PR Newswire | Feb 2, 2021 06:01AM EST

02/02 05:00 CST

ArcBest(r) 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-GAAP(1) 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, Ark., Feb. 2, 2021

FORT SMITH, Ark., Feb. 2, 2021 /PRNewswire/ -- ArcBest(r) (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 year. Revenue 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, representAsset-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(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 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.

Investor Relations Contact: David HumphreyTitle: Vice President - Investor RelationsPhone: 479-785-6200 Email: dhumphrey@arcb.com

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 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

The three months and year ended December 31, 2019 include a noncash^ impairment charge related to a portion of the goodwill, customer1) 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; 290 288 issued 2020: 29,045,309 shares; 2019: 28,810,902 shares

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 auditedfinancial statements at that date but does not include all of the informationand footnotes required by generally accepted accounting principles for completefinancial 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

^ Noncash impairment charge recognized in the year ended December 31, 20191) 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.

ARCBEST CORPORATION

FINANCIAL STATEMENT OPERATING SEGMENT DATA AND OPERATING RATIOS



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 %$1,095,69452.4 %$1,148,76153.6 %

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 % 1,993,16695.3 % 2,042,61895.2 %



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%$2,841,88596.7 %$2,924,54097.9 %



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

^ Represents costs associated with the freight handling pilot test program1) at ABF Freight.

^ Depreciation and amortization consists primarily of amortization of2) intangibles, including customer relationships, and software associated with acquired businesses.

^ Noncash impairment charge recognized in fourth quarter 2019 relates to a3) 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.

"Other and eliminations" includes corporate costs for certain unallocated^ shared service costs which are not attributable to any segment, additional4) investments to offer comprehensive transportation and logistics services across multiple operating segments, and other investments in ArcBest technology and innovations, including innovative technology costs.

ARCBEST CORPORATION RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES

Non-GAAP Financial 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 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, - 297 66 7,972 after-tax^(5)

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, - 0.01 - 0.30 after-tax^(5)

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 thisArcBest Corporation - Consolidated non-GAAP table.

Notes to Non-GAAP Financial Tables

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

^ Represents costs associated with the freight handling pilot test program at1) ABF Freight.

^ Noncash impairment charge recognized in fourth quarter 2019 relates to a2) 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.

^ The three months and year ended December 31, 2019 include impairment charges3) 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.

^ The year ended December 31, 2019 includes a one-time consulting fee4) associated with the termination of the nonunion defined benefit pension plan.

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 of5) 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.

^ The Company recognized the tax impact for the vesting of share-based6) compensation resulting in excess tax expense (benefit) during the three months and year ended December 31, 2020 and 2019.

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 and7) 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.

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 2019,8) 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 awards931,908

Non-GAAP diluted shares 26,422,301

^9) Non-GAAP EPS is calculated in total and may not sum due to rounding.

Tax rate for total "Amounts on GAAP basis" represents the effective tax^ rate. The tax effects of non-GAAP adjustments are calculated based on the10) 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 $5,488 98.2 %$1,142 99.5 %$13,022 98.7 %$11,166 98.8 %



Other and Eliminations

Operating Loss ($)

Amounts on GAAP basis $(3,179) $(6,403) $(13,609) $(22,908)

Innovative technology costs, pre-tax^(1) 294 14 113 1,918

Nonunion pension termination costs, pre-tax^(4) - - - 20

Non-GAAP amounts $(2,885) $(6,389) $(13,496) $(20,970)

Note: See "Notes to Non-GAAP Financial Tables" for the footnotes to thisArcBest Corporation - Segment Operating Income Reconciliations non-GAAPtable.

Effective Tax Rate Reconciliation

ArcBest Corporation - Consolidated



(Unaudited)

($ thousands, except percentages) Three Months Ended December 31, 2020

Other Income Income

Operating Income Before IncomeTax Net

Income (Costs) Taxes Provision Income Tax Rate^(10)

Amounts on GAAP basis $30,252 $(53) $ 30,199 $6,285 $23,914 20.8 %

Innovative technology costs^(1) 7,231 182 7,413 1,907 5,506 25.7

Life insurance proceeds and changes in cash surrender value - (2,058) (2,058) - (2,058)-

Tax benefit from vested RSUs^(6) - - - 31 (31) -

Tax credits^(7) - - - 1,285 (1,285)-

Non-GAAP amounts $37,483 $(1,929) $ 35,554 $9,508 $26,046 26.7 %



Year Ended December 31, 2020

Other Income BeforeIncome

Operating Income Income Tax Net

Income (Costs) Taxes Provision Income Tax Rate^(10)

Amounts on GAAP basis $98,278 $(5,782) $ 92,496 $21,396 $71,100 23.1 %

Innovative technology costs^(1) 22,571 779 23,350 6,010 17,340 25.7

Nonunion pension expense, including settlement^(5) - 89 89 23 66 25.8

Life insurance proceeds and changes in cash surrender value - (2,316) (2,316) - (2,316)-

Tax expense from vested RSUs^(6) - - - (510) 510 -

Tax credits^(7) - 1,285 (1,285)-

Non-GAAP amounts $120,849 $(7,230) $ 113,619 $28,204 $85,415 24.8 %



Three Months Ended December 31, 2019

Operating Other Income (Loss)Income Net

Income Income Before IncomeTax Income Provision

(Loss) (Costs) Taxes (Benefit) (Loss) Tax Rate^(10)

Amounts on GAAP basis $(11,229)$(798) $ (12,027) $(6,478) $(5,549)(53.9) %

Innovative technology costs^(1) 4,553 162 4,715 1,214 3,501 25.7

Asset impairment^(2) 26,514 - 26,514 6,678 19,836 25.2

ELD conversion costs^(3) 329 - 329 84 245 25.5

Nonunion pension expense, including settlement and - 399 399 102 297 25.6 termination expense^(5)

Life insurance proceeds and changes in cash surrender value - (979) (979) - (979) -

Tax expense from vested RSUs^(6) - - - (17) 17 -

Tax credits^(7) - - - 2,526 (2,526)-

Non-GAAP amounts $20,167 $(1,216) $ 18,951 $4,109 $14,842 21.7 %



Year Ended December 31, 2019

Other Income BeforeIncome

Operating Income Income Tax Net

Income (Costs) Taxes Provision Income Tax Rate^(10)

Amounts on GAAP basis $63,770 $(12,299)$ 51,471 $11,486 $39,985 22.3 %

Innovative technology costs^(1) 15,657 453 16,110 4,147 11,963 25.7

Asset impairment, pre-tax^(2) 26,514 - 26,514 6,678 19,836 25.2

ELD conversion costs^(3) 2,687 - 2,687 691 1,996 25.7

Nonunion pension termination costs^(4) 350 - 350 90 260 25.7

Nonunion pension expense, including settlement and - 9,358 9,358 1,386 7,972 14.8 termination expense^(5)

Life insurance proceeds and changes in cash surrender value - (3,692) (3,692) - (3,692)-

Tax expense from vested RSUs^(6) - - - (481) 481 -

Tax credits^(7) - - - 2,526 (2,526)-

Non-GAAP amounts $108,978 $(6,180) $ 102,798 $26,523 $76,275 25.8 %

Note: See "Notes to Non-GAAP Financial Tables" for the footnotes to thisArcBest Corporation - Effective Tax Rate Reconciliation non-GAAP table.

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 Year Ended

December 31 December 31

2020 2019 2020 2019

(Unaudited)

ArcBest Corporation - Consolidated Adjusted EBITDA($ thousands)



Net Income (Loss) $23,914$(5,549)$71,100 $39,985

Interest and other related financing costs 2,512 2,874 11,697 11,467

Income tax provision (benefit) 6,285 (6,478) 21,396 11,486

Depreciation and amortization 30,260 29,134 118,391 112,466

Amortization of share-based compensation 2,522 2,255 10,478 9,523

Amortization of net actuarial (gains) losses of benefit plans and pension settlement expense, (148) 618 (500) 9,758 including termination expense^(1)

Asset impairment^(2) - 26,514 - 26,514

Consolidated Adjusted EBITDA $65,345$49,368 $232,562$221,199

The year ended December 31, 2020 includes pre-tax pension settlement expense of $0.1 million related to the Company's supplemental benefit plan. The year ended December 31, 2019 includes pre-tax pension settlement expense of $4.2 million related to the Company's nonunion defined benefit^ pension plan, for which plan termination was completed as of1) December 31, 2019,and 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. The three months and year ended December 31, 2019 include pre-tax pension settlement expense of $0.4 million related to the Company's supplemental benefit plan.

^ Noncash impairment charge recognized in fourth quarter 2019 relates to a2) 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

Asset-Light Adjusted EBITDA (Unaudited)

($ thousands)



ArcBest

Operating Income (Loss) $4,930$(26,493)$9,655 $(20,189)

Depreciation and amortization^(3) 2,382 2,531 9,714 11,344

Asset impairment^(4) - 26,514 - 26,514

Adjusted EBITDA $7,312$2,552 $19,369$17,669



FleetNet

Operating Income $558 $1,121 $3,367 $4,806

Depreciation and amortization^(3) 418 359 1,622 1,341

Adjusted EBITDA $976 $1,480 $4,989 $6,147



Total Asset-Light

Operating Income (Loss) $5,488$(25,372)$13,022$(15,383)

Depreciation and amortization^(3) 2,800 2,890 11,336 12,685

Asset impairment^(4) - 26,514 - 26,514

Adjusted EBITDA $8,288$4,032 $24,358$23,816

^ Depreciation and amortization consists primarily of amortization of3) intangibles and software associated with acquired businesses.

^ Noncash impairment charge recognized in fourth quarter 2019 relates to a4) 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

OPERATING STATISTICS



Three Months Ended Year Ended

December 31 December 31

2020 2019 % Change2020 2019 % Change

(Unaudited)

Asset-Based



Workdays 61.5 61.5 253.0 251.5



Billed Revenue^(1) / CWT $35.76 $35.62 0.4% $34.60 $35.44 (2.4)%



Billed Revenue^(1) / Shipment $458.71 $435.59 5.3% $441.73 $435.60 1.4%



Shipments 1,206,783 1,173,9492.8% 4,756,248 4,928,750(3.5)%



Shipments / Day 19,622 19,089 2.8% 18,799 19,597 (4.1)%



Tonnage (Tons) 773,915 717,708 7.8% 3,035,834 3,028,9740.2%



Tons / Day 12,584 11,670 7.8% 11,999 12,044 (0.4)%



Pounds / Shipment 1,283 1,223 4.9% 1,277 1,229 3.9%



Average Length of Haul (Miles) 1,097 1,032 6.3% 1,080 1,034 4.4%



Revenue for undelivered freight is deferred for financial statement^ purposes in accordance with the Asset-Based segment revenue recognition1) policy. Billed revenue used for calculating revenue per hundredweight measurements has not been adjusted for the portion of revenue deferred for financial statement purposes.

Year Over Year % Change

Three Months Ended Year Ended

December 31, 2020 December 31, 2020



(Unaudited)

ArcBest^(2)



Revenue / Shipment 15.5% 4.9%



Shipments / Day 15.5% (4.9%)

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

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SOURCE ArcBest