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 ...

Financial Performance - Q3 2022 - ArcBest consolidated revenue reached $1.4 billion[13] - Non-GAAP operating income was $131.1 million[13], a 33% year-over-year increase[13] - Non-GAAP net income was $3.80 per diluted share[15], a 43% year-over-year increase[15] - Asset-Based revenue was $791.5 million[16], a 29% year-over-year increase[16] - Asset-Light revenue was $604.5 million[18], a 61% year-over-year increase[18] Financial Position - Trailing twelve months EBITDA was $590 million[15] - The company had a liquidity of $541 million[15] - The company had a net cash of $48 million[15] Asset-Based Segment Metrics - Asset-Based segment achieved a Non-GAAP operating ratio of 85.3%[16], a 140 bps year-over-year improvement[16] - Total Billed Revenue per hundredweight increased 16% year-over-year[16] - Daily shipments increased 4.4% year-over-year[16] - Daily tonnage increased 11.1% year-over-year[16] Asset-Light Segment Metrics - Asset-Light segment Non-GAAP operating income was $19.9 million[18] - Asset-Light segment Adjusted EBITDA was $21.8 million[18], a 53% year-over-year increase[18] - October 2022 Daily Revenue for Asset-Light operations increased 40% year-over-year[18] Strategic Initiatives - The company is focused on reaching $7 billion to $8 billion in revenue by 2025[11] - Over 60% of asset-light customers also use asset-based services[5, 26]