• Second quarter 2017 revenue of $720.4 million, and net income of $15.8 million, or $0.60 per diluted share. On a non-GAAP basis, second quarter 2017 net income of $14.9 million, or $0.57 per diluted share.
  • Increased revenue and profit in Asset-Based services resulting from shipment growth and improved pricing
  • Second quarter Asset-Light operating income improvement associated with revenue growth
FORTSMITH,Arkansas - ArcBestSM (Nasdaq:ARCB)todayreportedsecondquarter2017revenue of $720.4 million compared to second quarter 2016 revenue of $676.6 million. Second quarter 2017 operating income was $24.7 million compared to operating income of $16.7 million last year. Net income of $15.8 million, or $0.60 per diluted share, compared to second quarter 2016 net income of $10.2 million, or $0.39 per diluted share. Excluding certain items in both periods as identified in the attached reconciliation tables, non-GAAP net income was $14.9 million, or $0.57 per diluted share, in second quarter 2017 compared to second quarter 2016 net income of $10.0 million, or $0.38 per diluted share. On a non-GAAP basis, operating income was $25.8 million in second quarter 2017 compared to second quarter 2016 operating income of $17.2 million. Cost controls resulting from the enhanced market approach implemented at the beginning of the year continue to be in-line with expectations. “We were pleased to see improved results in the second quarter,” said ArcBest Chairman, President and CEO Judy R. McReynolds. “Our responsiveness to customers’ logistics needs supported by assured capacity options contributed to revenue growth and improved profitability. Favorable trends in economic indicators are expected to positively impact the freight environment going forward. In situations where multiple logistics solutions are increasingly required by customers to meet their own business objectives, we are well positioned to deliver.” Asset-Based Results of Operations Second Quarter 2017 Versus Second Quarter 2016
  •  Revenue of $514.5 million compared to $486.3 million, a per-day increase of 6.7 percent.
  •  Tonnage per day increase of 0.1 percent.
  •  Shipments per day increase of 4.4 percent.
  •  Total billed revenue per hundredweight increased 6.1 percent and was positively impacted by changes in shipment profile and higher fuel surcharges. Excluding fuel surcharge, the percentage increase on ArcBest’s Asset-Based LTL freight was in the mid-single digits.
  •  Operating income of $22.2 million and an operating ratio of 95.7 percent compared to operating income of $17.4 million and an operating ratio of 96.4 percent. On a non-GAAP basis, operating income of $22.7 million and an operating ratio of 95.6 percent compared to operating income of $17.8 million and an operating ratio of 96.3 percent.
The increase in total revenue and revenue per shipment for ArcBest’s Asset-Based services occurred within a positive industry pricing environment. Daily freight tonnage was flat versus the same period last year, as LTL-rated tonnage growth was partially offset by purposeful reductions in volume-quoted business. Asset-Based expenses were positively impacted by lower costs and greater efficiencies in linehaul and equipment repositioning costs, partially offset by the need for higher amounts of freight handling labor and purchased transportation associated with the quarterly shipment growth. Asset-Light‡ Results of Operations Second Quarter 2017 Versus Second Quarter 2016
  •  Revenue of $212.4 million compared to $196.1 million.
  •  Operating income of $6.5 million compared to operating income of $2.8 million. On a non-GAAP basis, operating income of $6.7 million compared to $2.8 million.
  •  Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) of $10.2 million compared to Adjusted EBITDA of $6.5 million.
ArcBest’s Asset-Light revenue increase was the result of continued strength in demand for expedite services combined with the effects of additional dedicated truckload business from a September 2016 acquisition. The significant year-over-year increase in asset-light operating income was the result of labor efficiencies, continued cost management and expedite revenue growth. Truckload revenue per shipment increased over the previous year’s period, but led to lower shipment levels. While the truckload market tightened, truckload net revenue margins continued to be compressed as higher market rates for purchased transportation outpaced increases in revenue per shipment. FleetNet maintained ongoing improvements in labor efficiencies and cost reductions that drove second quarter operating income improvement despite lower revenue and fewer total events versus last year associated with changes in customer profile. Credit Agreement Amendment As previously announced, on July 7, 2017 ArcBest amended the existing credit agreement with its current bank group. The new agreement increases the amount of the revolving credit facility to $200 million from $150 million, increases the revolver accordion to $100 million from $75 million and extends the credit facility maturity date approximately two and a half years to July 2022. Closing Comments “The improvement in the 2017 operating environment that we expected to see has materialized, giving us a solid foundation upon which to initiate our LTL, space-based pricing effort that takes effect August 1,” said McReynolds. “As the freight profile we see in our network continues to evolve, we are confident this complementary pricing structure will provide better compensation in cases where the space taken up on our equipment is the most important factor to consider. ArcBest is a trusted supply-chain advisor that understands our customers complex needs. We continue to evolve our approach for the benefit of customers, the broader marketplace and our shareholders. With the implementation of our enhanced market approach, we are now able to compete much more effectively for a larger segment of the logistics market by offering a wider array of solutions along with a more simplified customer experience.” Conference Call ArcBest will host a conference call with company executives to discuss the 2017 second quarter results. The call will be today, Friday, July 28, at 9:30 a.m. ET (8:30 a.m. CT). Interested parties are invited to listen by calling (888) 209-3771. Following the call, a recorded playback will be available through the end of the day on September 15, 2017. To listen to the playback, dial (800) 633-8284 or (402) 977-9140 (for international callers). The conference call ID for the playback is 21854790. The conference call and playback can also be accessed, through September 15, 2017, on ArcBest’s website at arcb.com. NOTE ‡ - The ArcBest and FleetNet reportable segments, combined, represent Asset-Light operations.