July 31--Fort Smith-based ArcBest Corp. reported a 14 percent increase in revenue for this year's second quarter led by performances at its two largest operating companies, ABF Freight and Panther Premium Logistics.
ArcBest's second-quarter 2014 revenue was $658.6 million compared $576.9 million in the second quarter of 2013. Second-quarter net income was $17.2 million compared to second-quarter 2013 net income of $4.9 million. On a per-share basis, this represents ArcBest's most profitable quarter in six years, a news release states.
In a conference call following the release of the report, ArcBest President and CEO Judy R. McReynolds said between the fourth quarter of last year and this second quarter, the company saw it's "largest sequential growth in 15 years."
McReynolds has expectations of improved production in 2015 as a host of new dock workers become more experienced following the expansion of services. The impact of new dock workers with less than one year's experience meant a 20 percent less in production as more hours were needed to do the work.
McReynolds also noted that the International Brotherhood of Teamsters truck drivers saw their first 2.7 percent rate increase following the 7 percent cut as part of the new five-year labor agreement contract ratified in November. The rate will be recouped over the term of the contract.
Brad Delco, investment banking associate for Stephens Inc., said ArcBest stock was reacting well before noon, but it had slipped to the low 30s by 1 p.m. after opening at $38.80 and rising a point. ArcBest closed at $31.73 Thursday, down nearly 25 percent.
At ABF Freight, second-quarter revenue rose to $492.9 million from $446.8 million, while operating income increased to $22.8 million from $5.5 million in second quarter 2013. Cost as a percentage of revenue improved to 95.4 percent following implementation of the new labor agreement in November 2013, compared with 98.8 percent in the year-ago period.
ArcBest's emerging, non-asset-based businesses, including Panther, grew combined revenues at a rate of 28 percent. During the second quarter, these businesses equaled 27 percent of total consolidated revenue compared to 24 percent during the same period last year. Second quarter 2014 earnings before interest, taxes, depreciation and amortization (EBITDA) at the non-asset-based businesses was $10.2 million, an increase of 47 percent compared to EBITDA in the second quarter of 2013.
"Our second-quarter results improved significantly from both the first quarter of 2014 and the year-ago quarter, which was welcome news as we emerged from the harsh winter weather earlier this year," McReynolds stated in the release.
McReynolds noted as the economy picked up in the second quarter, ABF Freight saw better pricing conditions and a positive impact from the new labor agreement with the Teamsters union.
"Panther reported one of the strongest quarters in its history," she stated. "We are also seeing more customers buying at the enterprise level, when they require two or more ArcBest services."
McReynolds said the company's new brand identity, logos, advertising campaign and tagline, "The Skill & The Will" -- which were launched on April 30 -- have been well-received by customers and employees. A new website, TheSkillandTheWill.com, will be launched in early August to tell the stories of customers who have "benefited from employees' willingness to go above and beyond, every day, to solve complex logistics challenges," and "the broader story of the company's culture through the eyes of the customer," McReynolds said.
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