FORT SMITH, Ark., Nov. 3, 2020 /PRNewswire/ — ArcBest a leader in supply chain logistics, today reported third quarter 2020 revenue of $795.0 million compared to third quarter 2019 revenue of $787.6 million. Third quarter 2020 operating income was $39.8 million compared to operating income of $31.2 million in the same period last year. Net income was $29.4 million, or $1.11 per diluted share, compared to third quarter 2019 net income of $16.3 million, or $0.62 per diluted share.
Excluding certain items in both periods as identified in the attached reconciliation tables, non-GAAP operating income was $45.8 million in third quarter 2020 compared to third quarter 2019 non-GAAP operating income of $38.1 million. On a non-GAAP basis, net income was $32.4 million, or $1.22 per diluted share, in third quarter 2020 compared to third quarter 2019 net income of $27.0 million, or $1.02 per diluted share.
At September 30, 2020, ArcBest’s consolidated cash and short-term investments, less debt, were $59 million net cash compared to the $41 million net cash position at June 30, 2020, reflecting an $18 million improvement during the third quarter.
“I am incredibly proud of our employees and how they have performed on behalf of customers as we navigate through the pandemic together,” said Judy R. McReynolds, chairman, president and CEO of ArcBest. “Throughout the third quarter and into October the ArcBest team, enabled by technology and assured capacity options, is providing much-needed flexibility to customer supply chains while also improving operational efficiency. Our company was built on strong customer relationships and it is our goal to ensure those customers are positioned well to succeed.”
Third Quarter Results of Operations Comparisons
Asset-Based
Third Quarter 2020 Versus Third Quarter 2019
- Revenue of $561.9 million compared to $565.6 million, a per-day decrease of 1.4 percent.
- Total tonnage per day increase of 1.2 percent, with a mid-single-digit percentage increase in LTL-rated tonnage and a double-digit percentage decrease in TL-rated spot shipment tonnage moving in the Asset-Based network.
- Total shipments per day decrease of 3.0 percent. Total weight per shipment increase of 4.4 percent and an increase of 7.4 percent in LTL-rated weight per shipment impacted by third quarter freight mix changes.
- Total billed revenue per hundredweight decreased 1.8 percent and was negatively impacted by freight mix changes and lower fuel surcharges versus prior year. Excluding fuel surcharge, LTL-rated freight experienced a percentage decrease in the low-single digits.
- Operating income of $36.6 million and an operating ratio of 93.5 percent compared to the prior year quarter operating income of $31.7 million and an operating ratio of 94.4 percent. On a non-GAAP basis, operating income of $42.8 million and an operating ratio of 92.4 percent compared to the prior year quarter operating income of $38.5 million and an operating ratio of 93.2 percent.
ArcBest’s Asset-Based business reflects the positive impact of an improving marketplace and sequential growth in shipments and tonnage compared to the second quarter. As business levels improved, labor and freight handling resources were added to handle the additional freight in order to sufficiently serve our customers’ needs. Operational costs were managed relative to growing freight levels. The resulting improvement in operational efficiencies, reduction in empty miles and cost decreases contributed to improved profitability. Throughout the quarter, customer shipments were strategically matched with available network capacity, resulting in improved resource utilization and better operational metrics. In a continuing rational industry pricing environment, freight mix changes and reduced fuel surcharges contributed to lower third quarter revenue per hundredweight. However, profitable growth resulted from optimal freight selection and enhanced matching of revenue and costs.
Asset-Light
Third Quarter 2020 Versus Third Quarter 2019
- Revenue of $267.8 million compared to $253.7 million, a per-day increase of 4.7 percent.
- Operating income of $5.8 million compared to operating income of $3.6 million.
- Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) of $8.6 million compared to Adjusted EBITDA of $6.6 million.
Third quarter revenue in the Asset-Light ArcBest segment increased compared to the prior year period reflecting better customer business levels associated with an improving economic environment. Significant revenue growth in managed transportation services was the biggest contributor to improved Asset-Light revenue totals while increases in international and ground expedite business were additional positive factors. Increased customer shipping levels combined with limited equipment availability in the logistics marketplace positively impacted demand for ground expedite services. Growth in these premium service asset-light offerings was a meaningful factor in the quarter’s improved profitability. Revenue associated with the truckload brokerage business positively contributed to third quarter totals, but increased mileage rates paid for equipment capacity related to current marketplace conditions contributed to higher purchased transportation expense as a percentage of total revenue. However, cost management and reduced expenses in other areas of the asset-light business resulted in greater operating profit during the quarter.
At FleetNet, a decrease in total events contributed to lower total revenue and reduced operating income compared to the prior year period.
