ArcBest Announces Second Quarter 2021 Results

Investor Relations Contact: David Humphrey
Title: Vice President - Investor Relations
Phone: 479-785-6200
Email: [email protected]

ArcBest^®Announces Second Quarter 2021 Results

• Second quarter 2021 revenue of $949.0 million, and net income of $61.0 million, or $2.27 per diluted share. On a non-GAAP¹ basis, second quarter 2021 net income of $53.1 million, or $1.97 per diluted share.
• Highest quarterly revenue and operating income in ArcBest's history.

FORT SMITH, Arkansas, August 2, 2021 - 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 $0.61per 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 $1.97per diluted share in second quarter 2021 compared to second quarter 2020 net income of $17.6million, or $0.67per 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.'

1. U.S. Generally Accepted Accounting Principles

Second Quarter Results of Operations Comparisons

Asset-Based

Second Quarter 2021Versus Second Quarter 2020

• Revenue of $652.8 million compared to $460.1 million, a per-dayincrease 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 percentincluding 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 percentand 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 environmentthat 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 totheprior 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

‡ - 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 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.

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		Six Months Ended
		June 30		June 30
		2021		2020		2021		2020
		(Unaudited)
		($ thousands, except share and per share data)
REVENUES		$	948,973		$	627,370		$	1,778,186		$	1,328,769
OPERATING EXPENSES			874,674			606,945			1,671,696			1,300,525
OPERATING INCOME			74,299			20,425			106,490			28,244
OTHER INCOME (COSTS)
Interest and dividend income			322			991			714			2,366
Interest and other related financing costs			(2,274)			(3,378)			(4,702)			(6,325)
Other, net			1,111			2,696			2,303			(1,166)
			(841)			309			(1,685)			(5,125)
INCOME BEFORE INCOME TAXES			73,458			20,734			104,805			23,119
INCOME TAX PROVISION			12,477			4,854			20,463			5,337
NET INCOME		$	60,981		$	15,880		$	84,342		$	17,782
EARNINGS PER COMMON SHARE
Basic		$	2.38		$	0.62		$	3.30		$	0.70
Diluted		$	2.27		$	0.61		$	3.13		$	0.68
AVERAGE COMMON SHARES OUTSTANDING
Basic			25,586,353			25,463,559			25,522,453			25,468,624
Diluted			26,910,796			26,217,957			26,926,133			26,252,486
CASH DIVIDENDS DECLARED PER COMMON SHARE		$	0.08		$	0.08		$	0.16		$	0.16

ARCBEST CORPORATION

CONSOLIDATED BALANCE SHEETS

		June 30		December 31
		2021		2020
		(Unaudited)		Note
		($ thousands, except share data)
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	362,619		$	303,954
Short-term investments			59,967			65,408
Accounts receivable, less allowances (2021 - $7,396; 2020 - $7,851)			360,498			320,870
Other accounts receivable, less allowances (2021 - $667; 2020 - $660)			13,284			14,343
Prepaid expenses			36,355			37,774
Prepaid and refundable income taxes			5,871			11,397
Other			4,937			4,422
TOTAL CURRENT ASSETS			843,531			758,168
PROPERTY, PLANT AND EQUIPMENT
Land and structures			345,829			342,178
Revenue equipment			933,264			916,760
Service, office, and other equipment			239,462			233,810
Software			170,528			163,193
Leasehold improvements			15,835			15,156
			1,704,918			1,671,097
Less allowances for depreciation and amortization			1,038,974			992,407
			665,944			678,690
GOODWILL			86,368			88,320
INTANGIBLE ASSETS, NET			53,084			54,981
OPERATING RIGHT-OF-USE ASSETS			109,860			115,195
DEFERRED INCOME TAXES			6,419			6,158
OTHER LONG-TERM ASSETS			76,267			77,496
		$	1,841,473		$	1,779,008
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable		$	204,124		$	170,898
Income taxes payable			7,357			316
Accrued expenses			260,185			246,746
Current portion of long-term debt			66,644			67,105
Current portion of operating lease liabilities			21,950			21,482
TOTAL CURRENT LIABILITIES			560,260			506,547
LONG-TERM DEBT, less current portion			171,075			217,119
OPERATING LEASE LIABILITIES, less current portion			92,811			97,839
POSTRETIREMENT LIABILITIES, less current portion			18,514			18,555
OTHER LONG-TERM LIABILITIES			35,722			37,948
DEFERRED INCOME TAXES			64,957			72,407
STOCKHOLDERS' EQUITY
Common stock, $0.01 par value, authorized 70,000,000 shares; issued 2021: 29,317,699 shares; 2020: 29,045,309 shares			293			290
Additional paid-in capital			338,263			342,354
Retained earnings			676,179			595,932
Treasury stock, at cost, 2021: 3,783,227 shares; 2020: 3,656,938 shares			(119,273)			(111,173)
Accumulated other comprehensive income			2,672			1,190
TOTAL STOCKHOLDERS' EQUITY			898,134			828,593
		$	1,841,473		$	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

		Six Months Ended
		June 30
		2021		2020
		Unaudited
		($ thousands)
OPERATING ACTIVITIES
Net income		$	84,342		$	17,782
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			58,709			56,140
Amortization of intangibles			1,927			1,959
Pension settlement expense			-			89
Share-based compensation expense			5,678			5,071
Provision for losses on accounts receivable			(334)			999
Change in deferred income taxes			(7,612)			(5,170)
Gain on sale of property and equipment and lease termination			(8,408)			(3,581)
Gain on sale of subsidiaries			(6,923)			-
Changes in operating assets and liabilities:
Receivables			(37,745)			9,626
Prepaid expenses			1,419			1,444
Other assets			25			4,358
Income taxes			12,275			8,413
Operating right-of-use assets and lease liabilities, net			761			(230)
Accounts payable, accrued expenses, and other liabilities			41,786			(14,833)
NET CASH PROVIDED BY OPERATING ACTIVITIES			145,900			82,067
INVESTING ACTIVITIES
Purchases of property, plant and equipment, net of financings			(25,395)			(16,209)
Proceeds from sale of property and equipment			10,864			7,670
Proceeds from sale of subsidiaries			9,013			-
Purchases of short-term investments			(43,690)			(97,493)
Proceeds from sale of short-term investments			49,165			46,725
Capitalization of internally developed software			(9,477)			(6,495)
NET CASH USED IN INVESTING ACTIVITIES			(9,520)			(65,802)
FINANCING ACTIVITIES
Borrowings under credit facilities			-			180,000
Borrowings under accounts receivable securitization program			-			45,000
Payments on long-term debt			(54,643)			(29,185)
Net change in book overdrafts			(922)			615
Deferred financing costs			(189)			-
Payment of common stock dividends			(4,095)			(4,082)
Purchases of treasury stock			(8,100)			(3,162)
Payments for tax withheld on share-based compensation			(9,766)			(1,070)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES			(77,715)			188,116
NET INCREASE IN CASH AND CASH EQUIVALENTS			58,665			204,381
Cash and cash equivalents at beginning of period			303,954			201,909
CASH AND CASH EQUIVALENTS AT END OF PERIOD		$	362,619		$	406,290
NONCASH INVESTING ACTIVITIES
Equipment financed		$	8,138		$	13,566
Accruals for equipment received		$	5,984		$	857
Lease liabilities arising from obtaining right-of-use assets		$	6,051		$	23,727

ARCBEST CORPORATION

FINANCIAL STATEMENT OPERATING SEGMENT DATA AND OPERATING RATIOS

		Three Months Ended			Six Months Ended
		June 30			June 30
		2021			2020			2021			2020
		Unaudited
		($ thousands, except percentages)
REVENUES
Asset-Based		$	652,832					$	460,070					$	1,209,124					$	975,783
ArcBest			270,748						151,467						523,084						316,242
FleetNet			59,547						46,440						118,710						98,879
Total Asset-Light			330,295						197,907						641,794						415,121
Other and eliminations			(34,154)						(30,607)						(72,732)						(62,135)
Total consolidated revenues		$	948,973					$	627,370					$	1,778,186					$	1,328,769
OPERATING EXPENSES
Asset-Based
Salaries, wages, and benefits		$	302,370		46.3	%		$	248,995		54.1	%		$	588,064		48.6	%		$	532,833		54.6	%
Fuel, supplies, and expenses			64,689		9.9				45,675		9.9				125,530		10.4				106,900		11.0
Operating taxes and licenses			12,303		1.9				11,629		2.5				24,551		2.0				24,423		2.5
Insurance			9,454		1.4				8,247		1.8				18,393		1.5				16,071		1.6
Communications and utilities			4,663		0.7				4,342		1.0				9,633		0.8				9,053		0.9
Depreciation and amortization			23,308		3.6				23,327		5.1				46,792		3.9				46,597		4.8
Rents and purchased transportation			95,082		14.6				46,152		10.0				170,670		14.1				101,922		10.4
Shared services			69,372		10.6				45,605		9.9				125,238		10.4				94,490		9.7
Gain on sale of property and equipment(1)			71		-				(1,175)		(0.2)				(8,624)		(0.7)				(3,339)		(0.3)
Innovative technology costs(2)			7,532		1.2				4,789		1.0				14,400		1.2				9,322		1.0
Other			77		-				1,448		0.3				511		-				3,235		0.3
Total Asset-Based			588,921		90.2	%			439,034		95.4	%			1,115,158		92.2	%			941,507		96.5	%
ArcBest
Purchased transportation			226,603		83.7	%			125,090		82.6	%			437,598		83.6	%			262,272		82.9	%
Supplies and expenses			2,476		0.9				1,989		1.3				5,044		1.0				4,269		1.3
Depreciation and amortization(3)			2,366		0.9				2,449		1.6				4,752		0.9				4,919		1.6
Shared services			29,078		10.7				18,840		12.4				55,150		10.5				40,567		12.8
Gain on sale of subsidiaries(4)			(6,923)		(2.6)				-		-				(6,923)		(1.3)				-		-
Other			2,021		0.8				1,796		1.2				4,071		0.8				4,321		1.4
			255,621		94.4	%			150,164		99.1	%			499,692		95.5	%			316,348		100.0	%
FleetNet			58,409		98.1	%			45,658		98.3	%			116,549		98.2	%			97,057		98.2	%
Total Asset-Light			314,030						195,822						616,241						413,405
Other and eliminations(5)			(28,277)						(27,911)						(59,703)						(54,387)
Total consolidated operating expenses		$	874,674		92.2	%		$	606,945		96.7	%		$	1,671,696		94.0	%		$	1,300,525		97.9	%
OPERATING INCOME (LOSS)
Asset-Based		$	63,911					$	21,036					$	93,966					$	34,276
ArcBest			15,127						1,303						23,392						(106)
FleetNet			1,138						782						2,161						1,822
Total Asset-Light			16,265						2,085						25,553						1,716
Other and eliminations(5)			(5,877)						(2,696)						(13,029)						(7,748)
Total consolidated operating income		$	74,299					$	20,425					$	106,490					$	28,244

1. The six months ended June 30, 2021 includes an $8.6 million gain on the sale of an unutilized service center property.
2. Represents costs associated with the freight handling pilot test program at ABF Freight.
3. Depreciation and amortization consists primarily of amortization of intangibles, including customer relationships, and software associated with acquired businesses.
4. Gain recognized for the three and six months ended June 30, 2021 relates to the sale of the labor services portion of the ArcBest segment's moving business in May 2021.
5. '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		Six Months Ended
		June 30			June 30
		2021		2020			2021			2020
ArcBest Corporation - Consolidated		(Unaudited)
		($ thousands, except per share data)
Operating Income
Amounts on GAAP basis		$	74,299		$	20,425		$	106,490		$	28,244
Innovative technology costs, pre-tax(1)			7,432			4,699			14,342			9,299
Gain on sale of subsidiaries, pre-tax(2)			(6,923)			-			(6,923)			-
Non-GAAP amounts		$	74,808		$	25,124		$	113,909		$	37,543
Net Income
Amounts on GAAP basis		$	60,981		$	15,880		$	84,342		$	17,782
Innovative technology costs, after-tax (includes related financing costs)(1)			5,642			3,637			10,903			7,207
Gain on sale of subsidiaries, after-tax(2)			(5,437)			-			(5,437)			-
Nonunion pension expense, including settlement expense, after-tax(3)			-			-			-			66
Life insurance proceeds and changes in cash surrender value			(1,248)			(2,560)			(2,514)			1,245
Tax expense (benefit) from vested RSUs(4)			(6,796)			659			(6,931)			679
Non-GAAP amounts		$	53,142		$	17,616		$	80,363		$	26,979
Diluted Earnings Per Share
Amounts on GAAP basis		$	2.27		$	0.61		$	3.13		$	0.68
Innovative technology costs, after-tax (includes related financing costs)(1)			0.21			0.14			0.40			0.27
Gain on sale of subsidiaries, after-tax(2)			(0.20)			-			(0.20)			-
Nonunion pension expense, including settlement expense, after-tax(3)			-			-			-			-
Life insurance proceeds and changes in cash surrender value			(0.05)			(0.10)			(0.09)			0.05
Tax expense (benefit) from vested RSUs(4)			(0.25)			0.03			(0.26)			0.03
Non-GAAP amounts(5)		$	1.97		$	0.67		$	2.98		$	1.03

1. Represents costs associated with the freight handling pilot test program at ABF Freight.
2. Gain recognized for the three and six months ended June 30, 2021 relates to the sale of the labor services portion of ArcBest segment's moving business in May 2021.
3. For the six months ended June 30, 2020, represents pension settlement expense related to the Company's supplemental benefit plan.
4. The Company recognized the tax impact for the vesting of share-based compensation resulting in excess tax expense (benefit) during the three and six months ended June 30, 2021 and 2020.
5. Non-GAAP EPS is calculated in total and may not foot due to rounding.

		Three Months Ended		Six Months Ended
		June 30		June 30
		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		$	63,911		90.2	%		$	21,036		95.4	%		$	93,966		92.2	%		$	34,276		96.5	%
Innovative technology costs, pre-tax(1)			7,532		(1.2)				4,789		(1.0)				14,400		(1.2)				9,322		(1.0)
Non-GAAP amounts(3)		$	71,443		89.0	%		$	25,825		94.4	%		$	108,366		91.0	%		$	43,598		95.5	%
Asset-Light
ArcBest Segment
Operating Income (Loss) ($) and Operating Ratio (% of revenues)
Amounts on GAAP basis		$	15,127		94.4	%		$	1,303		99.1	%		$	23,392		95.5	%		$	(106)		100.0	%
Gain on sale of subsidiaries, pre-tax(2)			(6,923)		2.6				-		-				(6,923)		1.3				-		-
Non-GAAP amounts		$	8,204		97.0	%		$	1,303		99.1	%		$	16,469		96.8	%		$	(106)		100.0	%
FleetNet Segment
Operating Income ($) and Operating Ratio (% of revenues)
Amounts on GAAP basis		$	1,138		98.1	%		$	782		98.3	%		$	2,161		98.2	%		$	1,822		98.2	%
Total Asset-Light
Operating Income (Loss) ($) and Operating Ratio (% of revenues)
Amounts on GAAP basis		$	16,265		95.1	%		$	2,085		98.9	%		$	25,553		96.0	%		$	1,716		99.6	%
Gain on sale of subsidiaries, pre-tax(2)			(6,923)		2.1				-		-				(6,923)		1.1				-		-
Non-GAAP amounts		$	9,342		97.2	%		$	2,085		98.9	%		$	18,630		97.1	%		$	1,716		99.6	%
Other and Eliminations
Operating Loss ($)
Amounts on GAAP basis		$	(5,877)					$	(2,696)					$	(13,029)					$	(7,748)
Innovative technology costs, pre-tax(1)			(100)						(90)						(58)						(23)
Non-GAAP amounts		$	(5,977)					$	(2,786)					$	(13,087)					$	(7,771)

1. Represents costs associated with the freight handling pilot test program at ABF Freight.
2. Gain recognized for the three and six months ended June 30, 2021 relates to the sale of the labor services portion of the ArcBest segment's moving business in May 2021.

Effective Tax Rate Reconciliation
ArcBest Corporation - Consolidated
(Unaudited)
($ thousands, except percentages)		Three Months Ended June 30, 2021
					Other		Income		Income
		Operating		Income		Before Income		Tax		Net
		Income		(Costs)		Taxes		Provision		Income		Tax Rate(4)
Amounts on GAAP basis		$	74,299		$	(841)		$	73,458		$	12,477		$	60,981		17.0	%
Innovative technology costs(1)			7,432			166			7,598			1,956			5,642		25.7
Gain on sale of subsidiaries(2)			(6,923)			-			(6,923)			(1,486)			(5,437)		(21.5)
Life insurance proceeds and changes in cash surrender value			-			(1,248)			(1,248)			-			(1,248)		-
Tax benefit from vested RSUs(3)			-			-			-			6,796			(6,796)		-
Non-GAAP amounts		$	74,808		$	(1,923)		$	72,885		$	19,743		$	53,142		27.1	%

		Six Months Ended June 30, 2021
				Other		Income Before		Income
		Operating		Income		Income		Tax		Net
		Income		(Costs)		Taxes		Provision		Income		Tax Rate(4)
Amounts on GAAP basis		$	106,490		$	(1,685)		$	104,805		$	20,463		$	84,342		19.5	%
Innovative technology costs(1)			14,342			340			14,682			3,779			10,903		25.7
Gain on sale of subsidiaries(2)			(6,923)			-			(6,923)			(1,486)			(5,437)		(21.5)
Life insurance proceeds and changes in cash surrender value			-			(2,514)			(2,514)			-			(2,514)		-
Tax expense from vested RSUs(3)			-			-			-			6,931			(6,931)		-
Non-GAAP amounts		$	113,909		$	(3,859)		$	110,050		$	29,687		$	80,363		27.0	%

		Three Months Ended June 30, 2020
				Other		Income
		Operating		Income		Before Income		Income		Net
		Income		(Costs)		Taxes		Tax Provision		Income		Tax Rate(4)
Amounts on GAAP basis		$	20,425		$	309		$	20,734		$	4,854		$	15,880		23.4	%
Innovative technology costs(1)			4,699			199			4,898			1,261			3,637		25.7
Life insurance proceeds and changes in cash surrender value			-			(2,560)			(2,560)			-			(2,560)		-
Tax expense from vested RSUs(3)			-			-			-			(659)			659		-
Non-GAAP amounts		$	25,124		$	(2,052)		$	23,072		$	5,456		$	17,616		23.6	%

		Six Months Ended June 30, 2020
				Other		Income Before		Income
		Operating		Income		Income		Tax		Net
		Income		(Costs)		Taxes		Provision		Income		Tax Rate(4)
Amounts on GAAP basis		$	28,244		$	(5,125)		$	23,119		$	5,337		$	17,782		23.1	%
Innovative technology costs(1)			9,299			406			9,705			2,498			7,207		25.7
Nonunion pension expense, including settlement (4)			-			89			89			23			66		25.8
Life insurance proceeds and changes in cash surrender value			-			1,245			1,245			-			1,245		-
Tax expense from vested RSUs(3)			-			-			-			(679)			679		-
Non-GAAP amounts		$	37,543		$	(3,385)		$	34,158		$	7,179		$	26,979		21.0	%

1. Represents costs associated with the freight handling pilot test program at ABF Freight.
2. Gain recognized for the three and six months ended June 30, 2021 relates to the sale of the labor services portion of the ArcBest segment's moving business in May 2021.
3. The Company recognized the tax impact for the vesting of share-based compensation resulting in excess tax expense (benefit) during the three and six months ended June 30, 2021 and 2020.
4. For the six months ended June 30, 2020, represents pension settlement expense related to the Company's supplemental benefit plan.
5. 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.

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.

		Three Months Ended		Six Months Ended
		June 30			June 30
		2021		2020		2021		2020
		(Unaudited)
ArcBest Corporation - Consolidated Adjusted EBITDA		($ thousands)
Net Income		$	60,981		$	15,880		$	84,342		$	17,782
Interest and other related financing costs			2,274			3,378			4,702			6,325
Income tax provision			12,477			4,854			20,463			5,337
Depreciation and amortization			30,282			29,086			60,636			58,099
Amortization of share-based compensation			3,324			2,890			5,678			5,071
Amortization of net actuarial gains of benefit plans and pension settlement expense(1)			(134)			(148)			(269)			(204)
Consolidated Adjusted EBITDA		$	109,204		$	55,940		$	175,552		$	92,410

1. The six months ended June 30, 2020 includes pre-tax pension settlement expense of $0.1 million related to the Company's supplemental benefit plan.

		Three Months Ended		Six Months Ended
		June 30		June 30
		2021		2020		2021		2020
Asset-Light Adjusted EBITDA		(Unaudited)
		($ thousands)
ArcBest
Operating Income (Loss)		$	15,127		$	1,303		$	23,392		$	(106)
Depreciation and amortization(2)			2,366			2,449			4,752			4,919
Adjusted EBITDA		$	17,493		$	3,752		$	28,144		$	4,813
FleetNet
Operating Income		$	1,138		$	782		$	2,161		$	1,822
Depreciation and amortization(2)			413			402			828			793
Adjusted EBITDA		$	1,551		$	1,184		$	2,989		$	2,615
Total Asset-Light
Operating Income		$	16,265		$	2,085		$	25,553		$	1,716
Depreciation and amortization(2)			2,779			2,851			5,580			5,712
Adjusted EBITDA		$	19,044		$	4,936		$	31,133		$	7,428

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