Arcbest Corporation · NASDAQ:ARCB

Arcbest — Q1 2023 Earnings Presentation

52 slides from Arcbest's earnings presentation, April 2023

  1. Slide 1: Investor Presentation 1Q'23

    Investor Presentation 1Q’23

  2. Slide 2: Forward Looking Statements

    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 o

  3. Slide 3: Profile of an Industry Leader

    PROFILE OF AN INDUSTRY LEADER 100 #1 >98% ~240 ~28K TOP 15 95K+ Years of Safety award Coverage of Asset-Based Owned U.S. Approved transportation winner in the United States North American revenue Truckload contract and logistics industry service centers equipment Broker carriers experience 3

  4. Slide 4: Our 100th Anniversary

    Our 100th Anniversary: The Heart of 100

  5. Slide 5: Broad Suite of Logistics Solutions and Services

    Premium Less-than- Managed Broad Truckload Logistics Truckload Transportation Suite of Logistics Solutions Expedite & Time Critical International Air & Ocean Supply Chain Optimization Product Launch and Services Final Retail Trade Show Warehousing Mile Logistics Shipping 5

  6. Slide 6: An Integrated Logistics Company

    A N I N T E G R AT E D L O G I S T I C S C O M PA N Y Ongoing investment in technology and of revenue from equipment 45% logistics in 2022 versus 7% in 2009 Realignment and enhanced market approach under the ArcBest Five key logistics brand in 2017 5 acquisitions since 2012 Opportunistic addition of

  7. Slide 7: Strategy in Action

    Strategy in Action Our strategy is delivering solid results Revenues ($B) Operating Income ($M) Earnings Per Share (Unaudited)(1) (Non-GAAP, Unaudited)(1)(2) (Non-GAAP, Unaudited)(1)(2) +69% +168% +197% $13.49 $468 $12.02 $5.0 $4.9 $413 $8.40 $314 $3.8 $2.9 $2.8 $2.8 $154 $4.05 $123 $2.96 $3.28 $112

  8. Slide 8: Strategy in Action: Asset-Based Operating Ratio Improvement

    Strategy in Action 97.9% 96.9% 94.5% 94.2% Improvement 93.3% in Asset-Based 88.8% Operating 86.4% 87.5% Ratio (1) 2016 2017 2018 2019 2020 2021 2022 1Q'23 TTM (Non-GAAP) FREIGHT RECESSION COVID-19 IMPACTS FREIGHT RECESSION (1) Operating Ratio adjusted for certain unusual items. See Reconciliations o

  9. Slide 9: A Values-Driven Culture

    At the Center of our Company: A VALUES-DRIVEN CULTURE Creativity Integrity Collaboration We create We do the We work solutions right thing together Growth Excellence Wellness We grow our We exceed We embrace people and our expectations total health business 9

  10. Slide 10: Environmental, Social and Corporate Governance

    ESG Environmental, Social And Corporate Governance • AA rating by MSCI distinguishes ArcBest as a leader in ESG among • 2022 Inbound Logistics Green 75 Supply Chain Partner transportation and logistics peers • Signed DOT’s Transportation Leaders Against Human • Recognized as one of America’s Best Em

  11. Slide 11: Leveraging a Differentiated Business Model

    L E V E R A G I N G A D I F F E R E N T I AT E D B U S I N E S S M O D E L 11

  12. Slide 12: Positioned in Large Markets

    POSITIONED IN LARGE MARKETS Less-than- Expedite Domestic Transportation Warehousing Truckload Shipping Management & Distribution $53B $5B $139B $55B Premium International Moving Final Logistics Shipping Services Mile $20B $127B $24B $13B ArcBest Opportunity: ~$436B 12 Source: Armstrong & Associates,

  13. Slide 13: Large Cross-Sell Opportunity

    Large Cross-Sell Opportunity T ARG ET LARG E 40% AT T R ACT IVE M ARKET S 78% Opportunity DEEPEN CUSTOMER RELATIONSHIPS 78% percent of customers 40% percent of customers DEVELO P INNO V AT I VE SO LUT IO NS indicate a need of leverage more than one more than one logistics service offered logistics s

  14. Slide 14: Our Deepening Focus: Customer Relationships

    Our Deepening Focus: Customer Relationships T ARG ET LARG E AT T R ACT IVE M ARKET S DEEPEN CUSTOMER ✓ Higher customer retention rates RELATIONSHIPS Profitability Recommend ✓ Higher profitability DEVELO P INNO V AT I VE SO LUT IO NS Advise & Cross-Sell ✓ Greater share of customer business W INNING C

  15. Slide 15: ArcBest's Customer-Led Strategy Yields Results

    A R C B E S T ’ S C U S T O M E R - L E D S T R AT E G Y Y I E L D S R E S U LT S 9% Retention rates are 9 percentage points >5x higher on cross-sold accounts Revenue per account is over 5X Over 75% of >75% higher on cross- revenue came from >4x digitally connected sold accounts customers Profit per

  16. Slide 16: Investments in Innovation

    Investments in Innovation CUSTOMER CAPABILITIES CAPACITY EXPERIENCE T ARG ET LARG E AT T R ACT IVE M ARKET S DEEPEN CUST O M ER RELAT IO NS HI PS • Customer engagement • Serving shippers and • Digital connectivity to focus: capacity providers in capacity sources DEVELOP INNOVATIVE - Voice of the cus

  17. Slide 17: Vaux: A New Freight Movement System

    Driving Innovation Developed and launched industry game Unload the entire contents of changing a trailer in minutes. innovation in 360o access allows for swarm Vaux – a new processing – pull product in seconds and unload in Freight Picture goes here minutes. Movement System Vaux OS TM gives piece-le

  18. Slide 18: Pilot Test Program at ABF Freight

    Investments in Innovation P I L O T T E S T P R O G R A M AT A B F F R E I G H T WHAT IT IS T ARG ET LARG E AT T R ACT IVE M ARKET S Patented handling equipment, software and a Potential patented process to load and unload trailers Benefits: DEEPEN CUST O M ER RELAT IO NS HI PS ✓ Improved transit pe

  19. Slide 19: ArcBest Investment in Phantom Auto

    ArcBest Investment in Phantom Auto ABOUT PHANTOM AUTO T ARG ET LARG E AT T R ACT IVE M ARKET S $25M Phantom Auto is solving fundamental challenges facing the On January 19, 2022, supply chain industry, and this investment aligns perfectly with ArcBest announced our ArcBest’s commitment to advancing

  20. Slide 20: Winning Customer Proposition

    Winning Customer Proposition T ARG ET LARG E AT T R ACT IVE M ARKET S Solves my logistics and Is a trusted provider Makes it easy transportation challenges and partner to do business DEEPEN CUST O M ER RELAT IO NS HI PS Customer visibility Unmatched Digital DEVELO P INNO V AT I VE SO LUT IO NS and a

  21. Slide 21: Integrated Logistics Provider

    Integrated Logistics Provider T ARG ET LARG E FULL SUPPLY CHAIN SOLUTIONS AT T R ACT IVE M ARKET S International shipping from DEEPEN CUST O M ER 1 warehouse to port RELAT IO NS HI PS Managed transportation 2 options for vendor consolidation at port DEVELO P INNO V AT I VE 3 Multiple transportation

  22. Slide 22: Balanced Approach to Capital Allocation

    B A L A N C E D A P P R O A C H T O C A P I TA L A L L O C AT I O N Strong business performance enables ArcBest to reinvest in the business and provide returns to shareholders while maintaining a solid balance sheet and investment-grade credit metrics. Dividends & Share Repurchases Increased share r

  23. Slide 23: Three-Point Strategy to Deliver Shareholder Value

    Three-Point Strategy Continues to Deliver Shareholder Value & Drive Business Growth 1 2 3 Accelerate Growth Increase Efficiency Drive Innovation Secure new customers Optimize ABF network Develop and implement disruptive and game-changing Expand with existing Drive scale and productivity innovations

  24. Slide 24: Accelerating Performance Over a Sustained Period

    A C C E L E R AT I N G P E R F O R M A N C E O V E R S U S TA I N E D P E R I O D 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 $5.3B Revenue $4.0B up 261% $2.3B $2.6B $2.7B $2.7B $2.8B $3.1B $3.0B $2.9B $1.9B $2.1B $1.5B $1.7B $473M Operating $318M Income $159M $118M $128M (

  25. Slide 25: The ArcBest Advantage Drives Superior Results

    The ArcBest Advantage … … Drives Superior Results Unmatched Market Visibility Shipment-level visibility to $25+ billion of annualized customer spend True integrated logistics allows for intelligent pricing and network and mode optimization partner in a growing $400B+ transportation Integrated & logi

  26. Slide 26: Compelling Investment Opportunity

    Compelling Competitive Moat Investment 100 Years of Logistics Experience Opportunity Sustainability Leader Effective Capital Allocation Strategy Significant Growth and Efficiency Opportunities Attractive Valuation 26

  27. Slide 27: Current Low Valuation Set to Improve

    Current Low Valuation Price to Earnings (BASED ON FY2024 CONSENSUS ESTIMATES) Set to Asset-Based 19.0X Improve as Peer Avg Strategy Logistics Peer Avg 16.3X Execution Advances 8.8X • Asset-Based peers include Old Dominion, Saia and XPO • Logistics peers include C.H. Robinson, Hub Group, J.B. Hunt, L

  28. Slide 28: Why ArcBest Will Continue to Outperform

    IN SU MMA RY Why ArcBest Will Continue to Outperform Strong financial profile Winning customer proposition Develop innovative solutions Deepen customer relationships Target large attractive markets 28

  29. Slide 29: Additional Information

    ADDITIONAL INFORMATION AWCBOSE yy) — ccc n sarin soe rans __ ©.

  30. Slide 30: ArcBest Consolidated

    ArcBest Consolidated (continuing operations)(1) (Unaudited) Three Months Three Months Twelve Months Twelve Months Ended Ended Per Day Ended Ended Per Day Millions ($000,000) 3/31/23 3/31/22 % Change 12/31/22 12/31/21 % Change Revenue $1,106.1 $1,268.1 (13.5%) $5,029.0 $3,763.5 33.6% Non-GAAP Operati

  31. Slide 31: Reconciliations of GAAP to Non-GAAP Financial Measures

    ARCBEST CORPORATION - CONSOLIDATED Three Months Ended Twelve Months Ended Reconciliations of Millions ($000,000), except per share data 3/31/2023 3/31/2022 12/31/2022 12/31/2021 GAAP to Non-GAAP Operating Income from Continuing Operations Amounts on a GAAP basis $ 21.2 $ 92.9 $ 394.5 $ 277.0 Financi

  32. Slide 32: ArcBest Consolidated Cash Flow

    ArcBest Consolidated In Millions TTM Consolidated Cash Flow 3/31/23 Cash and Short-term Investments, beginning of period $ 101 Net Income 299 Depreciation and amortization (a) 140 Gain on sale of discontinued operations (69) Net change in other assets and liabilities (b) 133 Cash from operations $ 5

  33. Slide 33: Business Segments

    Business Segments Three Months Three Months Twelve Months Twelve Months Ended Ended Per Day Ended Ended Per Day Millions ($000,000) 3/31/23 3/31/22 % Change 12/31/22 12/31/21 % Change Asset-Based Revenue $ 697.8 $ 705.3 (1.8%) $3,010.9 $2,573.8 17.0% Non-GAAP Operating Income(1) 53.5 87.0 409.6 288.

  34. Slide 34: Reconciliations of GAAP to Non-GAAP Financial Measures

    Reconciliations of Three Months Ended Twelve Months Ended GAAP to Non-GAAP Millions ($000,000) 3/31/2023 3/31/2022 12/31/2022 12/31/2021 ASSET-BASED SEGMENT Financial Measures (Unaudited) Operating Income Amounts on a GAAP basis $ 47.5 93.2% $ 80.0 88.7% $ 381.1 87.3% $ 260.7 89.9% 1) Represents cos

  35. Slide 35: Net Capital Expenditures vs. Operating Cash

    Net Capital Expenditures vs. Operating Cash 500 450 $471 400 350 Millions 300 $324 250 $255 200 $211 $206 150 $170 $144 $152 $146 $146 $152 $147 $143 $134 100 $112 $101 $104 $94 $86 $92 $77 $85 50 $69 $42 $26 $24 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Net Capex Cash Provi

  36. Slide 36: 2023 Net Capital Expenditures (estimated)

    2023 Net Capital Expenditures (estimated) $350 • Total Net Capital Expenditures, including financed equipment: $300 million $300 - $325 to $325 million (approximately $60 million of previously planned 2022 net capital expenditures, associated with supply chain-related manufacturing $300 delays and c

  37. Slide 37: Asset-Based Billed Revenue Per Hundredweight

    Asset-Based Billed Revenue Per Hundredweight (including FSC) $50.00 $45.00 August 2017 implementation $40.00 of space-based pricing $35.00 $30.00 $25.00 Decrease reflects lower fuel surcharge and freight mix changes related to the addition of transactional shipments $20.00 Revenue per Hundredweight,

  38. Slide 38: Additional Information

    Additional Information The following information was included in an exhibit of an ArcBest 8-K filed on 4/28/23. SUMMARY OPERATING AND FINANCIAL IMPACTS Asset-Based Segment 1Q’23 Year-over-Year Yield Metrics • Billed Rev/Cwt on LTL-rated freight, excluding fuel surcharges, decreased by a percentage i

  39. Slide 39: Additional Information: April 2023 Business Update

    Additional Information The following information was included in an exhibit of an ArcBest 8-K filed on 4/28/23. SUMMARY OPERATING AND FINANCIAL IMPACTS Asset-Based Segment April 2023 Business Update Statistics for April 2023 have not been finalized. Preliminary Asset-Based financial metrics and busi

  40. Slide 40: Additional Information: April 2023 Business Update (cont.)

    Additional Information The following information was included in an exhibit of an ArcBest 8-K filed on 4/28/23. SUMMARY OPERATING AND FINANCIAL IMPACTS Asset-Based Segment April 2023 Business Update (cont.) Revenue and tonnage levels in April are trending more moderately than the seasonal improvemen

  41. Slide 41: Additional Information: Asset-Light Segment

    Additional Information The following information was included in an exhibit of an ArcBest 8-K filed on 4/28/23. SUMMARY OPERATING AND FINANCIAL IMPACTS Asset-Light Operating Segment 1Q’23 and April 2023 Monthly Total Daily Business Trends 1) Statistics for the full month of April 2023 have not been

  42. Slide 42: Additional Information: ArcBest Consolidated

    Additional Information The following information was included in an exhibit of an ArcBest 8-K filed on 4/28/23. SUMMARY OPERATING AND FINANCIAL IMPACTS ArcBest Consolidated On a preliminary basis, April 2023 consolidated revenues decreased approximately 18% on a per day basis compared to April 2022.

  43. Slide 43: Additional Information: Other and Eliminations

    Additional Information The following information was included in an exhibit of an ArcBest 8-K filed on 4/28/23. SUMMARY OPERATING AND FINANCIAL IMPACTS ArcBest Consolidated “Other and eliminations” within Operating Income on the Operating Segment Data and Operating Ratios statement • The “Other and

  44. Slide 44: Additional Information: MoLo Contingent Earnout

    Additional Information The following information was included in an exhibit of an ArcBest 8-K filed on 4/28/23. SUMMARY OPERATING AND FINANCIAL IMPACTS ArcBest Consolidated MoLo Contingent Earnout Consideration • Projected expenses related to fair value adjustments for contingent earnout considerati

  45. Slide 45: Additional Information: Capital Expenditures

    Additional Information The following information was included in an exhibit of an ArcBest 8-K filed on 4/28/23. SUMMARY OPERATING AND FINANCIAL IMPACTS ArcBest Consolidated Capital Expenditures FY’23 – Projected • Total Net Capital Expenditures, including financed equipment: $300 million to $325 mil

  46. Slide 46: Additional Information: Share Repurchase and Tax Rate

    Additional Information The following information was included in an exhibit of an ArcBest 8-K filed on 4/28/23. SUMMARY OPERATING AND FINANCIAL IMPACTS ArcBest Consolidated Share Repurchase Program • Based on repurchases settled through Thursday April 27, 2023, $96.0 million remains available under

  47. Slide 47: Additional Information: Other, net

    Additional Information The following information was included in an exhibit of an ArcBest 8-K filed on 4/28/23. SUMMARY OPERATING AND FINANCIAL IMPACTS ArcBest Consolidated •“Other, net” line within Other Income (Costs) on the Consolidated Statements of Operations • The “Other, net” line of ArcBest’

  48. Slide 48: ArcBest Consolidated

    ArcBest Consolidated (continuing operations)(1) (Unaudited) RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES 2018 2019 2020 2021 2022 1Q’23 TTM ($ millions) ArcBest Corporation - Consolidated Operating Income Amounts on a GAAP basis (1) $ 103.6 $ 57.9 $ 93.7 $ 277.0 $ 394.5 $ 322.7 Restructuri

  49. Slide 49: ArcBest Consolidated

    ArcBest Consolidated (continuing operations)(1) (Unaudited) RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES 2018 2019 2020 2021 2022 1Q’23 TTM ArcBest Corporation – Consolidated ($ millions) Diluted Earnings Per Share Amounts on a GAAP basis (1) $ 2.35 $ 1.33 $ 2.55 $ 7.86 $ 11.52 $ 9.64 Rest

  50. Slide 50: Reconciliations of GAAP to Non-GAAP Financial Measures

    Reconciliations of GAAP to Non-GAAP Financial Measures (Unaudited) 1) Adjusted EBITDA is a primary component of the financial covenants contained in ArcBest Corporation’s Fourth Amended and Restated Credit Agreement. Twelve Months Ended Management believes Adjusted EBITDA to be relevant and useful i

  51. Slide 51: Asset-Based

    Asset-Based (Unaudited) RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES 2016 2017 2018 2019 2020 2021 2022 1Q’23 TTM ($ millions) ArcBest Corporation – Asset-Based Segment Operating Income Amounts on a GAAP basis (1) $ 36.9 98.1% $ 57.9 97.1% $ 103.9 95.2% $ 102.1 95.2% $ 98.9 95.3% $ 260.7 8

  52. Slide 52: Investor Presentation

    Investor Presentation

ArcBest — Q1 2023 Earnings Presentation on 6ix