0001104659-15-006424.txt : 20150204 0001104659-15-006424.hdr.sgml : 20150204 20150204060049 ACCESSION NUMBER: 0001104659-15-006424 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20150204 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20150204 DATE AS OF CHANGE: 20150204 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ARCBEST CORP /DE/ CENTRAL INDEX KEY: 0000894405 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 710673405 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-19969 FILM NUMBER: 15573402 BUSINESS ADDRESS: STREET 1: 3801 OLD GREENWOOD RD CITY: FORT SMITH STATE: AR ZIP: 72903 BUSINESS PHONE: 4797856000 MAIL ADDRESS: STREET 1: P O BOX 10048 CITY: FORT SMITH STATE: AR ZIP: 72917-0048 FORMER COMPANY: FORMER CONFORMED NAME: ARKANSAS BEST CORP /DE/ DATE OF NAME CHANGE: 19930917 8-K 1 a15-3614_18k.htm CURRENT REPORT OF MATERIAL EVENTS OR CORPORATE CHANGES

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549-1004

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): February 4, 2015 (February 4, 2015)

 

ARCBEST CORPORATION

(Exact name of registrant as specified in its charter)

 

Delaware

 

0-19969

 

71-0673405

(State or other

 

(Commission

 

(IRS Employer

jurisdiction of

 

File Number)

 

Identification No.)

incorporation or

 

 

 

 

organization)

 

 

 

 

 

3801 Old Greenwood Road

Fort Smith, Arkansas 72903

(479) 785-6000

(Address, including zip code, and telephone number, including area code, of

the registrant’s principal executive offices)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions.

 

o                            Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o                            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o                            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o                            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 



 

ITEM 2.02 — RESULTS OF OPERATIONS AND FINANCIAL CONDITION

 

On February 4, 2015, ArcBest Corporation (Nasdaq: ARCB) issued a press release announcing its unaudited fourth quarter 2014 and full year 2014 results. The press release contains reconciliations of GAAP earnings and earnings per share to non-GAAP financial measures. Management believes the non-GAAP financial measures are useful to investors in understanding the Company’s results of operations because they provide meaningful comparisons between current and prior period results. The press release also contains calculations of earnings before interest, taxes, depreciation and amortization (“EBITDA”) and Adjusted EBITDA. Management believes EBITDA to be relevant and useful information as it is a standard measure commonly reported and widely used by analysts, investors and others to measure financial performance and ability to service debt obligations. However, these financial measures should not be constructed as better measurements than operating income, operating cash flow, net income or earnings per share, as defined by GAAP. A copy of the press release is furnished as an exhibit to this Current Report on Form 8-K.

 

ITEM 9.01 — FINANCIAL STATEMENTS AND EXHIBITS.

 

99.1                        Press release of ArcBest Corporation dated February 4, 2015.

 

2



 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

ARCBEST CORPORATION

 

 

 

(Registrant)

 

 

Date:

       February 4, 2015

 

/s/ Michael R. Johns

 

Michael R. Johns

 

Vice President — General Counsel

 

and Corporate Secretary

 

3


EX-99.1 2 a15-3614_1ex99d1.htm EX-99.1

EXHIBIT 99.1

 

GRAPHIC

FOR IMMEDIATE RELEASE

 

 

 

 

 

Investor Relations Contact: David Humphrey

 

Media Contact: Kathy Fieweger

Title: Vice President — Investor Relations

 

Title: Chief Marketing Officer

Phone: 479-785-6200

 

Phone: 479-719-4358

Email: dhumphrey@arcb.com

 

Email: kfieweger@arcb.com

 

ArcBest Corporation Announces Improved Fourth Quarter 2014 Results

And Full Year 2014 Results

 

·                  Fourth quarter 2014 net income increased 41 percent to $14.5 million, or $0.53 per share.  Excluding certain identified items, fourth quarter 2014 net income increased 71 percent.

 

·                  Solid fourth quarter business growth at ABF FreightSM resulted in an 11 percent increase in revenue and improved operating margins.

 

·                  Fourth quarter revenue at ArcBest’s emerging businesses increased by 25 percent from the previous year and EBITDA increased by 14 percent.

 

·                  Full year 2014 revenue at ArcBest Corporation increased 14 percent to $2.6 billion with 27 percent of the total revenue generated by the emerging businesses.

 

·                  Full year 2014 net income was $46.2 million, nearly three times full year 2013 net income of $15.8 million.

 

FORT SMITH Arkansas, February 4, 2015 — ArcBest Corporation (Nasdaq: ARCB) today reported improved fourth quarter 2014 results reflecting improvements at ABF Freight and continued strong revenue growth at its emerging businesses — ABF LogisticsSM, Panther Premium LogisticsSM, FleetNet America®  and ABF MovingSM.

 

Fourth Quarter 2014 Results

 

ArcBest’s revenue was $664.8 million compared to revenue of $578.5 million in the fourth quarter of 2013, an increase of 15 percent.  Net income increased 41 percent to $14.5 million, or $0.53 per share compared to fourth quarter 2013 net income of $10.3 million, or $0.38 per share.  As shown in the attached reconciliation tables, both of these periods were impacted by favorable effective tax rates and adjustments for certain other items.  On an adjusted basis, ArcBest’s fourth quarter 2014 net income increased 71 percent compared to fourth quarter 2013 net income of $8.4 million, or $0.31 per share.

 

1



 

ABF Freight’s revenue was $485.9 million, an 11 percent increase over fourth quarter 2013 revenue of $436.7 million.  Operating income increased to $14.7 million from $9.9 million in fourth quarter 2013.  ABF Freight’s operating ratio was 97.0 percent versus 97.7 percent in 2013. Excluding adjustments for certain other items in the attached reconciliation table, operating income increased to $15.8 million from $7.7 million in fourth quarter 2013, and ABF Freight’s fourth quarter 2014 operating ratio was 96.8 percent versus 98.2 percent in the year-ago period.

 

Revenue for ArcBest’s emerging, non-asset-based businesses increased 25 percent over the same period of 2013.  Earnings before interest, taxes, depreciation and amortization (“EBITDA”) at the non-asset-based businesses increased 14 percent to $9.4 million compared to EBITDA of $8.2 million in fourth quarter 2013.  The percentage of year-over-year EBITDA improvement is below that of the first three quarters of 2014.  This is related to personnel and IT investments made to enhance continued growth in these businesses and due to a particularly strong fourth quarter result last year at Panther.

 

Full Year 2014 Results

 

“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,” said ArcBest President and CEO Judy R. McReynolds.  “Changing our company name, embracing “The Skill & The Will” positioning, and integrating customer offerings at ABF Freight, ABF Logistics and Panther through our Enterprise Customer Solutions group are all examples of how we serve customers better today than ever before.”

 

ArcBest’s revenue totaled $2.6 billion, an increase of 14 percent compared to $2.3 billion in 2013. Net income was $46.2 million, or $1.69 per share, approximately three times net income of $15.8 million, or $0.59 per share in 2013.  Excluding adjustments for certain other items in the attached reconciliation table, ArcBest had 2014 net income of $49.5 million, or $1.82 per share compared to net income of $14.7 million, or $0.55 per share in 2013.

 

ABF Freight’s revenue was $1.9 billion, a 10 percent increase over $1.8 billion 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.  As outlined in the attached reconciliation table, ABF Freight’s 2014 adjusted operating income increased to $55.4 million versus $11.9 million in 2013, and its adjusted operating ratio improved by over two percentage points to 97.1 percent.

 

2



 

On a combined basis, ArcBest’s emerging businesses had strong revenue growth and margin improvement while positively contributing to ArcBest’s total results.  These businesses have grown to be 27 percent of ArcBest’s revenue, nearly four times the percentage of total corporate revenue just five years ago.  Combined EBITDA for the emerging businesses in 2014 increased 45 percent to $40.5 million.

 

Capital Expenditures

 

In 2014, total net capital expenditures equaled $86 million, including approximately $65 million of revenue equipment for ABF Freight and Panther.  Depreciation and amortization costs on fixed assets equaled $82 million.

 

For 2015, total net capital expenditures are estimated to be approximately $200 million. This includes revenue equipment purchases of $110 million at ABF Freight and Panther.  Expected real estate expenditures, totaling approximately $55 million, are for previously disclosed growth initiatives at ArcBest and its operating subsidiaries.  These include freight service center construction, call center facilities and needed office buildings, a portion of which replaces leased space.  The remainder of expected capital expenditures includes the costs of other terminal and handling equipment at ABF Freight and technology investments across the corporation. ArcBest’s depreciation and amortization costs on fixed assets in 2015 are estimated to be in a range of $95 million to $100 million.

 

The majority of the revenue equipment purchases are for road and city tractors and trailers at ABF Freight needed to replace both existing equipment and local rentals.  In order to more rapidly replace used equipment and to reduce maintenance costs, ABF Freight is increasing the number of tractor and trailer replacements in 2015.  In addition, the majority of road tractors ABF Freight is purchasing this year will be equipped with automated manual transmissions.  In conjunction with the transportation industry’s move toward this technology, ABF Freight expects that these tractors will contribute to better fuel economy, reduced maintenance costs and an improved ability to attract new employees to what is already one of the best driver jobs in the industry.

 

Closing Comments

 

“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,” said McReynolds. “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

 

3



 

growth required for the next level of success at ArcBest.  Our improved operational and financial performance, along with ArcBest’s 2014 stock appreciation and previously announced dividend increase, benefit our employees, our customers and our shareholders.”

 

Conference Call

 

ArcBest Corporation will host a conference call with company executives to discuss the 2014 fourth quarter and full year results. The call will be today, Wednesday, February 4, at 9:30 a.m. ET (8:30 a.m. CT). Interested parties are invited to listen by calling (800) 896-0105. Following the call, a recorded playback will be available through the end of the day on March 7, 2015. To listen to the playback, dial (800) 633-8284 or (402) 977-9140 (for international callers). The conference call ID for the playback is 21758654. The conference call and playback can also be accessed, through March 7, 2015, on ArcBest’s website at arcb.com.

 

About ArcBest

 

ArcBest CorporationSM (Nasdaq: ARCB) solves complex logistics and transportation challenges. Our companies and brands — ABF FreightSM, ABF LogisticsSM, Panther Premium LogisticsSM, FleetNet America®, U-Pack® and ArcBest Technologies — apply the skill and the will with every shipment and supply chain solution, household move or vehicle repair. ArcBest finds a way.

 

For more information, visit arcb.com, abf.com, pantherpremium.com, fleetnetamerica.com and upack.com. ArcBest CorporationSM. The Skill & The WillSM.

 

Forward-Looking Statements

 

Certain statements and information in this press release concerning results for the three and twelve months ended December 31, 2014 may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “foresee,” “intend,” “may,” “plan,” “predict,” “project,” “scheduled,” “should,” “would” and similar expressions and the negatives of such terms are intended to identify forward-looking statements, which are generally not historical in nature. These forward-looking statements are based on management’s current expectations and beliefs concerning future developments and their potential effect on us. Although management believes that these forward-looking statements are reasonable, as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. Our forward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions that could cause actual results to differ materially from our historical experience and management’s present expectations or projections. Important factors that could cause our actual results to differ materially from those in the

 

4



 

forward-looking statements include, but are not limited to: general economic conditions and related shifts in market demand that impact the performance and needs of industries served by ArcBest Corporation’s subsidiaries and/or limit our customers’ access to adequate financial resources; unfavorable terms of, or the inability to reach agreement on, future collective bargaining agreements or a workforce stoppage by our employees covered under ABF Freight’s collective bargaining agreement; relationships with employees, including unions; union and nonunion employee wages and benefits, including changes in required contributions to multiemployer pension plans; competitive initiatives, pricing pressures, the effect of volatility in fuel prices and the associated changes in fuel surcharges on securing increases in base freight rates and the inability to collect fuel surcharges; availability of fuel; default on covenants of financing arrangements and the availability and terms of future financing arrangements; availability and cost of reliable third-party services; disruptions or failures of services essential to the operation of our business or the use of information technology platforms in our business; timing and amount of capital expenditures, increased prices for and decreased availability of new revenue equipment and decreases in value of used revenue equipment; future costs of operating expenses such as maintenance and fuel and related taxes; self-insurance claims and insurance premium costs; governmental regulations and policies, including environmental laws and regulations; potential impairment of goodwill and intangible assets; the impact of our brands and corporate reputation; the cost, timing and performance of growth initiatives; the cost, integration and performance of any future acquisitions; the costs of continuing investments in technology, a failure of our information systems and the impact of cyber incidents; weather conditions; and other financial, operational and legal risks and uncertainties detailed from time to time in ArcBest Corporation’s Securities and Exchange Commission public filings.

 

For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see our filings with SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

 

Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.

 

Financial Data and Operating Statistics

 

The following tables show financial data and operating statistics on ArcBest CorporationSM and its subsidiary companies.

 

5



 

ARCBEST CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

 

Three Months Ended
December 31

 

Year Ended
December 31

 

 

 

2014

 

2013

 

2014

 

2013

 

 

 

(Unaudited)

 

 

 

($ thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

 

 

REVENUES

 

$

664,848

 

$

578,549

 

$

2,612,693

 

$

2,299,549

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

646,799

 

565,047

 

2,543,454

 

2,280,479

 

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME

 

18,049

 

13,502

 

69,239

 

19,070

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (COSTS)

 

 

 

 

 

 

 

 

 

Interest and dividend income

 

252

 

182

 

851

 

681

 

Interest and other related financing costs

 

(822

)

(903

)

(3,190

)

(4,183

)

Other, net

 

2,161

 

1,114

 

3,712

 

3,893

 

 

 

1,591

 

393

 

1,373

 

391

 

 

 

 

 

 

 

 

 

 

 

INCOME BEFORE INCOME TAXES

 

19,640

 

13,895

 

70,612

 

19,461

 

 

 

 

 

 

 

 

 

 

 

INCOME TAX PROVISION

 

5,097

 

3,549

 

24,435

 

3,650

 

 

 

 

 

 

 

 

 

 

 

NET INCOME

 

$

14,543

 

$

10,346

 

$

46,177

 

$

15,811

 

 

 

 

 

 

 

 

 

 

 

EARNINGS PER COMMON SHARE(1)

 

 

 

 

 

 

 

 

 

Basic

 

$

0.53

 

$

0.38

 

$

1.69

 

$

0.59

 

Diluted

 

$

0.53

 

$

0.38

 

$

1.69

 

$

0.59

 

 

 

 

 

 

 

 

 

 

 

AVERAGE COMMON SHARES OUTSTANDING

 

 

 

 

 

 

 

 

 

Basic

 

26,073,256

 

25,785,485

 

25,993,255

 

25,714,205

 

Diluted

 

26,073,256

 

25,793,366

 

25,993,612

 

25,714,205

 

 

 

 

 

 

 

 

 

 

 

CASH DIVIDENDS DECLARED PER COMMON SHARE

 

$

0.06

 

$

0.03

 

$

0.15

 

$

0.12

 

 


(1)         ArcBest uses the two-class method for calculating earnings per share. This method, as calculated below, requires an allocation of dividends paid and a portion of undistributed net income to unvested restricted stock for calculating per share amounts.

 

NET INCOME

 

$

14,543

 

$

10,346

 

$

46,177

 

$

15,811

 

 

 

 

 

 

 

 

 

 

 

EFFECT OF UNVESTED RESTRICTED STOCK AWARDS

 

(703

)

(505

)

(2,300

)

(720

)

 

 

 

 

 

 

 

 

 

 

ADJUSTED NET INCOME FOR CALCULATING EARNINGS PER COMMON SHARE

 

$

13,840

 

$

9,841

 

$

43,877

 

$

15,091

 

 

6



 

ARCBEST CORPORATION

CONSOLIDATED BALANCE SHEETS

 

 

 

December 31
2014

 

December 31
2013

 

 

 

(Unaudited)

 

Note

 

 

 

($ thousands, except share data)

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

Cash and cash equivalents

 

$

157,042

 

$

105,354

 

Short-term investments

 

45,909

 

35,906

 

Restricted cash, cash equivalents, and short-term investments

 

1,386

 

1,902

 

Accounts receivable, less allowances (2014 — $5,731; 2013 — $4,533)

 

228,056

 

202,540

 

Other accounts receivable, less allowances (2014 — $1,701; 2013 — $1,422)

 

6,582

 

7,272

 

Prepaid expenses

 

20,906

 

19,016

 

Deferred income taxes

 

40,220

 

37,482

 

Prepaid and refundable income taxes

 

9,920

 

2,061

 

Other

 

4,968

 

6,952

 

TOTAL CURRENT ASSETS

 

514,989

 

418,485

 

 

 

 

 

 

 

PROPERTY, PLANT AND EQUIPMENT

 

 

 

 

 

Land and structures

 

251,836

 

245,805

 

Revenue equipment

 

633,455

 

589,902

 

Service, office, and other equipment

 

136,145

 

124,303

 

Software

 

116,112

 

110,998

 

Leasehold improvements

 

24,377

 

23,582

 

 

 

1,161,925

 

1,094,590

 

Less allowances for depreciation and amortization

 

752,075

 

700,193

 

 

 

409,850

 

394,397

 

GOODWILL

 

77,078

 

76,448

 

INTANGIBLE ASSETS, net

 

72,809

 

75,387

 

OTHER ASSETS

 

52,896

 

52,609

 

 

 

$

1,127,622

 

$

1,017,326

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

Bank overdraft and drafts payable

 

$

16,095

 

$

13,609

 

Accounts payable

 

104,230

 

89,091

 

Income taxes payable

 

527

 

1,782

 

Accrued expenses

 

194,674

 

173,622

 

Current portion of long-term debt

 

25,256

 

31,513

 

TOTAL CURRENT LIABILITIES

 

340,782

 

309,617

 

 

 

 

 

 

 

LONG-TERM DEBT, less current portion

 

102,474

 

81,332

 

PENSION AND POSTRETIREMENT LIABILITIES

 

42,418

 

26,847

 

OTHER LIABILITIES

 

16,667

 

15,041

 

DEFERRED INCOME TAXES

 

64,398

 

64,028

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

Common stock, $0.01 par value, authorized 70,000,000 shares; issued 2014: 27,722,010 shares; 2013: 27,507,241 shares

 

277

 

275

 

Additional paid-in capital

 

303,045

 

296,133

 

Retained earnings

 

338,810

 

296,735

 

Treasury stock, at cost, 1,677,932 shares

 

(57,770

)

(57,770

)

Accumulated other comprehensive loss

 

(23,479

)

(14,912

)

TOTAL STOCKHOLDERS’ EQUITY

 

560,883

 

520,461

 

 

 

$

1,127,622

 

$

1,017,326

 

 

Note: The balance sheet at December 31, 2013 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

 

 

7



 

ARCBEST CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

Year Ended
December 31

 

 

 

2014

 

2013

 

 

 

(Unaudited)

 

 

 

($ thousands)

 

OPERATING ACTIVITIES

 

 

 

 

 

Net income

 

$

46,177

 

$

15,811

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

Depreciation and amortization

 

81,870

 

84,215

 

Amortization of intangibles

 

4,352

 

4,174

 

Pension settlement expense

 

6,595

 

2,111

 

Share-based compensation expense

 

6,998

 

5,494

 

Provision for losses on accounts receivable

 

1,942

 

2,065

 

Deferred income tax provision (benefit)

 

4,692

 

(10,367

)

Gain on sale of property and equipment

 

(1,461

)

(153

)

Changes in operating assets and liabilities:

 

 

 

 

 

Receivables

 

(26,892

)

(24,200

)

Prepaid expenses

 

(1,888

)

(1,670

)

Other assets

 

889

 

(1,015

)

Income taxes

 

(11,972

)

8,468

 

Accounts payable, accrued expenses, and other liabilities(1)

 

32,464

 

8,571

 

NET CASH PROVIDED BY OPERATING ACTIVITIES

 

143,766

 

93,504

 

 

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

 

 

Purchases of property, plant and equipment, net of financings

 

(35,483

)

(26,369

)

Proceeds from sale of property and equipment

 

4,928

 

2,194

 

Purchases of short-term investments

 

(45,831

)

(39,605

)

Proceeds from sale of short-term investments

 

35,853

 

32,718

 

Business acquisition, net of cash acquired

 

(2,647

)

(4,146

)

Capitalization of internally developed software

 

(8,418

)

(7,668

)

NET CASH USED IN INVESTING ACTIVITIES

 

(51,598

)

(42,876

)

 

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

 

Payments on long-term debt

 

(40,440

)

(43,176

)

Net change in bank overdraft and drafts payable

 

2,486

 

(37

)

Net change in restricted cash, cash equivalents, and short-term investments

 

516

 

7,756

 

Deferred financing costs

 

(76

)

(71

)

Payment of common stock dividends

 

(4,102

)

(3,233

)

Proceeds from the exercise of stock options

 

1,136

 

2,785

 

NET CASH USED IN FINANCING ACTIVITIES

 

(40,480

)

(35,976

)

 

 

 

 

 

 

NET INCREASE IN CASH AND CASH EQUIVALENTS

 

51,688

 

14,652

 

Cash and cash equivalents at beginning of period

 

105,354

 

90,702

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

 

$

157,042

 

$

105,354

 

 

 

 

 

 

 

NONCASH INVESTING ACTIVITIES

 

 

 

 

 

Accruals for equipment received

 

$

928

 

$

324

 

Equipment financed

 

$

55,325

 

$

36

 

 


(1)  2013 includes $17.8 million of cash contributions to the Company’s nonunion defined benefit pension plan.

 

8



 

ARCBEST CORPORATION

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES

 

 

 

Three Months Ended
December 31

 

Year Ended
December 31

 

ARCBEST CORPORATION — CONSOLIDATED

 

2014

 

2013

 

2014

 

2013

 

 

 

(Unaudited)

 

 

 

($ thousands, except per share data)

 

 

 

 

 

Net Income

 

 

 

 

 

 

 

 

 

Amounts on a GAAP basis

 

$

14,543

 

$

10,346

 

$

46,177

 

$

15,811

 

Collective bargaining agreement adjustments, after tax(1)

 

 

(1,435

)

 

 

Tax benefits and credits(2)

 

(861

)

(670

)

(696

)

(2,352

)

Pension settlement expense, after-tax(3)

 

727

 

169

 

4,030

 

1,290

 

Non-GAAP amounts

 

$

14,409

 

$

8,410

 

$

49,511

 

$

14,749

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings Per Share

 

 

 

 

 

 

 

 

 

Amounts on a GAAP basis

 

$

0.53

 

$

0.38

 

$

1.69

 

$

0.59

 

Collective bargaining agreement adjustments, after tax(1)

 

 

(0.06

)

 

 

Tax benefits and credits(2)

 

(0.03

)

(0.02

)

(0.03

)

(0.09

)

Pension settlement expense, after-tax(3)

 

0.03

 

0.01

 

0.16

 

0.05

 

Non-GAAP amounts

 

$

0.53

 

$

0.31

 

$

1.82

 

$

0.55

 

 

 

 

 

 

 

 

 

 

 

Income Tax Rate Reconciliation

 

 

 

 

 

 

 

 

 

Statutory federal income tax rate:

 

35.0

%

35.0

%

35.0

%

35.0

%

State income taxes, net of federal benefit

 

2.4

 

3.7

 

3.1

 

3.4

 

Federal income tax effects of:

 

 

 

 

 

 

 

 

 

Alternative fuel tax credit

 

(5.8

)

(1.6

)

(1.6

)

(9.9

)

Life insurance proceeds and changes in cash surrender value

 

(4.4

)

(2.7

)

(1.9

)

(6.8

)

Decrease in valuation allowances

 

 

(4.8

)

(1.0

)

(7.4

)

Nondeductible expenses and other

 

(1.2

)

(4.1

)

1.0

 

4.5

 

Effective tax rate

 

26.0

%

25.5

%

34.6

%

18.8

%

 

 

 

 

 

 

 

 

 

 

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA)

 

 

 

 

 

 

 

 

 

Net income

 

$

14,543

 

$

10,346

 

$

46,177

 

$

15,811

 

Interest and other related financing costs

 

822

 

903

 

3,190

 

4,183

 

Income tax provision

 

5,097

 

3,549

 

24,435

 

3,650

 

Depreciation and amortization

 

22,367

 

20,820

 

86,222

 

88,389

 

Amortization of share-based compensation

 

1,636

 

1,915

 

6,998

 

5,494

 

Amortization of actuarial losses of benefit plans and pension settlement expense(3)

 

1,927

 

1,228

 

9,300

 

10,046

 

 

 

$

46,392

 

$

38,761

 

$

176,322

 

$

127,573

 

 


(1)         The ABF Freight collective bargaining agreement, which was implemented November 3, 2013, provided for certain reductions in annual compensated vacation that impacted amounts expensed but not paid in periods prior to fourth quarter 2013.

 

(2)         Tax benefits are related to decreases in deferred tax asset valuation allowances. The three-month period ended December 31, 2014 also includes the amount of the alternative fuel tax credit related to the first nine months of 2014 which was recorded in fourth quarter 2014 due to the December 2014 retroactive reinstatement of the alternative fuel tax credit to January 1, 2014. The year ended December 31, 2013 also includes the amount of the 2012 alternative fuel tax credit which was recorded in first quarter 2013 due to the January 2013 retroactive reinstatement of the alternative fuel tax credit to January 1, 2012.

 

(3)         Pension settlement expense totaled $1.2 million (pre-tax) and $6.6 million (pre-tax) for the three months and year ended December 31, 2014, respectively, and $0.3 million (pre-tax) and $2.1 million (pre-tax) for the three months and year ended December 31, 2013, respectively.

 

 

9



 

ARCBEST CORPORATION

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES

 

NON-ASSET-BASED SEGMENTS

 

Three Months Ended
December 31
2014

 

Three Months Ended
December 31
2013

 

 

 

(Unaudited)

 

 

 

($ thousands)

 

 

 

Operating
Income

 

Depreciation
and
Amortization

 

EBITDA

 

Operating
Income

 

Depreciation
and
Amortization

 

EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Premium Logistics (Panther)(1)

 

$

3,801

 

$

2,897

 

$

6,698

 

$

3,211

 

$

2,707

 

$

5,918

 

Emergency & Preventative Maintenance (FleetNet)

 

282

 

284

 

566

 

907

 

141

 

1,048

 

Transportation Management (ABF Logistics)

 

1,386

 

282

 

1,668

 

1,409

 

191

 

1,600

 

Household Goods Moving Services (ABF Moving)

 

88

 

340

 

428

 

(702

)

367

 

(335

)

Total non-asset-based segments

 

$

5,557

 

$

3,803

 

$

9,360

 

$

4,825

 

$

3,406

 

$

8,231

 

 

NON-ASSET-BASED SEGMENTS

 

Year Ended
December 31
2014

 

Year Ended
December 31
2013

 

 

 

(Unaudited)

 

 

 

($ thousands)

 

 

 

Operating
Income

 

Depreciation
and
Amortization

 

EBITDA

 

Operating
Income

 

Depreciation
and
Amortization

 

EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Premium Logistics (Panther)(1)

 

$

15,640

 

$

11,362

 

$

27,002

 

$

6,956

 

$

10,516

 

$

17,472

 

Emergency & Preventative Maintenance (FleetNet)

 

3,122

 

961

 

4,083

 

3,274

 

540

 

3,814

 

Transportation Management (ABF Logistics)

 

3,835

 

1,006

 

4,841

 

2,973

 

640

 

3,613

 

Household Goods Moving Services (ABF Moving)

 

3,179

 

1,384

 

4,563

 

1,850

 

1,247

 

3,097

 

Total non-asset-based segments

 

$

25,776

 

$

14,713

 

$

40,489

 

$

15,053

 

$

12,943

 

$

27,996

 

 


(1)         Depreciation and amortization consists primarily of amortization of intangibles, including customer relationships and software associated with the June 15, 2012 acquisition of Panther.

 

 

 

Three Months Ended

 

Year Ended

 

 

 

December 31

 

December 31

 

FREIGHT TRANSPORTATION (ABF FREIGHT)

 

2014

 

2013

 

2014

 

2013

 

 

 

(Unaudited)

 

 

($ thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income ($) Ratio (%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amounts on a GAAP basis

 

$

14,704

 

97.0

%

$

9,869

 

97.7

%

$

50,093

 

97.4

%

$

10,033

 

99.4

%

Collective bargaining agreement adjustments(2)

 

 

 

(2,361

)

0.6

%

 

 

 

 

Pension settlement expense

 

1,085

 

(0.2

)%

219

 

(0.1

)%

5,309

 

(0.3

)%

1,831

 

(0.1

)%

Non-GAAP amounts

 

$

15,789

 

96.8

%

$

7,727

 

98.2

%

$

55,402

 

97.1

%

$

11,864

 

99.3

%

 


(2)             The ABF Freight collective bargaining agreement, which was implemented November 3, 2013, provided for certain reductions in annual compensated vacation that impacted amounts expensed but not paid in periods prior to fourth quarter 2013.

 

Non-GAAP Financial Measures. ArcBest reports its financial results in accordance with generally accepted accounting principles (“GAAP”). However, management believes that certain non-GAAP performance measures and ratios utilized for internal analysis provide financial statement users meaningful comparisons between current and prior period results, as well as important information regarding performance trends. Certain information discussed in the scheduled conference call could be considered non-GAAP measures. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, ArcBest’s reported results. Management believes Adjusted EBITDA to be relevant and useful information as EBITDA is a standard measure commonly reported and widely used by analysts, investors and others to measure financial performance and ability to service debt obligations. However, these financial measures should not be construed as better measurements than operating income, operating cash flow, net income or earnings per share, as defined by GAAP. Other companies may calculate EBITDA differently and, therefore, ArcBest’s Adjusted EBITDA may not be comparable to similarly titled measures of other companies.

 

10



 

ARCBEST CORPORATION

FINANCIAL STATEMENT OPERATING SEGMENT DATA AND OPERATING RATIOS

 

 

 

Three Months Ended
December 31

 

Year Ended
December 31

 

 

 

2014

 

 

 

2013

 

 

 

2014

 

 

 

2013

 

 

 

 

 

(Unaudited)

 

 

 

($ thousands, except percentages)

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Freight Transportation (ABF Freight)

 

$

485,911

 

 

 

$

436,654

 

 

 

$

1,930,990

 

 

 

$

1,761,716

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Premium Logistics (Panther)

 

80,234

 

 

 

67,316

 

 

 

316,668

 

 

 

246,849

 

 

 

Emergency & Preventative Maintenance (FleetNet)

 

38,458

 

 

 

35,042

 

 

 

158,581

 

 

 

137,546

 

 

 

Transportation Management (ABF Logistics)

 

46,750

 

 

 

30,668

 

 

 

152,632

 

 

 

105,223

 

 

 

Household Goods Moving Services (ABF Moving)

 

21,685

 

 

 

16,811

 

 

 

94,628

 

 

 

82,169

 

 

 

Total non-asset-based segments

 

187,127

 

 

 

149,837

 

 

 

722,509

 

 

 

571,787

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other and eliminations

 

(8,190

)

 

 

(7,942

)

 

 

(40,806

)

 

 

(33,954

)

 

 

Total consolidated revenues

 

$

664,848

 

 

 

$

578,549

 

 

 

$

2,612,693

 

 

 

$

2,299,549

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Freight Transportation (ABF Freight)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries, wages, and benefits

 

$

285,824

 

58.8

%

$

258,757

 

59.3

%

$

1,121,177

 

58.1

%

$

1,075,259

 

61.0

%

Fuel, supplies, and expenses

 

85,377

 

17.6

 

81,946

 

18.8

 

360,850

 

18.7

 

332,433

 

18.9

 

Operating taxes and licenses

 

12,430

 

2.6

 

11,072

 

2.5

 

46,955

 

2.4

 

43,865

 

2.5

 

Insurance

 

7,101

 

1.5

 

4,413

 

1.0

 

24,960

 

1.3

 

21,823

 

1.2

 

Communications and utilities

 

3,657

 

0.8

 

3,492

 

0.8

 

15,398

 

0.8

 

15,027

 

0.9

 

Depreciation and amortization

 

17,828

 

3.7

 

16,810

 

3.8

 

68,752

 

3.6

 

72,971

 

4.1

 

Rents and purchased transportation

 

56,488

 

11.6

 

47,453

 

10.9

 

229,443

 

11.9

 

180,689

 

10.3

 

Gain on sale of property and equipment

 

(895

)

(0.2

)

(90

)

 

(1,471

)

(0.1

)

(576

)

 

Pension settlement expense(1)

 

1,085

 

0.2

 

219

 

0.1

 

5,309

 

0.3

 

1,831

 

0.1

 

Other

 

2,312

 

0.4

 

2,713

 

0.5

 

9,524

 

0.4

 

8,361

 

0.4

 

 

 

471,207

 

97.0

%

426,785

 

97.7

%

1,880,897

 

97.4

%

1,751,683

 

99.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Premium Logistics (Panther)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchased transportation

 

$

58,950

 

73.9

%

$

51,072

 

75.9

%

$

235,006

 

74.6

%

$

188,561

 

76.4

%

Depreciation and amortization(2)

 

2,897

 

3.6

 

2,707

 

4.0

 

11,362

 

3.6

 

10,516

 

4.3

 

Salaries, benefits, insurance, and other

 

14,586

 

17.7

 

10,326

 

15.3

 

54,660

 

16.8

 

40,816

 

16.5

 

 

 

76,433

 

95.3

%

64,105

 

95.2

%

301,028

 

95.1

%

239,893

 

97.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Emergency & Preventative Maintenance (FleetNet)

 

$

38,176

 

 

 

$

34,135

 

 

 

$

155,459

 

 

 

$

134,272

 

 

 

Transportation Management (ABF Logistics)

 

45,364

 

 

 

29,259

 

 

 

148,797

 

 

 

102,250

 

 

 

Household Goods Moving Services (ABF Moving)

 

21,597

 

 

 

17,513

 

 

 

91,449

 

 

 

80,319

 

 

 

Total non-asset-based segments(1)

 

181,570

 

 

 

145,012

 

 

 

696,733

 

 

 

556,734

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other and eliminations(1)

 

(5,978

)

 

 

(6,750

)

 

 

(34,176

)

 

 

(27,938

)

 

 

Total consolidated operating expenses and costs(1)

 

$

646,799

 

 

 

$

565,047

 

 

 

$

2,543,454

 

 

 

$

2,280,479

 

 

 

 


(1)

Pension settlement expense totaled $1.2 million (pre-tax) and $6.6 million (pre-tax) on a consolidated basis for the three months and year ended December 31, 2014, respectively, and $0.3 million (pre-tax) and $2.1 million (pre-tax) for the three months and year ended December 31, 2013, respectively. Of the total $6.6 million (pre-tax) pension settlement expense for the twelve months ended December 31, 2014, $5.3 million was reported by ABF Freight, $1.1 million was reported in Other and eliminations, and $0.2 million was reported by the non-asset-based segments. Of the total $2.1 million (pre-tax) pension settlement expense for the year ended December 31, 2013, $1.8 million was reported by ABF Freight and $0.3 million was reported in Other and eliminations.

 

 

(2)

Depreciation and amortization consists primarily of amortization of intangibles, including customer relationships and software associated with the June 15, 2012 acquisition of Panther.

 

11



 

ARCBEST CORPORATION

FINANCIAL STATEMENT OPERATING SEGMENT DATA AND OPERATING RATIOS — Continued

 

 

 

Three Months Ended
December 31

 

Year Ended
December 31

 

 

 

2014

 

2013

 

2014

 

2013

 

 

 

(Unaudited)
($ thousands)

 

OPERATING INCOME

 

 

 

 

 

 

 

 

 

Freight Transportation (ABF Freight)

 

$

14,704

 

$

9,869

 

$

50,093

 

$

10,033

 

 

 

 

 

 

 

 

 

 

 

Premium Logistics (Panther)

 

3,801

 

3,211

 

15,640

 

6,956

 

Emergency & Preventative Maintenance (FleetNet)

 

282

 

907

 

3,122

 

3,274

 

Transportation Management (ABF Logistics)

 

1,386

 

1,409

 

3,835

 

2,973

 

Household Goods Moving Services (ABF Moving)

 

88

 

(702

)

3,179

 

1,850

 

Total non-asset-based segments

 

5,557

 

4,825

 

25,776

 

15,053

 

 

 

 

 

 

 

 

 

 

 

Other and eliminations

 

(2,212

)

(1,192

)

(6,630

)

(6,016

)

Total consolidated operating income

 

$

18,049

 

$

13,502

 

$

69,239

 

$

19,070

 

 

12



 

ARCBEST CORPORATION

OPERATING STATISTICS

 

 

 

Three Months Ended

 

Year Ended

 

 

 

December 31

 

December 31

 

 

 

2014

 

2013

 

% Change

 

2014

 

2013

 

% Change

 

 

 

(Unaudited)

 

 

 

 

 

Freight Transportation (ABF Freight)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Workdays

 

61.0

 

61.5

 

 

 

251.5

 

251.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Billed Revenue(1) / CWT

 

$

29.34

 

$

28.46

 

3.1

%

$

28.74

 

$

27.94

 

2.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Billed Revenue(1) / Shipment

 

$

385.02

 

$

377.65

 

2.0

%

$

387.60

 

$

380.25

 

1.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shipments

 

1,255,272

 

1,143,813

 

9.7

%

4,980,365

 

4,632,150

 

7.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shipments / Day

 

20,578

 

18,599

 

10.6

%

19,803

 

18,418

 

7.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tonnage (tons)

 

823,675

 

758,987

 

8.5

%

3,358,910

 

3,152,042

 

6.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tons / Day

 

13,503

 

12,341

 

9.4

%

13,356

 

12,533

 

6.6

%

 


(1)         Revenue for undelivered freight is deferred for financial statement purposes in accordance with ABF Freight’s revenue recognition policy. Billed revenue used for calculating revenue per hundredweight measurements has not been adjusted for the portion of revenue deferred for financial statement purposes. Billed revenue has been adjusted to exclude intercompany revenue that is not related to freight transportation services.

 

###

 


 

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