Arcbest Corp 10-Q for FY2021 Q1

Arcbest Corp (ARCB)

10-Q 2021-05-07 For: 2021-03-31

Added on April 04, 2026

About this 10-Q

Arcbest Corp filed this 10-Q on May 7, 2021, covering the quarter ended March 31, 2021 (FY2021 Q1).

Headline figures

Quarter ended March 31, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $829.21M; up 18.2% from $701.4M a year earlier
Net income: $23.36M; up 1128.2% from net income of $1.9M a year earlier
Diluted EPS: $0.87; up 1142.9% from $0.07 a year earlier

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


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


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


		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


	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


	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


	December 31, 2020
			Fair Value Measurements Using
			Quoted Prices		Significant		Significant
			In Active		Observable		Unobservable
			Markets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)

	(in thousands)
Assets:
Money market funds⁽¹⁾	$	34,201	$	34,201	$	—	$	—
Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan⁽²⁾		2,955		2,955		—		—
	$	37,156	$	37,156	$	—	$	—
Liabilities:
Interest rate swaps⁽³⁾	$	1,622	$	—	$	1,622	$	—


		March 31, 2021						December 31, 2020
	Weighted-Average			Accumulated		Net				Accumulated		Net
	Amortization Period	Cost		Amortization		Value			Cost	Amortization		Value

	(in years)	(in thousands)						(in thousands)
Finite-lived intangible assets
Customer relationships	14	$	52,721	$	31,429	$	21,292	$	52,721	$	30,477	$	22,244
Other	13		994		558		436		980		543		437
	14		53,715		31,987		21,728		53,701		31,020		22,681
Indefinite-lived intangible assets
Trade name	N/A		32,300		N/A		32,300		32,300		N/A		32,300

Total intangible assets	N/A	$	86,015	$	31,987	$	54,028	$	86,001	$	31,020	$	54,981


	Amortization of
	Intangible Assets
	(in thousands)
Remainder of 2021	$	2,870
2022		3,815
2023		3,722
2024		3,689
2025		3,674
Thereafter		3,958
Total amortization	$	21,728


	Three Months Ended
	March 31, 2021		March 31, 2020

	(in thousands)
Operating lease expense	$	6,642	$	5,796
Variable lease expense		1,332		1,040
Sublease income		(155)		(92)

Total operating lease expense⁽¹⁾	$	7,819	$	6,744


					Equipment
			Land and		and
	Total		Structures		Other

	(in thousands)
Remainder of 2021	$	18,816	$	18,748	$	68
2022		21,459		21,423		36
2023		17,248		17,223		25
2024		15,088		15,088		—
2025		12,561		12,561		—
Thereafter		43,109		43,109		—
Total lease payments		128,281		128,152		129
Less imputed interest		(12,176)		(12,174)		(2)
Total	$	116,105	$	115,978	$	127




			Credit		Notes		Finance Lease
	Total		Facility⁽¹⁾		Payable		Obligations

	(in thousands)
Due in one year or less	$	71,839	$	899	$	70,933	$	7
Due after one year through two years		60,650		1,005		59,645		—
Due after two years through three years		43,891		1,362		42,529		—
Due after three years through four years		98,088		70,854		27,234		—
Due after four years through five years		6,117		—		6,117		—
Due after five years		—		—		—		—
Total payments		280,585		74,120		206,458		7
Less amounts representing interest		13,748		4,120		9,628		—
Long-term debt	$	266,837	$	70,000	$	196,830	$	7


	Three Months Ended March 31
	Supplemental				Postretirement
	Benefit Plan				Health Benefit Plan
	2021		2020		2021		2020

	(in thousands)
Service cost	$	—	$	—	$	48	$	47
Interest cost		1		3		107		144
Pension settlement expense⁽¹⁾		—		89		—		—
Amortization of net actuarial (gain) loss⁽²⁾		2		4		(137)		(149)
Net periodic benefit cost⁽³⁾	$	3	$	96	$	18	$	42


			Unrecognized			Interest	Foreign
			Net Periodic			Rate	Currency
	Total		Benefit Costs			Swap	Translation

	(in thousands)
Balances at December 31, 2020	$	1,190	$	3,260	$	(1,198)	$	(872)

Other comprehensive income before reclassifications		904		—		575		329
Amounts reclassified from accumulated other comprehensive loss		(100)		(100)		—		—
Net current-period other comprehensive income (loss)		804		(100)		575		329

Balances at March 31, 2021	$	1,994	$	3,160	$	(623)	$	(543)

Balances at December 31, 2019		203		2,152		(416)		(1,533)

Other comprehensive loss before reclassifications		(2,425)		(8)		(997)		(1,420)
Amounts reclassified from accumulated other comprehensive income		(42)		(42)		—		—
Net current-period other comprehensive loss		(2,467)		(50)		(997)		(1,420)

Balances at March 31, 2020	$	(2,264)	$	2,102	$	(1,413)	$	(2,953)


	Unrecognized Net Periodic
	Benefit Credit⁽¹⁾⁽²⁾
	Three Months Ended March 31
	2021		2020

	(in thousands)
Amortization of net actuarial gain	$	135	$	145
Pension settlement expense⁽³⁾		—		(89)
Total, pre-tax		135		56
Tax expense		(35)		(14)
Total, net of tax	$	100	$	42


	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)


	March 31				December 31
	2021				2020

	(in thousands)
		Carrying		Fair		Carrying		Fair
		Value		Value		Value		Value
Credit Facility⁽¹⁾	$	70,000	$	70,000	$	70,000	$	70,000
Notes payable⁽²⁾		196,830		201,282		214,216		217,226
New England Pension Fund withdrawal liability⁽³⁾		21,250		23,361		21,407		25,523
	$	288,080	$	294,643	$	305,623	$	312,749


	Year Over Year % Change
	Three Months Ended
	March 31, 2021

Revenue per shipment		25.9%

Shipments per day		22.7%


				Total Number of	Maximum
				Shares Purchased	Approximate Dollar
	Total Number	Average		as Part of Publicly	Value of Shares that
	of Shares	Price Paid		Announced	May Yet Be Purchased
	Purchased	Per Share⁽¹⁾		Program	Under the Program⁽²⁾

	(in thousands, except share and per share data)
1/1/2021-1/31/2021	—	$	—	—	$	50,000
2/1/2021-2/28/2021	5,350		58.82	5,350	$	49,685
3/1/2021-3/31/2021	9,573		71.72	9,573	$	48,999
Total	14,923	$	67.09	14,923


Exhibit
No.

3.1		Restated Certificate of Incorporation of the Company (previously filed as Exhibit 3.1 to the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2019, File No. 000-19969, and incorporated herein by reference).

3.2		Certificate of Amendment to the Restated Certificate of Incorporation of the Company (previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on April 24, 2009, File No. 000-19969, and incorporated herein by reference).

3.3		Fifth Amended and Restated Bylaws of the Company dated as of October 31, 2016 (previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on November 4, 2016, File No. 000-19969, and incorporated herein by reference).

3.4		Certificate of Ownership and Merger, effective May 1, 2014, as filed on April 29, 2014 with the Secretary of State of the State of Delaware (previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on April 30, 2014, File No. 000-19969, and incorporated herein by reference).

10.1#		Second Amendment to the Amended and Restated ArcBest Corporation Ownership Incentive Plan (previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on May 5, 2021, File No. 000-19969, and incorporated herein by reference).

10.2#*		The ArcBest 16b Annual Incentive Compensation Plan and form of award.

10.3#*		The ArcBest Long-Term (3-Year) Incentive Compensation Plan and form of award.

10.4#*		Form of Restricted Stock Unit Award Agreement (Non-Employee Directors – with deferral feature) (for 2021 awards).

10.5#*		Form of Restricted Stock Unit Award Agreement (Employees) (for 2021 awards).
.
31.1*		Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32**		Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS*		XBRL Instance Document – the instance document does not appear in the Interactive Data Files because its XBRL tags are embedded within the Inline XBRL document.

101.SCH*		Inline XBRL Taxonomy Extension Schema Document

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*		Inline XBRL Taxonomy Extension Labels Linkbase Document

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104*		The Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL document.


	ARCBEST CORPORATION
	(Registrant)

Date: May 7, 2021	/s/ Judy R. McReynolds
	Judy R. McReynolds
	Chairman, President and Chief Executive Officer
	and Principal Executive Officer


Date: May 7, 2021	/s/ David R. Cobb
	David R. Cobb
	Vice President — Chief Financial Officer
	and Principal Financial Officer