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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 September 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 October 28, 2022

Common Stock, $0.01 par value

24,417,880 shares

ARCBEST CORPORATION

INDEX

    

    

Page

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements

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

3

Consolidated Statements of Operations — For the Three and Nine Months ended September 30, 2022 and 2021

4

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

5

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

6

Consolidated Statement of Cash Flows — For the Nine Months ended September 30, 2022 and 2021

8

Notes to Consolidated Financial Statements

9

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

29

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

52

Item 4.

Controls and Procedures

52

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings

53

Item 1A.

Risk Factors

53

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

53

Item 3.

Defaults Upon Senior Securities

53

Item 4.

Mine Safety Disclosures

54

Item 5.

Other Information

54

Item 6.

Exhibits

55

SIGNATURES

57

PART I.

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ARCBEST CORPORATION

CONSOLIDATED BALANCE SHEETS

September 30

December 31

    

2022

    

2021

 

(Unaudited)

(in thousands, except share data)

ASSETS

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

 

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

LIABILITIES AND STOCKHOLDERS’ EQUITY

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

See notes to consolidated financial statements.

3

ARCBEST CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended 

Nine Months Ended 

September 30

September 30

    

2022

    

2021

    

2022

    

2021

 

(Unaudited)

(in thousands, except share and per share data)

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

 

(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

See notes to consolidated financial statements.

4

ARCBEST CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended 

Nine Months Ended 

September 30

September 30

    

2022

    

2021

    

2022

    

2021

 

(Unaudited)

(in thousands)

NET INCOME

$

88,842

$

63,691

$

260,872

$

148,033

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, 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

See notes to consolidated financial statements.

5

ARCBEST CORPORATION

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

Three and Nine Months Ended September 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

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


6

ARCBEST CORPORATION

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (CONTINUED)

Three and Nine Months Ended September 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

Net income

 

63,691

 

63,691

Other comprehensive loss, net of tax

(785)

(785)

Issuance of common stock under share-based compensation plans

34

 

1

(1)

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)

Balance at September 30, 2021

 

29,352