- Third quarter 2019 revenue of $787.6 million, and net income of $16.3 million, or $0.62 per diluted share. On a non‑GAAP (1) basis, third quarter 2019 net income was $27.0 million, or $1.02 per diluted share.

- Asset-Based yield improvement despite a decrease in shipment and tonnage levels

- Asset-Light revenue and operating income decreased due to lower demand

FORT SMITH, Ark., Oct. 31, 2019 /PRNewswire/ -- ArcBest® (Nasdaq: ARCB), a leading logistics company with creative problem solvers who deliver innovative solutions, today reported third quarter 2019 revenue of $787.6 million compared to third quarter 2018 revenue of $826.2 million. Third quarter 2019 operating income was $31.2 million compared to operating income of $56.1 million in third quarter last year. Third quarter net income was $16.3 million, or $0.62 per diluted share compared to third quarter 2018 net income of $40.8 million, or $1.52 per diluted share.

Excluding certain items in both periods, as identified in the attached reconciliation tables, including final nonunion pension charges of $6.0 million, or $0.23 per diluted share, eliminating any further nonunion pension expense, non‑GAAP net income was $27.0 million, or $1.02 per diluted share, in third quarter 2019 compared to third quarter 2018 net income of $40.0 million, or $1.49 per diluted share.

'While below last year's record-setting levels, the third quarter represented one of the best performances achieved for that period in recent history as we continued to see rational pricing amid softer demand compared with last year, „said Chairman, President & CEO Judy R. McReynolds. 'Revenue for expedite and truckload brokerage services declined as available capacity increased, which has been the case throughout the year, while our managed transportation solutions revenue continued to grow as a result of our team's ability to provide valued expertise.”

Reduced customer demand during a more moderate economic period resulted in fewer third quarter shipments and lower total freight tonnage in the Asset‑Based operating segment compared to the same period last year. The lower business levels experienced during the third quarter reflect a reduction in LTL‑rated tonnage partially offset by an increase in TL‑rated, spot shipments. This Asset‑Based business mix, combined with a decrease in the size of the average LTL‑rated shipment, contributed to a reduction in total third quarter Asset‑Based revenue. Yield management initiatives continue to generate positive results. The improvement in third quarter total revenue per hundredweight included additional, solid increases in average LTL pricing above a strong pricing period in 2018.

Lower freight levels adversely impacted productivity in city pickup, dock handling and final shipment delivery contributing to cost increases in these operational areas. Despite a reduction in fuel expense, increased repair and parts costs contributed to higher third quarter equipment maintenance costs. Third quarter linehaul costs were below the prior year due to improved utilization of owned equipment combined with reductions in the use of rail and other outside carrier resources.

A reduction in both total shipments and average revenue per shipment associated with lower market demand resulted in a third quarter revenue decline in the Asset-Light ArcBest segment compared to last year. As seen throughout this year relative to 2018, expedite and truckload brokerage services were the primary reasons for the overall reduction in revenue. Current market conditions have impacted customer pricing and freight mix. This, combined with purchased transportation costs that were comparable to those experienced in last year's higher revenue environment, put pressure on third quarter margins and reduced Asset-Light operating income. Managed transportation services were a significant positive contributor to Asset-Light results as the recent trend of solid demand for these value-added logistics services continued. Household goods shipments handled within the Asset‑Light business increased and were another positive contributor to this segment's revenue and profitability totals. At FleetNet, total event growth resulted in improved third quarter operating income.

Closing Comments

'Results for the first nine months remained solid though below last year's record-setting pace, as our customers' need for complex supply chain solutions aligns well with the broad array of services and expertise we provide, „said McReynolds.” We expect the trends that began in the first quarter, including more available capacity and softer market demand, to remain prevalent for the rest of the year. We will work to reduce costs where prudent while still investing in innovative technology that enables a best-in-class customer experience and offers the optimum benefit and improved efficiency to ArcBest."