With 2014 net income up more than 190% and annual revenue up almost 14%, officials with Fort Smith-based ArcBest plans to spend $200 million during 2015 to modernize and expand its trucking equipment, build new facilities and invest in technology.
ArcBest, a transportation holding company with less-than-truckload carrier ABF Freight as its largest subsidiary, reported early Wednesday (Feb. 4) full year net income of $46.177 million, up 192% compared to the $15.811 million in 2013, and a wide swing from the $7.7 million loss in 2012.
Total revenue during 2014 for ArcBest was $2.612 billion, up 13.6% compared to 2013.
The company ended the year on a positive note with fourth quarter net income hitting $14.543 million, up 40.5% compared to the 2013 quarter. The per share quarterly earnings of 53 cents per share also beat the consensus estimate of 44 cents. Revenue during the fourth quarter was $664.848 million, up 15% compared to the 2013 quarter.
"We made significant progress this year getting ABF Freight on a firmer path toward sustained, historical profitability and communicating with our customers about the full array of transportation and logistics solutions we offer through all of the ArcBest companies," ArcBest President and CEO Judy McReynolds said in a statement.
ArcBest also made progress toward its goal of diversifying revenue and income streams. For example, the Premium Logistics (Panther) division posted $15.64 million of operating income for the year, or 20.6% of the company’s total unadjusted operating income of $75.869 million. In total, the company’s four non-trucking subsidiaries – Premium, FleetNet, ABF Logistics, and ABF Moving – generated $25.776 million in operating income, or about 34% of the total
ABF Freight delivered $50.093 million in operating income during 2014, a big gain over the $10.033 million in 2013, and representing 66% of the company's unadjusted total.
"In addition to seeing improvements at ABF Freight, we are truly excited about the growth opportunities before us in 2015 in many areas, including truckload brokerage, expansion of premium logistics offerings and ongoing collaboration across all of the ArcBest companies," McReynolds said in the earnings report. "This past year was one of marked change for our company, and we now have many of the strategies and tools in place necessary to unlock the innovation and market share growth required for the next level of success at ArcBest.”
SEGMENT OPERATING INCOME 2014
ABF Freight
2014: $50.093 million
2013: $10.033 million
Premium Logistics (Panther)
ABF Freight
2014: $15.64 million
2013: $6.956 million
FleetNet (maintenance services)
ABF Freight
2014: $3.122 million
2013: $3.274 million
ABF Logistics
2014: $3.835 million
2013: $2.973 million
ABF Moving
2014: $3.179 million
2013: $1.85 million
TONNAGE, SHIPMENT REVENUE GAINS
ABF Freight is still the big wheel in the company even with gains in ArcBest’s non-trucking segments. That wheel spun faster in 2014 with improvements across all key metrics for the subsidiary. Those metrics include:
• Billed revenue per shipment during 2014 was $387.60, up 1.93%;
• Shipments during the year totaled 4.98 million, up more than 7.5%;
• Total tons shipped during the year was 3.359 million, up more than 6.5%; and
• The operating ratio for ABF Freight during 2014 was 97.4%, better than the 99.4% in 2013.
“As expected, ABF Freight's profitability improved as a result of its November 2013 union labor contract that reduced expenses and allowed ABF Freight to be more cost competitive with its LTL industry peers,” the company noted in the earnings report.
2015 CAPITAL PLANS
ArcBest officials also announced Wednesday that capital expenditures for 2015 will be around $200 million, much more than the $86 million in 2014.
Of that, $110 million is for new “road and city tractors and trailers” for ABF Freight to replace aging equipment and rentals. The company says the new equipment will reduce maintenance costs and improve fuel economy.
The company also said it will spend $55 million on real estate and new facilities. In May 2014 the company announced a $30 million plan to build a new office building and data center at Chaffee Crossing and boost corporate employment by an estimated 975 by 2021.
ArcBest shares (NASDAQ: ARCB) closed Tuesday at $38.74. During the past 52 weeks the share price ranged from a $47.52 high to a $29.88 low.