ArcBest Announces Third Quarter 2020 Results

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Investor Relations Contact: David Humphrey

 

Title: Vice President – Investor Relations

 

Phone: 479-785-6200 

 

Email: dhumphrey@arcb.com

 

ArcBest® Announces Third Quarter 2020 Results

 •           Third quarter 2020 revenue of $795.0 million, and net income of $29.4 million, or $1.11 per diluted share.  On a non GAAP1 basis, third quarter 2020 net income was $32.4 million, or $1.22 per diluted share.

•           Improving business trends contribute to increased Asset-Based and Asset-Light profitability

 FORT SMITH, Arkansas, November 3, 2020 — ArcBest® (Nasdaq: ARCB), a leader in supply chain logistics, today reported third quarter 2020 revenue of $795.0 million compared to third quarter 2019 revenue of $787.6 million.  Third quarter 2020 operating income was $39.8 million compared to operating income of $31.2 million in the same period last year.  Net income was $29.4 million, or $1.11 per diluted share, compared to third quarter 2019 net income of $16.3 million, or $0.62 per diluted share.

Excluding certain items in both periods as identified in the attached reconciliation tables, non-GAAP operating income was $45.8 million in third quarter 2020 compared to third quarter 2019 non-GAAP operating income of $38.1 million.  On a non-GAAP basis, net income was $32.4 million, or $1.22 per diluted share, in third quarter 2020 compared to third quarter 2019 net income of $27.0 million, or $1.02 per diluted share.

At September 30, 2020, ArcBest’s consolidated cash and short-term investments, less debt, were $59 million net cash compared to the $41 million net cash position at June 30, 2020, reflecting an $18 million improvement during the third quarter.

“I am incredibly proud of our employees and how they have performed on behalf of customers as we navigate through the pandemic together,” said Judy R. McReynolds, chairman, president and CEO of ArcBest. “Throughout the third quarter and into October the ArcBest team, enabled by technology and assured capacity options, is providing much-needed flexibility to customer supply chains while also improving operational efficiency.  Our company was built on strong customer relationships and it is our goal to ensure those customers are positioned well to succeed.”

 

Third Quarter Results of Operations Comparisons

Asset-Based

Third Quarter 2020 Versus Third Quarter 2019

  • Revenue of $561.9 million compared to $565.6 million, a per-day decrease of 1.4 percent.
  • Total tonnage per day increase of 1.2 percent, with a mid-single-digit percentage increase in LTL-rated tonnage and a double-digit percentage decrease in TL-rated spot shipment tonnage moving in the Asset-Based network.
  • Total shipments per day decrease of 3.0 percent.  Total weight per shipment increase of 4.4 percent and an increase of 7.4 percent in LTL-rated weight per shipment impacted by third quarter freight mix changes.
  • Total billed revenue per hundredweight decreased 1.8 percent and was negatively impacted by freight mix changes and lower fuel surcharges versus prior year.  Excluding fuel surcharge, LTL-rated freight experienced a percentage decrease in the low-single digits.
  • Operating income of $36.6 million and an operating ratio of 93.5 percent compared to the prior year quarter operating income of $31.7 million and an operating ratio of 94.4 percent.  On a non-GAAP basis, operating income of $42.8 million and an operating ratio of 92.4 percent compared to the prior year quarter operating income of $38.5 million and an operating ratio of 93.2 percent.

ArcBest’s Asset-Based business reflects the positive impact of an improving marketplace and sequential growth in shipments and tonnage compared to the second quarter.  As business levels improved, labor and freight handling resources were added to handle the additional freight in order to sufficiently serve our customers’ needs.  Operational costs were managed relative to growing freight levels.  The resulting improvement in operational efficiencies, reduction in empty miles and cost decreases contributed to improved profitability.  Throughout the quarter, customer shipments were strategically matched with available network capacity, resulting in improved resource utilization and better operational metrics.  In a continuing rational industry pricing environment, freight mix changes and reduced fuel surcharges contributed to lower third quarter revenue per hundredweight.  However, profitable growth resulted from optimal freight selection and enhanced matching of revenue and costs.

Asset-Light2

Third Quarter 2020 Versus Third Quarter 2019

  • Revenue of $267.8 million compared to $253.7 million, a per-day increase of 4.7 percent.
  • Operating income of $5.8 million compared to operating income of $3.6 million.
  • Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) of $8.6 million compared to Adjusted EBITDA of $6.6 million.

Third quarter revenue in the Asset-Light ArcBest segment increased compared to the prior year period reflecting better customer business levels associated with an improving economic environment.  Significant revenue growth in managed transportation services was the biggest contributor to improved Asset-Light revenue totals while increases in international and ground expedite business were additional positive factors.  Increased customer shipping levels combined with limited equipment availability in the logistics marketplace positively impacted demand for ground expedite services.  Growth in these premium service asset-light offerings was a meaningful factor in the quarter’s improved profitability. Revenue associated with the truckload brokerage business positively contributed to third quarter totals, but increased mileage rates paid for equipment capacity related to current marketplace conditions contributed to higher purchased transportation expense as a percentage of total revenue.  However, cost management and reduced expenses in other areas of the asset-light business resulted in greater operating profit during the quarter.

At FleetNet, a decrease in total events contributed to lower total revenue and reduced operating income compared to the prior year period.

Closing Comments

Tremendous opportunity exists for us to sustain the momentum of the third quarter and continue to profitably grow our company,” said McReynolds.  “As an innovative and integrated logistics company, I am excited about what the future holds and am confident in the strength and abilities of our workforce and leadership to seize the growth opportunity ahead of us.”

 

 

 

NOTES

  1. U.S. Generally Accepted Accounting Principles
  2. 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 2020 third quarter results. The call will be today, Tuesday, November 3, at 9:30 a.m. ET (8:30 a.m. CT). Interested parties are invited to listen by calling (800) 268-2160. Following the call, a recorded playback will be available through the end of the day on December 15, 2020. To listen to the playback, dial (800) 633‑8284 or (402) 977‑9140 (for international callers). The conference call ID for the playback is 21970321. The conference call and playback can also be accessed, through December 15, 2020, on ArcBest’s website at arcb.com.

About ArcBest

ArcBest® (Nasdaq: ARCB) is a leading logistics company with creative problem solvers who deliver innovative solutions for our customers’ supply chain needs.  We'll find a way to deliver knowledge, expertise and a can-do attitude with every shipment and supply chain solution, household move or vehicle repair.  At ArcBest, we’re More Than Logistics®. 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, 2020 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,” “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: 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; the ability to maintain third-party information technology systems or licenses; widespread outbreak of an illness or any other communicable disease and the effects of pandemics, including the COVID-19 pandemic, or any other public health crisis; regulatory measures that may be implemented in response to widespread illness, including the COVID-19 pandemic; ineffectiveness of our business continuity plans to meet our operational needs in the event of adverse external events or conditions; 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, and any write-offs associated therewith; the loss or reduction of business from large customers; competitive initiatives and pricing pressures; general economic conditions and related shifts in market demand, including the impact of and uncertainties related to the COVID-19 pandemic, that impact the performance and needs of industries we serve and/or limit our customers’ access to adequate financial resources; the ability to manage our cost structure, and the timing and performance of growth initiatives; 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; our ability to secure independent owner operators and/or operational or regulatory issues related to our use of their services; availability and cost of reliable third-party services; 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; governmental regulations; environmental laws and regulations, including emissions-control regulations; union employee wages and benefits, including changes in required contributions to multiemployer plans; litigation or claims asserted against us; the loss of key employees or the inability to execute succession planning strategies; maintaining our intellectual property rights, brand, and corporate reputation; default on covenants of financing arrangements and the availability and terms of future financing arrangements; timing and amount of capital expenditures; self-insurance claims and insurance premium costs; 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; potential impairment of goodwill and intangible assets; the cost, integration, and performance of any recent or future acquisitions; seasonal fluctuations and adverse weather conditions; regulatory, economic, and other risks arising from our international business; acts of terrorism or war, or the impact of antiterrorism and safety measures; and other financial, operational, and legal risks and uncertainties detailed from time to time in ArcBest’s public filings with the Securities and Exchange Commission (“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.

 

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

 

 

    

2020

    

2019

    

2020

    

2019

 

 

 

(Unaudited)

 

 

 

($ thousands, except share and per share data)

 

REVENUES

 

$

 794,980

 

$

 787,563

 

$

 2,123,749

 

$

 2,270,892

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 755,198

 

 

 756,355

 

 

 2,055,723

 

 

 2,195,893

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME

 

 

 39,782

 

 

 31,208

 

 

 68,026

 

 

 74,999

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (COSTS)

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and dividend income

 

 

 756

 

 

 1,768

 

 

 3,122

 

 

 4,862

 

Interest and other related financing costs

 

 

 (2,860)

 

 

 (2,900)

 

 

 (9,185)

 

 

 (8,593)

 

Other, net

 

 

 1,500

 

 

 (6,734)

 

 

 334

 

 

 (7,770)

 

 

 

 

 (604)

 

 

 (7,866)

 

 

 (5,729)

 

 

 (11,501)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME BEFORE INCOME TAXES

 

 

 39,178

 

 

 23,342

 

 

 62,297

 

 

 63,498

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME TAX PROVISION

 

 

 9,774

 

 

 7,072

 

 

 15,111

 

 

 17,964

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME

 

$

 29,404

 

$

 16,270

 

$

 47,186

 

$

 45,534

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EARNINGS PER COMMON SHARE(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

 1.15

 

$

 0.64

 

$

 1.86

 

$

 1.78

 

Diluted

 

$

 1.11

 

$

 0.62

 

$

 1.79

 

$

 1.72

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AVERAGE COMMON SHARES OUTSTANDING

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 25,470,094

 

 

 25,527,982

 

 

 25,403,786

 

 

 25,550,365

 

Diluted

 

 

 26,592,457

 

 

 26,416,595

 

 

 26,289,946

 

 

 26,461,668

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH DIVIDENDS DECLARED PER COMMON SHARE

 

$

 0.08

 

$

 0.08

 

$

 0.24

 

$

 0.24

 


  1. ArcBest uses the two-class method for calculating earnings per share. This method requires an allocation of dividends paid and a portion of undistributed net income (but not losses) to unvested restricted stock for calculating per share amounts.

 

 

 

ARCBEST CORPORATION

CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

 

 

 

 

September 30

 

December 31

 

 

    

2020

    

2019

 

 

 

(Unaudited)

 

Note

 

 

 

($ thousands, except share data)

 

ASSETS

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

 267,645

 

$

 201,909

 

Short-term investments

 

 

 83,411

 

 

 116,579

 

Accounts receivable, less allowances (2020 - $7,343; 2019 - $5,448)

 

 

 323,760

 

 

 282,579

 

Other accounts receivable, less allowances (2020 - $665; 2019 - $476)

 

 

 14,464

 

 

 18,774

 

Prepaid expenses

 

 

 29,562

 

 

 30,377

 

Prepaid and refundable income taxes

 

 

 6,163

 

 

 9,439

 

Other

 

 

 5,235

 

 

 4,745

 

TOTAL CURRENT ASSETS

 

 

 730,240

 

 

 664,402

 

 

 

 

 

 

 

 

 

PROPERTY, PLANT AND EQUIPMENT

 

 

 

 

 

 

 

Land and structures

 

 

 346,322

 

 

 342,122

 

Revenue equipment

 

 

 912,924

 

 

 896,020

 

Service, office, and other equipment

 

 

 233,689

 

 

 233,354

 

Software

 

 

 158,454

 

 

 151,068

 

Leasehold improvements

 

 

 14,064

 

 

 10,383

 

 

 

 

 1,665,453

 

 

 1,632,947

 

Less allowances for depreciation and amortization

 

 

 987,396

 

 

 949,355

 

 

 

 

 678,057

 

 

 683,592

 

 

 

 

 

 

 

 

 

GOODWILL

 

 

 88,320

 

 

 88,320

 

INTANGIBLE ASSETS, NET

 

 

 56,016

 

 

 58,832

 

OPERATING RIGHT-OF-USE ASSETS

 

 

 112,568

 

 

 68,470

 

DEFERRED INCOME TAXES

 

 

 6,975

 

 

 7,725

 

OTHER LONG-TERM ASSETS

 

 

 74,055

 

 

 79,866

 

 

 

$

 1,746,231

 

$

 1,651,207

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

Accounts payable

 

$

 162,021

 

$

 134,374

 

Income taxes payable

 

 

 5

 

 

 12

 

Accrued expenses

 

 

 249,172

 

 

 232,321

 

Current portion of long-term debt

 

 

 65,887

 

 

 57,305

 

Current portion of operating lease liabilities

 

 

 20,431

 

 

 20,265

 

TOTAL CURRENT LIABILITIES

 

 

 497,516

 

 

 444,277

 

 

 

 

 

 

 

 

 

LONG-TERM DEBT, less current portion

 

 

 226,037

 

 

 266,214

 

OPERATING LEASE LIABILITIES, less current portion

 

 

 96,549

 

 

 52,277

 

POSTRETIREMENT LIABILITIES, less current portion

 

 

 20,486

 

 

 20,294

 

OTHER LONG-TERM LIABILITIES

 

 

 35,377

 

 

 38,892

 

DEFERRED INCOME TAXES

 

 

 67,627

 

 

 66,210

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

Common stock, $0.01 par value, authorized 70,000,000 shares;
      issued 2020: 29,039,994 shares; 2019: 28,810,902 shares

 

 

 290

 

 

 288

 

Additional paid-in capital

 

 

 339,908

 

 

 333,943

 

Retained earnings

 

 

 574,053

 

 

 533,187

 

   Treasury stock, at cost, 2020: 3,632,099 shares; 2019: 3,404,639 shares

 

 

 (110,245)

 

 

 (104,578)

 

Accumulated other comprehensive income (loss)

 

 

 (1,367)

 

 

 203

 

TOTAL STOCKHOLDERS’ EQUITY

 

 

 802,639

 

 

 763,043

 

 

 

$

 1,746,231

 

$

 1,651,207

 

 

Note:  The balance sheet at December 31, 2019 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

 

 

    

2020

    

2019

 

 

 

Unaudited

 

 

 

($ thousands)

 

 OPERATING ACTIVITIES

 

 

 

 

 

 

 

Net income

 

$

 47,186

 

$

 45,534

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

 

 85,189

 

 

 79,967

 

Amortization of intangibles

 

 

 2,942

 

 

 3,365

 

Pension settlement expense, including termination expense

 

 

 89

 

 

 8,135

 

Share-based compensation expense

 

 

 7,956

 

 

 7,268

 

Provision for losses on accounts receivable

 

 

 2,170

 

 

 832

 

Change in deferred income taxes

 

 

 2,831

 

 

 14,099

 

Gain on sale of property and equipment and lease termination

 

 

 (3,280)

 

 

 (1,384)

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Receivables

 

 

 (38,905)

 

 

 4,216

 

Prepaid expenses

 

 

 809

 

 

 (265)

 

Other assets

 

 

 3,918

 

 

 (4,236)

 

Income taxes

 

 

 3,065

 

 

 (7,883)

 

Operating right-of-use assets and lease liabilities, net

 

 

 234

 

 

 526

 

Accounts payable, accrued expenses, and other liabilities

 

 

 37,062

 

 

 (12,161)

 

NET CASH PROVIDED BY OPERATING ACTIVITIES

 

 

 151,266

 

 

 138,013

 

 

 

 

 

 

 

 

 

 INVESTING ACTIVITIES

 

 

 

 

 

 

 

Purchases of property, plant and equipment, net of financings

 

 

 (20,146)

 

 

 (69,773)

 

Proceeds from sale of property and equipment

 

 

 8,943

 

 

 4,748

 

Purchases of short-term investments

 

 

 (159,253)

 

 

 (105,747)

 

Proceeds from sale of short-term investments

 

 

 192,563

 

 

 88,730

 

Capitalization of internally developed software

 

 

 (9,568)

 

 

 (8,500)

 

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

 

 

 12,539

 

 

 (90,542)

 

 

 

 

 

 

 

 

 

 FINANCING ACTIVITIES

 

 

 

 

 

 

 

Borrowings under credit facilities

 

 

 180,000

 

 

 —

 

Borrowings under accounts receivable securitization program

 

 

 45,000

 

 

 —

 

Proceeds from notes payable

 

 

 —

 

 

 9,552

 

Payments on long-term debt

 

 

 (309,640)

 

 

 (43,773)

 

Net change in book overdrafts

 

 

 349

 

 

 (5,570)

 

Deferred financing costs

 

 

 —

 

 

 (562)

 

Payment of common stock dividends

 

 

 (6,122)

 

 

 (6,145)

 

Purchases of treasury stock

 

 

 (5,667)

 

 

 (6,115)

 

Payments for tax withheld on share-based compensation

 

 

 (1,989)

 

 

 (1,206)

 

NET CASH USED IN FINANCING ACTIVITIES

 

 

 (98,069)

 

 

 (53,819)

 

 

 

 

 

 

 

 

 

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

 

 

 65,736

 

 

 (6,348)

 

Cash and cash equivalents at beginning of period

 

 

 201,909

 

 

 190,186

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

 

$

 267,645

 

$

 183,838

 

 

 

 

 

 

 

 

 

 NONCASH INVESTING ACTIVITIES

 

 

 

 

 

 

 

Equipment financed

 

$

 53,045

 

$

 40,966

 

Accruals for equipment received

 

$

 2,146

 

$

 18,949

 

Lease liabilities arising from obtaining right-of-use assets

 

$

 60,535

 

$

 26,810

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended 

 

 

Nine Months Ended 

 

 

 

September 30

 

 

September 30

 

 

    

2020

    

 

2019

    

 

2020

    

 

2019

 

 

 

Unaudited

 

 

 

($ thousands, except percentages)

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset-Based

 

$

 561,856

 

 

 

 

$

 565,621

 

 

 

 

$

 1,537,639

 

 

 

 

$

 1,631,348

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ArcBest

 

 

 217,294

 

 

 

 

 

 199,758

 

 

 

 

 

 533,536

 

 

 

 

 

 554,135

 

 

 

FleetNet

 

 

 50,545

 

 

 

 

 

 53,976

 

 

 

 

 

 149,424

 

 

 

 

 

 158,957

 

 

 

Total Asset-Light

 

 

 267,839

 

 

 

 

 

 253,734

 

 

 

 

 

 682,960

 

 

 

 

 

 713,092

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other and eliminations

 

 

 (34,715)

 

 

 

 

 

 (31,792)

 

 

 

 

 

 (96,850)

 

 

 

 

 

 (73,548)

 

 

 

Total consolidated revenues

 

$

 794,980

 

 

 

 

$

 787,563

 

 

 

 

$

 2,123,749

 

 

 

 

$

 2,270,892

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset-Based

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries, wages, and benefits

 

$

 287,385

 

 51.2

%

 

$

 296,503

 

 52.4

%

 

$

 820,218

 

 53.3

%

 

$

 873,795

 

 53.6

%

Fuel, supplies, and expenses

 

 

 50,144

 

 8.9

 

 

 

 65,738

 

 11.6

 

 

 

 157,044

 

 10.2

 

 

 

 195,502

 

 12.0

 

Operating taxes and licenses

 

 

 12,296

 

 2.2

 

 

 

 12,865

 

 2.3

 

 

 

 36,719

 

 2.4

 

 

 

 37,477

 

 2.3

 

Insurance

 

 

 8,587

 

 1.5

 

 

 

 7,646

 

 1.4

 

 

 

 24,658

 

 1.6

 

 

 

 23,235

 

 1.4

 

Communications and utilities

 

 

 4,373

 

 0.8

 

 

 

 5,064

 

 0.9

 

 

 

 13,426

 

 0.9

 

 

 

 14,181

 

 0.9

 

Depreciation and amortization

 

 

 24,054

 

 4.3

 

 

 

 23,776

 

 4.2

 

 

 

 70,651

 

 4.6

 

 

 

 66,370

 

 4.0

 

Rents and purchased transportation

 

 

 69,442

 

 12.4

 

 

 

 61,102

 

 10.8

 

 

 

 171,364

 

 11.2

 

 

 

 167,234

 

 10.2

 

Shared services

 

 

 60,664

 

 10.8

 

 

 

 56,031

 

 9.9

 

 

 

 155,154

 

 10.1

 

 

 

 161,664

 

 9.9

 

Gain on sale of property and equipment

 

 

 133

 

 —

 

 

 

 (82)

 

 —

 

 

 

 (3,206)

 

 (0.2)

 

 

 

 (1,703)

 

 (0.1)

 

Innovative technology costs(1)

 

 

 6,199

 

 1.1

 

 

 

 4,664

 

 0.8

 

 

 

 15,521

 

 1.0

 

 

 

 9,200

 

 0.6

 

Other

 

 

 1,933

 

 0.3

 

 

 

 592

 

 0.1

 

 

 

 5,168

 

 0.3

 

 

 

 2,878

 

 0.2

 

Total Asset-Based

 

 

 525,210

 

 93.5

%

 

 

 533,899

 

 94.4

%

 

 

 1,466,717

 

 95.4

%

 

 

 1,549,833

 

 95.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ArcBest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchased transportation

 

 

 181,129

 

 83.4

%

 

 

 164,521

 

 82.4

%

 

 

 443,401

 

 83.1

%

 

 

 452,178

 

 81.6

%

Supplies and expenses

 

 

 2,746

 

 1.3

 

 

 

 2,780

 

 1.4

 

 

 

 7,015

 

 1.3

 

 

 

 8,412

 

 1.5

 

Depreciation and amortization(2)

 

 

 2,413

 

 1.1

 

 

 

 2,607

 

 1.3

 

 

 

 7,332

 

 1.4

 

 

 

 8,813

 

 1.6

 

Shared services

 

 

 24,217

 

 11.1

 

 

 

 25,032

 

 12.5

 

 

 

 64,784

 

 12.1

 

 

 

 71,204

 

 12.9

 

Other

 

 

 1,958

 

 0.9

 

 

 

 2,366

 

 1.2

 

 

 

 6,279

 

 1.2

 

 

 

 7,224

 

 1.3

 

 

 

 

 212,463

 

 97.8

%

 

 

 197,306

 

 98.8

%

 

 

 528,811

 

 99.1

%

 

 

 547,831

 

 98.9

%

FleetNet

 

 

 49,558

 

 98.0

%

 

 

 52,805

 

 97.8

%

 

 

 146,615

 

 98.1

%

 

 

 155,272

 

 97.7

%

Total Asset-Light

 

 

 262,021

 

 

 

 

 

 250,111

 

 

 

 

 

 675,426

 

 

 

 

 

 703,103

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other and eliminations

 

 

 (32,033)

 

 

 

 

 

 (27,655)

 

 

 

 

 

 (86,420)

 

 

 

 

 

 (57,043)

 

 

 

Total consolidated operating expenses

 

$

 755,198

 

 95.0

%

 

$

 756,355

 

 96.0

%

 

$

 2,055,723

 

 96.8

%

 

$

 2,195,893

 

 96.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset-Based

 

$

 36,646

 

 

 

 

$

 31,722

 

 

 

 

$

 70,922

 

 

 

 

$

 81,515

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ArcBest

 

 

 4,831

 

 

 

 

 

 2,452

 

 

 

 

 

 4,725

 

 

 

 

 

 6,304

 

 

 

FleetNet

 

 

 987

 

 

 

 

 

 1,171

 

 

 

 

 

 2,809

 

 

 

 

 

 3,685

 

 

 

Total Asset-Light

 

 

 5,818

 

 

 

 

 

 3,623

 

 

 

 

 

 7,534

 

 

 

 

 

 9,989

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other and eliminations(3)

 

 

 (2,682)

 

 

 

 

 

 (4,137)

 

 

 

 

 

 (10,430)

 

 

 

 

 

 (16,505)

 

 

 

Total consolidated operating income

 

$

 39,782

 

 

 

 

$

 31,208

 

 

 

 

$

 68,026

 

 

 

 

$

 74,999

 

 

 


  1. Represents costs associated with the freight handling pilot test program at ABF Freight.
  2. Depreciation and amortization consists primarily of amortization of intangibles, including customer relationships, and software associated with acquired businesses.
  3. “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.

 

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

 

 

    

2020

 

2019

    

  

2020

 

 

2019

 

ArcBest Corporation - Consolidated

 

(Unaudited)

 

 

 

($ thousands, except per share data)

 

Operating Income

 

 

 

 

 

 

 

 

 

 

 

 

 

Amounts on GAAP basis

 

$

 39,782

 

$

 31,208

 

$

 68,026

 

$

 74,999

 

Innovative technology costs, pre-tax(1)

 

 

 6,041

 

 

 4,727

 

 

 15,340

 

 

 11,104

 

ELD conversion costs, pre-tax(2)

 

 

 —

 

 

 1,796

 

 

 —

 

 

 2,358

 

Nonunion pension termination costs, pre-tax(3)

 

 

 —

 

 

 350

 

 

 —

 

 

 350

 

Non-GAAP amounts

 

$

 45,823

 

$

 38,081

 

$

 83,366

 

$

 88,811

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

 

 

 

 

 

 

 

 

 

 

 

 

Amounts on GAAP basis

 

$

 29,404

 

$

 16,270

 

$

 47,186

 

$

 45,534

 

Innovative technology costs, after-tax (includes related financing costs)(1)

 

 

 4,627

 

 

 3,614

 

 

 11,834

 

 

 8,462

 

ELD conversion costs, after-tax(2)

 

 

 —

 

 

 1,333

 

 

 —

 

 

 1,751

 

Nonunion pension termination costs, after-tax(3)

 

 

 —

 

 

 260

 

 

 —

 

 

 260

 

Nonunion pension expense, including settlement and termination expense, after-tax(4)

 

 

 —

 

 

 6,011

 

 

 66

 

 

 7,675

 

Life insurance proceeds and changes in cash surrender value

 

 

 (1,503)

 

 

 (557)

 

 

 (258)

 

 

 (2,713)

 

Tax expense (benefit) from vested RSUs(5)

 

 

 (138)

 

 

 56

 

 

 541

 

 

 464

 

Non-GAAP amounts

 

$

 32,390

 

$

 26,987

 

$

 59,369

 

$

 61,433

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings Per Share

 

 

 

 

 

 

 

 

 

 

 

 

 

Amounts on GAAP basis

 

$

 1.11

 

$

 0.62

 

$

 1.79

 

$

 1.72

 

Innovative technology costs, after-tax (includes related financing costs)(1)

 

 

 0.17

 

 

 0.14

 

 

 0.45

 

 

 0.32

 

ELD conversion costs, after-tax(2)

 

 

 —

 

 

 0.05

 

 

 —

 

 

 0.07

 

Nonunion pension termination costs, after-tax(3)

 

 

 —

 

 

 0.01

 

 

 —

 

 

 0.01

 

Nonunion pension expense, including settlement and termination expense, after-tax(4)

 

 

 —

 

 

 0.23

 

 

 —

 

 

 0.29

 

Life insurance proceeds and changes in cash surrender value

 

 

 (0.06)

 

 

 (0.02)

 

 

 (0.01)

 

 

 (0.10)

 

Tax expense (benefit) from vested RSUs(5)

 

 

 (0.01)

 

 

 —

 

 

 0.02

 

 

 0.02

 

Non-GAAP amounts(6)

 

$

 1.22

 

$

 1.02

 

$

 2.26

 

$

 2.32

 


  1. Represents costs associated with the freight handling pilot test program at ABF Freight.
  2. The three and nine months ended September 30, 2019 include impairment charges related to equipment replacement and other one-time costs incurred to comply with the electronic logging device (“ELD”) mandate which became effective in December 2019.
  3. The three and nine months ended Septermber 30, 2019 include a one-time consulting fee associated with the termination of the nonunion defined benefit pension plan.
  4. For the nine months ended September 30, 2020, represents pension settlement expense related to the Company’s supplemental benefit plan. For the three and nine months ended September 30, 2019, nonunion defined benefit pension expense is presented as a non-GAAP adjustment with pension settlement expense, because expenses related to the plan were excluded from the financial information management used to make operating decisions, as the nonunion defined benefit pension plan was amended to terminate the plan with a termination date of December 31, 2017. Pension settlements related to benefit distributions for the plan termination began in fourth quarter 2018 and were completed in third quarter 2019.
  5. The Company recognized the tax impact for the vesting of share-based compensation resulting in excess tax expense (benefit) during the three and nine months ended September 30, 2020 and 2019.
  6. Non-GAAP EPS is calculated in total and may not foot due to rounding.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended 

 

Nine Months Ended 

 

 

 

September 30

 

September 30

 

 

    

2020

 

2019

 

2020

 

2019

 

Segment Operating Income Reconciliations

 

(Unaudited)

 

 

 

($ thousands, except percentages)

 

Asset-Based Segment

 

 

 

 

 

Operating Income ($) and Operating Ratio (% of revenues)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amounts on GAAP basis

 

$

 36,646

 

 93.5

%  

 

$

 31,722

 

 94.4

%  

 

$

 70,922

 

 95.4

%  

 

$

 81,515

 

 95.0

%  

 

Innovative technology costs, pre-tax(1)

 

 

 6,199

 

 (1.1)

 

 

 

 4,664

 

 (0.8)

 

 

 

 15,521

 

 (1.0)

 

 

 

 9,200

 

 (0.6)

 

 

ELD conversion costs, pre-tax(2)

 

 

 —

 

 —

 

 

 

 1,796

 

 (0.3)

 

 

 

 —

 

 —

 

 

 

 2,358

 

 (0.1)

 

 

Nonunion pension termination costs, pre-tax(3)

 

 

 —

 

 —

 

 

 

 295

 

 (0.1)

 

 

 

 —

 

 —

 

 

 

 295

 

 —

 

 

Non-GAAP amounts

 

$

 42,845

 

 92.4

%  

 

$

 38,477

 

 93.2

%  

 

$

 86,443

 

 94.4

%  

 

$

 93,368

 

 94.3

%  

 

 

 

 

 

 

 

Asset-Light

 

 

 

 

 

 

 

 

 

 

 

ArcBest Segment

 

 

 

 

 

Operating Income ($) and Operating Ratio (% of revenues)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amounts on GAAP basis

 

$

 4,831

 

 97.8

%  

 

$

 2,452

 

 98.8

%  

 

$

 4,725

 

 99.1

%  

 

$

 6,304

 

 98.9

%  

 

Nonunion pension termination costs, pre-tax(3)

 

 

 —

 

 —

 

 

 

 23

 

 —

 

 

 

 —

 

 —

 

 

 

 23

 

 —

 

 

Non-GAAP amounts

 

$

 4,831

 

 97.8

%  

 

$

 2,475

 

 98.8

%  

 

$

 4,725

 

 99.1

%  

 

$

 6,327

 

 98.9

%  

 

 

 

 

 

 

 

FleetNet Segment

 

 

 

 

 

Operating Income ($) and Operating Ratio (% of revenues)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amounts on GAAP basis

 

$

 987

 

 98.0

%  

 

$

 1,171

 

 97.8

%  

 

$

 2,809

 

 98.1

%  

 

$

 3,685

 

 97.7

%  

 

Nonunion pension termination costs, pre-tax(3)

 

 

 —

 

 —

 

 

 

 12

 

 —

 

 

 

 —

 

 —

 

 

 

 12

 

 —

 

 

Non-GAAP amounts

 

$

 987

 

 98.0

%  

 

$

 1,183

 

 97.8

%  

 

$

 2,809

 

 98.1

%  

 

$

 3,697

 

 97.7

%  

 

 

 

 

 

 

 

Total Asset-Light

 

 

 

 

 

Operating Income ($) and Operating Ratio (% of revenues)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amounts on GAAP basis

 

$

 5,818

 

 97.8

%  

 

$

 3,623

 

 98.6

%  

 

$

 7,534

 

 98.9

%  

 

$

 9,989

 

 98.6

%  

 

Nonunion pension termination costs, pre-tax(3)

 

 

 —

 

 —

 

 

 

 35

 

 —

 

 

 

 —

 

 —

 

 

 

 35

 

 —

 

 

Non-GAAP amounts

 

$

 5,818

 

 97.8

%  

 

$

 3,658

 

 98.6

%  

 

$

 7,534

 

 98.9

%  

 

$

 10,024

 

 98.6

%  

 

 

 

 

 

 

 

Other and Eliminations

 

 

 

 

 

Operating Loss ($)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amounts on GAAP basis

 

$

 (2,682)

 

 

 

 

$

 (4,137)

 

 

 

 

$

 (10,430)

 

 

 

 

$

 (16,505)

 

 

 

 

Innovative technology costs, pre-tax(1)

 

 

 (158)

 

 

 

 

 

 63

 

 

 

 

 

 (181)

 

 

 

 

 

 1,904

 

 

 

 

Nonunion pension termination costs, pre-tax(3)

 

 

 —

 

 

 

 

 

 20

 

 

 

 

 

 

 

 

 

 

 

 20

 

 

 

 

Non-GAAP amounts

 

$

 (2,840)

 

 

 

 

$

 (4,054)

 

 

 

 

$

 (10,611)

 

 

 

 

$

 (14,581)

 

 

 

 


  1. Represents costs associated with the freight handling pilot test program at ABF Freight.
  2. The three and nine months ended September 30, 2019 include impairment charges related to equipment replacement and other one-time costs incurred to comply with the electronic logging device (“ELD”) mandate which became effective in December 2019.
  3. The three and nine months ended September 30, 2019 include a one-time consulting fee associated with the termination of the nonunion defined benefit pension plan.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effective Tax Rate Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ArcBest Corporation - Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ thousands, except percentages)

 

Three Months Ended September 30, 2020

 

 

 

 

 

Other

 

Income

 

Income

 

 

 

 

 

 

 

 

Operating

 

Income

 

Before Income

 

Tax

 

Net

 

 

 

 

Income

 

(Costs)

 

Taxes

 

Provision

 

Income

 

Tax Rate(6)

Amounts on GAAP basis

 

$

 39,782

 

$

 (604)

 

$

 39,178

 

$

 9,774