Arnold Industries Quarterly Earnings Per Share Increase 29%
25 October 2000
Arnold Industries Quarterly Earnings Per Share Increase 29%
LEBANON, Pa.--Oct. 25, 2000--Arnold Industries, Inc. announced Wednesday that for the third quarter 2000 the Company achieved record earnings for any third quarter of $.40 per share, an increase of 29% when compared to $.31 per share in 1999.Results in the third quarter of 1999 had been negatively impacted by approximately $.04 per share for substantial insurance reserve adjustments for liability exposures from previous years of operations at New Penn and Arnold Transportation Services. Consolidated operating revenues rose 5%, and operating income increased 31%.
New Penn's revenues rose 8% compared to the third quarter of 1999, and its operating income increased 19% as the operating ratio was reduced from 81.4 to 79.4. During the third quarter New Penn was recognized for superior service quality by The Home Depot as well as in an independent survey conducted by Logistics Management and Distribution Report magazine.
The company introduced a new premium level of service that guarantees on-time delivery. To date, this new service has been 100% on-time. In September, New Penn implemented a general rate increase that impacted the portion of business not subject to contractual and other pricing agreements.
"New Penn had an excellent quarter despite fewer work days in the third quarter 2000," said Arnold Industries' Chairman, President and CEO, E. H. Arnold. "We continue to invest in the future with new facilities under construction in Albany, Buffalo and Reading to ensure New Penn has the capacity to grow and provide outstanding service."
Revenues at Arnold Transportation Services were flat compared to those of the third-quarter of 1999 while operating income surged 157%. Despite rising fuel prices, the operating ratio at Arnold Transportation declined to 95.6 from 98.3 in the prior year period. Although demand remained strong throughout the quarter, revenue growth was hindered by the shortage of qualified drivers and owner-operators. The company has successfully managed the mix of regional and interregional business to improve profitability.
"We were pleased to see Arnold Transportation continue to buck the trend in the truckload industry by posting improved operating margins. The company remains focused on improving asset utilization and using the drivers that are available to handle the more profitable business," noted Mr. Arnold.
Arnold Logistics' revenues increased 12% beyond the strong revenue gains of the prior year and operating income increased 58% compared to the third quarter 1999. Margins improved as the prior year included significant start-up costs for new fulfillment projects. The acquisition of National Corporate Marketing of Irving, TX, announced September 20, 2000 and completed on October 2, 2000, should impact fourth quarter comparisons favorably.
"Asset utilization and productivity will improve at Arnold Logistics as our volumes increase in subsequent quarters. We remain enthusiastic about future growth prospects as we take advantage of the new capabilities of our recent acquisition in the Dallas area, and seek another acquisition in the Midwest," said Mr. Arnold.
Net capital expenditures for the nine months ended September 30, 2000 amounted to approximately $12 million compared to September 30, 1999 of $42 million. The company expects full year capital expenditures to be approximately $21 million.
Set forth below are the Unaudited Consolidated Income Statements of Arnold Industries for the third quarter of 2000 compared to the third quarter of 1999 and for the first nine months of 2000 as compared to the first nine months of 1999:
Third Quarter Ended September 30,
2000 1999
---- ----
Operating Revenues $115,309,193 $109,776,176
Operating Income 15,825,315 12,067,648
Income Before Taxes 15,714,111 11,986,037
Net Income 9,851,187 7,621,547
Share Earnings:
Net income
per share-Basic .40 .31
Ave. shares
outstanding-Basic 24,591,581 24,865,309
Net income per
share-Diluted .39 .30
Ave. shares
outstanding-Diluted 24,695,745 25,080,882
Nine Months Ended September 30,
2000 1999
---- ----
Operating Revenues $347,481,799 $315,274,859
Operating Income 48,091,300 39,711,138
Income Before Taxes 47,437,641 39,250,356
Net Income 29,722,856 24,825,384
Share Earnings:
Net income
per share-Basic 1.21 1.00
Ave. shares
outstanding-Basic 24,604,035 24,852,767
Net income per
share-Diluted 1.20 .99
Ave. shares
outstanding-Diluted 24,688,383 25,102,096
Set forth below is a schedule of the Unaudited Operating Revenues, Expenses and Operating Income of the LTL, TL and Fulfillment/Logistics segments:
(Dollars in Thousands)
Third Quarter Ended September 30,
2000 1999
---------------------------------
Amount % Amount %
------ ----- ------ -----
LESS-THAN-TRUCKLOAD
Operating Revenues 60,318 100.0 55,984 100.0
Operating Expenses 47,918 79.4 45,570 81.4
------- ----- ------- -----
Operating Income 12,400 20.6 10,414 18.6
TRUCKLOAD
Operating Revenues 44,204 100.0 44,161 100.0
Operating Expenses 42,279 95.6 43,413 98.3
------- ----- ------- -----
Operating Income 1,925 4.4 748 1.7
FULFILLMENT/LOGISTICS
Operating Revenues 10,788 100.0 9,631 100.0
Operating Expenses 9,286 86.1 8,681 90.1
------- ----- ------- -----
Operating Income 1,502 13.9 950 9.9
Unallocated corporate
operating income (loss) (2) (44)
-------- -------
Consolidated operating income 15,825 12,068
======= =======
(Dollars in Thousands)
Nine-Month Period Ended September 30,
2000 1999
-----------------------------------
Amount % Amount %
------ ----- ------ -----
LESS-THAN-TRUCKLOAD
Operating Revenues 178,462 100.0 158,704 100.0
Operating Expenses 140,987 79.0 126,392 79.6
------- ----- ------- -----
Operating Income 37,475 21.0 32,312 20.4
TRUCKLOAD
Operating Revenues 135,276 100.0 130,111 100.0
Operating Expenses 129,593 95.8 126,414 97.2
------- ----- ------- -----
Operating Income 5,683 4.2 3,697 2.8
FULFILLMENT/LOGISTICS
Operating Revenues 33,743 100.0 26,459 100.0
Operating Expenses 28,785 85.3 22,432 84.8
------- ----- ------- -----
Operating Income 4,958 14.7 4,027 15.2
Unallocated corporate
operating income (loss) (25) (325)
-------- -------
Consolidated operating income 48,091 39,711
======= ======
Mr. Arnold announced that the Board of Directors declared the regular quarterly dividend of eleven cents (11(cent)) per share, payable December 1, 2000, to stockholders of record on November 17, 2000.
This release contains forward-looking comments that are subject to certain risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are detailed periodically in reports filed by the Company with the Securities and Exchange Commission, including 10-K's, 10-Q's and 8-K's.
Arnold Industries, Inc. is a holding company of transportation and logistics companies. For the year 1999, the Company reported consolidated revenues of $428 million. Business units include New Penn Motor Express, a Northeast regional next-day less-than-truckload carrier, Arnold Transportation Services, an irregular route and dedicated truckload carrier and Arnold Logistics, an integrated order fulfillment, distribution, contract packaging and reverse logistics service provider. For more information, please visit our Web site at http://www.aind.com.