ArcBest Announces Record-Setting Fourth Quarter 2021 and Full Year 2021 Results

Accelerating Growth to Benefit Customers, Empower Employees, and Enhance Value for Shareholders

- Delivered record fourth quarter net income of $65.5 million, or $2.47 per diluted share, with non-GAAP fourth quarter 2021 net income of $73.9 million, or $2.79 per diluted share.

- Generated full year 2021 net income of $213.5 million, or $7.98 per diluted share. On a non-GAAP basis, full year 2021 net income was $228.0 million, or $8.52 per diluted share.

- Achieved the highest revenue and net income in ArcBest's history on both a fourth quarter and annual basis.

- Returned $116 million to shareholders through stock repurchase programs and dividends.

- Continued strong results enable ArcBest to pay profit-sharing bonus to union-represented ABF Freight employees for the third year in a row.

News provided by

ArcBest

Feb 01, 2022, 06:00 ET

FORT SMITH, Ark., Feb. 1, 2022 /PRNewswire/ -- ArcBest® (Nasdaq: ARCB), a leader in supply chain logistics, today reported fourth quarter 2021 revenue of $1.2 billion, reflecting an increase of $368.8 million compared to fourth quarter 2020. Each of ArcBest's operating segments achieved double-digit percentage revenue growth over the prior year period. Fourth quarter 2021 results include the impact of the MoLo Solutions, LLC ("MoLo") acquisition, which closed on November 1, 2021.

ArcBest's fourth quarter 2021 operating income was $86.9 million and net income was $65.5 million, or $2.47 per diluted share, compared to fourth quarter 2020 operating income of $30.3 million and net income of $23.9 million, or $0.89 per diluted share. 

Excluding certain items in both periods as identified in the attached reconciliation tables, fourth quarter non-GAAP operating income was $102.2 million, compared to $39.5 million in the prior-year period. On a non-GAAP basis, net income was $73.9 million, or $2.79 per diluted share, in fourth quarter 2021 compared to $27.5 million, or $1.03 per diluted share, in fourth quarter 2020.

ArcBest's full year 2021 revenue totaled $4.0 billion compared to $2.9 billion in 2020. Net income was $213.5 million, or $7.98 per diluted share, compared to net income of $71.1 million, or $2.69 per diluted share in 2020. On a non-GAAP basis, ArcBest's 2021 net income was $228.0 million, or $8.52 per diluted share, compared to net income of $90.5 million, or $3.42 per diluted share, in 2020.

"I am extremely proud of the talented people of ArcBest, whose dedication and hard work have driven our record-breaking fourth quarter and full year results," said Judy R. McReynolds, ArcBest chairman, president and CEO. "2021 was a year of immense challenges – from the ongoing pandemic to extreme supply chain pressures – but our team stayed focused on our strategic initiatives and consistently exceeded expectations. We are making smart investments across our business to advance our strategic vision and adapt to the rapidly evolving market environment, all while being true advisors to our customers. Our recent announcement of an investment we made in Phantom Auto, the leading provider of human-centered remote operation software, is an example of our commitment in these areas. Investments in our people, our integrated logistics solutions, and our innovations and technology have provided ArcBest with a solid foundation and will continue to drive our company's growth, success and value-creation in 2022 and beyond."

Fourth Quarter Results of Operations Comparisons

Asset-Based

Fourth Quarter 2021 Versus Fourth Quarter 2020

  • Revenue of $683.5 million compared to $554.4 million, a per-day increase of 23.3 percent.
  • Total tonnage per day increase of 5.1 percent, including an increase of 1.1 percent in LTL-rated weight per shipment.
  • Total shipments per day increase of 1.5 percent.
  • Total billed revenue per hundredweight increased 17.3 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 $83.1 million compared to $27.9 million. On a non-GAAP basis, operating income of $89.5 million compared to $34.9 million.

Continued customer demand for ArcBest's Asset-Based services and a solid pricing environment are reflected in the segment's record-setting fourth quarter and full year revenue and profit. As transportation capacity challenges continued in the marketplace, ArcBest's customers benefited from integrated supply chain solutions enhanced by trusted relationships and utilization of ArcBest's Asset-Based network. Hiring events and initiatives have been successful and are expected to produce further benefits for customers. An emphasis on network resource allocation to serve core LTL customers continued to result in tonnage and shipment growth as well as increased profitability.

As a result of the operating ratio achieved in 2021, ABF Freight will pay a 3% profit-sharing bonus to qualifying union-represented employees – the maximum amount provided in the collective bargaining agreement.

"The ABF Freight team is an integral part of ArcBest's differentiated offering of integrated logistics solutions. It's because of that team's continued dedication and efforts that we're able to provide this bonus for the third year in a row and at a higher level compared to the previous two years," added McReynolds.

Asset-Light‡

Fourth Quarter 2021 Versus Fourth Quarter 2020 (including the results of MoLo beginning November 1, 2021)

  • Revenue of $541.2 million compared to $301.2 million, a per-day increase of 79.7 percent.
  • For the months of November and December 2021, MoLo revenue of $120.3 million.
  • Operating income of $13.9 million compared to $5.5 million. On a non-GAAP basis, operating income of $16.4 million compared to $6.4 million.
  • Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") of $18.6 million compared to $8.3 million, as detailed in the attached non-GAAP reconciliation tables.

Increased market rates associated with limited transport capacity, combined with continued strength in customer demand, resulted in another record-setting quarter for the ArcBest segment. For the months of November and December, the positive momentum in the ArcBest segment was enhanced by the addition of MoLo. With the addition of MoLo, ArcBest's truckload services produced a significant increase in truckload brokerage revenue and shipments over the prior year's fourth quarter. Revenue growth and enhanced profitability were driven by strong demand from customers seeking supply chain solutions requiring expedite, managed transportation and international services. ArcBest also continued to benefit from strong relationships with carrier partners, further improved by the addition of MoLo, and the ability to meet customers' needs through innovation in a tight freight market.

At FleetNet, an increase in roadside events and higher revenue per total service event contributed to record quarterly revenue and strong fourth quarter profitability for the segment.

Full Year Results of Operations Comparisons

Asset-Based

Full Year 2021 Versus Full Year 2020

  • Revenue of $2.6 billion, compared to $2.1 billion, a per-day increase of 23.5 percent.
  • Tonnage per day increase of 7.6 percent.
  • Shipments per day increase of 4.3 percent.
  • Total billed revenue per hundredweight increase of 14.7 percent, positively impacted by higher fuel surcharges.
  • Operating income of $260.7 million compared to $98.9 million. On a non-GAAP basis, operating income of $288.3 million compared to $121.3 million.
  • Profit-sharing bonus to union-represented ABF Freight employees of $15.1 million, an increase of approximately $10 million over those paid for both 2019 and 2020.

Asset-Light‡

Full Year 2021 Versus Full Year 2020 (including the results of MoLo beginning November 1, 2021)

  • Revenue of $1.6 billion compared to $984.2 million, a per-day increase of 58.6 percent.
  • Operating income of $50.9 million compared to $13.0 million. On a non-GAAP basis, operating income of $49.3 million compared to $16.8 million.
  • Adjusted EBITDA of $64.0 million compared to $24.4 million.

Capital Expenditures

In 2021, total net capital expenditures, including equipment financed, equaled $104 million. Net capital expenditures in 2021 included $79 million of revenue equipment, the majority of which was for ArcBest's Asset-Based operation. Revenue equipment purchases in 2021 were lower than the original estimate because of pandemic-related manufacturing delays, primarily on new road tractors. Depreciation and amortization costs on property, plant and equipment were $119 million in 2021.

Quarterly Dividend and Share Repurchase Programs

ArcBest generated solid cash from operations in 2021 and continued to return capital to shareholders through its dividend and share repurchase programs, including the $100 million accelerated share repurchase agreement that was entered into in early November 2021 and completed in January 2022. Currently, $41.9 million remains available under an authorized program for future common stock purchases.

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 fourth quarter and full year 2021 results. The call will be today, Tuesday, February 1, at 9:30 a.m. EST (8:30 a.m. CST). Interested parties are invited to listen by calling (800) 954-0652 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 February 1, 2022, 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 March 15, 2022. To listen to the playback, dial (800) 633–8284 or (402) 977–9140 (for international callers). The conference call ID for the playback is 22014422. The conference call and playback can also be accessed, through March 15, 2022, on ArcBest's website at arcb.com.

About ArcBest

ArcBest® (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 and twelve months ended December 31, 2021 may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others, statements regarding (i) our expectations about our intrinsic value or our prospects for growth and value creation and (ii) our financial outlook, position, strategies, goals, and expectations. 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: market fluctuations and interruptions affecting the price of our stock or the price or timing of our share repurchase programs; 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: [email protected] 

Email: [email protected]

Financial Data and Operating Statistics

The following tables show financial data and operating statistics on ArcBest® and its reportable segments.

ARCBEST CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS



Three Months Ended 

Year Ended 


December 31

December 31


2021

2020

2021

2020


(Unaudited)


($ thousands, except share and per share data)

REVENUES

$

1,185,224

$

816,414

$

3,980,067

$

2,940,163














OPERATING EXPENSES

1,098,289

786,162

3,699,081

2,841,885














OPERATING INCOME

86,935

30,252

280,986

98,278














OTHER INCOME (COSTS)












Interest and dividend income

238

494

1,275

3,616

Interest and other related financing costs

(2,130)

(2,512)

(8,904)

(11,697)

Other, net

1,156

1,965

3,797

2,299



(736)

(53)

(3,832)

(5,782)














INCOME BEFORE INCOME TAXES

86,199

30,199

277,154

92,496














INCOME TAX PROVISION

20,711

6,285

63,633

21,396














NET INCOME

$

65,488

$

23,914

$

213,521

$

71,100














EARNINGS PER COMMON SHARE












Basic

$

2.60

$

0.94

$

8.38

$

2.80

Diluted

$

2.47

$

0.89

$

7.98

$

2.69














AVERAGE COMMON SHARES OUTSTANDING












Basic

25,211,666

25,427,449

25,471,939

25,410,232

Diluted

26,467,420

26,734,287

26,772,126

26,422,523














CASH DIVIDENDS DECLARED PER COMMON SHARE

$

0.08

$

0.08

$

0.32

$

0.32

ARCBEST CORPORATION

CONSOLIDATED BALANCE SHEETS



December 31

December 31


2021

2020


(Unaudited)

Note


($ thousands, except share data)

ASSETS






CURRENT ASSETS






Cash and cash equivalents

$

76,620

$

303,954

Short-term investments

48,339

65,408

Accounts receivable, less allowances (2021 - $13,226; 2020 - $7,851)

582,344

320,870

Other accounts receivable, less allowances (2021 - $690; 2020 - $660)

13,094

14,343

Prepaid expenses

40,104

37,774

Prepaid and refundable income taxes

9,654

11,397

Other

5,898

4,422

   TOTAL CURRENT ASSETS

776,053

758,168








PROPERTY, PLANT AND EQUIPMENT






Land and structures

350,694

342,178

Revenue equipment

980,283

916,760

Service, office, and other equipment

251,085

233,810

Software

175,989

163,193

Leasehold improvements

16,931

15,156



1,774,982

1,671,097

Less allowances for depreciation and amortization

1,079,061

992,407



695,921

678,690








GOODWILL

300,337

88,320

INTANGIBLE ASSETS, NET

126,580

54,981

OPERATING RIGHT-OF-USE ASSETS

106,686

115,195

DEFERRED INCOME TAXES

5,470

6,158

OTHER LONG-TERM ASSETS

101,629

77,496

TOTAL ASSETS

$

2,112,676

$

1,779,008








LIABILITIES AND STOCKHOLDERS' EQUITY














CURRENT LIABILITIES






Accounts payable

$

311,401

$

170,898

Income taxes payable

12,087

316

Accrued expenses

305,851

246,746

Current portion of long-term debt

50,615

67,105

Current portion of operating lease liabilities

22,740

21,482

   TOTAL CURRENT LIABILITIES

702,694

506,547








LONG-TERM DEBT, less current portion

174,917

217,119

OPERATING LEASE LIABILITIES, less current portion

88,835

97,839

POSTRETIREMENT LIABILITIES, less current portion

16,733

18,555

OTHER LONG-TERM LIABILITIES

135,537

37,948

DEFERRED INCOME TAXES

64,893

72,407








STOCKHOLDERS' EQUITY






Common stock, $0.01 par value, authorized 70,000,000 shares;
      issued 2021: 29,359,597 shares; 2020: 29,045,309 shares

294

290

Additional paid-in capital

318,033

342,354

Retained earnings

801,314

595,932

   Treasury stock, at cost, 2021: 4,492,514 shares; 2020: 3,656,938 shares

(194,273)

(111,173)

Accumulated other comprehensive income

3,699

1,190

   TOTAL STOCKHOLDERS' EQUITY

929,067

828,593

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

2,112,676

$

1,779,008

Note:  The balance sheet at December 31, 2020 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

ARCBEST CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS



Year Ended 


December 31


2021

2020


Unaudited


($ thousands)

 OPERATING ACTIVITIES






Net income

$

213,521

$

71,100

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






  Depreciation and amortization

118,864

114,379

  Amortization of intangibles

5,357

4,012

  Pension settlement expense

—

89

  Share-based compensation expense

11,426

10,478

  Provision for losses on accounts receivable

1,466

4,327

  Change in deferred income taxes

(7,589)

7,715

  Gain on sale of property and equipment and lease termination

(8,520)

(2,376)

  Gain on sale of subsidiaries

(6,923)

—

  Changes in operating assets and liabilities:






Receivables

(122,782)

(38,129)

Prepaid expenses

(1,482)

(7,966)

Other assets

354

2,646

Income taxes

13,136

(1,712)

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

623

756

Accounts payable, accrued expenses, and other liabilities

106,064

40,670

NET CASH PROVIDED BY OPERATING ACTIVITIES

323,515

205,989








 INVESTING ACTIVITIES






Purchases of property, plant and equipment, net of financings

(58,412)

(43,248)

Proceeds from sale of property and equipment

13,815

13,348

Business acquisitions, net of cash acquired(1)

(239,380)

—

Proceeds from sale of subsidiaries

9,013

—

Purchases of short-term investments

(56,011)

(165,133)

Proceeds from sale of short-term investments

73,182

216,735

Purchase of long-term investments

(25,350)

—

Capitalization of internally developed software

(20,061)

(14,241)

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

(303,204)

7,461








 FINANCING ACTIVITIES






Borrowings under credit facilities

50,000

180,000

Borrowings under accounts receivable securitization program

—

45,000

Proceeds from notes payable

3,523

—

Payments on long-term debt

(171,915)

(326,098)

Net change in book overdrafts

(1,957)

6,510

Deferred financing costs

(314)

—

Payment of common stock dividends

(8,139)

(8,157)

Purchases of treasury stock

(83,100)

(6,595)

Forward contract for accelerated share repurchase

(25,000)

—

Payments for tax withheld on share-based compensation

(10,743)

(2,065)

NET CASH USED IN FINANCING ACTIVITIES

(247,645)

(111,405)








NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

(227,334)

102,045

Cash and cash equivalents at beginning of period

303,954

201,909

CASH AND CASH EQUIVALENTS AT END OF PERIOD

$

76,620

$

303,954








 NONCASH INVESTING ACTIVITIES






Equipment financed

$

59,700

$

61,803

Accruals for equipment received

$

1,704

$

1,667

Lease liabilities arising from obtaining right-of-use assets

$

14,671

$

67,819

____________________

1)         Represents the acquisition of MoLo Solutions, LLC ("MoLo") on November 1, 2021.

ARCBEST CORPORATION

FINANCIAL STATEMENT OPERATING SEGMENT DATA AND OPERATING RATIOS



Three Months Ended 

Year Ended 


December 31

December 31


2021

2020

2021

2020


Unaudited


($ thousands, except percentages)

REVENUES























Asset-Based

$

683,485



$

554,392



$

2,573,773



$

2,092,031



























ArcBest(1)

472,335




245,579




1,300,626




779,115


FleetNet

68,863




55,625




254,087




205,049


   Total Asset-Light



541,198




301,204




1,554,713




984,164



























Other and eliminations

(39,459)




(39,182)




(148,419)




(136,032)


   Total consolidated revenues

$

1,185,224



$

816,414



$

3,980,067



$

2,940,163



























OPERATING EXPENSES























Asset-Based























   Salaries, wages, and benefits

$

304,350

44.5

%

$

275,476

49.7

%

$

1,198,253

46.6

%

$

1,095,694

52.4

%

   Fuel, supplies, and expenses

73,662

10.8


52,051

9.4


266,139

10.3


209,095

10.0

   Operating taxes and licenses

12,484

1.8


12,581

2.2


49,461

1.9


49,300

2.4

   Insurance

9,232

1.4


8,910

1.6


37,800

1.5


33,568

1.6

   Communications and utilities

4,581

0.7


4,490

0.8


18,773

0.7


17,916

0.8

   Depreciation and amortization

23,774

3.5


23,675

4.3


93,799

3.6


94,326

4.5

   Rents and purchased transportation

97,820

14.3


78,795

14.2


364,345

14.2


250,159

12.0

   Shared services

67,277

9.8


62,104

11.2


263,532

10.2


217,258

10.4

   Gain on sale of property and equipment(2)

(52)

—


(103)

—


(8,676)

(0.3)


(3,309)

(0.2)

   Innovative technology costs(3)

6,328

0.9


6,937

1.3


27,631

1.1


22,458

1.1

   Other

906

0.1


1,533

0.3


2,009

0.1


6,701

0.3

   Total Asset-Based

600,362

87.8

%

526,449

95.0

%

2,313,066

89.9

%

1,993,166

95.3

%

























ArcBest(1)























   Purchased transportation

$

402,834

85.3

%

$

206,532

84.1

%

$

1,097,332

84.4

%

$

649,933

83.4

%

   Supplies and expenses

2,746

0.6


2,612

1.0


10,531

0.8


9,627

1.2

   Depreciation and amortization(4)

4,283

0.9


2,382

1.0


11,387

0.9


9,714

1.3

   Shared services

45,939

9.7


26,199

10.7


132,137

10.1


90,983

11.7

   Gain on sale of subsidiary(5)

—

—


—

—


(6,923)

(0.5)


—

—

   Other

3,710

0.8


2,924

1.2


9,765

0.7


9,203

1.2



459,512

97.3

%

240,649

98.0

%

1,254,229

96.4

%

769,460

98.8

%

FleetNet

67,749

98.4

%

55,067

99.0

%

249,543

98.2

%

201,682

98.4

%

   Total Asset-Light

527,261




295,716




1,503,772




971,142



























Other and eliminations(6)

(29,334)




(36,003)




(117,757)




(122,423)


   Total consolidated operating expenses

$

1,098,289

92.7

%

$

786,162

96.3

%

$

3,699,081

92.9

%

$

2,841,885

96.7

%

























OPERATING INCOME























Asset-Based

$

83,123



$

27,943



$

260,707



$

98,865



























ArcBest

12,823




4,930




46,397




9,655


FleetNet

1,114




558




4,544




3,367


   Total Asset-Light

13,937




5,488




50,941




13,022



























Other and eliminations(6)

(10,125)




(3,179)




(30,662)




(13,609)


   Total consolidated operating income

$

86,935



$

30,252



$

280,986



$

98,278


____________________

1)

The 2021 periods include the operations of MoLo since the November 1, 2021 acquisition date.

2)

The year ended December 31, 2021 includes an $8.6 million gain on the sale of an unutilized service center property.

3)

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

4)

Depreciation and amortization includes amortization of intangibles associated with acquired businesses.

5)

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

6)

"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.

ARCBEST CORPORATION

RECONCILIATIONS 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 

Year Ended 


December 31

December 31


2021

2020

2021

2020

ArcBest Corporation - Consolidated

(Unaudited)


($ thousands, except per share data)

Operating Income












Amounts on GAAP basis

$

86,935

$

30,252

$

280,986

$

98,278

Innovative technology costs, pre-tax(1)

8,454

8,279

32,845

25,620

Purchase accounting amortization(2)

2,455

937

5,266

3,749

Transaction costs, pre-tax(3)

4,362

—

5,969

—

Gain on sale of subsidiary, pre-tax(4)

—

—

(6,923)

—

Non-GAAP amounts

$

102,206

$

39,468

$

318,143

$

127,647














Net Income












Amounts on GAAP basis

$

65,488

$

23,914

$

213,521

$

71,100

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

6,388

6,283

24,871

19,604

Purchase accounting amortization(2)

1,837

702

3,940

2,805

Transaction costs, after-tax(3)

3,222

—

4,409

—

Gain on sale of subsidiary, after-tax(4)

—

—

(5,437)

—

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

—

—

—

66

Life insurance proceeds and changes in cash surrender value

(1,215)

(2,058)

(4,123)

(2,316)

Tax expense (benefit) from vested RSUs(6)

(236)

(31)

(7,647)

510

Tax credits(7)

(1,540)

(1,285)

(1,540)

(1,285)

Non-GAAP amounts

$

73,944

$

27,525

$

227,994

$

90,484














Diluted Earnings Per Share












Amounts on GAAP basis

$

2.47

$

0.89

$

7.98

$

2.69

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

0.24

0.24

0.93

0.74

Purchase accounting amortization(2)

0.07

0.03

0.15

0.11

Transaction costs, after-tax(3)

0.12

—

0.16

—

Gain on sale of subsidiary, after-tax(4)

—

—

(0.20)

—

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

—

—

—

—

Life insurance proceeds and changes in cash surrender value

(0.05)

(0.08)

(0.15)

(0.09)

Tax expense (benefit) from vested RSUs(6)

(0.01)

—

(0.29)

0.02

Tax credits(7)

(0.06)

(0.05)

(0.06)

(0.05)

Non-GAAP amounts(8)

$

2.79

$

1.03

$

8.52

$

3.42

____________________

1)

Represents costs associated with the freight handling pilot test program at ABF Freight and initiatives to optimize our performance through
technological innovation, including costs related to our recently announced investment in human-centered remote operation software.

2)

Represents the amortization of acquired intangible assets related to the November 1, 2021 acquisition of MoLo and previously acquired businesses in the ArcBest segment.

3)

Transaction costs are associated with the acquisition of MoLo.

4)

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

5)

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

6)

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

7)

Represents a research and development tax credit recognized in the tax provision during fourth quarter 2021 and 2020 which relates to the tax year ended February 28, 2021 and February 29, 2020, respectively.

8)

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 

Year Ended 


December 31

December 31


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

$

83,123

87.8

%

$

27,943

95.0

%

$

260,707

89.9

%

$

98,865

95.3

%

Innovative technology costs, pre-tax(1)

6,328

(0.9)


6,937

(1.3)


27,631

(1.1)


22,458

(1.1)

Non-GAAP amounts

$

89,451

86.9

%

$

34,880

93.7

%

$

288,338

88.8

%

$

121,323

94.2

%






Asset-Light










ArcBest Segment




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














Amounts on GAAP basis

$

12,823

97.3

%

$

4,930

98.0

%

$

46,397

96.4

%

$

9,655

98.8

%

Purchase accounting amortization(2)

2,455

(0.5)


937

(0.4)


5,266

(0.4)


3,749

(0.5)

Gain on sale of subsidiary, pre-tax(3)

—

—


—

—


(6,923)

0.5


—

—

Non-GAAP amounts

$

15,278

96.8

%

$

5,867

97.6

%

$

44,740

96.5

%

$

13,404

98.3

%






FleetNet Segment




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














Amounts on GAAP basis

$

1,114

98.4

%

$

558

99.0

%

$

4,544

98.2

%

$

3,367

98.4

%






Total Asset-Light




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














Amounts on GAAP basis

$

13,937

97.4

%

$

5,488

98.2

%

$

50,941

96.7

%

$

13,022

98.7

%

Purchase accounting amortization(2)

2,455

(0.5)


937

(0.3)


5,266

(0.3)


3,749

(0.4)

Gain on sale of subsidiary, pre-tax(3)

—

—


—

—


(6,923)

0.4


—

—

Non-GAAP amounts

$

16,392

96.9

%

$

6,425

97.9

%

$

49,284

96.8

%

$

16,771

98.3

%






Other and Eliminations




Operating Loss ($)














Amounts on GAAP basis

$

(10,125)



$

(3,179)



$

(30,662)



$

(13,609)



Innovative technology costs, pre-tax(4)

2,126




1,342




5,214




3,162



Transaction costs, pre-tax(5)

4,362




—




5,969




—



Non-GAAP amounts

$

(3,637)



$

(1,837)



$

(19,479)



$

(10,447)



____________________

1)

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

2)

Represents the amortization of acquired intangible assets related to the November 1, 2021 acquisition of MoLo and previously acquired businesses in the
ArcBest segment. Included in depreciation and amortization within ArcBest segment operating expenses.

3)

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

4)

Represents costs associated with initiative to optimize our performance through technological innovation, including costs related to our recently announced investment in human-centered remote operation software, and costs related to the freight handling pilot test program at ABF Freight.

5)

Transaction costs are associated with the acquisition of MoLo.

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 December 31, 2021





Other

Income

Income







Operating

Income

Before Income

Tax

Net



Income

(Costs)

Taxes

Provision

Income

Tax Rate(8)

Amounts on GAAP basis

$

86,935

$

(736)

$

86,199

$

20,711

$

65,488

24.0

%

Innovative technology costs(1)

8,454

149

8,603

2,215

6,388

25.7

Purchase accounting amortization(2)

2,455

—

2,455

618

1,837

25.2

Transaction costs(3)

4,362

—

4,362

1,140

3,222

26.1

Life insurance proceeds and changes in cash surrender value

—

(1,215)

(1,215)

—

(1,215)

—

Tax benefit from vested RSUs(4)

—

—

—

236

(236)

—

Tax credits(5)

—

—

—

1,540

(1,540)

—

Non-GAAP amounts

$

102,206

$

(1,802)

$

100,404

$

26,460

$

73,944

26.4

%





















Year Ended December 31, 2021




Other

Income

Income







Operating

Income

Before Income

Tax

Net



Income

(Costs)

Taxes

Provision

Income

Tax Rate(8)

Amounts on GAAP basis

$

280,986

$

(3,832)

$

277,154

$

63,633

$

213,521

23.0

%

Innovative technology costs(1)

32,845

646

33,491

8,620

24,871

25.7

Purchase accounting amortization(2)

5,266

—

5,266

1,326

3,940

25.2

Transaction costs(3)

5,969

—

5,969

1,560

4,409

26.1

Gain on sale of subsidiary(6)

(6,923)

—

(6,923)

(1,486)

(5,437)

(21.5)

Life insurance proceeds and changes in cash surrender value

—

(4,123)

(4,123)

—

(4,123)

—

Tax benefit from vested RSUs(4)

—

—

—

7,647

(7,647)

—

Tax credits(5)

—

—

—

1,540

(1,540)

—

Non-GAAP amounts

$

318,143

$

(7,309)

$

310,834

$

82,840

$

227,994

26.7

%





















Three Months Ended December 31, 2020




Other

Income

Income






Operating

Income

Before Income

Tax

Net



Income

(Costs)

Taxes

Provision

Income

Tax Rate(8)

Amounts on GAAP basis

$

30,252

$

(53)

$

30,199

$

6,285

$

23,914

20.8

%

Innovative technology costs(1)

8,279

182

8,461

2,178

6,283

25.7

Purchase accounting amortization(2)

937




937

235

702

25.1

Life insurance proceeds and changes in cash surrender value

—

(2,058)

(2,058)

—

(2,058)

—

Tax benefit from vested RSUs(4)

—

—

—

31

(31)

—

Tax credits(5)

—

—

—

1,285

(1,285)

—

Non-GAAP amounts

$

39,468

$

(1,929)

$

37,539

$

10,014

$

27,525

26.7

%





















Year Ended December 31, 2020




Other

Income

Income







Operating

Income

Before Income

Tax

Net



Income

(Costs)

Taxes

Provision

Income

Tax Rate(8)

Amounts on GAAP basis

$

98,278

$

(5,782)

$

92,496

$

21,396

$

71,100

23.1

%

Innovative technology costs(1)

25,620

779

26,399

6,795

19,604

25.7

Purchase accounting amortization(2)

3,749




3,749

944

2,805

25.2

Nonunion pension expense, including settlement (7)

—

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(4)

—

—

—

(510)

510

—

Tax credits(5)

—

—

—

1,285

(1,285)

—

Non-GAAP amounts

$

127,647

$

(7,230)

$

120,417

$

29,933

$

90,484

24.9

%

____________________

1)

Represents costs associated with the freight handling pilot test program at ABF Freight and initiatives to optimize our performance through technological innovation,
including costs related to our recently announced investment in human-centered remote operation software.

2)

Represents the amortization of acquired intangible assets related to the November 1, 2021 acquisition of MoLo and previously acquired businesses in the ArcBest segment.

3)

Transaction costs are associated with the acquisition of MoLo.

4)

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

5)

Represents a research and development tax credit recognized in the tax provision during fourth quarter 2021 and 2020 which relates to the tax year ended February 28, 2021 and February 29, 2020, respectively.

6)

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

7)

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

8)

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

ARCBEST CORPORATION

RECONCILIATIONS 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, 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 

Year Ended 


December 31

December 31


2021

2020

2021

2020


(Unaudited)

ArcBest Corporation - Consolidated Adjusted EBITDA

($ thousands)



Net Income

$

65,488

$

23,914

$

213,521

$

71,100

Interest and other related financing costs

2,130

2,512

8,904

11,697

Income tax provision

20,711

6,285

63,633

21,396

Depreciation and amortization(1)

33,226

30,260

124,221

118,391

Amortization of share-based compensation

2,859

2,522

11,426

10,478

Amortization of net actuarial gains of benefit plans and pension
settlement expense(2)

(135)

(148)

(539)

(500)

Transaction costs(3)

4,362

—

5,969

—

   Consolidated Adjusted EBITDA

$

128,641

$

65,345

$

427,135

$

232,562

____________________

1)

Includes amortization of intangibles associated with acquired businesses.

2)

The year ended December 31, 2020 includes pre-tax pension settlement expense of $0.1 million related to the Company's
supplemental benefit plan.

3)

Transaction costs are associated with the acquisition of MoLo.
















Three Months Ended 

Year Ended 


December 31

December 31


2021

2020

2021

2020

Asset-Light Adjusted EBITDA

(Unaudited)


($ thousands)





ArcBest












Operating Income

$

12,823

$

4,930

$

46,397

$

9,655

Depreciation and amortization(4)                                                     

4,283

2,382

11,387

9,714

Adjusted EBITDA

$

17,106

$

7,312

$

57,784

$

19,369





FleetNet



Operating Income

$

1,114

$

558

$

4,544

$

3,367

Depreciation and amortization(4)

420

418

1,661

1,622

Adjusted EBITDA

$

1,534

$

976

$

6,205

$

4,989





Total Asset-Light












Operating Income

$

13,937

$

5,488

$

50,941

$

13,022

Depreciation and amortization(4)

4,703

2,800

13,048

11,336

Adjusted EBITDA

$

18,640

$

8,288

$

63,989

$

24,358

____________________

4)

Includes amortization of intangibles associated with acquired businesses.

ARCBEST CORPORATION

OPERATING STATISTICS



Three Months Ended 

Year Ended 


December 31

December 31


2021

2020

% Change

2021

2020

% Change


(Unaudited)








Asset-Based


































Workdays

61.5

61.5



252.0

253.0




















Billed Revenue(1) / CWT

$

41.96

$

35.76

17.3%

$

39.70

$

34.60

14.7%


















Billed Revenue(1) / Shipment

$

557.49

$

458.71

21.5%

$

522.85

$

441.73

18.4%


















Shipments

1,224,928

1,206,783

1.5%

4,941,780

4,756,248

3.9%


















Shipments / Day

19,918

19,622

1.5%

19,610

18,799

4.3%


















Tonnage (Tons)

813,639

773,915

5.1%

3,253,853

3,035,834

7.2%


















Tons / Day

13,230

12,584

5.1%

12,912

11,999

7.6%


















Pounds / Shipment

1,328

1,283

3.5%

1,317

1,277

3.1%


















Average Length of Haul (Miles)

1,091

1,097

(0.5)%

1,097

1,080

1.6%

____________________

1)

Revenue for undelivered freight is deferred for financial statement 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 

Year Ended 


December 31, 2021

December 31, 2021


(Unaudited)

ArcBest(2)






Revenue / Shipment                                                 

33.9%

31.0%




Shipments / Day

50.8%

30.6%

____________________

2)

Statistical data related to the operations of MoLo since the November 1, 2021 acquisition date are included
in the presentation of operating statistics for the ArcBest segment. Statistical data related to managed
transportation solutions transactions are not included in the presentation.

SOURCE ArcBest

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