Arcbest Corporation · NASDAQ:ARCB
Arcbest — Investor Presentation (March 2022)
57 slides from Arcbest's investor presentation, Mar 30, 2022
Slide 1: Investor Presentation
Investor Presentation
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
Slide 3: Profile of an Industry Leader
PROFILE OF AN INDUSTRY LEADER 95+ #1 >98% ~240 25K+ TOP 15 80K 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
Slide 4: Broad Suite of Logistics Solutions
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 4
Slide 5: 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 44% logistics in 4Q’21 versus 7% in 2012 Realignment and enhanced market approach under the ArcBest Five key logistics brand in 2017 5 acquisitions since 2012 Opportunistic addition o
Slide 6: MoLo Acquisition Advances Strategy
(1) M O L O A C Q U I S I T I O N A D VA N C E S S T R AT E G Y Top 15 U.S. Truckload Broker in the Growing Domestic Transportation Management Marketplace [$91 Billion(2)] + Revenue(3) $4.0B Customers ~30,000 ~500 ~30,500 Employees ~14,000 ~500 ~14,500 Carriers ~40,000 ~45,000 ~80,000 (Net of overla
Slide 7: Strategy in Action
Strategy in Action Our strategy is delivering solid results (1) (1) Revenues ($B) Operating Income ($M) Earnings Per Share (Non-GAAP) (Non-GAAP) (2) (2) +48% +489% +816% $318 $8.52 $4.0 $3.1 $3.0 $2.8 $2.9 $160 $4.22 $2.7 $128 $3.42 $118 $3.14 $76 $1.61 $54 $1.13 2016 2017 2018 2019 2020 2021 2016 2
Slide 8: Strategy in Action: Asset-Based Operating Ratio
Strategy in Action 97.9% 96.9% 94.5% 94.2% Improvement 93.3% in Asset-Based 88.8% Operating Ratio* 2016 2017 2018 2019 2020 2021 (Non-GAAP) FREIGHT RECESSION COVID-19 IMPACTS *Operating Ratio adjusted for certain unusual items. See Reconciliations of GAAP to non-GAAP Financial Measures in the Additi
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
Slide 10: Environmental, Social And Corporate Governance
ESG Environmental, Social And Corporate Governance ESG HIGHLIGHTS • AA rating by MSCI distinguishes ArcBest as a leader in ESG among • Established GHG emissions measurement task force transportation and logistics peers • 2021 SmartWay Excellence Award (ABF Freight, 5-time winner) • March 2021 – Awar
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
Slide 12: Positioned in Large Markets
Positioned in Large Markets Domestic Less-than- Expedite Transportation Truckload Shipping Management TARGET LARGE ATTRACTIVE MARKETS $42B $5B $91B DEEPEN CUST O M ER RELAT IO NS HI PS Premium International Warehousing Logistics & Distribution $20B $70B $47B DEVELO P INNO V AT I VE SO LUT IO NS Movi
Slide 13: Large Cross-Sell Opportunity
Large Cross-Sell Opportunity T ARG ET LARG E 38% AT T R ACT IVE M ARKET S 78% Opportunity DEEPEN CUSTOMER RELATIONSHIPS 78% percent of customers 38% 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
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
Slide 15: Cross-Sell Opportunity
Cross-Sell Opportunity T ARG ET LARG E AT T R ACT IVE M ARKET S Loyal customer DEEPEN CUSTOMER RELATIONSHIPS DEVELO P INNO V AT I VE spend on Asset-Light >$3.5B SO LUT IO NS Services W INNING CUST O M ER PRO PO SIT IO N ST RONG FIN AN CI AL PRO FILE We have identified “ideal” customers= Loyal & Not
Slide 16: ArcBest's Customer-led Approach
ArcBest’s Customer-led Approach Retention rates are 9 percentage 9% points higher on cross-sold T ARG ET LARG E AT T R ACT IVE M ARKET S DEEPEN CUSTOMER 5x Revenue per account accounts RELATIONSHIPS is over 5X higher on >75% cross-sold accounts 4x DEVELO P INNO V AT I VE SO LUT IO NS Over 75% of rev
Slide 17: 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
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, Potential software and a patented process to load and unload trailers Benefits: DEEPEN CUST O M ER RELAT IO NS HI PS HOW IT WORKS ✓ Improv
Slide 19: ArcBest Announces Investment in Phantom Auto
ArcBest Announces 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 it ArcBest’s commitment to a
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
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
Slide 22: Customer Experience Improvement
Customer Experience Improvement +8% +8% Is a trusted provider T ARG ET LARG E AT T R ACT IVE M ARKET S and partner DEEPEN CUST O M ER RELAT IO NS HI PS Solves my logistics and transportation DEVELO P INNO V AT I VE challenges 4Q’21 +93% SO LUT IO NS versus 4Q’17 WINNING CUSTOMER PROPOSITION Net prom
Slide 23: ArcBest Balanced Capital Allocation
ArcBest Balanced Capital Allocation INVESTMENTS IN GROWTH AND OPERATING INITIATIVES • Capital investments consistent with service initiatives and growth strategy 2022 Projected Net Capital Expenditures: $270M - $290M(1) T ARG ET LARG E o Revenue equipment (tractors and trailers), dock equipment and
Slide 24: Three-Point Strategy Continues to Deliver Shareholder Value
Three-Point Strategy Continues to Deliver Shareholder Value & Drive Business Growth 3 2 Optimize Cost 1 More Balanced Structure Business Mix Advance adoption of Expand Revenue innovative technologies ENHANCED Accelerate SHAREHOLDER Opportunities Asset-Light growth VALUE Deepen customer relationships
Slide 25: Updated Long-Term Financial Targets
(1) U P D AT E D L O N G - T E R M F I N A N C I A L TA R G E T S (2) 2025 REVENUE O P E R AT I N G M A R G I N ROCE (Return on Capital Employed) ArcBest: 10%-15% ArcBest: Exceed Long-Term $7B-$8B Asset-Based Average 4%-6% (3) of S&P 500 Asset-Light (excluding FleetNet) Driving Growth, Enhancing Eff
Slide 26: Current Low Valuation Set to Improve as Strategy Advances
Current Low Valuation Price to Earnings (BASED ON FY2023 CONSENSUS ESTIMATES) Set to Improve as Asset-Based Peer Avg 21.7X Strategy Execution Logistics Peer Avg 15.3X Advances 8.5X • Asset-Based peers include Old Dominion and Saia • Logistics peers include C.H. Robinson, Echo, Hub Group, J.B. Hunt,
Slide 27: 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 27
Slide 28: Additional Information
ADDITIONAL INFORMATION ArcBest
Slide 29: ArcBest Consolidated
ArcBest Consolidated Three Months Three Months Twelve Months Twelve Months Ended Ended Per Day Ended Ended Per Day Millions ($000,000) 12/31/21 12/31/20 % Change 12/31/21 12/31/20 % Change Revenue $1,185.2 $ 816.4 45.2% $3,980.1 $2,940.2 35.9% Operating Income* 102.2 39.5 318.1 127.6 Net Income* $ 7
Slide 30: Reconciliations of GAAP to Non-GAAP Financial Measures
Reconciliations of GAAP to Non-GAAP Financial Measures (Unaudited) Three Months Three Months Twelve Months Twelve Months ARCBEST CORPORATION - CONSOLIDATED Ended Ended Ended Ended Millions ($000,000), except per share data 12/31/2021 12/31/2020 12/31/2021 12/31/2020 Operating Income Amounts on a GAA
Slide 31: ArcBest Consolidated Cash Flow
ArcBest Consolidated In Millions Consolidated Cash Flow 2021 Cash and Short-term Investments, beginning of period $ 369 Net Income 214 Depreciation and amortization (a) 124 Pension settlement expense and amortization of actuarial losses 10 on benefit plans and share-based compensation Net change in
Slide 32: Asset-Based
Asset-Based Three Months Three Months Twelve Months Twelve Months Ended Ended Per Day Ended Ended Per Day Millions ($000,000) 12/31/21 12/31/20 % Change 12/31/21 12/31/20 % Change Revenue $ 683.5 $ 554.4 23.3% $2,573.8 $2,092.0 23.5% Operating Income* 89.5 34.9 288.3 121.3 Operating Ratio* 86.9% 93.
Slide 33: Asset-Light
Asset-Light Three Months Three Months Twelve Months Twelve Months Ended Ended Ended Ended Millions ($000,000) 12/31/21 12/31/20 % Change 12/31/21 12/31/20 % Change ArcBest Revenue $ 472.3 $ 245.6 92.3% $1,300.6 $ 779.1 66.9% Operating Income* 15.3 5.9 44.7 13.4 FleetNet Revenue $ 68.9 $ 55.6 23.9% $
Slide 34: Net Capital Expenditures vs. Operating Cash
Net Capital Expenditures vs. Operating Cash 350 $324 300 250 $255 Millions 200 $206 $170 150 $152 $152 $147 $144 $146 $143 $146 $134 100 $112 $101 $104 $94 $92 $85 $86 $77 $69 50 $42 $26 $24 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Net Capex Cash Provided by Operations Note: Cap
Slide 35: 2022 Net Capital Expenditures (estimated)
2022 Net Capital Expenditures (estimated) $300 • Total Net Capital Expenditures, including financed equipment: $270 million to $290 million $270 - $290 $250 • As noted in the chart, approximately $35 million of previously planned 2021 net capital expenditures, associated with pandemic- related manuf
Slide 36: Asset-Based Billed Revenue Per Hundredweight
Asset-Based Billed Revenue Per Hundredweight (including FSC) $45.00 $40.00 August 2017 implementation of space-based pricing $35.00 $30.00 Decrease reflects lower fuel $25.00 surcharge and freight mix changes related to the addition of transactional shipments $20.00 Revenue per Hundredweight, Includ
Slide 37: Additional Information
Additional Information The following information was included in an exhibit of an ArcBest 8-K filed on 2/1/22. SUMMARY OPERATING AND FINANCIAL IMPACTS ArcBest Consolidated On a preliminary basis, January 2022 consolidated revenues grew approximately 56% on a per day basis compared to January 2021, r
Slide 38: Additional Information
Additional Information The following information was included in an exhibit of an ArcBest 8-K filed on 2/1/22. SUMMARY OPERATING AND FINANCIAL IMPACTS Asset-Based Segment Year-over-Year Monthly Total Daily Business Trends 1) Statistics for the full month of January 2022 have not been finalized and a
Slide 39: Additional Information
Additional Information The following information was included in an exhibit of an ArcBest 8-K filed on 2/1/22. SUMMARY OPERATING AND FINANCIAL IMPACTS Asset-Based Segment January 2022 Business Update Statistics for January 2022 have not been finalized. Preliminary Asset-Based financial metrics and b
Slide 40: Additional Information
Additional Information The following information was included in an exhibit of an ArcBest 8-K filed on 2/1/22. SUMMARY OPERATING AND FINANCIAL IMPACTS Asset-Based Segment 1Q’22 Other Items • 63.5 Working Days compared to 63 working days in 1Q’21 • Projected Innovative Technology Costs in our Asset-B
Slide 41: Additional Information
Additional Information The following information was included in an exhibit of an ArcBest 8-K filed on 2/1/22. SUMMARY OPERATING AND FINANCIAL IMPACTS Asset-Light ArcBest Operating Segment [Excluding FleetNet] Year-over-Year Monthly Total Daily Business Trends 1) Includes revenue of the acquired MoL
Slide 42: Additional Information
Additional Information The following information was included in an exhibit of an ArcBest 8-K filed on 2/1/22. SUMMARY OPERATING AND FINANCIAL IMPACTS Asset-Light ArcBest Operating Segment [Excluding FleetNet] Year-over-Year Monthly Total Daily Business Trends Excluding Results For MoLo 4) Excludes
Slide 43: Additional Information
Additional Information The following information was included in an exhibit of an ArcBest 8-K filed on 2/1/22. SUMMARY OPERATING AND FINANCIAL IMPACTS ArcBest Consolidated 1Q’22 – Projected • Loss in “Other and eliminations” (non-GAAP basis): $6 million vs. $6 million in 1Q’21. • Projected Innovativ
Slide 44: Additional Information
Additional Information The following information was included in an exhibit of an ArcBest 8-K filed on 2/1/22. SUMMARY OPERATING AND FINANCIAL IMPACTS ArcBest Consolidated Capital Expenditures FY’21 – Actual • Total Net Capital Expenditures, including financed equipment: $104 million • Includes reve
Slide 45: Additional Information
Additional Information The following information was included in an exhibit of an ArcBest 8-K filed on 2/1/22. SUMMARY OPERATING AND FINANCIAL IMPACTS Long-Term Financial Targets • ArcBest Consolidated 2025 Revenue: $7 billion to $8 billion • Operating Margin - Asset-Based: 10% - 15% - Asset-Light (
Slide 46: Additional Information
Additional Information The following information was included in an exhibit of an ArcBest 8-K filed on 2/1/22. ADDITIONAL DETAILED INFORMATION Asset-Based Segment Annual Union Profit-Sharing Bonus • As provided in ABF Freight’s current Teamster labor contract, for the full years of 2019 through 2022
Slide 47: Additional Information
Additional Information The following information was included in an exhibit of an ArcBest 8-K filed on 2/1/22. ADDITIONAL DETAILED INFORMATION ArcBest Consolidated Tax Rate • ArcBest’s fourth quarter 2021 effective GAAP tax rate was 24.0%. • This rate was impacted by several items identified in the
Slide 48: Additional Information
Additional Information The following information was included in an exhibit of an ArcBest 8-K filed on 2/1/22. ADDITIONAL DETAILED INFORMATION ArcBest Consolidated “Other and eliminations” within Operating Income on the Operating Segment Data and Operating Ratios statement • The “Other and eliminati
Slide 49: Additional Information
Additional Information The following information was included in an exhibit of an ArcBest 8-K filed on 2/1/22. ADDITIONAL DETAILED INFORMATION ArcBest Consolidated “Other, net” line within Other Income (Costs) on the Consolidated Statements of Operations • The “Other, net” line of ArcBest’s income s
Slide 50: Additional Information
Additional Information The following information was included in an exhibit of an ArcBest 8-K filed on 3/4/22. 1Q’22 QTD BUSINESS UPDATE ArcBest Consolidated On a preliminary basis, February 2022 consolidated revenues grew approximately 63% on a per day basis compared to February 2021, reflecting bu
Slide 51: Additional Information
Additional Information The following information was included in an exhibit of an ArcBest 8-K filed on 3/4/22. 1Q’22 QTD BUSINESS UPDATE Asset-Based Operating Segment The February 2022 Asset-Based tonnage and shipment trends have been impacted by changes in freight profile and business mix, and fewe
Slide 52: Additional Information
Additional Information The following information was included in an exhibit of an ArcBest 8-K filed on 3/4/22. 1Q’22 QTD BUSINESS UPDATE Asset-Light ArcBest Segment (not including FleetNet) For the months of January 2022 and February 2022: Customer demand for our Asset-Light services drove year-over
Slide 53: ArcBest Consolidated
ArcBest Consolidated (Unaudited) RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES 2016 2017 2018 2019 2020 2021 ($ millions) ArcBest Corporation - Consolidated Operating Income Amounts on a GAAP basis (1) $ 34.1 $ 61.3 $ 109.1 $ 63.8 $ 98.3 $ 281.0 Restructuring charges, pre-tax (2) 10.3 3.0 1
Slide 54: ArcBest Consolidated
ArcBest Consolidated (Unaudited) RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES 2016 2017 2018 2019 2020 2021 ArcBest Corporation - Consolidated ($ millions) Diluted Earnings Per Share Amounts on a GAAP basis $ 0.71 $ 2.25 $ 2.51 $ 1.51 $ 2.69 $ 7.98 Restructuring charges, after-tax (1) 0.24
Slide 55: Reconciliations of GAAP to Non-GAAP Financial Measures
Reconciliations of GAAP to Non-GAAP Financial Measures (Unaudited) Twelve Months Ended CONSOLIDATED ADJUSTED EBITDA (1) December 31, 2021 ($ millions) Net Income $ 213.5 Interest and other related financing costs 8.9 Income tax provision 63.6 Depreciation and amortization (2) 124.2 Amortization of s
Slide 56: Asset-Based
Asset-Based (Unaudited) RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES 2016 2017 2018 2019 2020 2021 ($ millions) ArcBest Corporation – Asset-Based Segment Operating Income Amounts on a GAAP basis (1) $ 37.4 98.0% $ 57.9 97.1% $ 103.9 95.2% $ 102.1 95.2% $ 98.9 95.3% $ 260.7 89.9% Restructur
Slide 57: Investor Presentation
Investor Presentation