ArcBest Corporation Q4 FY2025 earnings call

• Seth Runser highlighted ArcBest's solid fourth quarter and full-year results, navigating freight recession with focus on growth, efficiency, and innovation. Welcomed Mac Pinkerton as COO of Asset Light and new independent directors. Asset-based LTL shipments up 2%, managed solutions grew, and advanced technology projects. - Matt Beasley discussed consolidated revenue of $973 million, down 3% year over year. Non-GAAP operating income from continuing operations was $14 million. Asset-based non-GAAP operating income decreased $28 million, while Asset Light achieved breakeven. Talked about first-quarter operating ratio expectations and capital allocation, including net CapEx and returning capital to shareholders.

In the fourth quarter, asset-based LTL shipments increased 2% year over year, averaging about 20,000 shipments per day. Fourth-quarter revenue was $649 million, flat on a per-day basis. ABS operating ratio was 96.2%, up 420 basis points year over year. Revenue per hundredweight declined ~3% due to soft manufacturing vertical. Asset-light segment fourth-quarter revenue was $354 million, daily decrease 5%. Shipments per day were up slightly as managed solutions growth offset truckload volume reduction. Revenue per shipment decreased 6% due to soft freight market and higher managed business mix. Non-GAAP operating results were breakeven for the quarter. Full-year 2025 Asset Light delivered over $1 million in non-GAAP operating profit, had record employee productivity, and historic low in SG&A cost per shipment.

• First-quarter operating ratio expected to increase 100 to 200 basis points sequentially, better than typical seasonality. - Asset Light expects an operating loss of up to $1 million in Q1. - 2026 net CapEx anticipated in the range of $150 to $170 million, below 5% of revenue. - Continues to return capital to shareholders through share repurchases and dividends.

• Severe winter weather disrupted transportation networks and created challenges for operations. - Ongoing freight market volatility and macroeconomic uncertainties impacting business performance.

Q: Follow-up on January outlook and mix change.

A: Seth Runser discussed weather impacts, mix trends, and OR expectations, mentioning dynamic shipments trending heavier and OR expectations better than history but still reflecting macro weakness.

Q: Mix normalization and competitive dynamics.

A: Eddie Sorg and Seth Runser talked about mix management, disciplined pricing, and competitive focus, with mix influenced by macro and focus on profitable growth.

Q: January trends idiosyncratic or industry-wide and Amazon's potential entry.

A: Matt Beasley said January trends had specific mix dynamics, and Seth Runser noted focus on internal opportunities despite monitoring competitors.

Q: Insights on Mac Pinkerton's first weeks at Asset Light.

A: Mac Pinkerton expressed excitement, confidence in meeting Investor Day targets, and focus on making Asset Light more meaningful.

Q: Signposts of freight demand improvement.

A: Seth Runser and Eddie Sorg mentioned customer cost reduction efforts, bright spots in certain sectors, and strong pipeline due to integrated logistics approach.

Q: Competitive pricing environment and mix volume growth.

A: Seth Runser talked about strengthening yield metrics and disciplined pricing, while Eddie Sorg discussed mix management and profit maximization.

Q: Mix balance and dynamic pricing in upcycle.

A: Seth Runser and Eddie Sorg discussed mix fluctuation, core business focus, and dynamic pricing potential to improve pricing in upcycle.

Q: Operations recovery after winter storm and real estate footprint.

A: Seth Runser and Matt Beasley talked about operational recovery efforts and strategic real estate investments adding capacity.

Q: Leveraging AI and productivity investments in recovery.

A: Seth Runser discussed AI initiatives as foundational, focus on people and processes, and potential to scale without incremental cost.

Q: Long-term outlook and EPS acceleration.

A: Seth Runser and Matt Beasley reaffirmed 2028 targets, focus on controllable initiatives, and expectation of macro improvement aiding targets.

Q: 1Q guidance and seasonality.

A: Matt Beasley discussed 1Q tonnage and OR assumptions, expecting tonnage to moderate and OR within guidance range, with confidence in positioning for 2Q.