[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the company's unaudited consolidated financial statements and management's financial analysis [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements, including balance sheets, income statements, and cash flows, reflecting the reclassification of FleetNet as a discontinued operation [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased slightly to **$2.41 billion** at June 30, 2023, while total stockholders' equity increased to **$1.21 billion** Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | $865,190 | $989,783 | | **Total Assets** | **$2,414,102** | **$2,494,286** | | **Total Current Liabilities** | $641,266 | $768,470 | | **Total Liabilities** | $1,202,741 | $1,342,885 | | **Total Stockholders' Equity** | **$1,211,361** | **$1,151,401** | - Assets and liabilities of discontinued operations (FleetNet) were **$75.8 million** and **$52.4 million** respectively at Dec 31, 2022, and are zero as of June 30, 2023, following the sale[7](index=7&type=chunk) [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Q2 2023 revenues decreased to **$1.10 billion**, leading to a significant drop in operating income to **$42.1 million** Consolidated Operations Highlights (in thousands, except per share data) | Metric | Q2 2023 | Q2 2022 | 6 Months 2023 | 6 Months 2022 | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | $1,103,464 | $1,321,692 | $2,209,558 | $2,589,783 | | **Operating Income** | $42,116 | $136,038 | $63,275 | $228,981 | | **Net Income from Continuing Operations** | $39,600 | $101,542 | $58,447 | $169,550 | | **Diluted EPS from Continuing Operations** | $1.60 | $3.97 | $2.35 | $6.58 | - The company recognized significant income from discontinued operations of **$53.3 million** for the first six months of 2023, primarily due to the gain on the sale of FleetNet[9](index=9&type=chunk) [Consolidated Statements of Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Total comprehensive income for Q2 2023 was **$40.6 million**, a decrease from **$102.1 million** in Q2 2022 Comprehensive Income (in thousands) | Metric | Q2 2023 | Q2 2022 | 6 Months 2023 | 6 Months 2022 | | :--- | :--- | :--- | :--- | :--- | | **Net Income** | $40,443 | $102,461 | $111,726 | $172,030 | | **Other Comprehensive Income (Loss)** | $183 | $(349) | $(534) | $1,275 | | **Total Comprehensive Income** | **$40,626** | **$102,112** | **$111,192** | **$173,305** | [Consolidated Statement of Stockholders' Equity](index=7&type=section&id=Consolidated%20Statement%20of%20Stockholders%27%20Equity) Stockholders' equity increased to **$1.21 billion** driven by net income, partially offset by treasury stock purchases and dividends Changes in Stockholders' Equity (6 Months Ended June 30, 2023, in thousands) | Description | Amount | | :--- | :--- | | **Balance at Dec 31, 2022** | **$1,151,401** | | Net Income | $111,726 | | Other Comprehensive Loss | $(534) | | Purchase of Treasury Stock | $(41,240) | | Dividends Declared | $(5,809) | | Share-based Compensation & Other | $(4,183) | | **Balance at June 30, 2023** | **$1,211,361** | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities decreased to **$103.8 million** for the first six months of 2023, while investing activities provided **$30.5 million** Cash Flow Summary (6 Months Ended June 30, in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $103,757 | $184,623 | | **Net Cash from (used in) Investing Activities** | $30,456 | $(74,844) | | **Net Cash used in Financing Activities** | $(105,299) | $(59,341) | | **Net Increase in Cash** | $28,914 | $50,438 | | **Cash at End of Period** | $187,286 | $127,058 | - The sale of discontinued operations (FleetNet) provided **$100.9 million** in cash proceeds during the first six months of 2023[18](index=18&type=chunk) [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed disclosure on accounting policies and financial statement components, including segment performance and the FleetNet sale [NOTE A – ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION](index=10&type=section&id=NOTE%20A%20%E2%80%93%20ORGANIZATION%20AND%20DESCRIPTION%20OF%20THE%20BUSINESS%20AND%20FINANCIAL%20STATEMENT%20PRESENTATION) ArcBest operates through Asset-Based and Asset-Light segments, with FleetNet reclassified as discontinued operations after its sale - The company operates through two main segments: Asset-Based, which contributed **~63%** of total revenues in the first six months of 2023, and Asset-Light[20](index=20&type=chunk)[21](index=21&type=chunk) - A new 5-year collective bargaining agreement (2023 ABF NMFA) was ratified, effective July 1, 2023. It includes annual wage increases, profit-sharing bonuses, and increased benefit contributions, with an estimated **4.2%** compounded annual increase in top hourly wage and benefit rates[21](index=21&type=chunk)[22](index=22&type=chunk) - The company sold its FleetNet subsidiary for **$100.9 million** on Feb 28, 2023. FleetNet's results are now reported as discontinued operations, and prior periods have been reclassified[23](index=23&type=chunk) [NOTE B – FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS](index=12&type=section&id=NOTE%20B%20%E2%80%93%20FINANCIAL%20INSTRUMENTS%20AND%20FAIR%20VALUE%20MEASUREMENTS) The contingent consideration liability for MoLo increased to **$117.0 million** due to revised growth assumptions, impacting fair value measurements Cash and Short-Term Investments (in thousands) | Category | June 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $187,286 | $158,264 | | Short-term investments | $153,116 | $167,662 | - The fair value of the contingent consideration liability for the MoLo acquisition increased by **$5.0 million** to **$117.0 million** during the first six months of 2023. This was due to revised assumptions for business growth in 2024 and 2025, partially offset by softer 2023 market conditions[38](index=38&type=chunk)[41](index=41&type=chunk) - The fair value of the company's equity investment in Phantom Auto increased by **$3.7 million** based on an observable price change from a new funding round[43](index=43&type=chunk) [NOTE C – DISCONTINUED OPERATIONS](index=16&type=section&id=NOTE%20C%20%E2%80%93%20DISCONTINUED%20OPERATIONS) ArcBest sold FleetNet for **$100.9 million**, resulting in a pre-tax gain of **$70.2 million**, with its results now reported as discontinued operations - The company sold FleetNet for **$100.9 million**, recording a pre-tax gain of **$70.2 million** (**$52.3 million** after tax)[44](index=44&type=chunk) Financial Results from Discontinued Operations (in thousands) | Metric | 6 Months 2023 | 6 Months 2022 | | :--- | :--- | :--- | | Revenues | $55,929 | $138,220 | | Gain on sale of business | $(70,215) | — | | Income from discontinued operations, net of tax | $53,279 | $2,480 | [NOTE D – GOODWILL AND INTANGIBLE ASSETS](index=18&type=section&id=NOTE%20D%20%E2%80%93%20GOODWILL%20AND%20INTANGIBLE%20ASSETS) Goodwill remained at **$304.8 million**, primarily from Asset-Light acquisitions, while net intangible assets decreased due to amortization - The goodwill balance of **$304.8 million** at June 30, 2023, primarily relates to the Asset-Light segment acquisitions of MoLo and Panther[49](index=49&type=chunk) Future Amortization of Intangible Assets (in thousands) | Period | Amount | | :--- | :--- | | Remainder of 2023 | $6,394 | | 2024 | $12,778 | | 2025 | $12,778 | | 2026 | $8,671 | | 2027 | $7,247 | | Thereafter | $27,299 | | **Total** | **$75,167** | [NOTE E – INCOME TAXES](index=20&type=section&id=NOTE%20E%20%E2%80%93%20INCOME%20TAXES) The effective tax rate from continuing operations was **19.1%** for the first half of 2023, influenced by state taxes and tax credits Effective Tax Rate from Continuing Operations | Period | 2023 | 2022 | | :--- | :--- | :--- | | **Three Months Ended June 30** | 18.6% | 22.9% | | **Six Months Ended June 30** | 19.1% | 23.6% | - The 2023 effective tax rate was impacted by the reinstatement of the federal alternative fuel tax credit[53](index=53&type=chunk) - The company paid **$77.8 million** in federal, state, and foreign income taxes during the first six months of 2023, compared to **$56.4 million** in the same period of 2022[55](index=55&type=chunk) [NOTE F – LEASES](index=20&type=section&id=NOTE%20F%20%E2%80%93%20LEASES) Operating lease expense increased to **$22.4 million** for the first six months of 2023, with future payments totaling **$241.0 million** Total Operating Lease Expense (in thousands) | Period | 2023 | 2022 | | :--- | :--- | :--- | | **Three Months Ended June 30** | $11,805 | $8,338 | | **Six Months Ended June 30** | $22,397 | $16,236 | - As of June 30, 2023, total future lease payments under operating leases were **$241.0 million**, with a present value (lease liability) of **$205.2 million**[59](index=59&type=chunk) [NOTE G – LONG-TERM DEBT AND FINANCING ARRANGEMENTS](index=22&type=section&id=NOTE%20G%20%E2%80%93%20LONG-TERM%20DEBT%20AND%20FINANCING%20ARRANGEMENTS) Total long-term debt decreased to **$233.0 million**, including **$50.0 million** on the revolving credit facility and **$183.0 million** in notes payable Long-Term Debt (in thousands) | Category | June 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Credit Facility | $50,000 | $50,000 | | Notes payable | $182,987 | $214,623 | | **Total Debt** | **$232,987** | **$264,623** | - The company has a **$250.0 million** revolving credit facility maturing in October 2027, with **$200.0 million** available borrowing capacity as of June 30, 2023[65](index=65&type=chunk) - An accounts receivable securitization program provides **$50.0 million** in available proceeds, of which **$40.0 million** was available as of June 30, 2023, after issuing **$10.0 million** in standby letters of credit[70](index=70&type=chunk)[72](index=72&type=chunk) [NOTE H – STOCKHOLDERS' EQUITY](index=26&type=section&id=NOTE%20H%20%E2%80%93%20STOCKHOLDERS%27%20EQUITY) Stockholders' equity increased, driven by net income and partially offset by **$41.2 million** in treasury stock repurchases under a reauthorized program - The company declared dividends of **$0.12 per share** in Q1 and Q2 2023, totaling **$5.8 million** for the six-month period[83](index=83&type=chunk) - In February 2023, the Board reauthorized the share repurchase program and increased the total amount available to **$125.0 million**[84](index=84&type=chunk) - During the first six months of 2023, the company repurchased **453,296 shares** for **$41.2 million**, leaving **$83.8 million** available under the program as of June 30, 2023[85](index=85&type=chunk) [NOTE I – EARNINGS PER SHARE](index=28&type=section&id=NOTE%20I%20%E2%80%93%20EARNINGS%20PER%20SHARE) Diluted EPS from continuing operations was **$2.35** for the first six months of 2023, with total diluted EPS at **$4.49** Diluted Earnings Per Share | Category | Q2 2023 | Q2 2022 | 6 Months 2023 | 6 Months 2022 | | :--- | :--- | :--- | :--- | :--- | | **Continuing operations** | $1.60 | $3.97 | $2.35 | $6.58 | | **Discontinued operations** | $0.03 | $0.04 | $2.14 | $0.10 | | **Total diluted EPS** | **$1.64** | **$4.00** | **$4.49** | **$6.68** | [NOTE J – OPERATING SEGMENT DATA](index=28&type=section&id=NOTE%20J%20%E2%80%93%20OPERATING%20SEGMENT%20DATA) Asset-Based revenues were **$1.42 billion** with **$90.8 million** operating income, while Asset-Light revenues were **$847.9 million** with an operating loss Segment Revenues (6 Months Ended June 30, in thousands) | Segment | 2023 | 2022 | | :--- | :--- | :--- | | Asset-Based | $1,419,832 | $1,507,933 | | Asset-Light | $847,908 | $1,144,939 | | Other and eliminations | $(58,182) | $(63,089) | | **Total Consolidated** | **$2,209,558** | **$2,589,783** | Segment Operating Income (Loss) (6 Months Ended June 30, in thousands) | Segment | 2023 | 2022 | | :--- | :--- | :--- | | Asset-Based | $90,796 | $196,690 | | Asset-Light | $(911) | $48,595 | | Other and eliminations | $(26,610) | $(16,304) | | **Total Consolidated** | **$63,275** | **$228,981** | [NOTE K – LEGAL PROCEEDINGS, ENVIRONMENTAL MATTERS, AND OTHER EVENTS](index=33&type=section&id=NOTE%20K%20%E2%80%93%20LEGAL%20PROCEEDINGS%2C%20ENVIRONMENTAL%20MATTERS%2C%20AND%20OTHER%20EVENTS) The company faces lawsuits related to a pre-acquisition auto accident and agreed to pay a **$0.5 million** civil penalty for Clean Water Act issues - The company and its subsidiary MoLo are defendants in lawsuits related to a pre-acquisition auto accident. A loss is deemed reasonably possible and could be material, but an amount cannot be estimated[103](index=103&type=chunk) - In March 2023, ABF Freight entered a consent decree with the EPA and will pay a **$0.5 million** civil penalty to resolve alleged Clean Water Act compliance issues[108](index=108&type=chunk) - The company is appealing a Notice of Assessment from a state regarding an ongoing sales and use tax audit but does not believe the resolution will have a material adverse effect[109](index=109&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a **14.7%** consolidated revenue decrease for H1 2023 due to market softness, impacting both segments and liquidity [Consolidated Results](index=37&type=section&id=Consolidated%20Results) Consolidated revenues for H1 2023 decreased **14.7%** to **$2.21 billion**, with operating income dropping to **$63.3 million** due to market softness Consolidated Revenue and Operating Income (6 Months Ended June 30, in millions) | Metric | 2023 | 2022 | % Change | | :--- | :--- | :--- | :--- | | **Total Revenues** | $2,209.6 | $2,589.8 | (14.7%) | | **Operating Income** | $63.3 | $229.0 | (72.4%) | - Innovative technology costs, including the Vaux freight handling program, impacted consolidated results by **$27.3 million** (pre-tax) in the first half of 2023, up from **$20.0 million** in the prior year period[125](index=125&type=chunk) - The remeasurement of the MoLo contingent earnout consideration reduced consolidated results by a **$5.0 million** (pre-tax) expense in the first half of 2023[126](index=126&type=chunk) [Consolidated Adjusted EBITDA](index=41&type=section&id=Consolidated%20Adjusted%20EBITDA) Consolidated Adjusted EBITDA from continuing operations decreased significantly to **$154.4 million** for H1 2023, reflecting lower operating performance Consolidated Adjusted EBITDA from Continuing Operations (in thousands) | Period | 2023 | 2022 | | :--- | :--- | :--- | | **Three Months Ended June 30** | $76,301 | $171,865 | | **Six Months Ended June 30** | $154,405 | $301,988 | [Asset-Based Operations](index=43&type=section&id=Asset-Based%20Operations) Asset-Based segment revenues decreased **5.8%** to **$1.42 billion**, with operating income falling to **$90.8 million** due to lower rates and mix shift Asset-Based Segment Results (6 Months Ended June 30) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | **Revenues** | $1,419.8M | $1,507.9M | | **Operating Income** | $90.8M | $196.7M | | **Operating Ratio** | 93.6% | 87.0% | - A new 5-year collective bargaining agreement (2023 ABF NMFA) was implemented retroactive to July 1, 2023, and is expected to increase the combined wage and benefits top hourly rate by approximately **4.2%** on a compounded annual basis[148](index=148&type=chunk) - The company noted that a large LTL competitor ceased operations on July 30, 2023, which is expected to cause short-term market disruption and a possible increase in shipment levels[149](index=149&type=chunk) [Asset-Light Operations](index=53&type=section&id=Asset-Light%20Operations) Asset-Light segment revenues decreased **25.9%** to **$847.9 million**, resulting in an operating loss of **$0.9 million** due to market softness Asset-Light Segment Results (6 Months Ended June 30) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | **Revenues** | $847.9M | $1,144.9M | | **Operating Income (Loss)** | $(0.9)M | $48.6M | | **Operating Ratio** | 100.1% | 95.8% | Asset-Light Key Operating Statistics (% Change YoY, 6 Months Ended June 30, 2023) | Metric | % Change | | :--- | :--- | | Revenue per shipment | (30.3%) | | Shipments per day | 2.3% | - Operating results for the first half of 2023 were reduced by a **$5.0 million** expense from the change in fair value of the MoLo contingent earnout consideration[185](index=185&type=chunk) [Current Economic Conditions, Inflation, and Other Factors](index=59&type=section&id=Current%20Economic%20Conditions%2C%20Inflation%2C%20and%20Other%20Factors) Challenging economic conditions, including inflation and slowing manufacturing, have softened demand and impacted pricing and costs - The Manufacturing PMI, a key industry indicator, was **46.4%** for July 2023, marking the **nine consecutive months** of economic contraction in the manufacturing sector[196](index=196&type=chunk) - The company is piloting electric forklifts, yard tractors, and straight trucks and is implementing City Route Optimization (CRO) technology to reduce emissions and improve efficiency[205](index=205&type=chunk) - Cybersecurity is a key focus, with investments in safeguards, backup systems, and a disaster recovery plan to mitigate risks from potential attacks, especially with hybrid and remote work arrangements[210](index=210&type=chunk)[211](index=211&type=chunk) [Liquidity and Capital Resources](index=67&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity remains strong with **$340.4 million** in cash and investments, with estimated 2023 capital expenditures of **$270-$295 million** - Total cash, cash equivalents, and short-term investments stood at **$340.4 million** as of June 30, 2023[218](index=218&type=chunk) - The 2023 capital expenditure plan is estimated to be between **$270.0 million** and **$295.0 million**, net of asset sales, including approximately **$165.0 million** for revenue equipment[233](index=233&type=chunk) - The company has **$200.0 million** available under its revolving credit facility and **$40.0 million** under its accounts receivable securitization program as of June 30, 2023[234](index=234&type=chunk) [Balance Sheet Changes and Income Taxes](index=73&type=section&id=Balance%20Sheet%20Changes%20and%20Income%20Taxes) Significant balance sheet changes include decreased accounts receivable and accrued expenses, with an effective tax rate of **19.1%** for H1 2023 - Accounts receivable decreased by **$87.9 million** due to lower revenue levels and improved collections[240](index=240&type=chunk) - Accrued expenses decreased by **$39.1 million**, primarily due to payments for performance-based incentive plans accrued at year-end 2022[244](index=244&type=chunk) Reconciliation of Effective Tax Rate (Continuing Operations, 6 Months Ended June 30, 2023) | Description | Rate | | :--- | :--- | | Statutory federal rate | 21.0% | | State income tax provision | 4.6% | | Tax benefit from vested RSUs | (6.8%) | | Other items, net | 0.3% | | **Total Provision for Income Taxes** | **19.1%** | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=80&type=section&id=Item%203.Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risk is from interest rate fluctuations on variable-rate debt, partially mitigated by an interest rate swap - The primary market risk is from interest rate fluctuations on variable-rate debt under the revolving credit facility and AR securitization program[260](index=260&type=chunk) - The company uses an interest rate swap agreement to mitigate a portion of the interest rate risk associated with its **$50.0 million** in borrowings under the revolving credit facility[61](index=61&type=chunk)[260](index=260&type=chunk) [Item 4. Controls and Procedures](index=80&type=section&id=Item%204.Controls%20and%20Procedures) Disclosure controls and procedures were effective as of June 30, 2023, with no material changes to internal controls over financial reporting - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2023[262](index=262&type=chunk) - No changes occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the company's internal controls over financial reporting[263](index=263&type=chunk) [PART II. OTHER INFORMATION](index=81&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides additional information including legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings](index=81&type=section&id=Item%201.Legal%20Proceedings) Detailed information regarding the company's legal proceedings is provided in Note K to the Consolidated Financial Statements - Information regarding legal proceedings is detailed in Note K to the Consolidated Financial Statements[265](index=265&type=chunk) [Item 1A. Risk Factors](index=81&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors have occurred since the filing of the 2022 Annual Report on Form 10-K - No material changes to the company's risk factors have occurred since the filing of the 2022 Annual Report on Form 10-K[266](index=266&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=81&type=section&id=Item%202.Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **299,207 shares** for **$27.2 million** in Q2 2023 under its reauthorized share repurchase program Issuer Purchases of Equity Securities (Q2 2023) | Period | Total Shares Purchased | Average Price Paid | Approx. Value Remaining in Program | | :--- | :--- | :--- | :--- | | Apr 2023 | 171,967 | $92.28 | $95,038,000 | | May 2023 | 127,240 | $88.64 | $83,760,000 | | Jun 2023 | 0 | N/A | $83,760,000 | | **Total** | **299,207** | | **$83,760,000** | - In February 2023, the Board increased the total amount available for share repurchases to **$125.0 million**[268](index=268&type=chunk) [Item 5. Other Information](index=83&type=section&id=Item%205.Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2023 - No directors or officers adopted or terminated a Rule 10b5-1 trading arrangement during the three months ended June 30, 2023[270](index=270&type=chunk) [Item 6. Exhibits](index=84&type=section&id=Item%206.Exhibits) This section lists the exhibits filed with the report, including CEO and CFO certifications and XBRL data files - Exhibits filed include CEO and CFO certifications pursuant to Sarbanes-Oxley Sections 302 and 906, and Inline XBRL documents[273](index=273&type=chunk)

ArcBest Corporation (NASDAQ:ARCB) Q2 2023 Earnings Conference Call July 28, 2023 9:30 AM ET Company Participants David Humphrey - VP, IR Judy McReynolds - Chairman, President & CEO Matt Beasley - CFO and Treasurer Seth Runser - President of ABF Freight Christopher Adkins - VP, Yield Strategy and Management Steven Leonard - Chief Commercial Officer & President of Asset-Light Logistics Dennis Anderson - Chief Strategy Officer Conference Call Participants Stephanie Moore - Jefferies Chris Wetherbee – Citi Jor ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the company's consolidated financial statements, management's discussion, market risk disclosures, and internal controls [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The consolidated financial statements for Q1 2023 show decreased revenues and operating income, offset by a significant gain from discontinued operations [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets slightly decreased to $2.43 billion, while stockholders' equity increased to $1.21 billion as of March 31, 2023 Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | $917,030 | $989,783 | | **Total Assets** | $2,431,593 | $2,494,286 | | **Total Current Liabilities** | $688,043 | $768,470 | | **Total Liabilities** | $1,225,734 | $1,342,885 | | **Total Stockholders' Equity** | $1,205,859 | $1,151,401 | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Q1 2023 revenues from continuing operations declined, but total net income increased due to a substantial gain from discontinued operations Q1 2023 vs Q1 2022 Statement of Operations (in thousands, except per share data) | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | **Revenues** | $1,106,094 | $1,268,091 | | **Operating Income** | $21,159 | $92,943 | | **Net Income from Continuing Operations** | $18,847 | $68,008 | | **Income from Discontinued Operations, Net of Tax** | $52,436 | $1,561 | | **Net Income** | $71,283 | $69,569 | | **Diluted EPS from Continuing Operations** | $0.75 | $2.62 | | **Total Diluted EPS** | $2.84 | $2.68 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Q1 2023 operating cash flow improved significantly, with investing activities boosted by proceeds from the FleetNet sale Q1 2023 vs Q1 2022 Cash Flow Summary (in thousands) | Activity | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | **Net Cash Provided By (Used In) Operating Activities** | $20,663 | $(11,253) | | **Net Cash Provided By (Used In) Investing Activities** | $70,960 | $(7,396) | | **Net Cash Provided By (Used In) Financing Activities** | $(46,676) | $6,137 | | **Net Increase (Decrease) in Cash** | $44,947 | $(12,512) | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Key notes detail the FleetNet sale, contingent consideration for MoLo, segment reporting, and new legal proceedings - On February 28, 2023, the Company sold its FleetNet subsidiary for **$101.1 million** in cash, recording a pre-tax gain of **$69.1 million**[22](index=22&type=chunk)[39](index=39&type=chunk) - The fair value of the contingent consideration liability for the MoLo acquisition increased by **$15.04 million** during Q1 2023, to a total of **$127.04 million**[38](index=38&type=chunk)[36](index=36&type=chunk) - The company's reportable segments are Asset-Based (**61% of revenue**) and Asset-Light[20](index=20&type=chunk)[21](index=21&type=chunk) - In January 2023, the Company and MoLo were named as defendants in lawsuits related to a pre-acquisition auto accident involving a MoLo contract carrier, with a loss believed to be reasonably possible[101](index=101&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=36&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Consolidated revenue declined due to market rates, with operating income impacted by contingent consideration and technology costs, while liquidity remains strong [Results of Operations](index=37&type=section&id=Results%20of%20Operations) Q1 2023 consolidated revenue and operating income decreased, with Asset-Light experiencing an operating loss due to market softness and a contingent consideration charge Segment Performance Summary (in thousands) | Segment | Q1 2023 Revenue | Q1 2022 Revenue | Q1 2023 Operating Income (Loss) | Q1 2022 Operating Income | | :--- | :--- | :--- | :--- | :--- | | **Asset-Based** | $697,817 | $705,311 | $47,471 | $80,034 | | **Asset-Light** | $438,092 | $595,284 | $(14,091) | $21,116 | - The Asset-Based segment's billed revenue per hundredweight decreased **3.9%** YoY, while shipments per day increased **7.9%**, reflecting a strategic shift to optimize network capacity[115](index=115&type=chunk)[140](index=140&type=chunk) - The Asset-Light segment's revenue per shipment fell **30.5%** YoY due to a softer economic environment and increased truckload capacity[171](index=171&type=chunk) - Consolidated results were negatively impacted by a **$15.0 million** pre-tax charge for the remeasurement of the MoLo contingent earnout liability and **$12.5 million** in costs for innovative technology initiatives[119](index=119&type=chunk)[120](index=120&type=chunk) [Liquidity and Capital Resources](index=63&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity improved with the FleetNet sale proceeds, supporting planned capital expenditures and share repurchases - Total capital expenditures for 2023 are estimated to be **$300.0 million to $325.0 million**, net of asset sales, including approximately **$175.0 million** for revenue equipment[222](index=222&type=chunk) - During Q1 2023, the company repurchased **154,089 shares** for **$14.1 million**, with the Board increasing the share repurchase authorization to **$125.0 million** in February 2023[214](index=214&type=chunk)[226](index=226&type=chunk) - As of March 31, 2023, the company had available borrowing capacity of **$200.0 million** under its revolving credit facility and **$40.0 million** under its accounts receivable securitization program[223](index=223&type=chunk) - The fair value of the MoLo contingent earnout consideration is estimated at **$127.0 million**, with **$43.4 million** classified as a current liability expected to be paid in 2024[224](index=224&type=chunk) [Balance Sheet Changes and Income Taxes](index=69&type=section&id=Balance%20Sheet%20Changes%20and%20Income%20Taxes) Significant balance sheet changes include decreases in accounts receivable and accrued expenses, alongside a lower effective tax rate - Accrued expenses decreased by **$59.8 million**, primarily due to Q1 payments for performance-based incentive plans accrued at year-end 2022[233](index=233&type=chunk) - The effective tax rate for continuing operations was **20.0%** for Q1 2023, compared to the **21.0%** federal statutory rate, driven by state taxes, tax benefits from vested RSUs, and the federal alternative fuel credit[236](index=236&type=chunk)[239](index=239&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=75&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The primary market risk is interest rate fluctuations on variable-rate debt, partially mitigated by an interest rate swap agreement - The primary market risk is from interest rate fluctuations on variable-rate debt under the revolving credit facility and accounts receivable securitization program[246](index=246&type=chunk) - The company uses an interest rate swap agreement to mitigate a portion of its interest rate risk[246](index=246&type=chunk) [Item 4. Controls and Procedures](index=75&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2023, with no material changes to internal controls - Management concluded that the Company's disclosure controls and procedures were **effective** as of March 31, 2023[248](index=248&type=chunk) - No changes in internal controls over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, these controls[249](index=249&type=chunk) [PART II. OTHER INFORMATION](index=76&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity security sales, and a list of exhibits filed with the report [Item 1. Legal Proceedings](index=76&type=section&id=Item%201.%20Legal%20Proceedings) Information on legal proceedings, including a MoLo-related lawsuit and an environmental consent decree, is referenced in Note K of the financial statements - For information on legal proceedings, the report refers to Note K of the financial statements[251](index=251&type=chunk) [Item 1A. Risk Factors](index=76&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the company's risk factors since the filing of its 2022 Annual Report on Form 10-K - No material changes to the Company's risk factors have occurred since the Company filed its 2022 Annual Report on Form 10-K[252](index=252&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=76&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not have unregistered equity sales but repurchased 154,089 shares for $14.1 million, with $110.9 million remaining in the authorization Issuer Purchases of Equity Securities (Q1 2023) | Period | Total Shares Purchased | Average Price Paid per Share | Approx. Dollar Value Remaining in Program | | :--- | :--- | :--- | :--- | | **Jan 2023** | — | $— | $26,504,000 | | **Feb 2023** | — | $— | $125,000,000 | | **Mar 2023** | 154,089 | $91.45 | $110,908,000 | | **Total** | **154,089** | **$91.45** | **$110,908,000** | [Item 6. Exhibits](index=79&type=section&id=Item%206.%20Exhibits) This section lists various agreements, compensation plans, and required officer certifications filed as exhibits to the report - The exhibits filed with the report include various agreements, compensation plans, and required certifications such as the CEO and CFO certifications pursuant to Sarbanes-Oxley Sections 302 and 906[261](index=261&type=chunk)[262](index=262&type=chunk)

Call Start: 09:30 January 1, 0000 10:37 AM ET ArcBest Corporation (NASDAQ:ARCB) Q1 2023 Earnings Conference Call April 28, 2023 09:30 ET Company Participants David Humphrey - Vice President of Investor Relations Judy McReynolds - Chairman, President & Chief Executive Officer David Cobb - Chief Financial Officer Steven Leonard - Chief Commercial Officer & President of Asset-Light Logistics Danny Loe - President of Asset-light Logistics and Chief Yield Officer Conference Call Participants Jack Atkins - Stephe ...

Financial Performance - Total revenues for 2022 reached $5,324,052 thousand, a 33.6% increase from $3,980,067 thousand in 2021[457]. - Operating income for 2022 was $399,269 thousand, up 42.2% from $280,986 thousand in 2021[457]. - Net income for 2022 was $298,209 thousand, representing a 39.5% increase compared to $213,521 thousand in 2021[460]. - Basic earnings per share for 2022 were $12.13, a 44.5% increase from $8.38 in 2021[457]. - Operating expenses for 2022 were $4,924,783 thousand, an increase of 33.2% from $3,699,081 thousand in 2021[457]. Assets and Liabilities - Total current assets increased to $989,783 thousand in 2022, up 27.5% from $776,053 thousand in 2021[456]. - Total assets grew to $2,494,286 thousand in 2022, a 17.9% increase from $2,112,676 thousand in 2021[456]. - Total stockholders' equity rose to $1,151,401 thousand in 2022, up 24% from $929,067 thousand in 2021[456]. - The company’s total liabilities related to the postretirement health benefit plan are measured based on various assumptions, including discount rates and expected retirement age[503]. - Long-term debt, less current portion, was $198.371 million as of December 31, 2022, up from $174.917 million in 2021, reflecting a 13.4% increase[569]. Cash Flow - The company reported net cash provided by operating activities of $470,819 thousand in 2022, up from $323,515 thousand in 2021, indicating a 45.5% increase[466]. - Cash and cash equivalents at the end of 2022 were $158,372 thousand, compared to $76,620 thousand at the end of 2021, marking a 106.5% increase[466]. - The company reported a net cash used in financing activities of $127,984 thousand in 2022, a decrease from $247,645 thousand in 2021[466]. Market Risks - The company is exposed to market risks from changes in interest rates, diesel fuel prices, and foreign currency exchange rates[431]. - The company anticipates challenges from inflation and rising interest rates affecting operational costs[431]. - The interest rate swap agreement converts $50.0 million of borrowings under the Credit Facility from variable-rate to fixed-rate interest at 1.55%[433]. Insurance and Reserves - The company's aggregate insurance reserves accrual was $122.8 million, related to workers' compensation and third-party casualty claims[449]. - The allowance for credit losses on trade accounts receivable was $9.4 million as of December 31, 2022, an increase of $6.9 million from the previous year[477]. - The Company is self-insured for certain claims up to specified limits, with liabilities based on case reserves and independent actuarial analysis[492]. Acquisitions and Goodwill - The total purchase consideration for the MoLo acquisition was $330.8 million, which includes $237.1 million in net cash consideration and $93.7 million in contingent consideration[538]. - The goodwill recorded from the MoLo acquisition amounted to $219.0 million, reflecting the excess purchase price over the fair value of net assets acquired[540]. - As of December 31, 2022, total goodwill increased to $305,382 thousand from $300,337 thousand in 2021, reflecting an acquisition of MoLo[545]. Taxation - The total provision for income taxes in 2022 was $94,946 thousand, an increase from $63,633 thousand in 2021[552]. - The effective tax rate for 2022 was 24.1%, compared to 23.0% in 2021[555]. - Income taxes paid in 2022 totaled $148.7 million, significantly higher than $77.5 million in 2021[555]. Pension and Employee Benefits - ABF Freight contributed approximately $154.6 million to multiemployer pension plans in 2022, an increase from $146.9 million in 2021, reflecting a year-over-year growth of about 5.4%[622]. - The company's pension and postretirement liabilities, less current portion, were $338 million in 2022 compared to $381 million in 2021, indicating a decrease of 11.3%[593]. - The company's matching expense for nonunion 401(k) plans increased to $9.4 million in 2022 from $7.7 million in 2021, a rise of 22.1%[608].

ArcBest Corporation (NASDAQ:ARCB) Q4 2022 Earnings Conference Call February 3, 2023 9:30 AM ET Company Participants David Humphrey - Vice President, Investor Relations Judy McReynolds - Chairman, President, and Chief Executive Officer David Cobb - Chief Financial Officer Danny Loe - President of Asset-light Logistics, and Chief Yield Officer Dennis Anderson - Chief Customer Officer Conference Call Participants Chris Wetherbee - Citigroup Ravi Shanker - Morgan Stanley Jason Seidl - Cowen Jordan Alliger - Gol ...

Financial Performance - ArcBest Consolidated revenue for Q4 2022 was $12 billion, a 5% increase compared to Q4 2021[12] - ArcBest Consolidated revenue for the full year 2022 reached $53 billion, a 34% increase compared to 2021[12] - Non-GAAP Operating Income for ArcBest Consolidated in Q4 2022 was $827 million, a 19% decrease[12] - Non-GAAP Operating Income for the full year 2022 was $4729 million, a 49% increase[12] - Non-GAAP Net Income per diluted share for the full year 2022 was $1366, a 60% increase[12] - Asset-Based revenue for the full year 2022 was $30 billion, a 17% increase per day[13] - Asset-Light revenue for the full year 2022 was $25 billion, a 60% increase per day[16] Strategic Initiatives - Cross-sold accounts increased by 20% year-over-year[11] - 33% of accounts were cross-sold in FY 2022, compared to 17% in 2012[5] - Over 60% of asset-light customers also use ABF (Asset-Based) services[5, 24] Future Outlook - The company is focused on reaching $7 billion to $8 billion in revenue by 2025 in the asset-light segment[11]

ArcBest Corporation (NASDAQ:ARCB) Q3 2022 Earnings Conference Call November 1, 2022 9:30 AM ET Company Participants David Humphrey – Vice President-Investor Relations Judy McReynolds – Chairman, President and Chief Executive Officer David Cobb – Chief Financial Officer Danny Loe – President-Asset-light Logistics & Chief Yield Officer Dennis Anderson – Chief Customer Officer Conference Call Participants Chris Wetherbee – Citigroup Jordan Alliger – Goldman Sachs Jack Atkins – Stephens Incorporated Jason Seidl ...