Sunday, November 06, 2016
ArcBest Announces Restructuring, Income Drop, Job Eliminations
The company reported income of $12.9 million, down from $19.1 million in the same quarter of 2015. Earnings per share was 49 cents, down from 72 cents in the same quarter a year ago.
Quarterly revenue was $713.9 million, up 0.6 percent from the $709.4 million it reported in the third quarter of 2015.
ABF Freight, the company’s trucking division, reported a revenue drop to $509.4 million in the third quarter of 2016 from $511.3 million in the same quarter a year ago. The company said a continuing soft market caused a drop in rates and freight tonnage, which dropped from 855.9 tons to 831.8 tons.
The company's asset-light divisions saw a rise in revenue from $211.1 million a year ago to $217.9 million this year.
ArcBest CEO and Chairman Judy McReynolds also announced an organization change in which the asset-light divisions Panther Premium Logistics, ABF Logistics and ABF Moving will be combined under the ArcBest name, beginning in 2017.
McReynolds said about 130 employees' positions would be eliminated. "I recognize this is difficult but necessary," McReynolds said.
ArcBest said the restructuring aims to "differentiate" the company's asset-light divisions from a crowded logistics market — "more loudly trumpet the ArcBest brand," McReynolds said. The company said it will save about $15 million annually because of the restructuring to combine sales, marketing, customer serve and other functions.
FleetNet, ArcBest’s maintenance division, is not affected by the restructuring.
ArcBest has focused on expanding its asset-light logistic services since acquiring Panther Expedited Services in 2012. ArcBest said its non-asset divisions represented 31 percent of its third-quarter revenue.
In 2015, McReynolds said the company goal was to have its asset-light revenue account for 50 percent of its overall revenue.
ArcBest has made several asset-light acquisitions since Panther, including Bear Transportation in 2015 and Logistics & Distribution Services LLC in September.