Group 1 - The broader markets are experiencing a downturn due to concerns over tariffs, trade issues, inflation, and recession prospects [1] - Crude Value Insights provides an investment service focused on oil and natural gas, emphasizing cash flow and companies that generate it [1] - The service aims to identify value and growth prospects with real potential in the oil and gas sector [1] Group 2 - Subscribers have access to a model account with over 50 stocks, detailed cash flow analyses of exploration and production firms, and live discussions about the sector [2] - A two-week free trial is available for new subscribers to explore the oil and gas investment opportunities [3]

Financial Performance - Revenues for 2024 were $4,179,019, a decrease of 5.6% from $4,427,443 in 2023[455] - Operating income increased to $244,434 in 2024, up 41.6% from $172,619 in 2023[455] - Net income from continuing operations was $173,361, representing a 22% increase compared to $142,164 in 2023[455] - Net income for 2024 was $173.961 million, a decrease of 10.9% from $195.433 million in 2023 and a significant drop from $298.209 million in 2022[460] - The company reported a total comprehensive income of $169,909 in 2024, down from $192,654 in 2023[457] - Total consolidated revenues decreased to $4.179 billion in 2024 from $4.427 billion in 2023, a decline of approximately 5.6%[622] - The Asset-Based segment generated revenues of $2.750 billion in 2024, down from $2.871 billion in 2023, a decrease of 4.2%[622] - The Asset-Light segment's revenues fell to $1.553 billion in 2024 from $1.681 billion in 2023, a decline of 7.6%[622] Assets and Liabilities - Total current assets decreased to $675,642 in 2024, down 23.6% from $884,783 in 2023[454] - Total assets decreased to $2,429,731 in 2024, down 2.2% from $2,485,094 in 2023[454] - Total stockholders' equity increased to $1,314,362 in 2024, up 5.8% from $1,242,363 in 2023[454] - Cash and cash equivalents decreased to $127,444 in 2024, down 51.4% from $262,226 in 2023[454] - Total accrued expenses increased to $394.9 million in 2024 from $378.0 million in 2023, driven by higher workers' compensation and casualty claims reserves[569] - Long-term debt as of December 31, 2024, totaled $189.1 million, an increase from $178.9 million in 2023, with a weighted-average interest rate of 4.6%[557] Cash Flow and Investments - The Company reported net cash provided by operating activities of $285.846 million in 2024, down from $322.167 million in 2023[460] - The Company purchased property, plant, and equipment totaling $223.103 million in 2024, compared to $219.021 million in 2023[460] - Cash and cash equivalents at the end of 2024 were $127.444 million, a decrease from $262.226 million at the end of 2023[460] - The fair value of the company's equity investment in Phantom Auto increased by $3.7 million in 2023[627] Market Risks - Future borrowings under the Credit Facility and A/R Securitization are at a SOFR based variable interest rate, exposing the company to interest rate risks[435] - The company is exposed to market risk from changes in interest rates, diesel fuel prices, and foreign currency exchange rates[433] - The company has not engaged in a program for fuel price hedging and had no fuel hedging agreements outstanding as of December 31, 2024[438] - The company has not entered into any foreign currency forward exchange contracts to hedge against adverse fluctuations in foreign currency exchange rates[440] Employee and Pension Obligations - The Company recognized discretionary contribution expenses of $11.5 million in 2024, compared to $13.1 million in 2023 and $19.1 million in 2022[580] - The Company reported a matching expense for nonunion 401(k) plans totaling $9.2 million in 2024, up from $7.1 million in 2023[580] - Approximately 4% of ABF Freight's multiemployer pension plan contributions in 2024 were made to plans in "critical and declining status" and 54% to plans in "critical status"[592] - The funded percentage of the Central States Pension Plan was reported at 98.5% as of January 1, 2023, despite being in critical status through 2051 due to SFA Program funding[599] Shareholder Returns - The Company declared dividends on common stock amounting to $11.295 million in 2024, slightly down from $11.542 million in 2023[460] - Dividends declared for 2024 were consistent at $0.12 per share across all four quarters, totaling approximately $11.3 million for the year[608] - In 2024, the company repurchased 654,707 shares for a total cost of $75.2 million, leaving $56.6 million remaining under the share repurchase program[611] Impairments and Write-offs - The company recorded a pre-tax, noncash impairment charge of $28.7 million for its equity investment in Phantom Auto in Q1 2024 due to the company's cessation of operations[530] - The accumulated impairment of goodwill remained at $20 million as of December 31, 2024, with no impairment identified during the annual evaluation[537] - The company recorded impairment charges for revenue equipment and software totaling $1.7 million in Q4 2024 as part of a strategic decision to adjust capacity[531] Revenue Recognition and Accounting Policies - The company recognizes revenue based on the expense incurred relative to each shipment's transit time, utilizing a bill-by-bill analysis for revenue recognition[501] - The company estimates variable consideration for discounts based on historical expectations, ensuring revenue recognition aligns with actual amounts earned[502] - The company has adopted an amendment to ASC Topic 280, enhancing disclosures of significant segment expenses, effective from the fourth quarter of 2024[515]

Core Viewpoint - The Zacks Transportation-Truck industry is currently facing significant challenges, including weak freight rates, driver shortages, inflation, and ongoing supply-chain disruptions, which are impacting its overall performance and outlook [1][4][6]. Industry Overview - The Zacks Transportation-Truck industry consists of truck operators that transport freight across North America, offering various services such as full-truckload and less-than-truckload (LTL) [3]. - Companies in this industry also provide logistics, intermodal services, and value-added services like supply-chain consulting and warehousing [3]. Current Trends - Supply-chain disruptions and weak freight rates are negatively affecting the industry, with the Cass Freight Shipments Index declining by 8.2% year over year in January, indicating a consistent downward trend throughout 2024 [4]. - The industry is experiencing a prolonged truck-driver shortage, with an expected shortfall of over 160,000 drivers by 2030, exacerbating supply-chain challenges [6]. Financial Performance - Companies in the industry are returning value to shareholders through dividends and buybacks, reflecting their financial strength. For instance, Old Dominion Freight Line (ODFL) announced an increase in its quarterly dividend [5]. - The Zacks Transportation-Truck industry has underperformed the S&P 500, declining by 31.7% over the past year compared to the S&P 500's increase of 19.7% [11]. Valuation Metrics - The industry is currently trading at an EV-to-EBITDA ratio of 17.1X, slightly below the S&P 500's 17.52X but above the sector's 11.11X [13]. Company Highlights - **Forward Air Corporation (FWRD)**: This asset-light freight and logistics company is focused on growth through acquisitions, recently acquiring Edgmon Trucking. The Zacks Consensus Estimate for its 2025 earnings has been revised upward by 8.3% [15]. - **ArcBest Corporation (ARCB)**: The company is improving productivity and service quality, expecting a 11.5% increase in its 2025 earnings per share compared to 2024 [18]. - **Old Dominion Freight Line (ODFL)**: Known for its shareholder-friendly measures, ODFL anticipates a 3.7% increase in its 2025 earnings per share from 2024 [20].

Core Insights - ArcBest reported revenue of $1 billion for the quarter ended December 2024, reflecting an 8.1% decrease year-over-year, with EPS at $1.33 compared to $2.47 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $997.94 million by 0.37%, while the EPS surpassed the consensus estimate of $1.05 by 26.67% [1] Financial Performance Metrics - Asset-Based billed revenue per CWT was $49.27, slightly above the average estimate of $48.86 [4] - Asset-Light operating ratio was reported at 100.4%, better than the average estimate of 102.1% [4] - Asset-Based shipments per day were 19,698 tons, compared to the estimated 19,865.21 tons [4] - Asset-Based operating ratio (Non-GAAP) was 92%, compared to the average estimate of 93% [4] - Asset-Based workdays were consistent at 62, matching the average estimate [4] - Asset-Based pounds per shipment were 1,092 lbs, slightly below the average estimate of 1,098.08 lbs [4] - Asset-Based tons per day were reported at 10,758 tons, lower than the average estimate of 10,906.58 tons [4] - Asset-Light operating ratio (Non-GAAP) was 101.6%, close to the average estimate of 101.7% [4] - Revenues from Asset-Based operations were $656.22 million, slightly above the estimate of $653.87 million, but down 7.6% year-over-year [4] - Revenues from Asset-Light operations were $375.43 million, below the average estimate of $376.19 million, representing a 9.2% decline year-over-year [4] - Revenues from other and eliminations were -$30.01 million, better than the estimate of -$31.83 million, with an 11.4% decrease compared to the previous year [4] Stock Performance - ArcBest shares returned +2.8% over the past month, slightly underperforming the Zacks S&P 500 composite's +2.9% change [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating potential underperformance in the near term [3]

Earnings Presentation Three-Point Strategy Continues to Deliver Shareholder Value & Drive Business Growth 1 2 3 Increase Efficiency Leverage technology Optimize ABF network Drive scale and productivity to improve Asset-Light operating margin Drive Innovation Develop and implement disruptive and game changing innovations Launch new revenue streams Co-create and scale with customers Accelerate Growth Secure new customers to maximize profitability Expand with existing customers through market penetration Retai ...

Financial Performance - Fourth quarter 2024 revenue was $1.0 billion, a decrease of 9.1% from $1.1 billion in the same quarter of 2023[2] - Net income for the fourth quarter 2024 was $29.0 million, or $1.24 per diluted share, down from $48.8 million, or $2.01 per diluted share in the prior year[2] - Full year 2024 revenue totaled $4.2 billion, a decline of 4.5% compared to $4.4 billion in 2023[3] - Full year net income from continuing operations was $173.4 million, or $7.28 per diluted share, compared to $142.2 million, or $5.77 per diluted share in 2023[3] - Revenues for Q4 2024 were $1,001,645, a decrease of 8.1% from $1,089,535 in Q4 2023[22] - Operating income for Q4 2024 was $38,161, down 40.7% from $64,253 in Q4 2023[22] - The year ended December 31, 2024, saw total consolidated revenues of $4,179,019, a decrease of 5.6% from $4,427,443 in 2023[26] - The consolidated Adjusted EBITDA from continuing operations for the year ended December 31, 2024, was $328,599 thousand, down from $369,566 thousand in 2023[38] Asset Performance - The Asset-Based segment experienced a 6.3% decrease in weight per shipment and a 1.1% decrease in daily shipments in Q4 2024[5] - Asset-Light revenues decreased due to lower revenue per shipment and a 2.1% decline in shipments per day compared to Q4 2023[9] - Asset-Based revenues decreased to $656,220 in Q4 2024 from $709,986 in Q4 2023, while Asset-Light revenues fell to $375,432 from $413,425 in the same period[26] - Operating income from continuing operations for Q4 2024 was $38,161, down 40.7% from $64,253 in Q4 2023[33] - The operating income for the Asset-Based Segment on a GAAP basis was $52,335 thousand with an operating ratio of 92.0% for the three months ended December 31, 2024[34] - The Asset-Light Segment reported an operating loss of $1,579 thousand with an operating ratio of 100.4% for the same period[34] Capital Expenditures and Investments - Total net capital expenditures in 2024 were $288 million, including $160 million for revenue equipment[13] - The company incurred $223,103 in capital expenditures for property, plant, and equipment in 2024, compared to $219,021 in 2023[25] - The company plans to continue opportunistic share repurchases while prioritizing organic capital investments[14] Shareholder Returns - ArcBest returned over $85 million to shareholders in 2024 through share repurchases and dividends[14] Assets and Liabilities - Total current assets decreased to $675,642 in 2024 from $884,783 in 2023, a decline of 23.6%[24] - Total liabilities decreased to $1,115,369 in 2024 from $1,174,000 in 2023, a reduction of 5%[24] - Cash and cash equivalents at the end of 2024 were $127,444, down 51.4% from $262,226 at the end of 2023[25] - Net cash provided by operating activities for 2024 was $285,846, a decrease of 11.2% from $322,167 in 2023[25] - The company reported a net increase in cash and cash equivalents of $(134,782) for 2024, contrasting with an increase of $103,854 in 2023[25] Operating Expenses - Operating expenses from continuing operations totaled $963,484 in Q4 2024, a decrease of 6.0% compared to $1,025,282 in Q4 2023[26] - Total operating expenses for the year ended December 31, 2024, were $3,934,585, a decrease of 7.5% from $4,254,824 in 2023[26] Tax and Legal Matters - The effective tax rate for continuing operations was 22.5% for the three months ended December 31, 2024, compared to 28.0% in the same period of 2023[36] - Legal settlements recorded for the three months ended December 31, 2024, were $274 thousand, down from $9,500 thousand in the same period of 2023[36] Other Financial Metrics - The change in fair value of contingent consideration for the MoLo acquisition was a loss of $9,510 in Q4 2024, compared to a loss of $6,300 in Q4 2023[33] - The change in fair value of contingent consideration for the year ended December 31, 2024, was $(90,250) thousand, significantly impacting the overall income[36] - The total depreciation and amortization for the year ended December 31, 2024, was $149,087 thousand, slightly increasing from $145,349 thousand in 2023[38] - The Asset impairment charges for the year ended December 31, 2024, were $1,700 thousand, a significant decrease from $30,162 thousand in 2023[38] Operational Efficiency - Billed revenue per hundredweight (CWT) increased by 0.6% to $49.27 in Q4 2024, while for the year it rose by 11.7% to $49.68[42] - Tonnage per day decreased by 7.3% to 10,758 in Q4 2024, and for the year it fell by 14.3% to 10,968[42] - Revenue per shipment in the Asset-Light segment decreased by 7.2% in Q4 2024 and by 12.8% for the year[43] - Shipments per employee per day increased by 20.8% in Q4 2024 and by 24.2% for the year in the Asset-Light segment[43] - The average length of haul increased by 3.5% to 1,116 miles in Q4 2024, and by 3.1% for the year to 1,126 miles[42]

Company Overview - ArcBest (ARCB) is anticipated to report a year-over-year decline in earnings due to lower revenues for the quarter ended December 2024, with earnings expected to be $1.05 per share, reflecting a decrease of 57.5% compared to the previous year [1][3] - Revenues are projected to be $997.94 million, down 8.4% from the same quarter last year [3] Earnings Estimates and Revisions - The consensus EPS estimate for ArcBest has been revised down by 20.72% over the last 30 days, indicating a reassessment by analysts [4] - The Most Accurate Estimate for ArcBest is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +1.91% [10][11] Earnings Surprise Prediction - A positive Earnings ESP reading suggests a potential earnings beat, particularly when combined with a strong Zacks Rank; however, ArcBest currently holds a Zacks Rank of 5, making it challenging to predict an earnings beat [8][11] - Historically, ArcBest has only beaten consensus EPS estimates once in the last four quarters, with a recent surprise of -10.87% in the last reported quarter [12][13] Industry Context - In the Zacks Transportation - Truck industry, Heartland Express (HTLD) is expected to report a loss of $0.04 per share for the same quarter, indicating a year-over-year change of -166.7% [17] - Heartland Express has an Earnings ESP of 25.00% and a Zacks Rank of 3, suggesting a higher likelihood of beating the consensus EPS estimate [18]

Revenue Performance - Consolidated revenues decreased by 5.8% and 4.8% for the three and nine months ended September 30, 2024, compared to the same prior-year periods, primarily due to lower market rates and decreased tonnage levels [109]. - Asset-Based revenues declined by 4.2% and 3.1% for the three and nine months ended September 30, 2024, while Asset-Light revenues decreased by 8.1% and 7.1% for the same periods [109]. - The Asset-Light segment generated approximately 35% and 36% of total revenues for the three and nine months ended September 30, 2024, respectively [111]. - The Asset-Based segment revenues for the three months ended September 30, 2024, totaled $709.7 million, a decrease of 4.2% compared to $741.2 million for the same period in 2023 [134]. - Total shipments decreased by 0.7% for the three months ended September 30, 2024, compared to the same period in 2023, reflecting a softer freight environment [136]. - Tonnage per day decreased by 11.3% for the three months ended September 30, 2024, compared to the same period in 2023, contributing to the revenue decline [134]. Income and Operating Results - Total consolidated operating income increased to $134.993 million for the three months ended September 30, 2024, compared to $45.091 million for the same period in 2023 [108]. - Net income from continuing operations was $100.314 million for the three months ended September 30, 2024, up from $34.927 million in the prior year [108]. - Consolidated net income for the three months ended September 30, 2024, was $100.3 million, compared to $34.9 million for the same period in 2023, representing a significant increase [122]. - Adjusted EBITDA from continuing operations for the three months ended September 30, 2024, was $86.4 million, down from $101.6 million in the prior year, indicating a decrease of approximately 14.9% [122]. - The Asset-Based segment generated operating income of $64.0 million and $190.3 million for the three and nine months ended September 30, 2024, respectively, compared to $74.8 million and $165.6 million for the same periods of 2023 [139]. - The Asset-Light segment operating income totaled $84.8 million and $60.0 million for the three and nine months ended September 30, 2024, compared to an operating loss of $3.7 million and $4.6 million for the same periods of 2023 [157]. Expenses and Impairments - Innovative technology costs decreased consolidated operating results by $8.5 million (pre-tax) for the third quarter of 2024, compared to $14.1 million (pre-tax) for the same period in 2023 [113]. - A one-time, noncash impairment charge of $21.6 million (after-tax) was recognized for the nine months ended September 30, 2024, related to the equity investment in Phantom Auto [115]. - Lease impairment charges reduced operating results by $30.2 million (pre-tax) for the three months ended September 30, 2023 [118]. - Changes in the fair value of contingent earnout consideration reduced expenses by $91.9 million and $80.7 million for the three and nine months ended September 30, 2024, compared to $17.8 million and $12.8 million for the same periods of 2023 [157]. - Labor costs represented 50.5% and 50.4% of Asset-Based segment revenues for the three and nine months ended September 30, 2024, compared to 48.2% and 48.0% for the same periods of 2023 [140]. Cash Flow and Capital Expenditures - Cash provided by operating activities for the nine months ended September 30, 2024, was $229.0 million, an increase of 18.0% compared to $194.0 million in the same prior-year period [183]. - Capital expenditures for the nine months ended September 30, 2024, totaled $163.7 million, with an estimated total for 2024 projected at approximately $300.0 million [184][195]. - Cash, cash equivalents, and short-term investments decreased by $139.0 million from December 31, 2023, to September 30, 2024 [181]. - As of September 30, 2024, cash and cash equivalents decreased to $150.5 million from $262.2 million as of December 31, 2023 [186]. - The company repurchased 478,315 shares of common stock for an aggregate cost of $56.1 million during the nine months ended September 30, 2024 [185][201]. Taxation - The effective tax rate for continuing operations was 26.6% for the three months ended September 30, 2024, compared to 25.5% for the same period in 2023 [211]. - The total provision for income taxes for the nine months ended September 30, 2024, was $36,390 thousand, compared to $25,735 thousand for the same period in 2023 [217]. - The company made federal, state, and foreign tax payments totaling $29.2 million during the nine months ended September 30, 2024 [216]. - The effective tax rate for the nine months ended September 30, 2023, was 23.1%, indicating a decrease in the effective tax rate year-over-year [217]. - The company’s tax benefit from vested RSUs increased significantly due to vesting of RSUs granted in prior years [213]. Market Conditions and Economic Factors - Economic conditions are impacted by higher interest rates, supply chain volatility, and a slowing labor market, with potential disruptions from geopolitical conflicts [166]. - The consumer price index (CPI) increased by 2.4% year-over-year in September 2024, indicating ongoing inflationary pressures [170]. - The soft freight environment resulted in a year-over-year decline in market pricing for many Asset-Light services compared to the first nine months of 2023 [169]. - The estimated settlement expense related to the classification of certain Asset-Light employees under the Fair Labor Standards Act is $9.5 million, with preliminary court approval expected by year-end [179].

Financial Data and Key Metrics Changes - Consolidated revenue decreased by 6% year-over-year to $1.1 billion in Q3 2024 [26] - Non-GAAP operating income from continuing operations was $55 million, down from $75 million in the prior year [26] - Adjusted earnings per share were $1.64, down from $2.31 in Q3 2023 [26] Business Line Data and Key Metrics Changes - Asset-Based segment revenue was $710 million, a daily decrease of 6% [27] - Asset-Light segment revenue was $385 million, a daily decrease of 10% year-over-year [36] - Asset-Based non-GAAP operating ratio increased by 220 basis points year-over-year to 91% [27] Market Data and Key Metrics Changes - Daily shipments in the Asset-Based segment saw a slight decline of less than 1% year-over-year, with weight per shipment decreasing by 11% [28] - Revenue per hundredweight increased by 7% in Q3 2024, with a 5.9% general rate increase implemented on September 9 [30] Company Strategy and Development Direction - The company remains committed to growth, efficiency, and innovation, investing in people, solutions, and technologies [7] - Focus on improving service levels and operational efficiency to enhance margins and customer satisfaction [17][19] - Long-term facility roadmap includes opening remodeled facilities and expanding capacity [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in growth despite a challenging macro environment, citing strong customer relationships and ongoing service improvements [13] - The company anticipates a moderation in year-over-year revenue decreases, expecting mid-single-digit declines for the quarter [35] - Management highlighted the importance of maintaining pricing discipline and operational efficiency to counteract rising costs [31] Other Important Information - The company returned $65 million to shareholders through share buybacks and dividends year-to-date [41] - Capital expenditure estimates for the year have been revised downward to approximately $300 million [41] Q&A Session Summary Question: Trends in pricing environment and customer retention - Management noted that pricing trends remained consistent throughout the quarter, with good retention rates among customers [45][47] Question: Service improvements and cost implications - Management emphasized that service improvements have been achieved without significantly increasing costs, focusing on efficiency and productivity [49][50] Question: Revenue per day expectations - Management indicated that revenue per day is expected to improve as the quarter progresses, driven by easier year-over-year comparisons [54] Question: Weight per shipment dynamics - Management explained that lower weight per shipment is influenced by a shift of higher weight LTL shipments to the truckload market and lower household goods moves due to economic conditions [61][62] Question: Asset-Light segment profitability - Management discussed strategies to improve profitability in the Asset-Light segment, including focusing on account-level profitability and cost control measures [92][96]

ArcBest and and the state of the state of the state of the states of | --- | --- | |----------|-------| | | | | Earnings | | | --- ...