ArcBest Announces First Quarter 2024 Results

Continued focus on service excellence, disciplined pricing, growth, and efficiency

ArcBest® (Nasdaq: ARCB), a leader in supply chain logistics, today reported first quarter 2024 revenue from continuing operations of $1.0 billion, compared to $1.1 billion in the first quarter of 2023. First quarter 2024 operating income from continuing operations was $22.4 million, compared to $21.2 million in the prior year period, and net loss from continuing operations was $2.9 million, or $0.12 per diluted share, compared to net income of $18.8 million, or $0.75 per diluted share, in 2023. Included in the first quarter net loss from continuing operations is a $21.6 million after-tax, noncash impairment charge associated with ArcBest’s equity investment in Phantom Auto, which ceased operations during the first quarter of 2024.

Excluding certain items in both periods as identified in the attached reconciliation tables, first quarter 2024 non‑GAAP operating income from continuing operations was $42.6 million, compared to $51.9 million in the prior‑year period. While the non-GAAP operating income for the Asset-Based segment was unchanged versus the prior-year period, Asset-Light non-GAAP operating income declined $8.9 million compared to the prior-year period, reflecting the current macro weakness impacting demand combined with excess capacity serving the full truckload market.

On a non-GAAP basis, net income from continuing operations was $32.3 million, or $1.34 per diluted share, compared to $39.5 million, or $1.58 per diluted share, in the first quarter of 2023.

“Reflecting on the past quarter, I am proud of our employees for their commitment to excellence, which resulted in better customer service and operational efficiency gains,” said Judy R. McReynolds, ArcBest Chairman, President and CEO. “This commitment was also evident in our performance in this softer freight environment and the receipt of numerous customer and industry recognitions, including ABF’s recent receipt of the prestigious ATA Excellence in Security Award.”

First Quarter Results of Operations Comparisons

Asset-Based

First Quarter 2024 Versus First Quarter 2023

Revenue of $671.5 million compared to $697.8 million, a per-day decrease of 3.0 percent.
Total tonnage per day decrease of 16.8 percent.
Total shipments per day decrease of 6.2 percent.
Total billed revenue per hundredweight increase of 15.6 percent.
Core daily shipments increase of 12 percent and tonnage increase of 9 percent.
Operating income of $53.5 million and an operating ratio of 92.0 percent, on both a GAAP and non-GAAP basis, compared to prior-year GAAP operating income of $47.5 million and an operating ratio of 93.2 percent and prior-year non-GAAP operating income of $53.5 million and an operating ratio of 92.3 percent.

On a non-GAAP basis, the Asset-Based segment generated the same operating income as first quarter 2023 on lower revenue levels, which highlights the Company’s continued focus on serving core customers well and improving efficiencies in our operations. Total first quarter daily shipment and tonnage levels were below the prior year, as we continued to adjust freight mix, which positively impacted productivity and contributed to an improved operating ratio.

Pricing momentum continued in the quarter, driven by improved freight mix, higher pricing on transactional shipments and contract renewal increases of 5.3 percent. Overall, LTL industry pricing remains rational.

Compared sequentially to the strong fourth quarter of 2023, first quarter 2024 was impacted by weather in January and fewer workdays in March. Revenue per day was down 8.4 percent, tons per day declined 5.7 percent and shipments per day were down 1.8 percent, sequentially. First quarter billed revenue per hundredweight decreased 0.9 percent, compared to fourth quarter 2023. Although union benefit costs were higher in first quarter 2024, continued focus on operational efficiency resulted in improved productivity and lower overall operating expenses. The operating ratio increased 430 basis points sequentially, which was generally in-line with seasonal changes seen during previous soft freight environments.

Asset-Light

First Quarter 2024 Versus First Quarter 2023

Revenue of $396.4 million compared to $438.1 million, a per-day decrease of 8.8 percent.
Operating loss of $15.3 million compared to operating loss of $14.1 million. On a non‑GAAP basis, operating loss of $4.7 million compared to operating income of $4.1 million.
Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) of negative $2.9 million compared to $6.0 million, as detailed in the attached non-GAAP reconciliation tables.

Compared to the first quarter of 2023, Asset-Light results were impacted by lower revenue per shipment and reduced margins associated with changes in business mix and the soft rate environment. Shipments per day grew by 13.6 percent, as the managed transportation solution successfully partnered with more customers to optimize their logistics spend. Our biggest challenge to profitability resulted from lower rates and margins for truckload solutions. However, increased productivity mitigated market softness as shipments per employee per day and SG&A cost per shipment both significantly improved on a year-over-year basis.

Compared sequentially to the fourth quarter 2023, first quarter 2024 revenue per day was down 7.1 percent. Weather events in January resulted in significantly higher purchased transportation costs as a percentage of revenue. The non-GAAP operating loss in the first quarter was primarily attributable to performance in the month of January, as the segment saw improvements throughout the rest of the quarter. Total shipments per day were flat compared to fourth quarter 2023, with managed transportation seeing sequential growth. Operating expenses were slightly lower as employee productivity and cost per shipment metrics improved from fourth quarter levels. With a focus on growth and efficiency, the Company remains well-positioned for an eventual recovery of the full truckload and ground expedite markets.

Conference Call

ArcBest will host a conference call with company executives to discuss the first quarter 2024 results. The call will be today, Tuesday, April 30, 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 April 30, 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 May 15, 2024. To listen to the playback, dial (800) 770-2030. The conference call ID for the live conference call and the playback is 6865438. The conference call and playback can also be accessed through May 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 TIME’s 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 concerning results for the three months ended March 31, 2024 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

March 31

2024

2023

(Unaudited)

($ thousands, except share and per share data)

REVENUES

1,036,419

1,106,094

OPERATING EXPENSES

1,013,984

1,084,935

OPERATING INCOME

22,435

21,159

OTHER INCOME (COSTS)

Interest and dividend income

3,315

2,933

Interest and other related financing costs

(2,228

)

(2,327

)

Other, net

(28,199

)

1,780

(27,112

)

2,386

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

(4,677

)

23,545

INCOME TAX PROVISION (BENEFIT)

(1,765

)

4,698

NET INCOME (LOSS) FROM CONTINUING OPERATIONS

(2,912

)

18,847

INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX(1)

600

52,436

NET INCOME (LOSS)

(2,312

)

71,283

BASIC EARNINGS PER COMMON SHARE(2)

Continuing operations

(0.12

)

0.78

Discontinued operations(1)

0.03

2.16

(0.10

)

2.93

DILUTED EARNINGS PER COMMON SHARE(2)

Continuing operations

(0.12

)

0.75

Discontinued operations(1)

0.03

2.09

(0.10

)

2.84

AVERAGE COMMON SHARES OUTSTANDING

Basic

23,561,309

24,288,138

Diluted

23,561,309

25,057,726

_________________________

Represents the discontinued operations of FleetNet America® (“FleetNet”), which sold on February 28, 2023. The 2024 period represents adjustments related to the prior year gain on sale of FleetNet. The 2023 period includes the net gain on sale of FleetNet of $51.4 million after-tax, or $2.12 basic earnings per share and $2.05 diluted earnings per share, recognized in the first quarter of 2023.

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

March 31

December 31

2024

2023

(Unaudited)

Note

($ thousands, except share data)

ASSETS

CURRENT ASSETS

Cash and cash equivalents

172,855

262,226

Short-term investments

68,065

67,842

Accounts receivable, less allowances (2024 - $9,184; 2023 - $10,346)

433,717

430,122

Other accounts receivable, less allowances (2024 - $733; 2023 - $731)

11,389

52,124

Prepaid expenses

39,232

37,034

Prepaid and refundable income taxes

22,084

24,319

Other

11,136

11,116

TOTAL CURRENT ASSETS

758,478

884,783

PROPERTY, PLANT AND EQUIPMENT

Land and structures

491,555

460,068

Revenue equipment

1,119,446

1,126,055

Service, office, and other equipment

318,252

319,466

Software

176,988

173,354

Leasehold improvements

25,173

24,429

2,131,414

2,103,372

Less allowances for depreciation and amortization

1,193,584

1,188,548

PROPERTY, PLANT AND EQUIPMENT, NET

937,830

914,824

GOODWILL

304,753

INTANGIBLE ASSETS, NET

97,940

101,150

OPERATING RIGHT-OF-USE ASSETS

174,987

169,999

DEFERRED INCOME TAXES

10,032

8,140

OTHER LONG-TERM ASSETS

73,123

101,445

TOTAL ASSETS

2,357,143

2,485,094

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES

Accounts payable

209,908

214,004

Income taxes payable

10,410

Accrued expenses

313,494

378,029

Current portion of long-term debt

63,179

66,948

Current portion of operating lease liabilities

31,986

32,172

TOTAL CURRENT LIABILITIES

618,575

701,563

LONG-TERM DEBT, less current portion

148,992

161,990

OPERATING LEASE LIABILITIES, less current portion

174,085

176,621

POSTRETIREMENT LIABILITIES, less current portion

13,318

13,319

CONTINGENT CONSIDERATION

100,220

92,900

OTHER LONG-TERM LIABILITIES

34,422

40,553

DEFERRED INCOME TAXES

44,798

55,785

STOCKHOLDERS’ EQUITY

Common stock, $0.01 par value, authorized 70,000,000 shares; issued 2024: 30,038,556 shares; 2023: 30,024,125 shares

300

Additional paid-in capital

343,102

340,961

Retained earnings

1,267,444

1,272,584

Treasury stock, at cost, 2024: 6,580,818 shares; 2023: 6,460,137 shares

(391,458

)

(375,806

)

Accumulated other comprehensive income

3,345

4,324

TOTAL STOCKHOLDERS’ EQUITY

1,222,733

1,242,363

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

2,357,143

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

Three Months Ended

March 31

2024

2023

(Unaudited)

($ thousands)

OPERATING ACTIVITIES

Net income (loss)

(2,312

)

71,283

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

33,616

32,187

Amortization of intangibles

3,217

3,203

Share-based compensation expense

2,889

2,235

Provision for losses on accounts receivable

1,055

1,427

Change in deferred income taxes

(12,548

)

(9,814

)

(Gain) loss on sale of property and equipment

217

)

Pre-tax gain on sale of discontinued operations

(806

)

(69,083

)

Change in fair value of contingent consideration

7,320

15,040

Change in fair value of equity investment

28,739

—

Changes in operating assets and liabilities:

Receivables

35,059

43,977

Prepaid expenses

(2,198

)

(1,464

)

Other assets

(1,218

)

3,874

Income taxes

(8,305

)

6,221

Operating right-of-use assets and lease liabilities, net

(7,710

)

1,570

Accounts payable, accrued expenses, and other liabilities

(70,548

)

(79,984

)

NET CASH PROVIDED BY OPERATING ACTIVITIES

6,467

20,663

INVESTING ACTIVITIES

Purchases of property, plant and equipment, net of financings

(55,049

)

(34,657

)

Proceeds from sale of property and equipment

1,292

1,833

Proceeds from sale of discontinued operations

—

101,138

Purchases of short-term investments

(5,236

)

(35,588

)

Proceeds from sale of short-term investments

5,635

41,865

Capitalization of internally developed software

(3,635

)

(3,631

)

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

(56,993

)

70,960

FINANCING ACTIVITIES

Payments on long-term debt

(16,767

)

(17,649

)

Net change in book overdrafts

(2,850

)

(10,493

)

Deferred financing costs

—

Payment of common stock dividends

(2,828

)

(2,915

)

Purchases of treasury stock

(15,652

)

(14,092

)

Payments for tax withheld on share-based compensation

(748

)

(1,590

)

NET CASH USED IN FINANCING ACTIVITIES

(38,845

)

(46,676

)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

(89,371

)

44,947

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

172,855

203,319

NONCASH INVESTING ACTIVITIES

Equipment financed

—

3,478

Accruals for equipment received

915

1,453

Lease liabilities arising from obtaining right-of-use assets

5,694

30,581

_________________________

Note: The statements of cash flows for the three months ended March 31, 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

March 31

2024

2023

(Unaudited)

($ thousands, except percentages)

REVENUES FROM CONTINUING OPERATIONS

Asset-Based

671,467

697,817

Asset-Light

396,363

438,092

Other and eliminations

(31,411

)

(29,815

)

Total consolidated revenues from continuing operations

1,036,419

1,106,094

OPERATING EXPENSES FROM CONTINUING OPERATIONS

Asset-Based

Salaries, wages, and benefits

344,999

51.4

335,605

48.1

Fuel, supplies, and expenses

81,044

12.1

94,288

13.5

Operating taxes and licenses

13,529

2.0

13,979

2.0

Insurance

14,482

2.1

13,273

1.9

Communications and utilities

4,799

0.7

5,304

0.8

Depreciation and amortization

27,007

4.0

24,911

3.6

Rents and purchased transportation

65,671

9.8

90,744

13.0

Shared services

64,914

9.7

64,613

9.2

(Gain) loss on sale of property and equipment

149

—

(51

)

—

Innovative technology costs(1)

—

6,068

0.9

Other

1,417

0.2

1,612

0.2

Total Asset-Based

618,011

92.0

650,346

93.2

Asset-Light

Purchased transportation

344,122

86.8

370,163

84.5

Salaries, wages, and benefits(2)

30,304

7.6

34,894

8.0

Supplies and expenses(2)

2,809

0.7

3,629

0.8

Depreciation and amortization(3)

5,078

1.3

5,068

1.2

Shared services(2)

16,274

4.1

16,535

3.8

Contingent consideration(4)

7,320

1.8

15,040

3.4

Other(2)

5,714

1.5

6,854

1.5

Total Asset-Light

411,621

103.8

452,183

103.2

Other and eliminations(5)

(15,648

)

(17,594

)

Total consolidated operating expenses from continuing operations

1,013,984

97.8

1,084,935

98.1

OPERATING INCOME (LOSS) FROM CONTINUING OPERATIONS

Asset-Based

53,456

47,471

Asset-Light

(15,258

)

(14,091

)

Other and eliminations(5)

(15,763

)

(12,221

)

Total consolidated operating income from continuing operations

22,435

21,159

_________________________

Represents costs associated with the freight handling pilot test program at ABF Freight, for which the decision was made to pause the pilot during third quarter 2023.

For the 2023 period, certain expenses have been reclassed to conform to the current year presentation, including amounts previously reported in “Shared services” that were reclassed to present “Salaries, wages, and benefits” expenses in a separate line item.

Depreciation and amortization includes amortization of intangibles associated with acquired businesses.

Represents the change in fair value of the contingent earnout consideration recorded for the MoLo acquisition. The liability for contingent consideration is remeasured at each quarterly reporting date, and any change in fair value as a result of the recurring assessments is recognized in operating loss. The contingent consideration for the MoLo acquisition will be paid based on achievement of certain targets of adjusted earnings before interest, taxes, depreciation, and amortization, as adjusted for certain items pursuant to the merger agreement, for years 2023 through 2025, including catch-up provisions.

“Other and eliminations” includes corporate costs for certain unallocated shared service costs which are not attributable to any segment, additional investments to offer comprehensive transportation and logistics services across multiple operating segments, costs related to our customer pilot offering of Vaux, and other investments in ArcBest technology and innovations.

ARCBEST CORPORATION

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES

Non-GAAP Financial Measures

We report our financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). However, management believes that certain non-GAAP performance measures and ratios utilized for internal analysis provide analysts, investors, and others the same information that we use internally for purposes of assessing our core operating performance and provides meaningful comparisons between current and prior period results, as well as important information regarding performance trends. Accordingly, non-GAAP results are presented on a continuing operations basis, excluding the discontinued operations of FleetNet, which sold on February 28, 2023. The use of certain non-GAAP measures improves comparability in analyzing our performance because it removes the impact of items from operating results that, in management's opinion, do not reflect our core operating performance. Other companies may calculate non-GAAP measures differently; therefore, our calculation may not be comparable to similarly titled measures of other companies. Certain information discussed in the scheduled conference call could be considered non-GAAP measures. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, our reported results. These financial measures should not be construed as better measurements than operating income (loss), operating cash flow, net income (loss) or earnings per share, as determined under GAAP.

Three Months Ended

March 31

2024

2023

ArcBest Corporation - Consolidated

(Unaudited)

($ thousands, except per share data)

Operating Income from Continuing Operations

Amounts on GAAP basis

22,435

21,159

Innovative technology costs, pre-tax(1)

9,698

12,478

Purchase accounting amortization, pre-tax(2)

3,192

3,192

Change in fair value of contingent consideration, pre-tax(3)

7,320

15,040

Non-GAAP amounts

42,645

51,869

Net Income (Loss) from Continuing Operations

Amounts on GAAP basis

(2,912

)

18,847

Innovative technology costs, after-tax (includes related financing costs)(1)

7,440

9,480

Purchase accounting amortization, after-tax(2)

2,401

2,398

Change in fair value of contingent consideration, after-tax(3)

5,505

11,299

Change in fair value of equity investment, after-tax(4)

21,603

—

Life insurance proceeds and changes in cash surrender value

(1,233

)

(1,496

)

Tax benefit from vested RSUs(5)

(487

)

(1,051

)

Non-GAAP amounts

32,317

39,477

Diluted Earnings Per Share from Continuing Operations(6)

Amounts on GAAP basis

(0.12

)

0.75

Innovative technology costs, after-tax (includes related financing costs)(1)

0.31

0.38

Purchase accounting amortization, after-tax(2)

0.10

0.10

Change in fair value of contingent consideration, after-tax(3)

0.23

0.45

Change in fair value of equity investment, after-tax(4)

0.90

—

Life insurance proceeds and changes in cash surrender value

(0.05

)

(0.06

)

Tax benefit from vested RSUs(5)

(0.02

)

(0.04

)

Non-GAAP amounts(7)

1.34

1.58

_________________________

See “Notes to Non-GAAP Financial Tables” for footnotes to this ArcBest Corporation – Consolidated non-GAAP table.

ARCBEST CORPORATION

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES – Continued

Three Months Ended

March 31

2024

2023

Segment Operating Income (Loss) Reconciliations

(Unaudited)

($ thousands, except percentages)

Asset-Based Segment

Operating Income ($) and Operating Ratio (% of revenues)

Amounts on GAAP basis

53,456

92.0

47,471

93.2

Innovative technology costs, pre-tax(8)

—

6,068

(0.9

)

Non-GAAP amounts(7)

53,456

92.0

53,539

92.3

Asset-Light Segment

Operating Income (Loss) ($) and Operating Ratio (% of revenues)

Amounts on GAAP basis

(15,258

)

103.8

(14,091

)

103.2

Purchase accounting amortization, pre-tax(2)

3,192

(0.8

)

3,192

(0.7

)

Change in fair value of contingent consideration, pre-tax(3)

7,320

(1.8

)

15,040

(3.4

)

Non-GAAP amounts(7)

(4,746

)

101.2

4,141

99.1

Other and Eliminations

Operating Income (Loss) ($)

Amounts on GAAP basis

(15,763

)

(12,221

)

Innovative technology costs, pre-tax(1)

9,698

6,410

Non-GAAP amounts(7)

(6,065

)

(5,811

)

_________________________

Note: See “Notes to Non-GAAP Financial Tables” for footnotes to this Segment Operating Income (Loss) Reconciliations non-GAAP table.

ARCBEST CORPORATION

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES – Continued

Effective Tax Rate Reconciliation

ArcBest Corporation - Consolidated

(Unaudited)

($ thousands, except percentages)

Three Months Ended March 31, 2024

Other

Income (Loss)

Income Tax

Net

CONTINUING OPERATIONS

Operating

Income

Before Income

Provision

Income

(Costs)

Taxes

(Benefit)

(Loss)

Tax Rate(9)

Amounts on GAAP basis

22,435

(27,112

)

(4,677

)

(1,765

)

(2,912

)

(37.7

Innovative technology costs(1)

9,698

195

9,893

2,453

7,440

24.8

Purchase accounting amortization(2)

3,192

—

3,192

791

2,401

24.8

Change in fair value of contingent consideration(3)

7,320

—

7,320

1,815

5,505

24.8

Change in fair value of equity investment(4)

—

28,739

7,136

21,603

24.8

Life insurance proceeds and changes in cash surrender value

—

(1,233

)

(1,233

)

—

(1,233

)

—

Tax benefit from vested RSUs(5)

—

487

(487

)

—

Non-GAAP amounts

42,645

589

43,234

10,917

32,317

25.3

Three Months Ended March 31, 2023

Other

Income

CONTINUING OPERATIONS

Operating

Income

Before Income

Tax

Net

Income

(Costs)

Taxes

Provision

Income

Tax Rate(9)

Amounts on GAAP basis

21,159

2,386

23,545

4,698

18,847

20.0

Innovative technology costs(1)

12,478

259

12,737

3,257

9,480

25.6

Purchase accounting amortization(2)

3,192

—

3,192

794

2,398

24.9

Change in fair value of contingent consideration(3)

15,040

—

15,040

3,741

11,299

24.9

Life insurance proceeds and changes in cash surrender value

—

(1,496

)

(1,496

)

—

(1,496

)

—

Tax benefit from vested RSUs(5)

—

1,051

(1,051

)

—

Non-GAAP amounts

51,869

1,149

53,018

13,541

39,477

25.5

_________________________

Note: See “Notes to Non-GAAP Financial Tables” for footnotes to this Effective Tax Rate Reconciliation non-GAAP table.

ARCBEST CORPORATION RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES – Continued

Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (Adjusted EBITDA)

Management uses Adjusted EBITDA as a key measure of performance and for business planning. The measure is particularly meaningful for analysis of operating performance because it excludes amortization of acquired intangibles and software of the Asset-Light segment and changes in the fair values of contingent consideration and our equity investment, which are significant expenses resulting from strategic decisions or other factors rather than core daily operations. Additionally, Adjusted EBITDA is a primary component of the financial covenants contained in our credit agreement. The calculation of Consolidated Adjusted EBITDA as presented below begins with net income (loss) from continuing operations, which is the most directly comparable GAAP measure. The calculation of Asset-Light Adjusted EBITDA as presented below begins with operating income (loss), as other income (costs), income taxes, and net income (loss) from continuing operations are reported at the consolidated level and not included in the operating segment financial information evaluated by management to make operating decisions.

Three Months Ended

March 31

2024

2023

(Unaudited)

($ thousands)

ArcBest Corporation - Consolidated Adjusted EBITDA from Continuing Operations

Net Income (Loss) from Continuing Operations

(2,912

)

18,847

Interest and other related financing costs

2,228

2,327

Income tax provision (benefit)

(1,765

)

4,698

Depreciation and amortization(10)

36,833

35,010

Amortization of share-based compensation

2,889

2,182

Change in fair value of contingent consideration(3)

7,320

15,040

Change in fair value of equity investment(4)

28,739

—

Consolidated Adjusted EBITDA from Continuing Operations

73,332

78,104

_________________________

Note: See “Notes to Non-GAAP Financial Tables” for footnotes to this ArcBest Corporation – Consolidated Adjusted EBITDA from Continuing Operations non-GAAP table.

Three Months Ended

March 31

2024

2023

(Unaudited)

($ thousands)

Asset-Light Adjusted EBITDA

Operating Income (Loss)

(15,258

)

(14,091

)

Depreciation and amortization(10)

5,078

5,068

Change in fair value of contingent consideration(3)

7,320

15,040

Asset-Light Adjusted EBITDA

(2,860

)

6,017

_________________________

Note: See “Notes to Non-GAAP Financial Tables” for footnotes to this Asset-Light Adjusted EBITDA non-GAAP table.

ARCBEST CORPORATION

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES – Continued

Notes to Non-GAAP Financial Tables

The following footnotes apply to the non-GAAP financial tables presented in this press release.

Represents costs related to our customer pilot offering of Vaux and initiatives to optimize our performance through technological innovation. The 2023 period also includes costs associated with the freight handling pilot test program at ABF Freight, for which the decision was made to pause the pilot during third quarter 2023.

Represents the amortization of acquired intangible assets in the Asset-Light segment.

Represents change in fair value of the contingent earnout consideration recorded for the MoLo acquisition, as previously described in the footnotes to the Financial Statement Operating Segment Data and Operating Ratios table.

Represents a noncash impairment charge to write off our equity investment in Phantom Auto, a provider of human-centered remote operation software, which ceased operations during first quarter 2024.

Represents recognition of the tax impact for the vesting of share-based compensation.

For first quarter 2024, ArcBest reported a net loss on a GAAP basis and reported net income on a non-GAAP basis. The average common shares outstanding used to calculate non-GAAP diluted earnings per share for first quarter 2024 were adjusted to include unvested restricted stock awards, which were excluded from the calculation of GAAP diluted earnings per share due to the net loss.

Three Months Ended

March 31, 2024

Average Common Shares Outstanding

Diluted shares on GAAP basis

23,561,309

Effect of unvested restricted stock awards

568,770

Non-GAAP diluted shares

24,130,079

Non-GAAP amounts are calculated in total and may not equal the sum of the GAAP amounts and the non-GAAP adjustments due to rounding.

Represents costs associated with the freight handling pilot test program at ABF Freight, for which the decision was made to pause the pilot during third quarter 2023.

Tax rate for total “Amounts on GAAP basis” represents the effective tax rate. The tax effects of non-GAAP adjustments are calculated based on the statutory rate applicable to each item based on tax jurisdiction unless the nature of the item requires the tax effect to be estimated by applying a specific tax treatment.

10)

Includes amortization of intangibles associated with acquired businesses.

ARCBEST CORPORATION

OPERATING STATISTICS

Three Months Ended

March 31

2024

2023

% Change

(Unaudited)

Asset-Based

Workdays

63.5

64.0

Billed Revenue(1) / CWT

48.56

41.99

15.6

Billed Revenue(1) / Shipment

542.84

529.43

2.5

Shipments / Day

19,566

20,856

(6.2

Tons / Day

10,937

13,149

(16.8

Pounds / Shipment

1,118

1,261

(11.3

Average Length of Haul (Miles)

1,110

1,096

1.3

_________________________

Revenue for undelivered freight is deferred for financial statement purposes in accordance with the Asset-Based segment revenue recognition policy. Billed revenue used for calculating revenue per hundredweight measurements has not been adjusted for the portion of revenue deferred for financial statement purposes.

Year Over Year % Change

Three Months Ended

March 31, 2024

(Unaudited)

Asset-Light(2)

Revenue / Shipment

(19.7

Shipments / Day

13.6

_________________________

Statistical data for the periods presented include transactions related to managed transportation solutions which were previously excluded from the presentation of operating statistics for the Asset-Light segment for the three months ended March 31, 2023.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240430240510/en/

Investor Relations Contact: David Humphrey Title: Vice President – Investor Relations Phone: 479-785-6200 Email: dhumphrey@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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