ArcBest® Announces Record Third Quarter 2021 Results

Rhea-AI Summary

ArcBest (ARCB) reported a strong third quarter for 2021, achieving $1.0 billion in revenue, up from $795.0 million in Q3 2020. Operating income surged to $87.6 million, yielding a net income of $63.7 million or $2.38 per diluted share, compared to $29.4 million or $1.11 per share last year. Non-GAAP operating income reached $96.1 million versus $45.8 million in 2020. The acquisition of MoLo Solutions is expected to enhance ArcBest's logistics services, driving growth and shareholder value.

Positive

• Revenue increased by 26% year-over-year, from $795 million in Q3 2020 to $1 billion in Q3 2021.
• Operating income doubled compared to the previous year, reaching $87.6 million.
• Non-GAAP operating income improved significantly from $45.8 million to $96.1 million.
• Successful acquisition of MoLo Solutions expected to enhance logistics service offerings.

Negative

• None.

FORT SMITH, Ark., Nov. 2, 2021 /PRNewswire/ -- ArcBest^® (Nasdaq: ARCB), a leader in supply chain logistics, today reported third quarter 2021 revenue of $1.0 billion compared to third quarter 2020 revenue of $795.0 million. Each of ArcBest's operating segments achieved double-digit percentage revenue growth over the prior year. ArcBest's third quarter 2021 operating income was $87.6 million and net income was $63.7 million, or $2.38 per diluted share, compared to third quarter 2020 operating income of $39.8 million and net income of $29.4 million, or $1.11 per diluted share.

Excluding certain items in both periods as identified in the attached reconciliation tables, non-GAAP operating income was $96.1 million in third quarter 2021 compared to $45.8 million in the prior year period. On a non-GAAP basis, net income was $69.2 million, or $2.59 per diluted share, in third quarter 2021 compared to $32.4 million, or $1.22 per diluted share, in third quarter 2020.

"ArcBest continues to capitalize on the power of our integrated solutions to respond to today's rapidly evolving market environment," said Judy R. McReynolds, ArcBest chairman, president and CEO. "Our strategic vision, which is centered on accelerating growth through targeted investments in innovation, technology, logistics solutions and our people, continues to pay off. Furthering these efforts, yesterday's closing of the MoLo Solutions acquisition is expected to build and amplify our powerful portfolio of shipping and logistics services to help our customers drive the economy forward and unlock incremental value for our shareholders."

McReynolds added, "We wouldn't be where we are today – announcing record quarterly results – without ArcBest's talented and committed people, who are at the heart of our success. Our proven ability to operate safely and efficiently while advancing our strategic vision and generating strong financial results is due to our team's consistency and the trusted relationships they have built with our customers. Looking ahead, we are focused on continuing to successfully execute our growth strategy and creating sustainable value for our stakeholders, including our shareholders."

Third Quarter Results of Operations Comparisons

Asset-Based

Third Quarter 2021 Versus Third Quarter 2020

• Revenue of $681.2 million compared to $561.9 million, a per-day increase of 21.2 percent.
• Total tonnage per day increase of 2.4 percent, including an increase of 2.5 percent in LTL-rated weight per shipment.
• Total shipments per day increase of 0.5 percent.
• Total billed revenue per hundredweight increased 17.1 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 $83.6 million and an operating ratio of 87.7 percent compared to the prior-year quarter operating income of $36.6 million and an operating ratio of 93.5 percent. On a non-GAAP basis, operating income of $90.5 million and an operating ratio of 86.7 percent compared to the prior-year quarter operating income of $42.8 million and an operating ratio of 92.4 percent.

Strong shipper demand and a solid pricing environment coupled with ArcBest's deep understanding of customer needs resulted in the third record-setting quarter in a row this year for ArcBest's Asset-Based business. Year-over-year tonnage and shipment growth was the result of an emphasis on allocating network resources to serving core LTL customers. Shippers have continued to benefit from ArcBest's assets and facilities throughout its Asset-Based network being used to help solve supply chain challenges. Third quarter 2021 operating income more than doubled compared to the prior-year period and reflected a healthy sequential increase compared to the recent second quarter.

Asset-Light^‡

Third Quarter 2021 Versus Third Quarter 2020

• Revenue of $371.7 million compared to $267.8 million, a per-day increase of 38.8 percent.
• Operating income of $11.5 million compared to the prior-year quarter operating income of $5.8 million.
• Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") of $14.2 million compared to the prior-year quarter Adjusted EBITDA of $8.6 million, as detailed in the attached non-GAAP reconciliation tables.

Positive momentum in the ArcBest segment continued in the third quarter with record-setting quarterly revenue and operating income. The ability to positively respond to strong customer demand with innovative solutions contributed to solid revenue growth in the ArcBest segment. Increased demand for expedited and truckload logistics services resulted in higher shipment levels and higher average revenue per shipment. Customers' needs for managed transportation solutions also contributed to third quarter revenue growth and improved operating results. The increase in operating income reflects the benefits of higher revenue, partially offset by increased personnel costs in response to shipment growth and continued investments in technology.

Increased business volume combined with higher revenue per event contributed to record quarterly revenue for the FleetNet segment and an increase in operating income over the prior year's third quarter.

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 third quarter results. The call will be today, Tuesday, November 2, at 9:30 a.m. EDT (8:30 a.m. CDT). Interested parties are invited to listen by calling (800) 669-4993 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 November 2, 2021, 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 December 15, 2021. To listen to the playback, dial (800) 633–8284 or (402) 977–9140 (for international callers). The conference call ID for the playback is 21998422. The conference call and playback can also be accessed, through December 15, 2021, 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 months ended September 30, 2021 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," "int end," "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: 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						Nine Months Ended
		September 30						September 30
		2021			2020			2021			2020
		(Unaudited)
		($ thousands, except share and per share data)
REVENUES		$	1,016,657		$	794,980		$	2,794,843		$	2,123,749
OPERATING EXPENSES			929,096			755,198			2,600,792			2,055,723
OPERATING INCOME			87,561			39,782			194,051			68,026
OTHER INCOME (COSTS)
Interest and dividend income			323			756			1,037			3,122
Interest and other related financing costs			(2,072)			(2,860)			(6,774)			(9,185)
Other, net			338			1,500			2,641			334
			(1,411)			(604)			(3,096)			(5,729)
INCOME BEFORE INCOME TAXES			86,150			39,178			190,955			62,297
INCOME TAX PROVISION			22,459			9,774			42,922			15,111
NET INCOME		$	63,691		$	29,404		$	148,033		$	47,186
EARNINGS PER COMMON SHARE
Basic		$	2.48		$	1.15		$	5.79		$	1.86
Diluted		$	2.38		$	1.11		$	5.51		$	1.79
AVERAGE COMMON SHARES OUTSTANDING
Basic			25,632,805			25,470,094			25,559,642			25,403,786
Diluted			26,770,146			26,592,457			26,872,381			26,289,946
CASH DIVIDENDS DECLARED PER COMMON SHARE		$	0.08		$	0.08		$	0.24		$	0.24

 

ARCBEST CORPORATION
CONSOLIDATED BALANCE SHEETS
		September 30			December 31
		2021			2020
		(Unaudited)			Note
		($ thousands, except share data)
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	408,207		$	303,954
Short-term investments			60,289			65,408
Accounts receivable, less allowances (2021 - $6,847; 2020 - $7,851)			425,006			320,870
Other accounts receivable, less allowances (2021 - $671; 2020 - $660)			13,827			14,343
Prepaid expenses			30,120			37,774
Prepaid and refundable income taxes			9,258			11,397
Other			6,419			4,422
TOTAL CURRENT ASSETS			953,126			758,168
PROPERTY, PLANT AND EQUIPMENT
Land and structures			347,771			342,178
Revenue equipment			965,263			916,760
Service, office, and other equipment			243,601			233,810
Software			170,045			163,193
Leasehold improvements			15,970			15,156
			1,742,650			1,671,097
Less allowances for depreciation and amortization			1,058,343			992,407
			684,307			678,690
GOODWILL			86,368			88,320
INTANGIBLE ASSETS, NET			52,135			54,981
OPERATING RIGHT-OF-USE ASSETS			105,219			115,195
DEFERRED INCOME TAXES			6,544			6,158
OTHER LONG-TERM ASSETS			74,729			77,496
		$	1,962,428		$	1,779,008
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable		$	227,893		$	170,898
Income taxes payable			6,535			316
Accrued expenses			291,586			246,746
Current portion of long-term debt			67,897			67,105
Current portion of operating lease liabilities			21,765			21,482
TOTAL CURRENT LIABILITIES			615,676			506,547
LONG-TERM DEBT, less current portion			176,545			217,119
OPERATING LEASE LIABILITIES, less current portion			88,232			97,839
POSTRETIREMENT LIABILITIES, less current portion			18,506			18,555
OTHER LONG-TERM LIABILITIES			38,208			37,948
DEFERRED INCOME TAXES			64,218			72,407
STOCKHOLDERS' EQUITY
Common stock, $0.01 par value, authorized 70,000,000 shares;       issued 2021: 29,351,569 shares; 2020: 29,045,309 shares			294			290
Additional paid-in capital			340,315			342,354
Retained earnings			737,820			595,932
Treasury stock, at cost, 2021: 3,783,227 shares; 2020: 3,656,938 shares			(119,273)			(111,173)
Accumulated other comprehensive income			1,887			1,190
TOTAL STOCKHOLDERS' EQUITY			961,043			828,593
		$	1,962,428		$	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
		Nine Months Ended
		September 30
		2021			2020
		Unaudited
		($ thousands)
OPERATING ACTIVITIES
Net income		$	148,033		$	47,186
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			88,113			85,189
Amortization of intangibles			2,882			2,942
Pension settlement expense			—			89
Share-based compensation expense			8,567			7,956
Provision for losses on accounts receivable			(57)			2,170
Change in deferred income taxes			(8,593)			2,831
Gain on sale of property and equipment and lease termination			(8,389)			(3,280)
Gain on sale of subsidiaries			(6,923)			—
Changes in operating assets and liabilities:
Receivables			(103,886)			(38,905)
Prepaid expenses			7,655			809
Other assets			539			3,918
Income taxes			8,174			3,065
Operating right-of-use assets and lease liabilities, net			650			234
Accounts payable, accrued expenses, and other liabilities			101,577			37,062
NET CASH PROVIDED BY OPERATING ACTIVITIES			238,342			151,266
INVESTING ACTIVITIES
Purchases of property, plant and equipment, net of financings			(43,506)			(20,146)
Proceeds from sale of property and equipment			11,509			8,943
Proceeds from sale of subsidiaries			9,013			—
Purchases of short-term investments			(56,011)			(159,253)
Proceeds from sale of short-term investments			61,174			192,563
Capitalization of internally developed software			(14,308)			(9,568)
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES			(32,129)			12,539
FINANCING ACTIVITIES
Borrowings under credit facilities			—			180,000
Borrowings under accounts receivable securitization program			—			45,000
Payments on long-term debt			(76,513)			(309,640)
Net change in book overdrafts			(305)			349
Deferred financing costs			(295)			—
Payment of common stock dividends			(6,145)			(6,122)
Purchases of treasury stock			(8,100)			(5,667)
Payments for tax withheld on share-based compensation			(10,602)			(1,989)
NET CASH USED IN FINANCING ACTIVITIES			(101,960)			(98,069)
NET INCREASE IN CASH AND CASH EQUIVALENTS			104,253			65,736
Cash and cash equivalents at beginning of period			303,954			201,909
CASH AND CASH EQUIVALENTS AT END OF PERIOD		$	408,207		$	267,645
NONCASH INVESTING ACTIVITIES
Equipment financed		$	36,731		$	53,045
Accruals for equipment received		$	3,158		$	2,146
Lease liabilities arising from obtaining right-of-use assets		$	7,280		$	60,535

 

ARCBEST CORPORATION
FINANCIAL STATEMENT OPERATING SEGMENT DATA AND OPERATING RATIOS
		Three Months Ended												Nine Months Ended
		September 30												September 30
		2021						2020						2021						2020
		Unaudited
		($ thousands, except percentages)
REVENUES
Asset-Based		$	681,164					$	561,856					$	1,890,288					$	1,537,639
ArcBest			305,207						217,294						828,291						533,536
FleetNet			66,514						50,545						185,224						149,424
Total Asset-Light			371,721						267,839						1,013,515						682,960
Other and eliminations			(36,228)						(34,715)						(108,960)						(96,850)
Total consolidated revenues		$	1,016,657					$	794,980					$	2,794,843					$	2,123,749
OPERATING EXPENSES
Asset-Based
Salaries, wages, and benefits		$	305,839		44.9	%		$	287,385		51.2	%		$	893,903		47.3	%		$	820,218		53.3	%
Fuel, supplies, and expenses			66,947		9.8				50,144		8.9				192,477		10.2				157,044		10.2
Operating taxes and licenses			12,426		1.8				12,296		2.2				36,977		2.0				36,719		2.4
Insurance			10,175		1.5				8,587		1.5				28,568		1.5				24,658		1.6
Communications and utilities			4,559		0.7				4,373		0.8				14,192		0.7				13,426		0.9
Depreciation and amortization			23,233		3.4				24,054		4.3				70,025		3.7				70,651		4.6
Rents and purchased transportation			95,855		14.1				69,442		12.4				266,525		14.1				171,364		11.2
Shared services			71,017		10.4				60,664		10.8				196,255		10.4				155,154		10.1
Gain on sale of property and equipment(1)			—		—				133		—				(8,624)		(0.5)				(3,206)		(0.2)
Innovative technology costs(2)			6,903		1.0				6,199		1.1				21,303		1.1				15,521		1.0
Other			592		0.1				1,933		0.3				1,103		0.1				5,168		0.3
Total Asset-Based			597,546		87.7	%			525,210		93.5	%			1,712,704		90.6	%			1,466,717		95.4	%
ArcBest
Purchased transportation			256,900		84.2	%			181,129		83.4	%			694,498		83.8	%			443,401		83.1	%
Supplies and expenses			2,741		0.9				2,746		1.3				7,785		0.9				7,015		1.3
Depreciation and amortization(3)			2,352		0.8				2,413		1.1				7,104		0.9				7,332		1.4
Shared services			31,048		10.2				24,217		11.1				86,198		10.4				64,784		12.1
Gain on sale of subsidiary(4)			—		—				—		—				(6,923)		(0.8)				—		—
Other			1,984		0.6				1,958		0.9				6,055		0.7				6,279		1.2
			295,025		96.7	%			212,463		97.8	%			794,717		95.9	%			528,811		99.1	%
FleetNet			65,245		98.1	%			49,558		98.0	%			181,794		98.1	%			146,615		98.1	%
Total Asset-Light			360,270						262,021						976,511						675,426
Other and eliminations(5)			(28,720)						(32,033)						(88,423)						(86,420)
Total consolidated operating expenses		$	929,096		91.4	%		$	755,198		95.0	%		$	2,600,792		93.1	%		$	2,055,723		96.8	%
OPERATING INCOME
Asset-Based		$	83,618					$	36,646					$	177,584					$	70,922
ArcBest			10,182						4,831						33,574						4,725
FleetNet			1,269						987						3,430						2,809
Total Asset-Light			11,451						5,818						37,004						7,534
Other and eliminations(5)			(7,508)						(2,682)						(20,537)						(10,430)
Total consolidated operating income		$	87,561					$	39,782					$	194,051					$	68,026

_____________________________
1)	The nine months ended September 30, 2021 includes an $8.6 million gain on the sale of an unutilized service center property.
2)	Represents costs associated with the freight handling pilot test program at ABF Freight.
3)	Depreciation and amortization includes amortization of intangibles associated with acquired businesses.
4)	Gain relates to the sale of the labor services portion of the ArcBest segment's moving business in second quarter 2021.
5)	"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						Nine Months Ended
		September 30							September 30
		2021			2020				2021			2020
ArcBest Corporation - Consolidated		(Unaudited)
		($ thousands, except per share data)
Operating Income
Amounts on GAAP basis		$	87,561		$	39,782		$	194,051		$	68,026
Innovative technology costs, pre-tax(1)			6,893			6,041			21,235			15,340
Gain on sale of subsidiary, pre-tax(2)			—			—			(6,923)			—
Transaction costs, pre-tax(3)			1,607			—			1,607			—
Non-GAAP amounts		$	96,061		$	45,823		$	209,970		$	83,366
Net Income
Amounts on GAAP basis		$	63,691		$	29,404		$	148,033		$	47,186
Innovative technology costs, after-tax (includes related financing costs)(1)			5,236			4,627			16,139			11,834
Gain on sale of subsidiary, after-tax(2)			—			—			(5,437)			—
Transaction costs, after-tax(3)			1,187			—			1,187			—
Nonunion pension expense, including settlement expense, after-tax(4)			—			—			—			66
Life insurance proceeds and changes in cash surrender value			(394)			(1,503)			(2,908)			(258)
Tax expense (benefit) from vested RSUs(5)			(480)			(138)			(7,411)			541
Non-GAAP amounts		$	69,240		$	32,390		$	149,603		$	59,369
Diluted Earnings Per Share
Amounts on GAAP basis		$	2.38		$	1.11		$	5.51		$	1.79
Innovative technology costs, after-tax (includes related financing costs)(1)			0.20			0.17			0.60			0.45
Gain on sale of subsidiary, after-tax(2)			—			—			(0.20)			—
Transaction costs, after-tax(3)			0.04			—			0.04			—
Nonunion pension expense, including settlement expense, after-tax(4)			—			—			—			—
Life insurance proceeds and changes in cash surrender value			(0.01)			(0.06)			(0.11)			(0.01)
Tax expense (benefit) from vested RSUs(5)			(0.02)			(0.01)			(0.28)			0.02
Non-GAAP amounts(6)		$	2.59		$	1.22		$	5.57		$	2.26

_________________________
1)	Represents costs associated with the freight handling pilot test program at ABF Freight.
2)	Gain relates to the sale of the labor services portion of ArcBest segment's moving business in second quarter 2021.
3)	Transaction costs are associated with the previously announced acquisition of MoLo Solutions, LLC.
4)	Represents pension settlement expense related to the Company's supplemental benefit plan.
5)	The Company recognizes the tax impact for the vesting of share-based compensation resulting in excess tax expense (benefit).
6)	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												Nine Months Ended
		September 30												September 30
		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		$	83,618		87.7	%		$	36,646		93.5	%		$	177,584		90.6	%		$	70,922		95.4	%
Innovative technology costs, pre-tax(1)			6,903		(1.0)				6,199		(1.1)				21,303		(1.1)				15,521		(1.0)
Non-GAAP amounts		$	90,521		86.7	%		$	42,845		92.4	%		$	198,887		89.5	%		$	86,443		94.4	%
Asset-Light
ArcBest Segment
Operating Income ($) and Operating Ratio (% of revenues)
Amounts on GAAP basis		$	10,182		96.7	%		$	4,831		97.8	%		$	33,574		95.9	%		$	4,725		99.1	%
Gain on sale of subsidiary, pre-tax(2)			—		—				—		—				(6,923)		0.8				—		—
Non-GAAP amounts		$	10,182		96.7	%		$	4,831		97.8	%		$	26,651		96.7	%		$	4,725		99.1	%
FleetNet Segment
Operating Income ($) and Operating Ratio (% of revenues)
Amounts on GAAP basis		$	1,269		98.1	%		$	987		98.0	%		$	3,430		98.1	%		$	2,809		98.1	%
Total Asset-Light
Operating Income ($) and Operating Ratio (% of revenues)
Amounts on GAAP basis		$	11,451		96.9	%		$	5,818		97.8	%		$	37,004		96.3	%		$	7,534		98.9	%
Gain on sale of subsidiary, pre-tax(2)			—		—				—		—				(6,923)		0.7				—		—
Non-GAAP amounts		$	11,451		96.9	%		$	5,818		97.8	%		$	30,081		97.0	%		$	7,534		98.9	%
Other and Eliminations
Operating Loss ($)
Amounts on GAAP basis		$	(7,508)					$	(2,682)					$	(20,537)					$	(10,430)
Innovative technology costs, pre-tax(1)			(10)						(158)						(68)						(181)
Transaction costs, pre-tax(3)			1,607						—						1,607						—
Non-GAAP amounts		$	(5,911)					$	(2,840)					$	(18,998)					$	(10,611)

_____________________
1)	Represents costs associated with the freight handling pilot test program at ABF Freight.
2)	Gain relates to the sale of the labor services portion of the ArcBest segment's moving business in second quarter 2021.
3)	Transaction costs are associated with the previously announced acquisition of MoLo Solutions, LLC.

 

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 September 30, 2021
					Other			Income			Income
		Operating			Income			Before Income			Tax			Net
		Income			(Costs)			Taxes			Provision			Income			Tax Rate(6)
Amounts on GAAP basis		$	87,561		$	(1,411)		$	86,150		$	22,459		$	63,691		26.1	%
Innovative technology costs(1)			6,893			158			7,051			1,815			5,236		25.7
Transaction costs(2)			1,607			—			1,607			420			1,187		26.1
Life insurance proceeds and changes in cash surrender value			—			(394)			(394)			—			(394)		—
Tax benefit from vested RSUs(3)			—			—			—			480			(480)		—
Non-GAAP amounts		$	96,061		$	(1,647)		$	94,414		$	25,174		$	69,240		26.7	%
		Nine Months Ended September 30, 2021
					Other			Income Before			Income
		Operating			Income			Income			Tax			Net
		Income			(Costs)			Taxes			Provision			Income			Tax Rate(6)
Amounts on GAAP basis		$	194,051		$	(3,096)		$	190,955		$	42,922		$	148,033		22.5	%
Innovative technology costs(1)			21,235			498			21,733			5,594			16,139		25.7
Gain on sale of subsidiary(4)			(6,923)			—			(6,923)			(1,486)			(5,437)		(21.5)
Transaction costs(2)			1,607			—			1,607			420			1,187		26.1
Life insurance proceeds and changes in cash surrender value			—			(2,908)			(2,908)			—			(2,908)		—
Tax benefit from vested RSUs(3)			—			—			—			7,411			(7,411)		—
Non-GAAP amounts		$	209,970		$	(5,506)		$	204,464		$	54,861		$	149,603		26.8	%
		Three Months Ended September 30, 2020
					Other			Income
		Operating			Income			Before Income			Income			Net
		Income			(Costs)			Taxes			Tax Provision			Income			Tax Rate(6)
Amounts on GAAP basis		$	39,782		$	(604)		$	39,178		$	9,774		$	29,404		24.9	%
Innovative technology costs(1)			6,041			191			6,232			1,605			4,627		25.8
Life insurance proceeds and changes in cash surrender value			—			(1,503)			(1,503)			—			(1,503)		—
Tax benefit from vested RSUs(3)			—			—			—			138			(138)		—
Non-GAAP amounts		$	45,823		$	(1,916)		$	43,907		$	11,517		$	32,390		26.2	%
		Nine Months Ended September 30, 2020
					Other			Income Before			Income
		Operating			Income			Income			Tax			Net
		Income			(Costs)			Taxes			Provision			Income			Tax Rate(6)
Amounts on GAAP basis		$	68,026		$	(5,729)		$	62,297		$	15,111		$	47,186		24.3	%
Innovative technology costs(1)			15,340			597			15,937			4,103			11,834		25.7
Nonunion pension expense, including settlement (5)			—			89			89			23			66		25.8
Life insurance proceeds and changes in cash surrender value			—			(258)			(258)			—			(258)		—
Tax expense from vested RSUs(3)			—			—			—			(541)			541		—
Non-GAAP amounts		$	83,366		$	(5,301)		$	78,065		$	18,696		$	59,369		23.9	%

____________________
1)	Represents costs associated with the freight handling pilot test program at ABF Freight.
2)	Transaction costs are associated with the previously announced acquisition of MoLo Solutions, LLC.
3)	The Company recognizes the tax impact for the vesting of share-based compensation resulting in excess tax expense (benefit).
4)	Gain relates to the sale of the labor services portion of the ArcBest segment's moving business in second quarter 2021.
5)	Represents pension settlement expense related to the Company's supplemental benefit plan.
6)	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 (loss), 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						Nine Months Ended
		September 30							September 30
		2021			2020			2021			2020
		(Unaudited)
ArcBest Corporation - Consolidated Adjusted EBITDA		($ thousands)
Net Income		$	63,691		$	29,404		$	148,033		$	47,186
Interest and other related financing costs			2,072			2,860			6,774			9,185
Income tax provision			22,459			9,774			42,922			15,111
Depreciation and amortization			30,359			30,032			90,995			88,131
Amortization of share-based compensation			2,889			2,885			8,567			7,956
Amortization of net actuarial gains of benefit plans and pension settlement expense(1)			(135)			(148)			(404)			(352)
Transaction costs(2)			1,607			—			1,607			—
Consolidated Adjusted EBITDA		$	122,942		$	74,807		$	298,494		$	167,217

___________________
1)	The nine months ended September 30, 2020 includes pre-tax pension settlement expense of $0.1 million related to the Company's supplemental benefit plan.
2)	Transaction costs are associated with the previously announced acquisition of MoLo Solutions, LLC.

 

		Three Months Ended						Nine Months Ended
		September 30						September 30
		2021			2020			2021			2020
Asset-Light Adjusted EBITDA		(Unaudited)
		($ thousands)
ArcBest
Operating Income		$	10,182		$	4,831		$	33,574		$	4,725
Depreciation and amortization(3)			2,352			2,413			7,104			7,332
Adjusted EBITDA		$	12,534		$	7,244		$	40,678		$	12,057
FleetNet
Operating Income		$	1,269		$	987		$	3,430		$	2,809
Depreciation and amortization(3)			413			411			1,241			1,204
Adjusted EBITDA		$	1,682		$	1,398		$	4,671		$	4,013
Total Asset-Light
Operating Income		$	11,451		$	5,818		$	37,004		$	7,534
Depreciation and amortization(3)			2,765			2,824			8,345			8,536
Adjusted EBITDA		$	14,216		$	8,642		$	45,349		$	16,070

_________________
3)	Depreciation and amortization includes amortization of intangibles associated with acquired businesses.

 

ARCBEST CORPORATION
OPERATING STATISTICS
		Three Months Ended								Nine Months Ended
		September 30								September 30
		2021			2020			% Change		2021			2020			% Change
		(Unaudited)
Asset-Based
Workdays			64.0			64.0					190.5			191.5
Billed Revenue(1) / CWT		$	41.79		$	35.69		17.1%		$	38.95		$	34.21		13.9%
Billed Revenue(1) / Shipment		$	542.38		$	454.94		19.2%		$	511.43		$	435.96		17.3%
Shipments			1,249,645			1,242,943		0.5%			3,716,852			3,549,465		4.7%
Shipments / Day			19,526			19,421		0.5%			19,511			18,535		5.3%
Tonnage (Tons)			810,982			792,258		2.4%			2,440,214			2,261,919		7.9%
Tons / Day			12,672			12,379		2.4%			12,810			11,812		8.4%
Pounds / Shipment			1,298			1,275		1.8%			1,313			1,275		3.0%
Average Length of Haul (Miles)			1,098			1,096		0.2%			1,099			1,074		2.3%

__________________
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			Nine Months Ended
		September 30, 2021			September 30, 2021
		(Unaudited)
ArcBest(2)
Revenue / Shipment			27.0%			28.0%
Shipments / Day			9.7%			22.4%

__________________
2)	Statistical data related to managed transportation solutions transactions are not included in the presentation of operating statistics for the ArcBest segment.

 

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SOURCE ArcBest

FAQ

What was ArcBest's revenue in Q3 2021?

ArcBest reported revenue of $1.0 billion in Q3 2021.

How much did ArcBest's operating income grow compared to Q3 2020?

Operating income increased to $87.6 million in Q3 2021, compared to $39.8 million in Q3 2020.

What are the earnings per share reported by ArcBest for Q3 2021?

ArcBest reported earnings of $2.38 per diluted share for Q3 2021.

What impact will the MoLo Solutions acquisition have on ArcBest?

The MoLo Solutions acquisition is expected to enhance ArcBest's logistics services and drive growth.

What is ArcBest's non-GAAP operating income for Q3 2021?

The non-GAAP operating income for Q3 2021 was $96.1 million.