Each arrow is a separate tile. The frames in the tile are defined as ABB, BAB, BBA (I think... if there are three of them. Can't remember). A is the frame with the graphic, and B is a black (blank) frame.
Each tile is defined to be controlled by the counter. Thus, if the counter is at 0, the first tile is on A, while the other two are on B. When the counter is at 1, each tile moves to frame 1 of its "animation", so the first tile is on B, the second is on A, and the third is on B, and so on.