ArcBest(US:ARCB)2025-05-02 15:54Financial Performance - Consolidated revenues for the three months ended March 31, 2025, decreased by 6.7% to $967,077,000 compared to $1,036,419,000 in the same period of 2024[81]. - Total consolidated operating income fell to $6,630,000 from $22,435,000 year-over-year, reflecting the revenue decline[81]. - Net income from continuing operations was $3,131,000, a significant improvement from a net loss of $2,912,000 in the prior year[81]. - Adjusted EBITDA from continuing operations decreased to $49,276,000 from $73,332,000 year-over-year[93]. Revenue Breakdown - Asset-Based revenues declined by 3.7% to $646,294,000, while Asset-Light revenues decreased by 10.2% to $356,012,000 for the same period[83]. - The Asset-Light segment accounted for approximately 36% of total revenues in Q1 2025, down from 37% in Q1 2024[85]. - The Asset-Based segment revenues for Q1 2025 totaled $646.3 million, a decrease of 3.9% from $671.5 million in Q1 2024, primarily due to a 4.3% decrease in tonnage per day[104]. - The Asset-Light segment revenues decreased by 10.2% to $356.0 million in Q1 2025 from $396.4 million in Q1 2024, impacted by lower average revenue per shipment and a decrease in average daily shipments[124]. Operating Results - Innovative technology costs related to the Vaux™ program decreased operating results by $7.5 million (pre-tax) for Q1 2025, compared to $9.7 million (pre-tax) in Q1 2024[87]. - Operating income for the Asset-Based segment was $26.4 million in Q1 2025, down from $53.5 million in Q1 2024, reflecting a decline in revenues while operating expenses remained consistent[109]. - The Asset-Light segment operating loss improved to $4.4 million in Q1 2025 from a loss of $15.3 million in Q1 2024, driven by decreased operating expenses despite lower revenues[125]. - The Asset-Based segment's operating ratio increased to 95.9% in Q1 2025 from 92.0% in Q1 2024, with salaries, wages, and benefits rising to 53.2% of revenues from 51.4%[101]. Expenses and Costs - Purchased transportation costs decreased by $39.5 million, resulting in a 1.2 percentage point reduction as a percentage of revenue for Q1 2025 compared to Q1 2024[127]. - Salaries, wages, and benefits decreased by $4.8 million, with a 0.4 percentage point reduction as a percentage of revenue for Q1 2025 compared to Q1 2024[129]. - The Asset-Light segment's operating expenses decreased by $51.2 million in Q1 2025 compared to the prior year, with a reduction in the operating ratio to 101.2% from 103.8%[126]. Cash Flow and Capital Expenditures - Cash and cash equivalents decreased by $58.5 million from December 31, 2024, to March 31, 2025, totaling $74.1 million[148]. - Cash used in operating activities was $22.3 million in Q1 2025, compared to $6.5 million of cash provided in Q1 2024[150]. - Cash used in investing activities was $11.2 million in Q1 2025, down from $53.8 million in Q1 2024[151]. - Total capital expenditures for 2025 are estimated to range from $225.0 million to $275.0 million, including $130.0 million to $140.0 million for revenue equipment purchases and $60.0 million to $80.0 million for real estate and facility upgrades[159]. Debt and Obligations - Future payments due under notes payable totaled $233.1 million as of March 31, 2025, an increase of $27.6 million from December 31, 2024[153]. - The company reported a $25.1 million increase in long-term debt from December 31, 2024, primarily due to a $25.0 million borrowing on the Credit Facility during the first quarter of 2025[166]. - Contractual obligations for operating lease liabilities totaled $307.4 million as of March 31, 2025, reflecting an increase of $39.8 million from December 31, 2024[156]. Market Risks - The economic environment remains uncertain, with increased recession risk and challenges from inflation and supply chain disruptions impacting demand for services[133]. - The company's primary market risk arises from fluctuations in interest rates due to its debt portfolio, which includes fixed-rate notes payable[181]. - Future issuances of long-term debt may be affected by rising interest rates, potentially leading to increased interest costs[181]. - Borrowings under the revolving credit facility and accounts receivable securitization program are subject to variable interest rates, exposing the company to interest rate risk[181].