ArcBest Corporation (NASDAQ:ARCB) Q3 2020 Earnings Conference Call November 3, 2020 9:30 AM ET Company Participants David Humphrey - VP, IR Judy McReynolds - Chairman, President and CEO David Cobb - CFO Conference Call Participants Jordan Alliger - Goldman Sachs Jason Seidl - Cowen Jack Atkins - Stephens Chris Wetherbee - Citi David Ross - Stifel Ken Hoexter - Bank of America Scott Group - Wolfe Research Todd Fowler - KeyBanc Stephanie Benjamin - Truist Operator Greetings and welcome to the ArcBest Third Qu ...

PART I. FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The unaudited financial statements show results for the three and six months ended June 30, 2020 [Consolidated Financial Statements](index=3&type=section&id=Consolidated%20Financial%20Statements) Core financial statements reflect lower revenue and net income alongside higher cash and debt due to the pandemic Consolidated Statement of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | $627,370 | $771,490 | $1,328,769 | $1,483,329 | | **Operating Income** | $20,425 | $35,200 | $28,244 | $43,791 | | **Net Income** | $15,880 | $24,376 | $17,782 | $29,264 | | **Diluted EPS** | $0.61 | $0.92 | $0.68 | $1.10 | Consolidated Balance Sheet Highlights (in thousands) | Asset/Liability | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $406,290 | $201,909 | | **Total Current Assets** | $902,043 | $664,402 | | **Total Assets** | $1,870,760 | $1,651,207 | | **Long-Term Debt, less current portion** | $473,850 | $266,214 | | **Total Stockholders' Equity** | $775,091 | $763,043 | - For the six months ended June 30, 2020, net cash provided by operating activities was **$82.1 million**, slightly higher than the $80.5 million in the same period of 2019, while net cash from financing activities was a significant source of **$188.1 million**[13](index=13&type=chunk) [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail segment performance, accounting changes, and confirm no goodwill impairment was recorded - The company operates through three reportable segments: Asset-Based (ABF Freight), ArcBest (asset-light logistics), and FleetNet, with the **Asset-Based segment accounting for approximately 70% of total revenues** for the first half of 2020[14](index=14&type=chunk)[15](index=15&type=chunk) - On January 1, 2020, the company adopted the new CECL accounting standard (ASC Topic 326) for credit losses, which resulted in a **$0.2 million decrease to retained earnings**[19](index=19&type=chunk)[22](index=22&type=chunk) - Despite the impact of COVID-19, management concluded it was more likely than not that **goodwill ($88.3 million) and indefinite-lived intangible assets were not impaired** as of June 30, 2020[38](index=38&type=chunk)[40](index=40&type=chunk) Long-Term Debt Obligations (in thousands) | Debt Component | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Credit Facility | $250,000 | $70,000 | | Accounts receivable securitization borrowings | $85,000 | $40,000 | | Notes payable | $197,888 | $213,504 | | **Total Long-Term Debt** | **$532,900** | **$323,519** | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=41&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the pandemic's impact on financial results, liquidity, and segment performance - The COVID-19 pandemic significantly impacted the business, causing an **18.7% decline in consolidated revenues for Q2 2020** compared to Q2 2019[113](index=113&type=chunk) - In response to the pandemic, the company drew down **$180 million** from its credit facility and borrowed **$45 million** from its securitization program to preserve financial flexibility, and implemented cost reductions that saved approximately **$15 million in Q2 2020**[121](index=121&type=chunk)[123](index=123&type=chunk)[125](index=125&type=chunk) - Business levels showed sequential improvement through July 2020, leading the company to repay the **$45 million securitization borrowing** and plan for repayment of the **$180 million credit facility drawdown**[118](index=118&type=chunk)[126](index=126&type=chunk) - The company lowered its planned 2020 capital expenditures by **30% to a range of $95 million to $100 million**[122](index=122&type=chunk) [Results of Operations](index=47&type=section&id=Results%20of%20Operations) Segment analysis reveals revenue declines and margin compression across all business units Segment Revenue Performance (in thousands) | Segment | Q2 2020 Revenue | Q2 2019 Revenue | % Change | | :--- | :--- | :--- | :--- | | Asset-Based | $460,070 | $559,648 | (17.8%) | | ArcBest | $151,467 | $181,173 | (16.4%) | | FleetNet | $46,440 | $51,722 | (10.2%) | Segment Operating Income (Loss) Performance (in thousands) | Segment | Q2 2020 Operating Income | Q2 2019 Operating Income | % Change | | :--- | :--- | :--- | :--- | | Asset-Based | $21,036 | $36,178 | (41.8%) | | ArcBest | $1,303 | $2,122 | (38.6%) | | FleetNet | $782 | $1,026 | (23.8%) | - Asset-Based **tonnage per day decreased 13.8%** and **billed revenue per hundredweight fell 4.0%** in Q2 2020 YoY, reflecting reduced demand and changes in freight mix[136](index=136&type=chunk)[160](index=160&type=chunk) - ArcBest segment's **shipments per day fell 23.4%** in Q2 2020 YoY, and purchased transportation costs as a percentage of revenue increased from 81.4% to 82.6%, indicating margin pressure[191](index=191&type=chunk)[192](index=192&type=chunk) [Liquidity and Capital Resources](index=72&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity was enhanced through precautionary borrowings while capex was reduced and dividends continued - Cash, cash equivalents, and short-term investments **increased by $255.5 million** from year-end 2019, primarily due to **$225.0 million in borrowings**[217](index=217&type=chunk) - Net cash from operating activities for the first six months of 2020 was **$82.1 million**, comparable to the prior-year period despite lower net income[218](index=218&type=chunk) - The 2020 capital expenditure plan was **reduced by approximately 30%** to an estimated range of $95 million to $100 million[227](index=227&type=chunk) - The company declared a quarterly dividend of **$0.08 per share** and had **$10.0 million remaining** under its stock repurchase program[230](index=230&type=chunk)[231](index=231&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=84&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The primary market risk is interest rate exposure from variable-rate debt, partially hedged by a swap - The company is subject to interest rate risk from variable interest rates on its credit facility and accounts receivable securitization program[253](index=253&type=chunk) - In March 2020, the company drew down **$180 million** from its credit facility and borrowed an additional **$45 million** from its securitization program as a proactive measure[253](index=253&type=chunk) - The company extended the term of its **$50.0 million notional amount interest rate swap** agreement to October 2024 to convert a portion of its variable-rate debt to a fixed rate[255](index=255&type=chunk) [Controls and Procedures](index=85&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes - Management, including the CEO and CFO, concluded that the company's **disclosure controls and procedures were effective** as of June 30, 2020[258](index=258&type=chunk) - There were **no changes in the company's internal controls** over financial reporting during the second quarter of 2020 that have materially affected or are likely to materially affect them[259](index=259&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=86&type=section&id=Item%201.%20Legal%20Proceedings) Routine legal actions are not expected to have a material adverse effect on the company - The company is involved in various legal actions that arise in the ordinary course of business and maintains liability insurance and reserves for these exposures[104](index=104&type=chunk)[261](index=261&type=chunk) - Management **does not expect routine legal matters to have a material adverse effect** on the company's financial condition, results of operations, or cash flows[104](index=104&type=chunk)[261](index=261&type=chunk) [Risk Factors](index=86&type=section&id=Item%201A.%20Risk%20Factors) New risk factors related to the COVID-19 pandemic and other public health crises were added - A new risk factor was added to address the potential adverse effects of pandemics, like **COVID-19**, on the company's business, financial condition, and cash flows[262](index=262&type=chunk)[263](index=263&type=chunk) - A second new risk factor was added, stating that external events could adversely affect the company and that **business continuity plans may not provide adequate protection**[265](index=265&type=chunk)[266](index=266&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=87&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No shares were repurchased during the quarter, with $10.0 million remaining under the program - The company made **no share repurchases** during the three months ended June 30, 2020[268](index=268&type=chunk) - As of June 30, 2020, **$10.0 million remained available** for common stock repurchases under the company's program[268](index=268&type=chunk) [Other Disclosures (Items 3-6)](index=87&type=section&id=Other%20Disclosures%20(Items%203-6)) No defaults or other material events were reported, and required exhibits were filed - The company reported **no defaults upon senior securities** and that mine safety disclosures were not applicable[269](index=269&type=chunk) - A list of exhibits filed with the report is provided, including certifications by the CEO and CFO pursuant to the Sarbanes-Oxley Act[271](index=271&type=chunk)[272](index=272&type=chunk)

ArcBest Corporation (NASDAQ:ARCB) Q2 2020 Earnings Conference Call July 29, 2020 9:00 AM ET Company Participants David Humphrey - Vice President, Investor Relations Judy McReynolds - Chairman, President & Chief Executive Officer David Cobb - Chief Financial Officer Conference Call Participants Liam Garrity-Rokous - Citi Todd Fowler - KeyBanc Capital Markets Jack Atkins - Stephens Inc. Rob Ginsberg - Wolfe Research Jeff Kauffman - Loop Capital Markets Stephanie Benjamin - SunTrust Sanjay Ramaswamy - BofA Ope ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2020 ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission file number 000-19969 ARCBEST CORPORATION (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of in ...

ArcBest Corporation (NASDAQ:ARCB) Q1 2020 Earnings Conference Call May 5, 2020 9:30 AM ET Company Participants David Humphrey - Vice President, Investor Relations Judy McReynolds - Chairman, President & Chief Executive Officer David Cobb - Chief Financial Officer Conference Call Participants David Ross - Stifel Chris Wetherbee - Citi Scott Group - Wolfe Research Todd Fowler - KeyBanc Capital Markets Jack Atkins - Stephens Ken Hoexter - Bank of America Jeff Kauffman - Loop Capital Markets Stephanie Benjamin ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year December 31, 2019. ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to . Commission file number 0-19969 Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which ...

ArcBest Corporation (NASDAQ:ARCB) Q4 2019 Earnings Conference Call January 31, 2020 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 Operator Greetings, and welcome to the ArcBest Fourth Quarter 2019 Earnings Conference Call. During the presentation, all participants will be in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded Fr ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2019 ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission file number 000-19969 ARCBEST CORPORATION (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction o ...

ArcBest Corporation (NASDAQ:ARCB) Q3 2019 Earnings Conference Call November 1, 2019 9:30 AM ET Company Participants David Humphrey - Vice President of Investor Relations Judy McReynolds - Chairman, President and Chief Executive Officer David Cobb - Chief Financial Officer Conference Call Participants Operator Greetings, and welcome to the ArcBest Third Quarter 2019 Earnings Conference Call. During the presentation, all participants will be in a listen-only mode. [Operator Instructions] As a reminder, this c ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2019 ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission file number 000-19969 ARCBEST CORPORATION (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of inc ...