ArcBest Announces Second Quarter 2024 Results

Strong gains in productivity and service metrics

Delivered second quarter 2024 net income of $46.9 million, or $1.96 per diluted share, and non-GAAP net income of $47.4 million, or $1.98 per diluted share.
Significant efficiency improvements at ABF Freight while delivering the best on-time service in five years.
Improved Asset-Based operating income, despite higher labor contract costs and lower revenue.

FORT SMITH, Ark.–(BUSINESS WIRE)–ArcBest^® (Nasdaq: ARCB), a leader in supply chain logistics, today reported second quarter 2024 revenue from continuing operations of $1.08 billion, compared to $1.10 billion in the second quarter of 2023. Second quarter 2024 operating income from continuing operations was $48.8 million, compared to $42.1 million in the prior year period, and net income from continuing operations was $46.9 million, or $1.96 per diluted share, compared to $39.6 million, or $1.60 per diluted share, in 2023.

Excluding certain items in both periods as identified in the attached reconciliation tables, second quarter 2024 non‑GAAP operating income from continuing operations was $64.2 million, compared to $50.1 million in the prior year period, an improvement of $14.1 million. On a non-GAAP basis, net income from continuing operations was $47.4 million, or $1.98 per diluted share, compared to $38.0 million, or $1.54 per diluted share, in the second quarter of 2023.

“I am incredibly proud of our employees’ commitment to utilizing our quality process in pursuit of excellence every day. This dedication has led to significant improvements in our operational execution, with ABF Freight achieving its best on-time service performance in recent years,” said Judy R. McReynolds, ArcBest Chairman and CEO. “Furthermore, our substantial year-over-year improvement in operating income is a solid performance, especially considering ongoing macroeconomic headwinds.”

Results of Operations Comparisons

Asset-Based

Second Quarter 2024 Versus Second Quarter 2023

Revenue of $712.7 million compared to $722.0 million, a per-day decrease of 2.1 percent.
Total tonnage per day decrease of 20.3 percent.
Total shipments per day decrease of 4.8 percent.
Total billed revenue per hundredweight increase of 23.0 percent.
Core daily shipments increase of 14 percent and tonnage increase of 11 percent.
Operating income of $72.8 million and an operating ratio of 89.8 percent, on both a GAAP and non-GAAP basis, compared to prior-year GAAP operating income of $43.3 million and an operating ratio of 94.0 percent and prior-year non-GAAP operating income of $51.7 million and an operating ratio of 92.8 percent.

On a non-GAAP basis, the Asset-Based segment generated $21.1 million more operating income than second quarter 2023 despite lower revenue levels and higher labor costs, which highlights the continued focus on serving core customers well and improving operational efficiencies. Total second quarter daily shipment and tonnage levels were below the prior year, due primarily to fewer transactional shipments offset by increased core shipments, which positively impacted productivity and contributed to an improved operating ratio. On a non-GAAP basis, the Asset‑Based segment delivered its second-best operating income result for a second quarter in company history.

Pricing momentum continued in the quarter, driven by improved freight mix, higher pricing on transactional shipments and contract renewal increases of 5.1 percent. Overall, LTL industry pricing remains rational.

Compared sequentially to the first quarter of 2024, second quarter 2024 revenue per day was up 5.3 percent, tons per day improved 2.3 percent and shipments per day were better by 1.9 percent. Second quarter billed revenue per hundredweight increased 3.2 percent from first quarter 2024. The operating ratio improved 220 basis points sequentially, which was within the range of sequential quarterly changes seen in recent years.

Asset-Light

Second Quarter 2024 Versus Second Quarter 2023

Revenue of $395.8 million compared to $409.8 million, a per-day decrease of 4.2 percent.
Operating loss of $9.5 million compared to operating income of $13.2 million. On a non‑GAAP basis, operating loss of $2.5 million compared to operating income of $6.4 million.
Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) of negative $0.6 million compared to $8.3 million, as detailed in the attached non-GAAP reconciliation tables.

Compared to the second quarter of 2023, Asset-Light revenues were impacted by lower revenue per shipment and reduced margins associated with the soft rate environment and a higher mix of managed transportation business, which has lower revenue per shipment and margins. Shipments per day grew 12.6 percent, driven in part by customers turning to ArcBest’s managed solution to optimize their logistics spend. The decline in financial results on a year-over-year basis was primarily due to lower rates and margins for truckload solutions, reflecting the soft freight environment and excess full truckload capacity. The segment continues to benefit from productivity initiatives, as shipments per employee per day and SG&A cost per shipment both significantly improved on a year-over-year basis.

Compared sequentially to first quarter 2024, second quarter 2024 revenue per day was down one percent. Purchased transportation costs decreased sequentially as carrier rates dipped following the first quarter spike related to winter weather. The reduced purchased transportation costs were the biggest contributor to the lower non-GAAP operating loss in second quarter 2024, versus first quarter. Total shipments per day decreased 1.4 percent compared to first quarter 2024 and revenue per shipment was flat.

Conference Call

ArcBest will host a conference call with company executives to discuss the quarterly results. The call will be today, Friday, August 2, 2024 at 9:30 a.m. EDT (8:30 a.m. CDT). Interested parties are invited to listen by calling (800) 715‑9871 or by joining the webcast which can be found on ArcBest’s website at arcb.com. Slides to accompany this call are included in Exhibit 99.3 of the Form 8-K filed on August 2, 2024, will be posted and available to download on the company’s website prior to the scheduled conference time, and will be included in the webcast. Following the call, a recorded playback will be available through the end of the day on August 15, 2024. To listen to the playback, dial (800) 770-2030. The conference call ID for the live conference call and the playback is 4743250. The conference call and playback can also be accessed through August 15, 2024 on ArcBest’s website at arcb.com.

About ArcBest

ArcBest^® (Nasdaq: ARCB) is a multibillion-dollar integrated logistics company that helps keep the global supply chain moving. Founded in 1923 and now with 15,000 employees across 250 campuses and service centers, the company is a logistics powerhouse, using its technology, expertise and scale to connect shippers with the solutions they need — from ground, air and ocean transportation to fully managed supply chains. ArcBest has a long history of innovation that is enriched by deep customer relationships. With a commitment to helping customers navigate supply chain challenges now and in the future, the company is developing ground-breaking technology like Vaux™, one of the TIME Best Inventions of 2023. For more information, visit arcb.com.

The following is a “safe harbor” statement under the Private Securities Litigation Reform Act of 1995: Certain statements and information in this press release 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,” “expect,” “forecast,” “foresee,” “intend,” “may,” “plan,” “predict,” “project,” “scheduled,” “should,” “would,” and similar expressions and the negatives of such terms are intended to identify forward-looking statements. These statements are based on management’s beliefs, assumptions, and expectations based on currently available information, are not guarantees of future performance, and involve certain risks and uncertainties (some of which are beyond our control). Although we believe that the expectations reflected in these forward-looking statements are reasonable as and when made, we cannot provide assurance that our expectations will prove to be correct. Actual outcomes and results could materially differ from what is expressed, implied, or forecasted in these statements due to a number of factors, including, but not limited to: the effects of a widespread outbreak of an illness or disease or any other public health crisis, as well as regulatory measures implemented in response to such events; external events which may adversely affect us or the third parties who provide services for us, for which our business continuity plans may not adequately prepare us, including, but not limited to, acts of war or terrorism, or military conflicts; data privacy breaches, cybersecurity incidents, and/or failures of our information systems, including disruptions or failures of services essential to our operations or upon which our information technology platforms rely; interruption or failure of third-party software or information technology systems or licenses; untimely or ineffective development and implementation of, or failure to realize the potential benefits associated with, new or enhanced technology or processes, including our customer pilot offering of Vaux; the loss or reduction of business from large customers or an overall reduction in our customer base; the timing and performance of growth initiatives and the ability to manage our cost structure; the cost, integration, and performance of any recent or future acquisitions and the inability to realize the anticipated benefits of the acquisition within the expected time period or at all; unsolicited takeover proposals, proxy contests, and other proposals/actions by activist investors; maintaining our corporate reputation and intellectual property rights; nationwide or global disruption in the supply chain resulting in increased volatility in freight volumes; competitive initiatives and pricing pressures; increased prices for and decreased availability of equipment, including new revenue equipment, decreases in value of used revenue equipment, and higher costs of equipment-related operating expenses such as maintenance, fuel, and related taxes; availability of fuel, the effect of volatility in fuel prices and the associated changes in fuel surcharges on securing increases in base freight rates, and the inability to collect fuel surcharges; relationships with employees, including unions, and our ability to attract, retain, and upskill employees; unfavorable terms of, or the inability to reach agreement on, future collective bargaining agreements or a workforce stoppage by our employees covered under ABF Freight’s collective bargaining agreement; union employee wages and benefits, including changes in required contributions to multiemployer plans; availability and cost of reliable third-party services; our ability to secure independent owner-operators and/or operational or regulatory issues related to our use of their services; litigation or claims asserted against us; governmental regulations; environmental laws and regulations, including emissions-control regulations; default on covenants of financing arrangements and the availability and terms of future financing arrangements; our ability to generate sufficient cash from operations to support significant ongoing capital expenditure requirements and other business initiatives; self-insurance claims, insurance premium costs, and loss of our ability to self-insure; potential impairment of long-lived assets and goodwill and intangible assets; general economic conditions and related shifts in market demand that impact the performance and needs of industries we serve and/or limit our customers’ access to adequate financial resources; increasing costs due to inflation and higher interest rates; seasonal fluctuations, adverse weather conditions, natural disasters, and climate change; and other financial, operational, and legal risks and uncertainties detailed from time to time in ArcBest Corporation’s public filings with the Securities and Exchange Commission (“SEC”).

For additional information regarding known material factors that could cause our actual results to differ from those expressed in these forward-looking statements, please see our filings with the SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8K.

Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events, or otherwise.

Financial Data and Operating Statistics

The following tables show financial data and operating statistics on ArcBest^® and its reportable segments.

ARCBEST CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended						Six Months Ended
	June 30						June 30
	2024			2023			2024			2023
	(Unaudited)
	($ thousands, except share and per share data)
REVENUES	$	1,077,831		$	1,103,464		$	2,114,250		$	2,209,558

OPERATING EXPENSES		1,028,986			1,061,348			2,042,970			2,146,283

OPERATING INCOME		48,845			42,116			71,280			63,275

OTHER INCOME (COSTS)
Interest and dividend income		3,241			3,725			6,556			6,658
Interest and other related financing costs		(2,078	)		(2,205	)		(4,306	)		(4,532	)
Other, net		(781	)		5,038			(28,980	)		6,818
		382			6,558			(26,730	)		8,944

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		49,227			48,674			44,550			72,219

INCOME TAX PROVISION		2,303			9,074			538			13,772

NET INCOME FROM CONTINUING OPERATIONS		46,924			39,600			44,012			58,447

INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX⁽¹⁾		—			843			600			53,279

NET INCOME	$	46,924		$	40,443		$	44,612		$	111,726

BASIC EARNINGS PER COMMON SHARE⁽²⁾
Continuing operations	$	1.99		$	1.65		$	1.87		$	2.42
Discontinued operations⁽¹⁾		—			0.04			0.03			2.20
	$	1.99		$	1.68		$	1.89		$	4.62

DILUTED EARNINGS PER COMMON SHARE⁽²⁾
Continuing operations	$	1.96		$	1.60		$	1.83		$	2.35
Discontinued operations⁽¹⁾		—			0.03			0.02			2.14
	$	1.96		$	1.64		$	1.86		$	4.49

AVERAGE COMMON SHARES OUTSTANDING
Basic		23,618,318			24,064,882			23,589,814			24,175,893
Diluted		23,919,613			24,672,948			24,025,499			24,864,691

_________________________
¹⁾		Represents the discontinued operations of FleetNet America® (“FleetNet”), which sold on February 28, 2023. The six months ended June 30, 2024 represents adjustments related to the prior year gain on sale of FleetNet. The six months ended June 30, 2023 includes the net gain on sale of FleetNet of $52.3 million after-tax, or $2.16 basic earnings per share and $2.10 diluted earnings per share.
²⁾		Earnings per common share is calculated in total and may not equal the sum of earnings per common share from continuing operations and discontinued operations due to rounding.

ARCBEST CORPORATION CONSOLIDATED BALANCE SHEETS
	June 30			December 31
	2024			2023
	(Unaudited)			Note
	($ thousands, except share data)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	215,590		$	262,226
Short-term investments		44,865			67,842
Accounts receivable, less allowances (2024 – $8,788; 2023 – $10,346)		429,511			430,122
Other accounts receivable, less allowances (2024 – $654; 2023 – $731)		11,846			52,124
Prepaid expenses		31,835			37,034
Prepaid and refundable income taxes		22,555			24,319
Other		11,011			11,116
TOTAL CURRENT ASSETS		767,213			884,783

PROPERTY, PLANT AND EQUIPMENT
Land and structures		507,194			460,068
Revenue equipment		1,143,985			1,126,055
Service, office, and other equipment		326,633			319,466
Software		177,933			173,354
Leasehold improvements		27,675			24,429
		2,183,420			2,103,372
Less allowances for depreciation and amortization		1,212,381			1,188,548
PROPERTY, PLANT AND EQUIPMENT, NET		971,039			914,824

GOODWILL		304,753			304,753
INTANGIBLE ASSETS, NET		94,740			101,150
OPERATING RIGHT-OF-USE ASSETS		186,779			169,999
DEFERRED INCOME TAXES		9,974			8,140
OTHER LONG-TERM ASSETS		74,031			101,445
TOTAL ASSETS	$	2,408,529		$	2,485,094

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	222,303		$	214,004
Income taxes payable		—			10,410
Accrued expenses		332,258			378,029
Current portion of long-term debt		58,615			66,948
Current portion of operating lease liabilities		32,674			32,172
TOTAL CURRENT LIABILITIES		645,850			701,563

LONG-TERM DEBT, less current portion		144,972			161,990
OPERATING LEASE LIABILITIES, less current portion		185,637			176,621
POSTRETIREMENT LIABILITIES, less current portion		13,264			13,319
CONTINGENT CONSIDERATION		104,070			92,900
OTHER LONG-TERM LIABILITIES		37,606			40,553
DEFERRED INCOME TAXES		45,592			55,785

STOCKHOLDERS’ EQUITY
Common stock, $0.01 par value, authorized 70,000,000 shares; issued 2024: 30,399,853 shares; 2023: 30,024,125 shares		304			300
Additional paid-in capital		324,645			340,961
Retained earnings		1,311,549			1,272,584
Treasury stock, at cost, 2024: 6,711,805 shares; 2023: 6,460,137 shares		(407,433	)		(375,806	)
Accumulated other comprehensive income		2,473			4,324
TOTAL STOCKHOLDERS’ EQUITY		1,231,538			1,242,363
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,408,529		$	2,485,094

_________________________

Note: The balance sheet at December 31, 2023 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

ARCBEST CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six Months Ended
	June 30
	2024			2023
	(Unaudited)
	($ thousands)
OPERATING ACTIVITIES
Net income	$	44,612		$	111,726
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		66,693			64,804
Amortization of intangibles		6,416			6,398
Share-based compensation expense		6,322			5,585
Provision for losses on accounts receivable		1,248			2,257
Change in deferred income taxes		(11,457	)		(8,228	)
Loss on sale of property and equipment		565			1,188
Pre-tax gain on sale of discontinued operations		(806	)		(70,215	)
Change in fair value of contingent consideration		11,170			5,040
Change in fair value of equity investment		28,739			(3,739	)
Changes in operating assets and liabilities:
Receivables		38,702			83,542
Prepaid expenses		5,199			6,353
Other assets		(2,789	)		759
Income taxes		(8,806	)		(35,968	)
Operating right-of-use assets and lease liabilities, net		(7,262	)		3,059
Accounts payable, accrued expenses, and other liabilities		(38,344	)		(68,804	)
NET CASH PROVIDED BY OPERATING ACTIVITIES		140,202			103,757

INVESTING ACTIVITIES
Purchases of property, plant and equipment, net of financings		(104,909	)		(83,171	)
Proceeds from sale of property and equipment		2,341			2,853
Proceeds from sale of discontinued operations		—			100,949
Purchases of short-term investments		(5,236	)		(46,858	)
Proceeds from sale of short-term investments		28,504			63,693
Capitalization of internally developed software		(7,779	)		(7,010	)
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES		(87,079	)		30,456

FINANCING ACTIVITIES
Payments on long-term debt		(35,705	)		(35,114	)
Net change in book overdrafts		(4,146	)		(13,171	)
Deferred financing costs		—			57
Payment of common stock dividends		(5,647	)		(5,809	)
Purchases of treasury stock		(31,627	)		(41,240	)
Payments for tax withheld on share-based compensation		(22,634	)		(10,022	)
NET CASH USED IN FINANCING ACTIVITIES		(99,759	)		(105,299	)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(46,636	)		28,914
Cash and cash equivalents of continuing operations at beginning of period		262,226			158,264
Cash and cash equivalents of discontinued operations at beginning of period		—			108
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	215,590		$	187,286

NONCASH INVESTING ACTIVITIES
Equipment financed	$	10,354		$	3,478
Accruals for equipment received	$	3,904		$	10,106
Lease liabilities arising from obtaining right-of-use assets	$	26,001		$	43,366

_________________________

Note: The statements of cash flows for the six months ended June 30, 2024 and 2023 include cash flows from continuing operations and cash flows from discontinued operations of FleetNet, which sold on February 28, 2023.

ARCBEST CORPORATION FINANCIAL STATEMENT OPERATING SEGMENT DATA AND OPERATING RATIOS

	Three Months Ended											Six Months Ended
	June 30											June 30
	2024					2023						2024					2023
	(Unaudited)
	($ thousands, except percentages)
REVENUES FROM CONTINUING OPERATIONS
Asset-Based	$	712,725				$	722,015					$	1,384,192				$	1,419,832
Asset-Light		395,817					409,816						792,180					847,908
Other and eliminations		(30,711	)				(28,367	)					(62,122	)				(58,182	)
Total consolidated revenues from continuing operations	$	1,077,831				$	1,103,464					$	2,114,250				$	2,209,558

OPERATING EXPENSES FROM CONTINUING OPERATIONS
Asset-Based
Salaries, wages, and benefits	$	352,678		49.5	%	$	344,538		47.7		%	$	697,677		50.4	%	$	680,143		47.9	%
Fuel, supplies, and expenses		82,938		11.6			90,897		12.6				163,982		11.8			185,185		13.1
Operating taxes and licenses		13,557		1.9			14,094		2.0				27,086		2.0			28,073		2.0
Insurance		16,964		2.4			12,889		1.8				31,446		2.3			26,162		1.8
Communications and utilities		4,412		0.6			4,553		0.6				9,211		0.7			9,857		0.7
Depreciation and amortization		26,646		3.8			25,273		3.5				53,653		3.9			50,184		3.5
Rents and purchased transportation		70,315		9.9			101,922		14.1				135,986		9.8			192,666		13.6
Shared services		72,245		10.1			74,468		10.3				137,159		9.9			139,081		9.8
(Gain) loss on sale of property and equipment		(91	)	—			416		0.1				58		—			365		—
Innovative technology costs⁽¹⁾		—		—			8,343		1.1				—		—			14,411		1.0
Other		269		—			1,297		0.2				1,686		0.1			2,909		0.2
Total Asset-Based		639,933		89.8	%		678,690		94.0		%		1,257,944		90.9	%		1,329,036		93.6	%

Asset-Light
Purchased transportation	$	339,247		85.7	%	$	343,102		83.7		%	$	683,369		86.3	%	$	713,265		84.1	%
Salaries, wages, and benefits⁽²⁾		31,036		7.8			32,485		7.9				61,340		7.7			67,495		8.0
Supplies and expenses⁽²⁾		2,768		0.7			2,905		0.7				5,577		0.7			6,534		0.8
Depreciation and amortization⁽³⁾		5,039		1.3			5,085		1.2				10,117		1.3			10,153		1.2
Shared services⁽²⁾		17,297		4.4			16,500		4.1				33,571		4.2			33,014		3.9
Contingent consideration⁽⁴⁾		3,850		1.0			(10,000	)	(2.4	)			11,170		1.4			5,040		0.6
Other⁽²⁾		6,078		1.5			6,559		1.6				11,792		1.5			13,318		1.5
Total Asset-Light		405,315		102.4	%		396,636		96.8		%		816,936		103.1	%		848,819		100.1	%

Other and eliminations⁽⁵⁾		(16,262	)				(13,978	)					(31,910	)				(31,572	)
Total consolidated operating expenses from continuing operations	$	1,028,986		95.5	%	$	1,061,348		96.2		%	$	2,042,970		96.6	%	$	2,146,283		97.1	%

OPERATING INCOME (LOSS) FROM CONTINUING OPERATIONS
Asset-Based	$	72,792				$	43,325					$	126,248				$	90,796
Asset-Light		(9,498	)				13,180						(24,756	)				(911	)
Other and eliminations⁽⁵⁾		(14,449	)				(14,389	)					(30,212	)				(26,610	)
Total consolidated operating income from continuing operations	$	48,845				$	42,116					$	71,280				$	63,275

Contacts

Investor Relations Contact: Amy Mendenhall

Title: Vice President – Treasury & Investor Relations

Phone: 479-785-6200

Email: invrel@arcb.com

Media Contact: Autumnn Mahar

Title: Director External Communications and Public Relations

Phone: 479-494-8221

Email: amahar@arcb.com

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