ARCB - Earnings call transcript Q4 2020

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Operator

Greetings. And welcome to the ArcBest Fourth Quarter 2020 Earnings Conference Call.

During the presentation, all participants will be in a listen-only mode. Afterwards we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded Tuesday, February 2, 2021. to of conference Investor like Humphrey, to now President Vice Relations. would turn over the David I Please go ahead.

David Humphrey

Welcome to earnings conference the ArcBest fourth quarter XXXX call.

this Chairman, be us Chief ArcBest some Financial morning by of better ArcBest. call. Officer this understand be you Officer made order ArcBest; President for forward-looking to thank McReynolds, you joining of Cobb, presentation results, Executive In and statements and David Our and during its We could Chief today. will Judy done help

know, all their nature, we by As forward-looking risks. very are statements, and uncertainties subject to

For a and refer release could future discussed the more as to call complete the non-GAAP earnings please SEC public press filings. that earnings and In outlined press the discussion order company’s to tables this information of release. of results, section financial company’s affect includes in factors in measures provide most the recent statements forward-looking in certain described the meaningful our conference company’s comparisons,

with Judy. We will now begin

Judy McReynolds

good shown was in all opportunities. Thank uncertainty ArcBest our we character But and businesses David, because the new the customers, into in many and our challenges employees, heart disruption of everyone. lives. cause those challenged forget, won’t and and we of At pandemic you, by ways. we our in year morning, were turned the XXXX of

ArcBest in the creatively XX years. and of last I business. our am operating efficiencies produced on well hard income proud best improve work non-GAAP people Our say the to purposely served executed a customers initiatives in to the second and team

options meet and and We to solutions. build to deeper their to know strategy relationships us develop be more we and needs. information to customers We their and to look our responsive and ArcBest needs to that points, have to the customers use pain positioned to allows inform changing

worked pandemic as on unique well the in we effects of approach customers. XXXX, the nature recognize our Our

their goods to company destinations disrupted supply capacity and are we have growing a chains. alongside As we and and we essential tremendous The in environment. logistics our normalize worked move to are customers opportunities to committed providers solutions provider, economic ArcBest to any at the

last mix We pandemic and revenue our revenue year-over-year progress year optimizing profit, despite have XX% of expanding in strategy for cost representative opportunities, and multiyear progress. important revenue three made of our balancing areas, total quarter fourth structure. a we and growth is the our

quarterly relationships expanding growth up from Asset-Based solid revenue Asset-Light growth total significant Our and new of ArcBest of was and revenue resulted customer made growth of ones. X% onboarding growth XX%.

seamless in we Our the value options integration assert provide the created and marketplace. capacity

of shipment detail and our in team. quarter fourth segment I some discuss our increase. performance the am Asset-Based quarter to goal we am for by XX% union we I now, at proud reflect excited eligible quarter a increase and gained in with resulting our fourth results the offerings. revenue additional day levels average shipments on of our us accomplishment the a significant on bonus year, positive and produced quarter of stated will a with historical the consecutive As per Freight. a year. operating the Asset-Light larger OR prior The ABF. segment, basis coming momentum our shipment pay to last representative in employees I a second bonus revenue will reflects the profit sharing customer growth month service in XXXX say On And is combined XX.X% all the revenues This of each our fourth impacts business compared ABF This for goal result, revenue also ABF versus were Returning representing the Freight long to the quarter. year, toward from margins has fourth XX% been improving of tonnage in factors and Asset-Light to

utilization third impact impact traditional experience fourth residential the to total available to and addition the the impact to business the didn’t improved Similar designed LTL in purchase business. results. revenue. the equipment match represented to throughout household growth more to our freight increase traditional shift increase percent into our costs our meaningful timing meaningful result and use previous local included These improve effects delivery quarter, of environment, haul continuing quarter. of personnel by labor of this consumer as spilling manage and truckload moving these our fourth pandemic distribution saw in our shipments shipments levels network shipments caused systems. own a the second positively capacity lanes strategies operations resources consumer in activities, network. with LTL portion of of Asset-Based activities operational quarter continue continued revenue financial Asset-Based the quarters the our line our period taken initiatives supplement in over an Combined were a to larger busy transportation economic we from in a team existing we the the of goods on our of shopping moving Actions size the the and into associated with on In properly specific The online as from U-Pack to and the

are years. obsession Trucking in efficiency highlight and Excellence Loss Prevention relative local shipments care Claims the eight locations to handling Cargo through of and and Asset-Based we Cargo freight However, shipments. for contributed delivery ratio achievements watch the efficient on improved year, in Associations customer greater Award during customers’ another unprecedented positively awarded improved this in key over-the-road to docks, handling our business. ABF our that and the from to operating and past was network improving an times. their a measures customer pickup and safe to These quarter for was in important on our American the our profitability. metrics cargo In our of our closely time to our XX experience we focus last claim testament XXrd and

are way, rational our serving superior and to conditions equipment positively demand contributing our environment. a to these profitability. pricing and market addition costs actions for reduce in the capacity customers our high improve Current available the In

total hundredweight per in freight period, comparisons I and slightly was The impacted overall have mix recent metrics changes relative as size to mentioned Our profile. account earlier, pricing in positive the lower year of increase, related revenue shipment the surcharges. quarter, fuel prior to Asset-Based

the early accounts, are contract last generally of the and increases levels agreement improvement fourth further on encouraging. the before are XXXX availability the these of versus trends effects pandemic limited XXXX, rate the equipment quarter customer quarter in in third sensitive most fourth demand, to quarter profitability better price capacity had are improvement during However, in In Asset-Light which year’s deferred our an in quarter. marketplace secure during improving pricing seen and business resulted and on recent and late last begun, improve fourth pricing environment

shipment a shipments market business. growth in average revenue experienced portion increase we of that driven contributed year-over-year significant our along the Additional, with topline to in this

of customers year a fewer repair revenue, equipment income in on contributed resulted decrease the combination to lower year, service initiatives and Despite As year. FleetNet the Asset-Light previous in during management year, a status the maintain quarter higher two our To technologies providers, despite a efficiencies primary wage beneficial revenue events. that impact daily of and received versus efforts earlier to enhanced were XXX,XXX events, illustrate payback XXXX. and preventative in in the Operating partner. various profit a effective partners growth to fourth progress with due experienced the improved a FleetNet in percent having solid from FleetNet, was area, total of per connect transportation cost and quarter average resulting operational capacity for customers. reductions and event Despite efficiencies, in contribute operating throughout and both workforce fourth the with should digital lower their margins, with trends operating implemented to costs over previous to electronic fewer from consistent the made things, maintenance we improved increasing updates provider service the events revenue our from events the Last November, service. digitally At from improvements roadside by this its reflected connectivity in consistent future.

shareholder paid discuss the also them bought back to provide our of Later, dividends we to our we enhance by David, he During stock. action take the and extending repurchase Throughout shares improve will year to will quarterly continued our returns and share we recent XXXX, program. we took out more actions details value. specific of shareholder

to in a our many earnings in us existing capitalizing through company Our offers discussion now, operating profitably options growing it statistics. investments results Cobb over the marketplace position, the to combined and financial turn I will David opportunities businesses. on strong our And available for of with for

David Cobb

a to $XXX day fourth loss of fourth of will begin I GAAP impacted consolidated and This last non-cash you, impairment by last information. million basis, $XXX good per quarter a quarter per we XXXX net related year’s that net charge Asset-Light in were increase On had diluted some Thank $X.XX everyone. compared XXXX year, $X.XX was to compared share. per a share revenues Fourth to morning, Judy, with income business. consolidated million, XX%. quarter,

identified XX.X%, the tax of morning��s favorably of income to unusual in a net impacted the diluted GAAP share, $X.XX normal ArcBest on non-GAAP is fourth $X.XX to of in release, to share XXXX rate was same net by our earnings adjusted reconciliation per quarter table period this in income reconciliation number non-GAAP last XXXX fourth As compared items year. table. quarter detailed GAAP was operations per press effective

tax expect tax rate our a XX.X%. to any to be a period. be tax that on effective Under non-GAAP rate in So basis, range -- XXXX may while by we tax effective quarter was impacted XX% XX%, the full laws, the rate discrete current to year in law items the of non-GAAP

associated of pandemic million, planning majority reductions on replacement we our Full for for to road in as in getting net in a approximately and with full XXXX of pandemic, adjusted earnings XXXX, earnings financed second share impacted $X.XX the were fewer were into revenues the -- XXXX. purchased equipment the XXXX, we XXXX. which effects than impact of are billion in in XXXX expenditures, X.X per early year XX% below in pandemic per release, consolidated XXXX. shifts fewer is were including billion, to day decrease $XX compared which the by tractors equaled the $XX per expenditures which of earnings $X years, we per million, of For we totaled of capital share, per In equipment did ArcBest share, $X.XX On of basis the than revenue timing total global compared $X.XX press compared some year XXXX. X.X%. in Asset-Based to have $X.X share we in $X.XX the XXXX and in operation. XXXX a was non-GAAP quarter In outlined what XXXX, totaled the announced units because due in of spent expenditures recent XXXX, to

age of However, XXXX were equipment our to our the compares $XXX property, on road at tractor and average and of the fleet amortization million. costs favorably internal plant targets. Depreciation end

addition, assets In was in XXXX. amortization million of $X intangible

net and $XXX replacements credit million, which estimated includes amortization expense This in our million. with approximately enhancements. of $XXX cash range XXXX, range and equals receivables the dock to year $XXX million. are to operation. depreciation from technology, Combined includes million. items in This total For million $XXX ended Asset-Based our purchases of estate, $XXX to investments amortization capital and are equipment range to revenue are intangible available liquidity XXXX. the include XXXX real estimated of $XXX plant We primarily assets, upgrades revolver million estimated to our resources does million. be approximately and which equipment total unrestricted equipment with in property, Remaining million short-term $X not expenditures ArcBest $XXX amount and our related from cost is of agreement, securitization under to currently

XXXX on revolver at million operations. payable, total the and of $XXX number debt Deposit $XX credit the notes $XXX million rate equipment on all Our of X.X%. the of Asset-Based our includes was our end of debt of for primarily balance, interest million

The we am financial to challenging operating year and During compositor XX year compared very all our lowered fortified an our that by very points. balance the XXXX debt sheet ended solid I on previous increase pleased in and basis of this we cash rate further year, with net of interest during our results strong million challenging this solid the position. $XX

share that earlier, we ArcBest returns $XX purchase announced ArcBest $X.XX $X.X As payment Judy stock. extended during through total available of dividend and discussed program, of week last share of per our an Board XXXX, shareholder shares. Also the the repurchase ArcBest purchase quarterly million increased a of of making for million

and in allows details capital capabilities position were us repurchases payments. Asset-Based our compared X% stock fourth and revenue Asset-Based of our versus to investing quarter. earnings increased effectively increase our GAAP and per year. press of in shareholders technologies included The dividend flow Our cash fourth returning efficiently The an quarter serve quarterly total to through customers, continue was to also while financial tonnage release. to million, $XXX year’s day last last X.X% All

surcharges and points fuel fourth increased versus per a below per XXXX’s LTL-rated Asset-Based prior on and was X% digits. quarter. billion, the total during freight the XXXX negatively the improved by day total revenue Fourth total published to increased quarter contract With daily revenue increased last X.X% by in X.X% period quarter total Asset-Based year by due and Fourth business, XXXX, mix Asset-Based per versus in by same by quarter renewals compared impacted year. We October, $X.X increased billed revenue customer deferred to on For year’s shipments lower November X% Asset-Based traditional surcharges quarter. second basis by fourth month, tonnage LTL-rated agreements during of hundredweight low-single and total changes average full by impact in Revenue XX was year on quarter. last fuel December. primarily negotiated hundredweight X% excluding shipments XX.X% pricing the increase in secured on increased in X.X% pandemic levels the shipments business ArcBest an transactional

increased compared Asset-based million XXXX information field first points approximately daily demand reflecting to adjusted partially quarter Asset-Light in XXXX $X.X resulting compared an day operating Asset-Light previous in a of On an total operating morning X.X% $X.X financial XXXX metrics. Asset-Light was adjusted compared adjusted expectations the year, $XXX basis XXXX sold results, X%. decrease year. This property in to we compared our with full Asset-Light in these $XX.X ArcBest that business Full segment total X.X% by of shipments, recent not I Adjusted provided decreased tonnage businesses gain being basis per first XX to shipment. January in million, was $XX per fourth to adjusted in certain Adjusted XXXX. a for offset along increase year future year pounds income in strong per quarter Also the in XXXX. levels increase year million compared the and full about $X.X million our to for compared XXXX was EBITDA In used $X fourth of fourth XXXX million million, our of a that quarter we revenue businesses EBITDA of $X.X XXXX. $XXX quarter revenue fourth we to gain million, a in income basis, and year’s million, was last the XXXX was want our exhibit adjusted reflecting total quarter million XXXX, on to Full XX% million, current with release, $XX.X in Asset-Light along was quarter, fourth van million in Asset-Based $XX.X that versus our improved businesses additional ArcBest an revenue versus Asset-Based some of operating financial quarter our included last that million XXXX income earnings $X.X X-K an EBITDA an was million compared mention quarterly million, in $XXX.X year $XXX.X to segment. in On XXXX. EBITDA FleetNet operating the XXXX.

some turn will to Judy over comments. Now, for closing I it

Judy McReynolds

He Thorn, ABF the Officer President become for Xst. at each an significant company President and February has our Runser ABF July over decided Operating ABF to made will on XX-year closely and his has Seth to of has I retire became want ensure versed June. a well made of strategy. commitment in important our and David. is a to his together Seth to Tim on with integrity role of operations its and that will facilitate to team Xst family he as Tim work to career retirement. and our freight contributions transition and Tim smooth you, Freight he he in our Thank ABF growth to working deep has best year. January. announcement the he quality. this I approached looks Tim strong wish Chief knowledge ensure continues and very Seth end we are excellence. note

importance of whole want Looking to industry. also the back mention on I our XXXX,

industry I was essential As out the was shutdowns fright and and That The a I to mission, the our are our challenges. time. and logistics good disruption, serve value of products world reminder and our the how our say pandemic easy. the the know It is But we when height carry very delivered. our kept team clear, pandemic the that industry was response the for in through the trucking also of role chain touches speak the whole our caused impact display. wasn’t in Even full that and was on the to proud I heartwarming. is economy solving fundamental logistics were customers which the public our lives. public and positively nature all everyday to at of saw country our company moving clearly supply

For our made our almost XXX years and culture people difference. have the

and emerged throughout our the always collaboration from of I XXXX periods no demonstrated strength have was the employees very am of of stronger and character challenge pandemic. exceptions. have We proud the

growing profitably for our our to now, in are year, will to into early leads with over well, session. our it our David opportunities more pleased question-and-answer a company. business even offer turn serve that to we I trends Humphrey Moving forward which new customers And

David Humphrey

we are some I for questions. Thank you, think, Judy. Okay. ready And Jennifer,

Operator

from Seidl first comes [Operator Instructions] Thank proceed with Please question line of Our the with you. question. Cowen. your Jason

Jason Seidl

Thank you, everyone everybody. well. I Operator, hope and is morning, good

Judy McReynolds

Good morning, Jason.

David Cobb

Hi, Jason.

Jason Seidl

Yeah.

dig from want get a here? about through I blizzard. you move as pretty comps the January out We are want good pretty one X%. we to like big to your of a move overall was first XXXX tonnage talk it talk strong the terms the as trying XQ seems quarter your hard. because I -- started bit comps just to out little Do XQ, here up got hit in and we through growth harder

Judy McReynolds

day, the were if Well, per increases X.X% to at March, look tonnage X%. February X.X%, and XXXX, tonnage you compared back and January, in Jason, XXXX,

the yes. is answer So,

I go guess, a think but in there versus that -- March March increase -- as February, was, XXXX ‘XX you I in into ‘XX. lesser

Jason Seidl

for Right. That obviously Freight thus, makes in industry. for cases. UPS some going a leader in were is this sense. deal bundling Sale big said? my And known as you was sort up. UPS impact a pricing follow for of market a one of LTL the forward, you the to How going guys loss pretty last They is being

Judy McReynolds

We look when competing have this with appreciate out commentary that’s at the lot of transaction. there that approach business. Well, we a regarding TFI certainly some to experience and don’t their we of

think, are be I that’s we by encouraged going we would say, overall, thing. so And to that. probably We favorable a think

Jason Seidl

two. Those Okay. my Fair were enough.

David Cobb

Thank you.

Judy McReynolds

Yeah.

David Cobb

Jason. Thanks,

David Humphrey

Thanks Okay. Appreciate a it. Jason. lot,

Operator

apologies, Humphrey. Mr. My

of your Please from with next Our proceed Wetherbee comes the question. question Citi. Chris line with

David Cobb

Chris. Hi, Hey.

Chris Wetherbee

everybody. morning, Good Thanks. Hey.

David Cobb

morning. Good

Judy McReynolds

Good morning.

Chris Wetherbee

question sort of Good is guess morning. I environment. demand the about my

out of bit. the XQ are you Maybe comps the talk talked So through how mix that about we lap business some that. and sort a we spot whether the the dynamics December some do about But transitioning picked you I from seems end up of to Can first January, of the quarter. know truckload moving it. to you little of just as tonnage it here the as of the from XQ? beginning of has are rest sort think of that’s into like it’s demand we just about of coming business, move

David Cobb

had I to think, quarter. a will a, our that. we of well. continued I start had segments business fourth I Yeah. see, we see with solid guess, return really you We had as

some the sequential the last of our In XX in fact at years. in were trends or I best least history our think

Chris Wetherbee

Yes.

David Cobb

Yeah.

of revenue per day, per you in years. shipments of when per or total day sequential all top, those weight fourth that about think from third top and the in Just were last terms day, XX

was And to see. that so good

continued was moving our now. that’s is pointed and has of of aspect the in as we business how typically demand unusual about think, just very off we we anyway that’s our for this because January. are XXXX. the solid, But stronger been I our goods saying and that that the some I industrial core are business retailers household The of kind is, of as the this summer that seeing that But manufacturing that months and second influencing strong out that, into of into mentioned, stronger and some other quarter But just offering that’s year. that’s our And of and you market some business, a seeing with seeing encouraging. continuing we trends our kind the customers. of of there the just of It’s were in little think of U-Pack so kind improvement housing seasonally returning and from -- started pandemic

that’s I LTL as weight influencing per shipment well. think our

Chris Wetherbee

Okay.

And bigger Okay. That’s a picture about XXXX. question then just helpful. sort of maybe

thinking aspects ‘XX. for But labor bit under talk pricing you The helpful give are be second conceptually into XXXX of of you would us and get the that. how expansion of It and would in opportunity? costs ratio opportunity the have sort positive. control the your do can quarter easier with your about move inflationary seem side, opportunity just quite and in there the can a Asset-Based guys is on any versus for terms about is that sort with obviously some and for in into items of I that as same moving bigger guess help of agreement some the comps the tonnage on visibility XXXX. ‘XX you margin operating the direction beyond expense that actually you So you a tonnage kind

David Cobb

look as challenging our particularly XXXX. as compare in out, into have some our at, to Yeah. inflation to point contract back helpful. we contract, thing you union I so But visibility and the agree. a that’s It’s you

the though. challenge think I

challenge big resources Our right the locations. is right getting in the

there is costs transportation the us as work saw we our, through resource in out that, this pointed her headwind you so were some, probably for That may higher. as be challenge. earlier our and remarks purchase And near-term in in Judy a

As we XX% continue quarter and where pointed business changes over out double-digit our levels. last have to we this locations had of imbalance in

And resource resources so that creates a challenges obviously supporting right the location. of the right in lot in

so in and And the could would that but as a of year, tailwind But that piece a our really managed have the the could costs probably that team perhaps sort of I place that, priced through it later is near-term, on side we headwind say on. that a through of potential get be first half well. that the we good in

That’s done managing -- terms a choices job in they our good making great have that’s a It’s and mode so one place I so in mile cost selection think of a in the good that. challenge. and there -- getting per area. and just

The would XXXX. other substantial cost around the reduction costs we that be in took of is

returns, for think even marketing event you suspended cost, for time travel in about Some and we in and our XXXX. and a healthcare of for costs period of that other an instance, when XXX-k instance

It’s sort that. pre-COVID just to so, return And of levels. the costs those on we timing to expect

helps? Some that’s of some depended the just that when travel opportunities that Hopefully of return upon to though.

Judy McReynolds

… think I

Chris Wetherbee

does. It Yeah.

Judy McReynolds

such forward business we level. not in where changes say, year steep we a would are are looking to I managing

David Cobb

Yeah.

Judy McReynolds

more be easier that hopefully from XXXX, of standpoint from should in -- businesses our it have it’s an customers so. We as well, improvement and just

Chris Wetherbee

Chris. Hi,

David Humphrey

Okay.

Chris Wetherbee

man. Thanks a lot a

David Humphrey

appreciate it. Thank I you.

Chris Wetherbee

right. All

Operator

your next Our Stifel. the with from question Please line with David comes proceed of question. Ross

David Ross

Yeah.

Judy McReynolds

Hi, David.

David Ross

everyone. morning, Good

David Cobb

Hi, Dave.

David Ross

preliminary New might start there? on in might talks are new to thoughts I administration Year, What your Reform. have D.C.? had just be guys Pension What with and wanted you any off seeing you

Judy McReynolds

over the was move Relief We are of it. by year. Well, question XXXX We Act. change an through, administration. as states funding the it the will are XXst, would to January issues with other coalitions always multiemployer period a involved it introduced the follow great participated in coming plan worked become long we always and And pension of updated numerous to version years. part the And And a law, on funds Pension with And it’s passed Emergency that, in legislators I especially conversations with that. XXX Plan insolvent faced in and it’s and a Washington think Act of Lewis in into Butch address more enacted than that House. projected the central we hopeful

a it’s progress solution of sign toward in So a hopeful area. this

So for to in needing problem a that and faced have hope be near-term. there’s that, because and certainly we that the it’s it addressed again is

David Ross

And is there your there lower in operating off that? and take anything a that if books would liabilities your the essentially as orphan expenses result,

Judy McReynolds

getting of our lower democrats of had pension. you helps that issue. that address on sure our Congress. better encouraged contractually the costs both that’s there’s don’t by some to with the the the hourly we administration we discussion to know but any a that. Biden I we control to think orphan Well, that houses we nothing yet really can on -- relief But what insolvency was the report want part other being liabilities books. at and than have in conversations do rate specific make the But we that the and of for say in clearly. there’s average of are And that’s I on, And a said agreed chance to

in of and And in to near-term expires there I our so the try believe would although that. that be future in any contract June change to always address XXXX, don’t in opportunity there’s negotiations an

that. we that And to so some to the do our level best opportunity business, have opportunities is to have and to create continue done and in efficiencies to continue

So I hope that helps.

David Ross

Okay. Yes. Thank you.

Judy McReynolds

Thank you, David.

David Humphrey

Dave. lot Thanks a

Operator

Our Fowler KeyBanc Capital with comes with your next Todd of Markets. from question. Please proceed question the line

Todd Fowler

good Hi. Great. Thanks and morning.

Judy McReynolds

Todd. morning, Good

David Cobb

Hi, Todd.

Todd Fowler

mix the shipment, to two the to mix be, excuse there’s your down. it where morning, a right in doing in helpful? address shipments And that the like Just improve? that’s you other can truckload wanted as to core some the Good so capacity still to weighted there about opportunity the those like increase is some be quarter, to maybe improve hey. spots It around that seems feel back you you remarks X.X% a the well, shipments pieces come continue that -- to would about strong with that network I would during prepared then, Judy, things targeted weight effort ask pretty me, per comments customers if it everybody. in now. Does increase. like And -- LTL that. Is a had for

Judy McReynolds

months be in a move, that be -- an improvement lag have Todd. are even a coming the I that. PMI. Index do a us was was have now that you you, in had XX.X%, several still with robust of Thank really PMI strong to business with are that third Yeah. move quarter activity and think with mentioned the quarter, seeing core strong our those to fourth more And metric of quarter. the seen we Yesterday We And improved in about I really Great forward looking customers. more in Sure. back. think there business our yes just with And for for part there correlates the four improvement And think an second number -- David manufacturing questions. typically solid quarter. we fourth our the manufacturing in answer are that in remember is business we yes, come row. I that months compared improvement manufacturing And the strong of to that we that kind It and lesser sector retail noticeable in improvement returning. but a numbers. can that

the retail in in So side. strength business, same we thing perhaps the some seeing we are And the hopeful there. of the type side Asset-Light are

So is about improvement opportunity And shipments improvement. truckload-rated certainly more there right. is for your but observation

and on We want really spillover are the LTL not seeing customers. focus to our

the certainly continued a use a because and that to good we business and that’s January empty another the to results utilization shipments, in been that’s effective we been in talked quarters. second this because imbalance a concentrated profitability have glad this in business. contributed and about fill of one part gives That’s really And business. fourth effectively help improvement really company. overall versus and strength the that. normal, is U-Pack typically just see an the third our the -- to that are and relative to and also imbalance talked the We But capacity LTL to strategy us quarter business of transactional been It’s our of our part There the helps but network the the with improve of some really of us overall transactional opportunities David that of overall contribute it in has to way to into about.

Todd Fowler

sounds like it things the makes underlying sense That in should of of lot and as and trends a XXXX. quarter, but help into in the Okay. are mixed we some move fourth the it so positive business

Judy McReynolds

Absolutely.

Todd Fowler

going am Thanks. I David, Okay. queue. turn over. it to jump the I will in back

Judy McReynolds

you. Thank

David Humphrey

Todd. Thanks,

Operator

line comes Jack next of Please from question. Stephens. the Our your Atkins question with proceed with

Jack Atkins

Good taking morning, for everybody. Thank question. you my

Judy McReynolds

Good morning, Jack.

David Cobb

Hi, Jack.

David Humphrey

Hi, Jack.

Jack Atkins

take go you OR want this if I I me in to but Well, discussion did million for want a moment. David it, I business. XXXX $XX.X the back when to OR or guys could to And to the Judy you so if don’t for know you guess I look take let if back XXXX Asset-Based a

have a a are you but freight time We profitability at cycle this of of to made to improvements the I structural your cycle think kind lot guys cycle. of similar point

be it this Asset-Based a through as really you that’s quarter-to-quarter takes really help able there is lot and year the business, year. make the progress us think about to understand possible? in is ratio type if of an operating guess, think to I you I puts the So But of to right expect from move perspective about.

Judy McReynolds

of, mean, really allow to But about improvements we first add longer do something your worth that. comment think to will I term has Jack, comment commenting. him what Yeah. I is something will think, and and I I David that, is

If instance compare or you a for challenges, XXXX is a the is years, which few obviously that, some you look something -- could to it say, back had comparison last XXXX there but there. different like

for business OR that has close points the the think since basis the improvement been in to period. ABF I XXX

just when of became And then we for all cubic -- was really us a XXXX about minimum makes it in about improvements was effective just so XXXX, were think structural you part late customer the when of it that freight of and that accounts. -- the handling we with sure very in just the it’s and some effective business in think me approach just overall that charge of priced that, way have right, the also we making we do terms but put talk the and that that we

in haul, business. average. productivity optimization in of We different, Many the enable the or worked projects we line and improvements those have have either that rowboat and optimization several had implemented on

have and that LTL are making transactional XXXX. visibility guess, and us to manage a are that us some then we efficient with terms improvements tolerable decisions I we one, because things and profitable they of with week -- they what We setting. operation address efficiency. those that that even have and be helped incrementally imbalance the Honestly probably better so our more There’s in shipments based. these come. also and help has there routes appointments been to have shipments individually The many with the last lane us about city environment, and the in already. there’s with we more that talked help this know transactional to the the They of labor in had help But able really us to

that along future with is our based strategies together. when any our that approach all customers. approach not for company seen comes exciting driven shareholders, backdrop insights and customer and our well result use the a sales year of working in I great of think, that’s have the And only also informed management you but in So, where our never with the and time our the pretty I Well, history a for data yield for really needs company. XXXX, think to about but operations produce we

Jack Atkins

reaction your it Okay. sheet, discount a is bought, if think the capital Judy, strong makes healthy you this very guys Maybe stock just when peers. allocation, even UPS and such significant non-union squeeze feel a one more sense. at to And trading I you cash business are flow in. good -- very That of balance that about the there. TFI have freight could valuation hypothetical I

that So the just authorization with of more the you business know a in put signal on And that value your here. business last new aggressive operating not are performance given guys buyback not really I cycle-to-cycle? place. But aggressive the it’s this get why the buyback in comment improved generating you why buyback. pretty point the around just to

Judy McReynolds

shareholder to opportunities very are certainly do that point feel on a those And achieve. valuation your And look question. there’s we we and we focused improving is That can that Yeah. greater great there value. a for like out

got we X those projects very projects, to on returns as of the and average offset of Our is been above that’s have to a list shareholder to We we focus dilutive to have refer opportunities with our we long-term that. with on results will I do unit have really Tier a our we for the doing the and those see that team those side find program preference the the some of past lot focused effect restricted continue technology improving enhance worked company share buyback those. tell and effectively a of that. And compensation the over share to got has you, the value in and long my

wins our resources about well. we are a the using, that through are David all his return on opening comments, And evaluated capital so in highlighted as that capital employed

it, although, that, anything there business. And or we near-term the not have in looking We opportunities that is we for point side thing say stayed want to in the the at I other use against and that we know have but weigh particularly on I to very active horizon. Asset-Light will that’s there’s on that balance acquisition. other the we that opportunities authorization So we can

evaluating there. our options We are

I richer. valuations the think of are Some

and where different can and to providers. with connections involved are we our also and I startups think, other that customers have see we enhance We channels technology opportunities, in capacity our

Jack Atkins

Okay.

Judy McReynolds

lot that value see our mix on do strategy. shareholder there’s So a But goes great the opportunities. into we

Jack Atkins

Great. Thank you.

David Humphrey

Jack. lot man. Appreciate a Thanks it

Operator

the with question. Wolfe line question next comes Group Our with Research. from your Scott Please of proceed

Scott Group

Hey. Good morning, guys. Thanks.

David Cobb

Hi, Scott.

Scott Group

to want I margins the quarter. in ask first about So the

And a basis to is going about crux given revenue XXX than be talk question margins? guess guess be from typical to down typically the if year-over-year, environment. they implies fall are surprising points that So I fourth is, range, basis you XXX better we points. tonnage which to seasonality, same lot If the the apply first logic just would they that fall they the should I in to of

So any thoughts are out there.

David Cobb

will are beat quarter to one that, fourth what I historical in comparison. did, point really that quarters we to XXXX sequential to strive of a our for was was of change. base just you certainly The -- strongest mean going our company’s that if fourth guess, sequential I But Yeah. history. we I remarked

you I So a comparison a good, that typical gives tough but -- tougher guess. than

gain we some one fair good gain so sort $X.X the results about aside. put and that as normal -- -- it’s And of that’s year set Would And million the is out that a I there aspect. had million momentum. $X.X me property think, think you last operating this it’s think well. called I I to think, But

helpful. that’s think I

we there. movement color historical deal the the other this probably time I we to have. with all uncertainties that in see provide kind usually there about than of could think I But of as number that’s is at

Scott Group

a of or accruing with a the Asset-Based? the is just year quarter. quarter, you first with then first accrual of around things one you. -- then fourth relative business there was less Thank have And operating So typically to And then last good what’s there specific this Okay. few of quarter profit few lower say or day there. in sort all the any up of rule sharing, margin for little you cost got last And catch sort sort in the a quarter, is thing, strength, you you? can a better points that that a fourth U-Pack are what the thumb

David Cobb

I have it would we just those of that there, if guess. the, just our revenue. there, apply think would be questions would number of I that profit and the some incremental daily that year versus say, not profit I last Yeah. on one of daily potential that miss on maybe around a the about you revenue, mean had

do around the… and it’s to say and that’s it why our U-Pack profitability, We It’s I -- leave incremental other let’s helpful, The just that, good would business. we system. so

Judy McReynolds

Union profit sharing.

David Cobb

sharing. profit Union

well, So, that’s…

Judy McReynolds

And timing.

David Cobb

about if Yeah. the were comparison of that accruals levels quarter the just really rest first an there our to we are just we were given that the quite the of were And things quarter we say, effect time. the last on to time a were that uncertain and thinking incentive of you was In number year, perspective at so had will had we -- of but about it books and year. the That we about that the like year. and our thinking the time the lower pandemics, first think this to timing March closing still at that

year And hope guess, so, in better I that would a a element we we would yeah, this first arrangement, would have performance be wouldn’t in more or of we cost and have normal that of quarter. an accrual the have type

Judy McReynolds

David… say, would I what And Yeah.

Scott Group

be… that Will

Judy McReynolds

pandemic, cost have the then or just not ended visibility the known the Because quarter of impact that on that would you we half. would about quarter and second fallen add in I is the that. to to -- had if … second first that. mean we the have where the think

it… So

David Cobb

Right.

Judy McReynolds

It the half. in second would fallen have

Scott Group

significant… So

David Cobb

Scott…

Scott Group

Okay. Thank you, guys.

Judy McReynolds

Thanks.

Operator

comes Please question. next from Our proceed the of Ken Bank line Hoexter question your with of America. with

Ken Hoexter

Dave. and Dave Judy, Hey,

Judy McReynolds

Hi.

David Cobb

Ken. Hi,

Ken Hoexter

guys. hey, -- upon Following

changing more buying Todd’s regionally you upon the that thoughts market moving on of in your market kind YRC more coming with the e-commerce, Following of on a competitive -- and thoughts talk Judy light kind it? been shifting It’s UPS or of permanently with the little environment for you earlier, announced the market this while. just a good back rational with for such addressable that’s and kind that. now your on mix Freight have about question at obviously a little Maybe TFI IP yesterday. a Is of mentioned,

Judy McReynolds

am know But hand is has the and to been XXXX business and e-commerce, I And look market at am the the ability our just that And how because at have impact so well I do and glad I -- it I of back that glad that the am -- I in. for I that. when -- handle on I So, nimble also it glad LTL be market but our case. is. grown. we -- addressable market for have think it, business, don’t that the grown. our size fit do for the has I what the that’s I my think of e-commerce

challenged residential We But -- deliveries, done done times, kinds have deliveries. earlier year. many but really of we customers have that always with in those in residential the always, higher we not have modern those in were percentage we the some increases

in a to we residential I at were had point able period that through navigate business one and handle delivery. XX% am And we and increase think I talking about that well. that

operations credit different adaptability our for network to flexibility of So it the I team able and in the just being that do circumstances. shows well and

had business -- -- like be -- have efficiencies that are And we there. we that’s and so not around that we may always are that -- some business we

that able by threshold there’s people homes the don’t think I so items. that want of type and do fact to One have is of some those efficiencies their delivered those or created been curbside those really delivery inside we of

business. that enjoy we but So,

It to household in also moving it. goods works business. for glad the be are We well U-Pack

All think of have that that’s residential and and we grown opportunity. got expertise the I in LTL it an has area

Ken Hoexter

okay, that be fleet bit of CapEx mentioned up? you Can you mentioned, need despite age David may CapEx talk that repurchasing. -- a and to also So, slowing a little earlier, catch on the about pausing the you little but still is

David Cobb

-- to XX of We where that’s age months right I we average target in months XX be of now. our think and we landed kind to kind are the where road tractors

a We little below. actually are

We are months, XX about just -- were yeah. in we the quarter last

I right. that’s So about guess

the question? Sorry, what the was rest of

Ken Hoexter

No. Oh!

… -- just was I if I So, to slowed CapEx, there I was because catch going need you so to was a the you to mentioned say, if going asked up

Judy McReynolds

Yeah.

Ken Hoexter

some that? if … slowed would you of

Judy McReynolds

wasn’t Hey, it -- Ken. a slowdown… dramatic really It’s

Ken Hoexter

No. No.

Judy McReynolds

very It in grand minor scheme. was very, the

that have we some dollars have but So, poured into XXXX. over do

David Cobb

equipment, we anyway down CapEx on we think in what of less elements X% XXXX. I on than and some bought think, slowed like We I buying the were planning

Ken Hoexter

Okay.

David Humphrey

man… a lot Thanks Hey.

Ken Hoexter

Okay.

David Humphrey

I appreciate you…

Ken Hoexter

Thanks. Thanks.

David Humphrey

…being on the call.

Ken Hoexter

it. Appreciate

Judy McReynolds

Thank you.

Operator

line Stephanie of the proceed comes next Our Please question. Truist. question with your with from Benjamin

Stephanie Benjamin

morning, Good Hi. everybody.

Judy McReynolds

Stephanie. morning, Good

David Cobb

Steph. morning, Good

Stephanie Benjamin

you just I side? in little it’s side. January rollout a we that, truckload the any Asset-Light Asset-Light speak any bit little tied the think business, bit on strength on you benefit of either could vaccine have environment the are demand in rollout But or the maybe reported, -- the fourth seeing I business far it’s quarter a thus of your to kind vaccine to the or seen well any from spot kind just want on pretty

Judy McReynolds

let’s Well, either in actually distribution experienced shipments itself vaccine-related or we we that some first of in the are to, the relates it, quarter not just quarter in But the have loads. fourth or far. involved type vaccine so call increase

in a operators And say, kind owner back trends include more would that capacity That’s I the auto. And it’s a the really the coming then related of have think, just have that the just just that overall expedite after sought so not is the helpful expedite online tight that got experienced. to, impact we influence, the to plants manufacturing network I’d major you in of been and capacity whenever has, through market so.

Stephanie Benjamin

yourself. customers. really XXXX and imagine continuing it. existing past pretty desire you year expand the Asset-Light being your in your Got LTL And for you. can side, the a have to some cross-sell on your even Thank business of customers segment mentioned I challenging and the with

double do you Thanks. on that the cross-selling might you maybe larger, to So be down be strategy look accelerate if that there to helpful? in XXXX, think would opportunities any those or even year color this really opportunity

Judy McReynolds

total a growth that this good the in do terms X-K as in fourth business Asset-Light in there Yes. and highlighted of quarter that overall that I then momentum. we to that saw for my robust we of reported I the also in about fourth our the January. quarter movement the had and see we and really have really our percent the comments XX had opening morning

And that a handled our that we preferences treated and well think in of the in working sure year a strategy are like a we with brought carriers what as the later up -- see really our other that result the acceleration make early overall has will lot for that ways our participation our operations us as customers to in some that And enable well we into we also, got us. team and insights gathering also leadership think different accessing then opportunity, then about customer some and we We Danny Loe’s management have Asset-Light driven think, allows think the fit have using see we in get customers into the really is better strategies know their are data our opportunities. investments be to of about can or information focus making customer will our existing that -- new part the over very, with have customers. we and results that I growth going well. sure some that it there have then, are matched making after them how leadership can I that I And year of works that we

we there. -- also customers of had So by that encouraged have number managed are and by are we a growth the overall just

I XX% manage have we in project beyond or customers integrated really area a product near we have launch whether something that coming think worked that’s saying in the or together solutions bringing you that managing in like year that. can XXXX and the this end-to-end or Asset-Based special growth well. it’s is But are to us, last assets in are particular we and the some that this

that for question. you thank So

David Humphrey

that. Appreciate Stephanie. Thanks,

for or got more time call more question. we have I think one one

Operator

Thank you.

of Alliger question. your question Goldman Sachs. Our line Jordan last comes with from the Please proceed with

Jordan Alliger

everyone. Hi, Yeah.

David Cobb

Jordan. Hi,

Judy McReynolds

Jordan. Hi,

Jordan Alliger

Hi.

in revenue that a space it dissipating January, to pretty sort headwind fuel what so it a rough price I per being firm forward. move headwinds you -- tailwind is on around that Thanks. from that thought the level? just in that line of or LTL the total with we the X% of a that are hundredweight So has question seeing as fairly a could Is of assume some trend sort we and think, is flips

Judy McReynolds

of also management ability like the area. that of to in our elements get grow order going than opportunity know just And I those mean, or guidance for strengthening volumes is is to of we the know same provide. particularly strategies we our what we I’d with make and time, core yield feel and maybe that the value are but us say the are back you strengthening that some Jordan, online. I a seeing at all customers and to economy deployment don’t business do sure when come are it to about the paid for last some to to was do opportunity Well, the best customers, long I XXXX yield is for going that, to be increase we trying contract those, those this job navigate through mean give we discussions of bring better deferred advance time the yeah, in to that I in guess, in you year. price us and really

on and we this, that to we we know, rather are sure don’t but the we encouraged by But to honestly think have. result are do what the not we know there also percentages, going So comment grow company. have that backdrop the we best because the work I’d make I exact

Jordan Alliger

Thank you That No. Great. much. so sense. makes

David Humphrey

has call. a lot, interest Jennifer, I believe Jordan, our much. We call you and and thanks in ArcBest concludes your ended. that our Thank listen Well, Okay. very appreciate

Operator

your We day that disconnect thank you great you your lines. and for a everyone. Have ask kindly participation

ArcBest (ARCB) 2 Feb 212020 Q4 Earnings call transcript