ARCBEST CORP /DE/ [ARCB] Filings

10-Q 1 arcb-20230930x10q.htm 10-Q

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒

Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2023

☐

Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission file number 000-19969

ARCBEST CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of
incorporation or organization)

71-0673405

(I.R.S. Employer Identification No.)

8401 McClure Drive

Fort Smith, Arkansas 72916

(479) 785-6000

(Address, including zip code, and telephone number, including

area code, of the registrant’s principal executive offices)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report.)

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock $0.01 Par Value	ARCB	Nasdaq

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


	Large accelerated filer ☒		Accelerated filer ☐
	Non-accelerated filer ☐		Smaller reporting company ☐
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Class		Outstanding at November 2, 2023
Common Stock, $0.01 par value		23,661,868 shares

Table of Contents

ARCBEST CORPORATION

INDEX


		Page

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Balance Sheets — September 30, 2023 and December 31, 2022	3

	Consolidated Statements of Operations — For the Three and Nine Months ended September 30, 2023 and 2022	4

	Consolidated Statements of Comprehensive Income — For the Three and Nine Months ended September 30, 2023 and 2022	5

	Consolidated Statements of Stockholders’ Equity — For the Three and Nine Months ended September 30, 2023 and 2022	6

	Consolidated Statements of Cash Flows — For the Nine Months ended September 30, 2023 and 2022	7

	Notes to Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	53

Item 4.	Controls and Procedures	53

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	54

Item 1A.	Risk Factors	54

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	54

Item 3.	Defaults Upon Senior Securities	55

Item 4.	Mine Safety Disclosures	55

Item 5.	Other Information	55

Item 6.	Exhibits	56

SIGNATURES		57

Table of Contents

PART I.

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ARCBEST CORPORATION

CONSOLIDATED BALANCE SHEETS


	September 30		December 31
	2023		2022

	(Unaudited)
	(in thousands, except share data)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	251,503	$	158,264
Short-term investments		89,326		167,662
Accounts receivable, less allowances (2023 – $10,825; 2022 – $13,892)		469,490		517,494
Other accounts receivable, less allowances (2023 – $730; 2022 – $713)		10,984		11,016
Prepaid expenses		30,957		39,484
Prepaid and refundable income taxes		26,534		19,239
Current assets of discontinued operations		—		64,736
Other		11,342		11,888
TOTAL CURRENT ASSETS		890,136		989,783
PROPERTY, PLANT AND EQUIPMENT
Land and structures		430,263		401,840
Revenue equipment		1,094,183		1,038,832
Service, office, and other equipment		313,062		298,234
Software		169,434		167,164
Leasehold improvements		26,062		23,466
		2,033,004		1,929,536
Less allowances for depreciation and amortization		1,170,914		1,129,366
PROPERTY, PLANT AND EQUIPMENT, net		862,090		800,170
GOODWILL		304,753		304,753
INTANGIBLE ASSETS, net		104,288		113,733
OPERATING RIGHT-OF-USE ASSETS		164,082		166,515
DEFERRED INCOME TAXES		7,618		6,342
LONG-TERM ASSETS OF DISCONTINUED OPERATIONS		—		11,097
OTHER LONG-TERM ASSETS		104,479		101,893
TOTAL ASSETS	$	2,437,446	$	2,494,286

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	245,899	$	269,854
Income taxes payable		1,390		16,017
Accrued expenses		322,809		338,457
Current portion of long-term debt		66,862		66,252
Current portion of operating lease liabilities		31,414		26,225
Current liabilities of discontinued operations		—		51,665
TOTAL CURRENT LIABILITIES		668,374		768,470
LONG-TERM DEBT, less current portion		176,296		198,371
OPERATING LEASE LIABILITIES, less current portion		171,755		147,828
POSTRETIREMENT LIABILITIES, less current portion		12,167		12,196
LONG-TERM LIABILITIES OF DISCONTINUED OPERATIONS		—		781
CONTINGENT CONSIDERATION		99,200		112,000
OTHER LONG-TERM LIABILITIES		38,552		42,745
DEFERRED INCOME TAXES		50,369		60,494
STOCKHOLDERS’ EQUITY
Common stock, $0.01 par value, authorized 70,000,000 shares; issued 2023: 30,017,658 shares; 2022: 29,758,716 shares		300		298
Additional paid-in capital		338,368		339,582
Retained earnings		1,226,640		1,088,693
Treasury stock, at cost, 2023: 6,217,885 shares; 2022: 5,529,383 shares		(350,161)		(284,275)
Accumulated other comprehensive income		5,586		7,103
TOTAL STOCKHOLDERS’ EQUITY		1,220,733		1,151,401
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,437,446	$	2,494,286

See notes to consolidated financial statements.

Table of Contents

ARCBEST CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS


	Three Months Ended				Nine Months Ended
	September 30				September 30
	2023		2022		2023		2022

	(Unaudited)
	(in thousands, except share and per share data)
REVENUES	$	1,128,350	$	1,275,730	$	3,337,908	$	3,865,513

OPERATING EXPENSES		1,083,259		1,160,394		3,229,542		3,521,196

OPERATING INCOME		45,091		115,336		108,366		344,317

OTHER INCOME (COSTS)
Interest and dividend income		3,946		1,127		10,604		1,579
Interest and other related financing costs		(2,236)		(1,755)		(6,768)		(5,558)
Other, net		89		(189)		6,907		(3,822)
		1,799		(817)		10,743		(7,801)

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		46,890		114,519		119,109		336,516

INCOME TAX PROVISION		11,963		25,906		25,735		78,353

NET INCOME FROM CONTINUING OPERATIONS		34,927		88,613		93,374		258,163

INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX		(10)		229		53,269		2,709

NET INCOME	$	34,917	$	88,842	$	146,643	$	260,872

BASIC EARNINGS PER COMMON SHARE
Continuing operations	$	1.46	$	3.60	$	3.87	$	10.48
Discontinued operations		—		0.01		2.21		0.11
	$	1.45	$	3.61	$	6.08	$	10.59

DILUTED EARNINGS PER COMMON SHARE
Continuing operations	$	1.42	$	3.49	$	3.77	$	10.07
Discontinued operations		—		0.01		2.15		0.11
	$	1.42	$	3.50	$	5.92	$	10.18

AVERAGE COMMON SHARES OUTSTANDING
Basic		24,004,255		24,605,228		24,119,449		24,640,706
Diluted		24,525,258		25,372,755		24,756,993		25,626,225

See notes to consolidated financial statements.

Table of Contents

ARCBEST CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


	Three Months Ended				Nine Months Ended
	September 30				September 30
	2023		2022		2023		2022

	(Unaudited)
	(in thousands)
NET INCOME	$	34,917	$	88,842	$	146,643	$	260,872

OTHER COMPREHENSIVE INCOME (LOSS), net of tax

Postretirement benefit plans:
Amortization of unrecognized net periodic benefit credit, net of tax of: (2023 – Three-month period $86, Nine-month period $257) (2022 – Three-month period $49, Nine-month period $146)
Net actuarial gain		(247)		(141)		(741)		(422)

Interest rate swap and foreign currency translation:
Change in unrealized income (loss) on interest rate swap, net of tax of: (2023 – Three-month period $127, Nine-month period $277) (2022 – Three-month period $206, Nine-month period $844)		(360)		581		(781)		2,383
Change in foreign currency translation, net of tax of: (2023 – Three-month period $132, Nine-month period $3) (2022 – Three-month period $509, Nine-month period $595)		(376)		(1,436)		5		(1,682)

OTHER COMPREHENSIVE INCOME (LOSS), net of tax		(983)		(996)		(1,517)		279

TOTAL COMPREHENSIVE INCOME	$	33,934	$	87,846	$	145,126	$	261,151

See notes to consolidated financial statements.

Table of Contents

ARCBEST CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY


	Three Months Ended September 30, 2023 and 2022
												Accumulated
					Additional							Other
	Common Stock				Paid-In		Retained		Treasury Stock			Comprehensive		Total
	Shares		Amount		Capital		Earnings		Shares	Amount		Income		Equity

		(Unaudited)
		(in thousands)
Balance at June 30, 2023		30,008	$	300	$	335,397	$	1,194,610	5,983	$	(325,515)	$	6,569	$	1,211,361
Net income								34,917							34,917
Other comprehensive loss, net of tax													(983)		(983)
Issuance of common stock under share-based compensation plans		10		—		—									—
Shares withheld for employee tax remittance on share-based compensation						(34)									(34)
Share-based compensation expense						3,005									3,005
Purchase of treasury stock									235		(24,646)				(24,646)
Dividends declared on common stock								(2,887)							(2,887)
Balance at September 30, 2023		30,018	$	300	$	338,368	$	1,226,640	6,218	$	(350,161)	$	5,586	$	1,220,733

Balance at June 30, 2022		29,615	$	296	$	340,035	$	968,417	5,109	$	(250,510)	$	4,974	$	1,063,212
Net income								88,842							88,842
Other comprehensive loss, net of tax													(996)		(996)
Issuance of common stock under share-based compensation plans		133		1		(1)									—
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									232		(18,880)				(18,880)
Dividends declared on common stock								(2,965)							(2,965)
Balance at September 30, 2022		29,748	$	297	$	337,113	$	1,054,294	5,341	$	(269,390)	$	3,978	$	1,126,292


	Nine Months Ended September 30, 2023 and 2022
												Accumulated
					Additional							Other
	Common Stock				Paid-In		Retained		Treasury Stock			Comprehensive		Total
	Shares		Amount		Capital		Earnings		Shares	Amount		Income		Equity

		(Unaudited)
		(in thousands)
Balance at December 31, 2022		29,759	$	298	$	339,582	$	1,088,693	5,529	$	(284,275)	$	7,103	$	1,151,401
Net income								146,643							146,643
Other comprehensive loss, net of tax													(1,517)		(1,517)
Issuance of common stock under share-based compensation plans		259		2		(2)									—
Shares withheld for employee tax remittance on share-based compensation						(10,056)									(10,056)
Share-based compensation expense						8,844									8,844
Purchase of treasury stock									689		(65,886)				(65,886)
Dividends declared on common stock								(8,696)							(8,696)
Balance at September 30, 2023		30,018	$	300	$	338,368	$	1,226,640	6,218	$	(350,161)	$	5,586	$	1,220,733

Balance at December 31, 2021		29,360	$	294	$	318,033	$	801,314	4,493	$	(194,273)	$	3,699	$	929,067
Net income								260,872							260,872
Other comprehensive income, net of tax													279		279
Issuance of common stock under share-based compensation plans		388		3		(3)									—
Shares withheld for employee tax remittance on share-based compensation						(15,733)									(15,733)
Share-based compensation expense						9,816									9,816
Purchase of treasury stock									634		(50,117)				(50,117)
Forward contract for accelerated share repurchases						25,000			214		(25,000)				—
Dividends declared on common stock								(7,892)							(7,892)
Balance at September 30, 2022		29,748	$	297	$	337,113	$	1,054,294	5,341	$	(269,390)	$	3,978	$	1,126,292

See notes to consolidated financial statements.

Table of Contents

ARCBEST CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS


	Nine Months Ended
	September 30
	2023		2022

	(Unaudited)
	(in thousands)
OPERATING ACTIVITIES
Net income	$	146,643	$	260,872
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		98,711		95,169
Amortization of intangibles		9,631		9,691
Share-based compensation expense		8,590		9,816
Provision for losses on accounts receivable		2,621		5,065
Change in deferred income taxes		(10,880)		3,745
(Gain) loss on sale of property and equipment		1,134		(9,759)
Gain on sale of subsidiary		—		(402)
Pre-tax gain on sale of discontinued operations		(70,201)		—
Lease impairment charges		30,162		—
Change in fair value of contingent consideration		(12,800)		810
Change in fair value of equity investment		(3,739)		—
Changes in operating assets and liabilities:
Receivables		43,478		(54,889)

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