ArcBest(ARCB) - 2024 Q1 - Quarterly Results

Financial Highlights ArcBest reported a Q1 2024 revenue decline and a GAAP net loss, primarily due to an impairment charge, with non-GAAP net income also decreasing Key GAAP Financial Highlights | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Revenue from Continuing Operations | $1.0 billion | $1.1 billion | | Operating Income from Continuing Operations | $22.4 million | $21.2 million | | Net (Loss) Income from Continuing Operations | ($2.9 million) | $18.8 million | | Diluted EPS from Continuing Operations | ($0.12) | $0.75 | - The first quarter net loss from continuing operations includes a significant $21.6 million after-tax, noncash impairment charge related to the company's equity investment in Phantom Auto, which ceased operations during the quarter[2] Key Non-GAAP Financial Highlights | Non-GAAP Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Operating Income from Continuing Operations | $42.6 million | $51.9 million | | Net Income from Continuing Operations | $32.3 million | $39.5 million | | Diluted EPS from Continuing Operations | $1.34 | $1.58 | Segment Performance The Asset-Based segment maintained Q1 2024 non-GAAP operating income despite lower revenue, contrasting with the Asset-Light segment's decline Asset-Based Segment The Asset-Based segment reported lower Q1 2024 revenue but maintained non-GAAP operating income and improved its operating ratio Asset-Based Segment Key Metrics | Metric (YoY Change) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Revenue (in millions) | $671.5 | $697.8 | | Total Tonnage Per Day | -16.8% | N/A | | Total Shipments Per Day | -6.2% | N/A | | Billed Revenue / CWT | +15.6% | N/A | | GAAP Operating Income (in millions) | $53.5 | $47.5 | | Non-GAAP Operating Income (in millions) | $53.5 | $53.5 | | Non-GAAP Operating Ratio | 92.0% | 92.3% | - Pricing momentum continued with contract renewal increases of 5.3%, and the overall LTL industry pricing environment remains rational[6] - Sequentially, Q1 2024 performance was impacted by weather in January and fewer workdays in March, leading to an 8.4% decrease in revenue per day compared to Q4 2023[7] Asset-Light Segment The Asset-Light segment experienced decreased Q1 2024 revenue and a non-GAAP operating loss, primarily due to lower truckload rates and margins Asset-Light Segment Key Metrics | Metric | Q1 2024 (in millions) | Q1 2023 (in millions) | | :--- | :--- | :--- | | Revenue | $396.4 | $438.1 | | GAAP Operating Loss | ($15.3) | ($14.1) | | Non-GAAP Operating (Loss) Income | ($4.7) | $4.1 | | Adjusted EBITDA | ($2.9) | $6.0 | - Profitability challenges stemmed from lower rates and margins for truckload solutions, though this was partly mitigated by a 13.6% increase in shipments per day and improved SG&A cost per shipment[9] - The Q1 non-GAAP operating loss was primarily due to performance in January, affected by weather events causing higher purchased transportation costs, with improvements seen through the rest of the quarter[10] Consolidated Financial Statements ArcBest's Q1 2024 consolidated financials show revenue decline, a GAAP net loss from a non-operating charge, decreased assets, and lower operating cash flow Consolidated Statements of Operations Q1 2024 revenues decreased to $1.04 billion, resulting in a net loss from continuing operations due to a significant 'Other, net' cost Consolidated Statements of Operations (in thousands) | (In thousands) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Revenues | $1,036,419 | $1,106,094 | | Operating Income | $22,435 | $21,159 | | Net (Loss) Income from Continuing Operations | ($2,912) | $18,847 | | Diluted EPS from Continuing Operations | ($0.12) | $0.75 | Consolidated Balance Sheets As of March 31, 2024, total assets decreased to $2.36 billion, primarily from reduced cash, with stockholders' equity also slightly declining Consolidated Balance Sheet Summary (in thousands) | (In thousands) | March 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Current Assets | $758,478 | $884,783 | | Total Assets | $2,357,143 | $2,485,094 | | Total Current Liabilities | $618,575 | $701,563 | | Total Stockholders' Equity | $1,222,733 | $1,242,363 | Consolidated Statements of Cash Flows Q1 2024 net cash from operating activities significantly decreased to $6.5 million, with net cash used in investing and financing activities Consolidated Statements of Cash Flows Summary (in thousands) | (In thousands) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $6,467 | $20,663 | | Net Cash (Used in) Provided by Investing Activities | ($56,993) | $70,960 | | Net Cash Used in Financing Activities | ($38,845) | ($46,676) | | Net (Decrease) Increase in Cash | ($89,371) | $44,947 | Segment Financial Data and Operating Ratios This section details Q1 2024 segment revenues, operating income/loss, and operating ratios for Asset-Based and Asset-Light segments Q1 2024 Segment Financial Data (in millions) | Segment (Q1 2024) | Revenue (in millions) | Operating Income (Loss) (in millions) | Operating Ratio | | :--- | :--- | :--- | :--- | | Asset-Based | $671.5 | $53.5 | 92.0% | | Asset-Light | $396.4 | ($15.3) | 103.8% | Q1 2023 Segment Financial Data (in millions) | Segment (Q1 2023) | Revenue (in millions) | Operating Income (Loss) (in millions) | Operating Ratio | | :--- | :--- | :--- | :--- | | Asset-Based | $697.8 | $47.5 | 93.2% | | Asset-Light | $438.1 | ($14.1) | 103.2% | GAAP to Non-GAAP Reconciliations This section reconciles GAAP to non-GAAP financial measures, adjusting for non-core items to provide a clearer view of operating performance - Management believes non-GAAP measures provide meaningful comparisons by removing items that do not reflect core operating performance, such as acquisition-related costs and one-time charges[24] - Major non-GAAP adjustments for Q1 2024 include: innovative technology costs ($9.7 million pre-tax), purchase accounting amortization ($3.2 million pre-tax), change in fair value of contingent consideration ($7.3 million pre-tax), and a change in fair value of an equity investment ($28.7 million pre-tax)[25][30] Consolidated Non-GAAP Reconciliations Q1 2024 consolidated GAAP operating income was adjusted to $42.6 million non-GAAP, with net loss reconciled to $32.3 million non-GAAP net income Consolidated Operating Income Reconciliation (in thousands) | Reconciliation (Q1 2024, in thousands) | Amount | | :--- | :--- | | GAAP Operating Income | $22,435 | | Adjustments | $20,210 | | Non-GAAP Operating Income | $42,645 | Consolidated Net Income Reconciliation (in thousands) | Reconciliation (Q1 2024, in thousands) | Amount | | :--- | :--- | | GAAP Net Loss | ($2,912) | | Adjustments | $35,229 | | Non-GAAP Net Income | $32,317 | Segment Non-GAAP Reconciliations Q1 2024 Asset-Based segment had no non-GAAP adjustments, while Asset-Light's GAAP operating loss was adjusted to a non-GAAP loss Asset-Based Segment Operating Income Reconciliation (in thousands) | Asset-Based Segment (Q1 2024) | Operating Income (in thousands) | Operating Ratio | | :--- | :--- | :--- | | GAAP | $53,456 | 92.0% | | Non-GAAP | $53,456 | 92.0% | Asset-Light Segment Operating Loss Reconciliation (in thousands) | Asset-Light Segment (Q1 2024) | Operating Loss (in thousands) | Operating Ratio | | :--- | :--- | :--- | | GAAP | ($15,258) | 103.8% | | Adjustments | $10,512 | (2.6%) | | Non-GAAP | ($4,746) | 101.2% | Adjusted EBITDA Reconciliation Q1 2024 consolidated Adjusted EBITDA decreased to $73.3 million, with the Asset-Light segment reporting a negative Adjusted EBITDA Adjusted EBITDA from Continuing Operations (in millions) | Adjusted EBITDA from Continuing Operations | Q1 2024 (in millions) | Q1 2023 (in millions) | | :--- | :--- | :--- | | Consolidated | $73.3 | $78.1 | | Asset-Light | ($2.9) | $6.0 | Operating Statistics Q1 2024 Asset-Based segment saw decreased tonnage and shipments but increased billed revenue per hundredweight, while Asset-Light saw decreased revenue per shipment but increased daily shipments Asset-Based Segment Operating Statistics | Asset-Based Statistics | Q1 2024 | Q1 2023 | % Change | | :--- | :--- | :--- | :--- | | Billed Revenue / CWT | $48.56 | $41.99 | 15.6% | | Shipments / Day | 19,566 | 20,856 | (6.2%) | | Tons / Day | 10,937 | 13,149 | (16.8%) | Asset-Light Segment Operating Statistics | Asset-Light Statistics (YoY % Change) | Q1 2024 | | :--- | :--- | | Revenue / Shipment | (19.7%) | | Shipments / Day | 13.6% | Additional Information This section provides investor conference call details, an overview of ArcBest, and a safe harbor statement on forward-looking statements and risks - A conference call to discuss Q1 2024 results was scheduled for April 30, 2024, at 9:30 a.m. EDT[11] - ArcBest is a multibillion-dollar integrated logistics company founded in 1923, with 15,000 employees across 250 locations[12] - The press release contains forward-looking statements subject to risks and uncertainties, as detailed in the company's SEC filings, cautioning readers not to place undue reliance[14][15]