Arcbest Earnings 2021-03-31

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒

Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2021

☐

Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission file number 000-19969

ARCBEST CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of
incorporation or organization)

71-0673405

(I.R.S. Employer Identification No.)

8401 McClure Drive

Fort Smith, Arkansas 72916

(479) 785-6000

(Address, including zip code, and telephone number, including

area code, of the registrant’s principal executive offices)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report.)

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock $0.01 Par Value	ARCB	Nasdaq

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


	Large accelerated filer ☒		Accelerated filer ☐
	Non-accelerated filer ☐		Smaller reporting company ☐
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Class		Outstanding at April 30, 2021
Common Stock, $0.01 par value		25,385,513 shares

Table of Contents

ARCBEST CORPORATION

INDEX


		Page

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Balance Sheets — March 31, 2021 and December 31, 2020	3

	Consolidated Statements of Operations — For the Three Months ended March 31, 2021 and 2020	4

	Consolidated Statements of Comprehensive Income — For the Three Months ended March 31, 2021 and 2020	5

	Consolidated Statement of Stockholders’ Equity — For the Three Months ended March 31, 2021 and 2020	6

	Consolidated Statement of Cash Flows — For the Three Months ended March 31, 2021 and 2020	7

	Notes to Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43

Item 4.	Controls and Procedures	43

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	44

Item 1A.	Risk Factors	44

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44

Item 3.	Defaults Upon Senior Securities	44

Item 4.	Mine Safety Disclosures	44

Item 5.	Other Information	44

Item 6.	Exhibits	45

SIGNATURES		46

Table of Contents

PART I.

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ARCBEST CORPORATION

CONSOLIDATED BALANCE SHEETS


	March 31		December 31
	2021		2020
	(Unaudited)

	(in thousands, except share data)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	301,542	$	303,954
Short-term investments		59,316		65,408
Accounts receivable, less allowances (2021 – $7,736; 2020 – $7,851)		344,242		320,870
Other accounts receivable, less allowances (2021 – $662; 2020 – $660)		13,766		14,343
Prepaid expenses		40,356		37,774
Prepaid and refundable income taxes		4,604		11,397
Other		4,893		4,422
TOTAL CURRENT ASSETS		768,719		758,168
PROPERTY, PLANT AND EQUIPMENT
Land and structures		344,282		342,178
Revenue equipment		914,140		916,760
Service, office, and other equipment		235,727		233,810
Software		169,004		163,193
Leasehold improvements		15,534		15,156
		1,678,687		1,671,097
Less allowances for depreciation and amortization		1,015,989		992,407
PROPERTY, PLANT AND EQUIPMENT, net		662,698		678,690
GOODWILL		88,320		88,320
INTANGIBLE ASSETS, net		54,028		54,981
OPERATING RIGHT-OF-USE ASSETS		111,412		115,195
DEFERRED INCOME TAXES		6,289		6,158
OTHER LONG-TERM ASSETS		76,549		77,496
TOTAL ASSETS	$	1,768,015	$	1,779,008

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	177,885	$	170,898
Income taxes payable		—		316
Accrued expenses		235,161		246,746
Current portion of long-term debt		66,064		67,105
Current portion of operating lease liabilities		21,632		21,482
TOTAL CURRENT LIABILITIES		500,742		506,547
LONG-TERM DEBT, less current portion		200,773		217,119
OPERATING LEASE LIABILITIES, less current portion		94,473		97,839
POSTRETIREMENT LIABILITIES, less current portion		18,518		18,555
OTHER LONG-TERM LIABILITIES		33,992		37,948
DEFERRED INCOME TAXES		67,608		72,407
STOCKHOLDERS’ EQUITY
Common stock, $0.01 par value, authorized 70,000,000 shares; issued 2021: 29,057,374 shares, 2020: 29,045,309 shares		291		290
Additional paid-in capital		344,542		342,354
Retained earnings		617,256		595,932
Treasury stock, at cost, 2021: 3,671,861 shares; 2020: 3,656,938 shares		(112,174)		(111,173)
Accumulated other comprehensive income		1,994		1,190
TOTAL STOCKHOLDERS’ EQUITY		851,909		828,593
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,768,015	$	1,779,008

See notes to consolidated financial statements.

Table of Contents

ARCBEST CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS


	Three Months Ended
	March 31
	2021		2020

	(Unaudited)
	(in thousands, except share and per share data)
REVENUES	$	829,213	$	701,399

OPERATING EXPENSES		797,022		693,580

OPERATING INCOME		32,191		7,819

OTHER INCOME (COSTS)
Interest and dividend income		392		1,375
Interest and other related financing costs		(2,428)		(2,947)
Other, net		1,192		(3,862)
		(844)		(5,434)

INCOME BEFORE INCOME TAXES		31,347		2,385

INCOME TAX PROVISION		7,986		483

NET INCOME	$	23,361	$	1,902

EARNINGS PER COMMON SHARE
Basic	$	0.92	$	0.07
Diluted	$	0.87	$	0.07

AVERAGE COMMON SHARES OUTSTANDING
Basic		25,454,921		25,390,377
Diluted		26,930,402		26,246,800

CASH DIVIDENDS DECLARED PER COMMON SHARE	$	0.08	$	0.08

See notes to consolidated financial statements.

Table of Contents

ARCBEST CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


	Three Months Ended
	March 31
	2021		2020

	(Unaudited)
	(in thousands)
NET INCOME	$	23,361	$	1,902

OTHER COMPREHENSIVE INCOME (LOSS), net of tax

Postretirement benefit plans:
Net actuarial loss, net of tax of: (2021 – $—; 2020 – $3)		—		(8)
Pension settlement expense, net of tax of: (2021 – $—; 2020 – $23)		—		66
Amortization of unrecognized net periodic benefit credit, net of tax of: (2021 – $35; 2020 – $37)
Net actuarial gain		(100)		(108)

Interest rate swap and foreign currency translation:
Change in unrealized gain (loss) on interest rate swap, net of tax of: (2021 – $204; 2020 – $352)		575		(997)
Change in foreign currency translation, net of tax of: (2021 – $118; 2020 – $502)		329		(1,420)

OTHER COMPREHENSIVE INCOME (LOSS), net of tax		804		(2,467)

TOTAL COMPREHENSIVE INCOME (LOSS)	$	24,165	$	(565)

See notes to consolidated financial statements.

Table of Contents

ARCBEST CORPORATION

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

Three Months Ended March 31, 2021

Accumulated

Additional

Other

Common Stock

Paid-In

Retained

Treasury Stock

Comprehensive

Total

Shares

Amount

Capital

Earnings

Shares

Amount

Income

Equity

(Unaudited)

(in thousands)

Balance at December 31, 2020

29,045

290

342,354

595,932

3,657

(111,173)

1,190

828,593

Net income

23,361

Other comprehensive income, net of tax

804

Issuance of common stock under share-based compensation plans

(1)

—

Tax effect of share-based compensation plans

(165)

Share-based compensation expense

2,354

Purchase of treasury stock

(1,001)

Dividends declared on common stock

(2,037)

Balance at March 31, 2021

29,057

291

344,542

617,256

3,672

(112,174)

1,994

851,909

Three Months Ended March 31, 2020

Accumulated

Additional

Other

Common Stock

Paid-In

Retained

Treasury Stock

Comprehensive

Total

Shares

Amount

Capital

Earnings

Shares

Amount

Income (Loss)

Equity

(Unaudited)

(in thousands)

Balance at December 31, 2019

28,811

288

333,943

533,187

3,405

(104,578)

203

763,043

Adjustments to beginning retained earnings for adoption of accounting standard

(198)

Balance at January 1, 2020

28,811

288

333,943

532,989

3,405

(104,578)

203

762,845

Net income

1,902

Other comprehensive income, net of tax

(2,467)

Issuance of common stock under share-based compensation plans

—

Tax effect of share-based compensation plans

(60)

Share-based compensation expense

2,181

Purchase of treasury stock

150

(3,162)

Dividends declared on common stock

(2,033)

Balance at March 31, 2020

28,817

288

336,064

532,858

3,555

(107,740)

(2,264)

759,206

See notes to consolidated financial statements.

Table of Contents

ARCBEST CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS


	Three Months Ended
	March 31
	2021		2020

	(Unaudited)
	(in thousands)
OPERATING ACTIVITIES
Net income	$	23,361	$	1,902
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		29,387		28,032
Amortization of intangibles		967		981
Pension settlement expense		—		89
Share-based compensation expense		2,354		2,181
Provision for losses on accounts receivable		(96)		1,383
Change in deferred income taxes		(4,998)		(2,815)
Gain on sale of property and equipment		(8,635)		(2,130)
Changes in operating assets and liabilities:
Receivables		(22,568)		3,874
Prepaid expenses		(2,582)		(3,429)
Other assets		(164)		5,800
Income taxes		6,376		2,949
Operating right-of-use assets and lease liabilities, net		567		(138)
Accounts payable, accrued expenses, and other liabilities		(1,435)		(15,550)
NET CASH PROVIDED BY OPERATING ACTIVITIES		22,534		23,129

INVESTING ACTIVITIES
Purchases of property, plant and equipment, net of financings		(9,588)		(6,738)
Proceeds from sale of property and equipment		10,079		4,692
Purchases of short-term investments		(18,130)		(73,973)
Proceeds from sale of short-term investments		24,418		12,210
Capitalization of internally developed software		(5,705)		(3,342)
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES		1,074		(67,151)

FINANCING ACTIVITIES
Borrowings under credit facilities		—		180,000
Borrowings under accounts receivable securitization program		—		45,000
Payments on long-term debt		(17,387)		(14,598)
Net change in book overdrafts		(5,434)		(10,869)
Payment of common stock dividends		(2,037)		(2,033)
Purchases of treasury stock		(1,001)		(3,162)
Payments for tax withheld on share-based compensation		(161)		(60)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		(26,020)		194,278

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(2,412)		150,256
Cash and cash equivalents at beginning of period		303,954		201,909
CASH AND CASH EQUIVALENTS CASH AT END OF PERIOD	$	301,542	$	352,165

NONCASH INVESTING ACTIVITIES
Accruals for equipment received	$	233	$	39
Lease liabilities arising from obtaining right-of-use assets	$	1,959	$	10,370

See notes to consolidated financial statements.

Table of Contents

ARCBEST CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE A – ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION

ArcBest Corporation^™ (the “Company”) is the parent holding company of freight transportation and integrated logistics businesses providing innovative solutions. The Company’s operations are conducted through its three reportable operating segments: Asset-Based, which consists of ABF Freight System, Inc. and certain other subsidiaries (“ABF Freight”); ArcBest, the Company’s asset-light logistics operation; and FleetNet. References to the Company in this Quarterly Report on Form 10-Q are primarily to the Company and its subsidiaries on a consolidated basis.

The Asset-Based segment represented approximately 64% of the Company’s total revenues before other revenues and intercompany eliminations for the three months ended March 31, 2021. As of March 2021, approximately 82% of the Asset-Based segment’s employees were covered under a collective bargaining agreement, the ABF National Master Freight Agreement (the “2018 ABF NMFA”), with the International Brotherhood of Teamsters (the “IBT”), which will remain in effect through June 30, 2023.

Financial Statement Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) pertaining to interim financial information. Accordingly, these interim financial statements do not include all information or footnote disclosures required by accounting principles generally accepted in the United States for complete financial statements and, therefore, should be read in conjunction with the audited financial statements and accompanying notes included in the Company’s 2020 Annual Report on Form 10-K and other current filings with the SEC. In the opinion of management, all adjustments (which are of a normal and recurring nature) considered necessary for a fair presentation have been included.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual amounts may differ from those estimates. The Company considered the impact of the novel coronavirus (“COVID-19”) pandemic on the estimates and assumptions used in preparation of the Company’s consolidated financial statements as of and for the three months ended March 31, 2021. Given the uncertainties regarding the economic environment and the impact of the COVID-19 pandemic on our business, it is possible that these estimates and assumptions may materially change in future periods.

Reclassifications: Certain reclassifications have been made to the prior period presentation in the consolidated statements of cash flows to conform to the current year presentation. The multiemployer pension fund withdrawal liability, which was associated with the 2018 transition agreement and withdrawal from the New England Teamsters and Trucking Industry Pension Fund, was previously presented in a separate line of changes in operating assets and liabilities in the consolidated statements of cash flows and has been reclassed to the accounts payable, accrued expenses, and other liabilities line. There was no impact on net cash used in operating activities or total cash and cash equivalents as a result of the reclassification.

Adopted Accounting Pronouncements

ASC Topic 740, Income Taxes, was amended to simplify the accounting for income taxes to improve consistency of accounting methods and remove certain exceptions. The amendment was effective for the Company on January 1, 2021, and did not impact the consolidated financial statements and disclosures.

Table of Contents

Accounting Pronouncements Not Yet Adopted

Management believes there is no other new accounting guidance issued but not yet effective that is relevant to the Company’s current financial statements.

NOTE B – FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

Financial Instruments

The following table presents the components of cash and cash equivalents and short-term investments:


	March 31		December 31
	2021		2020

	(in thousands)
Cash and cash equivalents
Cash deposits⁽¹⁾	$	236,380	$	240,687
Variable rate demand notes⁽¹⁾⁽²⁾		29,161		29,066
Money market funds⁽³⁾		36,001		34,201
Total cash and cash equivalents	$	301,542	$	303,954

Short-term investments
Certificates of deposit⁽¹⁾	$	59,316	$	53,297
U.S. Treasury securities⁽⁴⁾		—		12,111
Total short-term investments	$	59,316	$	65,408

(1)	Recorded at cost plus accrued interest, which approximates fair value.

(2)	Amounts may be redeemed on a daily basis with the original issuer.

(3)	Recorded at fair value as determined by quoted market prices (see amounts presented in the table of financial assets and liabilities measured at fair value within this Note).

(4)	Recorded at amortized cost plus accrued interest, which approximates fair value. U.S. Treasury securities included in short-term investments are held-to-maturity investments with maturity dates of less than one year.

The Company’s long-term financial instruments are presented in the table of financial assets and liabilities measured at fair value within this Note.

Concentrations of Credit Risk of Financial Instruments

The Company is potentially subject to concentrations of credit risk related to its cash, cash equivalents, and short-term investments. The Company reduces credit risk by maintaining its cash deposits primarily in FDIC-insured accounts and placing its short-term investments primarily in FDIC-insured certificates of deposit. However, certain cash deposits and certificates of deposit may exceed federally insured limits. At March 31, 2021 and December 31, 2020, cash, cash equivalents, and short-term investments totaling $152.9 million and $156.4 million, respectively, were neither FDIC insured nor direct obligations of the U.S. government.

Fair Value Disclosure of Financial Instruments

Fair value disclosures are made in accordance with the following hierarchy of valuation techniques based on whether the inputs of market data and market assumptions used to measure fair value are observable or unobservable:

●

Level 1 — Quoted prices for identical assets and liabilities in active markets.

Price	31.70	EPS	2
Shares	26	P/E	14
MCap	839	P/FCF	6
Net Debt	115	EBIT	89
TEV	953	TEV/EBIT	11
TTM 2019-09-30, in MM, except price, ratios

10-Q	2021-03-31	Filed 2021-05-07
10-K	2020-12-31	Filed 2021-02-26
10-Q	2020-09-30	Filed 2020-11-06
10-Q	2020-06-30	Filed 2020-08-06
10-Q	2020-03-31	Filed 2020-05-11
10-K	2019-12-31	Filed 2020-02-28
10-Q	2019-09-30	Filed 2019-11-08
10-Q	2019-06-30	Filed 2019-08-08
10-Q	2019-03-31	Filed 2019-05-09
10-K	2018-12-31	Filed 2019-02-28
10-Q	2018-09-30	Filed 2018-11-08
10-Q	2018-06-30	Filed 2018-08-08
10-Q	2018-03-31	Filed 2018-05-10
10-K	2017-12-31	Filed 2018-02-28
10-Q	2017-09-30	Filed 2017-11-08
10-Q	2017-06-30	Filed 2017-08-08
10-Q	2017-03-31	Filed 2017-05-09
10-K	2016-12-31	Filed 2017-02-28
10-Q	2016-09-30	Filed 2016-11-08
10-Q	2016-06-30	Filed 2016-08-05
10-Q	2016-03-31	Filed 2016-05-09
10-K	2015-12-31	Filed 2016-02-26
10-Q	2015-09-30	Filed 2015-11-06
10-Q	2015-06-30	Filed 2015-08-07
10-Q	2015-03-31	Filed 2015-05-08
10-K	2014-12-31	Filed 2015-03-02
10-Q	2014-09-30	Filed 2014-11-07
10-Q	2014-06-30	Filed 2014-08-08
10-Q	2014-03-31	Filed 2014-05-09
10-K	2013-12-31	Filed 2014-02-28
10-Q	2013-09-30	Filed 2013-11-12
10-Q	2013-06-30	Filed 2013-08-09
10-Q	2013-03-31	Filed 2013-05-08
10-K	2012-12-31	Filed 2013-02-28
10-Q	2012-09-30	Filed 2012-11-07
10-Q	2012-06-30	Filed 2012-08-08
10-Q	2012-03-31	Filed 2012-05-09
10-K	2011-12-31	Filed 2012-02-29
10-Q	2011-09-30	Filed 2011-11-08
10-Q	2011-06-30	Filed 2011-08-09
10-Q	2011-03-31	Filed 2011-05-05
10-K	2010-12-31	Filed 2011-02-23
10-Q	2010-09-30	Filed 2010-11-04
10-Q	2010-06-30	Filed 2010-08-05
10-Q	2010-03-31	Filed 2010-05-05
10-K	2009-12-31	Filed 2010-02-24

8-K	2021-02-02
8-K	2021-01-28
8-K	2021-01-11
8-K	2020-12-08
8-K	2020-11-03
8-K	2020-10-30
8-K	2020-09-09
8-K	2020-07-29
8-K	2020-07-24
8-K	2020-06-04
8-K	2020-05-05
8-K	2020-05-01
8-K	2020-05-01
8-K	2020-04-24
8-K	2020-04-01
8-K	2020-03-26
8-K	2020-01-30
8-K	2020-01-28
8-K	2019-12-16
8-K	2019-12-05
8-K	2019-10-31
8-K	2019-10-29
8-K	2019-10-22
8-K	2019-09-27
8-K	2019-09-04
8-K	2019-07-30
8-K	2019-07-26
8-K	2019-06-06
8-K	2019-05-02
8-K	2019-04-30
8-K	2019-04-30
8-K	2019-01-30
8-K	2019-01-25
8-K	2018-12-07
8-K	2018-11-01
8-K	2018-10-30
8-K	2018-09-06
8-K	2018-08-31
8-K	2018-08-03
8-K	2018-07-31
8-K	2018-07-27
8-K	2018-07-26
8-K	2018-07-09
8-K	2018-06-07
8-K	2018-05-11
8-K	2018-05-10
8-K	2018-05-01
8-K	2018-05-01
8-K	2018-04-13
8-K	2018-03-29
8-K	2018-01-31
8-K	2018-01-26

EX-10.2	arcb-20210331xex10d2.htm
EX-10.3	arcb-20210331xex10d3.htm
EX-10.4	arcb-20210331xex10d4.htm
EX-10.5	arcb-20210331xex10d5.htm
EX-31.1	arcb-20210331xex31d1.htm
EX-31.2	arcb-20210331xex31d2.htm
EX-32	arcb-20210331xex32.htm

ARCB 10Q Quarterly Report

Arcbest Earnings 2021-03-31