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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 June 30, 2022

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 July 29, 2022

Common Stock, $0.01 par value

24,529,070 shares

ARCBEST CORPORATION

INDEX

    

    

Page

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements

Consolidated Balance Sheets — June 30, 2022 and December 31, 2021

3

Consolidated Statements of Operations — For the Three and Six Months ended June 30, 2022 and 2021

4

Consolidated Statements of Comprehensive Income — For the Three and Six Months ended June 30, 2022 and 2021

5

Consolidated Statement of Stockholders’ Equity — For the Three and Six Months ended June 30, 2022 and 2021

6

Consolidated Statement of Cash Flows — For the Three and Six Months ended June 30, 2022 and 2021

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

51

Item 4.

Controls and Procedures

51

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings

52

Item 1A.

Risk Factors

52

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

52

Item 3.

Defaults Upon Senior Securities

52

Item 4.

Mine Safety Disclosures

53

Item 5.

Other Information

53

Item 6.

Exhibits

54

SIGNATURES

56

PART I.

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ARCBEST CORPORATION

CONSOLIDATED BALANCE SHEETS

June 30

December 31

    

2022

    

2021

 

(Unaudited)

(in thousands, except share data)

ASSETS

CURRENT ASSETS

Cash and cash equivalents

$

127,058

$

76,620

Short-term investments

 

76,802

 

48,339

Accounts receivable, less allowances (2022 – $15,991; 2021 – $13,226)

 

659,672

 

582,344

Other accounts receivable, less allowances (2022 – $703; 2021 – $690)

 

18,612

 

13,094

Prepaid expenses

 

32,353

 

40,104

Prepaid and refundable income taxes

 

10,310

 

9,654

Other

 

10,750

 

5,898

TOTAL CURRENT ASSETS

 

935,557

 

776,053

PROPERTY, PLANT AND EQUIPMENT

Land and structures

 

356,149

 

350,694

Revenue equipment

 

993,008

 

980,283

Service, office, and other equipment

 

276,965

 

251,085

Software

 

179,195

 

175,989

Leasehold improvements

 

20,189

 

16,931

 

1,825,506

 

1,774,982

Less allowances for depreciation and amortization

 

1,115,887

 

1,079,061

PROPERTY, PLANT AND EQUIPMENT, net

 

709,619

 

695,921

GOODWILL

 

299,075

 

300,337

INTANGIBLE ASSETS, net

 

120,145

 

126,580

OPERATING RIGHT-OF-USE ASSETS

124,086

106,686

DEFERRED INCOME TAXES

 

5,655

 

5,470

OTHER LONG-TERM ASSETS

 

99,569

 

101,629

TOTAL ASSETS

$

2,293,706

$

2,112,676

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES

Accounts payable

$

346,051

$

311,401

Income taxes payable

 

17,110

 

12,087

Accrued expenses

 

304,425

 

305,851

Current portion of long-term debt

 

56,049

 

50,615

Current portion of operating lease liabilities

24,534

22,740

TOTAL CURRENT LIABILITIES

 

748,169

 

702,694

LONG-TERM DEBT, less current portion

 

169,356

 

174,917

OPERATING LEASE LIABILITIES, less current portion

104,253

88,835

POSTRETIREMENT LIABILITIES, less current portion

 

16,694

 

16,733

OTHER LONG-TERM LIABILITIES

 

132,930

 

135,537

DEFERRED INCOME TAXES

 

59,092

 

64,893

STOCKHOLDERS’ EQUITY

Common stock, $0.01 par value, authorized 70,000,000 shares; issued 2022: 29,614,798 shares,
2021: 29,359,597 shares

 

296

 

294

Additional paid-in capital

 

340,035

 

318,033

Retained earnings

 

968,417

 

801,314

Treasury stock, at cost, 2022: 5,109,030 shares; 2021: 4,492,514 shares

 

(250,510)

 

(194,273)

Accumulated other comprehensive income

 

4,974

 

3,699

TOTAL STOCKHOLDERS’ EQUITY

 

1,063,212

 

929,067

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

2,293,706

$

2,112,676

See notes to consolidated financial statements.

3

ARCBEST CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended 

Six Months Ended 

June 30

June 30

    

2022

    

2021

    

2022

    

2021

 

(Unaudited)

(in thousands, except share and per share data)

REVENUES

$

1,392,929

$

948,973

$

2,728,003

$

1,778,186

OPERATING EXPENSES

 

1,255,583

874,674

 

2,495,729

1,671,696

OPERATING INCOME

 

137,346

 

74,299

 

232,274

 

106,490

OTHER INCOME (COSTS)

Interest and dividend income

 

361

 

322

 

467

 

714

Interest and other related financing costs

 

(1,863)

 

(2,274)

 

(3,802)

 

(4,702)

Other, net

 

(2,807)

 

1,111

 

(3,633)

 

2,303

 

(4,309)

 

(841)

 

(6,968)

 

(1,685)

INCOME BEFORE INCOME TAXES

 

133,037

 

73,458

 

225,306

 

104,805

INCOME TAX PROVISION

 

30,576

 

12,477

 

53,276

 

20,463

NET INCOME

$

102,461

$

60,981

$

172,030

$

84,342

EARNINGS PER COMMON SHARE

Basic

$

4.16

$

2.38

$

6.98

$

3.30

Diluted

$

4.00

$

2.27

$

6.68

$

3.13

AVERAGE COMMON SHARES OUTSTANDING

Basic

 

24,607,362

 

25,586,353

 

24,658,739

 

25,522,453

Diluted

 

25,596,031

 

26,910,796

 

25,756,314

 

26,926,133

See notes to consolidated financial statements.

4

ARCBEST CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended 

Six Months Ended 

June 30

June 30

    

2022

    

2021

    

2022

    

2021

 

(Unaudited)

(in thousands)

NET INCOME

$

102,461

$

60,981

$

172,030

$

84,342

OTHER COMPREHENSIVE INCOME (LOSS), net of tax

Postretirement benefit plans:

Amortization of unrecognized net periodic benefit costs, net of tax of: (2022 – Three-month period $49, Six-month period $97; 2021 – Three-month period $34, Six-month period $69)

Net actuarial gain

 

(140)

 

(100)

 

(281)

 

(200)

Interest rate swap and foreign currency translation:

Change in unrealized income on interest rate swap, net of tax of: (2022 – Three-month period $121, Six-month period $638; 2021 – Three-month period $59, Six-month period $263)

344

166

1,802

741

Change in foreign currency translation, net of tax of: (2022 – Three-month period $194, Six-month period $86; 2021 – Three-month period $215, Six-month period $333)

 

(553)

 

612

 

(246)

 

941

OTHER COMPREHENSIVE INCOME (LOSS), net of tax

 

(349)

 

678

 

1,275

 

1,482

TOTAL COMPREHENSIVE INCOME

$

102,112

$

61,659

$

173,305

$

85,824

See notes to consolidated financial statements.

5

ARCBEST CORPORATION

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

Six Months Ended June 30, 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, 2021

29,360

$

294

$

318,033

$

801,314

 

4,493

$

(194,273)

$

3,699

$

929,067

Net income

 

69,569

 

69,569

Other comprehensive income, net of tax

 

1,624

 

1,624

Issuance of common stock under share-based compensation plans

 

25

 

 

 

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

194

(16,506)

(16,506)

Forward contract for accelerated share repurchases

25,000

214

(25,000)

Dividends declared on common stock

 

(1,978)

 

(1,978)

Balance at March 31, 2022

 

29,385

$

294

$

344,429

$

868,905

 

4,901

$

(235,779)

$

5,323

$

983,172

Net income

 

102,461

 

102,461

Other comprehensive loss, net of tax

 

(349)

 

(349)

Issuance of common stock under share-based compensation plans

 

230

 

2

 

(2)

 

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

208

(14,731)

(14,731)

Dividends declared on common stock

 

(2,949)

 

(2,949)

Balance at June 30, 2022

 

29,615

$

296

$

340,035

$

968,417

 

5,109

$

(250,510)

$

4,974

$

1,063,212

Six Months Ended June 30, 2021

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, 2020

 

29,045

$

290

$

342,354

$

595,932

 

3,657

$

(111,173)

$

1,190

$

828,593

Net income

 

23,361

 

23,361

Other comprehensive income, net of tax

804

804

Issuance of common stock under share-based compensation plans

12

 

1

(1)

Shares withheld for employee tax remittance on share-based compensation

(165)

(165)

Share-based compensation expense

2,354

2,354

Purchase of treasury stock

15

(1,001)

(1,001)

Dividends declared on common stock

 

(2,037)

(2,037)

Balance at March 31, 2021

 

29,057

$

291

$

344,542

$

617,256

 

3,672

$

(112,174)

$

1,994

$

851,909

Net income

 

60,981

 

60,981

Other comprehensive income, net of tax

678

678

Issuance of common stock under share-based compensation plans

261

 

2

(2)

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

111

(7,099)

(7,099)

Dividends declared on common stock

 

(2,058)

(2,058)

Balance at June 30, 2021

 

29,318

$

293

$

338,263

$

676,179

 

3,783

$

(119,273)

$

2,672

$

898,134

See notes to consolidated financial statements.

6

ARCBEST CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended 

June 30

    

2022

    

2021

 

(Unaudited)

(in thousands)

OPERATING ACTIVITIES

Net income

$

172,030

$

84,342

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

 

63,690

 

58,709

Amortization of intangibles

 

6,463

 

1,927

Share-based compensation expense

 

6,641

 

5,678

Provision for losses on accounts receivable

 

3,583

 

(334)

Change in deferred income taxes

 

(6,371)

 

(7,612)

Gain on sale of property and equipment

 

(4,073)

 

(8,408)

Gain on sale of subsidiary

(402)

(6,923)

Changes in operating assets and liabilities:

Receivables

 

(87,092)

 

(37,745)

Prepaid expenses

 

7,477

 

1,419

Other assets

 

72

 

25

Income taxes

 

4,211

 

12,275

Operating right-of-use assets and lease liabilities, net

114

761

Accounts payable, accrued expenses, and other liabilities

 

18,280

 

41,786

NET CASH PROVIDED BY OPERATING ACTIVITIES

 

184,623

 

145,900

INVESTING ACTIVITIES

Purchases of property, plant and equipment, net of financings

 

(49,682)

 

(25,395)

Proceeds from sale of property and equipment

 

9,115

 

10,864

Proceeds from sale of subsidiary

475

 

9,013

Purchases of short-term investments

 

(64,330)

 

(43,690)

Proceeds from sale of short-term investments

 

35,840

 

49,165

Capitalization of internally developed software

(8,541)

 

(9,477)

Business acquisition, net of cash acquired

2,279

 

NET CASH USED IN INVESTING ACTIVITIES

 

(74,844)

 

(9,520)

FINANCING ACTIVITIES

Borrowings under credit facilities

 

58,000

 

Proceeds from notes payable

7,280

 

Payments on long-term debt

 

(84,905)

 

(54,643)

Net change in book overdrafts

 

6,085

 

(922)

Deferred financing costs

 

 

(189)

Payment of common stock dividends

 

(4,927)

 

(4,095)

Purchases of treasury stock

(31,237)

(8,100)

Payments for tax withheld on share-based compensation

 

(9,637)

 

(9,766)

NET CASH USED IN FINANCING ACTIVITIES

 

(59,341)

 

(77,715)