ArcBest Announces Record-Setting Fourth Quarter 2021 and Full Year 2021 Results

Rhea-AI Summary

ArcBest (Nasdaq: ARCB) reported a robust fourth quarter of 2021, achieving $1.2 billion in revenue, a $368.8 million increase from Q4 2020. Operating income surged to $86.9 million with a net income of $65.5 million or $2.47 per diluted share. Full year revenue reached $4.0 billion, compared to $2.9 billion in 2020. The positive results were bolstered by the acquisition of MoLo Solutions. The company plans strategic investments in technology and logistics solutions to maintain growth momentum in 2022.

Positive

• Fourth quarter 2021 revenue of $1.2 billion, up $368.8 million YoY.
• Net income of $65.5 million, up from $23.9 million YoY.
• Full year revenue of $4.0 billion, compared to $2.9 billion in 2020.
• Successful acquisition of MoLo Solutions enhancing logistics capabilities.
• Strong operating income of $86.9 million for Q4 2021.

Negative

• None.

FORT SMITH, Ark., Feb. 1, 2022 /PRNewswire/ -- ArcBest^® (Nasdaq: ARCB), a leader in supply chain logistics, today reported fourth quarter 2021 revenue of $1.2 billion, reflecting an increase of $368.8 million compared to fourth quarter 2020. Each of ArcBest's operating segments achieved double-digit percentage revenue growth over the prior year period. Fourth quarter 2021 results include the impact of the MoLo Solutions, LLC ("MoLo") acquisition, which closed on November 1, 2021.

ArcBest's fourth quarter 2021 operating income was $86.9 million and net income was $65.5 million, or $2.47 per diluted share, compared to fourth quarter 2020 operating income of $30.3 million and net income of $23.9 million, or $0.89 per diluted share. 

Excluding certain items in both periods as identified in the attached reconciliation tables, fourth quarter non-GAAP operating income was $102.2 million, compared to $39.5 million in the prior-year period. On a non-GAAP basis, net income was $73.9 million, or $2.79 per diluted share, in fourth quarter 2021 compared to $27.5 million, or $1.03 per diluted share, in fourth quarter 2020.

ArcBest's full year 2021 revenue totaled $4.0 billion compared to $2.9 billion in 2020. Net income was $213.5 million, or $7.98 per diluted share, compared to net income of $71.1 million, or $2.69 per diluted share in 2020. On a non-GAAP basis, ArcBest's 2021 net income was $228.0 million, or $8.52 per diluted share, compared to net income of $90.5 million, or $3.42 per diluted share, in 2020.

"I am extremely proud of the talented people of ArcBest, whose dedication and hard work have driven our record-breaking fourth quarter and full year results," said Judy R. McReynolds, ArcBest chairman, president and CEO. "2021 was a year of immense challenges – from the ongoing pandemic to extreme supply chain pressures – but our team stayed focused on our strategic initiatives and consistently exceeded expectations. We are making smart investments across our business to advance our strategic vision and adapt to the rapidly evolving market environment, all while being true advisors to our customers. Our recent announcement of an investment we made in Phantom Auto, the leading provider of human-centered remote operation software, is an example of our commitment in these areas. Investments in our people, our integrated logistics solutions, and our innovations and technology have provided ArcBest with a solid foundation and will continue to drive our company's growth, success and value-creation in 2022 and beyond."

Fourth Quarter Results of Operations Comparisons

Asset-Based

Fourth Quarter 2021 Versus Fourth Quarter 2020

• Revenue of $683.5 million compared to $554.4 million, a per-day increase of 23.3 percent.
• Total tonnage per day increase of 5.1 percent, including an increase of 1.1 percent in LTL-rated weight per shipment.
• Total shipments per day increase of 1.5 percent.
• Total billed revenue per hundredweight increased 17.3 percent and was positively impacted by higher fuel surcharges. Revenue per hundredweight on LTL-rated business, excluding fuel surcharge, improved by a percentage in the double digits.
• Operating income of $83.1 million compared to $27.9 million. On a non-GAAP basis, operating income of $89.5 million compared to $34.9 million.

Continued customer demand for ArcBest's Asset-Based services and a solid pricing environment are reflected in the segment's record-setting fourth quarter and full year revenue and profit. As transportation capacity challenges continued in the marketplace, ArcBest's customers benefited from integrated supply chain solutions enhanced by trusted relationships and utilization of ArcBest's Asset-Based network. Hiring events and initiatives have been successful and are expected to produce further benefits for customers. An emphasis on network resource allocation to serve core LTL customers continued to result in tonnage and shipment growth as well as increased profitability.

As a result of the operating ratio achieved in 2021, ABF Freight will pay a 3% profit-sharing bonus to qualifying union-represented employees – the maximum amount provided in the collective bargaining agreement.

"The ABF Freight team is an integral part of ArcBest's differentiated offering of integrated logistics solutions. It's because of that team's continued dedication and efforts that we're able to provide this bonus for the third year in a row and at a higher level compared to the previous two years," added McReynolds.

Asset-Light^‡

Fourth Quarter 2021 Versus Fourth Quarter 2020 (including the results of MoLo beginning November 1, 2021)

• Revenue of $541.2 million compared to $301.2 million, a per-day increase of 79.7 percent.
• For the months of November and December 2021, MoLo revenue of $120.3 million.
• Operating income of $13.9 million compared to $5.5 million. On a non-GAAP basis, operating income of $16.4 million compared to $6.4 million.
• Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") of $18.6 million compared to $8.3 million, as detailed in the attached non-GAAP reconciliation tables.

Increased market rates associated with limited transport capacity, combined with continued strength in customer demand, resulted in another record-setting quarter for the ArcBest segment. For the months of November and December, the positive momentum in the ArcBest segment was enhanced by the addition of MoLo. With the addition of MoLo, ArcBest's truckload services produced a significant increase in truckload brokerage revenue and shipments over the prior year's fourth quarter. Revenue growth and enhanced profitability were driven by strong demand from customers seeking supply chain solutions requiring expedite, managed transportation and international services. ArcBest also continued to benefit from strong relationships with carrier partners, further improved by the addition of MoLo, and the ability to meet customers' needs through innovation in a tight freight market.

At FleetNet, an increase in roadside events and higher revenue per total service event contributed to record quarterly revenue and strong fourth quarter profitability for the segment.

Full Year Results of Operations Comparisons

Asset-Based

Full Year 2021 Versus Full Year 2020

• Revenue of $2.6 billion, compared to $2.1 billion, a per-day increase of 23.5 percent.
• Tonnage per day increase of 7.6 percent.
• Shipments per day increase of 4.3 percent.
• Total billed revenue per hundredweight increase of 14.7 percent, positively impacted by higher fuel surcharges.
• Operating income of $260.7 million compared to $98.9 million. On a non-GAAP basis, operating income of $288.3 million compared to $121.3 million.
• Profit-sharing bonus to union-represented ABF Freight employees of $15.1 million, an increase of approximately $10 million over those paid for both 2019 and 2020.

Asset-Light^‡

Full Year 2021 Versus Full Year 2020 (including the results of MoLo beginning November 1, 2021)

• Revenue of $1.6 billion compared to $984.2 million, a per-day increase of 58.6 percent.
• Operating income of $50.9 million compared to $13.0 million. On a non-GAAP basis, operating income of $49.3 million compared to $16.8 million.
• Adjusted EBITDA of $64.0 million compared to $24.4 million.

Capital Expenditures

In 2021, total net capital expenditures, including equipment financed, equaled $104 million. Net capital expenditures in 2021 included $79 million of revenue equipment, the majority of which was for ArcBest's Asset-Based operation. Revenue equipment purchases in 2021 were lower than the original estimate because of pandemic-related manufacturing delays, primarily on new road tractors. Depreciation and amortization costs on property, plant and equipment were $119 million in 2021.

Quarterly Dividend and Share Repurchase Programs

ArcBest generated solid cash from operations in 2021 and continued to return capital to shareholders through its dividend and share repurchase programs, including the $100 million accelerated share repurchase agreement that was entered into in early November 2021 and completed in January 2022. Currently, $41.9 million remains available under an authorized program for future common stock purchases.

NOTE

 ‡ - The ArcBest and FleetNet reportable segments, combined, represent Asset-Light operations.

Conference Call

ArcBest will host a conference call with company executives to discuss the 2021 fourth quarter and full year 2021 results. The call will be today, Tuesday, February 1, at 9:30 a.m. EST (8:30 a.m. CST). Interested parties are invited to listen by calling (800) 954-0652 or by joining the webcast which can be found on ArcBest's website at arcb.com. Slides to accompany this call are included in Exhibit 99.3 of the Form 8-K filed on February 1, 2022, will be posted and available to download on the company's website prior to the scheduled conference time, and will be included in the webcast. Following the call, a recorded playback will be available through the end of the day on March 15, 2022. To listen to the playback, dial (800) 633–8284 or (402) 977–9140 (for international callers). The conference call ID for the playback is 22014422. The conference call and playback can also be accessed, through March 15, 2022, on ArcBest's website at arcb.com.

About ArcBest

ArcBest^® (Nasdaq: ARCB) is a multibillion-dollar integrated logistics company that helps keep the global supply chain moving. Founded in 1923 and now with over 14,000 employees across more than 250 campuses and service centers, the company is a logistics powerhouse, fueled by the simple notion of finding a way to get the job done. Through innovative thinking, agility and trust, ArcBest leverages their full suite of shipping and logistics solutions to meet customers' critical needs, each and every day. For more information, visit arcb.com.

The following is a "safe harbor" statement under the Private Securities Litigation Reform Act of 1995: Certain statements and information in this press release concerning results for the three and twelve months ended December 31, 2021 may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others, statements regarding (i) our expectations about our intrinsic value or our prospects for growth and value creation and (ii) our financial outlook, position, strategies, goals, and expectations. 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. These statements are based on management's beliefs, assumptions, and expectations based on currently available information, are not guarantees of future performance, and involve certain risks and uncertainties (some of which are beyond our control). Although we believe that the expectations reflected in these forward-looking statements are reasonable as and when made, we cannot provide assurance that our expectations will prove to be correct. Actual outcomes and results could materially differ from what is expressed, implied, or forecasted in these statements due to a number of factors, including, but not limited to: market fluctuations and interruptions affecting the price of our stock or the price or timing of our share repurchase programs; widespread outbreak of an illness or disease, including the COVID-19 pandemic and its effects, or any other public health crisis, as well as regulatory measures implemented in response to such events; external events which may adversely affect us or the third parties who provide services for us, for which our business continuity plans may not adequately prepare us; a failure of our information systems, including disruptions or failures of services essential to our operations or upon which our information technology platforms rely, data breach, and/or cybersecurity incidents; interruption or failure of third-party software or information technology systems or licenses; untimely or ineffective development and implementation of, or failure to realize potential benefits associated with, new or enhanced technology or processes, including the pilot test program at ABF Freight; the loss or reduction of business from large customers; the ability to manage our cost structure, and the timing and performance of growth initiatives; the cost, integration, and performance of any recent or future acquisitions, including the MoLo acquisition, and the inability to realize the anticipated benefits of the acquisition within the expected time period or at all; the timing or amount of the earnout payments for the MoLo acquisition, if any; maintaining our corporate reputation and intellectual property rights; competitive initiatives and pricing pressures; increased prices for and decreased availability of new revenue equipment, decreases in value of used revenue equipment, and higher costs of equipment-related operating expenses such as maintenance, fuel, and related taxes; availability of fuel, 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; relationships with employees, including unions, and our ability to attract, retain, and develop employees; 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; union employee wages and benefits, including changes in required contributions to multiemployer plans; availability and cost of reliable third-party services; our ability to secure independent owner operators and/or operational or regulatory issues related to our use of their services; litigation or claims asserted against us; governmental regulations; environmental laws and regulations, including emissions-control regulations; default on covenants of financing arrangements and the availability and terms of future financing arrangements; self-insurance claims and insurance premium costs; potential impairment of goodwill and intangible assets; general economic conditions and related shifts in market demand that impact the performance and needs of industries we serve and/or limit our customers' access to adequate financial resources; seasonal fluctuations and adverse weather conditions; and other financial, operational, and legal risks and uncertainties detailed from time to time in ArcBest Corporation's public filings with the Securities and Exchange Commission (the "SEC").

For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see our filings with the 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.

Investor Relations Contact: David Humphrey	Media Contact: Autumnn Mahar
Title: Vice President – Investor Relations	Title: Senior Manager, PR and Social
Phone: 479-785-6200	Phone: 479-494-8221
Email: dhumphrey@arcb.com	Email: amahar@arcb.com

 

Financial Data and Operating Statistics

The following tables show financial data and operating statistics on ArcBest^® and its reportable segments.

 

ARCBEST CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS
		Three Months Ended						Year Ended
		December 31						December 31
		2021			2020			2021			2020
		(Unaudited)
		($ thousands, except share and per share data)
REVENUES		$	1,185,224		$	816,414		$	3,980,067		$	2,940,163
OPERATING EXPENSES			1,098,289			786,162			3,699,081			2,841,885
OPERATING INCOME			86,935			30,252			280,986			98,278
OTHER INCOME (COSTS)
Interest and dividend income			238			494			1,275			3,616
Interest and other related financing costs			(2,130)			(2,512)			(8,904)			(11,697)
Other, net			1,156			1,965			3,797			2,299
			(736)			(53)			(3,832)			(5,782)
INCOME BEFORE INCOME TAXES			86,199			30,199			277,154			92,496
INCOME TAX PROVISION			20,711			6,285			63,633			21,396
NET INCOME		$	65,488		$	23,914		$	213,521		$	71,100
EARNINGS PER COMMON SHARE
Basic		$	2.60		$	0.94		$	8.38		$	2.80
Diluted		$	2.47		$	0.89		$	7.98		$	2.69
AVERAGE COMMON SHARES OUTSTANDING
Basic			25,211,666			25,427,449			25,471,939			25,410,232
Diluted			26,467,420			26,734,287			26,772,126			26,422,523
CASH DIVIDENDS DECLARED PER COMMON SHARE		$	0.08		$	0.08		$	0.32		$	0.32

 

 

ARCBEST CORPORATION CONSOLIDATED BALANCE SHEETS
		December 31			December 31
		2021			2020
		(Unaudited)			Note
		($ thousands, except share data)
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	76,620		$	303,954
Short-term investments			48,339			65,408
Accounts receivable, less allowances (2021 - $13,226; 2020 - $7,851)			582,344			320,870
Other accounts receivable, less allowances (2021 - $690; 2020 - $660)			13,094			14,343
Prepaid expenses			40,104			37,774
Prepaid and refundable income taxes			9,654			11,397
Other			5,898			4,422
TOTAL CURRENT ASSETS			776,053			758,168
PROPERTY, PLANT AND EQUIPMENT
Land and structures			350,694			342,178
Revenue equipment			980,283			916,760
Service, office, and other equipment			251,085			233,810
Software			175,989			163,193
Leasehold improvements			16,931			15,156
			1,774,982			1,671,097
Less allowances for depreciation and amortization			1,079,061			992,407
			695,921			678,690
GOODWILL			300,337			88,320
INTANGIBLE ASSETS, NET			126,580			54,981
OPERATING RIGHT-OF-USE ASSETS			106,686			115,195
DEFERRED INCOME TAXES			5,470			6,158
OTHER LONG-TERM ASSETS			101,629			77,496
TOTAL ASSETS		$	2,112,676		$	1,779,008
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable		$	311,401		$	170,898
Income taxes payable			12,087			316
Accrued expenses			305,851			246,746
Current portion of long-term debt			50,615			67,105
Current portion of operating lease liabilities			22,740			21,482
TOTAL CURRENT LIABILITIES			702,694			506,547
LONG-TERM DEBT, less current portion			174,917			217,119
OPERATING LEASE LIABILITIES, less current portion			88,835			97,839
POSTRETIREMENT LIABILITIES, less current portion			16,733			18,555
OTHER LONG-TERM LIABILITIES			135,537			37,948
DEFERRED INCOME TAXES			64,893			72,407
STOCKHOLDERS' EQUITY
Common stock, $0.01 par value, authorized 70,000,000 shares;       issued 2021: 29,359,597 shares; 2020: 29,045,309 shares			294			290
Additional paid-in capital			318,033			342,354
Retained earnings			801,314			595,932
Treasury stock, at cost, 2021: 4,492,514 shares; 2020: 3,656,938 shares			(194,273)			(111,173)
Accumulated other comprehensive income			3,699			1,190
TOTAL STOCKHOLDERS' EQUITY			929,067			828,593
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	2,112,676		$	1,779,008
Note:  The balance sheet at December 31, 2020 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.

 

 

ARCBEST CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS
		Year Ended
		December 31
		2021			2020
		Unaudited
		($ thousands)
OPERATING ACTIVITIES
Net income		$	213,521		$	71,100
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			118,864			114,379
Amortization of intangibles			5,357			4,012
Pension settlement expense			—			89
Share-based compensation expense			11,426			10,478
Provision for losses on accounts receivable			1,466			4,327
Change in deferred income taxes			(7,589)			7,715
Gain on sale of property and equipment and lease termination			(8,520)			(2,376)
Gain on sale of subsidiaries			(6,923)			—
Changes in operating assets and liabilities:
Receivables			(122,782)			(38,129)
Prepaid expenses			(1,482)			(7,966)
Other assets			354			2,646
Income taxes			13,136			(1,712)
Operating right-of-use assets and lease liabilities, net			623			756
Accounts payable, accrued expenses, and other liabilities			106,064			40,670
NET CASH PROVIDED BY OPERATING ACTIVITIES			323,515			205,989
INVESTING ACTIVITIES
Purchases of property, plant and equipment, net of financings			(58,412)			(43,248)
Proceeds from sale of property and equipment			13,815			13,348
Business acquisitions, net of cash acquired(1)			(239,380)			—
Proceeds from sale of subsidiaries			9,013			—
Purchases of short-term investments			(56,011)			(165,133)
Proceeds from sale of short-term investments			73,182			216,735
Purchase of long-term investments			(25,350)			—
Capitalization of internally developed software			(20,061)			(14,241)
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES			(303,204)			7,461
FINANCING ACTIVITIES
Borrowings under credit facilities			50,000			180,000
Borrowings under accounts receivable securitization program			—			45,000
Proceeds from notes payable			3,523			—
Payments on long-term debt			(171,915)			(326,098)
Net change in book overdrafts			(1,957)			6,510
Deferred financing costs			(314)			—
Payment of common stock dividends			(8,139)			(8,157)
Purchases of treasury stock			(83,100)			(6,595)
Forward contract for accelerated share repurchase			(25,000)			—
Payments for tax withheld on share-based compensation			(10,743)			(2,065)
NET CASH USED IN FINANCING ACTIVITIES			(247,645)			(111,405)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS			(227,334)			102,045
Cash and cash equivalents at beginning of period			303,954			201,909
CASH AND CASH EQUIVALENTS AT END OF PERIOD		$	76,620		$	303,954
NONCASH INVESTING ACTIVITIES
Equipment financed		$	59,700		$	61,803
Accruals for equipment received		$	1,704		$	1,667
Lease liabilities arising from obtaining right-of-use assets		$	14,671		$	67,819
____________________
1)         Represents the acquisition of MoLo Solutions, LLC ("MoLo") on November 1, 2021.

 

 

ARCBEST CORPORATION FINANCIAL STATEMENT OPERATING SEGMENT DATA AND OPERATING RATIOS
		Three Months Ended												Year Ended
		December 31												December 31
		2021						2020						2021						2020
		Unaudited
		($ thousands, except percentages)
REVENUES
Asset-Based		$	683,485					$	554,392					$	2,573,773					$	2,092,031
ArcBest(1)			472,335						245,579						1,300,626						779,115
FleetNet			68,863						55,625						254,087						205,049
Total Asset-Light			541,198						301,204						1,554,713						984,164
Other and eliminations			(39,459)						(39,182)						(148,419)						(136,032)
Total consolidated revenues		$	1,185,224					$	816,414					$	3,980,067					$	2,940,163
OPERATING EXPENSES
Asset-Based
Salaries, wages, and benefits		$	304,350		44.5	%		$	275,476		49.7	%		$	1,198,253		46.6	%		$	1,095,694		52.4	%
Fuel, supplies, and expenses			73,662		10.8				52,051		9.4				266,139		10.3				209,095		10.0
Operating taxes and licenses			12,484		1.8				12,581		2.2				49,461		1.9				49,300		2.4
Insurance			9,232		1.4				8,910		1.6				37,800		1.5				33,568		1.6
Communications and utilities			4,581		0.7				4,490		0.8				18,773		0.7				17,916		0.8
Depreciation and amortization			23,774		3.5				23,675		4.3				93,799		3.6				94,326		4.5
Rents and purchased transportation			97,820		14.3				78,795		14.2				364,345		14.2				250,159		12.0
Shared services			67,277		9.8				62,104		11.2				263,532		10.2				217,258		10.4
Gain on sale of property and equipment(2)			(52)		—				(103)		—				(8,676)		(0.3)				(3,309)		(0.2)
Innovative technology costs(3)			6,328		0.9				6,937		1.3				27,631		1.1				22,458		1.1
Other			906		0.1				1,533		0.3				2,009		0.1				6,701		0.3
Total Asset-Based			600,362		87.8	%			526,449		95.0	%			2,313,066		89.9	%			1,993,166		95.3	%
ArcBest(1)
Purchased transportation		$	402,834		85.3	%		$	206,532		84.1	%		$	1,097,332		84.4	%		$	649,933		83.4	%
Supplies and expenses			2,746		0.6				2,612		1.0				10,531		0.8				9,627		1.2
Depreciation and amortization(4)			4,283		0.9				2,382		1.0				11,387		0.9				9,714		1.3
Shared services			45,939		9.7				26,199		10.7				132,137		10.1				90,983		11.7
Gain on sale of subsidiary(5)			—		—				—		—				(6,923)		(0.5)				—		—
Other			3,710		0.8				2,924		1.2				9,765		0.7				9,203		1.2
			459,512		97.3	%			240,649		98.0	%			1,254,229		96.4	%			769,460		98.8	%
FleetNet			67,749		98.4	%			55,067		99.0	%			249,543		98.2	%			201,682		98.4	%
Total Asset-Light			527,261						295,716						1,503,772						971,142
Other and eliminations(6)			(29,334)						(36,003)						(117,757)						(122,423)
Total consolidated operating expenses		$	1,098,289		92.7	%		$	786,162		96.3	%		$	3,699,081		92.9	%		$	2,841,885		96.7	%
OPERATING INCOME
Asset-Based		$	83,123					$	27,943					$	260,707					$	98,865
ArcBest			12,823						4,930						46,397						9,655
FleetNet			1,114						558						4,544						3,367
Total Asset-Light			13,937						5,488						50,941						13,022
Other and eliminations(6)			(10,125)						(3,179)						(30,662)						(13,609)
Total consolidated operating income		$	86,935					$	30,252					$	280,986					$	98,278

____________________
1)	The 2021 periods include the operations of MoLo since the November 1, 2021 acquisition date.
2)	The year ended December 31, 2021 includes an $8.6 million gain on the sale of an unutilized service center property.
3)	Represents costs associated with the freight handling pilot test program at ABF Freight.
4)	Depreciation and amortization includes amortization of intangibles associated with acquired businesses.
5)	Gain relates to the sale of the labor services portion of the ArcBest segment's moving business in second quarter 2021.
6)	"Other and eliminations" includes corporate costs for certain unallocated shared service costs which are not attributable to any segment, additional investments to offer comprehensive transportation and logistics services across multiple operating segments, and other investments in ArcBest technology and innovations, including innovative technology costs.

 

 

ARCBEST CORPORATION RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES
Non-GAAP Financial Measures We report our 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 analysts, investors, and others the same information that we use internally for purposes of assessing our core operating performance and provides meaningful comparisons between current and prior period results, as well as important information regarding performance trends. The use of certain non-GAAP measures improves comparability in analyzing our performance because it removes the impact of items from operating results that, in management's opinion, do not reflect our core operating performance. Other companies may calculate non-GAAP measures differently; therefore, our calculation may not be comparable to similarly titled measures of other companies. 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, our reported results. These financial measures should not be construed as better measurements than operating income, operating cash flow, net income or earnings per share, as determined under GAAP.
		Three Months Ended						Year Ended
		December 31							December 31
		2021			2020				2021			2020
ArcBest Corporation - Consolidated		(Unaudited)
		($ thousands, except per share data)
Operating Income
Amounts on GAAP basis		$	86,935		$	30,252		$	280,986		$	98,278
Innovative technology costs, pre-tax(1)			8,454			8,279			32,845			25,620
Purchase accounting amortization(2)			2,455			937			5,266			3,749
Transaction costs, pre-tax(3)			4,362			—			5,969			—
Gain on sale of subsidiary, pre-tax(4)			—			—			(6,923)			—
Non-GAAP amounts		$	102,206		$	39,468		$	318,143		$	127,647
Net Income
Amounts on GAAP basis		$	65,488		$	23,914		$	213,521		$	71,100
Innovative technology costs, after-tax (includes related financing costs)(1)			6,388			6,283			24,871			19,604
Purchase accounting amortization(2)			1,837			702			3,940			2,805
Transaction costs, after-tax(3)			3,222			—			4,409			—
Gain on sale of subsidiary, after-tax(4)			—			—			(5,437)			—
Nonunion pension expense, including settlement expense, after-tax(5)			—			—			—			66
Life insurance proceeds and changes in cash surrender value			(1,215)			(2,058)			(4,123)			(2,316)
Tax expense (benefit) from vested RSUs(6)			(236)			(31)			(7,647)			510
Tax credits(7)			(1,540)			(1,285)			(1,540)			(1,285)
Non-GAAP amounts		$	73,944		$	27,525		$	227,994		$	90,484
Diluted Earnings Per Share
Amounts on GAAP basis		$	2.47		$	0.89		$	7.98		$	2.69
Innovative technology costs, after-tax (includes related financing costs)(1)			0.24			0.24			0.93			0.74
Purchase accounting amortization(2)			0.07			0.03			0.15			0.11
Transaction costs, after-tax(3)			0.12			—			0.16			—
Gain on sale of subsidiary, after-tax(4)			—			—			(0.20)			—
Nonunion pension expense, including settlement expense, after-tax(5)			—			—			—			—
Life insurance proceeds and changes in cash surrender value			(0.05)			(0.08)			(0.15)			(0.09)
Tax expense (benefit) from vested RSUs(6)			(0.01)			—			(0.29)			0.02
Tax credits(7)			(0.06)			(0.05)			(0.06)			(0.05)
Non-GAAP amounts(8)		$	2.79		$	1.03		$	8.52		$	3.42

____________________
1)	Represents costs associated with the freight handling pilot test program at ABF Freight and initiatives to optimize our performance through technological innovation, including costs related to our recently announced investment in human-centered remote operation software.
2)	Represents the amortization of acquired intangible assets related to the November 1, 2021 acquisition of MoLo and previously acquired businesses in the ArcBest segment.
3)	Transaction costs are associated with the acquisition of MoLo.
4)	Gain relates to the sale of the labor services portion of ArcBest segment's moving business in second quarter 2021.
5)	Represents pension settlement expense related to the Company's supplemental benefit plan.
6)	The Company recognizes the tax impact for the vesting of share-based compensation resulting in excess tax expense (benefit).
7)	Represents a research and development tax credit recognized in the tax provision during fourth quarter 2021 and 2020 which relates to the tax year ended February 28, 2021 and February 29, 2020, respectively.
8)	Non-GAAP EPS is calculated in total and may not foot due to rounding.

 

 

ARCBEST CORPORATION RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES – Continued
		Three Months Ended												Year Ended
		December 31												December 31
		2021						2020						2021						2020
Segment Operating Income Reconciliations		(Unaudited)
		($ thousands, except percentages)
Asset-Based Segment
Operating Income ($) and Operating Ratio (% of revenues)
Amounts on GAAP basis		$	83,123		87.8	%		$	27,943		95.0	%		$	260,707		89.9	%		$	98,865		95.3	%
Innovative technology costs, pre-tax(1)			6,328		(0.9)				6,937		(1.3)				27,631		(1.1)				22,458		(1.1)
Non-GAAP amounts		$	89,451		86.9	%		$	34,880		93.7	%		$	288,338		88.8	%		$	121,323		94.2	%
Asset-Light
ArcBest Segment
Operating Income ($) and Operating Ratio (% of revenues)
Amounts on GAAP basis		$	12,823		97.3	%		$	4,930		98.0	%		$	46,397		96.4	%		$	9,655		98.8	%
Purchase accounting amortization(2)			2,455		(0.5)				937		(0.4)				5,266		(0.4)				3,749		(0.5)
Gain on sale of subsidiary, pre-tax(3)			—		—				—		—				(6,923)		0.5				—		—
Non-GAAP amounts		$	15,278		96.8	%		$	5,867		97.6	%		$	44,740		96.5	%		$	13,404		98.3	%
FleetNet Segment
Operating Income ($) and Operating Ratio (% of revenues)
Amounts on GAAP basis		$	1,114		98.4	%		$	558		99.0	%		$	4,544		98.2	%		$	3,367		98.4	%
Total Asset-Light
Operating Income ($) and Operating Ratio (% of revenues)
Amounts on GAAP basis		$	13,937		97.4	%		$	5,488		98.2	%		$	50,941		96.7	%		$	13,022		98.7	%
Purchase accounting amortization(2)			2,455		(0.5)				937		(0.3)				5,266		(0.3)				3,749		(0.4)
Gain on sale of subsidiary, pre-tax(3)			—		—				—		—				(6,923)		0.4				—		—
Non-GAAP amounts		$	16,392		96.9	%		$	6,425		97.9	%		$	49,284		96.8	%		$	16,771		98.3	%
Other and Eliminations
Operating Loss ($)
Amounts on GAAP basis		$	(10,125)					$	(3,179)					$	(30,662)					$	(13,609)
Innovative technology costs, pre-tax(4)			2,126						1,342						5,214						3,162
Transaction costs, pre-tax(5)			4,362						—						5,969						—
Non-GAAP amounts		$	(3,637)					$	(1,837)					$	(19,479)					$	(10,447)

____________________
1)	Represents costs associated with the freight handling pilot test program at ABF Freight.
2)	Represents the amortization of acquired intangible assets related to the November 1, 2021 acquisition of MoLo and previously acquired businesses in the ArcBest segment. Included in depreciation and amortization within ArcBest segment operating expenses.
3)	Gain relates to the sale of the labor services portion of the ArcBest segment's moving business in second quarter 2021.
4)	Represents costs associated with initiative to optimize our performance through technological innovation, including costs related to our recently announced investment in human-centered remote operation software, and costs related to the freight handling pilot test program at ABF Freight.
5)	Transaction costs are associated with the acquisition of MoLo.

 

 

ARCBEST CORPORATION RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES – Continued
Effective Tax Rate Reconciliation
ArcBest Corporation - Consolidated
(Unaudited)
($ thousands, except percentages)		Three Months Ended December 31, 2021
					Other			Income			Income
		Operating			Income			Before Income			Tax			Net
		Income			(Costs)			Taxes			Provision			Income			Tax Rate(8)
Amounts on GAAP basis		$	86,935		$	(736)		$	86,199		$	20,711		$	65,488		24.0	%
Innovative technology costs(1)			8,454			149			8,603			2,215			6,388		25.7
Purchase accounting amortization(2)			2,455			—			2,455			618			1,837		25.2
Transaction costs(3)			4,362			—			4,362			1,140			3,222		26.1
Life insurance proceeds and changes in cash surrender value			—			(1,215)			(1,215)			—			(1,215)		—
Tax benefit from vested RSUs(4)			—			—			—			236			(236)		—
Tax credits(5)			—			—			—			1,540			(1,540)		—
Non-GAAP amounts		$	102,206		$	(1,802)		$	100,404		$	26,460		$	73,944		26.4	%
		Year Ended December 31, 2021
					Other			Income			Income
		Operating			Income			Before Income			Tax			Net
		Income			(Costs)			Taxes			Provision			Income			Tax Rate(8)
Amounts on GAAP basis		$	280,986		$	(3,832)		$	277,154		$	63,633		$	213,521		23.0	%
Innovative technology costs(1)			32,845			646			33,491			8,620			24,871		25.7
Purchase accounting amortization(2)			5,266			—			5,266			1,326			3,940		25.2
Transaction costs(3)			5,969			—			5,969			1,560			4,409		26.1
Gain on sale of subsidiary(6)			(6,923)			—			(6,923)			(1,486)			(5,437)		(21.5)
Life insurance proceeds and changes in cash surrender value			—			(4,123)			(4,123)			—			(4,123)		—
Tax benefit from vested RSUs(4)			—			—			—			7,647			(7,647)		—
Tax credits(5)			—			—			—			1,540			(1,540)		—
Non-GAAP amounts		$	318,143		$	(7,309)		$	310,834		$	82,840		$	227,994		26.7	%
		Three Months Ended December 31, 2020
					Other			Income			Income
		Operating			Income			Before Income			Tax			Net
		Income			(Costs)			Taxes			Provision			Income			Tax Rate(8)
Amounts on GAAP basis		$	30,252		$	(53)		$	30,199		$	6,285		$	23,914		20.8	%
Innovative technology costs(1)			8,279			182			8,461			2,178			6,283		25.7
Purchase accounting amortization(2)			937						937			235			702		25.1
Life insurance proceeds and changes in cash surrender value			—			(2,058)			(2,058)			—			(2,058)		—
Tax benefit from vested RSUs(4)			—			—			—			31			(31)		—
Tax credits(5)			—			—			—			1,285			(1,285)		—
Non-GAAP amounts		$	39,468		$	(1,929)		$	37,539		$	10,014		$	27,525		26.7	%
		Year Ended December 31, 2020
					Other			Income			Income
		Operating			Income			Before Income			Tax			Net
		Income			(Costs)			Taxes			Provision			Income			Tax Rate(8)
Amounts on GAAP basis		$	98,278		$	(5,782)		$	92,496		$	21,396		$	71,100		23.1	%
Innovative technology costs(1)			25,620			779			26,399			6,795			19,604		25.7
Purchase accounting amortization(2)			3,749						3,749			944			2,805		25.2
Nonunion pension expense, including settlement (7)			—			89			89			23			66		25.8
Life insurance proceeds and changes in cash surrender value			—			(2,316)			(2,316)			—			(2,316)		—
Tax expense from vested RSUs(4)			—			—			—			(510)			510		—
Tax credits(5)			—			—			—			1,285			(1,285)		—
Non-GAAP amounts		$	127,647		$	(7,230)		$	120,417		$	29,933		$	90,484		24.9	%

____________________
1)	Represents costs associated with the freight handling pilot test program at ABF Freight and initiatives to optimize our performance through technological innovation, including costs related to our recently announced investment in human-centered remote operation software.
2)	Represents the amortization of acquired intangible assets related to the November 1, 2021 acquisition of MoLo and previously acquired businesses in the ArcBest segment.
3)	Transaction costs are associated with the acquisition of MoLo.
4)	The Company recognizes the tax impact for the vesting of share-based compensation resulting in excess tax expense (benefit).
5)	Represents a research and development tax credit recognized in the tax provision during fourth quarter 2021 and 2020 which relates to the tax year ended February 28, 2021 and February 29, 2020, respectively.
6)	Gain relates to the sale of the labor services portion of the ArcBest segment's moving business in second quarter 2021.
7)	Represents pension settlement expense related to the Company's supplemental benefit plan.
8)	Tax rate for total "Amounts on GAAP basis" represents the effective tax rate. The tax effects of non-GAAP adjustments are calculated based on the statutory rate applicable to each item based on tax jurisdiction, unless the nature of the item requires the tax effect to be estimated by applying a specific tax treatment.

 

ARCBEST CORPORATION RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES – Continued
Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (Adjusted EBITDA) Management uses Adjusted EBITDA as a key measure of performance and for business planning. The measure is particularly meaningful for analysis of operating performance because it excludes amortization of acquired intangibles and software of the Asset-Light businesses, which are significant expenses resulting from strategic decisions rather than core daily operations. Additionally, Adjusted EBITDA is a primary component of the financial covenants contained in our credit agreement. The calculation of Asset-Light Adjusted EBITDA as presented below begins with operating income, as other income (costs), income taxes, and net income are reported at the consolidated level and not included in the operating segment financial information evaluated by management to make operating decisions.
		Three Months Ended						Year Ended
		December 31							December 31
		2021			2020			2021			2020
		(Unaudited)
ArcBest Corporation - Consolidated Adjusted EBITDA		($ thousands)
Net Income		$	65,488		$	23,914		$	213,521		$	71,100
Interest and other related financing costs			2,130			2,512			8,904			11,697
Income tax provision			20,711			6,285			63,633			21,396
Depreciation and amortization(1)			33,226			30,260			124,221			118,391
Amortization of share-based compensation			2,859			2,522			11,426			10,478
Amortization of net actuarial gains of benefit plans and pension settlement expense(2)			(135)			(148)			(539)			(500)
Transaction costs(3)			4,362			—			5,969			—
Consolidated Adjusted EBITDA		$	128,641		$	65,345		$	427,135		$	232,562

____________________
1)	Includes amortization of intangibles associated with acquired businesses.
2)	The year ended December 31, 2020 includes pre-tax pension settlement expense of $0.1 million related to the Company's supplemental benefit plan.
3)	Transaction costs are associated with the acquisition of MoLo.

 

 

		Three Months Ended						Year Ended
		December 31						December 31
		2021			2020			2021			2020
Asset-Light Adjusted EBITDA		(Unaudited)
		($ thousands)
ArcBest
Operating Income		$	12,823		$	4,930		$	46,397		$	9,655
Depreciation and amortization(4)			4,283			2,382			11,387			9,714
Adjusted EBITDA		$	17,106		$	7,312		$	57,784		$	19,369
FleetNet
Operating Income		$	1,114		$	558		$	4,544		$	3,367
Depreciation and amortization(4)			420			418			1,661			1,622
Adjusted EBITDA		$	1,534		$	976		$	6,205		$	4,989
Total Asset-Light
Operating Income		$	13,937		$	5,488		$	50,941		$	13,022
Depreciation and amortization(4)			4,703			2,800			13,048			11,336
Adjusted EBITDA		$	18,640		$	8,288		$	63,989		$	24,358

____________________
4)	Includes amortization of intangibles associated with acquired businesses.

 

 

ARCBEST CORPORATION OPERATING STATISTICS
		Three Months Ended								Year Ended
		December 31								December 31
		2021			2020			% Change		2021			2020			% Change
		(Unaudited)
Asset-Based
Workdays			61.5			61.5					252.0			253.0
Billed Revenue(1) / CWT		$	41.96		$	35.76		17.3%		$	39.70		$	34.60		14.7%
Billed Revenue(1) / Shipment		$	557.49		$	458.71		21.5%		$	522.85		$	441.73		18.4%
Shipments			1,224,928			1,206,783		1.5%			4,941,780			4,756,248		3.9%
Shipments / Day			19,918			19,622		1.5%			19,610			18,799		4.3%
Tonnage (Tons)			813,639			773,915		5.1%			3,253,853			3,035,834		7.2%
Tons / Day			13,230			12,584		5.1%			12,912			11,999		7.6%
Pounds / Shipment			1,328			1,283		3.5%			1,317			1,277		3.1%
Average Length of Haul (Miles)			1,091			1,097		(0.5)%			1,097			1,080		1.6%

____________________
1)	Revenue for undelivered freight is deferred for financial statement purposes in accordance with the Asset-Based segment 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.

 

 

		Year Over Year % Change
		Three Months Ended			Year Ended
		December 31, 2021			December 31, 2021
		(Unaudited)
ArcBest(2)
Revenue / Shipment		33.9%			31.0%
Shipments / Day		50.8%			30.6%

____________________
2)	Statistical data related to the operations of MoLo since the November 1, 2021 acquisition date are included in the presentation of operating statistics for the ArcBest segment. Statistical data related to managed transportation solutions transactions are not included in the presentation.

 

 

 

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SOURCE ArcBest