With Gov. Asa Hutchinson and Mike Preston, his new jobs boss, in attendance, the mood was celebratory at the formal groundbreaking for the $30-plus million new corporate headquarters for Fort Smith-based ArcBest. But company CEO Judy McReynolds brought a sense of urgency. Her comments during Wednesday’s (April 15) event touched on market opportunity and a 2015 revenue goal of $3 billion.
“Let’s get the shovels digging,” she said, drawing laughter from the more than 50 people gathered near McClure Amphitheatre at Chaffee Crossing for the ceremony.
McReynolds, a tax accountant by training and a 17-year veteran with ArcBest, is serious. The company just pulled together two consecutive years in the black. Full year net income in 2014 was $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 the publicly held company (NASDAQ: ARCB) was $2.612 billion, up 13.6% compared to 2013.
The transportation and logistics company is expected to spend $200 million during 2015 to modernize and expand its trucking equipment, build new facilities – about $55 million planned for buildings and real estate – and invest in technology.
Such spending is part of the company’s goal to push beyond $3 billion in annual revenue in 2015. McReynolds is likely counting on financial momentum, a favorable rate environment resulting from capacity constraints in the freight sector, a more flexible labor contract with the International Brotherhood of Teamsters, growth in non-trucking subsidiaries, and acquisitions to meet and exceed the self-imposed goal.
As to acquisitions, the company has little debt, and as of Dec. 31 was sitting on almost $205 million in cash or holdings easily converted to cash. ArcBest officials have said they continue to seek companies to buy.
ArcBest officials first announced in May 2014 the plan to invest $30 million in a new 40-acre corporate campus. The news was part of a larger announcement in which the company plans to add 975 corporate jobs in the area by 2021. As of May, there were about 1,400 ArcBest employees in the Fort Smith area. The company employed more than 11,480 at the end of 2014.
When first announced, the new corporate office was estimated to be up to 150,000 square foot. The building is now projected to be 200,000 square foot and four stories, with completion expected by late 2016. ArcBest corporate offices and its technology subsidiary will move into the new building. Walter Echols, a vice president at ArcBest and head of real estate for the company, is managing the process.
The company will retain its high-profile, 195,000-square-feet corporate headquarter building on Old Greenwood Road in Fort Smith. That facility, which opened in early 1995, is expected to provide space for the consolidation of ABF Freight and ArcBest Technologies offices. Moving corporate and logistics jobs out of the existing corporate headquarters will allow room for expansion at ABF Freight and ArcBest.
ArcBest’s largest subsidiary is less-than-truckload carrier ABF Freight System. The non-asset subsidiaries are Panther Premium Logistics, ABF Logistics, FleetNet, ABF Moving and ArcBest Technologies (formerly known as Data-Tronic.).
COMMUNITY HISTORY, FUTURE
In her opening comments, McReynolds said the ceremony is another example of how the company has “grown from a local trucker” to a global logistics and transportation company.
Arkansas Best began as a small local freight hauler – OK Transfer – in 1923 operating in the Fort Smith area. The company has grown organically and through acquisitions to provide global shipping and logistics services. Fort Smith attorney Robert A. Young Jr. bought the a small regional trucking company in 1951 and through several acquisitions grew the company to a national freight carrier.
Mike Barr, with Fort Smith-based Harry G. Barr Company and board chairman of the Fort Smith Regional Chamber of Commerce, thanked McReynolds and ArcBest Board Chairman Robert A. Young III, for the investment in the region. Barr noted that one of the ceremonial shovels is from the chamber vault and was part of a 1970 headquarters groundbreaking for Arkansas Best Corp. (The company changed its named to ArcBest in May 2014.)
“It’s (the shovel) a good reminder of the partnerships between our community and our corporations,” Barr said prior to introducing Gov. Hutchinson.
Hutchinson said he was living in Fort Smith and remembers when the corporate building at Old Greenwood Road opened in 1995. He also said Wednesday’s ceremony is another example that “good things are happening in Arkansas,” and that economic development “pieces are fitting together for future growth.”
The Governor also said the $5 million investment in computer coding classes in Arkansas schools – part of his legislative package and recently approved by the Arkansas Legislature – will help companies like ArcBest who depend heavily on information technology.
“It means something, I believe, to Arkansas … and to the future of Fort Smith,” Hutchinson said.
Hutchinson also took the opportunity to introduce Mike Preston, executive director of the Arkansas Economic Development Commission, to the Fort Smith community. Preston, who has worked with an economic development agency in Florida, was named the new director on March 26.