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    Default ArcBest First Quarter 2021 Results

    - First quarter 2021 revenue of $829.2 million, and net income of $23.4 million, or $0.87 per diluted share. On a non-GAAP1 basis, first quarter 2021 net income of $27.2 million, or $1.01 per diluted share.

    - Record quarterly revenue that increased 18% over last year.

    - First quarter operating income, which increased more than three times over first quarter 2020, was the best in ArcBest's history.

    "We're pleased to report our best-ever operating income for the first quarter as well as increased revenue and profitability in what is historically the most challenging quarter of the year, "said Judy R. McReynolds, ArcBest chairman, president and CEO.” These strong results reflect our ability to create solutions to support our customers as they continue to face supply chain challenges associated with their rebound from the COVID-19 pandemic."

    First Quarter Results of Operations Comparisons

    Asset-Based

    First Quarter 2021 Versus First Quarter 2020

    * Revenue of $556.3 million compared to $515.7 million, a per-day increase of 9.6 percent.

    * Total tonnage per day increase of 1.8 percent, with a mid-single-digit percentage increase in LTL-rated tonnage partially offset by a double-digit percentage decrease in TL-rated spot shipment tonnage moving in the Asset-Based network.

    * Total shipments per day increase of 2.6 percent including a 3.0 percent increase in LTL-rated shipments per day and an increase of 2.6 percent in LTL-rated weight per shipment which was positively impacted by first quarter freight mix changes.

    * Total billed revenue per hundredweight increased 8.8 percent and was negatively impacted by lower fuel surcharges. Revenue per hundredweight on LTL-rated business, excluding fuel surcharge, improved by a percentage in the mid–single digits.

    * Operating income of $30.1 million and an operating ratio of 94.6 percent compared to the prior year quarter operating income of $13.2 million and an operating ratio of 97.4 percent. On a non-GAAP basis, operating income of $36.9 million and an operating ratio of 93.4 percent compared to the prior year quarter operating income of $17.8 million and an operating ratio of 96.5 percent.

    https://www.prnewswire.com/news-rele...301282795.html

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  3. #2
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    Default Re: ArcBest First Quarter 2021 Results

    ArcBest Corporation: A Reasonable Play With Early Signs Of A Recovery

    Summary
    • ArcBest has had an interesting time in recent years, with recent performance taking a hit.
    • Shares look pricey relative to their peers, but they are attractive on an absolute basis.
    • Add in what looks to be a recovery taking place, and it could make for a reasonable prospect moving forward.
    • Looking for a helping hand in the market? Members of Crude Value Insights get exclusive ideas and guidance to navigate any climate.

    The trucking industry, at least in North America, is a major piece of everyday life. The majority of all goods and services sold in this country, as well as much that is imported into this country and exported from it, see at least some time on a truck before reaching their final destination. Though the industry is largely fragmented, with many mom-and-pop players that comprise the largest chunk of the market, there are some larger competitors in the space. One such firm is ArcBest Corporation. With a market capitalization of $2.07 billion, ArcBest is a sizable player but not the largest. Even so, it has a large physical presence over most of the United States and it offers a full array of services to meet every need its clients might have. On an absolute basis, shares of the enterprise look fairly attractive. Though relative to its peers, it is trading toward the high end of the range that you would expect. This makes understanding whether the company is a truly attractive prospect or not a bit of a challenge, but all things considered, it does appear to be a business that could offer investors decent upside potential.

    A look at ArcBest

    Though the market capitalization of ArcBest is small, the company has a significant footprint throughout North America. At present, it has at least 240 service centers on the continent, giving it exposure to 98% of the US. This includes in all 50 states, as well as Canada and Puerto Rico. According to management, the company services these clients through three different operating segments. The first of these is its Asset-Based segment. This represents the bulk of the business, working out to 71.2% of the company's overall revenue in 2020. Largely speaking, this includes its LTL services through its ABF Freight network and involves the transportation of general merchandise like food, textiles, and more through its network of truck drivers. Worth noting is that this segment is incredibly diverse, with the top 10 largest customers the business services accounting for no more than 11% of its revenue, and its largest accounting for no more than 4%. The next largest set of operations is its ArcBest segment. This includes, but is not limited to, the company’s ground expedite services. And, last but not least, is the firm's FleetNet business. This involves roadside repair solutions and vehicle maintenance management services for both commercial and private fleets then it provides through various third parties.

    Over the past few years, the picture for the business has been a little rocky. Revenue expanded nicely from $2.70 billion in 2016 to $3.09 billion in 2018. This is driven by growth in all three of its segments, with its Asset-Based operation seeing revenue expand from $1.92 billion to $2.18 billion. Its ArcBest segment saw revenue grow from $640.73 million to $787.12 million over the same period of time. And FleetNet saw revenue jumped from $162.63 million to $195.13 million.Then, in 2019, revenue dipped to $2.99 billion. This was followed up in 2020 by a decline to $2.94 billion. The 2020 drop should not be surprising. In fact, if anything, it might be surprising that that year wasn't worse for the business given the impact caused by the COVID-19 pandemic. However, the decline seen in 2019 is a little surprising. According to management, even as FleetNet saw revenue rise to $211.74 million, its other two segments reported shrinkage. Management chalked this up to softer economic conditions as well as excess truckload capacity. My own research on the matter suggests that this does not make a great deal of sense. According to one source, the revenue in the industry in 2019 surged from $700.1 billion in 2018 to $796.7 billion in 2019. This came as the gross tons transported throughout the trucking space grew from 11.49 billion to 11.84 billion.

    On the bottom line, it is important for investors to understand that ArcBest has never been much when it comes to delivery. True, its operating income rose from $34.07 million in 2016 to $109.10 million by 2018. This dipped to $63.77 million in 2019, and, in 2020, came in at $98.28 million. Substantially all of this came from its large Asset-Based segment. In 2020 alone, its two other segments combined were responsible for operating profit of just $13 million. In short, ArcBest is a low margin player, but that is not uncharacteristic of the industry more broadly.One bright spot for the company though involves its operating cash flow. This figure expanded from $111.94 million in 2016 to $255.35 million by 2018. It then dipped to $170.36 million in 2019, before recovering some to $205.99 million last year. So even when the business was negatively affected on the revenue side, it is managed to churn out some reasonable cash flow. Based on the figures of the company generated from its 2020 fiscal year, it is currently trading at a price to operating cash flow multiple of 10.1.

    To put this in perspective, I decided to compare the business to the five highest rated firms that are similar to it as defined by Seeking Alpha’s Quant platform. I was shocked to see that ArcBest, despite trading at a low level on an absolute basis, was one of the most expensive of the firms like it. The five companies I looked at saw a price to operating cash flow multiple range of 1.9 to 9.2. Only one of these firms was more expensive than ArcBest was.Now, it is possible that the company might see its multiple decrease if shares don’t move higher. That is, of course, if its first quarter performance is indicative of the future. In the first quarter, the company generated revenue of $829.21 million. This compares favorably to the $701.40 million the company generated the same period last year. Net income during this timeframe jumped from $1.90 million to $23.36 million, further proving how well the company is doing. Operating cash flow, however, did decrease, though only modestly, falling from $23.13 million to $22.53 million.

    Takeaway

    Based on the data provided, it is clear that ArcBest has done reasonably well over time, but it is undeniable that the business has had a bit of a rough time. That said, the industry is only set to grow in the long run, as evident when you consider that 72.5% of the nation's freight weight is transported by truck. In addition, the company is showing some signs of recovering. Relative to its peers, ArcBest is not cheap, but on an absolute basis it looks fairly attractive. The low margin nature of the enterprise leads me to be cautious in general, since one year can hurt the firm. But for investors who are truly interested in getting into the trucking space, this is at least a reasonable prospect to consider.

    https://seekingalpha.com/article/442...-of-a-recovery

 

 

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