Earnings call transcript Q4 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, and welcome to the ArcBest Fourth Quarter 2022 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 on Friday, February 03, 2023.

I would now like to turn the conference over to Mr. of President Vice Humphrey, Investor Relations. David ahead. go Please

David Humphrey

full-year call, Thank an provide the of quarter today's some then walk you joining us. details and fourth recent for we our results, update questions. through and answer will you On XXXX on business, our

Cobb, Customer ArcBest Officer; today David Chief President Anderson, Logistics, Chief Judy Yield of well of are of as ArcBest Officer me Chairman, President Asset-light Financial Joining CEO ArcBest; as Dennis and Officer. McReynolds, ArcBest; Chief Danny Loe, and

you help its some To ArcBest understand results, during forward-looking and made be this statements could call.

nature, Forward-looking statements, by subject and their very risk. are uncertainties to

most For results, SEC of please discussion section public factors future the to affect our forward-looking statements ArcBest's press a recent more refer earnings of filings. that complete our could and release,

comparisons, GAAP information non-GAAP slides. discussed non-GAAP to the additional presentation tables measures this call meaningful provided in the as and release. provide information press financial call in the earnings the section this in certain Reconciliations described of includes outlined discussed of measures in in are measures also financial related To the our

reminder, the a arcb.com, on Web is As earlier filed Exhibit deck call or that webcast. can this the in X-K of was ArcBest XX.X the site found be morning, a that can along slide you there on conference follow

begin We will with now Judy.

Judy McReynolds

few Good morning, a ArcBest. to milestones tremendous thank acknowledging you all by for for joining like us. I begin would

time with in First, we history, first exceeded $X.X $X company the annual billion revenue for growth in year-over-year revenue of billion.

ArcBest dedication per happened entire team. the These accomplishments have important highest the without the history. earnings and could work achieved share in also company's our We hard not of

next core hundredth a marks continue resilience, the flourished and over are with values. and years past ArcBest momentum the highlight The solutions, century. to is other to has The I to road important cutting XXX a commitment edge anniversary. paved has this to into innovative our positioned been celebration, flexibility, we forward century, thinking, XXXX driving milestone our want

We to been because focused we have us. change. navigate know true strengths, and we've to intimidates who able and of stayed and successfully values Nothing our amounts our innovate we are, on enormous

find We means stop get accomplished well. proud way," a I'm of saying, have at a we've what incredibly nothing done job together. "We'll we'll the to which

growth remain strong, industry. the regardless as of results Our does our facing opportunity, our obstacles

We financial track in are billion of and billion revenue will as $X evolve. conditions on our continue short-term by XXXX, to the manage achieve long-term target to in to the market business $X

for again, long-term. shown are the we've a company ahead we time and As and that plans thinks

edge decisions grow. we that make The We personalized them; our to customers strengthen most and allows of portfolio. for competitive through breadth diverse modes will help decisions to our continue offer strategic our the us them

connected initially as recently managing LTL exceptional their learning their creating ArcBest chain partnership, but for ArcBest deep we logistics as partner. with a after our about customer we company, a year. saw I a fact, value transportation, started whose amount of managing In They developed fairly solutions short and last time, supply additional them an selected Within they

way issues, better allow quickly that with daily which XXXX, identify technology started projects work. throughout more customer this we technology any embedded and numerous approach plans, our growth to run deep, our buzzword XXXX, Throughout environment. XXXX. completed tailored we're We it's and the continue isn't operating in to customer have a ArcBest; root result, continued solution. like contribute that and investments our is in will a innovation. success wit with relationships precision, address for our As to long-term expecting strategic our we double-digit just in Innovation trusted, this causes the in a us business It and and in

mindset business serve prioritize building more to our use business. we digital better capabilities We our innovative to our business our efficient advancing We and every of to easier processes these that it patented Looking investment that, made make our investments partnership, do and reference to parts in heard trailers. and critical strengthen handling are and an technology in ahead future. and you've includes bring ahead, the we've load to customers. unload of us equipment, which patented stay and innovation now, software, and a Building process on succeed

are of being our addition used locations. several In piloting this to in currently customer parts network, in program we

interested of the has the it's solution. early this more, delivering, quarter. We sharing value this believe changer, large to in encouraged and we already look potential be b deployments several and have to industry forward We're later game customers it broader an

our Of work innovation without who challenges hard logistics course, would over customers; solve thank a to every sincere XXX the have our years past our the for none possible to ArcBest and people you day great or of team. results year this been

you And take will now, over I'll turn the greater detail. David it through the who year to and in quarter

David Cobb

by were increase to quarter our diluted revenues results. $X.XX. was non-GAAP highlighting consolidated per and a Fourth operating billion, XX% consolidated last you, On decreased morning, begin I'll million. income share adjusted And a our earnings $X.X Thank consolidated quarter XXXX year. good basis, Judy, $XX X% over everyone. fourth

XX% $XXX of all XXXX, of XX%. of share, diluted earnings Non-GAAP million, adjusted over were a operating XXXX. billion, For a per consolidated XXXX. consolidated increase income our XX% $X.X XXXX year-over-year were revenues increase over an $XX.XX was increase

The to that to our And rate XXXX to expect XX% rate non-GAAP XXXX we the XX%. used XX.X%. calculate was fourth quarter non-GAAP tax from range current tax was tax laws, effective under EPS

of since end the $XX of of XXXX, this we course, had cash cash year $XXX and million. also impacted total liquidity liquidity that totaling ArcBest's our throughout level. with at be pleased discreet improvement $XX levels. million, of EBITDA cash momentum XXXX Total We're remains balance the net solid strong of a quarter. as this are by third may $XXX business flow, Of very end And at million the million items an of healthy year. produced the our

innovations, just year-end estate composite with We capital equipment new competitive operating ability regularly rising allowed XXXX customers. all opportunities company's are in April our invest ArcBest's and have Board returned in in enhanced the on and growth and shareholders, flow which and increased technological rates, improvements, under rate additions to generated which will share sheet repurchases the strong review external edge purchases, cash balance and despite of to the the And the cash real by to a debt through to interest strengthen XX%, XXXX. of business X%. outstanding pleased dividend, us serve was in quarterly at

opportunities while our share considering through to capital appropriate. approach We to allocation, prioritizing balance repurchases maintain when targeting returning credit dividends, shareholders and metrics, M&A investment-grade will capital and

environment profit Additionally, resources business equipment, controlling we're reduced to levels, focused especially customer effectively and improving managing the with superior current personnel, costs margins. while in provide service on and other

Asset-Based the The over is to our non-GAAP fourth fourth metrics Asset-Based quarter of XXX last Turning $XXX a ratio, increase million, our points. increase of business, revenue key Asset-Based daily XX.X, year. quarter year-over-year an X% in operation was average basis of

and as last fuel, percent of as make been mentioned to good inflationary replacement outside to last part Also mentioned quarter, for As to due in in costs Asset-Based due costs, declining a revenue. have elevated quarter, line on usage were of purchase able delays transportation and our repairs progress the resource optimizing the are expenses. supplies, costs and maintenance receiving with we equipment. in Those in I

total In quarter revenue quarter. surcharges. and tonnage that contract renewed X.X%, Asset-Based hundredweight revenue was including approximately X.X% secured Asset-Based shipments negotiated per daily increase $X daily ABF. average during by XXXX, of agreements build X%. increased shipments Total customer Total tonnage X.X% and both quarter grew customer were with billion, X%. an day per the Fourth deferred per Total the an deferred pricing increased the and increased revenue XX%, increase We and contract on for during agreements increase a renewals hundredweight decreased average ever X.X% highest and on year. fourth fuel pricing XX.X%

was an The previous improvement of operating and X,XXX XX.X%, full-year XXX reflecting points year-over-year, over the basis basis period. ratio points six-year non-GAAP

trends, to basis, Asset-Based impacted resulting quantities As XXXX X% a our the has increased customer economy XXXX. sizes year-over-year. On preliminary in the general shipments at January tonnage increased and we January January compared order slowdown X%, and shipment look

trends, to For additional press please the X-K to XXXX on exhibit our details release. January Form refer our

total full customer in particularly over months events in year two revenue first-half business, of XXXX, increased strong and In in quarter daily million, of reflecting increased all results, event for of XXXX. prior-year XXXX, a for X% per fourth logistic slowdown Asset-Light to increase fourth reflecting softness our business year's customer rates, shipping quarter the the and was revenue revenue of in a in of MoLo offset Asset-Light also changes only ArcBest impact period. demand billion, of compared a the to of $X.X In XXXX, XX% And $XXX FleetNet last operations and versus services, quarter over the full market but and MoLo XXXX, in by segment, mix. the volumes,

Fourth increase. for that Asset-Light of operating million, morning. release $XX trends year-over-year non-GAAP exhibit filed to totaled totaled press for XXXX. XXXX difficulty] The an recent trends We the million, this over demand current income was reflecting the XXXX, the provided a and January increase slowdown. business preliminary full-year EBITDA XX% was $XX million, softer, to in quarter asset-light XXXX, be XX% continuing business in X-K Form Fourth and $XX Asset-Light quarter full-year [technical

million, most XXXX financed net XXXX, and revenue which totaled for of operation. equipment and ArcBest's totaled In million. expenditures capital equipment Depreciation on expenditures amortization for $XX $XXX million. Asset-Based totaled $XXX property, plant, equipment cost including

In was XXXX. amortization addition, in million assets $XX and tangible

manufacturing XXXX. to XXXX. trailer projects a some XXXX, asset-based equipment. into had impacted shortages result, orders during year portion the out in reduce as and pushed delays estate in real us And As our a of were and we part And in

capital to equipment of expenditures expect $XXX XXXX, million. approximately million million For including $XXX purchases net we total of $XXX

is A operation. Asset-Based majority which for of ArcBest's

$XXX our some As be amortization year's reflect well estimated XXXX is primarily real amortization projects associated in equipment, support targets. our related and cost tangible I assets investments long-term XXXX, last through XXXX million. in with acquisition. above as to the MoLo plans around million to investment as XXXX $XX which up not purchase approximately amortization are and equipment for on growth mentioned, does levels include plans accounting depreciation This to catching estate to be XXXX estimated

our pleased with XXXX. results very financial in are We

effectively long-term while navigate needs strategy challenges on century financial Our meeting and focusing our us street for loan commitment to sustained growth to and profitability. customer market effectively positions

call Danny. turn Now, I'll the to

Danny Loe

on of the Thanks, high view a over David. provide I'll side morning, asset-light give and level on yield. an everyone. Good update business the

from contractual us market. spot the We business has as to and acquisition. brought offering it favorable been well timing benefits of particularly see continue an MoLo the as in more The procurement as benefits from truckload that better improved acquisition

of strength our in truckload shipments, solution. grew declined the rates which still While is truckload spot the we quarter, testament a sharply fourth to

profitable targets continue on long-term despite We pressures also of fourth focused quarter. that market term, are what that managing impacted part financial our can in to the focus pursuit shipment we on control. of we And Shorter in growth is cost. us

We with team to a our employee invest continue productivity. in focus existing on

career and MoLo's have are we to better management Additionally, from approach. continuing benefit capacity capabilities,

side, On November. profitable And be appropriately pricing our will we the our price focus reflect We to control. and increase cost estimated continues remained asset-based growth high rational. offering. to early has general quality on service rate effective our also And in

we positions we in us continue market serve entered evolve customers and year, better which environment. any XXXth As our to our well

diligently our services. diversified them seamless have We our and access so to integrate customers worked have to solutions

and customers this our execution We benefits the with streamlining interactions business are to the work. seeing of day-to-day our from strategic are initial the

built like pricing market based LTL dynamic flex customer streams our business and dynamics. allow through needs U-Pack, which published have on additional and supplement to us We solutions revenue and

with efficiency improve approach. giving a avoid these to point needs being capacity a for big industry positioned that human-centered We In to on switch our for more sustainable shipments, both, empty times tools and profitable toward the us employees customers. win technology like our of from ArcBest, There to human in is furloughs our strategically offering, use their or versus ability about and which growth enabled provide while key a to solutions In these, and service the profitable technology-centered our moment. to up our long-term at targets. having layoffs for we fill using believe our choice while customers a this technology driven transactional short, ones the driven seamlessly a better has blend to debate employees, based

have We we received are the feedback our and pleased we customers. made, progress have with the from

are with is we truckload productive platform. Having productivity improvements having the on all seeing the employees critical. are And pleased of with same we operational employees our

best with to yes within uniquely that want who It choose customers have selection for needs. are to solutions of find to of Taking freight partnership the coordinate has we us best but positioned centralize business. has the allowed both broader With of fit to experience, say benefited our way better the has enabled experience. help network. hundred freight segments shipments a our their years ABF a supply logistics ability that chain another and ArcBest customers to And move to logistics the

So LTL important learned through some to expand we brokered began this, pilot would shippers. we a that And lessons. transactional

inefficiencies a experience a As learned to relationships, we system be that efficient. internal that tech of and gather in the feedback identified. more could places up LTL and our proprietary we carrier leveraging the LTL much partners our close some quickly team our result industry, address were from to experience of customers able there and stood years valuable were our XXX Using

are project pilot is more to results, to expanding look early by and in this encouraged we customers. serve phase, the While the pilot forward still

Now I'll Dennis. turn over it to

Dennis Anderson

Danny, Thank and you, everyone. good morning,

on focus alignment technology. to important and have Our collaboration, help investments our and our steps strategic and creating strengthening for making remains we customers, advance organizational including value goal, in taken this us

experience sales, more productive coordination to enables seamless marketing, and efficient while service for tightened our across a teams, have and which We providing be customers. operations us more

focused they When a You our celebrating about we win. decisions talk they logistics to to a XXXth we're trust customers. challenges. win, year our continue anniversary hear And because this us And to strive solve make us lot we customer with mindset. their

but means also them value, serving superior service that course, they that offering a efficiently. it having means Of

the that Technology giving build this investment best-in-class by of that strengthens view working years, that happen. we customer last to is starts a point have our the every need. few been as give big a making over throughout a customers they to journey. our part tools Providing diligently an on experience. experience And employees systems We the journey best-in-class

our a project, which example ABF the been effective of optimization and advanced technology An time it with just of the our service work amount using the are more this network. half that at of in takes cartage were XX% to city system so reduce improve of centers, we So our a already routes pickup relentlessly to about which more people pursuing has in analytics fourth This to efficient approach freight nearly doing to quarter. out is disciplined dramatically of efficiency. process reducing example and focus route rolled they operation deploys third better, real we plan managing in on this delivery the one can Locations is ways time. more how of the This business. handled

want for a options them. began also their value success visibility across feat breadth solutions. opportunity know customer This enhance our that mode to And based given of feedback, to it's we on our visibility. chain sources. and better our proposition building no is of enhance supply platform our and But for an we capacity important Customers small all

later customers with year. testing begin this will we So,

Additionally, and the functionality the be user arcb.com out sites we rolling throughout just enhancing year launched a improving experience. we'll the redesigned enhancements there and website at

drive customer customer act strategy position We're our a in feedback. needs to both strong to investments. innovation Our and listen on and

company important The our driver is that this handle pilots excited results. with short, been the differentiator share way and transform quarter. with technology we've you customers. our to are more an providing customers and later for about for innovative important And freight running growth they In we're efficiency with our solution ArcBest to encouraging of an

just significant effective has never running opportunity Shippers in The efficient supply as is capacity Despite in transportation for And to as just securing and integrated have we're ever more in industry been from prime opportunity as efficiency. us chains on been. to focus supply managed softening it in position and chain this improving designed the largely capitalize our their that. economy, particular designing our offering that shifted have solutions our the occurring for and critical. are

It's industries, larger across deals, to through Customer customers logistics companies, our then We're robust. than diversification And more multiple closing solutions. uncommon us before even using their with more better customer strong. take them are ever provider. who cycle. pipeline with we have retention of remained positioned any customers one is as not our and Additionally, more perform and to are change our

a prior They was to did recently, who with their solution used they Just transportation company. new But manage talking this. most customer they us I the with truckload. at a joined help needed had their when was the organization,

relationships their business. to stories of testament what we team deep with entire we supply customers that's from Hearing for very So, chain as past these have them the proud our the I accomplished to a where this we started. build am partner year. best is

Our our the expertise long-term of regardless breadth of and our large tech-savvy people, integrated creation, to opportunity poised us, market capture mean on innovative of spirit and that value solutions, focus customer are of our our targets long-term environment. ahead the the we and reach financial

back to Now, Judy, I'll turn you. it over

Judy McReynolds

Thank you, Dennis.

ArcBest from changes. with the today. way other into He revenue, many conclude, we thank David alongside first business. working $X.X step to we and will retiring us ArcBest. identify in actively leaders logistics ago, his and his David of me David announced When Cobb has joined helping I the integrated every XX% of skill, and year, our contributions be we a that and it years has the Asset-Based revenues billion our XX and want worked organization side recently to this moment for successor. to integrity take to of Before led company came help had the are he David is transform later navigate

on David And a has working with it pleasure. of been all, top

the him best will October, with leaves, he his working miss in wish We David retirement. in but when

and Supply to of carrier against complex. our to over and our And regularly When customer more never customers network for serve want we last revisit XX,XXX strategic one to with and it. well critical deliver. own we capacity, executing needed currently we're looking to positioned partners. sure with it's were make been time We close, chains assets strategy grow have I position. sound them on we a reflect that and As well-positioned are efficiency, our now, or

talented We us customers' a implementing our in to who efficient. have our technology an including more building nearly team experts in-house of group systems businesses make employees and XXX-person and field, are incredibly

our resilient of breadth us solutions flexible, supply and Our mindset to chains. innovative allow build

ArcBest headwinds, are history. has there some its throughout demonstrated resilience macroeconomic While

We are current our close both employees, you and customers, our reach for for to I'm and year Thank thanking helping ready and for us past what's our opportunity ahead beyond. by to going this partners, XXXth shareholders the serve you. anniversary.

We are as proud years. to keeping delivering growth of on committed to chain forward We're our just are we started. the but next XXX accomplished, goals, we global supply and look what we've driving getting moving, our

prepared we David That remarks. to concludes can now our call the Humphrey, questions. open up

David Humphrey

think for I Frank, some Okay, we're ready questions.

Operator

first comes Wetherbee Our Instructions] Chris from Citigroup. you. Thank Please [Operator question proceed. with

Chris Wetherbee

Hey, thanks. Good morning, everybody.

Judy McReynolds

Chris. morning, Good

Chris Wetherbee

demand start wanted seeing and in I you guess I to on what the are Asset-Based trends business. guys

the So, think, I the then tonnage, course the decelerated it bit quarter. looks plus number, the a of But was January if look at like monthly we over X.

So, maybe reversal like of bit that. it looks little a a of

terms corner what customer want XXXX up on hung too of the don't to to coming on sense a in terms rounding of of demand LTL? given wanted one month, in So, you're but in get XXXX, and get into feeling necessarily any

Dennis Anderson

Dennis. is this Chris, Hey,

course, have in into look as we let quarter all, as some environment the Really, First at very to he fourth the in weakening to things the that. any as quarter, But, a seen mean manufacturing of see other as ended a the where comment progressed. well. Danny the progressed softening, demand quarter certainly deceleration when January, of retail environment, we did Certainly the you and similar, led if I'll are progressed, it add. similar I But has feels number. where year-over-year trends we

Danny Loe

managed retail Maybe of I we -- what our is leanness a think but said broad-based. representation see Dennis No, we customers. think what that's it, across. great Dennis said leading consistent. really It's I felt is with is

in in We But a seen have we which is that. whole inside supply can't customers the rate, line customer revenue we've as because necessarily shipping very that, much we've a top remember that see our lost really the for meaning high time that chain. retention aren't deceleration a business last

that's all this fourth think really representative business we I So, the saw quarter, at of our what and through point. across January, into of

Dennis Anderson

Asset-Light. Yes, general, shipping retention in Customer that the across customers, the is but trend is terrific, board. still less consistent Asset-Based across are and

Chris Wetherbee

to that to pricing a are a color. that sustainability year I the clearly feel getting But have January, over through fuel, months level something or in good the softer that sense helpful the sustainability And that's pricing, next know in so just really digits, noticed sizing power power? is how up the of this X-K maybe in some I as of on comps move the follow-up your just several yes, tonnage ex well of mentioned the And kind several Okay, get do double environment as what the a you're in pricing on side quarters? we of the LTL of with LTL coming sense the as increases you about wanted business progresses. of in

Danny Loe

look deferred Danny hundredweight. across comfortable not is revenue but again. seeing we still that January price in fourth like can year, to on pricing per go as really contracts, forward. quarter you that obviously This in price what [indiscernible] is same the weaknesses at with it. rational. you We we're inflation It's continue of our haven't last The above mentioned as and increases we if piece the We're the seen Sure.

right we, our confidence with far. trends through consistent say now, it's that about fourth I helps we've what first actual quarter strength the gives would in there. we business the the -- again into price seen what with so and more core levels can we us talk Our do have business us But to the -- that

Chris Wetherbee

the thanks for it. morning. Appreciate time much Okay, this very

David Cobb

Thanks, Chris.

Operator

comes from question next Our proceed. Shanker with Ravi Please Morgan Stanley.

Ravi Shanker

to best congrats Congrats, the XXXth everyone. wish for anniversary. and everyone, David, Thanks with

and give swag, us edition perfect the Day that's Analyst I just to but some host another think is limited me. this catalyst

Judy McReynolds

good some swag. have We

Ravi Shanker

and yes, a be will good that catalyst. Then

much such question, how some you follow-up too just or that that previous background what helpful. get up volumes more is you just operating with growth down a at thing to drive there bit little on process tonnage leverage and So, about be of price that the algorithm between a some dial Kind like as -- to do to think pricing? of the point would

Danny Loe

Sure. some Ravi, Dennis is and may this Danny start, have again. I'll more. maybe

We are core to that us transactional market want having the with again, we're make network. business we And capacity ever into fill key the an meets advantage in approach visibility have really think that place. had. than every and decisions is to make but we're about seeking the week, is how operations balance, right the conversations I able every unique to to really more ABF We're what we've with having with then long-term team we day. but our the have decisions. in going ability gives really team committed able My and we on yield And business, where the

employees. a revenue per at transactional move now. us. do, business. us business profitable able mentioned and comes to position great so, the transactional higher right can customers' had and And If one as the our furlough lay that puts market turns in a we're our to great than biggest not us of a with And that, off back, the haven't long-term business business need or things to transactional for in puts that we position we we That the is they targets. from that -- hundredweight core But demand approach is

thinking we're how about it. adjust really goes. the as kind that's We of So, market

there, company. so, bend to flexibility the And is dynamics key able that the for and flex right as to answer change the the our market we're

Dennis Anderson

Hey, is this Ravi, Dennis.

about look looks really time at to pipeline and LTL as company, what we that's can talked base. Asset-Based for that in able an logistics more grow manage, business. business Just we really demand strengthened. integrated there, more in that and want take we're like opportunity our positioned to have think we're when about, opportunities where seen And as we long a And business, we've Danny you seeing adding what than

with we answer to to approach so, that really able the capability logistics And have integrated us. that for optimize be

Ravi Shanker

some customers maybe your it, between sense. your follow-up, industrial the makes end seeing parse differences you outlook and are And that just there customers. you of Got as in out retail can the a

I think there's might your them, outlook fairly normalization longer. can difference might soon, between two some of but of take the of and customers us the see also expectation mix A, you might them? that what retail be industrials remind

Dennis Anderson

Yes, we're our certainly. -- the inventory levels. hearing The at either then the does retail retailer. a some Certainly vary of base, or vary customers type does back is the that third that manufacturing of it's and levels, space, our in that about they're what behind we're of the within And from of pre-pandemic within is most our little near but part still retail a retail certainly But by that. base. the of follows customer customer seeing leading normalization over industry,

-- some that. we within trends different so, And see different

side retail that things, little as weakness. the bit, I But mentioned, on manufacturing of the lagged that's mean a certainly, I

little showed progressed. quarter a the so, weakness that manufacturing we And the early, fourth we probably saw bit retail saw up as weakness before

that's So, there. what we're seeing really

Ravi Shanker

everyone. Thank good. Sounds you,

Judy McReynolds

Thank you.

Operator

question Cowen. Seidl next from with proceed. Please comes Our Jason

Jason Seidl

Thank you, operator. Hey, David, good congratulations. Judy. Hey, morning. team,

Judy McReynolds

Jason. you, Thank

David Cobb

much, very you Thank Jason.

Jason Seidl

to you're terms Oh, welcome, of you But you sir. to David. call did think, bit in drop your seeing, a here. so Well renewals. marketplace. deserved, what go pricing rational We're some good see and still Want contract little sequential would I a

a slows, worry starting fearing you cost being as number economy are in able pricing the to cost close market And I where your it Are move we're everyone's inflation, we price think, two, see BPS. right that to which volumes if we the XXX a to lot it that could the year? getting said slides, to your point up about of going throughout detriment above in now? the seeing a could you drop-off be

Danny Loe

is Danny. Yes. Jason, this

can just the It's one, things; on in X.X% about, top probably XXth we -- us, continuing to as the increases. feel a still levels and as two price still offering go service inflation as we fourth so for market. we've in if And we also So, talked rational value ahead, percentile forward. quarter, capture back, a it's go far confident yes, we our cover

other And back trying of the the at you pricing just core you're stack great is over if business the cover It a pieces trying puts think to really I at off that get larger to two-year that of pressure improvements increases of our forward. to go it piece the we've look inflationary had. takes level. that

demand what regard your other think pressure, kind I declining of put question I is with mentioned does to before.

transactional that business. And that above inflation. we're our will employees, network a keep the also and on that keep I it we keep our we -- right again, shipments keep pricing will and keep some focusing have think we employees And confident positioned can price pressure so of off that us lever core that we the returns business into have demand and the as profitable and the on now takes feel we for going, active it.

The logistics other a piece is we're company.

we're is to our thing managed have So, from, a a operations to, and they and with supply immediate business. standpoint, with to talk trying as discussion back what accomplish cost they're if want them pricing us going customers come on their to chain about the

make off we're our can't service is we that logistics going handle ABF really the into move partners. and the operation, And we'll a so, in using it the want, if it margin customer, of we'll they at price to level that our to business point managed

way the which matter customer turns. no well-positioned just we're so, And

Jason Seidl

on side it? my it prior where I Judy, good forward, brokerage. is things expectations question is cost what to And is there? market on think relative sort for or you looking do the your the - that's do any any improve other guys here get to guys levers productivity are can you of guess, bought when the you MoLo, then Well, the Wanted color. next to any But there market

Judy McReynolds

Well, and the the fully it And the having for We the the expectations with has really in but it last what areas -- we of one scale we year, what good, -- initial were and and buying, met greater and truckload there, critical And things, by closed year, the the little approach, we just solution capacity that's actually two the performance, track particular the adopted and targets our one, a used and customer or bit opening out knowledge solution a helped we're all truckload then was are us. in had EBITDA Asset-Light, up that of the of business year, predicted. the today, into has of model that was doing at opportunities and as on really successful. here.

through that. And environment. about do do the some reviews good position absent saying going we us I is with you're cost have better But And certainly an that. we're current on to hear just We so, that depressed, market. are spot about navigating It what feel appropriate. costs

is And advancement, to all that us I to a And position this to of the already But our good say able on going of move enable now focused targets. come talked going efficient. people this; be think little as a areas technology right we bit We And to we trying be to about those in we're going we've feel of want forever. it. we to we're we're forward. XXXX position out grow. help to And more like in I we're as environment that to want to last is not ourselves this. grow

Jason Seidl

Thanks, as Judy always. the appreciate and time, team,

Judy McReynolds

Thank you.

Operator

from Our proceed. with Jordan Sachs. Goldman Alliger next question Please comes

Jordan Alliger

the to trying at and, Thanks. what the sense just get course of situation? least you your demand the to softer additional be start the that of transport, for a Hi. year, -- the some maybe OR the talk for over are ability to things to purchase slowdown, in year, on the able Yes, you lines could the we doing a just headcount, be so on for on as you can stuff side demand lever of cost may Asset-Based, this maintain

David Cobb

do start Yes, have utilization. more the this I we base, off where internally, and is But that good ground which in made progression And in here, things opening something I'll David. employee comes of our mentioned couple as a mentioned, the quarter, with, on we just if we do. able to others outside some about comments resource and add. to like having that we're that

see their get we that to We we expect in productivity opportunity and move forward. team our we improve team of as hiring in so more lot so, did XXXX, a we as And as forward, productive. move there we

one that's So, area.

and items elevated repairs maintenance costs. those the is called we area other where is the had of think out, some I one I that

to cost is due is inflationary as of repairs of bring that of it could the delivered equipment the this cycle of some XXXX. and make as and replacement on plan that. -- get didn't we some that in have equipment that the good some place, But some until we of the into year, timing CapEx and Some But progress of just that late side in service were a we we that on and seeing. in

is about. this And so, orders I'm our XXXX talking

could So, some we improvement. But are areas opportunity that where there probably of has as move those see the, we forward, as well.

Jordan Alliger

And that? headcount or stay it front, I do static on relatively for what's thoughts mean to on you the now expect your

David Cobb

from but to to think extent. a prove just then of hiring look, say, kind I right our business going levels certainly XXXX, that roughly And that's we've as of been dictated be we're levels certain year from through -- Well, December we're some. flattish by January, moving monitor obviously But I moving going to business now. the December would to to --

Judy McReynolds

thing, other is, retirements. the we David, naturally, have Well,

David Cobb

Right.

Judy McReynolds

the technology, had provides results that's on, for places, that sure productivity and focused an in better optimization that's and us. volumes really we XX% about we and and opportunity that other something has pilot well better we network also, city we for right our at about a we our X.X% that us our really talked better. we never route than those And works have XX% to in by one locations. some initial costs, been reduction improved of in that and of why in a manage Danny's the we're we business people opportunity reasons that It's visibility locations into that the but have then making And of business, -- as given the have some transactional go. the And of cartage have already, reduction locations,

we So, best serve the have to on levels, business ability as in also the not matching that's transactional just optimize that attract, this we of have the our those pure to have going of do to needs well the as business to quoted only when type network. work headcount we the or but

Jordan Alliger

much. so Great, thanks

Operator

comes question Please Jack Incorporated. with proceed. Atkins next Our Stephens from

Jack Atkins

the Good And morning. my great. for to David, add Thanks others. Okay, over here. I'll congratulations all the help

about uncertainty, on you should performing all just hit we it's mean, So, to a during make you you've have you terms terms for the efforts would think cycle first in first business I deterioration quarter, kind resilient business the I really to more I more and make implemented? that it I based highlighted fourth greater here in historically, operations. of of in you -- kind of you've think you through in the quarter quarter, highlighted sequential we this, undertaken think the economic quarter guys basis you about that all periods than first of think in that maybe sort X-K, on business about of the as sort as guys the items processes of the you than its better you average, flagged XXX the points, dynamic of as mean, about, guess David.

David Cobb

number. cost place. our of be would we think to of a achievable shipment, we There's would intention Jack. to, historical of get in try to kind sort to a that, point give it's per reference Yes, as certainly lower that beat we And that try our

opportunity Certainly, mentioned workforce. technologies, is that there's to around, a in macro going our So, and I areas, there. from an the and of mentioned, stable Judy have bit things, then dictate and though so as influence. And those

managing for on longer-term through business. that. And targets. just I'm really so, it's we'll quarter-to-quarter, And that not growth about the it's staying carefully But about manage focused these excited about

Jack Atkins

Okay.

of was in like that expecting I half the they've related significant a the as help last you they my guess, kind bargaining of this I employer to about don't follow-up labor then year, of week, think of been And doesn't timing? sort want quarter businesses terms inflation. new up maybe has can to step-up the large there through year. bring keeping conference in the how assure of union you reported their towards is you table sort but There sort that with negotiations, to question, this anything think just another watch unfolds kind their that of expenses they're there and like us fourth second feel their to that the of have market feel you of sort So, know call, contract,

the labor second a maybe that's investors, concern you. inflation that anything of I of the think there be know just you help year? Is there us point because some in can Thank could half through for

Judy McReynolds

we and our contract has feel are, from our like of employees their place, always what's the as minds. team in planned, negotiations, and Well, coming on our with we're in we're in are a for prepared directly what's hear I prepared regularly and about the leaders terms and field good them,

you're our prepared, and we're through I of experienced, work long and I've and typically, this. as way but these, a as through different, information, like been all good intentions And approach, we feel a you in so, very and can the place, they're number that good we're have

that. the on to do, so, so lot focused the of a expiration we're And obviously and to stay and now of contract, between there's work going

Jack Atkins

I that a Okay, would Is win-win-win? is UPS up? well? expectation you framed as your think to it expect it be what

Judy McReynolds

yet it's winning mean, I has Well, and not winning be really still worked outcome. I But comment certainly to rather want because through. always on that you situation

Jack Atkins

Okay, thank you.

Operator

proceed. comes with question next Research. Please Our Group from Scott Wolfe

Unidentified Analyst

Hey, Erin comments, on I January to guys, for bit this the is tonnage just actually Scott. little on follow-up wanted a the

January said that is, it's similar. seasonally, we're how the December like throughout like trying to that that curious, pickup. But quarter? of is expecting then I'm are trends seasonality. how And versus like versus normal I'm versus what seasonality deceleration quarter. the pretty just kind curious year-over-year you just I that know you're fourth throughout and

David Cobb

the December bit. about little a And certainly about to think periods when up shipments from about changes. of one sequential sort quarter a up of December, fourth in terms quarter, of January. it but that's in are back compared kind just talking lower you But trend. That's was versus quarter, I'll XX sequentially there's worst just month-to-month our tonnage X%, fourth third to sequentially past typically, when years, Yes, of tonnage and some January

demand comment about mean environment is I seasonality. it's above to is But this one really similar, customer would I hard So, though. say particular -- the month. it's trending certainly normal

Unidentified Analyst

Got in year? second fuel quickly impact half, net guys think the comps there's of how headwind think about you this that by tougher know about then just should that it, how mid-year? later okay. guess in do the be And some could potential that I fuel on the and I year, we

David Cobb

fuel yes of dollars of was big prices go. it's lower in I per so the and where peaked as of a is not revenue, price and But year XXXX. it'll level, have it certainly you now overall sure the last mentioned, there's We're in from XXXX this there's will spring the Yes, when spring, fuel part shipment. the kind impact the that think in versus of we'll

for us. So, a for tougher little our the mechanism as fuel that'll terms comp, of really be well as in surcharge works well customer,

in cost. fuel really, our in just our impacts a lot so, there's And of of business,

fuel And cover surcharge to serves mechanism so, that costs. those

Unidentified Analyst

the Okay, got it. thank Again, time. for you

David Cobb

Thank you.

Operator

next Our Capital Markets. Please with Fowler proceed. Todd comes question KeyBanc from

Todd Fowler

and Thanks good morning. great. Hey,

back CapEx, the the I network the going the expanding on estate, in like it's for you the got in maybe million over $XX and about environment to in changes, just talked have Thanks. $XX your at earmarked could I million plans, out growth think I know flexibility as the this you cadence So, you've expansion I wanted past thoughts on point, or year much do this environments? you've expansion real guess I environment, to ask about so, how but talk the and around know

David Cobb

it's in in and a estate what way. mean, talked to invested great position that number better that to as real flow we've a we did to similar have is and have sheet 'XX I about, cash area haven't Yes, ourselves XXXX. years, of the in the in Todd, we And great balance for plan that we

so, able perspective. the capacity of the that, looking count the and we're real And XXXX, adding shipment just end that to from the be a our from expand estate we're with again, have capacity to mid-single-digits by to to, by

every And an eventual grow. And we're ourselves is positioning so, like to Judy with there recessionary said, upturn. freight recession,

approach call equipment plans our want taking our to so, a for that, program we side. we're on be perspective and that's ownership cost timely equipment sort of what And around total of in our for and measured replacing and positioned CapEx our

is as spillover this little XXXX a do the that so, said, year because and of we from of And some we catch-up there. heavier some to needed

hopefully that helps. So,

Todd Fowler

sense the it. makes costs it Judy, But certainly bait. short-term in the the just quick thinking appreciate I'll versus just and of we David startup no for follow-up, you're that makes Yes, the piece about kind of take sense. long-term, a that Maybe

you and think like that are use I you paying based with with that the you have share with teaser you for or be about the customers that here technology teased that sounds it quarter. now, handling out maybe you us that willing some partnering in the maybe service what to with would a more is a that are technology, it But later put today? they'd or couple what some of something and to with details fee times willing now share you be them having us

Judy McReynolds

talked within before. only and not the we piloting within that we Well, that it's opportunities technology outside presented the and doing. work themselves ABF And think customers but about that are and the mean, have that process I I equipment network, we with have they're

for be that pilot, would a be doing we're work excited And eventually we're once work customer, for paid it's about through it. so, if that. the And obviously, going we we to

when things it's later you But It referred it connected is in when that we've exciting them. scenario, talk with quarter we But the the the, technology do again, be to a you flexibility the and in more thing. an And to over that so, will have some sometimes process have equipment you're about it. pilot to before.

to forward sharing more. look And so,

Todd Fowler

All right, sounds morning. the for Thanks time good. Well, tuned. stay this

Judy McReynolds

you. Thank

Operator

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

Ken Hoexter

thanks and and morning, the discussions great. David Good again, team years David over for and Hey, the congrats. all Judy,

David Cobb

Yes, Ken.

Ken Hoexter

it, you Yes, got Dave.

the pure discussion in shift It I just the I'm about heard But Q&A. pricing in talked about maybe seems confused fourth I've talk could you through you low-single-digits ex-fuel, the the here. If mean like a quarter. little

still there talking early in or 'XX. Now what's missing in tough you it's comps pricing of the categories? about I different January face something double-digits from Am

David Cobb

we double That's about. talk -- we're call that when talking really So, about have at price kind may double-digits offered past. to point long-term business that we that's we've in it some committed customers core the that of on the our or published

Judy McReynolds

contracts just what other in piece then that's that the And it's in year-over-year at the X% referring fourth renewed quarter we're year-over-year. the to. were And is January,

categories, on give the we're different really, color just of it's It's give is in you, the environment different pricing a indications but trying so, And is of to just you couple it that. areas strength what of different.

Ken Hoexter

contract, a you're hundredweight, low-single-digits firm remove, is like, you holding are moving January? you But per as then if is saying forward decelerating then looks I it the on into it it guess or revenue and you're

Danny Loe

those when involved So get I that. the core said, overall numbers, business, get like we you in kind we think you of look mix the piece,

And into revenue so, I are a a standpoint, per bringing like revenue, you're that fill could that but lower on hundredweight that some from could getting mix be the factors it we be transactional the business at mentioned, to But profitable. to. capacity empty it's

Judy McReynolds

customers, published call our So, shipping. What that's that core are customers regular Ken are we try those me rates. our have And let this. they

needs was at lanes, Danny to are be network when What levels the those when talked there. business particularly in weaker, with referencing are transactional we're market. when certain the in what supplementing that's and we that that so, just comes And about business filled

so, profile the think have not both and Danny because made But seeing revenue and pricing I can because strong involved. that, of change per real of earlier, any that's to in of that. environment hundredweight we're we're differences the And the comment be also you seeing some comparisons, the freight the

Ken Hoexter

and is I before into kind and was market. the kind I now run a after years That's clarification XXs, David you with do high decelerate, some you of the what you of, volumes in historical the as 'XX? with made guess this? as on do the understand expectation think what guess kind XXs. to sequential, plus through move, your I of for I seemed XX I some I we follow-up ratio, up of the we How costs shift, that XX because your above a talked costs on it operating normal think Maybe and level structural back like you've leverage helpful questions view And thoughts on of see Jack's are want going could the just bounce about got, then concern pricing go a into cost that in but if really there sequential on Judy,

Danny Loe

quarter. talking Yes, short-term, just to a comment in reference, of and quarter kind here, about first short-term fourth just

and about that given term, that basis the first XXX a to like XX% know or our targets despite the first you in second longer-term weak ABF, for first that's to it we environment, in long-term best of our operate weakest any a if year. that an think business of profit this in I quarter I freight a you margin XX% consistent a quarter, to give basis, those operating building and even that And being typically annual targets, margin a XX that's and quarter short so years added would fourth perspective kind more said, is quarter, past OR You probably operating know for profit of we're points that's perspective. for quarter and

manage not that So, we're build for trying you this again, quarter-to-quarter a with from to I'd longer-term view. to we're quarter trying share perspective,

Ken Hoexter

as guess, just flattish business, a a and given seasonal XQ was quarter if or first trying between that It's better maybe even sequential you're I'm bit not that to XQ. different helpful, a becomes than but such flat, I fourth becomes little given that retail quarter was seasonal and shifts exposed, shift know I then typically than normal, understand it

Judy McReynolds

benefit hard we're ourselves navigate -- it's ever also a we've than this think as really think to business positioned see opportunities what customers a help do, the where read mean, result. think but all right I to been we are, I through that. I need then of mean, I I And and to and is really Well, now. I better

environment predict So, an sure. but it's to for to try interesting

Ken Hoexter

and Great, to Thanks insights the progress look negotiations. appreciate the forward on Judy. the

Judy McReynolds

Thank you.

David Humphrey

a I more going Looks ask minutes, couple some to just want go a like over to got that few but questions. we're

So, we'll proceed. go ahead and

Operator

question comes Credit Rosa with from Our next proceed. Suisse. Please Ari

Ari Rosa

comments just pending to I'll echo And the morning. congrats everyone saying retirement. Good Great. David, else's in on

about was think was challenging the you transactional these shipment it confirm out but of also, So, we kind that's to the competitors. of things kind sounds one were I'm It it or opportunities clear business of saw to volume volume I like, in then whether been was the your one network some of how of or could empty things fill noteworthy less not call, that when and reason case the maybe when environment, talking of that you curious, and the the than throughout using capacity. easy that just then demand for returns context we've the declines a from returns? is

Danny Loe

business profitable want are reiterate this And fill I'm pointed to network. that business, again, our Danny, glad Yes, the in market is our point. using is transactional out we you got this Judy Hey, as empty price have I to business. we capacity

We commitment are making shipment-by-shipment a those. on

see of our core our the from our as business and additional ability business that day demands the move we fulfill pull back customers, basically, turn the of it shippers dials out comes our so, some of transactional the on as by is our will back can in. And we we of as of and to network to needs on bring the demand

Ari Rosa

then to going one, just employees. get quarter to paid first But guess that we ask expense in we expect perhaps. to Got super should helpful. in question, step-up modeling how mentioned it. How sharing I profit I that? in to And wanted does bonus be reflected model you than for the or That's compensation that's results, should

Danny Loe

pay We'll be OR out just for say to XXXX, glad bonus to the earn that were incentive. we able highest that on

and the year the Typically And so good to quarter the for programs, are that, And in -- we throughout year we that's glad those earnings full-year to accrued as for we process. those think a so, able to that's as made throughout when be do as our a we're thing accrued the employees. the that. we it's do particular we relative we way have is

Ari Rosa

it. Got

Okay, very helpful. time. for the Thanks

Judy McReynolds

Thank you, Ari.

Operator

question Kauffman comes Our Vertical from proceed. with Partners. Please next Research Jeff

Jeff Kauffman

miss Dave, a much. all talking may assume push much before billion going that that to you going Well, question, so very David, not to we're at $X.X strategic ask I'm I question go. more I'll long-term you guess a so you Judy have to in to just by Thank in your congratulations. you, And, and XXXX. revenue, targets the XXXX expressed forward. confidence achieving you

think the Organically, range. I 'XX if 'XX, to I it when there. know So, got revenue hit grow of to that low-end about gets we XX%-XX% it to don't

acquisitive us So, of idea would an can types building sense you give what franchise? make the potentially growth way the of you're

your of would CapEx as And the bump, the is, with leverage-wise question cash looks the very not much part strong. balance free sheet How then the but you there's this David for year, high strategic go right opportunity?

Judy McReynolds

existing to providing to for solutions seen scale look customers. as listening we're is that constantly what approach Jeff, they customers see we that add already that well, to us need. using, our opportunities with we're -- Okay, we'll you've We're do the

of better us or results on technologies that opportunities that achieve also customers. these startup going our the better advance and we're on could top pilots. looking what benefit sort are at are to to our help something And of space, then always also platform in have customer to either and We involved perform be some we doing the tech and disruptive execute line,

did that organically But -- you has position it, out company as an like we all at have I'll we don't robust see with invest that's say that's its and there those to acquisition, make this; advantageous in if XXXX. see have again, We're do David's to after we results on have we approach to where looking MoLo, which those active we're an just you how comes things. achieve in the that excited that. for we But to see But go could way we market, gets very a those So, the targets. what into can to a question. about opportunities

David Cobb

you it's, as and -- Yes,

Judy McReynolds

Yes.

David Cobb

that, and stay to an investment-grade metrics. just we would speaking, credit I'll within generally say And like

EBITDA And that go up place. we've we our another that so, EBITDA, you were -- just and you that's going -- just year. a the we could strong to or one-times borrow had for to have got facilities if And $XXX so under additional million

liquidity of like with there, so, CapEx and our plan at And the returns. and year, of place, million the good, with we're total the feel and have business $XXX a into end year, we in solid investing good a for good

are. so, And excited we we're where about

Jeff Kauffman

Well, that's one-and-a-half my question.

So, thank you.

David Humphrey

Thanks Jeff. a lot,

more question. I got Hey, Frank, we've for think time one

Operator

Our question Bruce proceed. with comes Please from Stifel. Chan

Bruce Chan

good Hey, morning, everyone.

those having how in chain more little with your of understand some the supply works a want up about maybe to pricing on some of around bit follow comments the conversations cross-selling process. broader And Just customers.

of all cross-selling rundown good the a benefits us slide. of gave You in the

an So, of thinking process? growth all is one just in there is sales growth cross-sold of Or and another? philosophically, those, separate any entirely RFP I maybe versus about inclination guess or that part to incentivize business the

Dennis Anderson

would holistically. Bruce. look our we customers that I Dennis. thanks, is at This say Yes,

in we are. so, and service needs not chain understand their going for typically their think specific prescribing them And until supply a what needs. we We're about

we and their and understanding we their and on be their today, needs what supply and pain points. what's about their happening And so, into might these chain going learn in shift, as tomorrow, conversations so get needs, about

be what into to the step of becomes process how built understanding -- once so, priced. need, and we that then then, to solution the that need be And identify we those needs

has so, And I'll Danny to other -- any he turn it in over case

Danny Loe

cost takes Yes, supply think just if from the you which the that think in of eliminate chain Dennis right could on optimization. what chain supply the we to the we what price. is, pressure off chain, we had said. supply -- up seeing about When we're conversations Really, follow about

the chain. point of described. taking I supply kind And by of, so, of lower that there's overall to kind not a to need out at We -- think, able were you inefficiencies

business have And the there. allows on to us margin need so, that and our excited, customers we that are

Dennis Anderson

the Yes. a To magnitude way an works, add to able chain cost that that, their reduction points supply how is optimize distribution they're product, having conversation that for changing Danny, of -- if that and and versus so, the to conversation. it's different for rate customer a frequency a different; rate cost shipping a you're the order significantly conversation their than that savings

Bruce Chan

your helpful I are an optimizing for as clarify as are simply, it that's service color. your or managing you all-in is Okay, no, and business more and growing, kind of towards now customers? baked maybe fully lines price just growing put to guess And

Danny Loe

of Bruce, I to solution the There's components that underneath conversation. what structure, the but pricing on Dennis we're is vary kind as still overall depending say those an it. would having described, individual

individual then holistically we But with the still after down it yes, And so, components customer. drives to think overall, that.

Bruce Chan

clear. very it, Got Thank you.

David Cobb

Thank you.

David Humphrey

concludes I Well, appreciate to We this been disconnect now. Okay. ask call. that much. very with We morning. Thank everybody think our you you us

Operator

conclude the call today. ask that and does your disconnect That everyone. Have conference participation, thank for day, you We you for great your line. a please

ArcBest (ARCB) 3 Feb 232022 Q4 Earnings call transcript