ArcBest Corporation

Good morning. My name is Dennis, and I will be your conference operator today. At this time, I would like to welcome everyone to the ARCBEST first quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then your number one, onto our telephone keypad. If you would like to withdraw your question, press star one again. I would now like to turn the conference over to Mr. David Humphrey, Vice President of Investor Relations. Please go ahead.

Thank you for joining us. Today, we'll provide an update on our business, walk you through the details of our recent first quarter of 2024 results, and then answer some questions. Joining me for the prepared remarks are Judy McReynolds, Chairman, President, and CEO of Artvest, Matt Beasley, Chief Financial Officer, and Seth Runzer, President of ABF Freight. In addition, Stephen Leonard, Chief Commercial Officer and President of Asset Lock Logistics, Dennis Anderson, Chief Strategy Officer, and Christopher Adkins, Vice President, Yield Strategy and Management, are available to help answer questions. To help you better understand ARCBEST and our 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 more complete discussion of factors that could affect ARPBEST's future results, please refer to the forward-looking statement section of our earnings press release and our 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 tables 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, there is a conference call slide deck that can be found on the ARCBEST website, arcb.com, in Exhibit 99.3 of the 8 that was filed earlier this morning. Before I turn the call over to Judy, I wanted to let you all know that I will be retiring from ARCBEST at the end of August, so the second quarter earnings conference call will be the last one I do. It's been a privilege being a part of this wonderful company for my entire career. I came here right out of college in 1983, and it was the best career decision I could have made. It's been an honor to have been part of the success story of growing from a $468 million LTL company into a multi-billion dollar integrated logistics company. But as the proud grandfather of seven, I'm looking forward to spending more time with my family. I look forward to watching and cheering for ArcBest as it continues to prosper in its second century of business. With that, I will now turn it over to Judy.

Good morning, everyone. I'd like to begin by expressing my heartfelt gratitude to David for his enormous contributions to ArcBest. As he prepares for a well-deserved retirement, we celebrate his remarkable tenure of nearly 41 years with us, 26 of which he spent leading our investor relations team. Throughout my time as CEO and even before that, I've had the privilege of working closely with David. He has been an outstanding colleague and friend, and his dedication and leadership have been instrumental to our success. I am excited to welcome Amy Mendenhall as our new head of investor relations. Amy has been with ARCBEST for 26 years and until recently served as vice president controller for asset light operations. Earlier this year, Amy assumed the role of treasurer and she has been working closely with David to ensure a seamless transition as she adds investor relations responsibilities. We believe the core of our best success is our people, and our people rose to the occasion this quarter as we navigated continued market softness and weather events. Despite these challenges, we delivered solid first quarter results, including generating $1 billion in revenue and nearly $43 million in non-GAAP operating income. Our focus remains on efficiently running our business, delivering a high-quality service that our customers value, and effectively managing costs. Here are some key highlights from the first quarter that show our continued focus on our three-point strategy of accelerating growth, increasing efficiency, and driving innovation, all while delivering a high-quality service that our customers value and effectively managing costs. Demand for our services remains strong with a solid pipeline that has grown by 35% since the start of the year as ArcVest continues to act as a trusted advisor to customers, helping them solve their logistics challenges. We have seen positive trends in our core asset-based business, with daily shipments and tonnage both increasing over last year. Our asset-light shipment volume has grown significantly, with double-digit growth in the managed transportation solution. This is a testament to our commitment to helping our customers optimize their supply chains. A large and longtime customer recently told us how much they value our hands-on approach to creating logistic strategies that enhance flexibility in their network, increasing efficiencies, and reducing costs. Despite severe weather conditions in January, we achieved the highest on-time performance and network efficiency since 2021, a testament to our laser focus on operational excellence. We continue to make strategic investments to accelerate growth and increase operational efficiency. For instance, the opening of a new facility in Olathe, Kansas allowed us to relocate city operations from the Kansas City Distribution Center, leading to a significant increase in productivity across the facilities. We anticipate similar productivity gains with the upcoming Lithia Springs, Georgia facility set to open in June, which will enable us to relocate our Atlanta area city operations from our Atlanta area distribution center. And we remain committed to innovation. In March, we announced the next step in our box suite, Fox Smart Autonomy, which includes forklifts and reach trucks that leverage automation and tele-operations when needed. This transformational solution empowers customers to unlock supply chain efficiencies across their facilities. Before I pass the call to Matt, I'd like to address the non-cash impairment charge related to ArcBest's equity investment in Phantom Auto, which resulted in a $22 million reduction in net income. For context, in January of 2022, ArcBest announced a $25 million investment in Phantom Auto as a part of a transformative initiative centered around remote-operated autonomous forklifts developed for use in ArcBest customer locations. Since our March launch of the Vox Smart Autonomy solution, we've seen significant customer interest, and we currently have pilots underway with key customers. These pilots are leveraging our own technology solution for any required teleoperations instead of the Phantom Auto solution we previously used. Vox is just one example of our proud legacy of developing creative solutions and investing in strategic and transformative initiatives. We remain encouraged by our progress and are committed to staying involved in leading-edge innovations to help our customers solve real supply chain challenges. And with that, I'll turn it over to Matt to take you through the results in more detail.