ArcBest® Announces Fourth Quarter 2020 And Full Year 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 Fourth Quarter 2020 And Full Year 2020 Results

 

  • Fourth quarter 2020 revenue of $816.4 million, and net income of $23.9 million, or $0.89 per diluted share.  On a non-GAAP1 basis, fourth quarter 2020 net income of $26.0 million, or $0.97 per diluted share.
  • ArcBest non-GAAP operating income is the second-best since 2006.
  • Profit-sharing bonus to union-represented ABF Freight employees for the second year in a row.
  • As recently announced, share repurchase amount restored to $50 million.

FORT SMITH, Arkansas, February 2, 2021 — ArcBest® (Nasdaq: ARCB), a leader in supply chain logistics, today reported fourth quarter 2020 revenue of $816.4 million compared to fourth quarter 2019 revenue of $717.4 million.  ArcBest’s fourth quarter 2020 operating income was $30.3 million compared to an operating loss of $11.2 million the previous year, and net income of $23.9 million, or $0.89 per diluted share compared to a fourth quarter 2019 net loss of $5.5 million, or $0.22 per diluted share.  The 2019 fourth quarter results included a noncash impairment charge of $26.5 million (pre-tax), or $19.8 million (after-tax) and $0.75 per diluted share.

Excluding certain items in both periods as identified in the attached reconciliation tables, non-GAAP operating income was $37.5 million in fourth quarter 2020 compared to fourth quarter 2019 operating income of $20.2 million.  On a non-GAAP basis, net income was $26.0 million, or $0.97 per diluted share in fourth quarter 2020 compared to fourth quarter 2019 net income of $14.8 million, or $0.56 per diluted share.

“Year-over-year fourth quarter revenue growth of nearly 14 percent and non-GAAP operating income growth of nearly 86 percent reflects improvements in the demand for our integrated capacity solutions in this environment, and effective cost management,” said ArcBest chairman, president and CEO, Judy R. McReynolds. 

ArcBest’s full year 2020 revenue totaled $2.9 billion compared to $3.0 billion in 2019.  Net income was $71.1 million, or $2.69 per diluted share, compared to net income of $40.0 million, or $1.51 per diluted share in 2019.  On a non-GAAP basis, ArcBest’s 2020 net income was $85.4 million, or $3.23 per diluted share, compared to net income of $76.3 million, or $2.88 per diluted share, in 2019. 

ABF Freight will pay a profit-sharing bonus to union-represented employees.  As provided for in the 2018 collective bargaining agreement, the bonus is the result of achieving a 95.3 percent ABF Freight operating ratio in 2020.  “I’m proud of our ABF Freight team and I’m very pleased we are able to pay this bonus,” said McReynolds.

  

 

 

 

 

  1. U.S. Generally Accepted Accounting Principles

 

Fourth Quarter Results of Operations Comparisons

Asset-Based

Fourth Quarter 2020 Versus Fourth Quarter 2019

  • Revenue of $554.4 million compared to $513.3 million, a per-day increase of 8.0 percent.
  • Total tonnage per day increase of 7.8 percent, with a double-digit percentage increase in LTL-rated tonnage partially offset by a double-digit percentage decrease in TL-rated spot shipment tonnage moving in the Asset-Based network.
  • Total shipments per day increase of 2.8 percent.  Total weight per shipment increase of 4.9 percent and an increase of 9.5 percent in LTL-rated weight per shipment positively impacted by fourth quarter freight mix changes.
  • Total billed revenue per hundredweight increased 0.4 percent and was negatively impacted by lower fuel surcharges and freight mix changes versus prior yearRevenue per hundredweight on traditional published LTL-rated business, excluding fuel surcharge and transactional LTL-rated shipments, improved by a percentage in the low-single digits.
  • Operating income of $27.9 million compared to operating income of $20.5 million.  On a non-GAAP basis, operating income of $34.9 million compared to operating income of $25.4 million.   

Fourth quarter revenue growth in ArcBest’s Asset-Based business was the result of improving trends in customer shipping patterns, including strength in the housing market, that contributed to shipment and tonnage growth versus the prior year period.  Continuing strategies to fill available empty capacity in the Asset-Based network, which contributed to the increase in the average size of shipments, resulted in improved average shipment revenue and greater profitability.  Shipment handling and freight movement metrics were also positive during the quarter and reflect the benefits of enhanced optimization and labor management tools previously implemented.  The marketplace pricing environment remains positive and rational in support of ArcBest’s efforts to secure needed price increases. 

Asset-Light

Fourth Quarter 2020 Versus Fourth Quarter 2019

  • Revenue of $301.2 million compared to $237.0 million, a per-day increase of 27.1 percent.
  • Operating income of $5.5 million compared to an operating loss of $25.4 million that was impacted by a noncash impairment charge in fourth quarter 2019. On a non-GAAP basis, operating income of $5.5 million compared to operating income of $1.1 million.
  • Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) of $8.3 million compared to Adjusted EBITDA of $4.0 million.

Fourth quarter revenue in the Asset-Light ArcBest segment increased significantly compared to the prior year period as improving customer demand, combined with higher market-driven rate levels, resulted in business growth and improved profitability.  Limited availability of logistics equipment and carrier resources in the marketplace positively impacted the demand for most all of the asset-light services offered by ArcBest.  As seen throughout the year, growth in the offering of managed transportation solutions positively contributed to fourth quarter revenue growth.  The tradeoffs of managing rising purchased transportation costs relative to the price increases secured from customers continues to pressure margins.  However, labor and other cost efficiencies, in part reflect the benefit of technologies, resulted in an increase in fourth quarter operating income.

At FleetNet, despite an increase in total revenue associated with improved revenue per event, a decline in total events contributed to lower operating income compared to the prior year period.

 

Full Year Results of Operations Comparisons

Asset-Based

Full Year 2020 Versus Full Year 2019

  • Revenue of $2.09 billion, compared to $2.14 billion, an average daily decrease of 3.0 percent.
  • Tonnage per day decrease of 0.4 percent.
  • Shipments per day decrease of 4.1 percent.
  • Total billed revenue per hundredweight decrease of 2.4 percent impacted by lower fuel surcharges and freight mix changes versus prior year.  Revenue per hundredweight on traditional published LTL-rated business, excluding fuel surcharge and transactional LTL-rated shipments, improved by a percentage in the mid-single digits.
  • Operating income of $98.9 million compared to $102.1 million.  On a non-GAAP basis, operating income of $121.3 million compared to $118.8 million.
  • Profit-sharing bonus to union-represented ABF Freight employees of $5.0 million, consistent with 2019.

Asset-Light

Full Year 2020 Versus Full Year 2019

  • Revenue of $984.2 million compared to $950.1 million, an average daily increase of 3.0 percent.
  • Operating income of $13.0 million compared to an operating loss of $15.4 million that was impacted by a noncash impairment charge in fourth quarter 2019. On a non-GAAP basis, operating income of $13.0 million compared to operating income of $11.2 million.
  • Adjusted EBITDA of $24.4 million compared to $23.8 million.

Capital Expenditures

In 2020, total net capital expenditures, including equipment financed, equaled $92 million.  Net capital expenditures in 2020 included $63 million of revenue equipment, the majority of which was for ArcBest’s Asset-Based operation.  Because of reductions announced in early second quarter 2020 associated with the effects of the global pandemic and shifts in the timing of some expenditures into 2021, net capital expenditures for 2020 were approximately 35 percent below the annual average during the previous three years.  Depreciation and amortization costs on property, plant and equipment were $114 million in 2020.

Quarterly Dividends and Share Repurchase Program

During 2020, ArcBest increased shareholder returns through payment of an eight cent per share quarterly dividend and purchase of ArcBest shares valued at approximately $6.6 million.  These actions to enhance shareholder returns are expected to continue in 2021.  As recently announced, ArcBest restored the authorized amount of its share repurchase program for future purchases of ArcBest common stock to $50 million.         

Closing Comments

The impact of the COVID-19 pandemic was unpredictable, and 2020 was a very challenging year for our customers and our employees,” McReynolds said. “Our execution during this unprecedented period is worth noting. As an essential business, our logistics solutions are aiding our customers and our society as we all navigate an uncertain event. I’m very proud of the way our employees are responding to customers’ needs for changes and continuing to strengthen our relationships while being flexible and adaptive.

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 2020 fourth quarter and full year 2020 results.  The call will be today, Tuesday, February 2, at 9:30 a.m. ET (8:30 a.m. CT). Interested parties are invited to listen by calling (800) 747-0365. Following the call, a recorded playback will be available through the end of the day on March 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 21989590. The conference call and playback can also be accessed, through March 15, 2021, 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 and twelve months ended December 31, 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 

 

Year Ended 

 

 

 

December 31

 

December 31

 

 

    

2020

    

2019

    

2020

    

2019

 

 

 

(Unaudited)

 

 

 

($ thousands, except share and per share data)

 

REVENUES

 

$

 816,414

 

$

 717,418

 

$

 2,940,163

 

$

 2,988,310

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES(1)

 

 

 786,162

 

 

 728,647

 

 

 2,841,885

 

 

 2,924,540

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME (LOSS)

 

 

 30,252

 

 

 (11,229)

 

 

 98,278

 

 

 63,770

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (COSTS)

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and dividend income

 

 

 494

 

 

 1,591

 

 

 3,616

 

 

 6,453

 

Interest and other related financing costs

 

 

 (2,512)

 

 

 (2,874)

 

 

 (11,697)

 

 

 (11,467)

 

Other, net

 

 

 1,965

 

 

 485

 

 

 2,299

 

 

 (7,285)

 

 

 

 

 (53)

 

 

 (798)

 

 

 (5,782)

 

 

 (12,299)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) BEFORE INCOME TAXES

 

 

 30,199

 

 

 (12,027)

 

 

 92,496

 

 

 51,471

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME TAX PROVISION (BENEFIT)

 

 

 6,285

 

 

 (6,478)

 

 

 21,396

 

 

 11,486

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS)

 

$

 23,914

 

$

 (5,549)

 

$

 71,100

 

$

 39,985

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EARNINGS PER COMMON SHARE

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

 0.94

 

$

 (0.22)

 

$

 2.80

 

$

 1.56

 

Diluted

 

$

 0.89

 

$

 (0.22)

 

$

 2.69

 

$

 1.51

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AVERAGE COMMON SHARES OUTSTANDING

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 25,427,449

 

 

 25,490,393

 

 

 25,410,232

 

 

 25,535,529

 

Diluted

 

 

 26,734,287

 

 

 25,490,393

 

 

 26,422,523

 

 

 26,450,055

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH DIVIDENDS DECLARED PER COMMON SHARE

 

$

 0.08

 

$

 0.08

 

$

 0.32

 

$

 0.32

 


  1. The three months and year ended December 31, 2019 include a noncash impairment charge related to a portion of the goodwill, customer relationship, intangible assets, and revenue equipment associated with the acquisition of truckload brokerage and truckload dedicated businesses within the ArcBest segment.

 

 

 

 

ARCBEST CORPORATION

CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

 

 

 

 

December 31

 

December 31

 

 

    

2020

    

2019

 

 

 

(Unaudited)

 

Note

 

 

 

($ thousands, except share data)

 

ASSETS

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

 303,954

 

$

 201,909

 

Short-term investments

 

 

 65,408

 

 

 116,579

 

Accounts receivable, less allowances (2020 - $7,851; 2019 - $5,448)

 

 

 320,870

 

 

 282,579

 

Other accounts receivable, less allowances (2020 - $660; 2019 - $476)

 

 

 14,343

 

 

 18,774

 

Prepaid expenses

 

 

 37,774

 

 

 30,377

 

Prepaid and refundable income taxes

 

 

 11,397

 

 

 9,439

 

Other

 

 

 4,422

 

 

 4,745

 

TOTAL CURRENT ASSETS

 

 

 758,168

 

 

 664,402

 

 

 

 

 

 

 

 

 

PROPERTY, PLANT AND EQUIPMENT

 

 

 

 

 

 

 

Land and structures

 

 

 342,178

 

 

 342,122

 

Revenue equipment

 

 

 916,760

 

 

 896,020

 

Service, office, and other equipment

 

 

 233,810

 

 

 233,354

 

Software

 

 

 163,193

 

 

 151,068

 

Leasehold improvements

 

 

 15,156

 

 

 10,383

 

 

 

 

 1,671,097

 

 

 1,632,947

 

Less allowances for depreciation and amortization

 

 

 992,407

 

 

 949,355

 

 

 

 

 678,690

 

 

 683,592

 

 

 

 

 

 

 

 

 

GOODWILL

 

 

 88,320

 

 

 88,320

 

INTANGIBLE ASSETS, NET

 

 

 54,981

 

 

 58,832

 

OPERATING RIGHT-OF-USE ASSETS

 

 

 115,195

 

 

 68,470

 

DEFERRED INCOME TAXES

 

 

 6,158

 

 

 7,725

 

OTHER LONG-TERM ASSETS

 

 

 77,496

 

 

 79,866

 

 

 

$

 1,779,008

 

$

 1,651,207

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

Accounts payable

 

$

 170,898

 

$

 134,374

 

Income taxes payable

 

 

 316

 

 

 12

 

Accrued expenses

 

 

 246,746

 

 

 232,321

 

Current portion of long-term debt

 

 

 67,105

 

 

 57,305

 

Current portion of operating lease liabilities

 

 

 21,482

 

 

 20,265

 

TOTAL CURRENT LIABILITIES

 

 

 506,547

 

 

 444,277

 

 

 

 

 

 

 

 

 

LONG-TERM DEBT, less current portion

 

 

 217,119

 

 

 266,214

 

OPERATING LEASE LIABILITIES, less current portion

 

 

 97,839

 

 

 52,277

 

POSTRETIREMENT LIABILITIES, less current portion

 

 

 18,555

 

 

 20,294

 

OTHER LONG-TERM LIABILITIES

 

 

 37,948

 

 

 38,892

 

DEFERRED INCOME TAXES

 

 

 72,407

 

 

 66,210

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

Common stock, $0.01 par value, authorized 70,000,000 shares;
      issued 2020: 29,045,309 shares; 2019: 28,810,902 shares

 

 

 290

 

 

 288

 

Additional paid-in capital

 

 

 342,354

 

 

 333,943

 

Retained earnings

 

 

 595,932

 

 

 533,187

 

   Treasury stock, at cost, 2020: 3,656,938 shares; 2019: 3,404,639 shares

 

 

 (111,173)

 

 

 (104,578)

 

Accumulated other comprehensive income

 

 

 1,190

 

 

 203

 

TOTAL STOCKHOLDERS’ EQUITY

 

 

 828,593

 

 

 763,043

 

 

 

$

 1,779,008

 

$

 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

 

 

 

 

 

 

 

 

 

 

 

Year Ended 

 

 

 

December 31

 

 

    

2020

    

2019

 

 

 

Unaudited

 

 

 

($ thousands)

 

 OPERATING ACTIVITIES

 

 

 

 

 

 

 

Net income

 

$

 71,100

 

$

 39,985

 

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

 

 

 

 

 

 

 

Depreciation and amortization

 

 

 114,379

 

 

 108,099

 

Amortization of intangibles

 

 

 4,012

 

 

 4,367

 

Pension settlement expense, including termination expense

 

 

 89

 

 

 8,505

 

Share-based compensation expense

 

 

 10,478

 

 

 9,523

 

Provision for losses on accounts receivable

 

 

 2,058

 

 

 1,223

 

Change in deferred income taxes

 

 

 7,715

 

 

 5,411

 

Asset impairment(1)

 

 

 —

 

 

 26,514

 

Gain on sale of property and equipment and lease termination

 

 

 (2,376)

 

 

 (5,247)

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Receivables

 

 

 (35,860)

 

 

 13,720

 

Prepaid expenses

 

 

 (7,966)

 

 

 (4,756)

 

Other assets

 

 

 2,646

 

 

 (1,365)

 

Income taxes

 

 

 (1,712)

 

 

 (8,720)

 

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

 

 

 756

 

 

 728

 

Accounts payable, accrued expenses, and other liabilities

 

 

 40,670

 

 

 (27,623)

 

NET CASH PROVIDED BY OPERATING ACTIVITIES

 

 

 205,989

 

 

 170,364

 

 

 

 

 

 

 

 

 

 INVESTING ACTIVITIES

 

 

 

 

 

 

 

Purchases of property, plant and equipment, net of financings

 

 

 (43,248)

 

 

 (90,955)

 

Proceeds from sale of property and equipment

 

 

 13,348

 

 

 13,490

 

Purchases of short-term investments

 

 

 (165,133)

 

 

 (129,709)

 

Proceeds from sale of short-term investments

 

 

 216,735

 

 

 120,409

 

Capitalization of internally developed software

 

 

 (14,241)

 

 

 (11,476)

 

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

 

 

 7,461

 

 

 (98,241)

 

 

 

 

 

 

 

 

 

 FINANCING ACTIVITIES

 

 

 

 

 

 

 

Borrowings under credit facilities

 

 

 180,000

 

 

 —

 

Borrowings under accounts receivable securitization program

 

 

 45,000

 

 

 —

 

Proceeds from notes payable

 

 

 —

 

 

 20,410

 

Payments on long-term debt

 

 

 (326,098)

 

 

 (58,938)

 

Net change in book overdrafts

 

 

 6,510

 

 

 (2,722)

 

Deferred financing costs

 

 

 —

 

 

 (562)

 

Payment of common stock dividends

 

 

 (8,157)

 

 

 (8,187)

 

Purchases of treasury stock

 

 

 (6,595)

 

 

 (9,110)

 

Payments for tax withheld on share-based compensation

 

 

 (2,065)

 

 

 (1,291)

 

NET CASH USED IN FINANCING ACTIVITIES

 

 

 (111,405)

 

 

 (60,400)

 

 

 

 

 

 

 

 

 

NET INCREASE IN CASH AND CASH EQUIVALENTS

 

 

 102,045

 

 

 11,723

 

Cash and cash equivalents at beginning of period

 

 

 201,909

 

 

 190,186

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

 

$

 303,954

 

$

 201,909

 

 

 

 

 

 

 

 

 

 NONCASH INVESTING ACTIVITIES

 

 

 

 

 

 

 

Equipment and other financings

 

$

 61,803

 

$

 70,372

 

Accruals for equipment received

 

$

 1,667

 

$

 234

 

Lease liabilities arising from obtaining right-of-use assets

 

$

 67,819

 

$

 32,761

 


  1. Noncash impairment charge recognized in the year ended December 31, 2019 relates to a portion of the goodwill, customer relationship intangible assets, and revenue equipment associated with the acquisition of truckload brokerage and truckload dedicated businesses within the ArcBest segment.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended 

 

 

Year Ended 

 

 

 

December 31

 

 

December 31

 

 

    

2020

    

 

2019

    

 

2020

    

 

2019

 

 

 

Unaudited

 

 

 

($ thousands, except percentages)

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset-Based

 

$

 554,392

 

 

 

 

$

 513,331

 

 

 

 

$

 2,092,031

 

 

 

 

$

 2,144,679

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ArcBest

 

 

 245,579

 

 

 

 

 

 184,257

 

 

 

 

 

 779,115

 

 

 

 

 

 738,392

 

 

 

FleetNet

 

 

 55,625

 

 

 

 

 

 52,781

 

 

 

 

 

 205,049

 

 

 

 

 

 211,738

 

 

 

Total Asset-Light

 

 

 301,204

 

 

 

 

 

 237,038

 

 

 

 

 

 984,164

 

 

 

 

 

 950,130

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other and eliminations

 

 

 (39,182)

 

 

 

 

 

 (32,951)

 

 

 

 

 

 (136,032)

 

 

 

 

 

 (106,499)

 

 

 

Total consolidated revenues

 

$

 816,414

 

 

 

 

$

 717,418

 

 

 

 

$

 2,940,163

 

 

 

 

$

 2,988,310

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset-Based

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries, wages, and benefits

 

$

 275,476

 

 49.7

%

 

$

 274,966

 

 53.6

%

 

$

 1,095,694

 

 52.4

%

 

$

 1,148,761

 

 53.6

%

Fuel, supplies, and expenses

 

 

 52,051

 

 9.4

 

 

 

 61,631

 

 12.0

 

 

 

 209,095

 

 10.0

 

 

 

 257,133

 

 12.0

 

Operating taxes and licenses

 

 

 12,581

 

 2.2

 

 

 

 12,732

 

 2.5

 

 

 

 49,300

 

 2.4

 

 

 

 50,209

 

 2.3

 

Insurance

 

 

 8,910

 

 1.6

 

 

 

 9,281

 

 1.8

 

 

 

 33,568

 

 1.6

 

 

 

 32,516

 

 1.5

 

Communications and utilities

 

 

 4,490

 

 0.8

 

 

 

 4,433

 

 0.9

 

 

 

 17,916

 

 0.8

 

 

 

 18,614

 

 0.9

 

Depreciation and amortization

 

 

 23,675

 

 4.3

 

 

 

 23,428

 

 4.5

 

 

 

 94,326

 

 4.5

 

 

 

 89,798

 

 4.2

 

Rents and purchased transportation

 

 

 78,795

 

 14.2

 

 

 

 54,245

 

 10.6

 

 

 

 250,159

 

 12.0

 

 

 

 221,479

 

 10.3

 

Shared services

 

 

 62,104

 

 11.2

 

 

 

 51,109

 

 9.9

 

 

 

 217,258

 

 10.4

 

 

 

 212,773

 

 9.9

 

Gain on sale of property and equipment

 

 

 (103)

 

 —

 

 

 

 (4,189)

 

 (0.8)

 

 

 

 (3,309)

 

 (0.2)

 

 

 

 (5,892)

 

 (0.3)

 

Innovative technology costs(1)

 

 

 6,937

 

 1.3

 

 

 

 4,539

 

 0.9

 

 

 

 22,458

 

 1.1

 

 

 

 13,739

 

 0.6

 

Other

 

 

 1,533

 

 0.3

 

 

 

 610

 

 0.1

 

 

 

 6,701

 

 0.3

 

 

 

 3,488

 

 0.2

 

Total Asset-Based

 

 

 526,449

 

 95.0

%

 

 

 492,785

 

 96.0

%

 

 

 1,993,166

 

 95.3

%

 

 

 2,042,618

 

 95.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ArcBest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchased transportation

 

 

 206,532

 

 84.1

%

 

 

 153,935

 

 83.5

%

 

 

 649,933

 

 83.4

%

 

 

 606,113

 

 82.1

%

Supplies and expenses

 

 

 2,612

 

 1.0

 

 

 

 2,377

 

 1.3

 

 

 

 9,627

 

 1.2

 

 

 

 10,789

 

 1.5

 

Depreciation and amortization(2)

 

 

 2,382

 

 1.0

 

 

 

 2,531

 

 1.4

 

 

 

 9,714

 

 1.3

 

 

 

 11,344

 

 1.5

 

Shared services

 

 

 26,199

 

 10.7

 

 

 

 22,757

 

 12.4

 

 

 

 90,983

 

 11.7

 

 

 

 93,961

 

 12.7

 

Other

 

 

 2,924

 

 1.2

 

 

 

 2,636

 

 1.4

 

 

 

 9,203

 

 1.2

 

 

 

 9,860

 

 1.3

 

Asset Impairment(3)

 

 

 —

 

 —

 

 

 

 26,514

 

 14.4

 

 

 

 —

 

 —

 

 

 

 26,514

 

 3.6

 

 

 

 

 240,649

 

 98.0

%

 

 

 210,750

 

 114.4

%

 

 

 769,460

 

 98.8

%

 

 

 758,581

 

 102.7

%

FleetNet

 

 

 55,067

 

 99.0

%

 

 

 51,660

 

 97.9

%

 

 

 201,682

 

 98.4

%

 

 

 206,932

 

 97.7

%

Total Asset-Light

 

 

 295,716

 

 

 

 

 

 262,410

 

 

 

 

 

 971,142

 

 

 

 

 

 965,513

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other and eliminations

 

 

 (36,003)

 

 

 

 

 

 (26,548)

 

 

 

 

 

 (122,423)

 

 

 

 

 

 (83,591)

 

 

 

Total consolidated operating expenses

 

$

 786,162

 

 96.3

%

 

$

 728,647

 

 101.6

%

 

$

 2,841,885

 

 96.7

%

 

$

 2,924,540

 

 97.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME (LOSS)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset-Based

 

$

 27,943

 

 

 

 

$

 20,546

 

 

 

 

$

 98,865

 

 

 

 

$

 102,061

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ArcBest

 

 

 4,930

 

 

 

 

 

 (26,493)

 

 

 

 

 

 9,655

 

 

 

 

 

 (20,189)

 

 

 

FleetNet

 

 

 558

 

 

 

 

 

 1,121

 

 

 

 

 

 3,367

 

 

 

 

 

 4,806

 

 

 

Total Asset-Light

 

 

 5,488

 

 

 

 

 

 (25,372)

 

 

 

 

 

 13,022

 

 

 

 

 

 (15,383)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other and eliminations(4)

 

 

 (3,179)

 

 

 

 

 

 (6,403)

 

 

 

 

 

 (13,609)

 

 

 

 

 

 (22,908)

 

 

 

Total consolidated operating income (loss)

 

$

 30,252

 

 

 

 

$

 (11,229)

 

 

 

 

$

 98,278

 

 

 

 

$

 63,770

 

 

 


  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. Noncash impairment charge recognized in fourth quarter 2019 relates to a portion of the goodwill, customer relationship intangible assets, and revenue equipment associated with the acquisition of truckload brokerage and truckload dedicated businesses within the ArcBest segment.
  4. “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 

 

Year Ended 

 

 

December 31

 

 

December 31

 

 

    

2020

 

2019

    

  

2020

 

 

2019

 

ArcBest Corporation - Consolidated

 

(Unaudited)

 

 

 

($ thousands, except per share data)

 

Operating Income (Loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

Amounts on GAAP basis

 

$

 30,252

 

$

 (11,229)

 

$

 98,278

 

$

 63,770

 

Innovative technology costs, pre-tax(1)

 

 

 7,231

 

 

 4,553

 

 

 22,571

 

 

 15,657

 

Asset impairment, pre-tax(2)

 

 

 —

 

 

 26,514

 

 

 —

 

 

 26,514

 

ELD conversion costs, pre-tax(3)

 

 

 —

 

 

 329

 

 

 —

 

 

 2,687

 

Nonunion pension termination costs, pre-tax(4)

 

 

 —

 

 

 —

 

 

 —

 

 

 350

 

Non-GAAP amounts

 

$

 37,483

 

$

 20,167

 

$

 120,849

 

$

 108,978

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

Amounts on GAAP basis

 

$

 23,914

 

$

 (5,549)

 

$

 71,100

 

$

 39,985

 

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

 

 

 5,506

 

 

 3,501

 

 

 17,340

 

 

 11,963

 

Asset impairment, after-tax(2)

 

 

 —

 

 

 19,836

 

 

 —

 

 

 19,836

 

ELD conversion costs, after-tax(3)

 

 

 —

 

 

 245

 

 

 —

 

 

 1,996

 

Nonunion pension termination costs, after-tax(4)

 

 

 —

 

 

 —

 

 

 —

 

 

 260

 

Nonunion pension expense, including settlement and termination expense, after-tax(5)

 

 

 —

 

 

 297

 

 

 66

 

 

 7,972

 

Life insurance proceeds and changes in cash surrender value

 

 

 (2,058)

 

 

 (979)

 

 

 (2,316)

 

 

 (3,692)

 

Tax expense (benefit) from vested RSUs(6)

 

 

 (31)

 

 

 17

 

 

 510

 

 

 481

 

Tax credits(7)

 

 

 (1,285)

 

 

 (2,526)

 

 

 (1,285)

 

 

 (2,526)

 

Non-GAAP amounts

 

$

 26,046

 

$

 14,842

 

$

 85,415

 

$

 76,275

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings Per Share(8)

 

 

 

 

 

 

 

 

 

 

 

 

 

Amounts on GAAP basis

 

$

 0.89

 

$

 (0.22)

 

$

 2.69

 

$

 1.51

 

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

 

 

 0.21

 

 

 0.13

 

 

 0.66

 

 

 0.45

 

Asset impairment, after-tax(2)

 

 

 —

 

 

 0.75

 

 

 —

 

 

 0.75

 

ELD conversion costs, after-tax(3)

 

 

 —

 

 

 0.01

 

 

 —

 

 

 0.08

 

Nonunion pension termination costs, after-tax(4)

 

 

 —

 

 

 —

 

 

 —

 

 

 0.01

 

Nonunion pension expense, including settlement and termination expense, after-tax(5)

 

 

 —

 

 

 0.01

 

 

 —

 

 

 0.30

 

Life insurance proceeds and changes in cash surrender value

 

 

 (0.08)

 

 

 (0.04)

 

 

 (0.09)

 

 

 (0.14)

 

Tax expense (benefit) from vested RSUs(6)

 

 

 —

 

 

 —

 

 

 0.02

 

 

 0.02

 

Tax credits(7)

 

 

 (0.05)

 

 

 (0.10)

 

 

 (0.05)

 

 

 (0.10)

 

Non-GAAP amounts(9)

 

$

 0.97

 

$

 0.56

 

$

 3.23

 

$

 2.88

 

 


Note: See “Notes to Non-GAAP Financial Tables” for the footnotes to this ArcBest Corporation – Consolidated non-GAAP table.    

 

 


 

Notes to Non-GAAP Financial Tables

 

The following footnotes apply to the non-GAAP financial tables presented in this press release.

 

  1. Represents costs associated with the freight handling pilot test program at ABF Freight.
  2. Noncash impairment charge recognized in fourth quarter 2019 relates to a portion of the goodwill, customer relationship intangible assets, and revenue equipment associated with the acquisition of truckload brokerage and truckload dedicated businesses within the ArcBest segment.
  3. The three months and year ended December 31, 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.
  4. The year ended December 31, 2019 includes a one-time consulting fee associated with the termination of the nonunion defined benefit pension plan.
  5. For the year ended December 31, 2020, represents pension settlement expense related to the Company’s supplemental benefit plan. For the three months and year ended December 31, 2019, nonunion 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. Termination of the nonunion defined benefit pension plan was completed in 2019. The year ended December 31, 2019 also includes a noncash pension termination expense related to an amount which was stranded in accumulated other comprehensive income until the pension benefit obligation was settled upon plan termination. The three months and year ended December 31, 2019 include pension settlement expense of $0.3 million after-tax, or $0.01 per diluted share, related to the Company’s supplemental benefit plan.
  6. The Company recognized the tax impact for the vesting of share-based compensation resulting in excess tax expense (benefit) during the three months and year ended December 31, 2020 and 2019.
  7. For the three months and year ended December 31, 2020, represents a research and development tax credit recognized in the tax provision during fourth quarter 2020 which relates to the year ended December 31, 2019. The three months and year ended December 31, 2019 include a $1.4 million research and development tax credit recognized in the tax provision during fourth quarter 2019 which relates to years prior to 2019, and include a $1.2 million alternative fuel tax credit related to the year ended December 31, 2018 which was recorded in fourth quarter 2019 due to the December 2019 retroactive reinstatement.
  8. For the year ended December 31, 2019, ArcBest used the two-class method for calculating earnings per share, which 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. For fourth quarter 2019, ArcBest reported a net loss on a GAAP basis and reported net income on a non-GAAP basis. The average common shares outstanding used to calculate non-GAAP diluted earnings per share for fourth quarter 2019 were adjusted to include unvested restricted stock awards in the calculation of non-GAAP diluted earnings per share under the two-class method as follows:

 

 

 

 

 

 

 

    

Three Months Ended December 31, 2019

    

Average Common Shares Outstanding

 

 

 

 

Diluted shares on GAAP basis

 

 

 25,490,393

 

Effect of unvested restricted stock awards

 

 

 931,908

 

Non-GAAP diluted shares

 

 

 26,422,301

 

 

  1. Non-GAAP EPS is calculated in total and may not sum due to rounding.
  2. 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended 

 

Year Ended 

 

 

 

December 31

 

December 31

 

 

    

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

 

$

 27,943

 

 95.0

%  

 

$

 20,546

 

 96.0

%  

 

$

 98,865

 

 95.3

%  

 

$

 102,061

 

 95.2

%  

 

Innovative technology costs, pre-tax(1)

 

 

 6,937

 

 (1.3)

 

 

 

 4,539

 

 (0.9)

 

 

 

 22,458

 

 (1.1)

 

 

 

 13,739

 

 (0.6)

 

 

ELD conversion costs, pre-tax(3)

 

 

 —

 

 —

 

 

 

 329

 

 (0.1)

 

 

 

 —

 

 —

 

 

 

 2,687

 

 (0.1)

 

 

Nonunion pension termination costs, pre-tax(4)

 

 

 —

 

 —

 

 

 

 —

 

 —

 

 

 

 —

 

 —

 

 

 

 295

 

 —

 

 

Non-GAAP amounts

 

$

 34,880

 

 93.7

%  

 

$

 25,414

 

 95.0

%  

 

$

 121,323

 

 94.2

%  

 

$

 118,782

 

 94.5

%  

 

 

 

 

 

 

 

Asset-Light

 

 

 

 

 

 

 

 

 

 

 

ArcBest Segment

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amounts on GAAP basis

 

$

 4,930

 

 98.0

%  

 

$

 (26,493)

 

 114.4

%  

 

$

 9,655

 

 98.8

%  

 

$

 (20,189)

 

 102.7

%  

 

Asset impairment, pre-tax(2)

 

 

 —

 

 —

 

 

 

 26,514

 

 (14.4)

 

 

 

 —

 

 —

 

 

 

 26,514

 

 (3.6)

 

 

Nonunion pension termination costs, pre-tax(4)

 

 

 —

 

 —

 

 

 

 —

 

 —

 

 

 

 —

 

 —

 

 

 

 23

 

 —

 

 

Non-GAAP amounts

 

$

 4,930

 

 98.0

%  

 

$

 21

 

 100.0

%  

 

$

 9,655

 

 98.8

%  

 

$

 6,348

 

 99.1

%  

 

 

 

 

 

 

 

FleetNet Segment

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amounts on GAAP basis

 

$

 558

 

 99.0

%  

 

$

 1,121

 

 97.9

%  

 

$

 3,367

 

 98.4

%  

 

$

 4,806

 

 97.7

%  

 

Nonunion pension termination costs, pre-tax(4)

 

 

 —

 

 —

 

 

 

 —

 

 —

 

 

 

 —

 

 —

 

 

 

 12

 

 —

 

 

Non-GAAP amounts

 

$

 558

 

 99.0

%  

 

$

 1,121

 

 97.9

%  

 

$

 3,367

 

 98.4

%  

 

$

 4,818

 

 97.7

%  

 

 

 

 

 

 

 

Total Asset-Light

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amounts on GAAP basis

 

$

 5,488

 

 98.2

%  

 

$

 (25,372)

 

 110.7

%  

 

$

 13,022

 

 98.7

%  

 

$

 (15,383)

 

 101.6

%  

 

Asset impairment, pre-tax(2)

 

 

 —

 

 —

 

 

 

 26,514

 

 (11.2)

 

 

 

 —

 

 —

 

 

 

 26,514

 

 (2.8)

 

 

Nonunion pension termination costs, pre-tax(4)

 

 

 —

 

 —

 

 

 

 —

 

 —

 

 

 

 —

 

 —

 

 

 

 35

 

 —

 

 

Non-GAAP amounts

 

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