PR Newswire | Nov 2, 2021 06:01AM EDT

11/02 05:00 CDT

ArcBest(r) Announces Record Third Quarter 2021 ResultsSuccessful growth strategy driving superior performanceAdvancing strategic vision to better serve customers and further enhance value for shareholders- Third quarter 2021 revenue of $1.0 billion increased 27.9 percent over third quarter 2020.- Net income improved to $63.7 million, or $2.38 per diluted share. On a non-GAAP basis, third quarter 2021 net income was $69.2 million, or $2.59 per diluted share.- Highest quarterly revenue and operating income in ArcBest's history. FORT SMITH, Ark., Nov. 2, 2021

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

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

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

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

Third Quarter Results of Operations Comparisons

Asset-Based

Third Quarter 2021 Versus Third Quarter 2020

* Revenue of $681.2 million compared to $561.9 million, a per-day increase of 21.2 percent. * Total tonnage per day increase of 2.4 percent, including an increase of 2.5 percent in LTL-rated weight per shipment. * Total shipments per day increase of 0.5 percent. * Total billed revenue per hundredweight increased 17.1 percent and was positively impacted by higher fuel surcharges. Revenue per hundredweight on LTL-rated business, excluding fuel surcharge, improved by a percentage in the double digits. * Operating income of $83.6 million and an operating ratio of 87.7 percent compared to the prior-year quarter operating income of $36.6 million and an operating ratio of 93.5 percent. On a non-GAAP basis, operating income of $90.5 million and an operating ratio of 86.7 percent compared to the prior-year quarter operating income of $42.8 million and an operating ratio of 92.4 percent.

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

Asset-Light?

Third Quarter 2021 Versus Third Quarter 2020

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

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

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

NOTE

? - The ArcBest and FleetNet reportable segments, combined, represent Asset-Light operations.

Conference Call

ArcBest will host a conference call with company executives to discuss the 2021 third quarter results. The call will be today, Tuesday, November 2, at 9:30 a.m. EDT (8:30 a.m. CDT). Interested parties are invited to listen by calling (800) 669-4993 or by joining the webcast which can be found on ArcBest's website at arcb.com. Slides to accompany this call are included in Exhibit 99.3 of the Form 8-K filed on November 2, 2021, will be posted and available to download on the company's website prior to the scheduled conference time, and will be included in the webcast. Following the call, a recorded playback will be available through the end of the day on December 15, 2021. To listen to the playback, dial (800) 633-8284 or (402) 977-9140 (for international callers). The conference call ID for the playback is 21998422. The conference call and playback can also be accessed, through December 15, 2021, on ArcBest's website at arcb.com.

About ArcBest

ArcBest(r) (Nasdaq: ARCB) is a multibillion-dollar integrated logistics company that helps keep the global supply chain moving. Founded in 1923 and now with over 14,000 employees across more than 250 campuses and service centers, the company is a logistics powerhouse, fueled by the simple notion of finding a way to get the job done. Through innovative thinking, agility and trust, ArcBest leverages their full suite of shipping and logistics solutions to meet customers' critical needs, each and every day. For more information, visit arcb.com.

The following is a "safe harbor" statement under the Private Securities Litigation Reform Act of 1995: Certain statements and information in this press release concerning results for the three months ended September 30, 2021 may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Terms such as "anticipate," "believe," "could," "estimate," "expect," "forecast," "foresee," "int end," "may," "plan," "predict," "project," "scheduled," "should," "would," and similar expressions and the negatives of such terms are intended to identify forward-looking statements. These statements are based on management's beliefs, assumptions, and expectations based on currently available information, are not guarantees of future performance, and involve certain risks and uncertainties (some of which are beyond our control). Although we believe that the expectations reflected in these forward-looking statements are reasonable as and when made, we cannot provide assurance that our expectations will prove to be correct. Actual outcomes and results could materially differ from what is expressed, implied, or forecasted in these statements due to a number of factors, including, but not limited to: widespread outbreak of an illness or disease, including the COVID-19 pandemic and its effects, or any other public health crisis, as well as regulatory measures implemented in response to such events; external events which may adversely affect us or the third parties who provide services for us, for which our business continuity plans may not adequately prepare us; a failure of our information systems, including disruptions or failures of services essential to our operations or upon which our information technology platforms rely, data breach, and/or cybersecurity incidents; interruption or failure of third-party software or information technology systems or licenses; untimely or ineffective development and implementation of, or failure to realize potential benefits associated with, new or enhanced technology or processes, including the pilot test program at ABF Freight; the loss or reduction of business from large customers; the ability to manage our cost structure, and the timing and performance of growth initiatives; the cost, integration, and performance of any recent or future acquisitions, including the MoLo acquisition, and the inability to realize the anticipated benefits of the acquisition within the expected time period or at all; the timing or amount of the earnout payments for the MoLo acquisition, if any; maintaining our corporate reputation and intellectual property rights; competitive initiatives and pricing pressures; increased prices for and decreased availability of new revenue equipment, decreases in value of used revenue equipment, and higher costs of equipment-related operating expenses such as maintenance, fuel, and related taxes; availability of fuel, the effect of volatility in fuel prices and the associated changes in fuel surcharges on securing increases in base freight rates, and the inability to collect fuel surcharges; relationships with employees, including unions, and our ability to attract, retain, and develop employees; unfavorable terms of, or the inability to reach agreement on, future collective bargaining agreements or a workforce stoppage by our employees covered under ABF Freight's collective bargaining agreement; union employee wages and benefits, including changes in required contributions to multiemployer plans; availability and cost of reliable third-party services; our ability to secure independent owner operators and/or operational or regulatory issues related to our use of their services; litigation or claims asserted against us; governmental regulations; environmental laws and regulations, including emissions-control regulations; default on covenants of financing arrangements and the availability and terms of future financing arrangements; self-insurance claims and insurance premium costs; potential impairment of goodwill and intangible assets; general economic conditions and related shifts in market demand that impact the performance and needs of industries we serve and/or limit our customers' access to adequate financial resources; seasonal fluctuations and adverse weather conditions; and other financial, operational, and legal risks and uncertainties detailed from time to time in ArcBest Corporation's public filings with the Securities and Exchange Commission (the "SEC").

For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see our filings with the SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K.

Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events, or otherwise.

Investor Relations Contact: David Humphrey Media Contact: Autumnn Mahar

Title: Vice President - Investor Relations Title: Senior Manager, PR and Social

Phone: 479-785-6200 Phone: 479-494-8221

Email: dhumphrey@arcb.com Email: amahar@arcb.com

Financial Data and Operating Statistics

The following tables show financial data and operating statistics on ArcBest(r) and its reportable segments.

ARCBEST CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS



Three Months Ended Nine Months Ended

September 30 September 30

2021 2020 2021 2020

(Unaudited)

($ thousands, except share and per share data)

REVENUES $1,016,657 $794,980 $2,794,843 $2,123,749



OPERATING EXPENSES 929,096 755,198 2,600,792 2,055,723



OPERATING INCOME 87,561 39,782 194,051 68,026



OTHER INCOME (COSTS)

Interest and dividend income 323 756 1,037 3,122

Interest and other related financing costs (2,072) (2,860) (6,774) (9,185)

Other, net 338 1,500 2,641 334

(1,411) (604) (3,096) (5,729)



INCOME BEFORE INCOME TAXES 86,150 39,178 190,955 62,297



INCOME TAX PROVISION 22,459 9,774 42,922 15,111



NET INCOME $63,691 $29,404 $148,033 $47,186



EARNINGS PER COMMON SHARE

Basic $2.48 $1.15 $5.79 $1.86

Diluted $2.38 $1.11 $5.51 $1.79



AVERAGE COMMON SHARES OUTSTANDING

Basic 25,632,805 25,470,094 25,559,642 25,403,786

Diluted 26,770,146 26,592,457 26,872,381 26,289,946



CASH DIVIDENDS DECLARED PER COMMON SHARE $0.08 $0.08 $0.24 $0.24

ARCBEST CORPORATION

CONSOLIDATED BALANCE SHEETS





September 30 December 31

2021 2020

(Unaudited) Note

($ thousands, except share data)

ASSETS

CURRENT ASSETS

Cash and cash equivalents $408,207 $ 303,954

Short-term investments 60,289 65,408

Accounts receivable, less allowances (2021 - $6,847; 2020 - $7,851) 425,006 320,870

Other accounts receivable, less allowances (2021 - $671; 2020 - $660) 13,827 14,343

Prepaid expenses 30,120 37,774

Prepaid and refundable income taxes 9,258 11,397

Other 6,419 4,422

TOTAL CURRENT ASSETS 953,126 758,168



PROPERTY, PLANT AND EQUIPMENT

Land and structures 347,771 342,178

Revenue equipment 965,263 916,760

Service, office, and other equipment 243,601 233,810

Software 170,045 163,193

Leasehold improvements 15,970 15,156

1,742,650 1,671,097

Less allowances for depreciation and amortization 1,058,343 992,407

684,307 678,690



GOODWILL 86,368 88,320

INTANGIBLE ASSETS, NET 52,135 54,981

OPERATING RIGHT-OF-USE ASSETS 105,219 115,195

DEFERRED INCOME TAXES 6,544 6,158

OTHER LONG-TERM ASSETS 74,729 77,496

$1,962,428 $ 1,779,008



LIABILITIES AND STOCKHOLDERS' EQUITY



CURRENT LIABILITIES

Accounts payable $227,893 $ 170,898

Income taxes payable 6,535 316

Accrued expenses 291,586 246,746

Current portion of long-term debt 67,897 67,105

Current portion of operating lease liabilities 21,765 21,482

TOTAL CURRENT LIABILITIES 615,676 506,547



LONG-TERM DEBT, less current portion 176,545 217,119

OPERATING LEASE LIABILITIES, less current portion 88,232 97,839

POSTRETIREMENT LIABILITIES, less current portion 18,506 18,555

OTHER LONG-TERM LIABILITIES 38,208 37,948

DEFERRED INCOME TAXES 64,218 72,407



STOCKHOLDERS' EQUITY

Common stock, $0.01 par value, authorized 70,000,000 shares; 294 290 issued 2021: 29,351,569 shares; 2020: 29,045,309 shares

Additional paid-in capital 340,315 342,354

Retained earnings 737,820 595,932

Treasury stock, at cost, 2021: 3,783,227 shares; 2020: 3,656,938 shares (119,273) (111,173)

Accumulated other comprehensive income 1,887 1,190

TOTAL STOCKHOLDERS' EQUITY 961,043 828,593

$1,962,428 $ 1,779,008

Note: The balance sheet at December 31, 2020 has been derived from the 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



Nine Months Ended

September 30

2021 2020

Unaudited

($ thousands)

OPERATING ACTIVITIES

Net income $148,033 $47,186

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

Depreciation and amortization 88,113 85,189

Amortization of intangibles 2,882 2,942

Pension settlement expense - 89

Share-based compensation expense 8,567 7,956

Provision for losses on accounts receivable (57) 2,170

Change in deferred income taxes (8,593) 2,831

Gain on sale of property and equipment and lease termination (8,389) (3,280)

Gain on sale of subsidiaries (6,923) -

Changes in operating assets and liabilities:

Receivables (103,886) (38,905)

Prepaid expenses 7,655 809

Other assets 539 3,918

Income taxes 8,174 3,065

Operating right-of-use assets and lease liabilities, net 650 234

Accounts payable, accrued expenses, and other liabilities 101,577 37,062

NET CASH PROVIDED BY OPERATING ACTIVITIES 238,342 151,266



INVESTING ACTIVITIES

Purchases of property, plant and equipment, net of financings (43,506) (20,146)

Proceeds from sale of property and equipment 11,509 8,943

Proceeds from sale of subsidiaries 9,013 -

Purchases of short-term investments (56,011) (159,253)

Proceeds from sale of short-term investments 61,174 192,563

Capitalization of internally developed software (14,308) (9,568)

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (32,129) 12,539



FINANCING ACTIVITIES

Borrowings under credit facilities - 180,000

Borrowings under accounts receivable securitization program - 45,000

Payments on long-term debt (76,513) (309,640)

Net change in book overdrafts (305) 349

Deferred financing costs (295) -

Payment of common stock dividends (6,145) (6,122)

Purchases of treasury stock (8,100) (5,667)

Payments for tax withheld on share-based compensation (10,602) (1,989)

NET CASH USED IN FINANCING ACTIVITIES (101,960) (98,069)



NET INCREASE IN CASH AND CASH EQUIVALENTS 104,253 65,736

Cash and cash equivalents at beginning of period 303,954 201,909

CASH AND CASH EQUIVALENTS AT END OF PERIOD $408,207 $267,645



NONCASH INVESTING ACTIVITIES

Equipment financed $36,731 $53,045

Accruals for equipment received $3,158 $2,146

Lease liabilities arising from obtaining right-of-use assets $7,280 $60,535

ARCBEST CORPORATION

FINANCIAL STATEMENT OPERATING SEGMENT DATA AND OPERATING RATIOS



Three Months Ended Nine Months Ended

September 30 September 30

2021 2020 2021 2020

Unaudited

($ thousands, except percentages)

REVENUES

Asset-Based $681,164 $561,856 $1,890,288 $1,537,639



ArcBest 305,207 217,294 828,291 533,536

FleetNet 66,514 50,545 185,224 149,424

Total Asset-Light 371,721 267,839 1,013,515 682,960



Other and eliminations (36,228) (34,715) (108,960) (96,850)

Total consolidated revenues $1,016,657 $794,980 $2,794,843 $2,123,749



OPERATING EXPENSES

Asset-Based

Salaries, wages, and benefits $305,839 44.9%$287,385 51.2%$893,903 47.3 %$820,218 53.3 %

Fuel, supplies, and expenses 66,947 9.8 50,144 8.9 192,477 10.2 157,044 10.2

Operating taxes and licenses 12,426 1.8 12,296 2.2 36,977 2.0 36,719 2.4

Insurance 10,175 1.5 8,587 1.5 28,568 1.5 24,658 1.6

Communications and utilities 4,559 0.7 4,373 0.8 14,192 0.7 13,426 0.9

Depreciation and amortization 23,233 3.4 24,054 4.3 70,025 3.7 70,651 4.6

Rents and purchased transportation 95,855 14.1 69,442 12.4 266,525 14.1 171,364 11.2

Shared services 71,017 10.4 60,664 10.8 196,255 10.4 155,154 10.1

Gain on sale of property and equipment^(1) - - 133 - (8,624) (0.5) (3,206) (0.2)

Innovative technology costs^(2) 6,903 1.0 6,199 1.1 21,303 1.1 15,521 1.0

Other 592 0.1 1,933 0.3 1,103 0.1 5,168 0.3

Total Asset-Based 597,546 87.7% 525,210 93.5% 1,712,70490.6 % 1,466,71795.4 %



ArcBest

Purchased transportation 256,900 84.2% 181,129 83.4% 694,498 83.8 % 443,401 83.1 %

Supplies and expenses 2,741 0.9 2,746 1.3 7,785 0.9 7,015 1.3

Depreciation and amortization^(3) 2,352 0.8 2,413 1.1 7,104 0.9 7,332 1.4

Shared services 31,048 10.2 24,217 11.1 86,198 10.4 64,784 12.1

Gain on sale of subsidiary^(4) - - - - (6,923) (0.8) - -

Other 1,984 0.6 1,958 0.9 6,055 0.7 6,279 1.2

295,025 96.7% 212,463 97.8% 794,717 95.9 % 528,811 99.1 %

FleetNet 65,245 98.1% 49,558 98.0% 181,794 98.1 % 146,615 98.1 %

Total Asset-Light 360,270 262,021 976,511 675,426



Other and eliminations^(5) (28,720) (32,033) (88,423) (86,420)

Total consolidated operating expenses $929,096 91.4%$755,198 95.0%$2,600,79293.1 %$2,055,72396.8 %



OPERATING INCOME

Asset-Based $83,618 $36,646 $177,584 $70,922



ArcBest 10,182 4,831 33,574 4,725

FleetNet 1,269 987 3,430 2,809

Total Asset-Light 11,451 5,818 37,004 7,534



Other and eliminations^(5) (7,508) (2,682) (20,537) (10,430)

Total consolidated operating income $87,561 $39,782 $194,051 $68,026

_____________________________

^1) The nine months ended September 30, 2021 includes an $8.6 million gain on the sale of an unutilized service center property.

^2) Represents costs associated with the freight handling pilot test program at ABF Freight.

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

^4) Gain relates to the sale of the labor services portion of the ArcBest segment's moving business in second quarter 2021.

"Other and eliminations" includes corporate costs for certain unallocated shared service costs which are not attributable to any^5) segment, additional investments to offer comprehensive transportation and logistics services across multiple operating segments, and other investments in ArcBest technology and innovations, including innovative technology costs.

ARCBEST CORPORATIONRECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES

Non-GAAP Financial Measures

We report our financial results in accordance with generally accepted accounting principles ("GAAP"). However, management believes that certain non-GAAP performance measures and ratios utilized for internal analysis provide analysts, investors, and others the same information that we use internally for purposes of assessing our core operating performance and provides meaningful comparisons between current and prior period results, as well as important information regarding performance trends. The use of certain non-GAAP measures improves comparability in analyzing our performance because it removes the impact of items from operating results that, in management's opinion, do not reflect our core operating performance. Other companies may calculate non-GAAP measures differently; therefore, our calculation may not be comparable to similarly titled measures of other companies. Certain information discussed in the scheduled conference call could be considered non-GAAP measures. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, our reported results. These financial measures should not be construed as better measurements than operating income, operating cash flow, net income or earnings per share, as determined under GAAP.



Three Months Ended Nine Months Ended

September 30 September 30

2021 2020 2021 2020

ArcBest Corporation - Consolidated (Unaudited)

($ thousands, except per share data)

Operating Income

Amounts on GAAP basis $87,561$39,782 $194,051$68,026

Innovative technology costs, pre-tax^(1) 6,893 6,041 21,235 15,340

Gain on sale of subsidiary, pre-tax^(2) - - (6,923) -

Transaction costs, pre-tax^(3) 1,607 - 1,607 -

Non-GAAP amounts $96,061$45,823 $209,970$83,366



Net Income

Amounts on GAAP basis $63,691$29,404 $148,033$47,186

Innovative technology costs, after-tax (includes related financing costs)^(1) 5,236 4,627 16,139 11,834

Gain on sale of subsidiary, after-tax^(2) - - (5,437) -

Transaction costs, after-tax^(3) 1,187 - 1,187 -

Nonunion pension expense, including settlement expense, after-tax^(4) - - - 66

Life insurance proceeds and changes in cash surrender value (394) (1,503) (2,908) (258)

Tax expense (benefit) from vested RSUs^(5) (480) (138) (7,411) 541

Non-GAAP amounts $69,240$32,390 $149,603$59,369



Diluted Earnings Per Share

Amounts on GAAP basis $2.38 $1.11 $5.51 $1.79

Innovative technology costs, after-tax (includes related financing costs)^(1) 0.20 0.17 0.60 0.45

Gain on sale of subsidiary, after-tax^(2) - - (0.20) -

Transaction costs, after-tax^(3) 0.04 - 0.04 -

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

Life insurance proceeds and changes in cash surrender value (0.01) (0.06) (0.11) (0.01)

Tax expense (benefit) from vested RSUs^(5) (0.02) (0.01) (0.28) 0.02

Non-GAAP amounts^(6) $2.59 $1.22 $5.57 $2.26

_________________________

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

^2) Gain relates to the sale of the labor services portion of ArcBest segment's moving business in second quarter 2021.

^3) Transaction costs are associated with the previously announced acquisition of MoLo Solutions, LLC.

^4) Represents pension settlement expense related to the Company's supplemental benefit plan.

^5) The Company recognizes the tax impact for the vesting of share-based compensation resulting in excess tax expense (benefit).

^6) Non-GAAP EPS is calculated in total and may not foot due to rounding.

ARCBEST CORPORATION

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES - Continued



Three Months Ended Nine Months Ended

September 30 September 30

2021 2020 2021 2020

Segment Operating Income Reconciliations(Unaudited)

($ thousands, except percentages)

Asset-Based Segment

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

Amounts on GAAP basis $83,618 87.7 %$36,646 93.5 %$177,584 90.6 %$70,922 95.4 %

Innovative technology costs, pre-tax^(1) 6,903 (1.0) 6,199 (1.1) 21,303 (1.1) 15,521 (1.0)

Non-GAAP amounts $90,521 86.7 %$42,845 92.4 %$198,887 89.5 %$86,443 94.4 %



Asset-Light



ArcBest Segment

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

Amounts on GAAP basis $10,182 96.7 %$4,831 97.8 %$33,574 95.9 %$4,725 99.1 %

Gain on sale of subsidiary, pre-tax^(2) - - - - (6,923) 0.8 - -

Non-GAAP amounts $10,182 96.7 %$4,831 97.8 %$26,651 96.7 %$4,725 99.1 %



FleetNet Segment

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

Amounts on GAAP basis $1,269 98.1 %$987 98.0 %$3,430 98.1 %$2,809 98.1 %



Total Asset-Light

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

Amounts on GAAP basis $11,451 96.9 %$5,818 97.8 %$37,004 96.3 %$7,534 98.9 %

Gain on sale of subsidiary, pre-tax^(2) - - - - (6,923) 0.7 - -

Non-GAAP amounts $11,451 96.9 %$5,818 97.8 %$30,081 97.0 %$7,534 98.9 %



Other and Eliminations

Operating Loss ($)

Amounts on GAAP basis $(7,508) $(2,682) $(20,537) $(10,430)

Innovative technology costs, pre-tax^(1) (10) (158) (68) (181)

Transaction costs, pre-tax^(3) 1,607 - 1,607 -

Non-GAAP amounts $(5,911) $(2,840) $(18,998) $(10,611)

_____________________

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

^2) Gain relates to the sale of the labor services portion of the ArcBest segment's moving business in second quarter 2021.

^3) Transaction costs are associated with the previously announced acquisition of MoLo Solutions, LLC.

ARCBEST CORPORATION

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES - Continued



Effective Tax Rate Reconciliation

ArcBest Corporation - Consolidated



(Unaudited)

($ thousands, except percentages) Three Months Ended September 30, 2021

Other Income Income

OperatingIncome Before IncomeTax Net

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

Amounts on GAAP basis $87,561 $(1,411)$ 86,150 $ 22,459 $63,691 26.1 %

Innovative technology costs^(1) 6,893 158 7,051 1,815 5,236 25.7

Transaction costs^(2) 1,607 - 1,607 420 1,187 26.1

Life insurance proceeds and changes in cash surrender value - (394) (394) - (394) -

Tax benefit from vested RSUs^(3) - - - 480 (480) -

Non-GAAP amounts $96,061 $(1,647)$ 94,414 $ 25,174 $69,240 26.7 %



Nine Months Ended September 30, 2021

Other Income BeforeIncome

OperatingIncome Income Tax Net

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

Amounts on GAAP basis $194,051$(3,096)$ 190,955 $ 42,922 $148,03322.5 %

Innovative technology costs^(1) 21,235 498 21,733 5,594 16,139 25.7

Gain on sale of subsidiary^(4) (6,923) - (6,923) (1,486) (5,437)(21.5)

Transaction costs^(2) 1,607 - 1,607 420 1,187 26.1

Life insurance proceeds and changes in cash surrender value - (2,908) (2,908) - (2,908)-

Tax benefit from vested RSUs^(3) - - - 7,411 (7,411)-

Non-GAAP amounts $209,970$(5,506)$ 204,464 $ 54,861 $149,60326.8 %



Three Months Ended September 30, 2020

Other Income

OperatingIncome Before IncomeIncome Net

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

Tax benefit from vested RSUs^(3) - - - 138 (138) -

Non-GAAP amounts $45,823 $(1,916)$ 43,907 $ 11,517 $32,390 26.2 %



Nine Months Ended September 30, 2020

Other Income BeforeIncome

OperatingIncome Income Tax Net

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

Amounts on GAAP basis $68,026 $(5,729)$ 62,297 $ 15,111 $47,186 24.3 %

Innovative technology costs^(1) 15,340 597 15,937 4,103 11,834 25.7

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

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

Tax expense from vested RSUs^(3) - - - (541) 541 -

Non-GAAP amounts $83,366 $(5,301)$ 78,065 $ 18,696 $59,369 23.9 %

____________________

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

^2) Transaction costs are associated with the previously announced acquisition of MoLo Solutions, LLC.

^3) The Company recognizes the tax impact for the vesting of share-based compensation resulting in excess tax expense (benefit).

^4) Gain relates to the sale of the labor services portion of the ArcBest segment's moving business in second quarter 2021.

^5) Represents pension settlement expense related to the Company's supplemental benefit plan.

Tax rate for total "Amounts on GAAP basis" represents the effective^6) tax rate. The tax effects of non-GAAP adjustments are calculated based on the statutory rate applicable to each item based on tax jurisdiction, unless the nature of the item requires the tax effect to be estimated by applying a specific tax treatment.

ARCBEST CORPORATIONRECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES - Continued

Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (Adjusted EBITDA)

Management uses Adjusted EBITDA as a key measure of performance and for business planning. The measure is particularly meaningful for analysis of operating performance because it excludes amortization of acquired intangibles and software of the Asset-Light businesses, which are significant expenses resulting from strategic decisions rather than core daily operations. Additionally, Adjusted EBITDA is a primary component of the financial covenants contained in our credit agreement. The calculation of Asset-Light Adjusted EBITDA as presented below begins with operating income (loss), as other income (costs), income taxes, and net income are reported at the consolidated level and not included in the operating segment financial information evaluated by management to make operating decisions.



Three Months Ended Nine Months Ended

September 30 September 30

2021 2020 2021 2020

(Unaudited)

ArcBest Corporation - Consolidated Adjusted EBITDA ($ thousands)



Net Income $63,691 $29,404$148,033$47,186

Interest and other related financing costs 2,072 2,860 6,774 9,185

Income tax provision 22,459 9,774 42,922 15,111

Depreciation and amortization 30,359 30,032 90,995 88,131

Amortization of share-based compensation 2,889 2,885 8,567 7,956

Amortization of net actuarial gains of benefit plans and pension settlement (135) (148) (404) (352) expense^(1)

Transaction costs^(2) 1,607 - 1,607 -

Consolidated Adjusted EBITDA $122,942$74,807$298,494$167,217

___________________

^1) The nine months ended September 30, 2020 includes pre-tax pension settlement expense of $0.1 million related to the Company's supplemental benefit plan.

^2) Transaction costs are associated with the previously announced acquisition of MoLo Solutions, LLC.



Three Months Ended Nine Months Ended

September 30 September 30

2021 2020 2021 2020

Asset-Light Adjusted EBITDA (Unaudited)

($ thousands)



ArcBest

Operating Income $ 10,182$ 4,831$33,574$4,725

Depreciation and amortization^(3) 2,352 2,413 7,104 7,332

Adjusted EBITDA $ 12,534$ 7,244$40,678$12,057



FleetNet

Operating Income $ 1,269 $ 987 $3,430 $2,809

Depreciation and amortization^(3) 413 411 1,241 1,204

Adjusted EBITDA $ 1,682 $ 1,398$4,671 $4,013



Total Asset-Light

Operating Income $ 11,451$ 5,818$37,004$7,534

Depreciation and amortization^(3) 2,765 2,824 8,345 8,536

Adjusted EBITDA $ 14,216$ 8,642$45,349$16,070

_________________

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

ARCBEST CORPORATION

OPERATING STATISTICS



Three Months Ended Nine Months Ended

September 30 September 30

2021 2020 % Change2021 2020 % Change

(Unaudited)

Asset-Based



Workdays 64.0 64.0 190.5 191.5



Billed Revenue^(1) / CWT $41.79 $35.69 17.1% $38.95 $34.21 13.9%



Billed Revenue^(1) / Shipment $542.38 $454.94 19.2% $511.43 $435.96 17.3%



Shipments 1,249,645 1,242,9430.5% 3,716,852 3,549,4654.7%



Shipments / Day 19,526 19,421 0.5% 19,511 18,535 5.3%



Tonnage (Tons) 810,982 792,258 2.4% 2,440,214 2,261,9197.9%



Tons / Day 12,672 12,379 2.4% 12,810 11,812 8.4%



Pounds / Shipment 1,298 1,275 1.8% 1,313 1,275 3.0%



Average Length of Haul (Miles) 1,098 1,096 0.2% 1,099 1,074 2.3%



__________________

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, 2021 September 30, 2021

(Unaudited)

ArcBest^(2)



Revenue / Shipment 27.0% 28.0%



Shipments / Day 9.7% 22.4%

__________________

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

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SOURCE ArcBest