Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 30, 2020 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 000-19969 | |
Entity Registrant Name | ARCBEST CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 71-0673405 | |
Entity Address, Address Line One | 8401 McClure Drive | |
Entity Address, City or Town | Fort Smith | |
Entity Address, State or Province | AR | |
Entity Address, Postal Zip Code | 72916 | |
City Area Code | 479 | |
Local Phone Number | 785-6000 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | ARCB | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 25,407,895 | |
Entity Central Index Key | 0000894405 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 267,645 | $ 201,909 |
Short-term investments | 83,411 | 116,579 |
Accounts receivable, less allowances (2020 - $7,343; 2019 - $5,448) | 323,760 | 282,579 |
Other accounts receivable, less allowances (2020 - $665; 2019 - $476) | 14,464 | 18,774 |
Prepaid expenses | 29,562 | 30,377 |
Prepaid and refundable income taxes | 6,163 | 9,439 |
Other | 5,235 | 4,745 |
TOTAL CURRENT ASSETS | 730,240 | 664,402 |
PROPERTY, PLANT AND EQUIPMENT | ||
Land and structures | 346,322 | 342,122 |
Revenue equipment | 912,924 | 896,020 |
Service, office, and other equipment | 233,689 | 233,354 |
Software | 158,454 | 151,068 |
Leasehold improvements | 14,064 | 10,383 |
TOTAL PROPERTY, PLANT AND EQUIPMENT, Gross | 1,665,453 | 1,632,947 |
Less allowances for depreciation and amortization | 987,396 | 949,355 |
PROPERTY, PLANT AND EQUIPMENT, net | 678,057 | 683,592 |
GOODWILL | 88,320 | 88,320 |
INTANGIBLE ASSETS, net | 56,016 | 58,832 |
OPERATING RIGHT-OF-USE ASSETS | 112,568 | 68,470 |
DEFERRED INCOME TAXES | 6,975 | 7,725 |
OTHER LONG-TERM ASSETS | 74,055 | 79,866 |
TOTAL ASSETS | 1,746,231 | 1,651,207 |
CURRENT LIABILITIES | ||
Accounts payable | 162,021 | 134,374 |
Income taxes payable | 5 | 12 |
Accrued expenses | 249,172 | 232,321 |
Current portion of long-term debt | 65,887 | 57,305 |
Current portion of operating lease liabilities | 20,431 | 20,265 |
TOTAL CURRENT LIABILITIES | 497,516 | 444,277 |
LONG-TERM DEBT, less current portion | 226,037 | 266,214 |
OPERATING LEASE LIABILITIES, less current portion | 96,549 | 52,277 |
POSTRETIREMENT LIABILITIES, less current portion | 20,486 | 20,294 |
OTHER LONG-TERM LIABILITIES | 35,377 | 38,892 |
DEFERRED INCOME TAXES | 67,627 | 66,210 |
STOCKHOLDERS' EQUITY | ||
Common stock, $0.01 par value, authorized 70,000,000 shares; issued 2020: 29,039,994 shares, 2019: 28,810,902 shares | 290 | 288 |
Additional paid-in capital | 339,908 | 333,943 |
Retained earnings | 574,053 | 533,187 |
Treasury stock, at cost, 2020: 3,632,099 shares; 2019: 3,404,639 shares | (110,245) | (104,578) |
Accumulated other comprehensive income (loss) | (1,367) | 203 |
TOTAL STOCKHOLDERS' EQUITY | 802,639 | 763,043 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 1,746,231 | $ 1,651,207 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowances (in dollars) | $ 7,343 | $ 5,448 |
Other accounts receivable, allowances (in dollars) | $ 665 | $ 476 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares | 70,000,000 | 70,000,000 |
Common stock, issued shares | 29,039,994 | 28,810,902 |
Treasury stock, at cost, shares | 3,632,099 | 3,404,639 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
REVENUES | $ 794,980 | $ 787,563 | $ 2,123,749 | $ 2,270,892 |
OPERATING EXPENSES | 755,198 | 756,355 | 2,055,723 | 2,195,893 |
OPERATING INCOME | 39,782 | 31,208 | 68,026 | 74,999 |
OTHER INCOME (COSTS) | ||||
Interest and dividend income | 756 | 1,768 | 3,122 | 4,862 |
Interest and other related financing costs | (2,860) | (2,900) | (9,185) | (8,593) |
Other, net | 1,500 | (6,734) | 334 | (7,770) |
TOTAL OTHER INCOME (COSTS) | (604) | (7,866) | (5,729) | (11,501) |
INCOME BEFORE INCOME TAXES | 39,178 | 23,342 | 62,297 | 63,498 |
INCOME TAX PROVISION | 9,774 | 7,072 | 15,111 | 17,964 |
NET INCOME | $ 29,404 | $ 16,270 | $ 47,186 | $ 45,534 |
EARNINGS PER COMMON SHARE | ||||
Basic (in dollars per share) | $ 1.15 | $ 0.64 | $ 1.86 | $ 1.78 |
Diluted (in dollars per share) | $ 1.11 | $ 0.62 | $ 1.79 | $ 1.72 |
AVERAGE COMMON SHARES OUTSTANDING | ||||
Basic (in shares) | 25,470,094 | 25,527,982 | 25,403,786 | 25,550,365 |
Diluted (in shares) | 26,592,457 | 26,416,595 | 26,289,946 | 26,461,668 |
CASH DIVIDENDS DECLARED PER COMMON SHARE (in dollars per share) | $ 0.08 | $ 0.08 | $ 0.24 | $ 0.24 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
NET INCOME | $ 29,404 | $ 16,270 | $ 47,186 | $ 45,534 |
Pension and other postretirement benefit plans: | ||||
Net actuarial loss, net of tax of: (2020 - Three-month period $-, Nine-month period $3; 2019 - Three-month period $310, Nine-month period $100) | (894) | (8) | (291) | |
Pension settlement expense, including termination expense, net of tax of: (2020 - Three-month period $-, Nine-month period $23; 2019 - Three-month period $651, Nine-month period $1,072) | 5,850 | 66 | 7,063 | |
Amortization of unrecognized net periodic benefit cost (credit), net of tax of: (2020 - Three-month period $38, Nine-month period $114; 2019 - Three-month period $75, Nine-month period $252) | ||||
Net actuarial (gain) loss | (110) | 222 | (327) | 746 |
Prior service credit | (6) | (18) | ||
Interest rate swap and foreign currency translation: | ||||
Change in unrealized loss on interest rate swap, net of tax of: (2020 - Three-month period $48, Nine-month period $366; 2019 - Three-month period $120, Nine-month period $425) | 136 | (338) | (1,035) | (1,198) |
Change in foreign currency translation, net of tax of: (2020 - Three-month period $246, Nine-month period $94; 2019 - Three-month period $12, Nine-month period $108) | 697 | (35) | (266) | 306 |
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | 723 | 4,799 | (1,570) | 6,608 |
TOTAL COMPREHENSIVE INCOME | $ 30,127 | $ 21,069 | $ 45,616 | $ 52,142 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net actuarial loss, tax (benefit) | $ (310) | $ (3) | $ (100) | |
Pension settlement expense, tax | 651 | 23 | 1,072 | |
Amortization of unrecognized net periodic benefit costs (credit), tax | $ (38) | 75 | (114) | 252 |
Change in unrealized income (loss) on interest rate swap, tax (benefit) | 48 | (120) | (366) | (425) |
Change in foreign currency translation, tax expense (benefit) | $ 246 | $ (12) | $ (94) | $ 108 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common StockCumulative Effect, Period of Adoption, Adjusted Balance | Common Stock | Additional Paid-In CapitalCumulative Effect, Period of Adoption, Adjusted Balance | Additional Paid-In Capital | Retained EarningsCumulative Effect, Period of Adoption, Adjustment | Retained EarningsCumulative Effect, Period of Adoption, Adjusted Balance | Retained Earnings | Treasury StockCumulative Effect, Period of Adoption, Adjusted Balance | Treasury Stock | Accumulated Other Comprehensive Income (Loss)Cumulative Effect, Period of Adoption, Adjusted Balance | Accumulated Other Comprehensive Income (Loss) | Cumulative Effect, Period of Adoption, Adjustment | Cumulative Effect, Period of Adoption, Adjusted Balance | Total |
Balances at Dec. 31, 2018 | $ 287 | $ 325,712 | $ 501,389 | $ (95,468) | $ (14,238) | $ 717,682 | ||||||||
Balances (in shares) at Dec. 31, 2018 | 28,685 | 3,098 | ||||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||
Net income | 4,888 | 4,888 | ||||||||||||
Other comprehensive income (loss) net of tax | 1,850 | 1,850 | ||||||||||||
Tax effect of share-based compensation plans | (8) | (8) | ||||||||||||
Share-based compensation expense | 2,058 | 2,058 | ||||||||||||
Purchase of treasury stock | $ (2,663) | (2,663) | ||||||||||||
Purchase of treasury stock (in shares) | 74 | |||||||||||||
Dividends declared on common stock | (2,052) | (2,052) | ||||||||||||
Balances at Mar. 31, 2019 | $ 287 | 327,762 | 504,225 | $ (98,131) | (12,388) | 721,755 | ||||||||
Balances (in shares) at Mar. 31, 2019 | 28,685 | 3,172 | ||||||||||||
Balances at Dec. 31, 2018 | $ 287 | 325,712 | 501,389 | $ (95,468) | (14,238) | 717,682 | ||||||||
Balances (in shares) at Dec. 31, 2018 | 28,685 | 3,098 | ||||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||
Net income | 45,534 | |||||||||||||
Other comprehensive income (loss) net of tax | 6,608 | 6,608 | ||||||||||||
Balances at Sep. 30, 2019 | $ 288 | 331,773 | 540,778 | $ (101,583) | (7,630) | 763,626 | ||||||||
Balances (in shares) at Sep. 30, 2019 | 28,801 | 3,300 | ||||||||||||
Balances at Mar. 31, 2019 | $ 287 | 327,762 | 504,225 | $ (98,131) | (12,388) | 721,755 | ||||||||
Balances (in shares) at Mar. 31, 2019 | 28,685 | 3,172 | ||||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||
Net income | 24,376 | 24,376 | ||||||||||||
Other comprehensive income (loss) net of tax | (41) | (41) | ||||||||||||
Issuance of common stock under share-based compensation plans | $ 1 | (1) | ||||||||||||
Issuance of common stock under share-based compensation plans (in shares) | 101 | |||||||||||||
Tax effect of share-based compensation plans | (1,174) | (1,174) | ||||||||||||
Share-based compensation expense | 2,801 | 2,801 | ||||||||||||
Purchase of treasury stock | $ (2,508) | (2,508) | ||||||||||||
Purchase of treasury stock (in shares) | 94 | |||||||||||||
Dividends declared on common stock | (2,050) | (2,050) | ||||||||||||
Balances at Jun. 30, 2019 | $ 288 | 329,388 | 526,551 | $ (100,639) | (12,429) | 743,159 | ||||||||
Balances (in shares) at Jun. 30, 2019 | 28,786 | 3,266 | ||||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||
Net income | 16,270 | 16,270 | ||||||||||||
Other comprehensive income (loss) net of tax | 4,799 | 4,799 | ||||||||||||
Issuance of common stock under share-based compensation plans (in shares) | 15 | |||||||||||||
Tax effect of share-based compensation plans | (24) | (24) | ||||||||||||
Share-based compensation expense | 2,409 | 2,409 | ||||||||||||
Purchase of treasury stock | $ (944) | (944) | ||||||||||||
Purchase of treasury stock (in shares) | 34 | |||||||||||||
Dividends declared on common stock | (2,043) | (2,043) | ||||||||||||
Balances at Sep. 30, 2019 | $ 288 | 331,773 | 540,778 | $ (101,583) | (7,630) | 763,626 | ||||||||
Balances (in shares) at Sep. 30, 2019 | 28,801 | 3,300 | ||||||||||||
Balances at Dec. 31, 2019 | $ 288 | $ 288 | $ 333,943 | 333,943 | $ (198) | $ 532,989 | 533,187 | $ (104,578) | $ (104,578) | $ 203 | 203 | $ (198) | $ 762,845 | 763,043 |
Balances (in shares) at Dec. 31, 2019 | 28,811 | 28,811 | 3,405 | 3,405 | ||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||
Net income | 1,902 | 1,902 | ||||||||||||
Other comprehensive income (loss) net of tax | (2,467) | (2,467) | ||||||||||||
Issuance of common stock under share-based compensation plans (in shares) | 6 | |||||||||||||
Tax effect of share-based compensation plans | (60) | (60) | ||||||||||||
Share-based compensation expense | 2,181 | 2,181 | ||||||||||||
Purchase of treasury stock | $ (3,162) | (3,162) | ||||||||||||
Purchase of treasury stock (in shares) | 150 | |||||||||||||
Dividends declared on common stock | (2,033) | (2,033) | ||||||||||||
Balances at Mar. 31, 2020 | $ 288 | 336,064 | 532,858 | $ (107,740) | (2,264) | 759,206 | ||||||||
Balances (in shares) at Mar. 31, 2020 | 28,817 | 3,555 | ||||||||||||
Balances at Dec. 31, 2019 | $ 288 | $ 288 | $ 333,943 | 333,943 | $ (198) | $ 532,989 | 533,187 | $ (104,578) | $ (104,578) | $ 203 | 203 | $ (198) | $ 762,845 | 763,043 |
Balances (in shares) at Dec. 31, 2019 | 28,811 | 28,811 | 3,405 | 3,405 | ||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||
Net income | 47,186 | |||||||||||||
Other comprehensive income (loss) net of tax | (1,570) | (1,570) | ||||||||||||
Balances at Sep. 30, 2020 | $ 290 | 339,908 | 574,053 | $ (110,245) | (1,367) | 802,639 | ||||||||
Balances (in shares) at Sep. 30, 2020 | 29,040 | 3,632 | ||||||||||||
Balances at Mar. 31, 2020 | $ 288 | 336,064 | 532,858 | $ (107,740) | (2,264) | 759,206 | ||||||||
Balances (in shares) at Mar. 31, 2020 | 28,817 | 3,555 | ||||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||
Net income | 15,880 | 15,880 | ||||||||||||
Other comprehensive income (loss) net of tax | 174 | 174 | ||||||||||||
Issuance of common stock under share-based compensation plans | $ 2 | (2) | ||||||||||||
Issuance of common stock under share-based compensation plans (in shares) | 141 | |||||||||||||
Tax effect of share-based compensation plans | (1,010) | (1,010) | ||||||||||||
Share-based compensation expense | 2,890 | 2,890 | ||||||||||||
Dividends declared on common stock | (2,049) | (2,049) | ||||||||||||
Balances at Jun. 30, 2020 | $ 290 | 337,942 | 546,689 | $ (107,740) | (2,090) | 775,091 | ||||||||
Balances (in shares) at Jun. 30, 2020 | 28,958 | 3,555 | ||||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||
Net income | 29,404 | 29,404 | ||||||||||||
Other comprehensive income (loss) net of tax | 723 | 723 | ||||||||||||
Issuance of common stock under share-based compensation plans (in shares) | 82 | |||||||||||||
Tax effect of share-based compensation plans | (919) | (919) | ||||||||||||
Share-based compensation expense | 2,885 | 2,885 | ||||||||||||
Purchase of treasury stock | $ (2,505) | (2,505) | ||||||||||||
Purchase of treasury stock (in shares) | 77 | |||||||||||||
Dividends declared on common stock | (2,040) | (2,040) | ||||||||||||
Balances at Sep. 30, 2020 | $ 290 | $ 339,908 | $ 574,053 | $ (110,245) | $ (1,367) | $ 802,639 | ||||||||
Balances (in shares) at Sep. 30, 2020 | 29,040 | 3,632 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
OPERATING ACTIVITIES | ||
Net income | $ 47,186 | $ 45,534 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 85,189 | 79,967 |
Amortization of intangibles | 2,942 | 3,365 |
Pension settlement expense, including termination expense | 89 | 8,135 |
Share-based compensation expense | 7,956 | 7,268 |
Provision for losses on accounts receivable | 2,170 | 832 |
Change in deferred income taxes | 2,831 | 14,099 |
Gain on sale of property and equipment and lease termination | (3,280) | (1,384) |
Changes in operating assets and liabilities: | ||
Receivables | (38,905) | 4,216 |
Prepaid expenses | 809 | (265) |
Other assets | 3,918 | (4,236) |
Income taxes | 3,065 | (7,883) |
Operating right-of-use assets and lease liabilities, net | 234 | 526 |
Accounts payable, accrued expenses, and other liabilities | 37,062 | (12,161) |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 151,266 | 138,013 |
INVESTING ACTIVITIES | ||
Purchases of property, plant and equipment, net of financings | (20,146) | (69,773) |
Proceeds from sale of property and equipment | 8,943 | 4,748 |
Purchases of short-term investments | (159,253) | (105,747) |
Proceeds from sale of short-term investments | 192,563 | 88,730 |
Capitalization of internally developed software | (9,568) | (8,500) |
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | 12,539 | (90,542) |
FINANCING ACTIVITIES | ||
Borrowings under credit facilities | 180,000 | |
Borrowings under accounts receivable securitization program | 45,000 | |
Proceeds from notes payable | 9,552 | |
Payments on long-term debt | (309,640) | (43,773) |
Net change in book overdrafts | 349 | (5,570) |
Deferred financing costs | (562) | |
Payment of common stock dividends | (6,122) | (6,145) |
Purchases of treasury stock | (5,667) | (6,115) |
Payments for tax withheld on share-based compensation | (1,989) | (1,206) |
NET CASH USED IN FINANCING ACTIVITIES | (98,069) | (53,819) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 65,736 | (6,348) |
Cash and cash equivalent at beginning of period | 201,909 | 190,186 |
CASH AND CASH EQUIVALENTS CASH AT END OF PERIOD | 267,645 | 183,838 |
NONCASH INVESTING ACTIVITIES | ||
Equipment financed | 53,045 | 40,966 |
Accruals for equipment received | 2,146 | 18,949 |
Lease liabilities arising from obtaining right-of-use assets | $ 60,535 | $ 26,810 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION | 9 Months Ended |
Sep. 30, 2020 | |
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION | |
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION | NOTE A – ORGANIZATIO N AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION ArcBest Corporation ™ The Asset-Based segment represented approximately 69% of the Company’s total revenues before other revenues and intercompany eliminations for the nine months ended September 30, 2020. As of September 2020, 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 2019 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 Accounting Policies The Company’s accounting policies are described in Note B to the consolidated financial statements included in Part II, Item 8 of the Company’s 2019 Annual Report on Form 10-K. The following policies have been updated during the nine months ended September 30, 2020 for the adoption of accounting standard updates disclosed within this Note. Allowances: Financial Instruments – Credit Losses The Company maintains allowances for credit losses (formerly known as the allowance for doubtful accounts) and revenue adjustments on its trade receivables. The Company estimates the allowance for credit losses based on historical write-offs, factors surrounding the credit risk of specific customers, and forecasts of future economic conditions. In order to gather information regarding these trends and factors, the Company performs ongoing credit evaluations of customers, an analysis of accounts receivable aging by business segment, and an analysis of future economic conditions at period end. The allowance for revenue adjustments is an estimate based on historical revenue adjustments and current information regarding trends and business changes. Actual write-offs or adjustments could differ from the allowance estimates due to a number of factors, including future changes in the forecasted economic environment or new factors and risks surrounding a particular customer. Accounts receivable are written off when the accounts are turned over to a collection agency or when the accounts are determined to be uncollectible. Actual write-offs and adjustments are charged against the allowances for doubtful accounts and revenue adjustments. Adopted Accounting Pronouncements As previously discussed within Accounting Policies in this Note, effective January 1, 2020, the Company adopted ASC Topic 326, which replaces the incurred loss methodology model with an expected loss methodology referred to as the CECL methodology for the Company’s trade receivables and other receivables. The Company adopted ASC Topic 326 with the modified retrospective approach. Under this approach, results for reporting periods after January 1, 2020 are presented under ASC Topic 326 while prior period amounts continue to be reported in accordance with previously applicable accounting guidance. The Company recorded a decrease to retained earnings of $0.2 million as of January 1, 2020 for the cumulative effect of adopting ASC Topic 326. On January 1, 2020 the Company adopted ASC Subtopic 350-40, Intangibles – Goodwill and Other – Internal-Use Software: Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement , (“ASC Subtopic 350-40”) which was amended by the Financial Accounting Standards Board in August 2018. The amendments to ASC Subtopic 350-40 clarify the accounting treatment for implementation costs incurred by the customer in a cloud computing software arrangement. The amendments allow implementation costs of cloud computing arrangements to be capitalized using the same method prescribed by ASC Subtopic 350-40, Internal-Use Software . The amendments to ASC Subtopic 350-40 were adopted on a prospective basis and did not have an impact on the Company’s consolidated financial statements. On January 1, 2020 the Company adopted ASC Topic 820, Fair Value Measurement , which was amended to modify the disclosure requirements of fair value measurements, primarily impacting the disclosures for Level 3 fair value measurements. The amendment did not have an impact on the Company’s financial statement disclosures as of September 30, 2020. The amendments to ASC Topic 848, Reference Rate Reform Accounting Pronouncements Not Yet Adopted ASC Topic 740, Income Taxes Management believes there is no other new accounting guidance issued but not yet effective that is relevant to the Company’s current financial statements. |
FINANCIAL INSTRUMENTS AND FAIR
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2020 | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | 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: September 30 December 31 2020 2019 (in thousands) Cash and cash equivalents Cash deposits (1) $ 236,838 $ 166,619 Variable rate demand notes (1)(2) 14,306 14,750 Money market funds (3) 16,501 20,540 Total cash and cash equivalents $ 267,645 $ 201,909 Short-term investments Certificates of deposit (1) $ 59,243 $ 69,314 U.S. Treasury securities (4) 24,168 47,265 Total short-term investments $ 83,411 $ 116,579 (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 with a maturity date within 90 days of the purchase date are classified as cash equivalents. 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 September 30, 2020 and December 31, 2019, cash, cash equivalents, and short-term investments totaling $118.1 million and $66.2 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. ● Level 2 — Quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. ● Level 3 — Unobservable inputs (Company’s market assumptions) that are significant to the valuation model. Fair value and carrying value disclosures of financial instruments are presented in the following table: September 30 December 31 2020 2019 (in thousands) Carrying Fair Carrying Fair Value Value Value Value Credit Facility (1) $ 70,000 $ 70,000 $ 70,000 $ 70,000 Accounts receivable securitization borrowings (2) — — 40,000 40,000 Notes payable (3) 221,914 225,330 213,504 216,432 New England Pension Fund withdrawal liability (4) 21,563 26,306 22,018 24,462 $ 313,477 $ 321,636 $ 345,522 $ 350,894 (1) The revolving credit facility (the “Credit Facility”) carries a variable interest rate based on LIBOR, plus a margin, that is considered to be priced at market for debt instruments having similar terms and collateral requirements (Level 2 of the fair value hierarchy). (2) Borrowings under the Company’s accounts receivable securitization program carry a variable interest rate based on LIBOR, plus a margin. The borrowings are considered to be priced at market for debt instruments having similar terms and collateral requirements (Level 2 of the fair value hierarchy). (3) Fair value of the notes payable was determined using a present value income approach based on quoted interest rates from lending institutions with which the Company would enter into similar transactions (Level 2 of the fair value hierarchy). (4) ABF Freight’s multiemployer pension plan obligation with the New England Teamsters and Trucking Industry Pension Fund (the “New England Pension Fund”) was restructured under a transition agreement effective on August 1, 2018, which resulted in a related withdrawal liability (see in Note I to the consolidated financial statements in Item 8 of the Company’s 2019 Annual Report on Form 10-K). The fair value of the outstanding withdrawal liability is equal to the present value of the future withdrawal liability payments, discounted at an interest rate of 2.4% and 3.4% at September 30, 2020 and December 31, 2019, respectively, determined using the 20-year U.S. Treasury rate plus a spread (Level 2 of the fair value hierarchy). Included in other long-term liabilities with the current portion included in accrued expenses. Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table presents the assets and liabilities that are measured at fair value on a recurring basis: September 30, 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) $ 16,501 $ 16,501 $ — $ — Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan (2) 2,523 2,523 — — $ 19,024 $ 19,024 $ — $ — Liabilities: Interest rate swaps (3) $ 1,964 $ — $ 1,964 $ — December 31, 2019 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) $ 20,540 $ 20,540 $ — $ — Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan (2) 2,427 2,427 — — $ 22,967 $ 22,967 $ — $ — Liabilities: Interest rate swaps (3) $ 563 $ — $ 563 $ — (1) Included in cash and cash equivalents. (2) Nonqualified deferred compensation plan investments consist of U.S. and international equity mutual funds, government and corporate bond mutual funds, and money market funds which are held in a trust with a third-party brokerage firm. Included in other long-term assets, with a corresponding liability reported within other long-term liabilities. (3) Included in other long-term liabilities. The fair values of the interest rate swaps were determined by discounting future cash flows and receipts based on expected interest rates observed in market interest rate curves adjusted for estimated credit valuation considerations reflecting nonperformance risk of the Company and the counterparty, which are considered to be in Level 3 of the fair value hierarchy. The Company assessed Level 3 inputs as insignificant to the valuation at September 30, 2020 and December 31, 2019 and considers the interest rate swap valuations in Level 2 of the fair value hierarchy. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2020 | |
GOODWILL AND INTANGIBLE ASSETS | |
GOODWILL AND INTANGIBLE ASSETS | NOTE C – GOODWILL AND INTANGIBLE ASSETS Goodwill represents the excess of cost over the fair value of net identifiable tangible and intangible assets acquired. Goodwill by reportable operating segment consisted of $87.7 million and $0.6 million reported in the ArcBest and FleetNet segments, respectively, for both September 30, 2020 and December 31, 2019. Intangible assets consisted of the following: September 30, 2020 December 31, 2019 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 $ 29,526 $ 23,195 $ 52,721 $ 26,667 $ 26,054 Other 12 1,420 899 521 1,294 816 478 14 54,141 30,425 23,716 54,015 27,483 26,532 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 $ 86,441 $ 30,425 $ 56,016 $ 86,315 $ 27,483 $ 58,832 The future amortization for intangible assets acquired through business acquisitions as of September 30, 2020 was as follows: Amortization of Intangible Assets (in thousands) Remainder of 2020 $ 977 2021 3,871 2022 3,844 2023 3,746 2024 3,696 Thereafter 7,582 Total amortization $ 23,716 Goodwill and indefinite-lived intangible assets are not amortized, but rather are evaluated for impairment annually or more frequently if indicators of impairment exist. Due to the impact of COVID-19 on business and freight levels, the Company considered several factors to evaluate if it was more likely than not that impairment of these assets existed as of September 30, 2020. In making this analysis, management considered current and forecasted business levels and estimated future cash flows over several years. Management’s assumptions include a continuing economic recovery through the remainder of 2020 and into 2021. Based on the analysis performed, management determined it was more likely than not that goodwill and indefinite-lived intangible assets were not impaired as of September 30, 2020. The evaluation of goodwill impairment requires management’s judgment and the use of estimates and assumptions to determine if indicators of impairment exist at an interim date. Assumptions require considerable judgment because changes in broad economic factors and industry factors can result in variable and volatile fair values. Changes in key estimates and assumptions that impact the fair value of the operations, including the impact of COVID-19 on the reporting units, could materially affect future analyses and result in material impairments of goodwill and indefinite-lived intangible assets. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2020 | |
INCOME TAXES | |
INCOME TAXES | NOTE D – INCOME TAXES The effective tax rate was 24.9% and 24.3% for the three and nine months ended September 30, 2020, respectively. The effective tax rate was 30.3% and 28.3% for the three and nine months ended September 30, 2019, respectively. State tax rates vary among states and average approximately 6.0% to 6.5%, although some state rates are higher and a small number of states do not impose an income tax. For the three and nine months ended September 30, 2020, the difference between the Company’s effective tax rate and the federal statutory rate primarily resulted from state income taxes, nondeductible expenses, changes in the cash surrender value of life insurance, federal alternative fuel and research and development tax credits, changes in tax valuation allowances, and tax expense (benefit) from the vesting of stock awards. For the nine months ended September 30, 2020, the difference between the Company’s effective tax rate and the federal statutory rate also resulted from the reversal of an uncertain tax position. For the three and nine months ended September 30, 2019, the difference between the Company’s effective tax rate and the federal statutory rate primarily resulted from state income taxes, nondeductible expenses, changes in the cash surrender value of life insurance, tax expense from the vesting of stock awards, and noncash pension settlement expense related to changes in other comprehensive income for which there was no tax benefit. As of September 30, 2020, the Company’s deferred tax liabilities, which will reverse in future years, exceeded the deferred tax assets. The Company evaluated the total deferred tax assets at September 30, 2020 and concluded that, other than for certain deferred tax assets related to foreign tax credit carryforwards, the assets did not exceed the amount for which realization is more likely than not. In making this determination, the Company considered the future reversal of existing taxable temporary differences, future taxable income, and tax planning strategies. Valuation allowances for deferred tax assets totaled $1.0 million and $0.7 million at September 30, 2020 and December 31, 2019, respectively. The Company had a reserve for uncertain tax positions of $0.9 million at December 31, 2019. The reserve was reversed in the first quarter of 2020 due to the expiration of the statute of limitations. The Company paid federal, state, and foreign income taxes of $9.2 million and $11.7 million during the nine months ended September 30, 2020 and 2019, respectively. The Company received refunds of $0.4 million of federal and state income taxes and refunds of less than $0.1 million of state income taxes that were paid in prior years during the nine months ended September 30, 2020 and 2019, respectively. |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2020 | |
Leases | |
LEASES | NOTE E – LEASES The Company leases, under finance and operating lease arrangements, certain facilities used primarily in the Asset-Based segment service center operations, certain revenue equipment used in the ArcBest segment operations, and certain other office equipment. The components of operating lease expense were as follows: Three Months Ended Nine Months Ended September 30 September 30 2020 2019 2020 2019 (in thousands) Operating lease expense $ 6,351 $ 5,651 $ 17,950 $ 16,632 Variable lease expense 665 878 2,248 2,491 Sublease income (120) (99) (254) (235) Total operating lease expense $ 6,896 $ 6,430 $ 19,944 $ 18,888 The operating cash flows from operating lease activity were as follows: Nine Months Ended September 30, 2020 September 30, 2019 (in thousands) Noncash change in operating right-of-use assets $ 15,718 $ 15,093 Change in operating lease liabilities (15,484) (14,567) Operating right-of-use-assets and lease liabilities, net $ 234 $ 526 Cash paid for amounts included in the measurement of operating lease liabilities $ (17,715) $ (16,256) Maturities of operating lease liabilities at September 30, 2020 were as follows: Equipment Land and and Total Structures Other (in thousands) Remainder of 2020 $ 5,941 $ 5,713 $ 228 2021 23,560 23,283 277 2022 20,008 19,997 11 2023 15,755 15,755 — 2024 13,766 13,766 — Thereafter 51,827 51,827 — Total lease payments 130,857 130,341 516 Less imputed interest (13,877) (13,872) (5) Total $ 116,980 $ 116,469 $ 511 |
LONG-TERM DEBT AND FINANCING AR
LONG-TERM DEBT AND FINANCING ARRANGEMENTS | 9 Months Ended |
Sep. 30, 2020 | |
LONG-TERM DEBT AND FINANCING ARRANGEMENTS | |
LONG-TERM DEBT AND FINANCING ARRANGEMENTS | NOTE F – LONG-TERM DEBT AND FINANCING ARRANGEMENTS Long-Term Debt Obligations Long-term debt consisted of borrowings outstanding under the Company’s revolving credit facility and accounts receivable securitization program, both of which are further described in Financing Arrangements within this Note, and notes payable and finance lease obligations related to the financing of revenue equipment (tractors and trailers used primarily in Asset-Based segment operations), certain other equipment, and software as follows: September 30 December 31 2020 2019 (in thousands) Credit Facility (interest rate of 1.3% (1) $ 70,000 $ 70,000 Accounts receivable securitization borrowings — 40,000 Notes payable (weighted-average interest rate of 3.0% at September 30, 2020) 221,914 213,504 Finance lease obligations (weighted-average interest rate of 3.3% at September 30, 2020) 10 15 291,924 323,519 Less current portion 65,887 57,305 Long-term debt, less current portion $ 226,037 $ 266,214 (1) The interest rate swap mitigates interest rate risk by effectively converting $50.0 million of borrowings under the Credit Facility from variable-rate interest to fixed-rate interest with a per annum rate of 3.12% and 2.98% based on the margin of the Credit Facility as of September 30, 2020 and December 31, 2019, respectively. Scheduled maturities of long-term debt obligations as of September 30, 2020 were as follows: Credit Notes Finance Lease Total Facility (1) Payable Obligations (in thousands) Due in one year or less $ 72,505 $ 899 $ 71,599 $ 7 Due after one year through two years 66,329 885 65,441 3 Due after two years through three years 50,883 908 49,975 — Due after three years through four years 33,744 994 32,750 — Due after four years through five years 84,331 70,000 14,331 — Due after five years 133 — 133 — Total payments 307,925 73,686 234,229 10 Less amounts representing interest 16,001 3,686 12,315 — Long-term debt $ 291,924 $ 70,000 $ 221,914 $ 10 (1) The future interest payments included in the scheduled maturities due are calculated using variable interest rates based on the LIBOR swap curve, plus the anticipated applicable margin. Assets securing notes payable or held under finance leases were included in property, plant and equipment as follows: September 30 December 31 2020 2019 (in thousands) Revenue equipment $ 317,318 $ 265,315 Software — 2,140 Service, office, and other equipment 26,270 26,344 Total assets securing notes payable or held under finance leases 343,588 293,799 Less accumulated depreciation and amortization (1) 103,425 71,405 Net assets securing notes payable or held under finance leases $ 240,163 $ 222,394 (1) Amortization of assets held under finance leases and depreciation of assets securing notes payable are included in depreciation expense. Financing Arrangements Credit Facility The Company has a revolving credit facility (the “Credit Facility”) under its Third Amended and Restated Credit Agreement (the “Credit Agreement”) with an initial maximum credit amount of $250.0 million, including a swing line facility in an aggregate amount of up to $25.0 million and a letter of credit sub-facility providing for the issuance of letters of credit up to an aggregate amount of $20.0 million. The Company may request additional revolving commitments or incremental term loans thereunder up to an aggregate amount of $125.0 million, subject to certain additional conditions as provided in the Credit Agreement. The Company borrowed an additional $180.0 million under the Credit Facility in March 2020 as a precautionary measure to preserve financial flexibility during the COVID-19 pandemic, and repaid the borrowing in August 2020 . As of September 30, 2020, the Company had available borrowing capacity of $180.0 million under the initial maximum credit amount of the Credit Facility. Principal payments under the Credit Facility are due upon maturity of the facility on October 1, 2024; however, borrowings may be repaid, at the Company’s discretion, in whole or in part at any time, without penalty, subject to required notice periods and compliance with minimum prepayment amounts. Borrowings under the Credit Agreement can either be, at the Company’s election: (i) at an alternate base rate (as defined in the Credit Agreement) plus a spread; or (ii) at a Eurodollar rate (as defined in the Credit Agreement) plus a spread. The applicable spread is dependent upon the Company’s Adjusted Leverage Ratio (as defined in the Credit Agreement). The Credit Agreement contains conditions, representations and warranties, events of default, and indemnification provisions that are customary for financings of this type, including, but not limited to, a minimum interest coverage ratio, a maximum adjusted leverage ratio, and limitations on incurrence of debt, investments, liens on assets, certain sale and leaseback transactions, transactions with affiliates, mergers, consolidations, purchases and sales of assets, and certain restricted payments. The Company was in compliance with the covenants under the Credit Agreement at September 30, 2020. Interest Rate Swaps The Company has an interest rate swap agreement with a $50.0 million notional amount which started on January 2, 2020 and will mature on June 30, 2022. The Company receives floating-rate interest amounts based on one-month LIBOR in exchange for fixed-rate interest payments of 1.99% over the life of the agreement. The interest rate swap mitigates interest rate risk by effectively converting $50.0 million of borrowings under the Credit Facility from variable-rate interest to fixed-rate interest with a per annum rate of 3.12% based on the margin of the Credit Facility as of September 30, 2020. The fair value of the interest rate swap of $1.7 million and $0.6 million was recorded in other long-term liabilities in the consolidated balance sheet at September 30, 2020 and December 31, 2019, respectively. The Company had a five-year interest rate swap agreement with a $50.0 million notional amount that matured on January 2, 2020 for which less than $0.1 million was recorded in other long-term liabilities in the consolidated balance sheet at December 31, 2019. The unrealized gain or loss on the interest rate swap instruments was reported as a component of accumulated other comprehensive loss, net of tax, in stockholders’ equity at September 30, 2020 and December 31, 2019, and the change in the unrealized income or loss on the interest rate swaps for the three and nine months ended September 30, 2020 and 2019 was reported in other comprehensive income (loss), net of tax, in the consolidated statements of comprehensive income. The interest rate swaps are subject to certain customary provisions that could allow the counterparty to request immediate settlement of the fair value liability or asset upon violation of any or all of the provisions. The Company was in compliance with all provisions of the interest rate swap agreements at September 30, 2020. On May 4, 2020, the Company extended the term of its $50.0 million notional amount interest rate swap agreement from June 30, 2022 to October 1, 2024. The Company will receive floating-rate interest amounts based on one-month LIBOR in exchange for fixed-rate interest payments of 0.43% beginning on June 30, 2022 throughout the remaining term of the agreement. From June 30, 2022 to October 1, 2024, the extended interest rate swap agreement will effectively convert $50.0 million of borrowings under the Credit Facility from variable-rate interest to fixed-rate interest with a per annum rate of 1.56% based on the margin of the Credit Facility as of September 30, 2020. The fair value of the interest rate swap of $0.3 million was recorded in other long-term liabilities in the consolidated balance sheet at September 30, 2020. Accounts Receivable Securitization Program The Company’s accounts receivable securitization program, which matures on October 1, 2021, allows for cash proceeds of $125.0 million to be provided under the program and has an accordion feature allowing the Company to request additional borrowings up to $25.0 million, subject to certain conditions. As of December 31, 2019, $40.0 million was borrowed under the program. The Company borrowed an additional $45.0 million under the program in March 2020 as a precautionary measure to preserve financial flexibility during the COVID-19 pandemic, and repaid the outstanding balance of $85.0 million during the third quarter of 2020. Under this program, certain subsidiaries of the Company continuously sell a designated pool of trade accounts receivables to a wholly owned subsidiary which, in turn, may borrow funds on a revolving basis. This wholly owned consolidated subsidiary is a separate bankruptcy-remote entity, and its assets would be available only to satisfy the claims related to the lender’s interest in the trade accounts receivables. Borrowings under the accounts receivable securitization program bear interest based upon LIBOR, plus a margin, and an annual facility fee. The securitization agreement contains representations and warranties, affirmative and negative covenants, and events of default that are customary for financings of this type, including a maximum adjusted leverage ratio covenant. The Company was in compliance with the covenants under the accounts receivable securitization program at September 30, 2020. The accounts receivable securitization program includes a provision under which the Company may request and the letter of credit issuer may issue standby letters of credit, primarily in support of workers’ compensation and third-party casualty claims liabilities in various states in which the Company is self-insured. The outstanding standby letters of credit reduce the availability of borrowings under the program. As of September 30, 2020, standby letters of credit of $11.7 million have been issued under the program, which reduced the available borrowing capacity to $113.3 million. Letter of Credit Agreements and Surety Bond Programs As of September 30, 2020, the Company had letters of credit outstanding of $12.3 million (including $11.7 million issued under the accounts receivable securitization program). The Company has programs in place with multiple surety companies for the issuance of surety bonds in support of its self-insurance program. As of September 30, 2020, surety bonds outstanding related to the self-insurance program totaled $61.6 million. Notes Payable The Company has financed the purchase of certain revenue equipment, other equipment, and software through promissory note arrangements, including $39.4 million and $53.0 million for revenue equipment during the three and nine months ended September 30, 2020, respectively. Subsequent to September 30, 2020, the Company financed the purchase of an additional $7.2 million of revenue equipment through promissory note arrangements as of November 1, 2020. |
PENSION AND OTHER POSTRETIREMEN
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS | 9 Months Ended |
Sep. 30, 2020 | |
EMPLOYEE BENEFIT PLANS | |
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS | NOTE G – PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS Nonunion Defined Benefit Pension, Supplemental Benefit, and Postretirement Health Benefit Plans The following is a summary of the components of net periodic benefit cost: Three Months Ended September 30 Nonunion Defined Supplemental Postretirement Benefit Pension Plan Benefit Plan Health Benefit Plan 2020 (1) 2019 2020 2019 2020 (2) 2019 (in thousands) Service cost $ — $ — $ — $ — $ 46 $ 80 Interest cost — 138 2 9 144 303 Expected return on plan assets — 29 — — — — Amortization of prior service credit — — — — — (8) Pension settlement expense (3) — 2,530 — — — — Amortization of net actuarial (gain) loss (4) — 50 2 24 (150) 225 Net periodic benefit cost $ — $ 2,747 $ 4 $ 33 $ 40 $ 600 Nine Months Ended September 30 Nonunion Defined Supplemental Postretirement Benefit Pension Plan Benefit Plan Health Benefit Plan 2020 (1) 2019 2020 2019 2020 (2) 2019 (in thousands) Service cost $ — $ — $ — $ — $ 140 $ 240 Interest cost — 624 7 29 432 909 Expected return on plan assets — (60) — — — — Amortization of prior service credit — — — — — (25) Pension settlement expense (3) — 4,164 89 — — — Amortization of net actuarial (gain) loss (4) — 260 7 71 (448) 674 Net periodic benefit cost $ — $ 4,988 $ 103 $ 100 $ 124 $ 1,798 (1) Termination of the nonunion defined benefit pension plan was completed in 2019 and the plan was liquidated as of December 31, 2019. (2) Expense for the postretirement health benefit plan is lower for the three and nine months ended September 30, 2020, compared to the same periods of 2019, due to the impact of a lower cost prescription drug plan effective January 1, 2020. (3) For the nine months ended September 30, 2020, pension settlement expense for the supplemental benefit plan of $0.1 million (pre-tax), or $0.1 million (after-tax), was due to a $0.7 million benefit related to an officer retirement. For the three and nine months ended September 30, 2019, pension settlement expense for the nonunion defined benefit pension plan of $2.5 million (pre-tax), or $1.9 million (after-tax), and $4.2 million (pre-tax), or $3.1 million (after-tax), respectively, was related to lump-sum distributions from the plan of $16.0 million and $33.9 million, respectively, which included third quarter 2019 payments to purchase a nonparticipating annuity contract and transfer the remaining benefit obligation to the Pension Benefit Guaranty Corporation (the “PBGC”). During the three and nine months ended September 30, 2019, an additional $4.0 million pension termination expense (with no tax benefit) was recorded with pension settlement expense in the “Other, net” line of other income (costs) in the consolidated statements of operations. This noncash charge was related to an amount which was stranded in accumulated other comprehensive loss until the nonunion defined benefit pension obligation was settled upon plan termination. (4) The Company amortizes actuarial gains and losses over the average remaining active service period of the plan participants and does not use a corridor approach. Multiemployer Plans ABF Freight System, Inc. and certain other subsidiaries reported in the Company’s Asset-Based operating segment (“ABF Freight”) contribute to multiemployer pension and health and welfare plans, which have been established pursuant to the Taft-Hartley Act, to provide benefits for its contractual employees. ABF Freight’s contributions generally are based on the time worked by its contractual employees, in accordance with the 2018 ABF NMFA and other related supplemental agreements. ABF Freight recognizes as expense the contractually required contributions for each period and recognizes as a liability any contributions due and unpaid. The 25 multiemployer pension plans to which ABF Freight contributes vary greatly in size and in funded status. Contribution obligations to these plans are generally specified in the 2018 ABF NMFA, which will remain in effect through June 30, 2023. The funding obligations to the pension plans are intended to satisfy the requirements imposed by the Pension Protection Act of 2006, which was permanently extended by the Multiemployer Pension Reform Act (the “Reform Act”) included in the Consolidated and Further Continuing Appropriations Act of 2015. Provisions of the Reform Act include, among others, providing qualifying plans the ability to self-correct funding issues, subject to various requirements and restrictions, including applying to the U.S. Department of the Treasury for the reduction of certain accrued benefits. Through the term of its current collective bargaining agreement, ABF Freight’s contribution obligations generally will be satisfied by making the specified contributions when due. However, the Company cannot determine with any certainty the contributions that will be required under future collective bargaining agreements for ABF Freight’s contractual employees. If ABF Freight was to completely withdraw from certain multiemployer pension plans, under current law, ABF Freight would have material liabilities for its share of the unfunded vested liabilities of each such plan. Approximately one half of ABF Freight’s total contributions to multiemployer pension plans are made to the Central States, Southeast and Southwest Areas Pension Plan (the “Central States Pension Plan”). As set forth in the 2019 Annual Funding Notice for the Central States Pension Plan, the funded percentage of the plan was 24.8% as of January 1, 2019. In the Notice of Critical and Declining Status for the Central States Pension Plan dated March 30, 2020, the plan’s actuary certified that, as of January 1, 2020, the plan is in critical and declining status, as defined by the Reform Act. Critical and declining status is applicable to critical status plans that are projected to become insolvent anytime within the next 14 plan years, or if the plan is projected to become insolvent within the next 19 plan years and either the plan’s ratio of inactive participants to active participants exceeds two to one or the plan’s funded percentage is less than 80% . The Company received a notice of insolvency dated September 30, 2020 for the Trucking Employees of North Jersey Welfare Fund, Inc. – Pension Fund (the “560 Pension Fund”) which is expected to become insolvent in April 2021. Approximately 2% of ABF Freight’s total multiemployer pension contributions for the year ended December 31, 2019, were made to the 560 Pension Fund. While the board of trustees of the 560 Pension Fund will continue to administer the fund, the PBGC will provide financial assistance to the fund by paying retiree benefits not to exceed the PBGC guarantee limits for insolvent multiemployer plans. The multiemployer plan administrators have provided to the Company no other significant changes in information related to multiemployer plans from the information disclosed in the Company’s 2019 Annual Report on Form 10-K. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2020 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | NOTE H – STOCKHOLDERS’ EQUITY Accumulated Other Comprehensive Income (Loss) Components of accumulated other comprehensive income (loss) were as follows: September 30 December 31 2020 2019 (in thousands) Pre-tax amounts: Unrecognized net periodic benefit credit $ 2,535 $ 2,898 Interest rate swap (1,964) (563) Foreign currency translation (2,435) (2,075) Total $ (1,864) $ 260 After-tax amounts: Unrecognized net periodic benefit credit $ 1,883 $ 2,152 Interest rate swap (1,451) (416) Foreign currency translation (1,799) (1,533) Total $ (1,367) $ 203 The following is a summary of the changes in accumulated other comprehensive income (loss), net of tax, by component for the nine months ended September 30, 2020 and 2019: Unrecognized Interest Foreign Net Periodic Rate Currency Total Benefit Costs Swap Translation (in thousands) Balances at December 31, 2019 $ 203 $ 2,152 $ (416) $ (1,533) Other comprehensive loss before reclassifications (1,309) (8) (1,035) (266) Amounts reclassified from accumulated other comprehensive income (261) (261) — — Net current-period other comprehensive loss (1,570) (269) (1,035) (266) Balances at September 30, 2020 $ (1,367) $ 1,883 $ (1,451) $ (1,799) Balances at December 31, 2018 $ (14,238) $ (12,749) $ 591 $ (2,080) Other comprehensive income (loss) before reclassifications (1,183) (291) (1,198) 306 Amounts reclassified from accumulated other comprehensive loss 7,791 7,791 — — Net current-period other comprehensive income (loss) 6,608 7,500 (1,198) 306 Balances at September 30, 2019 $ (7,630) $ (5,249) $ (607) $ (1,774) The following is a summary of the significant reclassifications out of accumulated other comprehensive income (loss) by component: Unrecognized Net Periodic Benefit Credit (Costs) (1)(2) Nine Months Ended September 30 2020 2019 (in thousands) Amortization of net actuarial gain (loss) $ 441 $ (1,005) Amortization of prior service credit — 25 Pension settlement expense, including termination expense (3)(4) (89) (8,135) Total, pre-tax 352 (9,115) Tax benefit (expense) (91) 1,324 Total, net of tax $ 261 $ (7,791) (1) Amounts in parentheses indicate increases in expense or loss. (2) These components of accumulated other comprehensive loss are included in the computation of net periodic benefit cost as disclosed in Note G. (3) For the nine months ended September 30, 2020, pension settlement expense is related to the supplemental benefit plan (see Note G). (4) For the nine months ended September 30, 2019, amounts included in accumulated other comprehensive loss related to the nonunion defined benefit pension plan were reclassed to net income in their entirety upon settlement of the pension plan obligations in third quarter 2019. These amounts include amortization of net actuarial loss of $0.3 million (pre-tax) and pension settlement expense, including termination expense, of $8.1 million (pre-tax) which were recognized in the “Other, net” line of other income (costs). These reclassifications impacted net income by $7.3 million for the nine months ended September 30, 2019. The nine months ended September 30, 2019 also includes a $4.0 million noncash pension termination expense (with no tax benefit) related to an amount which was stranded in accumulated other comprehensive loss until the pension benefit obligation was settled upon plan termination (see Note G). Dividends on Common Stock The following table is a summary of dividends declared during the applicable quarter: 2020 2019 Per Share Amount Per Share Amount (in thousands, except per share data) First quarter $ 0.08 $ 2,033 $ 0.08 $ 2,052 Second quarter $ 0.08 $ 2,049 $ 0.08 $ 2,050 Third quarter $ 0.08 $ 2,040 $ 0.08 $ 2,043 On October 30, 2020, the Company’s Board of Directors declared a dividend of $0.08 per share to stockholders of record as of November 13, 2020. Treasury Stock The Company has a program to repurchase its common stock in the open market or in privately negotiated transactions. The program has no expiration date but may be terminated at any time at the Board of Directors’ discretion. Repurchases may be made using the Company’s cash reserves or other available sources. As of December 31, 2019, the Company had $13.2 million remaining under the program for repurchases of its common stock. During the nine months ended September 30, 2020, the Company purchased 227,460 shares for an aggregate cost of $5.7 million, leaving $7.5 million available for repurchase of common stock under the program. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2020 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE I – EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended Nine Months Ended September 30 September 30 2020 2019 2020 2019 (in thousands, except share and per share data) Basic Numerator: Net income $ 29,404 $ 16,270 $ 47,186 $ 45,534 Effect of unvested restricted stock awards (4) (2) (22) (28) Adjusted net income $ 29,400 $ 16,268 $ 47,164 $ 45,506 Denominator: Weighted-average shares 25,470,094 25,527,982 25,403,786 25,550,365 Earnings per common share $ 1.15 $ 0.64 $ 1.86 $ 1.78 Diluted Numerator: Net income $ 29,404 $ 16,270 $ 47,186 $ 45,534 Effect of unvested restricted stock awards (4) (2) (22) (28) Adjusted net income $ 29,400 $ 16,268 $ 47,164 $ 45,506 Denominator: Weighted-average shares 25,470,094 25,527,982 25,403,786 25,550,365 Effect of dilutive securities 1,122,363 888,613 886,160 911,303 Adjusted weighted-average shares and assumed conversions 26,592,457 26,416,595 26,289,946 26,461,668 Earnings per common share $ 1.11 $ 0.62 $ 1.79 $ 1.72 Under the two-class method of calculating earnings per share, dividends paid and a portion of undistributed net income, but not losses, are allocated to unvested RSUs that receive dividends, which are considered participating securities. For the three months ended September 30, 2020, there were no antidilutive securities. Outstanding stock awards of less than $0.1 million for the nine months ended September 30, 2020 and outstanding stock awards of $0.2 million for the three and nine months ended September 30, 2019, were not included in the diluted earnings per share calculation because their inclusion would have the effect of increasing the earnings per share. |
OPERATING SEGMENT DATA
OPERATING SEGMENT DATA | 9 Months Ended |
Sep. 30, 2020 | |
OPERATING SEGMENT DATA | |
OPERATING SEGMENT DATA | NOTE J – OPERATING SEGMENT DATA The Company uses the “management approach” to determine its reportable operating segments, as well as to determine the basis of reporting the operating segment information. The management approach focuses on financial information that the Company’s management uses to make operating decisions. Management uses revenues, operating expense categories, operating ratios, operating income, and key operating statistics to evaluate performance and allocate resources to the Company’s operations. Shared services represent costs incurred to support all segments, including sales, pricing, customer service, marketing, capacity sourcing functions, human resources, financial services, information technology, and other company-wide services. Certain overhead costs are not attributable to any segment and remain unallocated in “Other and eliminations.” Included in unallocated costs are expenses related to investor relations, legal, the ArcBest Board of Directors, and certain technology investments. Shared services costs attributable to the operating segments are predominantly allocated based upon estimated and planned resource utilization-related metrics such as estimated shipment levels, number of pricing proposals, or number of personnel supported. The bases for such charges are modified and adjusted by management when necessary or appropriate to reflect fairly and equitably the actual incidence of cost incurred by the operating segments. Management believes the methods used to allocate expenses are reasonable. The Company’s reportable operating segments are impacted by seasonal fluctuations which affect tonnage, shipment or service event levels, and demand for services, as described below; therefore, operating results for the interim periods presented may not necessarily be indicative of the results for the fiscal year. The COVID-19 pandemic had a significant negative impact on demand for the Company’s services during the second quarter of 2020, resulting in lower tonnage, shipment, and service event levels and, consequently, lower segment revenues for the second quarter of 2020. Although business levels improved in the third quarter of 2020, the Company’s operating segment information for the nine months ended September 30, 2020 does not reflect typical seasonal trends in business levels as described below for the Company’s reportable operating segments as a result of the impact on the COVID-19 pandemic on second quarter business levels. The Company’s reportable operating segments are as follows: ● The Asset-Based segment includes the results of operations of ABF Freight System, Inc. and certain other subsidiaries. The segment operations include national, inter-regional, and regional transportation of general commodities through standard, expedited, and guaranteed LTL services. In addition, the segment operations include freight transportation related to certain consumer household goods self-move services. Freight shipments and operating costs of the Asset-Based segment can be adversely affected by inclement weather conditions. The second and third calendar quarters of each year usually have the highest tonnage levels while the first quarter generally has the lowest, although other factors, including the state of the U.S. and global economies, available capacity in the market, and the impact of other adverse external events or conditions, including the COVID-19 pandemic as previously described, may influence quarterly freight tonnage levels. ● The ArcBest segment includes the results of operations of the Company’s service offerings in ground expedite, truckload, truckload-dedicated, intermodal, household goods moving, managed transportation, warehousing and distribution, and international freight transportation for air, ocean, and ground. ArcBest segment operations are influenced by seasonal fluctuations that impact customers’ supply chains. The second and third calendar quarters of each year usually have the highest shipment levels while the first quarter generally has the lowest, although other factors, including the state of the U.S. and global economies, available capacity in the market, and the impact of other adverse external events or conditions, including the COVID-19 pandemic as previously described, may impact quarterly business levels. Shipments of the ArcBest segment may decline during winter months because of post-holiday slowdowns, but expedite shipments can be subject to short-term increases depending on the impact of weather disruptions to customers’ supply chains. Plant shutdowns during summer months may affect shipments for automotive and manufacturing customers of the ArcBest segment, but severe weather events can result in higher demand for expedite services. Moving services of the ArcBest segment are impacted by seasonal fluctuations, generally resulting in higher business levels in the second and third quarters as the demand for moving services is typically stronger in the summer months. ● FleetNet includes the results of operations of FleetNet America, Inc. and certain other subsidiaries that provide roadside assistance and maintenance management services for commercial vehicles through a network of third-party service providers. FleetNet provides services to the Asset-Based and ArcBest segments. Approximately 18% and 20% of FleetNet’s revenues for the three and nine months ended September 30, 2020, respectively, are for services provided to the Asset-Based and ArcBest segments compared to approximately 19% and 17% , respectively, for the same periods of 2019. Emergency roadside service events of the FleetNet segment are favorably impacted by extreme weather conditions that affect commercial vehicle operations, and the segment’s results of operations will be influenced by seasonal variations in service event volume and the impact of other external events or conditions, including the COVID-19 pandemic as previously described. The Company’s other business activities and operating segments that are not reportable include ArcBest Corporation and certain other subsidiaries. Certain costs incurred by the parent holding company and the Company’s shared services subsidiary are allocated to the reporting segments. The Company eliminates intercompany transactions in consolidation. However, the information used by the Company’s management with respect to its reportable segments is before intersegment eliminations of revenues and expenses. Further classifications of operations or revenues by geographic location are impracticable and, therefore, are not provided. The Company’s foreign operations are not significant. The following tables reflect reportable operating segment information: Three Months Ended Nine Months Ended September 30 September 30 2020 2019 2020 2019 (in thousands) REVENUES Asset-Based $ 561,856 $ 565,621 $ 1,537,639 $ 1,631,348 ArcBest 217,294 199,758 533,536 554,135 FleetNet 50,545 53,976 149,424 158,957 Other and eliminations (34,715) (31,792) (96,850) (73,548) Total consolidated revenues $ 794,980 $ 787,563 $ 2,123,749 $ 2,270,892 OPERATING EXPENSES Asset-Based Salaries, wages, and benefits $ 287,385 $ 296,503 $ 820,218 $ 873,795 Fuel, supplies, and expenses 50,144 65,738 157,044 195,502 Operating taxes and licenses 12,296 12,865 36,719 37,477 Insurance 8,587 7,646 24,658 23,235 Communications and utilities 4,373 5,064 13,426 14,181 Depreciation and amortization 24,054 23,776 70,651 66,370 Rents and purchased transportation 69,442 61,102 171,364 167,234 Shared services 60,664 56,031 155,154 161,664 Gain on sale of property and equipment 133 (82) (3,206) (1,703) Innovative technology costs (1) 6,199 4,664 15,521 9,200 Other (1) 1,933 592 5,168 2,878 Total Asset-Based 525,210 533,899 1,466,717 1,549,833 ArcBest Purchased transportation 181,129 164,521 443,401 452,178 Supplies and expenses 2,746 2,780 7,015 8,412 Depreciation and amortization 2,413 2,607 7,332 8,813 Shared services 24,217 25,032 64,784 71,204 Other 1,958 2,366 6,279 7,224 Total ArcBest 212,463 197,306 528,811 547,831 FleetNet 49,558 52,805 146,615 155,272 Other and eliminations (32,033) (27,655) (86,420) (57,043) Total consolidated operating expenses $ 755,198 $ 756,355 $ 2,055,723 $ 2,195,893 OPERATING INCOME (LOSS) Asset-Based $ 36,646 $ 31,722 $ 70,922 $ 81,515 ArcBest 4,831 2,452 4,725 6,304 FleetNet 987 1,171 2,809 3,685 Other and eliminations (2,682) (4,137) (10,430) (16,505) Total consolidated operating income $ 39,782 $ 31,208 $ 68,026 $ 74,999 OTHER INCOME (COSTS) Interest and dividend income $ 756 $ 1,768 $ 3,122 $ 4,862 Interest and other related financing costs (2,860) (2,900) (9,185) (8,593) Other, net (2) 1,500 (6,734) 334 (7,770) Total other income (costs) (604) (7,866) (5,729) (11,501) INCOME BEFORE INCOME TAXES $ 39,178 $ 23,342 $ 62,297 $ 63,498 (1) Represents costs associated with the freight handling pilot test program at ABF Freight. (2) Includes the components of net periodic benefit cost other than service cost related to the Company’s nonunion pension, SBP, and postretirement plans (see Note G) and proceeds and changes in cash surrender value of life insurance policies. The following table presents operating expenses by category on a consolidated basis: Three Months Ended Nine Months Ended September 30 September 30 2020 2019 2020 2019 (in thousands) OPERATING EXPENSES Salaries, wages, and benefits $ 363,035 $ 363,902 $ 1,013,201 $ 1,068,685 Rents, purchased transportation, and other costs of services 267,438 249,110 672,380 706,200 Fuel, supplies, and expenses 61,321 81,023 187,932 241,059 Depreciation and amortization (1) 30,032 29,361 88,131 83,332 Other 33,372 32,959 94,079 96,617 $ 755,198 $ 756,355 $ 2,055,723 $ 2,195,893 (1) Includes amortization of intangible assets. |
LEGAL PROCEEDINGS, ENVIRONMENTA
LEGAL PROCEEDINGS, ENVIRONMENTAL MATTERS, AND OTHER EVENTS | 9 Months Ended |
Sep. 30, 2020 | |
LEGAL PROCEEDINGS, ENVIRONMENTAL MATTERS, AND OTHER EVENTS | |
LEGAL PROCEEDINGS, ENVIRONMENTAL MATTERS, AND OTHER EVENTS | NOTE K – LEGAL PROCEEDINGS, ENVIRONMENTAL MATTERS, AND OTHER EVENTS The Company is involved in various legal actions arising in the ordinary course of business. The Company maintains liability insurance against certain risks arising out of the normal course of its business, subject to certain self-insured retention limits. The Company routinely establishes and reviews the adequacy of reserves for estimated legal, environmental, and self-insurance exposures. While management believes that amounts accrued in the consolidated financial statements are adequate, estimates of these liabilities may change as circumstances develop. Considering amounts recorded, routine legal matters are not expected to have a material adverse effect on the Company’s financial condition, results of operations, or cash flows. Environmental Matters The Company’s subsidiaries store fuel for use in tractors and trucks in 56 underground tanks located in 16 states. Maintenance of such tanks is regulated at the federal and, in most cases, state levels. The Company believes it is in substantial compliance with all such regulations. The Company’s underground storage tanks are required to have leak detection systems. The Company is not aware of any leaks from such tanks that could reasonably be expected to have a material adverse effect on the Company. The Company has received notices from the Environmental Protection Agency and others that it has been identified as a potentially responsible party under the Comprehensive Environmental Response Compensation and Liability Act, or other federal or state environmental statutes, at several hazardous waste sites. After investigating the Company’s involvement in waste disposal or waste generation at such sites, the Company has either agreed to de minimis settlements or determined that its obligations, other than those specifically accrued with respect to such sites, would involve immaterial monetary liability, although there can be no assurances in this regard. At September 30, 2020 and December 31, 2019, the Company’s reserve, which was reported in accrued expenses, for estimated environmental cleanup costs of properties currently or previously operated by the Company totaled $0.5 million and $0.4 million, respectively. Amounts accrued reflect management’s best estimate of the future undiscounted exposure related to identified properties based on current environmental regulations, management’s experience with similar environmental matters, and testing performed at certain sites. |
ORGANIZATION AND DESCRIPTION _2
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION | |
Financial Statement Presentation | 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 2019 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 |
Allowances | Allowances: Financial Instruments – Credit Losses The Company maintains allowances for credit losses (formerly known as the allowance for doubtful accounts) and revenue adjustments on its trade receivables. The Company estimates the allowance for credit losses based on historical write-offs, factors surrounding the credit risk of specific customers, and forecasts of future economic conditions. In order to gather information regarding these trends and factors, the Company performs ongoing credit evaluations of customers, an analysis of accounts receivable aging by business segment, and an analysis of future economic conditions at period end. The allowance for revenue adjustments is an estimate based on historical revenue adjustments and current information regarding trends and business changes. Actual write-offs or adjustments could differ from the allowance estimates due to a number of factors, including future changes in the forecasted economic environment or new factors and risks surrounding a particular customer. Accounts receivable are written off when the accounts are turned over to a collection agency or when the accounts are determined to be uncollectible. Actual write-offs and adjustments are charged against the allowances for doubtful accounts and revenue adjustments. |
Adopted Accounting Pronouncements and Accounting Pronouncements Not Yet Adopted | Adopted Accounting Pronouncements As previously discussed within Accounting Policies in this Note, effective January 1, 2020, the Company adopted ASC Topic 326, which replaces the incurred loss methodology model with an expected loss methodology referred to as the CECL methodology for the Company’s trade receivables and other receivables. The Company adopted ASC Topic 326 with the modified retrospective approach. Under this approach, results for reporting periods after January 1, 2020 are presented under ASC Topic 326 while prior period amounts continue to be reported in accordance with previously applicable accounting guidance. The Company recorded a decrease to retained earnings of $0.2 million as of January 1, 2020 for the cumulative effect of adopting ASC Topic 326. On January 1, 2020 the Company adopted ASC Subtopic 350-40, Intangibles – Goodwill and Other – Internal-Use Software: Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement , (“ASC Subtopic 350-40”) which was amended by the Financial Accounting Standards Board in August 2018. The amendments to ASC Subtopic 350-40 clarify the accounting treatment for implementation costs incurred by the customer in a cloud computing software arrangement. The amendments allow implementation costs of cloud computing arrangements to be capitalized using the same method prescribed by ASC Subtopic 350-40, Internal-Use Software . The amendments to ASC Subtopic 350-40 were adopted on a prospective basis and did not have an impact on the Company’s consolidated financial statements. On January 1, 2020 the Company adopted ASC Topic 820, Fair Value Measurement , which was amended to modify the disclosure requirements of fair value measurements, primarily impacting the disclosures for Level 3 fair value measurements. The amendment did not have an impact on the Company’s financial statement disclosures as of September 30, 2020. The amendments to ASC Topic 848, Reference Rate Reform Accounting Pronouncements Not Yet Adopted ASC Topic 740, Income Taxes Management believes there is no other new accounting guidance issued but not yet effective that is relevant to the Company’s current financial statements. |
FINANCIAL INSTRUMENTS AND FAI_2
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | |
Schedule components of cash and cash equivalents, short term investments, and restricted funds | September 30 December 31 2020 2019 (in thousands) Cash and cash equivalents Cash deposits (1) $ 236,838 $ 166,619 Variable rate demand notes (1)(2) 14,306 14,750 Money market funds (3) 16,501 20,540 Total cash and cash equivalents $ 267,645 $ 201,909 Short-term investments Certificates of deposit (1) $ 59,243 $ 69,314 U.S. Treasury securities (4) 24,168 47,265 Total short-term investments $ 83,411 $ 116,579 (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 with a maturity date within 90 days of the purchase date are classified as cash equivalents. U.S. Treasury securities included in short-term investments are held-to-maturity investments with maturity dates of less than one year. |
Schedule of fair value and carrying value disclosures of financial instruments | September 30 December 31 2020 2019 (in thousands) Carrying Fair Carrying Fair Value Value Value Value Credit Facility (1) $ 70,000 $ 70,000 $ 70,000 $ 70,000 Accounts receivable securitization borrowings (2) — — 40,000 40,000 Notes payable (3) 221,914 225,330 213,504 216,432 New England Pension Fund withdrawal liability (4) 21,563 26,306 22,018 24,462 $ 313,477 $ 321,636 $ 345,522 $ 350,894 (1) The revolving credit facility (the “Credit Facility”) carries a variable interest rate based on LIBOR, plus a margin, that is considered to be priced at market for debt instruments having similar terms and collateral requirements (Level 2 of the fair value hierarchy). (2) Borrowings under the Company’s accounts receivable securitization program carry a variable interest rate based on LIBOR, plus a margin. The borrowings are considered to be priced at market for debt instruments having similar terms and collateral requirements (Level 2 of the fair value hierarchy). (3) Fair value of the notes payable was determined using a present value income approach based on quoted interest rates from lending institutions with which the Company would enter into similar transactions (Level 2 of the fair value hierarchy). (4) ABF Freight’s multiemployer pension plan obligation with the New England Teamsters and Trucking Industry Pension Fund (the “New England Pension Fund”) was restructured under a transition agreement effective on August 1, 2018, which resulted in a related withdrawal liability (see in Note I to the consolidated financial statements in Item 8 of the Company’s 2019 Annual Report on Form 10-K). The fair value of the outstanding withdrawal liability is equal to the present value of the future withdrawal liability payments, discounted at an interest rate of 2.4% and 3.4% at September 30, 2020 and December 31, 2019, respectively, determined using the 20-year U.S. Treasury rate plus a spread (Level 2 of the fair value hierarchy). Included in other long-term liabilities with the current portion included in accrued expenses. |
Schedule of financial assets and liabilities measured at fair value on a recurring basis | September 30, 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) $ 16,501 $ 16,501 $ — $ — Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan (2) 2,523 2,523 — — $ 19,024 $ 19,024 $ — $ — Liabilities: Interest rate swaps (3) $ 1,964 $ — $ 1,964 $ — December 31, 2019 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) $ 20,540 $ 20,540 $ — $ — Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan (2) 2,427 2,427 — — $ 22,967 $ 22,967 $ — $ — Liabilities: Interest rate swaps (3) $ 563 $ — $ 563 $ — (1) Included in cash and cash equivalents. (2) Nonqualified deferred compensation plan investments consist of U.S. and international equity mutual funds, government and corporate bond mutual funds, and money market funds which are held in a trust with a third-party brokerage firm. Included in other long-term assets, with a corresponding liability reported within other long-term liabilities. (3) Included in other long-term liabilities. The fair values of the interest rate swaps were determined by discounting future cash flows and receipts based on expected interest rates observed in market interest rate curves adjusted for estimated credit valuation considerations reflecting nonperformance risk of the Company and the counterparty, which are considered to be in Level 3 of the fair value hierarchy. The Company assessed Level 3 inputs as insignificant to the valuation at September 30, 2020 and December 31, 2019 and considers the interest rate swap valuations in Level 2 of the fair value hierarchy. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of intangible assets | September 30, 2020 December 31, 2019 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 $ 29,526 $ 23,195 $ 52,721 $ 26,667 $ 26,054 Other 12 1,420 899 521 1,294 816 478 14 54,141 30,425 23,716 54,015 27,483 26,532 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 $ 86,441 $ 30,425 $ 56,016 $ 86,315 $ 27,483 $ 58,832 |
Schedule of future amortization for intangible assets | The future amortization for intangible assets acquired through business acquisitions as of September 30, 2020 was as follows: Amortization of Intangible Assets (in thousands) Remainder of 2020 $ 977 2021 3,871 2022 3,844 2023 3,746 2024 3,696 Thereafter 7,582 Total amortization $ 23,716 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases | |
Schedule of components of lease expense | Three Months Ended Nine Months Ended September 30 September 30 2020 2019 2020 2019 (in thousands) Operating lease expense $ 6,351 $ 5,651 $ 17,950 $ 16,632 Variable lease expense 665 878 2,248 2,491 Sublease income (120) (99) (254) (235) Total operating lease expense $ 6,896 $ 6,430 $ 19,944 $ 18,888 |
Schedule of operating cash flows from operating lease activity | Nine Months Ended September 30, 2020 September 30, 2019 (in thousands) Noncash change in operating right-of-use assets $ 15,718 $ 15,093 Change in operating lease liabilities (15,484) (14,567) Operating right-of-use-assets and lease liabilities, net $ 234 $ 526 Cash paid for amounts included in the measurement of operating lease liabilities $ (17,715) $ (16,256) |
Schedule of maturities of operating lease liabilities | Equipment Land and and Total Structures Other (in thousands) Remainder of 2020 $ 5,941 $ 5,713 $ 228 2021 23,560 23,283 277 2022 20,008 19,997 11 2023 15,755 15,755 — 2024 13,766 13,766 — Thereafter 51,827 51,827 — Total lease payments 130,857 130,341 516 Less imputed interest (13,877) (13,872) (5) Total $ 116,980 $ 116,469 $ 511 |
LONG-TERM DEBT AND FINANCING _2
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
LONG-TERM DEBT AND FINANCING ARRANGEMENTS | |
Schedule of long-term debt | September 30 December 31 2020 2019 (in thousands) Credit Facility (interest rate of 1.3% (1) $ 70,000 $ 70,000 Accounts receivable securitization borrowings — 40,000 Notes payable (weighted-average interest rate of 3.0% at September 30, 2020) 221,914 213,504 Finance lease obligations (weighted-average interest rate of 3.3% at September 30, 2020) 10 15 291,924 323,519 Less current portion 65,887 57,305 Long-term debt, less current portion $ 226,037 $ 266,214 (1) The interest rate swap mitigates interest rate risk by effectively converting $50.0 million of borrowings under the Credit Facility from variable-rate interest to fixed-rate interest with a per annum rate of 3.12% and 2.98% based on the margin of the Credit Facility as of September 30, 2020 and December 31, 2019, respectively. |
Scheduled maturities of long-term debt obligations | Scheduled maturities of long-term debt obligations as of September 30, 2020 were as follows: Credit Notes Finance Lease Total Facility (1) Payable Obligations (in thousands) Due in one year or less $ 72,505 $ 899 $ 71,599 $ 7 Due after one year through two years 66,329 885 65,441 3 Due after two years through three years 50,883 908 49,975 — Due after three years through four years 33,744 994 32,750 — Due after four years through five years 84,331 70,000 14,331 — Due after five years 133 — 133 — Total payments 307,925 73,686 234,229 10 Less amounts representing interest 16,001 3,686 12,315 — Long-term debt $ 291,924 $ 70,000 $ 221,914 $ 10 (1) The future interest payments included in the scheduled maturities due are calculated using variable interest rates based on the LIBOR swap curve, plus the anticipated applicable margin. |
Schedule of assets securing notes payable or held under capital leases | September 30 December 31 2020 2019 (in thousands) Revenue equipment $ 317,318 $ 265,315 Software — 2,140 Service, office, and other equipment 26,270 26,344 Total assets securing notes payable or held under finance leases 343,588 293,799 Less accumulated depreciation and amortization (1) 103,425 71,405 Net assets securing notes payable or held under finance leases $ 240,163 $ 222,394 (1) Amortization of assets held under finance leases and depreciation of assets securing notes payable are included in depreciation expense. |
PENSION AND OTHER POSTRETIREM_2
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
EMPLOYEE BENEFIT PLANS | |
Summary of the components of net periodic benefit cost | Three Months Ended September 30 Nonunion Defined Supplemental Postretirement Benefit Pension Plan Benefit Plan Health Benefit Plan 2020 (1) 2019 2020 2019 2020 (2) 2019 (in thousands) Service cost $ — $ — $ — $ — $ 46 $ 80 Interest cost — 138 2 9 144 303 Expected return on plan assets — 29 — — — — Amortization of prior service credit — — — — — (8) Pension settlement expense (3) — 2,530 — — — — Amortization of net actuarial (gain) loss (4) — 50 2 24 (150) 225 Net periodic benefit cost $ — $ 2,747 $ 4 $ 33 $ 40 $ 600 Nine Months Ended September 30 Nonunion Defined Supplemental Postretirement Benefit Pension Plan Benefit Plan Health Benefit Plan 2020 (1) 2019 2020 2019 2020 (2) 2019 (in thousands) Service cost $ — $ — $ — $ — $ 140 $ 240 Interest cost — 624 7 29 432 909 Expected return on plan assets — (60) — — — — Amortization of prior service credit — — — — — (25) Pension settlement expense (3) — 4,164 89 — — — Amortization of net actuarial (gain) loss (4) — 260 7 71 (448) 674 Net periodic benefit cost $ — $ 4,988 $ 103 $ 100 $ 124 $ 1,798 (1) Termination of the nonunion defined benefit pension plan was completed in 2019 and the plan was liquidated as of December 31, 2019. (2) Expense for the postretirement health benefit plan is lower for the three and nine months ended September 30, 2020, compared to the same periods of 2019, due to the impact of a lower cost prescription drug plan effective January 1, 2020. (3) For the nine months ended September 30, 2020, pension settlement expense for the supplemental benefit plan of $0.1 million (pre-tax), or $0.1 million (after-tax), was due to a $0.7 million benefit related to an officer retirement. For the three and nine months ended September 30, 2019, pension settlement expense for the nonunion defined benefit pension plan of $2.5 million (pre-tax), or $1.9 million (after-tax), and $4.2 million (pre-tax), or $3.1 million (after-tax), respectively, was related to lump-sum distributions from the plan of $16.0 million and $33.9 million, respectively, which included third quarter 2019 payments to purchase a nonparticipating annuity contract and transfer the remaining benefit obligation to the Pension Benefit Guaranty Corporation (the “PBGC”). During the three and nine months ended September 30, 2019, an additional $4.0 million pension termination expense (with no tax benefit) was recorded with pension settlement expense in the “Other, net” line of other income (costs) in the consolidated statements of operations. This noncash charge was related to an amount which was stranded in accumulated other comprehensive loss until the nonunion defined benefit pension obligation was settled upon plan termination. (4) The Company amortizes actuarial gains and losses over the average remaining active service period of the plan participants and does not use a corridor approach. |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
STOCKHOLDERS' EQUITY | |
Components of accumulated other comprehensive income (loss) | September 30 December 31 2020 2019 (in thousands) Pre-tax amounts: Unrecognized net periodic benefit credit $ 2,535 $ 2,898 Interest rate swap (1,964) (563) Foreign currency translation (2,435) (2,075) Total $ (1,864) $ 260 After-tax amounts: Unrecognized net periodic benefit credit $ 1,883 $ 2,152 Interest rate swap (1,451) (416) Foreign currency translation (1,799) (1,533) Total $ (1,367) $ 203 |
Summary of changes in accumulated other comprehensive income (loss), net of tax, by component | Unrecognized Interest Foreign Net Periodic Rate Currency Total Benefit Costs Swap Translation (in thousands) Balances at December 31, 2019 $ 203 $ 2,152 $ (416) $ (1,533) Other comprehensive loss before reclassifications (1,309) (8) (1,035) (266) Amounts reclassified from accumulated other comprehensive income (261) (261) — — Net current-period other comprehensive loss (1,570) (269) (1,035) (266) Balances at September 30, 2020 $ (1,367) $ 1,883 $ (1,451) $ (1,799) Balances at December 31, 2018 $ (14,238) $ (12,749) $ 591 $ (2,080) Other comprehensive income (loss) before reclassifications (1,183) (291) (1,198) 306 Amounts reclassified from accumulated other comprehensive loss 7,791 7,791 — — Net current-period other comprehensive income (loss) 6,608 7,500 (1,198) 306 Balances at September 30, 2019 $ (7,630) $ (5,249) $ (607) $ (1,774) |
Summary of the significant reclassifications out of accumulated other comprehensive income (loss) by component | Unrecognized Net Periodic Benefit Credit (Costs) (1)(2) Nine Months Ended September 30 2020 2019 (in thousands) Amortization of net actuarial gain (loss) $ 441 $ (1,005) Amortization of prior service credit — 25 Pension settlement expense, including termination expense (3)(4) (89) (8,135) Total, pre-tax 352 (9,115) Tax benefit (expense) (91) 1,324 Total, net of tax $ 261 $ (7,791) (1) Amounts in parentheses indicate increases in expense or loss. (2) These components of accumulated other comprehensive loss are included in the computation of net periodic benefit cost as disclosed in Note G. (3) For the nine months ended September 30, 2020, pension settlement expense is related to the supplemental benefit plan (see Note G). (4) For the nine months ended September 30, 2019, amounts included in accumulated other comprehensive loss related to the nonunion defined benefit pension plan were reclassed to net income in their entirety upon settlement of the pension plan obligations in third quarter 2019. These amounts include amortization of net actuarial loss of $0.3 million (pre-tax) and pension settlement expense, including termination expense, of $8.1 million (pre-tax) which were recognized in the “Other, net” line of other income (costs). These reclassifications impacted net income by $7.3 million for the nine months ended September 30, 2019. The nine months ended September 30, 2019 also includes a $4.0 million noncash pension termination expense (with no tax benefit) related to an amount which was stranded in accumulated other comprehensive loss until the pension benefit obligation was settled upon plan termination (see Note G). |
Summary of dividends declared | 2020 2019 Per Share Amount Per Share Amount (in thousands, except per share data) First quarter $ 0.08 $ 2,033 $ 0.08 $ 2,052 Second quarter $ 0.08 $ 2,049 $ 0.08 $ 2,050 Third quarter $ 0.08 $ 2,040 $ 0.08 $ 2,043 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
EARNINGS PER SHARE | |
Schedule of computation of basic and diluted earnings (loss) per share | Three Months Ended Nine Months Ended September 30 September 30 2020 2019 2020 2019 (in thousands, except share and per share data) Basic Numerator: Net income $ 29,404 $ 16,270 $ 47,186 $ 45,534 Effect of unvested restricted stock awards (4) (2) (22) (28) Adjusted net income $ 29,400 $ 16,268 $ 47,164 $ 45,506 Denominator: Weighted-average shares 25,470,094 25,527,982 25,403,786 25,550,365 Earnings per common share $ 1.15 $ 0.64 $ 1.86 $ 1.78 Diluted Numerator: Net income $ 29,404 $ 16,270 $ 47,186 $ 45,534 Effect of unvested restricted stock awards (4) (2) (22) (28) Adjusted net income $ 29,400 $ 16,268 $ 47,164 $ 45,506 Denominator: Weighted-average shares 25,470,094 25,527,982 25,403,786 25,550,365 Effect of dilutive securities 1,122,363 888,613 886,160 911,303 Adjusted weighted-average shares and assumed conversions 26,592,457 26,416,595 26,289,946 26,461,668 Earnings per common share $ 1.11 $ 0.62 $ 1.79 $ 1.72 |
OPERATING SEGMENT DATA (Tables)
OPERATING SEGMENT DATA (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
OPERATING SEGMENT DATA | |
Schedule of reportable operating segment information | Three Months Ended Nine Months Ended September 30 September 30 2020 2019 2020 2019 (in thousands) REVENUES Asset-Based $ 561,856 $ 565,621 $ 1,537,639 $ 1,631,348 ArcBest 217,294 199,758 533,536 554,135 FleetNet 50,545 53,976 149,424 158,957 Other and eliminations (34,715) (31,792) (96,850) (73,548) Total consolidated revenues $ 794,980 $ 787,563 $ 2,123,749 $ 2,270,892 OPERATING EXPENSES Asset-Based Salaries, wages, and benefits $ 287,385 $ 296,503 $ 820,218 $ 873,795 Fuel, supplies, and expenses 50,144 65,738 157,044 195,502 Operating taxes and licenses 12,296 12,865 36,719 37,477 Insurance 8,587 7,646 24,658 23,235 Communications and utilities 4,373 5,064 13,426 14,181 Depreciation and amortization 24,054 23,776 70,651 66,370 Rents and purchased transportation 69,442 61,102 171,364 167,234 Shared services 60,664 56,031 155,154 161,664 Gain on sale of property and equipment 133 (82) (3,206) (1,703) Innovative technology costs (1) 6,199 4,664 15,521 9,200 Other (1) 1,933 592 5,168 2,878 Total Asset-Based 525,210 533,899 1,466,717 1,549,833 ArcBest Purchased transportation 181,129 164,521 443,401 452,178 Supplies and expenses 2,746 2,780 7,015 8,412 Depreciation and amortization 2,413 2,607 7,332 8,813 Shared services 24,217 25,032 64,784 71,204 Other 1,958 2,366 6,279 7,224 Total ArcBest 212,463 197,306 528,811 547,831 FleetNet 49,558 52,805 146,615 155,272 Other and eliminations (32,033) (27,655) (86,420) (57,043) Total consolidated operating expenses $ 755,198 $ 756,355 $ 2,055,723 $ 2,195,893 OPERATING INCOME (LOSS) Asset-Based $ 36,646 $ 31,722 $ 70,922 $ 81,515 ArcBest 4,831 2,452 4,725 6,304 FleetNet 987 1,171 2,809 3,685 Other and eliminations (2,682) (4,137) (10,430) (16,505) Total consolidated operating income $ 39,782 $ 31,208 $ 68,026 $ 74,999 OTHER INCOME (COSTS) Interest and dividend income $ 756 $ 1,768 $ 3,122 $ 4,862 Interest and other related financing costs (2,860) (2,900) (9,185) (8,593) Other, net (2) 1,500 (6,734) 334 (7,770) Total other income (costs) (604) (7,866) (5,729) (11,501) INCOME BEFORE INCOME TAXES $ 39,178 $ 23,342 $ 62,297 $ 63,498 (1) Represents costs associated with the freight handling pilot test program at ABF Freight. (2) Includes the components of net periodic benefit cost other than service cost related to the Company’s nonunion pension, SBP, and postretirement plans (see Note G) and proceeds and changes in cash surrender value of life insurance policies. The following table presents operating expenses by category on a consolidated basis: Three Months Ended Nine Months Ended September 30 September 30 2020 2019 2020 2019 (in thousands) OPERATING EXPENSES Salaries, wages, and benefits $ 363,035 $ 363,902 $ 1,013,201 $ 1,068,685 Rents, purchased transportation, and other costs of services 267,438 249,110 672,380 706,200 Fuel, supplies, and expenses 61,321 81,023 187,932 241,059 Depreciation and amortization (1) 30,032 29,361 88,131 83,332 Other 33,372 32,959 94,079 96,617 $ 755,198 $ 756,355 $ 2,055,723 $ 2,195,893 (1) Includes amortization of intangible assets. |
ORGANIZATION AND DESCRIPTION _3
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION (Organization) (Details) $ in Millions | 9 Months Ended | |
Sep. 30, 2020USD ($)segment | Dec. 31, 2019USD ($) | |
Organization and description of business | ||
Number of reportable operating segments | segment | 3 | |
Allowance for credit losses on trade accounts receivable | $ | $ 3.6 | $ 1.8 |
Asset-Based | ||
Organization and description of business | ||
Percentage of the Company's revenues, before other revenues and intercompany eliminations, represented by the Asset-Based segment | 69.00% | |
Asset-Based | Unionized employees concentration risk | Number of employees | ||
Organization and description of business | ||
Percentage of Asset-Based segment employees covered under collective bargaining agreement with the IBT | 82.00% |
ORGANIZATION AND DESCRIPTION _4
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION (Adopted Pronouncements) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Jan. 01, 2020 | Dec. 31, 2019 |
Adopted Accounting Pronouncements | |||
Retained earnings | $ 574,053 | $ 533,187 | |
ASC Topic 326, Financial Instruments-Credit Losses | |||
Adopted Accounting Pronouncements | |||
Change in Accounting Principle, Accounting Standards Update, Adopted | true | ||
ASC Topic 326, Financial Instruments-Credit Losses | Cumulative Effect, Period of Adoption, Adjustment | |||
Adopted Accounting Pronouncements | |||
Retained earnings | $ (200) | ||
ASC Topic 350-40, Goodwill and Other-Internal-Use Software | |||
Adopted Accounting Pronouncements | |||
Change in Accounting Principle, Accounting Standards Update, Adopted | true | ||
ASC Topic 820, Fair Value Measurement | |||
Adopted Accounting Pronouncements | |||
Change in Accounting Principle, Accounting Standards Update, Adopted | true |
FINANCIAL INSTRUMENTS AND FAI_3
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Cash and Cash Equivalents and Short-term Investments) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Fair value disclosure | ||
Cash and cash equivalents | $ 267,645 | $ 201,909 |
Short-term investments | 83,411 | 116,579 |
Concentrations of Credit Risk of Financial Instruments | ||
Cash, cash equivalents and short-term investments not FDIC-insured | 118,100 | 66,200 |
Cash deposits | ||
Fair value disclosure | ||
Cash and cash equivalents | 236,838 | 166,619 |
Variable rate demand notes | ||
Fair value disclosure | ||
Cash and cash equivalents | 14,306 | 14,750 |
Money market funds | ||
Fair value disclosure | ||
Cash and cash equivalents | 16,501 | 20,540 |
Certificates of deposit | ||
Fair value disclosure | ||
Short-term investments | 59,243 | 69,314 |
U.S. Treasury securities | ||
Fair value disclosure | ||
Short-term investments | $ 24,168 | $ 47,265 |
FINANCIAL INSTRUMENTS AND FAI_4
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Debt) (Details) $ in Thousands | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) |
Carrying Value | ||
Fair value disclosure | ||
Financial instruments | $ 313,477 | $ 345,522 |
Fair Value | ||
Fair value disclosure | ||
Financial instruments | 321,636 | 350,894 |
Credit Facility | Carrying Value | Level 2 | ||
Fair value disclosure | ||
Financial instruments | 70,000 | 70,000 |
Credit Facility | Fair Value | Level 2 | ||
Fair value disclosure | ||
Financial instruments | 70,000 | 70,000 |
Accounts receivable securitization borrowings | Carrying Value | Level 2 | ||
Fair value disclosure | ||
Financial instruments | 40,000 | |
Accounts receivable securitization borrowings | Fair Value | Level 2 | ||
Fair value disclosure | ||
Financial instruments | 40,000 | |
Notes payable | Carrying Value | Level 2 | ||
Fair value disclosure | ||
Financial instruments | 221,914 | 213,504 |
Notes payable | Fair Value | Level 2 | ||
Fair value disclosure | ||
Financial instruments | $ 225,330 | $ 216,432 |
New England Pension Fund withdrawal liability | Discount Rate | ||
Fair value disclosure | ||
Measurement input | 0.024 | 0.034 |
New England Pension Fund withdrawal liability | Carrying Value | Level 2 | ||
Fair value disclosure | ||
Financial instruments | $ 21,563 | $ 22,018 |
New England Pension Fund withdrawal liability | Fair Value | Level 2 | ||
Fair value disclosure | ||
Financial instruments | $ 26,306 | $ 24,462 |
FINANCIAL INSTRUMENTS AND FAI_5
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Assets and Liabilities) (Details) - Recurring basis - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Assets: | ||
Assets | $ 19,024 | $ 22,967 |
Cash and cash equivalents | ||
Assets: | ||
Money market funds | 16,501 | 20,540 |
Other long-term assets | ||
Assets: | ||
Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan | 2,523 | 2,427 |
Other long-term liabilities | ||
Liabilities: | ||
Interest rate swap | 1,964 | 563 |
Level 1 | ||
Assets: | ||
Assets | 19,024 | 22,967 |
Level 1 | Cash and cash equivalents | ||
Assets: | ||
Money market funds | 16,501 | 20,540 |
Level 1 | Other long-term assets | ||
Assets: | ||
Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan | 2,523 | 2,427 |
Level 2 | Other long-term liabilities | ||
Liabilities: | ||
Interest rate swap | $ 1,964 | $ 563 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Goodwill) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Goodwill by reportable operating segment | ||
Goodwill | $ 88,320 | $ 88,320 |
ArcBest | ||
Goodwill by reportable operating segment | ||
Goodwill | 87,700 | 87,700 |
FleetNet | ||
Goodwill by reportable operating segment | ||
Goodwill | $ 600 | $ 600 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS (Intangible) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Finite-lived intangible assets | ||
Weighted Average Amortization Period | 14 years | |
Cost | $ 54,141 | $ 54,015 |
Accumulated Amortization | 30,425 | 27,483 |
Net Value | 23,716 | 26,532 |
Total intangible assets | ||
Cost | 86,441 | 86,315 |
Net Value | 56,016 | 58,832 |
Trade name | ||
Indefinite-lived intangible assets | ||
Net Value | $ 32,300 | 32,300 |
Customer relationships | ||
Finite-lived intangible assets | ||
Weighted Average Amortization Period | 14 years | |
Cost | $ 52,721 | 52,721 |
Accumulated Amortization | 29,526 | 26,667 |
Net Value | $ 23,195 | 26,054 |
Other intangible assets | ||
Finite-lived intangible assets | ||
Weighted Average Amortization Period | 12 years | |
Cost | $ 1,420 | 1,294 |
Accumulated Amortization | 899 | 816 |
Net Value | $ 521 | $ 478 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS (Amortization) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Future amortization for intangible assets | ||
Remainder of 2020 | $ 977 | |
2021 | 3,871 | |
2022 | 3,844 | |
2023 | 3,746 | |
2024 | 3,696 | |
Thereafter | 7,582 | |
Net Value | $ 23,716 | $ 26,532 |
INCOME TAXES (Tax Rate) (Detail
INCOME TAXES (Tax Rate) (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
INCOME TAXES | ||||
Effective tax rate (as a percent) | 24.90% | 30.30% | 24.30% | 28.30% |
State tax, low end of range of rate (as a percent) | 6.00% | |||
State tax, high end of range of rate (as a percent) | 6.50% |
INCOME TAXES (Allowance) (Detai
INCOME TAXES (Allowance) (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Valuation allowance | $ 1 | $ 0.7 |
INCOME TAXES (Uncertain Tax Pos
INCOME TAXES (Uncertain Tax Positions) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
INCOME TAXES | ||
Reserve for uncertain tax positions | $ 0.9 | |
Reversal of uncertain tax positions, Expiration of statute of limitations | $ 0.9 |
INCOME TAXES (Taxes Paid) (Deta
INCOME TAXES (Taxes Paid) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
State | Maximum | ||
Income taxes | ||
Income tax refunds received (in dollars) | $ 0.1 | |
Federal and state | ||
Income taxes | ||
Income tax refunds received (in dollars) | $ 0.4 | |
Federal, state and foreign | ||
Income taxes | ||
Income taxes paid (in dollars) | $ 9.2 | $ 11.7 |
LEASES (Components of Lease Exp
LEASES (Components of Lease Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Leases | ||||
Operating lease expense | $ 6,351 | $ 5,651 | $ 17,950 | $ 16,632 |
Variable lease expense | 665 | 878 | 2,248 | 2,491 |
Sublease income | (120) | (99) | (254) | (235) |
Total operating lease expense | $ 6,896 | $ 6,430 | $ 19,944 | $ 18,888 |
LEASES (Cash flows) (Details)
LEASES (Cash flows) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Operating leases | ||
Noncash change in operating right-of-use assets | $ 15,718 | $ 15,093 |
Change in operating lease liabilities | (15,484) | (14,567) |
Operating right-of-use assets and lease liabilities, net | 234 | 526 |
Cash paid for amounts included in the measurement of operating lease liabilities | $ (17,715) | $ (16,256) |
LEASES (Maturities of Operating
LEASES (Maturities of Operating Lease Liabilities) (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Maturities of operating lease liabilities | |
Remainder of 2020 | $ 5,941 |
2021 | 23,560 |
2022 | 20,008 |
2023 | 15,755 |
2024 | 13,766 |
Thereafter | 51,827 |
Total lease payments | 130,857 |
Less imputed interest | (13,877) |
Total operating lease liabilities | 116,980 |
Land and Structures | |
Maturities of operating lease liabilities | |
Remainder of 2020 | 5,713 |
2021 | 23,283 |
2022 | 19,997 |
2023 | 15,755 |
2024 | 13,766 |
Thereafter | 51,827 |
Total lease payments | 130,341 |
Less imputed interest | (13,872) |
Total operating lease liabilities | 116,469 |
Equipment and Others | |
Maturities of operating lease liabilities | |
Remainder of 2020 | 228 |
2021 | 277 |
2022 | 11 |
Total lease payments | 516 |
Less imputed interest | (5) |
Total operating lease liabilities | $ 511 |
LONG-TERM DEBT AND FINANCING _3
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Summary) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Long-term debt obligations | ||
Long-term debt | $ 291,924 | $ 323,519 |
Less current portion | 65,887 | 57,305 |
Long-term debt, less current portion | 226,037 | 266,214 |
Payments under long-term debt obligations | ||
2020 | 72,505 | |
2021 | 66,329 | |
2022 | 50,883 | |
2023 | 33,744 | |
2024 | 84,331 | |
Thereafter | 133 | |
Total payments | 307,925 | |
Less amounts representing interest | 16,001 | |
Long-term debt | 291,924 | 323,519 |
Credit Facility | ||
Long-term debt obligations | ||
Long-term debt | $ 70,000 | 70,000 |
Interest rate (as a percent) | 1.30% | |
Amount of borrowings covered by the interest rate swap | $ 50,000 | $ 50,000 |
Effective fixed interest rate on hedged borrowings (as a percent) | 3.12% | 2.98% |
Payments under long-term debt obligations | ||
2020 | $ 899 | |
2021 | 885 | |
2022 | 908 | |
2023 | 994 | |
2024 | 70,000 | |
Total payments | 73,686 | |
Less amounts representing interest | 3,686 | |
Long-term debt | 70,000 | $ 70,000 |
Accounts receivable securitization borrowings | ||
Long-term debt obligations | ||
Long-term debt | 40,000 | |
Payments under long-term debt obligations | ||
Long-term debt | 40,000 | |
Notes payable | ||
Long-term debt obligations | ||
Long-term debt | $ 221,914 | 213,504 |
Weighted-average interest rate (as a percent) | 3.00% | |
Payments under long-term debt obligations | ||
2020 | $ 71,599 | |
2021 | 65,441 | |
2022 | 49,975 | |
2023 | 32,750 | |
2024 | 14,331 | |
Thereafter | 133 | |
Total payments | 234,229 | |
Less amounts representing interest | 12,315 | |
Long-term debt | 221,914 | 213,504 |
Finance lease obligations | ||
Long-term debt obligations | ||
Long-term debt | $ 10 | 15 |
Weighted-average interest rate (as a percent) | 3.30% | |
Payments under long-term debt obligations | ||
2020 | $ 7 | |
2021 | 3 | |
Total payments | 10 | |
Long-term debt | $ 10 | $ 15 |
LONG-TERM DEBT AND FINANCING _4
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Assets Sec) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Financing Arrangements | ||
Total assets securing notes payable or held under finance leases | $ 343,588 | $ 293,799 |
Less accumulated depreciation and amortization | 103,425 | 71,405 |
Net assets securing notes payable or held under finance leases | 240,163 | 222,394 |
Revenue equipment | ||
Financing Arrangements | ||
Total assets securing notes payable or held under finance leases | 317,318 | 265,315 |
Software | ||
Financing Arrangements | ||
Total assets securing notes payable or held under finance leases | 2,140 | |
Service, office, and other equipment | ||
Financing Arrangements | ||
Total assets securing notes payable or held under finance leases | $ 26,270 | $ 26,344 |
LONG-TERM DEBT AND FINANCING _5
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Credit Facility) (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | ||
Aug. 31, 2020 | Mar. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | |
Financing Arrangements | ||||
Borrowings under credit facilities | $ 180,000 | |||
Repayment of debt | 309,640 | $ 43,773 | ||
Credit Facility | ||||
Financing Arrangements | ||||
Maximum borrowing capacity | 250,000 | |||
Additional borrowing capacity that may be requested | 125,000 | |||
Borrowings under credit facilities | $ 180,000 | |||
Repayment of debt | $ 180,000 | |||
Remaining borrowing capacity | 180,000 | |||
Swing Line Facility | ||||
Financing Arrangements | ||||
Maximum borrowing capacity | 25,000 | |||
Letters of Credit, Sub-Facility | ||||
Financing Arrangements | ||||
Maximum borrowing capacity | $ 20,000 |
LONG-TERM DEBT AND FINANCING _6
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Interest rate swaps) (Details) - USD ($) $ in Millions | Nov. 30, 2014 | Jun. 30, 2022 | Sep. 30, 2020 | May 04, 2020 | Jan. 02, 2020 | Dec. 31, 2019 |
Credit Facility | ||||||
Financing Arrangements | ||||||
Amount of borrowings covered by the interest rate swap | $ 50 | $ 50 | ||||
Effective fixed interest rate on hedged borrowings (as a percent) | 3.12% | 2.98% | ||||
Interest rate swap agreement, maturing on June 30, 2022 | ||||||
Financing Arrangements | ||||||
Notional amount | $ 50 | |||||
Fixed interest rate payments (as a percent) | 1.99% | |||||
Interest rate swap agreement, maturing on June 30, 2022 | Other long-term liabilities | ||||||
Financing Arrangements | ||||||
Fair value of interest rate swap, liability | $ 1.7 | $ 0.6 | ||||
Interest rate swap agreement, maturing on June 30, 2022 | Credit Facility | ||||||
Financing Arrangements | ||||||
Amount of borrowings covered by the interest rate swap | $ 50 | |||||
Effective fixed interest rate on hedged borrowings (as a percent) | 3.12% | |||||
Interest rate swap, maturing on January 2, 2020 | ||||||
Financing Arrangements | ||||||
Term of swap agreement | 5 years | |||||
Notional amount | $ 50 | |||||
Interest rate swap, maturing on January 2, 2020 | Other long-term liabilities | Maximum | ||||||
Financing Arrangements | ||||||
Fair value of interest rate swap, liability | $ 0.1 | |||||
Amended interest rate swap agreement, maturing on October 1, 2024 | ||||||
Financing Arrangements | ||||||
Notional amount | $ 50 | |||||
Fixed interest rate payments (as a percent) | 0.43% | |||||
Amended interest rate swap agreement, maturing on October 1, 2024 | Forecast | ||||||
Financing Arrangements | ||||||
Effective fixed interest rate on hedged borrowings (as a percent) | 1.56% | |||||
Amended interest rate swap agreement, maturing on October 1, 2024 | Other long-term liabilities | ||||||
Financing Arrangements | ||||||
Fair value of interest rate swap, liability | $ 0.3 | |||||
Amended interest rate swap agreement, maturing on October 1, 2024 | Credit Facility | Forecast | ||||||
Financing Arrangements | ||||||
Amount of borrowings covered by the interest rate swap | $ 50 |
LONG-TERM DEBT AND FINANCING _7
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Securitization program) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |
Mar. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | |
Financing Arrangements | ||||
Long-term debt | $ 291,924 | $ 291,924 | $ 323,519 | |
Additional borrowings under accounts receivable securitization program | 45,000 | |||
Accounts receivable securitization borrowings | ||||
Financing Arrangements | ||||
Maximum borrowing capacity | 125,000 | 125,000 | ||
Additional borrowing capacity that may be requested | 25,000 | 25,000 | ||
Long-term debt | $ 40,000 | |||
Additional borrowings under accounts receivable securitization program | $ 45,000 | |||
Repayment of accounts receivable securitization | 85,000 | |||
Outstanding letters of credit | 11,700 | 11,700 | ||
Remaining borrowing capacity | $ 113,300 | $ 113,300 |
LONG-TERM DEBT AND FINANCING _8
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Financing arrangements - Letters of credit & Surety bonds) (Details) $ in Millions | Sep. 30, 2020USD ($) |
Accounts receivable securitization borrowings | |
Financing Arrangements | |
Outstanding letters of credit | $ 11.7 |
Letters Of Credit Agreements | |
Financing Arrangements | |
Outstanding letters of credit | 12.3 |
Surety bonds | |
Financing Arrangements | |
Outstanding surety bonds under uncollateralized bond programs | $ 61.6 |
LONG-TERM DEBT AND FINANCING _9
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Financing arrangements - Notes Payable) (Details) - Notes payable - Revenue equipment - USD ($) $ in Millions | Nov. 01, 2020 | Sep. 30, 2020 | Sep. 30, 2020 |
Financing Arrangements | |||
Assets financed during the period under promissory note arrangements | $ 39.4 | $ 53 | |
Subsequent Event | |||
Financing Arrangements | |||
Assets financed during the period under promissory note arrangements | $ 7.2 |
PENSION AND OTHER POSTRETIREM_3
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Components of cost) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Components of net periodic benefit cost | ||||
Pension settlement expense | $ 89 | $ 8,135 | ||
Nonunion Defined Benefit Pension Plan | ||||
Components of net periodic benefit cost | ||||
Interest cost | $ 138 | 624 | ||
Expected return on plan assets | 29 | (60) | ||
Pension settlement expense | 2,530 | 4,164 | ||
Amortization of net actuarial (gain) loss | 50 | 260 | ||
Net periodic benefit cost | 2,747 | 4,988 | ||
Noncash charge to pension settlement expense | 4,000 | 4,000 | ||
Supplemental Benefit Plan | ||||
Components of net periodic benefit cost | ||||
Interest cost | $ 2 | 9 | 7 | 29 |
Pension settlement expense | 89 | |||
Amortization of net actuarial (gain) loss | 2 | 24 | 7 | 71 |
Net periodic benefit cost | 4 | 33 | 103 | 100 |
Postretirement Health Benefit Plan | ||||
Components of net periodic benefit cost | ||||
Service cost | 46 | 80 | 140 | 240 |
Interest cost | 144 | 303 | 432 | 909 |
Amortization of prior service credit | (8) | (25) | ||
Amortization of net actuarial (gain) loss | (150) | 225 | (448) | 674 |
Net periodic benefit cost | $ 40 | $ 600 | $ 124 | $ 1,798 |
PENSION AND OTHER POSTRETIREM_4
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Nonunion) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Pension and other postretirement benefit plans | |||
Pension settlement expense | $ 89 | $ 8,135 | |
Pension settlement expense, net of tax | $ 5,850 | 66 | 7,063 |
Nonunion Defined Benefit Pension Plan | |||
Pension and other postretirement benefit plans | |||
Pension settlement expense | 2,530 | 4,164 | |
Pension settlement expense, net of tax | 1,900 | 3,100 | |
Lump-sum distributions | 16,000 | 33,900 | |
Noncash charge to pension settlement expense | 4,000 | 4,000 | |
Noncash charge to pension settlement expense, Tax | $ 0 | $ 0 | |
Supplemental Benefit Plan | |||
Pension and other postretirement benefit plans | |||
Benefit | 700 | ||
Pension settlement expense | 89 | ||
Pension settlement expense, net of tax | $ 100 |
PENSION AND OTHER POSTRETIREM_5
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Multiemployer Plans) (Details) - Nonunion Defined Benefit Pension Plan - Asset-Based | Jan. 01, 2020 | Sep. 30, 2020plan | Dec. 31, 2019 | Jan. 01, 2019 |
Multiemployer Plans | ||||
Number of multiemployer plans to which ABF Freight currently contributes | 25 | |||
Maximum projected time to insolvency for plans in "critical and declining" status | 14 years | |||
Maximum projected time to insolvency for plans in "critical and declining" status if additional criteria apply | 19 years | |||
Threshold ratio of inactive to active participants for greater insolvency period to determine "critical and declining" status | 2 | |||
Threshold funded percentage for greater insolvency period to determine "critical and declining" status | 80.00% | |||
Central States Pension Plan | ||||
Multiemployer Plans | ||||
Approximate proportion of multiemployer pension plan contributions (as a percent) | 50.00% | |||
Actuarially certified projected funded percentage of multiemployer pension plan | 24.80% | |||
560 Pension Fund | ||||
Multiemployer Plans | ||||
Approximate proportion of multiemployer pension plan contributions (as a percent) | 2.00% |
STOCKHOLDERS' EQUITY (AOCI) (De
STOCKHOLDERS' EQUITY (AOCI) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Accumulated Other Comprehensive Income (Loss) | ||||||||
Total after-tax amount | $ 802,639 | $ 775,091 | $ 759,206 | $ 763,043 | $ 763,626 | $ 743,159 | $ 721,755 | $ 717,682 |
Accumulated Other Comprehensive Income (Loss) | ||||||||
Accumulated Other Comprehensive Income (Loss) | ||||||||
Total pre-tax amount | (1,864) | 260 | ||||||
Total after-tax amount | (1,367) | $ (2,090) | $ (2,264) | 203 | (7,630) | $ (12,429) | $ (12,388) | (14,238) |
Unrecognized Net Periodic Benefit Credit (cost) | ||||||||
Accumulated Other Comprehensive Income (Loss) | ||||||||
Total pre-tax amount | 2,535 | 2,898 | ||||||
Total after-tax amount | 1,883 | 2,152 | (5,249) | (12,749) | ||||
Interest Rate Swap | ||||||||
Accumulated Other Comprehensive Income (Loss) | ||||||||
Total pre-tax amount | (1,964) | (563) | ||||||
Total after-tax amount | (1,451) | (416) | (607) | 591 | ||||
Foreign Currency Translation | ||||||||
Accumulated Other Comprehensive Income (Loss) | ||||||||
Total pre-tax amount | (2,435) | (2,075) | ||||||
Total after-tax amount | $ (1,799) | $ (1,533) | $ (1,774) | $ (2,080) |
STOCKHOLDERS' EQUITY (AOCI comp
STOCKHOLDERS' EQUITY (AOCI comp) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Changes in accumulated other comprehensive income (loss), net of tax, by component | ||||||||
Balances | $ 775,091 | $ 759,206 | $ 763,043 | $ 743,159 | $ 721,755 | $ 717,682 | $ 763,043 | $ 717,682 |
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | 723 | 174 | (2,467) | 4,799 | (41) | 1,850 | (1,570) | 6,608 |
Balances | 802,639 | 775,091 | 759,206 | 763,626 | 743,159 | 721,755 | 802,639 | 763,626 |
Accumulated Other Comprehensive Income (Loss) | ||||||||
Changes in accumulated other comprehensive income (loss), net of tax, by component | ||||||||
Balances | (2,090) | (2,264) | 203 | (12,429) | (12,388) | (14,238) | 203 | (14,238) |
Other comprehensive income (loss) before reclassifications | (1,309) | (1,183) | ||||||
Amounts reclassified from accumulated other comprehensive income (loss) | (261) | 7,791 | ||||||
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | 723 | 174 | (2,467) | 4,799 | (41) | 1,850 | (1,570) | 6,608 |
Balances | (1,367) | $ (2,090) | (2,264) | (7,630) | $ (12,429) | (12,388) | (1,367) | (7,630) |
Unrecognized Net Periodic Benefit Credit (cost) | ||||||||
Changes in accumulated other comprehensive income (loss), net of tax, by component | ||||||||
Balances | 2,152 | (12,749) | 2,152 | (12,749) | ||||
Other comprehensive income (loss) before reclassifications | (8) | (291) | ||||||
Amounts reclassified from accumulated other comprehensive income (loss) | (261) | 7,791 | ||||||
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | (269) | 7,500 | ||||||
Balances | 1,883 | (5,249) | 1,883 | (5,249) | ||||
Interest Rate Swap | ||||||||
Changes in accumulated other comprehensive income (loss), net of tax, by component | ||||||||
Balances | (416) | 591 | (416) | 591 | ||||
Other comprehensive income (loss) before reclassifications | (1,035) | (1,198) | ||||||
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | (1,035) | (1,198) | ||||||
Balances | (1,451) | (607) | (1,451) | (607) | ||||
Foreign Currency Translation | ||||||||
Changes in accumulated other comprehensive income (loss), net of tax, by component | ||||||||
Balances | $ (1,533) | $ (2,080) | (1,533) | (2,080) | ||||
Other comprehensive income (loss) before reclassifications | (266) | 306 | ||||||
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | (266) | 306 | ||||||
Balances | $ (1,799) | $ (1,774) | $ (1,799) | $ (1,774) |
STOCKHOLDERS' EQUITY (Reclass)
STOCKHOLDERS' EQUITY (Reclass) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Unrecognized Net Periodic Benefit Credit (cost) | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | $ 352 | $ (9,115) |
Tax benefit (expense) | (91) | 1,324 |
Total, net of tax | 261 | (7,791) |
Unrecognized Net Periodic Benefit Credit (cost) | Nonunion Defined Benefit Pension Plan | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | (7,300) | |
Amortization of net actuarial gain (loss) | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | 441 | (1,005) |
Amortization of net actuarial gain (loss) | Nonunion Defined Benefit Pension Plan | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | (300) | |
Amortization of prior service credit | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | 25 | |
Pension settlement expense, including termination expense | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | $ (89) | (8,135) |
Pension settlement expense, including termination expense | Nonunion Defined Benefit Pension Plan | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | (8,100) | |
Pension termination expense | Nonunion Defined Benefit Pension Plan | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | (4,000) | |
Tax benefit (expense) | $ 0 |
STOCKHOLDERS' EQUITY (Dividends
STOCKHOLDERS' EQUITY (Dividends) (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 30, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Dividends on Common Stock | |||||||||
Dividends declared (in dollars per share) | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.24 | $ 0.24 | |
Dividend Amount | $ 2,040 | $ 2,049 | $ 2,033 | $ 2,043 | $ 2,050 | $ 2,052 | |||
Subsequent Event | |||||||||
Dividends on Common Stock | |||||||||
Dividends declared (in dollars per share) | $ 0.08 |
STOCKHOLDERS' EQUITY (Treasury
STOCKHOLDERS' EQUITY (Treasury Stock) (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Treasury Stock | |||
Aggregate cost of shares repurchased during the period | $ 5,667 | $ 6,115 | |
Treasury stock (in shares) | 3,632,099 | 3,404,639 | |
Stock Repurchase Program | |||
Treasury Stock | |||
Number of shares repurchased during the period | 227,460 | ||
Aggregate cost of shares repurchased during the period | $ 5,700 | ||
Amount available for repurchase | $ 7,500 | $ 13,200 |
EARNINGS PER SHARE (Basic and D
EARNINGS PER SHARE (Basic and Diluted) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Basic, numerator: | ||||||||
Net income | $ 29,404 | $ 15,880 | $ 1,902 | $ 16,270 | $ 24,376 | $ 4,888 | $ 47,186 | $ 45,534 |
Effect of unvested restricted stock unit awards | (4) | (2) | (22) | (28) | ||||
Adjusted net income | $ 29,400 | $ 16,268 | $ 47,164 | $ 45,506 | ||||
Basic, denominator: | ||||||||
Weighted-average shares | 25,470,094 | 25,527,982 | 25,403,786 | 25,550,365 | ||||
Earnings per common share (in dollars per share) | $ 1.15 | $ 0.64 | $ 1.86 | $ 1.78 | ||||
Diluted, numerator: | ||||||||
Net income | $ 29,404 | $ 15,880 | $ 1,902 | $ 16,270 | $ 24,376 | $ 4,888 | $ 47,186 | $ 45,534 |
Effect of unvested restricted stock unit awards | (4) | (2) | (22) | (28) | ||||
Adjusted net income | $ 29,400 | $ 16,268 | $ 47,164 | $ 45,506 | ||||
Diluted, denominator: | ||||||||
Weighted-average shares | 25,470,094 | 25,527,982 | 25,403,786 | 25,550,365 | ||||
Effect of dilutive securities | 1,122,363 | 888,613 | 886,160 | 911,303 | ||||
Adjusted weighted-average shares and assumed conversions | 26,592,457 | 26,416,595 | 26,289,946 | 26,461,668 | ||||
Earnings per common share (in dollars per share) | $ 1.11 | $ 0.62 | $ 1.79 | $ 1.72 |
EARNINGS PER SHARE (AntiDil) (D
EARNINGS PER SHARE (AntiDil) (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Antidilutive securities | ||||
Antidilutive securities | 0 | |||
Maximum | ||||
Antidilutive securities | ||||
Antidilutive securities | 0.1 | |||
Stock awards | ||||
Antidilutive securities | ||||
Antidilutive securities | 0.2 | 0.2 |
OPERATING SEGMENT DATA - (Conce
OPERATING SEGMENT DATA - (Concentrations) (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenues | Customer concentration risk | Asset-Based and ArcBest segments | FleetNet | ||||
Concentrations | ||||
Concentration Risk, Percentage | 18.00% | 19.00% | 20.00% | 17.00% |
OPERATING SEGMENT DATA - (Rev a
OPERATING SEGMENT DATA - (Rev and Expenses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
REVENUES | ||||
Revenues | $ 794,980 | $ 787,563 | $ 2,123,749 | $ 2,270,892 |
OPERATING EXPENSES | ||||
Salaries, wages, and benefits | 363,035 | 363,902 | 1,013,201 | 1,068,685 |
Fuel, supplies, and expenses | 61,321 | 81,023 | 187,932 | 241,059 |
Depreciation and amortization | 30,032 | 29,361 | 88,131 | 83,332 |
Gain on sale of property and equipment | (3,280) | (1,384) | ||
Other | 33,372 | 32,959 | 94,079 | 96,617 |
Total consolidated operating expenses | 755,198 | 756,355 | 2,055,723 | 2,195,893 |
OPERATING INCOME (LOSS) | ||||
Operating income (loss) | 39,782 | 31,208 | 68,026 | 74,999 |
OTHER INCOME (COSTS) | ||||
Interest and dividend income | 756 | 1,768 | 3,122 | 4,862 |
Interest and other related financing costs | (2,860) | (2,900) | (9,185) | (8,593) |
Other, net | 1,500 | (6,734) | 334 | (7,770) |
TOTAL OTHER INCOME (COSTS) | (604) | (7,866) | (5,729) | (11,501) |
INCOME BEFORE INCOME TAXES | 39,178 | 23,342 | 62,297 | 63,498 |
Operating Segments | Asset-Based | ||||
REVENUES | ||||
Revenues | 561,856 | 565,621 | 1,537,639 | 1,631,348 |
OPERATING EXPENSES | ||||
Salaries, wages, and benefits | 287,385 | 296,503 | 820,218 | 873,795 |
Fuel, supplies, and expenses | 50,144 | 65,738 | 157,044 | 195,502 |
Operating taxes and licenses | 12,296 | 12,865 | 36,719 | 37,477 |
Insurance | 8,587 | 7,646 | 24,658 | 23,235 |
Communications and utilities | 4,373 | 5,064 | 13,426 | 14,181 |
Depreciation and amortization | 24,054 | 23,776 | 70,651 | 66,370 |
Rents and purchased transportation | 69,442 | 61,102 | 171,364 | 167,234 |
Shared services | 60,664 | 56,031 | 155,154 | 161,664 |
Gain on sale of property and equipment | 133 | (82) | (3,206) | (1,703) |
Innovative technology costs | 6,199 | 4,664 | 15,521 | 9,200 |
Other | 1,933 | 592 | 5,168 | 2,878 |
Total consolidated operating expenses | 525,210 | 533,899 | 1,466,717 | 1,549,833 |
OPERATING INCOME (LOSS) | ||||
Operating income (loss) | 36,646 | 31,722 | 70,922 | 81,515 |
Operating Segments | ArcBest | ||||
REVENUES | ||||
Revenues | 217,294 | 199,758 | 533,536 | 554,135 |
OPERATING EXPENSES | ||||
Purchased transportation | 181,129 | 164,521 | 443,401 | 452,178 |
Supplies and expenses | 2,746 | 2,780 | 7,015 | 8,412 |
Depreciation and amortization | 2,413 | 2,607 | 7,332 | 8,813 |
Shared services | 24,217 | 25,032 | 64,784 | 71,204 |
Other | 1,958 | 2,366 | 6,279 | 7,224 |
Total consolidated operating expenses | 212,463 | 197,306 | 528,811 | 547,831 |
OPERATING INCOME (LOSS) | ||||
Operating income (loss) | 4,831 | 2,452 | 4,725 | 6,304 |
Operating Segments | FleetNet | ||||
REVENUES | ||||
Revenues | 50,545 | 53,976 | 149,424 | 158,957 |
OPERATING EXPENSES | ||||
Total consolidated operating expenses | 49,558 | 52,805 | 146,615 | 155,272 |
OPERATING INCOME (LOSS) | ||||
Operating income (loss) | 987 | 1,171 | 2,809 | 3,685 |
Other and eliminations | ||||
REVENUES | ||||
Revenues | (34,715) | (31,792) | (96,850) | (73,548) |
OPERATING EXPENSES | ||||
Total consolidated operating expenses | (32,033) | (27,655) | (86,420) | (57,043) |
OPERATING INCOME (LOSS) | ||||
Operating income (loss) | $ (2,682) | $ (4,137) | $ (10,430) | $ (16,505) |
OPERATING SEGMENT DATA - (Opera
OPERATING SEGMENT DATA - (Operating Expenses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
OPERATING EXPENSES | ||||
Salaries, wages, and benefits | $ 363,035 | $ 363,902 | $ 1,013,201 | $ 1,068,685 |
Rents, purchased transportation, and other costs of services | 267,438 | 249,110 | 672,380 | 706,200 |
Fuel, supplies, and expenses | 61,321 | 81,023 | 187,932 | 241,059 |
Depreciation and amortization | 30,032 | 29,361 | 88,131 | 83,332 |
Other | 33,372 | 32,959 | 94,079 | 96,617 |
Total consolidated operating expenses | $ 755,198 | $ 756,355 | $ 2,055,723 | $ 2,195,893 |
LEGAL PROCEEDINGS, ENVIRONMEN_2
LEGAL PROCEEDINGS, ENVIRONMENTAL MATTERS, AND OTHER EVENTS (Environmental Matters) (Details) $ in Millions | 9 Months Ended | |
Sep. 30, 2020USD ($)tankstate | Dec. 31, 2019USD ($) | |
Underground fuel storage tanks | ||
Environmental Matters | ||
Number of underground tanks where the company's subsidiaries store fuel for use in tractors and trucks | tank | 56 | |
Number of states in which underground tanks are located | state | 16 | |
Environmental cleanup costs | Accrued expenses | ||
Environmental Matters | ||
Reserve for environmental contingencies | $ | $ 0.5 | $ 0.4 |