EX-99.2 4 tm2128772d1_ex99-2.htm EXHIBIT 99.2

 

Exhibit 99.2

 

MOLO SOLUTIONS ACQUISITION September 29, 2021

 

 

The following is a “safe harbor” statement under the Private Securities Litigation Reform Act of 1995 : Certain statements and information contained in this presentation that are not based on historical facts may constitute “forward - looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Terms su ch as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “foresee,” “intend,” “may,” “plan,” “predict,” “project,” “scheduled,” “should,” “would,” and similar expressions and the negatives of such terms are intended to identify forward - looking statements. These statements are based on management’s beliefs, assumptions, and expectations based on currently available information, are not guarantees of future pe rfo rmance, and involve certain risks and uncertainties (some of which are beyond our control). Although we believe that the expectations reflected in these forward - looking statements are reasonable as and when mad e, we cannot provide assurance that our expectations will prove to be correct. Actual outcomes and results could materially differ from what is expressed, implied, or forecasted in these statements due to a numb er of factors, including, but not limited to: widespread outbreak of an illness or disease, including the COVID - 19 pandemic and its effects, or any other public health crisis, as well as regulatory measures implemented i n response to such events; external events which may adversely affect us or the third parties who provide services for us, for which our business continuity plans may not adequately prepare us; a failure of our inf ormation systems, including disruptions or failures of services essential to our operations or upon which our information technology platforms rely, data breach, and/or cybersecurity incidents; interruption or failure of third - party software or information technology systems or licenses; untimely or ineffective development and implementation of, or failure to realize potential benefits associated with, new or enhanced technology or pr oce sses, including the pilot test program at ABF Freight; the loss or reduction of business from large customers; the ability to manage our cost structure, and the timing and performance of growth initiatives; inabili ty to close the contemplated MoLo acquisition in the anticipated timeframe or at all; the cost, integration, and performance of any recent or future acquisitions, including the MoLo acquisition, and the inability to reali ze the anticipated benefits of the acquisition within the expected time period or at all; the timing or amount of the earnout payments for the MoLo acquisition, if any; maintaining our corporate reputation and intellectual pro per ty rights; competitive initiatives and pricing pressures; increased prices for and decreased availability of new revenue equipment, decreases in value of used revenue equipment, and higher costs of equipment - related opera ting expenses such as maintenance, fuel, and related taxes; availability of fuel, the effect of volatility in fuel prices and the associated changes in fuel surcharges on securing increases in base freight rates , a nd the inability to collect fuel surcharges; relationships with employees, including unions, and our ability to attract, retain, and develop employees; unfavorable terms of, or the inability to reach agreement on, future c oll ective bargaining agreements or a workforce stoppage by our employees covered under ABF Freight’s collective bargaining agreement; union employee wages and benefits, including changes in required contributions to mul tiemployer plans; availability and cost of reliable third - party services; our ability to secure independent owner operators and/or operational or regulatory issues related to our use of their services; litigation o r c laims asserted against us; governmental regulations; environmental laws and regulations, including emissions - control regulations; default on covenants of financing arrangements and the availability and terms of future financing arrangements; self - insurance claims and insurance premium costs; potential impairment of goodwill and intangible assets; general economic conditions and related shifts in market demand that impact the pe rformance and needs of industries we serve and/or limit our customers’ access to adequate financial resources; seasonal fluctuations and adverse weather conditions; and other financial, operational, and leg al risks and uncertainties detailed from time to time in ArcBest Corporation’s public filings with the Securities and Exchange Commission (the “SEC”). For additional information regarding known material factors that could cause our actual results to differ from our projected res ults, please see our filings with the SEC, including our Annual Report on Form 10 - K, Quarterly Reports on Form 10 - Q, and Current Reports on Form 8 - K. Readers are cautioned not to place undue reliance on forward - looking statements, which speak only as of the date hereof. We unde rtake no obligation to publicly update or revise any forward - looking statements after the date they are made, whether as a result of new information, future events, or otherwise. Forward Looking Statements 2

 

 

CONTINUING GROWTH MOMENTUM AND STRATEGY ADVANCEMENT AT ARCBEST 3 Year - to - Date September 2021 Revenue Growth (1) : Consolidated 32% Asset - Based 24% Asset - Light ArcBest 55% (2) Year - to - Date September 2021 Asset - Based Operating Ratio of 89.6% (3) ​ (As of 6/30/21) Cash Balance: $423M ($185M Net Cash) Debt Maintenance: 0.7X Debt to LTM EBITDAR (4) Total liquidity: $662M Focused hiring/retention initiatives in both Asset - Based and Asset - Light Increasing investments in Asset - Based equipment and real estate High customer retention levels (increases by 10 percentage points when multiple solutions are provided) ​ STRONG BUSINESS MOMENTUM ​ SOLID FINANCIAL POSITION ​ STRATEGIC PROGRESS See footnotes in Additional Information section of this presentation (3) and (4) reflect Non - GAAP results. See Reconciliations of GAAP to non - GAAP Financial Measures in the Additional Information s ection of this presentation.

 

 

1 Provides expanded access to truckload capacity partners 2 Accelerates growth of the Asset - Light business 3 Expands revenue opportunities 4 Enhances shareholder value 5 Strengthens shared culture of customer obsession 6 Accretive to earnings in the first full year of ownership ACQUISITION HIGHLIGHTS 4 4 ​ +

 

 

Key Leadership Accolades Matthew Vogrich – President & COO ▪ 4+ years of supply chain experience at IBM prior to founding MoLo ▪ Focused on driving MoLo’s operational excellence ▪ Entrepreneur of the Year 2021 ® Ernst & Young Midwest award winner 5 Andrew Silver – CEO ▪ Previously served as Managing Director at Coyote Logistics ▪ 15 years of industry experience ▪ Entrepreneur of the Year 2021 ® Ernst & Young Midwest award winner Inc. Best Workplaces 2021 Forbes 2021 Best Startup Employers Built In 2021 Best Places To Work Top - ranked transportation and logistics company Inc. 5000 2021 Fastest - Growing Private Companies ABOUT MOLO Business Overview • Founded in 2017 • One of the fastest growing truckload brokers in North America (120% YoY revenue growth (5) ) • Prioritizes long - term shipper and carrier relationships • Headquartered in Chicago with an office in Nashville Brokerage Service Offerings x Truckload x Dedicated Capacity x Dry Van x Flatbed x Refrigerated x 24/7 Tracking x GPS Integration

 

 

6 6 COMBINED COMPANY TO BENEFIT FROM ENHANCED SCALE Leading Customer Delivery Platform in Growing Domestic Transportation Management Marketplace [$91 Billion*] ​ + ​ Revenue (6) ​ Employees ​ Expertise ​ Carriers ​ Customers $600M Asset - Light ~500 ~500 TL brokerage and entrepreneurial mindset ~45,000 $1.2B Asset - Light $2.3B Asset - Based ~14,000 Nearly 100 - year history as a trusted logistics provider ~40,000 ~30,000 ~14,500 Improved value proposition for customers, carriers, employees and shareholders ~30,500 ~70,000 ​ (Net of overlap) $4.1B *Source: Armstrong & Associates, as of August 2021

 

 

TRANSACTION OVERVIEW 7 • $235M at close (funded with A rcBest cash) • Substanti al earnout potential based on future adjusted EBITDA performance (7) (2023 - 2025) • Treated as an asset purchase for tax purposes ​ PRICE • Subject to regulatory clearances and customary closing conditions • Transaction expected to close in 4Q 2021 ​ TIMING • To be reported in the Asset - Light ArcBest segment with the ArcBest truckload brokerage business • Leveraging of best practices and advancements in technologies across organizations ​ INTEGRATION ​ SYNERGIES & ACCRETION • Substantial synergy opportunities, including revenue growth and economies of scale • Accretive to earnings before acquisition - related amortization in the first full year of ownership (2022) • Accretive to ArcBest returns on capital in the first full year of ownership (2022)

 

 

8 EARNOUT AGREEMENT Mutually aligns our respective interests in significantly growing our truckload brokerage and related capabilities over the long - term *Incremental Adjusted EBITDA (7) at 100% Target – 2023: $25 Million; 2024: $33 Million; 2025: $44 Million (millions, except %) Threshold Target* Maximum Adjusted EBITDA (7) % of Target 80% 100% 300% 2021 Initial Purchase Price $235 $235 $235 2022 No earnout No earnout No earnout 2023, 2024 and 2025 Cumulative Potential Earnout Payments $95 $215 $455 Total Cumulative Potential Consideration (including initial purchase price of $235) $330 $450 $690 2022 – Designated for integration of best practices with continued growth 2023, 2024, and 2025 annual earnout potential based on incremental adjusted EBITDA (7) ​ (8)

 

 

9 MOLO ACQUISITION ADVANCES STRATEGY 56% 44% 66% 34% ▪ Cash Balance: $423M ($ 185 M Net Cash) ▪ Debt Maintenance: 0.7X Debt to LTM EBITDAR (4) ▪ Total Liquidity: $662M • Cash Balance: $188M ($50M Net Debt ) • Debt Maintenance: 0.7X Debt to LTM EBITDAR (4) • Total Liquidity: $427M ​ $2.3B ​ $1.8B ​ Asset - Light ​ Asset - Based ​ $2.3B ​ $1.2B ​ Asset - Light ​ Asset - Based SOLID FINANCIAL POSITION BALANCED REVENUE MIX (6) ​ PRE - ACQUISITION ​ POST - ACQUISITION ​ (as of 6/30/21) ​ (Pro Forma as of 6/30/21)

 

 

10 MOLO ACQUISITION DELIVERS ON ARCBEST THREE - POINT STRATEGY * 1 2 3 More Balanced Business Mix Accelerate Asset - Light growth Continue to grow Asset - Based business Optimize Cost Structure Advance adoption of innovative technologies Expand Revenue Opportunities Deepen customer relationships Secure new customers ​ x ​ x ​ x *ArcBest’s previously disclosed three - point strategy Enhanced Shareholder Value

 

 

11 • Customer engagement focus: - Voice of the customer - Customer analytics • Online access to all ArcBest services through arcb.com • Robust API/EDI connectivity • Serving shippers and capacity providers in the channels they desire • Seamless access to multiple service options quoted on one shipment request • Pricing intelligence • Digital connectivity to capacity sources • Algorithmic matching of capacity sources to shipments • Asset - based optimization CUSTOMER EXPERIENCE ARCBEST CAPACITY MOLO ACQUISITION FURTHER ADVANCES OUR DIGITAL BUSINESS CAPABILITIES

 

 

1 Provides expanded access to truckload capacity partners 2 Accelerates growth of the Asset - Light business 3 Expands revenue opportunities 4 Enhances shareholder value 5 Strengthens shared culture of customer obsession 6 Accretive to earnings in the first full year of ownership ACQUISITION HIGHLIGHTS 12 12 ​ +

 

 

13 ADDITIONAL INFORMATION

 

 

14 FOOTNOTES The following footnotes apply throughout the presentation. 1) Preliminary, expected year - to - date revenue per day through September 30, 2021,​ compared to the same prior year period. 2) Represents the Asset - Light ArcBest segment (not including FleetNet). 3) Preliminary, expected year - to - date Asset - Based non - GAAP operating ratio through September 30, 2021. Reconciliations of GAAP to n on - GAAP operating segment results will be provided in ArcBest’s third quarter 2021 earnings press release. For year - to - date through September 30, 2021, the non - GAAP adjustment to the Asset - Based operating ratio represents pre - tax innovative technology costs associated with the freight handlin g pilot test program at ABF Freight. 4) EBITDAR is defined as net income before interest, taxes, depreciation, amortization and rent (“EBITDAR”). See non - GAAP reconcili ation on following slide. 5) MoLo’s full year 2021 expected revenue compared to full year 2020 revenue. 6) ArcBest revenue based on last twelve months as of June 30, 2021 (before other revenues and intercompany eliminations). Asset - Lig ht represents the combined revenues of our ArcBest and FleetNet operating segments. MoLo revenue based on expected full year 2021 revenue. 7) As related to this acquisition, adjusted EBITDA represents operating income adjusted for depreciation and amortization and th e c hange in contingent consideration. 8) Under this agreement, potential earnout payments are based on incremental EBITDA improvements from the combined performance o f t he MoLo and ArcBest truckload brokerage businesses. The EBITDA amounts will be calculated on an adjusted basis including certain assumed cost al loc ations and reflects incremental improvements over pre - acquisition performance levels. The Proforma Brokerage Adjusted EBITDA amounts were negotiate d between the parties solely for the purpose of determining the amount of future earnout payments and should not be used to determine the expected or actual future financial contributions of the combined truckload brokerage business of MoLo and ArcBest.

 

 

15 RECONCILIATIONS OF GAAP TO NON - GAAP FINANCIAL MEASURES (Unaudited) Note: ArcBest Corporation reports its financial results in accordance with generally accepted accounting principles (“GAAP”) . H owever, management believes that certain non - GAAP performance measures utilized for internal analysis provides analysts, investors, and others the same information that we use in ternally for purposes of assessing our core operating performance and provides meaningful comparisons between current and prior period results, as well as important information re gar ding performance trends. Accordingly, using these measures improves comparability in analyzing our performance because it removes the impact of items from operating results th at, in management's opinion, do not reflect our core operating performance. Non - GAAP financial measures should be viewed in addition to, and not as an alternative for, our reported results. These financial measures should not be construed as better measurements than operating income (loss), operating cash flow, net income (loss) or earnings (loss) per sha re, as determined under GAAP. Twelve Months Ended June 30, 2021 ArcBest Corporation - Consolidated ($ millions) Consolidated Adjusted EBITDAR Net Income $ 137.7 Interest and other related financing costs 10.1 Income tax provision 36.5 Depreciation and amortization 120.9 Amortization of share - based compensation 11.1 Amortization of actuarial losses of benefit plans and pension settlement expense (0.6) Rent expense 24.4 Consolidated Adjusted EBITDAR $ 340.1