ArcBest Corporation

Greetings and welcome to the ARCBEST fourth quarter 2021 earnings conference call. At the start of the presentation, all lines will be in a listen-only mode. Afterwards, we will conduct a question and answer session. At that time, if you have a question, please press the 1, followed by the 4 on your telephone. If at any time during the conference you need to reach an operator, please press star 0. As a reminder, today's call has been recorded Tuesday, February 1, 2022. I would now like to send the conference over to David Humphrey, Vice President of Investor Relations. Please go ahead, sir.

Thank you for joining us. On today's call, we will walk you through the details of our recent fourth quarter and full year 2021 results. Our presentation will be done by Judy McReynolds, Chairman, President, and CEO of ARCBEST, and David Cobb, Chief Financial Officer of ARCBEST. Also joining us for the question and answer period will be Danny Lowe, ARTBEST President of Asset Light Logistics and Chief Yield Officer, Dennis Anderson, ARTBEST Chief Customer Officer, and Michael Newcity, ARTBEST Chief Innovation Officer and President of ARTBEST Technologies. To help you better understand ARTBEST and its results, some forward-looking statements could be made during this call. Forward-looking statements, by their very nature, are subject to uncertainties and risks. For a more complete discussion of factors that could affect the company's future results, please refer to the forward-looking statement section of the company's press release and the company's most recent SEC public filings. To provide meaningful comparisons, certain information discussed in this call includes non-GAAP financial measures as outlined and described in the table in our earnings press release. Reconciliations of the GAAP financial measures to the related non-GAAP measures discussed in this call are also provided in the Additional Information section of the presentation slides. As a reminder, the slides that Judy and David will be reviewing here can be found on the ARCBEST website, arcb.com, in Exhibit 99.3 of the 8-K that was filed earlier this morning, or you can follow along with us on the webcast. We will now begin with Judy.

Thank you, David, and good morning, everyone. I want to start out today by recognizing our excellent employees and our amazing leadership team for their contributions to our success and their hard work that enabled us to deliver outstanding, record-breaking fourth quarter and full year results. In 2021, challenges across the world contributed to demand for our services reaching all-time highs. While this certainly was a factor in our success over the past year, I credit the exceptional nature of our achievement to the ARCBEST team and their unwavering commitment to our strategic vision and years of hard work. This has set us up for success, even in the midst of a global pandemic. Before I take the time to look back at our quarter and year in more detail, I want to look forward. Our business stands apart because of several key differentiators. Our dedication to and focus on our customers. We are strategic advisors to our customers, building trust to ensure we're a reliable partner. This partnership is what drives our long-term growth. Our employees are adaptable and dedicated to our business. Throughout the pandemic and this past year, Our team has successfully navigated ongoing change and pressures in the market to deliver for our customers. Our smart strategic investments, especially in technology. We have a rich history of delivering innovations and leading edge solutions that make it easier for our customers, employees, and carriers to do business. It is central to our ongoing strategy. We continuously analyze emerging technologies and collaborate with partners to ensure we can continue supporting our customers' success in the future. And we have alignment across the organization on our growth strategy. Our mission and our strategy are clear and are communicated regularly across the entire organization. When we're aligned and working toward the same goals, success follows. As a team and an organization, we've made great progress and we have no intentions of slowing down as we continue to capitalize on the significant opportunities ahead. I'll highlight some key achievements from our fourth quarter and full year and discuss our prospects for continued business success in 2022 and beyond. And then David Cobb will take you through the specifics of the quarterly and annual financials. And finally, I'll offer a few additional comments before we open it up for some questions. Slide four shows several milestones we reached in 2021. I am so pleased to be able to share with you ARCBEST's fourth quarter and full year 2021 financial results. In the fourth quarter, we delivered the highest quarterly revenue and net income in our company's nearly 100-year history. For the full year of 2021, our revenue was $4 billion, and our non-GAAP operating income increased 149%. 2021 was a big year for ArcBest's infrastructure growth due to the addition of Molo Solutions in November, which further deepened our customer relationships. Through this acquisition, we became a top 15 U.S. truckload broker, strengthening our position in the $91 billion domestic transportation management market. It also more than doubled our number of carrier partners, providing more resources for serving our customers. We moved closer to our strategic long-term goal of mirroring our customers' transportation spend as reflected in our revenue mix between asset-based and asset-light segments. A decade ago, the asset light segment represented less than 10% of ARCBEST revenue. This grew to 44% by the end of 2021. During the recent year, we also made significant progress on our corporate ESG and DEI initiatives. I'll share more details on these efforts later in the call. Importantly, we were also able to continue our track record of balanced capital allocation. Since the beginning of 2021, we have returned $116 million of capital to shareholders through share repurchases and dividends. This was meaningfully increased by the $100 million accelerated share repurchase agreement we entered into in the fourth quarter and completed last month. In line with our balanced capital allocation strategy and in light of ARCBEST's continued strong free cash flow generation, shareholder returns are a priority, and that will continue in 2022. And finally, we announced a $25 million investment in Phantom Auto, the leading provider of human-centered remote operations software. This investment aligns with our long-term goals. complementing our existing innovation pipeline, technology roadmap and partnerships, and building on the important work already underway to support our customer success and, in return, strengthen our business for the benefit of all stakeholders. Slide 5 outlines our three-point strategy to grow revenue and improve margins, which we discussed in prior quarters. Our recent financial results and some of the key highlights that I just mentioned, including our revenue growth and more balanced revenue mix, illustrate the success we are already seeing as we execute on each tenant of this strategy. As a company, we are always looking at strategic investments across our business to enhance shareholder value and efficiently serve customers. Two key elements involved with that are investing in technology and investing in our people. Through technology investment using new and innovative solutions, we're able to improve efficiencies, lower costs, and overcome operational disruptions. We also invest in our people, who are key to our success. We want to ensure that they have the tools, resources, and means to do their jobs every day. These investments enable us to expand our revenue opportunities by serving our customers efficiently. As demonstrated on slide six, our growth strategy is grounded in the deep relationships we develop with our customers. We are constantly working to more effectively partner with them by expanding our offering of integrated logistics services. We continue to build our suite of solutions to serve our customers in multiple ways. When customers buy multiple solutions from us, we benefit from higher account revenues, improved profitability, and better retention. More than six out of every 10 ArcBest customers utilizing our asset-light services are also using ABF Freight for LTL services. Our strategy of offering a comprehensive set of logistics solutions positions ArcBest for sustainable, long-term growth, and value creation. ArcVest has a rich history of innovation, and our technology advancements help us better serve our customers, our employees, and our carrier partners. As a result, more than three-fourths of our revenue comes from digitally connected customers who do business with us through channels like ARCB.com, APIs, or other digital connections. Having these digital connections established enables us to more efficiently scale as we further grow the business. Technology is an important element to ensure that our services are provided in the most efficient manner and are serving customers in the places they want to do business. And now I'll turn it over to David Cobb for more details on our fourth quarter and full year results.