PR Newswire | Nov 3, 2020 06:01AM EST

11/03 05:00 CST

ArcBest(r) 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 GAAP? 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, Ark., Nov. 3, 2020

FORT SMITH, Ark., Nov. 3, 2020 /PRNewswire/ -- ArcBest(r) (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(r) (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(r). 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(r) 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; 290 288 issued 2020: 29,039,994 shares; 2019: 28,810,902 shares

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% 1,466,71795.4 % 1,549,83395.0 %



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%$2,055,72396.8 %$2,195,89396.7 %



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 MeasuresWe 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, - 6,011 66 7,675 after-tax^(4)

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, - 0.23 - 0.29 after-tax^(4)

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.

The three and nine months ended September 30, 2019 include impairment ^2) 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.

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 ^4) 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.

The three and nine months ended September 30, 2019 include impairment ^2) 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

OperatingIncome Before IncomeTax Net

Income (Costs) Taxes ProvisionIncome 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 - (1,503) (1,503) - (1,503)- value

Tax benefit from vested RSUs^(2) - - - 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 BeforeIncome

OperatingIncome Income Tax Net

Income (Costs) Taxes ProvisionIncome Tax Rate^(6)

Amounts on GAAP basis $ 68,026$(5,729)$ 62,297 $ 15,111$47,18624.3 %

Innovative technology costs^(1) 15,340 597 15,937 4,103 11,83425.7

Nonunion pension expense, including settlement^(3) - 89 89 23 66 25.8

Life insurance proceeds and changes in cash surrender - (258) (258) - (258) - value

Tax expense from vested RSUs^(2) - - - (541) 541 -

Non-GAAP amounts $ 83,366$(5,301)$ 78,065 $ 18,696$59,36923.9 %



Three Months Ended September 30, 2019

Other Income Income

OperatingIncome Before IncomeTax Net

Income (Costs) Taxes ProvisionIncome Tax Rate^(6)

Amounts on GAAP basis $ 31,208$(7,866)$ 23,342 $ 7,072 $16,27030.3 %

Innovative technology costs^(1) 4,727 139 4,866 1,252 3,614 25.7

ELD conversion costs^(4) 1,796 - 1,796 463 1,333 25.8

Nonunion pension termination costs^(5) 350 - 350 90 260 25.7

Nonunion pension expense, including settlement and - 6,718 6,718 707 6,011 10.5 termination expense^(3)

Life insurance proceeds and changes in cash surrender - (557) (557) - (557) - value

Tax expense from vested RSUs^(2) - - - (56) 56 -

Non-GAAP amounts $ 38,081$(1,566)$ 36,515 $ 9,528 $26,98726.1 %



Nine Months Ended September 30, 2019

Other Income BeforeIncome

OperatingIncome Income Tax Net

Income (Costs) Taxes ProvisionIncome Tax Rate^(6)

Amounts on GAAP basis $ 74,999$(11,501)$ 63,498 $ 17,964$45,534 28.3 %

Innovative technology costs^(1) 11,104 291 11,395 2,933 8,462 25.7

ELD conversion costs^(4) 2,358 - 2,358 607 1,751 25.7

Nonunion pension termination costs^(5) 350 - 350 90 260 25.7

Nonunion pension expense, including settlement and - 8,959 8,959 1,284 7,675 14.3 termination expense^(3)

Life insurance proceeds and changes in cash surrender - (2,713) (2,713) - (2,713)- value

Tax expense from vested RSUs^(2) - - - (464) 464 -

Non-GAAP amounts $ 88,811$(4,964) $ 83,847 $ 22,414$61,433 26.7 %

________________________

^1) Represents costs associated with the freight handling pilot test program at ABF Freight.

^2) 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.

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 ^3) 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. The three and nine months ended September 30, 2019 include 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 and nine months ended September 30, 2019 include impairment ^4) 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.

^5) 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.

Tax rate for total "Amounts on GAAP basis" represents the effective tax^6) 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.

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.



Three Months Ended Nine Months Ended

September 30 September 30

2020 2019 2020 2019

(Unaudited)

ArcBest Corporation - Consolidated Adjusted EBITDA ($ thousands)



Net Income $29,404 $16,270 $47,186 $45,534

Interest and other related financing costs 2,860 2,900 9,185 8,593

Income tax provision 9,774 7,072 15,111 17,964

Depreciation and amortization 30,032 29,361 88,131 83,332

Amortization of share-based compensation 2,885 2,409 7,956 7,268

Amortization of net actuarial (gains) losses of benefit plans and (148) 6,800 (352) 9,140 pension settlement expense, including termination expense^(1)

Consolidated Adjusted EBITDA $74,807 $64,812 $167,217$171,831

_______________________

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. The three and nine months ended September 30, 2019 includes pre-tax pension settlement expense of $2.5 million ^1) and $4.2 million, respectively, related to the Company's nonunion defined benefit pension plan for which plan termination was completed as of December 31, 2019. The three and nine months ended September 30, 2019 also include a $4.0 million 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.



Three Months Ended Nine Months Ended

September 30 September 30

2020 2019 2020 2019

Asset-Light Adjusted EBITDA (Unaudited)

($ thousands)



ArcBest

Operating Income $4,831 $2,452 $4,725 $6,304

Depreciation and amortization^(2) 2,413 2,607 7,332 8,813

Adjusted EBITDA $7,244 $5,059 $12,057$15,117



FleetNet

Operating Income $987 $1,171 $2,809 $3,685

Depreciation and amortization 411 332 1,204 982

Adjusted EBITDA $1,398 $1,503 $4,013 $4,667



Total Asset-Light

Operating Income $5,818 $3,623 $7,534 $9,989

Depreciation and amortization^(2) 2,824 2,939 8,536 9,795

Adjusted EBITDA $8,642 $6,562 $16,070$19,784

_________________________

^2) Depreciation and amortization consists primarily of amortization of intangibles and software associated with acquired businesses.



Three Months Ended Nine Months Ended

September 30 September 30

2020 2019 % Change2020 2019 % Change

(Unaudited)

Asset-Based



Workdays 64.0 63.5 191.5 190.0



Billed Revenue^(1) / CWT $35.69 $36.35 (1.8%) $34.21 $35.38 (3.3%)



Billed Revenue^(1) / Shipment $454.94 $443.82 2.5% $435.96 $435.61 0.1%



Shipments 1,242,943 1,271,697(2.3%) 3,549,465 3,754,801(5.5%)



Shipments / Day 19,421 20,027 (3.0%) 18,535 19,762 (6.2%)



Tonnage (Tons) 792,258 776,370 2.0% 2,261,919 2,311,266(2.1%)



Tons / Day 12,379 12,226 1.2% 11,812 12,165 (2.9%)



Pounds / Shipment 1,275 1,221 4.4% 1,275 1,231 3.6%



Average Length of Haul (Miles) 1,096 1,040 5.4% 1,074 1,035 3.8%



______________________

Revenue for undelivered freight is deferred for financial statement ^1) 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, 2020 September 30, 2020

(Unaudited)

ArcBest^(2)



Revenue / Shipment 5.7% 0.7%



Shipments / Day (0.4%) (11.1%)

________________________

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

Investor Relations Contact: David Humphrey

Title: Vice President - Investor Relations

Phone: 479-785-6200

Email: dhumphrey@arcb.com

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SOURCE ArcBest