ArcBest® Announces Second Quarter 2021 Results

FORT SMITH, Ark., Aug. 2, 2021 /PRNewswire/ -- ArcBest^® (Nasdaq: ARCB), a leader in supply chain logistics, today reported second quarter 2021 revenue of $949.0 million compared to second quarter 2020 revenue of $627.4 million.  ArcBest's second quarter 2021 operating income was $74.3 million and net income was $61.0 million, or $2.27 per diluted share compared to second quarter 2020 operating income of $20.4 million and net income of $15.9 million, or $0.61 per diluted share.

Excluding certain items in both periods as identified in the attached reconciliation tables, non-GAAP operating income was $74.8 million in second quarter 2021 compared to second quarter 2020 operating income of $25.1 million.  On a non-GAAP basis, net income was $53.1 million, or $1.97 per diluted share in second quarter 2021 compared to second quarter 2020 net income of $17.6 million, or $0.67 per diluted share.

"We're very pleased to report record results for the second consecutive quarter," said Judy R. McReynolds, ArcBest chairman, president and CEO. "Our strong results for the first half of 2021 reflect our tireless execution in a period of extremely tight capacity and high demand. We put the customer at the center of everything we do, and we're seeing our approach pay off as we work alongside shippers and capacity providers to solve their complex challenges."

Second Quarter Results of Operations Comparisons

Asset-Based

Second Quarter 2021 Versus Second Quarter 2020

• Revenue of $652.8 million compared to $460.1 million, a per-day increase of 41.9 percent.
• Total tonnage per day increase of 22.7 percent, with double-digit percentage increases in both LTL-rated tonnage and TL-rated spot shipment tonnage moving in the Asset-Based network.
• Total shipments per day increase of 13.5 percent including a 13.7 percent increase in LTL-rated shipments per day and an increase of 10.8 percent in LTL-rated weight per shipment.
• Total billed revenue per hundredweight increased 15.4 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 mid-single digits.
• Operating income of $63.9 million and an operating ratio of 90.2 percent compared to the prior year quarter operating income of $21.0 million and an operating ratio of 95.4 percent. On a non-GAAP basis, operating income of $71.4 million and an operating ratio of 89.0 percent compared to the prior year quarter operating income of $25.8 million and an operating ratio of 94.4 percent.

ArcBest's Asset-Based business continued to benefit from increasing customer demand and a solid pricing environment that contributed to record-setting revenue and profits.  This quarter's results compared favorably to the second quarter of 2020 which was significantly impacted by the COVID-19 pandemic.  Considering the strength of business from core customers, along with unseasonable demand for household goods moving services which was earlier in the year than normal, Asset-Based shipment mix was managed for customer service levels, while optimizing revenue.  In response to the need for increased use of local and linehaul purchased transportation to supplement the Asset-Based network and meet customers' needs, second quarter hiring initiatives were successful and should produce future benefits. 

Asset-Light^‡

Second Quarter 2021 Versus Second Quarter 2020

• Revenue of $330.3 million compared to $197.9 million, a per-day increase of 66.9 percent.
• Operating income of $16.3 million compared to the prior year quarter operating income of $2.1 million. Operating income includes a $6.9 million gain on the sale of the labor services portion of the Asset-Light moving business. Non-GAAP operating income, as detailed in the attached reconciliation tables, excludes the gain on the sale of the moving services subsidiary and totaled $9.3 million in second quarter 2021.
• Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") of $19.0 million compared to the prior year quarter Adjusted EBITDA of $4.9 million, as detailed in the attached reconciliation tables.

Solid customer demand and higher market rates resulting from continued tightness in available truckload capacity translated into strong second quarter revenue growth in the ArcBest segment. The increased need for expedite service and managed logistics solutions, along with new account growth, contributed to higher shipment levels and profitability.  The operating income improvement reflects higher revenue, partially offset by investments in technology and personnel associated with shipment growth. ArcBest continued to benefit from strong relationships with carrier partners to meet customers' needs in a tight market. 

An increase in revenue per event combined with an increase in total events contributed to total revenue and profitability growth for FleetNet.

Closing Comments

"We are experiencing a strong start to 2021 and I'm proud of the work our leaders and employees are doing on behalf of our customers as their businesses normalize," McReynolds said. "Providing assured capacity is a shared mindset of employees across our organization."

NOTE

Conference Call

ArcBest will host a conference call with company executives to discuss the 2021 second quarter results.  The call will be today, Monday, August 2, at 9:30 a.m. EDT (8:30 a.m. CDT). Interested parties are invited to listen by calling (800) 926-9871. Following the call, a recorded playback will be available through the end of the day on September 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 21995988. The conference call and playback can also be accessed, through September 15, 2021, on ArcBest's website at arcb.com.

About ArcBest

ArcBest^® (Nasdaq: ARCB) is a leading logistics company with creative problem solvers who deliver innovative solutions for our customers' supply chain needs.  We'll find a way to deliver knowledge, expertise and a can-do attitude with every shipment and supply chain solution, household move or vehicle repair.  At ArcBest, we're More Than Logistics^®. For more information, visit arcb.com.

The following is a "safe harbor" statement under the Private Securities Litigation Reform Act of 1995:  Certain statements and information in this press release concerning results for the three months ended June 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," "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: 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; 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
Title: Vice President – Investor Relations
Phone: 479-785-6200
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
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.

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 (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.

SOURCE ArcBest

Related Links

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