation of net periodic benefit cost as disclosed in Note H. |
Summary of dividends declared | 2022 2021 Per Share Amount Per Share Amount (in thousands, except per share data) First quarter $ 0.08 $ 1,978 $ 0.08 $ 2,037 Second quarter $ 0.12 $ 2,949 $ 0.08 $ 2,058 Third quarter $ 0.12 $ 2,965 $ 0.08 $ 2,050 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
EARNINGS PER SHARE | |
Schedule of computation of basic and diluted earnings (loss) per share | Three Months Ended Nine Months Ended September 30 September 30 2022 2021 2022 2021 (in thousands, except share and per share data) Basic Numerator: Net income $ 88,842 $ 63,691 $ 260,872 $ 148,033 Denominator: Weighted-average shares 24,605,228 25,632,805 24,640,706 25,559,642 Earnings per common share $ 3.61 $ 2.48 $ 10.59 $ 5.79 Diluted Numerator: Net income $ 88,842 $ 63,691 $ 260,872 $ 148,033 Denominator: Weighted-average shares 24,605,228 25,632,805 24,640,706 25,559,642 Effect of dilutive securities 767,527 1,137,341 985,519 1,312,739 Adjusted weighted-average shares and assumed conversions 25,372,755 26,770,146 25,626,225 26,872,381 Earnings per common share $ 3.50 $ 2.38 $ 10.18 $ 5.51 |
OPERATING SEGMENT DATA (Tables)
OPERATING SEGMENT DATA (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
OPERATING SEGMENT DATA | |
Schedule of reportable operating segment information | Three Months Ended Nine Months Ended September 30 September 30 2022 2021 2022 2021 (in thousands) REVENUES Asset-Based $ 791,531 $ 681,164 $ 2,299,464 $ 1,890,288 ArcBest (1) 515,235 305,207 1,660,174 828,291 FleetNet 89,276 66,514 249,786 185,224 Other and eliminations (44,211) (36,228) (129,590) (108,960) Total consolidated revenues $ 1,351,831 $ 1,016,657 $ 4,079,834 $ 2,794,843 OPERATING EXPENSES Asset-Based Salaries, wages, and benefits $ 332,359 $ 305,839 $ 973,924 $ 893,903 Fuel, supplies, and expenses 97,279 66,947 281,406 192,477 Operating taxes and licenses 13,089 12,426 38,405 36,977 Insurance 13,180 10,175 35,808 28,568 Communications and utilities 4,794 4,559 14,129 14,192 Depreciation and amortization 24,117 23,233 72,885 70,025 Rents and purchased transportation 123,714 95,855 348,249 266,525 Shared services 72,286 71,017 215,020 196,255 Gain on sale of property and equipment (2) (5,910) — (9,975) (8,624) Innovative technology costs (3) 6,068 6,903 20,982 21,303 Other 1,243 592 2,629 1,103 Total Asset-Based 682,219 597,546 1,993,462 1,712,704 ArcBest (1) Purchased transportation 425,567 256,900 1,382,107 694,498 Supplies and expenses 4,378 2,741 11,907 7,785 Depreciation and amortization (4) 5,072 2,352 15,720 7,104 Shared services 56,371 31,048 164,554 86,198 Gain on sale of subsidiary (5) — — (402) (6,923) Other 8,463 1,984 22,309 6,055 Total ArcBest 499,851 295,025 1,596,195 794,717 FleetNet 88,395 65,245 245,596 181,794 Other and eliminations (34,395) (28,720) (103,454) (88,423) Total consolidated operating expenses $ 1,236,070 $ 929,096 $ 3,731,799 $ 2,600,792 (1) The 2022 periods include the operations of MoLo, which was acquired on November 1, 2021. (2) The three and nine months ended September 30, 2022 include a $4.3 million noncash gain on a like-kind property exchange of a service center, with the remaining gains related primarily to sales of replaced equipment. The nine months ended September 30, 2021 include an $8.6 million gain on the sale of an unutilized service center property. (3) Represents costs associated with the freight handling pilot test program at ABF Freight. (4) Depreciation and amortization includes amortization of intangibles associated with acquired businesses. (5) Gain recognized relates to the sale of the labor services portion of the ArcBest segment’s moving business in May 2021, including the contingent amount recognized in second quarter 2022 when the funds were released from escrow. Three Months Ended Nine Months Ended September 30 September 30 2022 2021 2022 2021 (in thousands) OPERATING INCOME Asset-Based $ 109,312 $ 83,618 $ 306,002 $ 177,584 ArcBest (1) 15,384 10,182 63,979 33,574 FleetNet 881 1,269 4,190 3,430 Other and eliminations (9,816) (7,508) (26,136) (20,537) Total consolidated operating income $ 115,761 $ 87,561 $ 348,035 $ 194,051 OTHER INCOME (COSTS) Interest and dividend income $ 1,147 $ 323 $ 1,614 $ 1,037 Interest and other related financing costs (1,749) (2,072) (5,551) (6,774) Other, net (2) (189) 338 (3,822) 2,641 Total other income (costs) (791) (1,411) (7,759) (3,096) INCOME BEFORE INCOME TAXES $ 114,970 $ 86,150 $ 340,276 $ 190,955 (1) The 2022 periods include the operations of MoLo which was acquired on November 1, 2021. (2) Includes the components of net periodic benefit cost other than service cost related to the Company’s SBP and postretirement plans (see Note H) and proceeds and changes in cash surrender value of life insurance policies. |
Schedule of revenues from customers and intersegment revenues | Three Months Ended Nine Months Ended September 30 September 30 2022 2021 2022 2021 (in thousands) Revenues from customers Asset-Based $ 778,473 $ 655,737 $ 2,242,964 $ 1,815,606 ArcBest (1) 503,182 303,076 1,633,684 821,355 FleetNet 72,318 56,656 207,505 155,041 Other (2,142) 1,188 (4,319) 2,841 Total consolidated revenues (1) $ 1,351,831 $ 1,016,657 $ 4,079,834 $ 2,794,843 Intersegment revenues Asset-Based $ 13,058 $ 25,427 $ 56,500 $ 74,682 ArcBest 12,053 2,131 26,490 6,936 FleetNet 16,958 9,858 42,281 30,183 Other and eliminations (42,069) (37,416) (125,271) (111,801) Total intersegment revenues $ — $ — $ — $ — Total segment revenues Asset-Based $ 791,531 $ 681,164 $ 2,299,464 $ 1,890,288 ArcBest (1) 515,235 305,207 1,660,174 828,291 FleetNet 89,276 66,514 249,786 185,224 Other and eliminations (44,211) (36,228) (129,590) (108,960) Total consolidated revenues (1) $ 1,351,831 $ 1,016,657 $ 4,079,834 $ 2,794,843 (1) The 2022 periods include the operations of MoLo, which was acquired on November 1, 2021. |
Schedule of consolidated operating expenses by component | Three Months Ended Nine Months Ended September 30 September 30 2022 (1) 2021 2022 (1) 2021 (in thousands) OPERATING EXPENSES Salaries, wages, and benefits $ 451,824 $ 397,116 $ 1,321,871 $ 1,145,657 Rents, purchased transportation, and other costs of services 596,631 382,759 1,854,387 1,039,857 Fuel, supplies, and expenses 112,834 82,051 331,759 235,221 Depreciation and amortization (2) 34,707 30,359 104,860 90,995 Other (3) 40,074 36,811 118,922 89,062 $ 1,236,070 $ 929,096 $ 3,731,799 $ 2,600,792 (1) The 2022 periods include the operations of MoLo, which was acquired on November 1, 2021. (2) Includes amortization of intangible assets. (3) The nine months ended September 30, 2021 include a $6.9 million gain related to the sale of a subsidiary within the ArcBest segment. |
ORGANIZATION AND DESCRIPTION _3
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION - Organization (Details) | 9 Months Ended |
Sep. 30, 2022 segment | |
Organization and description of business | |
Number of reportable operating segments | 3 |
Asset Based | |
Organization and description of business | |
Percentage of the Company's revenues, before other revenues and intercompany eliminations, represented by the Asset-Based segment | 55% |
Asset Based | Unionized employees concentration risk | Number of employees | |
Organization and description of business | |
Percentage of Asset-Based segment employees covered under collective bargaining agreement with the IBT | 82% |
FINANCIAL INSTRUMENTS AND FAI_3
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS - Cash and Cash Equivalents and Short-term Investments (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Fair value disclosure | ||
Cash and cash equivalents | $ 155,531 | $ 76,620 |
Short-term investments | 145,758 | 48,339 |
Concentrations of Credit Risk of Financial Instruments | ||
Cash, cash equivalents and short-term investments not FDIC-insured | 121,900 | 42,600 |
Cash deposits | ||
Fair value disclosure | ||
Cash and cash equivalents | 123,612 | 72,790 |
Variable rate demand notes | ||
Fair value disclosure | ||
Cash and cash equivalents | 19,150 | 230 |
Money market funds | ||
Fair value disclosure | ||
Cash and cash equivalents | 12,769 | 3,600 |
Certificates of deposit | ||
Fair value disclosure | ||
Short-term investments | 76,652 | $ 48,339 |
U.S. Treasury securities | ||
Fair value disclosure | ||
Short-term investments | $ 69,106 |
FINANCIAL INSTRUMENTS AND FAI_4
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS - Debt (Details) $ in Thousands | Sep. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) |
Fair value disclosure | ||
Outstanding withdrawal liability | $ 20,300 | |
Accrued expenses | ||
Fair value disclosure | ||
Outstanding withdrawal liability | 700 | |
Other long-term liabilities | ||
Fair value disclosure | ||
Outstanding withdrawal liability | 19,600 | |
Carrying value | ||
Fair value disclosure | ||
Financial instruments | 273,589 | $ 246,299 |
Fair value disclosure | ||
Fair value disclosure | ||
Financial instruments | 263,287 | 249,458 |
Credit Facility | Carrying value | Level 2 | ||
Fair value disclosure | ||
Financial instruments | 50,000 | 50,000 |
Credit Facility | Fair value disclosure | Level 2 | ||
Fair value disclosure | ||
Financial instruments | 50,000 | 50,000 |
Notes payable | Carrying value | Level 2 | ||
Fair value disclosure | ||
Financial instruments | 203,319 | 175,530 |
Notes payable | Fair value disclosure | Level 2 | ||
Fair value disclosure | ||
Financial instruments | $ 194,138 | $ 175,937 |
New England Pension Fund withdrawal liability | Discount Rate | ||
Fair value disclosure | ||
Measurement input | 5.2 | 3.1 |
New England Pension Fund withdrawal liability | Carrying value | Level 2 | ||
Fair value disclosure | ||
Financial instruments | $ 20,270 | $ 20,769 |
New England Pension Fund withdrawal liability | Fair value disclosure | Level 2 | ||
Fair value disclosure | ||
Financial instruments | $ 19,149 | $ 23,521 |
FINANCIAL INSTRUMENTS AND FAI_5
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS - Assets and Liabilities (Details) - Recurring basis - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Assets: | ||
Assets | $ 20,035 | $ 8,322 |
Liabilities: | ||
Liabilities | 94,510 | 94,155 |
Cash and cash equivalents | ||
Assets: | ||
Money market funds | 12,769 | 3,600 |
Other long-term assets | ||
Assets: | ||
Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan | 3,620 | 3,848 |
Interest rate swaps | 3,646 | 874 |
Other long-term liabilities | ||
Liabilities: | ||
Interest rate swap | 455 | |
Contingent consideration | 94,510 | 93,700 |
Level 1 | ||
Assets: | ||
Assets | 16,389 | 7,448 |
Level 1 | Cash and cash equivalents | ||
Assets: | ||
Money market funds | 12,769 | 3,600 |
Level 1 | Other long-term assets | ||
Assets: | ||
Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan | 3,620 | 3,848 |
Level 2 | ||
Assets: | ||
Assets | 3,646 | 874 |
Liabilities: | ||
Liabilities | 455 | |
Level 2 | Other long-term assets | ||
Assets: | ||
Interest rate swaps | 3,646 | 874 |
Level 2 | Other long-term liabilities | ||
Liabilities: | ||
Interest rate swap | 455 | |
Level 3 | ||
Liabilities: | ||
Liabilities | 94,510 | 93,700 |
Level 3 | Other long-term liabilities | ||
Liabilities: | ||
Contingent consideration | $ 94,510 | $ 93,700 |
FINANCIAL INSTRUMENTS AND FAI_6
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS - Nonrecurring (Details) | Sep. 30, 2022 | Dec. 31, 2021 |
Discount Rate | Valuation Technique, Discounted Cash Flow | ||
Fair value measurement | ||
Measurement input | 10.6 | 9 |
FINANCIAL INSTRUMENTS AND FAI_7
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS - Changes in Fair Value of Liabilities (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning Balances | $ 93,700 |
Change in fair value included in operating income | $ 810 |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income | Operating income |
Ending Balances | $ 94,510 |
ACQUISITION - MoLo (Details)
ACQUISITION - MoLo (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Nov. 01, 2021 | Sep. 30, 2022 | |
Business Acquisition | ||
Business acquisition, net of cash acquired | $ 2,279 | |
MoLo Solutions, LLC | ||
Business Acquisition | ||
Business acquisition, net of cash acquired | 2,300 | |
Purchase Consideration | ||
Net cash consideration, including estimated post-closing adjustments | $ 235,751 | $ 235,800 |
Contingent consideration | 93,700 | |
Total purchase consideration | $ 329,451 | |
MoLo Solutions, LLC | 100% of target | ||
Business Acquisition | ||
Adjusted EBITDA target percentage | 100% | |
Contingent consideration, target | $ 215,000 | |
MoLo Solutions, LLC | 80% of target | ||
Business Acquisition | ||
Adjusted EBITDA target percentage | 80% | |
Contingent consideration, low range | $ 95,000 | |
MoLo Solutions, LLC | 300% of target | ||
Business Acquisition | ||
Adjusted EBITDA target percentage | 300% | |
Contingent consideration, high range | $ 455,000 |
ACQUISITION - Estimated Fair Va
ACQUISITION - Estimated Fair Values of Acquired Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Purchase Allocation | ||
Goodwill | $ 307,252 | $ 300,337 |
MoLo Solutions, LLC | ||
Purchase Allocation | ||
Accounts receivable | 130,206 | |
Prepaid expenses | 468 | |
Property and equipment | 2,309 | |
Operating lease right-of use assets | 844 | |
Intangible assets | 76,900 | |
Other assets | 170 | |
Total identifiable assets acquired | 210,897 | |
Accounts payable | 97,199 | |
Accrued expenses and other current liabilities | 4,148 | |
Operating lease liabilities | 983 | |
Total liabilities | 102,330 | |
Total identifiable net assets | 108,567 | |
Goodwill | 220,884 | |
Net assets acquired | $ 329,451 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Goodwill by reportable operating segment | |
Balance at the beginning of the period | $ 300,337 |
Purchase accounting adjustment | 6,915 |
Balance at the end of the period | 307,252 |
ArcBest | |
Goodwill by reportable operating segment | |
Balance at the beginning of the period | 299,707 |
Purchase accounting adjustment | 6,915 |
Balance at the end of the period | 306,622 |
FleetNet | |
Goodwill by reportable operating segment | |
Balance at the beginning of the period | 630 |
Balance at the end of the period | $ 630 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Intangible (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Finite-lived intangible assets | ||
Weighted Average Amortization Period | 11 years | |
Cost | $ 130,689 | $ 130,656 |
Accumulated Amortization | 46,067 | 36,376 |
Net Value | 84,622 | 94,280 |
Total intangible assets | ||
Cost | 162,989 | 162,956 |
Net Value | 116,922 | 126,580 |
Trade name | ||
Indefinite-lived intangible assets | ||
Net Value | $ 32,300 | 32,300 |
Customer relationships | ||
Finite-lived intangible assets | ||
Weighted Average Amortization Period | 12 years | |
Cost | $ 100,321 | 100,321 |
Accumulated Amortization | 41,489 | 35,072 |
Net Value | $ 58,832 | 65,249 |
Other intangible assets | ||
Finite-lived intangible assets | ||
Weighted Average Amortization Period | 8 years | |
Cost | $ 30,368 | 30,335 |
Accumulated Amortization | 4,578 | 1,304 |
Net Value | $ 25,790 | $ 29,031 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Amortization (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Future amortization for intangible assets | ||
Remainder of 2022 | $ 3,229 | |
2023 | 12,826 | |
2024 | 12,793 | |
2025 | 12,778 | |
2026 | 8,671 | |
Thereafter | 34,325 | |
Net Value | $ 84,622 | $ 94,280 |
INCOME TAXES - Tax Rate (Detail
INCOME TAXES - Tax Rate (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
INCOME TAXES | ||||
Effective tax rate (as a percent) | 22.70% | 26.10% | 23.30% | 22.50% |
State tax, low end of range of rate (as a percent) | 6% | 6% | 6% | 6% |
State tax, high end of range of rate (as a percent) | 6.50% | 6.50% | 6.50% | 6.50% |
INCOME TAXES - Allowance (Detai
INCOME TAXES - Allowance (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Valuation allowance | $ 2.4 | $ 2.2 |
INCOME TAXES - Taxes Paid (Deta
INCOME TAXES - Taxes Paid (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Income taxes | ||
Income taxes paid (in dollars) | $ 87.5 | $ 43 |
Federal and state | ||
Income taxes | ||
Income tax refunds received (in dollars) | $ 1.2 | |
Federal and state | Maximum | ||
Income taxes | ||
Income tax refunds received (in dollars) | $ 0.1 |
LEASES - Components of Lease Ex
LEASES - Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
LEASES | ||||
Operating lease expense | $ 8,666 | $ 6,575 | $ 23,116 | $ 19,801 |
Variable lease expense | 1,176 | 957 | 3,220 | 3,252 |
Sublease income | (286) | (157) | (544) | (468) |
Total operating lease expense | $ 9,556 | $ 7,375 | $ 25,792 | $ 22,585 |
LEASES - Cash Flows (Details)
LEASES - Cash Flows (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Operating leases | ||
Noncash change in operating right-of-use assets | $ 20,356 | $ 17,256 |
Change in operating lease liabilities | (18,777) | (16,606) |
Operating right-of-use assets and lease liabilities, net | 1,579 | 650 |
Cash paid for amounts included in the measurement of operating lease liabilities | $ (21,526) | $ (19,128) |
LEASES - Maturities of Operatin
LEASES - Maturities of Operating Lease Liabilities (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Maturities of operating lease liabilities | |
Remainder of 2022 | $ 7,277 |
2023 | 30,182 |
2024 | 28,601 |
2025 | 24,856 |
2026 | 22,616 |
Thereafter | 83,884 |
Total lease payments | 197,416 |
Less imputed interest | (26,596) |
Total operating lease liabilities | $ 170,820 |
Operating Lease, Liability, Statement of Financial Position | Operating Lease, Liability, Current, Operating Lease, Liability, Noncurrent |
Land and Structures | |
Maturities of operating lease liabilities | |
Remainder of 2022 | $ 7,178 |
2023 | 29,760 |
2024 | 28,302 |
2025 | 24,856 |
2026 | 22,616 |
Thereafter | 83,884 |
Total lease payments | 196,596 |
Less imputed interest | (26,563) |
Total operating lease liabilities | 170,033 |
Future minimum payments for leases that have not yet commenced | $ 41,100 |
Lease term for lease commitments that have not yet commenced | 10 years |
Equipment and Others | |
Maturities of operating lease liabilities | |
Remainder of 2022 | $ 99 |
2023 | 422 |
2024 | 299 |
Total lease payments | 820 |
Less imputed interest | (33) |
Total operating lease liabilities | $ 787 |
LONG-TERM DEBT AND FINANCING _3
LONG-TERM DEBT AND FINANCING ARRANGEMENTS - Summary (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Long-term debt obligations | ||
Long-term debt | $ 253,319 | $ 225,532 |
Less current portion | 63,521 | 50,615 |
Long-term debt, less current portion | 189,798 | 174,917 |
Credit Facility | ||
Long-term debt obligations | ||
Long-term debt | $ 50,000 | 50,000 |
Interest rate (as a percent) | 4.20% | |
Credit Facility | Interest rate swap agreement | ||
Long-term debt obligations | ||
Amount of borrowings covered by the interest rate swap | $ 50,000 | $ 50,000 |
Effective fixed interest rate on hedged borrowings (as a percent) | 1.56% | 3.12% |
Notes payable | ||
Long-term debt obligations | ||
Long-term debt | $ 203,319 | $ 175,530 |
Weighted-average interest rate (as a percent) | 3% | |
Finance lease obligations | ||
Long-term debt obligations | ||
Long-term debt | $ 2 |
LONG-TERM DEBT AND FINANCING _4
LONG-TERM DEBT AND FINANCING ARRANGEMENTS - Maturities (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Maturities of long-term debt obligations | |
Due in one year or less | $ 71,428 |
Due after one year through two years | 62,723 |
Due after two years through three years | 94,012 |
Due after three years through four years | 27,888 |
Due after four years through five years | 14,421 |
Due after five years | 379 |
Total payments | 270,851 |
Less amounts representing interest | 17,532 |
Long-term debt | 253,319 |
Credit Facility | |
Maturities of long-term debt obligations | |
Due in one year or less | 2,754 |
Due after one year through two years | 2,638 |
Due after two years through three years | 50,000 |
Total payments | 55,392 |
Less amounts representing interest | 5,392 |
Long-term debt | 50,000 |
Notes payable | |
Maturities of long-term debt obligations | |
Due in one year or less | 68,674 |
Due after one year through two years | 60,085 |
Due after two years through three years | 44,012 |
Due after three years through four years | 27,888 |
Due after four years through five years | 14,421 |
Due after five years | 379 |
Total payments | 215,459 |
Less amounts representing interest | 12,140 |
Long-term debt | $ 203,319 |
LONG-TERM DEBT AND FINANCING _5
LONG-TERM DEBT AND FINANCING ARRANGEMENTS - Assets Securing Notes (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Financing Arrangements | ||
Total assets securing notes payable or held under finance leases | $ 313,968 | $ 271,665 |
Less accumulated depreciation and amortization | 106,769 | 88,696 |
Net assets securing notes payable or held under finance leases | 207,199 | 182,969 |
Revenue equipment | ||
Financing Arrangements | ||
Total assets securing notes payable or held under finance leases | 274,540 | 241,892 |
Service, office, and other equipment | ||
Financing Arrangements | ||
Total assets securing notes payable or held under finance leases | $ 39,428 | $ 29,773 |
LONG-TERM DEBT AND FINANCING _6
LONG-TERM DEBT AND FINANCING ARRANGEMENTS - Credit Facility (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Oct. 07, 2022 | |
Financing Arrangements | |||||
Borrowings under credit facilities | $ 58,000 | ||||
Repayment of debt | 99,567 | $ 76,513 | |||
Outstanding letters of credit | 10,600 | ||||
Credit Facility | |||||
Financing Arrangements | |||||
Maximum borrowing capacity | 250,000 | ||||
Additional borrowing capacity that may be requested | 125,000 | ||||
Borrowings under credit facilities | $ 58,000 | ||||
Repayment of debt | $ 38,000 | $ 20,000 | |||
Remaining borrowing capacity | 200,000 | ||||
Swing Line Facility | |||||
Financing Arrangements | |||||
Maximum borrowing capacity | 25,000 | ||||
Swing Line Facility | Subsequent Event | |||||
Financing Arrangements | |||||
Maximum borrowing capacity | $ 40,000 | ||||
Letters of Credit, Sub-Facility | |||||
Financing Arrangements | |||||
Maximum borrowing capacity | $ 20,000 |
LONG-TERM DEBT AND FINANCING _7
LONG-TERM DEBT AND FINANCING ARRANGEMENTS - Interest Rate Swaps (Details) - USD ($) $ in Millions | Oct. 18, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Jan. 02, 2020 |
Interest rate swap agreement | Credit Facility | |||||
Financing Arrangements | |||||
Amount of borrowings covered by the interest rate swap | $ 50 | $ 50 | |||
Effective fixed interest rate on hedged borrowings (as a percent) | 1.56% | 3.12% | |||
Interest rate swap agreement, maturing on June 30, 2022 | |||||
Financing Arrangements | |||||
Notional amount | $ 50 | ||||
Interest rate swap agreement, maturing on June 30, 2022 | Other long-term liabilities | |||||
Financing Arrangements | |||||
Fair value of interest rate swap, liability | $ 0.5 | ||||
Interest rate swap agreement, maturing on October 1, 2024 | |||||
Financing Arrangements | |||||
Notional amount | $ 50 | $ 50 | |||
Fixed interest rate payments (as a percent) | 0.43% | ||||
Interest rate swap agreement, maturing on October 1, 2024 | Subsequent Event | |||||
Financing Arrangements | |||||
Notional amount | $ 50 | ||||
Fixed interest rate payments (as a percent) | 0.33% | ||||
Effective fixed interest rate on hedged borrowings (as a percent) | 1.55% | ||||
Interest rate swap agreement, maturing on October 1, 2024 | Other long-term assets | |||||
Financing Arrangements | |||||
Fair value of interest rate swap, asset | 3.6 | $ 0.9 | |||
Interest rate swap agreement, maturing on October 1, 2024 | Credit Facility | |||||
Financing Arrangements | |||||
Amount of borrowings covered by the interest rate swap | $ 50 | ||||
Effective fixed interest rate on hedged borrowings (as a percent) | 1.56% |
LONG-TERM DEBT AND FINANCING _8
LONG-TERM DEBT AND FINANCING ARRANGEMENTS - Securitization Program (Details) $ in Millions | Sep. 30, 2022 USD ($) |
Financing Arrangements | |
Outstanding letters of credit | $ 10.6 |
Accounts receivable securitization program | |
Financing Arrangements | |
Maximum borrowing capacity | 50 |
Additional borrowing capacity that may be requested | 100 |
Outstanding letters of credit | 10 |
Remaining borrowing capacity | $ 40 |
LONG-TERM DEBT AND FINANCING _9
LONG-TERM DEBT AND FINANCING ARRANGEMENTS - Letters of Credit & Surety Bonds (Details) $ in Millions | Sep. 30, 2022 USD ($) |
Financing Arrangements | |
Outstanding letters of credit | $ 10.6 |
Accounts receivable securitization program | |
Financing Arrangements | |
Outstanding letters of credit | 10 |
Surety bonds | |
Financing Arrangements | |
Outstanding surety bonds under uncollateralized bond programs | $ 62.6 |
LONG-TERM DEBT AND FINANCING_10
LONG-TERM DEBT AND FINANCING ARRANGEMENTS - Notes Payable (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
Notes payable | ||
Financing Arrangements | ||
Assets financed during the period under promissory note arrangements | $ 42.6 | $ 69.4 |
POSTRETIREMENT BENEFIT PLANS -
POSTRETIREMENT BENEFIT PLANS - Components of Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Components of net periodic benefit cost (credit) | ||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Interest Cost, Statement of Income or Comprehensive Income | Other, net | Other, net | Other, net | Other, net |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Amortization of Gain (Loss), Statement of Income or Comprehensive Income | Other, net | Other, net | Other, net | Other, net |
Supplemental Benefit Plan | ||||
Components of net periodic benefit cost (credit) | ||||
Interest cost | $ 2 | $ 1 | $ 5 | $ 3 |
Amortization of net actuarial (gain) loss | 2 | 2 | 6 | 7 |
Net periodic benefit cost (credit) | 4 | 3 | 11 | 10 |
Postretirement Health Benefit Plan | ||||
Components of net periodic benefit cost (credit) | ||||
Service cost | 39 | 48 | 117 | 144 |
Interest cost | 111 | 107 | 331 | 321 |
Amortization of net actuarial (gain) loss | (192) | (137) | (574) | (411) |
Net periodic benefit cost (credit) | $ (42) | $ 18 | $ (126) | $ 54 |
POSTRETIREMENT BENEFIT PLANS _2
POSTRETIREMENT BENEFIT PLANS - Multiemployer Plans (Details) | 9 Months Ended |
Sep. 30, 2022 plan | |
Nonunion Defined Benefit Pension Plan | Asset Based | |
Multiemployer Plans | |
Number of multiemployer plans to which ABF Freight currently contributes | 25 |
STOCKHOLDERS' EQUITY - AOCI (De
STOCKHOLDERS' EQUITY - AOCI (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Accumulated Other Comprehensive Income | ||||||||
Total after-tax amount | $ 1,126,292 | $ 1,063,212 | $ 983,172 | $ 929,067 | $ 961,043 | $ 898,134 | $ 851,909 | $ 828,593 |
Accumulated Other Comprehensive Income (Loss) | ||||||||
Accumulated Other Comprehensive Income | ||||||||
Total pre-tax amount | 5,359 | 4,977 | ||||||
Total after-tax amount | 3,978 | $ 4,974 | $ 5,323 | 3,699 | 1,887 | $ 2,672 | $ 1,994 | 1,190 |
Unrecognized Net Periodic Benefit Credit | ||||||||
Accumulated Other Comprehensive Income | ||||||||
Total pre-tax amount | 5,034 | 5,602 | ||||||
Total after-tax amount | 3,738 | 4,160 | 2,960 | 3,260 | ||||
Interest Rate Swap | ||||||||
Accumulated Other Comprehensive Income | ||||||||
Total pre-tax amount | 3,646 | 419 | ||||||
Total after-tax amount | 2,692 | 309 | (329) | (1,198) | ||||
Foreign Currency Translation | ||||||||
Accumulated Other Comprehensive Income | ||||||||
Total pre-tax amount | (3,321) | (1,044) | ||||||
Total after-tax amount | $ (2,452) | $ (770) | $ (744) | $ (872) |
STOCKHOLDERS' EQUITY - AOCI Com
STOCKHOLDERS' EQUITY - AOCI Components (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Changes in accumulated other comprehensive income, net of tax, by component | ||||||||
Balances | $ 1,063,212 | $ 983,172 | $ 929,067 | $ 898,134 | $ 851,909 | $ 828,593 | $ 929,067 | $ 828,593 |
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | (996) | (349) | 1,624 | (785) | 678 | 804 | 279 | 697 |
Balances | 1,126,292 | 1,063,212 | 983,172 | 961,043 | 898,134 | 851,909 | 1,126,292 | 961,043 |
Accumulated Other Comprehensive Income (Loss) | ||||||||
Changes in accumulated other comprehensive income, net of tax, by component | ||||||||
Balances | 4,974 | 5,323 | 3,699 | 2,672 | 1,994 | 1,190 | 3,699 | 1,190 |
Other comprehensive income (loss) before reclassifications | 701 | 997 | ||||||
Amounts reclassified from accumulated other comprehensive income | (422) | (300) | ||||||
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | (996) | (349) | 1,624 | (785) | 678 | 804 | 279 | 697 |
Balances | 3,978 | $ 4,974 | 5,323 | 1,887 | $ 2,672 | 1,994 | 3,978 | 1,887 |
Unrecognized Net Periodic Benefit Credit | ||||||||
Changes in accumulated other comprehensive income, net of tax, by component | ||||||||
Balances | 4,160 | 3,260 | 4,160 | 3,260 | ||||
Amounts reclassified from accumulated other comprehensive income | (422) | (300) | ||||||
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | (422) | (300) | ||||||
Balances | 3,738 | 2,960 | 3,738 | 2,960 | ||||
Interest Rate Swap | ||||||||
Changes in accumulated other comprehensive income, net of tax, by component | ||||||||
Balances | 309 | (1,198) | 309 | (1,198) | ||||
Other comprehensive income (loss) before reclassifications | 2,383 | 869 | ||||||
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | 2,383 | 869 | ||||||
Balances | 2,692 | (329) | 2,692 | (329) | ||||
Foreign Currency Translation | ||||||||
Changes in accumulated other comprehensive income, net of tax, by component | ||||||||
Balances | $ (770) | $ (872) | (770) | (872) | ||||
Other comprehensive income (loss) before reclassifications | (1,682) | 128 | ||||||
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | (1,682) | 128 | ||||||
Balances | $ (2,452) | $ (744) | $ (2,452) | $ (744) |
STOCKHOLDERS' EQUITY - Reclass
STOCKHOLDERS' EQUITY - Reclass (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Unrecognized Net Periodic Benefit Credit | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Tax expense | $ (146) | $ (104) |
Total, net of tax | 422 | 300 |
Amortization of net actuarial gain | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | $ 568 | $ 404 |
STOCKHOLDERS' EQUITY - Dividend
STOCKHOLDERS' EQUITY - Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||||||
Oct. 28, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | |
Dividends on Common Stock | |||||||
Dividends declared (in dollars per share) | $ 0.12 | $ 0.12 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | |
Dividend Amount | $ 2,965 | $ 2,949 | $ 1,978 | $ 2,050 | $ 2,058 | $ 2,037 | |
Subsequent Event | |||||||
Dividends on Common Stock | |||||||
Dividends declared (in dollars per share) | $ 0.12 |
STOCKHOLDERS' EQUITY - Treasury
STOCKHOLDERS' EQUITY - Treasury Stock (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Apr. 30, 2022 | Nov. 02, 2021 | |
Treasury Stock | ||||||||||
Purchases of treasury stock | $ (50,117) | $ (8,100) | ||||||||
Cost of repurchased shares | $ 18,880 | $ 14,731 | $ 7,099 | $ 1,001 | ||||||
Treasury stock, at cost, shares | 5,340,836 | 5,340,836 | 4,492,514 | |||||||
Existing Share Repurchase Program and ASR | ||||||||||
Treasury Stock | ||||||||||
Number of shares repurchased during the period | 848,322 | |||||||||
Cost of repurchased shares | $ 75,100 | |||||||||
Amount available for repurchase | $ 66,900 | |||||||||
Existing Share Repurchase Program | ||||||||||
Treasury Stock | ||||||||||
Amount of stock repurchases authorized | $ 75,000 | |||||||||
Cost of repurchased shares | $ 16,506 | |||||||||
Amount available for repurchase | $ 41,400 | $ 41,400 | ||||||||
Accelerated Share Repurchase Agreement ("ASR") | ||||||||||
Treasury Stock | ||||||||||
Amount paid in accelerated repurchase | $ 100,000 | |||||||||
Number of shares repurchased during the period | 214,763 | |||||||||
Cost of repurchased shares | $ 25,000 | 75,000 | ||||||||
Amount of unsettled forward contract classified within stockholders' equity as additional paid in capital. | $ 25,000 |
EARNINGS PER SHARE - Basic And
EARNINGS PER SHARE - Basic And Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Basic, numerator: | ||||
Net income, Basic | $ 88,842 | $ 63,691 | $ 260,872 | $ 148,033 |
Basic, denominator: | ||||
Weighted-average shares | 24,605,228 | 25,632,805 | 24,640,706 | 25,559,642 |
Earnings per common share (in dollars per share) | $ 3.61 | $ 2.48 | $ 10.59 | $ 5.79 |
Diluted, numerator: | ||||
Net income, Diluted | $ 88,842 | $ 63,691 | $ 260,872 | $ 148,033 |
Diluted, denominator: | ||||
Weighted-average shares | 24,605,228 | 25,632,805 | 24,640,706 | 25,559,642 |
Effect of dilutive securities | 767,527 | 1,137,341 | 985,519 | 1,312,739 |
Adjusted weighted-average shares and assumed conversions | 25,372,755 | 26,770,146 | 25,626,225 | 26,872,381 |
Earnings per common share (in dollars per share) | $ 3.50 | $ 2.38 | $ 10.18 | $ 5.51 |
OPERATING SEGMENT DATA - Revenu
OPERATING SEGMENT DATA - Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues | ||||
Revenues | $ 1,351,831 | $ 1,016,657 | $ 4,079,834 | $ 2,794,843 |
Asset Based | ||||
Revenues | ||||
Revenues | 778,473 | 655,737 | 2,242,964 | 1,815,606 |
ArcBest | ||||
Revenues | ||||
Revenues | 503,182 | 303,076 | 1,633,684 | 821,355 |
FleetNet | ||||
Revenues | ||||
Revenues | 72,318 | 56,656 | 207,505 | 155,041 |
Operating Segments | Asset Based | ||||
Revenues | ||||
Revenues | 791,531 | 681,164 | 2,299,464 | 1,890,288 |
Operating Segments | ArcBest | ||||
Revenues | ||||
Revenues | 515,235 | 305,207 | 1,660,174 | 828,291 |
Operating Segments | FleetNet | ||||
Revenues | ||||
Revenues | 89,276 | 66,514 | 249,786 | 185,224 |
Other and eliminations | ||||
Revenues | ||||
Revenues | $ (44,211) | $ (36,228) | $ (129,590) | $ (108,960) |
OPERATING SEGMENT DATA - Operat
OPERATING SEGMENT DATA - Operating Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
OPERATING EXPENSES | ||||
Salaries, wages, and benefits | $ 451,824 | $ 397,116 | $ 1,321,871 | $ 1,145,657 |
Fuel, supplies, and expenses | 112,834 | 82,051 | 331,759 | 235,221 |
Depreciation and amortization | 34,707 | 30,359 | 104,860 | 90,995 |
Gain on sale of subsidiary | (402) | (6,923) | ||
Gain on sale of property and equipment | (9,759) | (8,389) | ||
Other | 40,074 | 36,811 | 118,922 | 89,062 |
Total consolidated operating expenses | 1,236,070 | 929,096 | 3,731,799 | 2,600,792 |
ArcBest | ||||
OPERATING EXPENSES | ||||
Gain on sale of subsidiary | (6,900) | |||
Operating Segments | Asset Based | ||||
OPERATING EXPENSES | ||||
Salaries, wages, and benefits | 332,359 | 305,839 | 973,924 | 893,903 |
Fuel, supplies, and expenses | 97,279 | 66,947 | 281,406 | 192,477 |
Operating taxes and licenses | 13,089 | 12,426 | 38,405 | 36,977 |
Insurance | 13,180 | 10,175 | 35,808 | 28,568 |
Communications and utilities | 4,794 | 4,559 | 14,129 | 14,192 |
Depreciation and amortization | 24,117 | 23,233 | 72,885 | 70,025 |
Rents and purchased transportation | 123,714 | 95,855 | 348,249 | 266,525 |
Shared services | 72,286 | 71,017 | 215,020 | 196,255 |
Gain on sale of property and equipment | (5,910) | (9,975) | (8,624) | |
Innovative technology costs | 6,068 | 6,903 | 20,982 | 21,303 |
Other | 1,243 | 592 | 2,629 | 1,103 |
Total consolidated operating expenses | 682,219 | 597,546 | 1,993,462 | 1,712,704 |
Operating Segments | Asset Based | Land and structures | ||||
OPERATING EXPENSES | ||||
Gain on sale of property and equipment | (8,600) | |||
Noncash gain on a like-kind property exchange of a service center | 4,300 | 4,300 | ||
Operating Segments | ArcBest | ||||
OPERATING EXPENSES | ||||
Purchased transportation | 425,567 | 256,900 | 1,382,107 | 694,498 |
Supplies and expenses | 4,378 | 2,741 | 11,907 | 7,785 |
Depreciation and amortization | 5,072 | 2,352 | 15,720 | 7,104 |
Shared services | 56,371 | 31,048 | 164,554 | 86,198 |
Gain on sale of subsidiary | (402) | (6,923) | ||
Other | 8,463 | 1,984 | 22,309 | 6,055 |
Total consolidated operating expenses | 499,851 | 295,025 | 1,596,195 | 794,717 |
Operating Segments | FleetNet | ||||
OPERATING EXPENSES | ||||
Total consolidated operating expenses | 88,395 | 65,245 | 245,596 | 181,794 |
Other and eliminations | ||||
OPERATING EXPENSES | ||||
Total consolidated operating expenses | $ (34,395) | $ (28,720) | $ (103,454) | $ (88,423) |
OPERATING SEGMENT DATA - Income
OPERATING SEGMENT DATA - Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
OPERATING INCOME | ||||
Operating income | $ 115,761 | $ 87,561 | $ 348,035 | $ 194,051 |
OTHER INCOME (COSTS) | ||||
Interest and dividend income | 1,147 | 323 | 1,614 | 1,037 |
Interest and other related financing costs | (1,749) | (2,072) | (5,551) | (6,774) |
Other, net | (189) | 338 | (3,822) | 2,641 |
TOTAL OTHER INCOME (COSTS) | (791) | (1,411) | (7,759) | (3,096) |
INCOME BEFORE INCOME TAXES | 114,970 | 86,150 | 340,276 | 190,955 |
Operating Segments | Asset Based | ||||
OPERATING INCOME | ||||
Operating income | 109,312 | 83,618 | 306,002 | 177,584 |
Operating Segments | ArcBest | ||||
OPERATING INCOME | ||||
Operating income | 15,384 | 10,182 | 63,979 | 33,574 |
Operating Segments | FleetNet | ||||
OPERATING INCOME | ||||
Operating income | 881 | 1,269 | 4,190 | 3,430 |
Other and eliminations | ||||
OPERATING INCOME | ||||
Operating income | $ (9,816) | $ (7,508) | $ (26,136) | $ (20,537) |
OPERATING SEGMENT DATA - Reve_2
OPERATING SEGMENT DATA - Revenue from Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues | ||||
Revenues | $ 1,351,831 | $ 1,016,657 | $ 4,079,834 | $ 2,794,843 |
Asset Based | ||||
Revenues | ||||
Revenues | 778,473 | 655,737 | 2,242,964 | 1,815,606 |
ArcBest | ||||
Revenues | ||||
Revenues | 503,182 | 303,076 | 1,633,684 | 821,355 |
FleetNet | ||||
Revenues | ||||
Revenues | 72,318 | 56,656 | 207,505 | 155,041 |
Corporate and Other | ||||
Revenues | ||||
Revenues | (2,142) | 1,188 | (4,319) | 2,841 |
Operating Segments | Asset Based | ||||
Revenues | ||||
Revenues | 791,531 | 681,164 | 2,299,464 | 1,890,288 |
Operating Segments | ArcBest | ||||
Revenues | ||||
Revenues | 515,235 | 305,207 | 1,660,174 | 828,291 |
Operating Segments | FleetNet | ||||
Revenues | ||||
Revenues | 89,276 | 66,514 | 249,786 | 185,224 |
Intersegment revenues | ||||
Revenues | ||||
Revenues | (42,069) | (37,416) | (125,271) | (111,801) |
Intersegment revenues | Asset Based | ||||
Revenues | ||||
Revenues | 13,058 | 25,427 | 56,500 | 74,682 |
Intersegment revenues | ArcBest | ||||
Revenues | ||||
Revenues | 12,053 | 2,131 | 26,490 | 6,936 |
Intersegment revenues | FleetNet | ||||
Revenues | ||||
Revenues | 16,958 | 9,858 | 42,281 | 30,183 |
Other and eliminations | ||||
Revenues | ||||
Revenues | $ (44,211) | $ (36,228) | $ (129,590) | $ (108,960) |
OPERATING SEGMENT DATA - Oper_2
OPERATING SEGMENT DATA - Operating Expenses by Category (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
OPERATING EXPENSES | ||||
Salaries, wages, and benefits | $ 451,824 | $ 397,116 | $ 1,321,871 | $ 1,145,657 |
Rents, purchased transportation, and other costs of services | 596,631 | 382,759 | 1,854,387 | 1,039,857 |
Fuel, supplies, and expenses | 112,834 | 82,051 | 331,759 | 235,221 |
Depreciation and amortization | 34,707 | 30,359 | 104,860 | 90,995 |
Other | 40,074 | 36,811 | 118,922 | 89,062 |
Total consolidated operating expenses | $ 1,236,070 | $ 929,096 | 3,731,799 | 2,600,792 |
Gain on sale of subsidiaries | 402 | 6,923 | ||
Gain on sale of property and equipment | $ 9,759 | 8,389 | ||
ArcBest | ||||
OPERATING EXPENSES | ||||
Gain on sale of subsidiaries | $ 6,900 |