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, 2023 ☐ 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 2023 Results Conference Call October 27, 2023 9:00 AM ET Company Participants David Humphrey - VP, IR Judy McReynolds - Chairman, President & CEO Matt Beasley - CFO and Treasurer Seth Runser - President of ABF Freight Steven Leonard - Chief Commercial Officer & President of Asset-Light Logistics Dennis Anderson - Chief Strategy Officer Christopher Adkins - VP, Yield Strategy and Management Conference Call Participants Ravi Shankar - Morgan Stanley Jason Seidl - TD Ken Ho ...

[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 ...

Earnings Presentation 4Q'22 Forward Looking Statements Certain statements and information in this presentation may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others, statements regarding (i) our expectations about our intrinsic value or our prospects for growth and value creation and (ii) our financial outlook, position, strategies, goals, and expectations. Terms such as "anticipate," "believe," "could," "estimate," "e ...