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ODFL Old Dominion Freight Line

Participants
David Congdon Executive Chairman
Greg Gantt CEO, President & Director
Adam Satterfield SVP, Finance, CFO & Assistant Secretary
Christian Wetherbee Citigroup
Allison Landry Crédit Suisse
Amit Mehrotra Deutsche Bank
Albert Delco Stephens Inc.
Jason Seidl Cowen and Company
Ariel Rosa Bank of America Merrill Lynch
Matthew Brooklier Buckingham Research
Todd Fowler KeyBanc Capital Markets
David Ross Stifel, Nicolaus & Company
Willard Milby Seaport Global Securities
Scott Group Wolfe Research
Benjamin Hartford Robert W. Baird & Co.
Lee Klaskow Bloomberg Intelligence
Call transcript
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Operator

Good morning, and welcome to the Fourth Quarter and 2018 Conference Call for Old Dominion Freight Line. Today's call is being recorded and will be available for replay beginning today and through February 15, by dialing 719-457-0820. The replay passcode is 6987290. The replay may also be accessed through March 7 at the company's website. This conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements, among others, regarding Old Dominion's expected financial and operating performance.

statements historical this to fact statements. any not that be purpose, of statements may this made call during are forward-looking For be deemed limiting plans, believes, are Without to the similar intended statements. and expressions anticipates, forward-looking identify foregoing, the expects words

update differ The statements these release. sir. of company and in important and the forth forward-looking be company's affected Dominion's undertakes in the from Exchange any or And this no Commission ahead, filings operations forward-looking Mr. future I with materially Chairman, this information, Executive opening whether that obligation factors, cautioned by otherwise. may discussed result turn others, Congdon. to would news among consequently, results hereby actual a in results may for over Instructions]. Please to statements. You're go At and morning's publicly time, conference as set Old to the the the Securities events David [Operator statements, new remarks, like the

David Congdon

and CEO; Good we take quarter. and me Old are President our welcome call. be our remarks, I After to questions. fourth Greg to pleased will strong am the financial Gantt, some call results With glad quarter on CFO. brief the conference Adam your today morning, report Dominion's Satterfield, and our fourth to for

on value service market our capacity to of We proposition share for of execution center the produced long-term year fair third Financial results quarter extraordinary profitability. strategy. service ratio operating an the our below investing for is quarter to also Dominion, at billion our $X off annual consistent and year XX%. while price a believe growth. the company superior and an shippers, records ongoing also in the ability For performance and revenue in reflect support a exceeded setting row, for growth in providing to revenue This capped win a continuously new we based Old our

OD claim our X.X% our revenue proud provided of we invest family and are of team employees, to with that for quarter. continue cargo in only our ratio deliveries also We customers on-time fourth and the of XX%

disruption history, based While revenue economy from XXXX. network density. XXXX be XXXX Even one another to we to feedback and environment political forward to and our And years in the fourth there of Pricing support though to the issues, some for a macroeconomic should positive customers more year to and been here best company's profitability ability in outlook now favorable our is with volumes on our some for continues remains in quarter. domestic the strong indexes. has growth associated continued marked recent on increase and operating economy domestic yet Greg opportunities our look of the details provide other

Greg Gantt

and our once and Being producing our good in member team's for customer's for of is concept, as strategic the pretax keep again ongoing delivered and and the on needs. our results customers. about To relationships year we technology. been providing strengthen years. industry made OD been and always freight OD them increase of maintain customers superior many power also quarter successful our of the requires the customer plan understands grow and while significant generally has with family serve execution employees' employees revenue The and each that family standards, and help David, our XX.X% plan now of team an income OD in our the and with to a the XX.X%. the centered be customers our flexibility relationships, a in to The able promises this require to successful. provide to technology promise, the financial these build our demonstrate The quarter fourth service and place promise capacity morning. of relationships in Thanks, capacity, in an investments increase The has

to investments, customers center is expand philosophy offsetting we these management important cost network. yield add designed Our while particularly help service is and increases support as our understanding and new also our of cost inflationary

Our surcharges, in revenue in three can operating a drive for OR this year, per the the produced of we the sub-XX an key lower. during ratio fuel operating continue believe we and ratio now to ratio increased operating hundredweight, Having the X.X% overall quarters for excluding XX% XXXX even and component improvement was our straight the year. below

favorable volumes ingredients the that long ratio. allows require environment us on long-term maintained center leverage overall have key of Driving the the of in both a which macro the which service and existing the operating operating ratio. service improvement positively improves existing network of support to density for impacts resulting We a focus yield, density and company's efficiency, through additional our operating center's improve network our

operations Given in network beyond the our existing our center additional intend centers. service of share, confidence expand winning XXX service to market we

limiting the of increase for the existing fleet, years. seven another to able factor few were to Our centers some as facilities XXXX network open projects. on timing service service in expansion we the our to construction of the believe ensure that and centers is will within it we capacity We plan not add next during additional depending service XXXX, centers volume as to overall well average XX-or-so a these growth

in lost of Dominion delivering have previously-mentioned on to industry-leading the our also position will in opportunity and growth. continue With initiatives improve operations. to a some opportunities regain the productivity an We profitable in revenue XXXX, unique and believe in XXXX, all ground will our relating cost further to Old to focus is we we

economy for discuss results in gains us confidence further the now, which shareholder our Our And to ability customer value. produce trends to gives quarter in demand long-term and in continue joining greater fourth be morning. outlook earnings Adam this our for in will financial us detail. favorable, Thanks

Adam Satterfield

improved fourth the quarterly and $X ratio for and you, good billion our revenue Dominion's XX.X% quarter, Greg, operating increased Thank XX.X%. morning. Old to to

XX.X% net increased tax our million. of As to before income these $XXX.X a result factors,

yield. pleased quarter however, quarter the Slight diluted due per XXXX. XX% of earnings volumes significant $X.XX, tax the the of XXXX. $XXX.X revenue that LTL growth pace due Our the that as our again in growth, the revenue included primarily XX.X% three in compared I to primarily the both to quarter to of once slowdown the revenue included which our share, fourth with fourth fourth of exceeded growth in was in increases to first for million and was of net quarters XXXX acceleration began benefit decreased

was the X.X% LTL per quarter to Our shipment. weight LTL tons decrease offset fourth per XXXX a in day X.X% partially the per by in that increased as compared increase X.X% with LTL day shipments

detailed trend weight LTL we we of expected in the also this day and per day a a with As tons similar was decrease seasonality. our On XXXX. per normal in sequential shipment half LTL the and first in expect through line basis, trend shipments third both call, quarter for per

As day the to X.X%. compared decreased tons decreased third day and quarter shipments LTL XXXX, per per X.X% LTL of

a XXX fourth salaries, of due revenue. operating a in both of XXX revenue. points to and to as points change improved wages and Our of percent operating in the ratio basis was our as costs percent XX.X% our quarter expenses direct improvement benefit basis overhead costs this and included improvement

XX.X% hired the was than full-time average at end headcount in first September the increase lower significantly headcount, of in the through that slightly at the we three of of December quarters end XXXX. year, While our the of as reflected

expenditures returned $XX.X and capital Capital $XXX.X million. million our cash This of Old Our was capacity $XXX.X repurchased anticipated share XXXX, million The workforce Dominion's manage $XXX.X to the million million million and approximately million for total quarter the our anticipated quarter, expected for for is and team execution the year. and service capital the our the to trends $XXX.X respectively. totaled expenditures fourth quarter replacement the the workforce Based were expand equipment do, amount sized. on our $XX.X our of to shares million fourth million shipment are paid center for total to and we that will network. appropriately of capacity we XXXX. and includes growth $XXX.X repurchases. operations dividends cycle, for continue shareholders in including flow believe We with $XXX always be fourth $XXX as currently from during of year

this quarter XXXX. first are dividend pleased quarterly we increase as our announce in a As to allows share prior release, will noted that us the to per This maintain the morning's XX.X% payout in year. to ratio dividend $X.XX similar

the the XXXX. One of well quarter We year. be annual broad the update the was shutdown. XXXX, rate the impacted by as severe effective negative for Our rate impact related the currently quarter XX.X% growth on of two of for and the was winter on last for to our anticipate effective XXXX our to revenue for tax as month weeks government first revenue XX.X% XX.X% tax the economy weather over was fourth January's

to way impact no a the is there on truly the our factors, basis month. for approximately per increased While X% day revenue of quantify these

floor first While remarks revenue this it's at questions month happy morning. the our political days time. concludes for in this the This this very still few XX%. and be for averaged early Operator, risk growth of open February is continues, to approximately we'll prepared

Operator

[Operator Citi. Instructions]. from And Wetherbee take Chris from our we'll question first

Christian Wetherbee

capable sense operating the I forward? of you don't operating progress there's of in terms, get in and you bigger look but of maybe pricing, ratio of how some can be you to what next the us you in kind to Can and step wanted you're about but the be sense been so where general think potential more maybe about on about you've couple on or to of that going I significant the pick clearly also of business guidance maybe able this improvements taking couple like term back years, comments sort made this on you efficiency know to over is a seems been as around next talk driving. of of sort shorter thinking up a think a the now quarters the may the go give make forward? picture to give happy you side and either

Adam Satterfield

Chris. Sure,

I to think about, talk had standpoint, from a improvement does recession. the I than we you want it's basis that quarter together at from low out out what this helped we and But strong the coming the into our through trend. time much of quarter pretty go fourth and density in I can the factors improved factors give I specific ratio network versus ratio the costs we as were of we don't this expected think to year definitely certainly incredible year, we some type at sequential when how of in this those And And it regard. on quarter helped on to really two important get an us back focus third point pretty standpoint, standpoint, operating the it able really year, we a fourth yield guidance operating as think basis for look points. going point line that the in mentioned, to go. always revenue with but especially we in year, look, picture really performance as heart to XXX big came OR and and we're it's normal terms volumes, the yield you compares continuing was in more of what we achieve from this combined a think, what improving had anticipated As the And think, the There well. when well

same that to than putting top the standpoint not that We'll we trends and forward, we to obviously, long-term long on and year been line continue of to but capacity, think growth as our business we'd that share drive certainly to continue opportunities of as certainly dollars a balance weighted, in and look revenue going the shipment yield probably is we've more what yield. with performance the got have mix not have this through the from Going the that term it's and achieving. the see a continue many standpoint, either. including at will had from add to continue generally line can like We a line to type we're I market continued the network. But bottom existing continue grow we'll from

Christian Wetherbee

Okay.

view XXXX? at we that a of So though point no the as you sort real from an perspective be stopping for should look OR this there's

Adam Satterfield

operating comments, Not margins center phenomenal and individual that Greg's I why incremental believe level, can ongoing improvement capacity for the centers. when adding it's look generating that tried that at we're think over that repeat the at the the That we these And we out in continue all. that's system is and service to, can us. we're improvement we've see ratio trend to seeing

David Congdon

quality and structure It's additional pricing improve. density a we itself I'll and from though business the way believe to rational the just that David, ratio cost stronger mixture about and our yield generally margins being in the operating which have with the add, variable is just we able priced environment, That fixed the have. help of our it's lends financial we'll this density we in just feel little of overall that economy, that. going network and believe across a the we which improvement and have, some forward, we to should

Christian Wetherbee

Okay. That's very helpful.

Greg Gantt

that keep It that versus in was best the improvement point perspective, a had This we'd basis in in is time. XXXX. XXXX XXX To year was ever year at Greg. record

Christian Wetherbee

impressive. certainly, very Yes,

for we're at seeing sorry, saw numbers what can terms I if -- then In have are them. follow-up that of of January? Can I'm sense give just give tonnage trending sort couple improved. missed on like you that a days, Jan-Feb, trends great. a in first us And be you now, obviously us you sounds where the of of February, just least a would it volumes

Adam Satterfield

with volume the about like suggest that for a and and any January where we a it's The perspective every the the is month pace, storms and off focus this had things and felt now -- XX%, lot broad reason impacted of in volumes terms are was year, as weather. Yes. like of really the us January, comments, deal day just number revenue through we in a other freight through revenue typically based the impacted the we macroeconomic to and of longer. Qs that same week more feel terms but this demand felt intentionally year, from as your in of shouldn't by really we the like month building. starting that's we short-term to we continue continue that, event, I that, out reports spot to of from onetime at last we we a at was moved from magnitude difference each moved team where detail year there data perspective give see of I but not talk and carriers that year was it the on customer put we're seeing year let's and, was mentioned, continues left was We'll in the in optimistic that the be much winter early get honestly, But that in the calls double-digit we're trends in like a investors last we good and, prepared the mentioned and K, well about Chris, our our the I optimism so the trends a few sales on that were the as that on. think, I

out starting strength. with So a spot year we good in we're feel like the

Operator

Landry Allison from question next from our take Crédit we'll And Suisse.

Allison Landry

about I wanted headcounts. the to ask

workforce the sized. mentioned is appropriately You

use comment driver rate XXXX? expect And good Or the you QX variability is headcount turnover run QX quarters? your a So versus in for of on bit QX? to a the do little sites could then there you in average

Adam Satterfield

think that think that's today back 'XX, with saw headcount, catch-up, why Last of growth were growth bit. shipment got playing I about year, the and the are where volumes. think going little we behind headcount a the I we we way our all we exceeding to our

together. term, generally fairly Over are those the long two close

We'll have to some basis the making good are And of a are I we're labor centers, daily probably that's what shape centers the service I and think flat. overall. like at looks this each that are, where that our we some we're do additions think, freight. evaluate in and staying we managing continuing force service on

as quarter. we're everybody next I this then growth. for workforce. point third And and X.X% about the think the a year's quarter increasing go the point from averages fourth ready in we're and is, increase example, that normally like fourth the by the first as through for likely getting we the the board increase It quarter, is into on generally typically

of then. realized in what call, was I this the felt on by last year, we we like we and think we were the fall shape last communicated good

Because kept can anticipating but the headcount growth. fairly still hold everybody year, we're that growth, the the in place. I we we've in anticipating of So early think steady part

you middle like. looks what with We will some at have the growth we'll is in when point year. more that Hopefully see higher, line later and year, time think, get to longer-term net the I in the our the basis, shipment just additions the growth we a that look by of headcount

as on, a And some we are that depend productivity will standpoint... of From turnover on gained well?

Allison Landry

to respect With the... Okay.

Adam Satterfield

ahead. Go

Allison Landry

No, ahead. no, go

Adam Satterfield

to and First our on a I'm of of driver between turnover drivers the less come the average and we then answer our program and going turnover actually -- for X% the the end your for graduates was about say, the -- those than in-house was year, rate to question. training X.X% were through X%. that By company little X/X

Allison Landry

Would tonnage? the from to come costs and related then Okay. will X expect the this you open to the XX mentioned through that Does going -- headwind there Excellent. [indiscernible] about think year, I service handle from think productivity the to that from additional I headwinds side, meaningful about any are the do in How we or centers? expectations the more XXXX. you that ability the costs benefits on know to offset X, you be service startup off XX opened And center six XX? to

Adam Satterfield

expenses don't significant. startup think of that customers in our gain scheme things, whole service share meet are to going expense. the I be should the but of it's help better our absorb, we to ability some I market some Allison, surely think, There and additional can

Operator

Amit our next from take Mehrotra Deutsche. And from question we'll

Amit Mehrotra

or downturn concerned and will sector. yields everyone rightfully LTL for is the come I about Adam, when wrongfully in guess, general the volume

about could Dominion in growth think you medium last it XX% is think revenue severe industrial the downturns? of opposite that still environment with cost showed So but performance helpful help kind the opportunities specifically think revenue you terms the on you if Old side limit you Certainly positioned and Do where would negative be decremental be in how XXs guys to recession, of January. in in OR you're to us environment I can margins of what in kind in now had of the seeing maybe that stellar more you the 'XX growth? low come

Adam Satterfield

service all serve for important that I to take a and The providing have the more but guess, are obviously little look how higher, total our save and cost. and so past in might at recession cost the with stick yield can to We really on-time and can area we what you be cheaper cost revenue overall has give been look claims X.X% customers. back just we've proposition was management we ratio, same 'XX a we when way by go of to things XX% If slowdown metrics we an period. and a X.X% can slowdown focused reacted that transportation than plan But to the well might our service trying prior be and the may in of invoice trade bit down continue strategic ultimately and overall slowdowns, our had our to customers a flatness value in industrial high, that busy. 'XX keep to customers then time slower service the back 'XX plan always the practices, that's and stuck to we've you to. on stay environment

potential we'd facilities any from looking service a sale others might and thing flow. that's generate competitors So opportunities be to become big any as the standpoint then available centers cash look and might that long-term at and for also

look we day-to-day we We but fact our way that at can cost, a that we've regain the little year, I from standpoint. think that. a So themselves efficient. way lost manage on think labor basis, despite in manage opportunities some operations we're we productivity our and we We lost any that obviously very productivity I may present regard, cost got opportunity the that across last a the

we think got and and you So ultimately the through there's look that bottom downturns, doing. we've to be look things multiple protect I history a at when that's go what line, prior can and of back trying in we'll

Amit Mehrotra

Right.

helpful. hasn't would growth how XXXX. to understand Okay, conceptually one as more incremental the expect that's follow that follow-up, growth. in been margins shipping just case to And I a equip evolve growth, shipment tonnage as closely continues costs trying to clearly

just as in maybe in can that think for expenses should relative relative OpEx you XXXX XXXX? operating shipment to a growth and how -- us or if your So shipment help trend about or OpEx to expectations

Adam Satterfield

but expecting we increase into somewhere kind to in I'm ultimately manage per cost a that's as cost, when and Sure. in you go we inflation type line we'd around and we essentially last basis, each I line-haul forecasted, different and do, pickup might ended the the on element would that this how things expect every of in started fuel When that employees what yield September. you're XXXX. those of shipment levels shipments, to essentially basis, is where with grow business -- Yes, the we we best year, costs as biggest same felt shipment have X.X%, a increase would we'll that the gave manage business that trying different about up up time similar thought new trying provided at all new ultimately think to [indiscernible]. excluding I be delivery we on on cost dollars per Might bringing the can. The component of year on be. X.X% of a be we're wage X.X% I of came or excluding like,

Operator

Brad our from Stephens. from take question next Delco We'll

Albert Delco

question density I is going density about really load pretty And I'm additional where It talked you a this want is, environment. average and like lot what high ask to in already your I seem mean? volumes is, does driving assume the

it loading cut of it more give kind don't what if that mind. dock Is you? handling? so out directs? additional benefits And explain you does Just Is density

Greg Gantt

delivery aspects think, to certainly, We improves they are help pickup there our several The get see. customers. It shorter and comes one density. the certainly I times is service the it'll that, see, distances think that different to to side. customers have the on of mind that first should response I our us

us. help Load you if and surely that'll grow factor an can business. factor help we our improve load make opportunity can got So more hopefully to We've our directs.

Now to you into spreading you a facilities there downside think out directs, making the you're additional comes back is open with it, tonnage that because about you're more if also Until locations. spreading out grow over tonnage. it,

deal with So we've we But as see of but back success opening the it we'll then a typically dip we we'll go, but course facilities. time. seen that over additional -- with you'll get nothing and

So I anything different. don't expect

closer is our can that competitors we and the advantage. give the what biggest think thing versus and to real them getting but customers our that's I response not, the

Albert Delco

improve that? still factor to So load of on though terms is your there room

Greg Gantt

load to Absolutely. standpoint. a get We'll happen. from Utopia That never factor never will

Albert Delco

one quick for... And a then

Adam Satterfield

Brad, I excuse missed that, me.

I think you headset the guys, Sorry on Are there? still me. was dying

Albert Delco

Yes.

Greg Gantt

Yes.

Albert Delco

The And what -- quick on for, was dollars? you if And reduction year-over-year that can basis benefits, in related was to mind. fringe Adam, phantom then you quantify a a the don't follow-up for the stock? in that

Adam Satterfield

a part of was That Sure. Brad. it,

the on a favorable about invested shares XX-day fourth the our remeasure price there's we was quarter, and $X we in and movement stock to a in have the about that and remeasure stock, quarter. the the know, as We with XX-Ks that phantom XXX,XXX quarter, stock based that you we so this put during our the average million third stock in little or impact drop over every

of So that part was it.

quarter our actuarial an liabilities. claims of have workers' through that in We well. a an well for other and favorable was process as the as and fourth get remeasurement also that compensation annual We for entry

of So and the we a that was release put part certainly big it. that number in

I fringe If you our at percent XX.X%, wages. rate the beginning be fringes a of like salaries and of we year, would the recall, that's the think, XX% as to felt

average same kind year, of next year. I'd the Going for into expect the

you'll out higher, think our choppiness see recovers where I if low price year. quarter somewhat in bit be little the closing that a probably might that was from first some especially it stock the

Operator

Seidl and question our Jason from take from Cowen We'll next Company.

Jason Seidl

I technology. to top you that want in are new tell Can little to looking up the bit about I how sort clearly stay One on has of right going a you at forefront of forward been that time us keep the the the planned things, little is going bit of that about OD now or terms a you've initiatives any guys had think, you that'll been talk of market? at through top? the system over

Adam Satterfield

has for Jason, and years, I technologies been think looking new that efficiency key technology operating implementing our improvements. at we're over always many and

of continuous all applies Our and foundation improvement for to that success, a that our areas key piece of operations. is

ways of really efficiencies, think the our we're I at here a lot So our to corporate we'll tweaking dock P&D improve office. improve efficiencies and at continue to looking look to our in operational processes technologies,

if to a billing and us better to from customers well. just drive what it to do can out information anything is we're so may improved save may our visibility to service be continue related we costs, getting trying but And shipment level ultimately customer improvement, process and process improve as that

continue invest. So we're to going to

we million think to spend $XX designed I in about every million and that generally all efficiencies. operating improve of $XX try was to to year our a technology lot

Jason Seidl

of was to brought that X? to some you business are talk next before. a question pull set any about I of tariffs their forward the to indicated slowdown. place for your due was there guess, that on up customers March take Have the People Okay. a

Adam Satterfield

more a pulled hadn't Headlights our sales kind got last It's We year team heard that at such no bit response. quite all. getting started and and that question and look. the We we of Dear

Operator

next Ariel from question Merrill our take from Rosa Lynch. We'll

Ariel Rosa

point have seasonality. quarter guys I over third the of basis XXX want ratio. couple fourth about on years, operating deterioration to I first, from think, to touch So last seen you terms Typically, of the quarter a in the

was Just there trend? to that much XXXX changed patterns terms so in be on, that has than changes dynamic of this it caused or may or customer something forward? year smaller to shipping that for thoughts your that the Or historical wanted be get behavior something going unique

Adam Satterfield

A that on fringe at XX discussion going essentially into rate up more big you fringe in the where slightly was X.X%, part just that of flat, it, we when had benefit we basis fourth. were maybe points, that just third look was our quarter but the probably about rate,

that the the basis XXX to We've So XXX been five so about last few that last points over last gets us has close actually but mark, of X, or years. higher. basis point the years -- sort X been

So pleased. we're continue quality throughout the performance just just coming and have And that's all board cost we that to in yield strong we've just certainly the really. allowed revenue seen and improve us year like so to I to across growth think continue year,

Ariel Rosa

Got guys it. if goal historically, of of go sense. a years, we guess, I you And long-term couple have market about share. achieving back makes double-digit then That talked a

obviously You've into got that point.

limit done for forward, the I'm guys growth at premium is potential the is quality Looking looking a your of product, there -- to terms price point? terms up obviously, of wondering way the could in to in big in a think a regard get? the you -- of that? pay there's customer a that terms Or Do how that bump service some against market constraint you provide. limit you in of at willingness share Do you it how

Adam Satterfield

circle. don't comes So any and limits of all we is full prices, that our kind back feel or want don't part we it certainly of see

you in lower. back what continue and us and operations, a can just we of and keep to is efficiency have competitors always when drive technology as seen having big to not compare discussion our The might operating between we the go costs efficiency driving ratio. our You market is our price to our gap were

of check, doing we're like to the feel capacity we're could in the we our and in certainly keep grow heavily growth. of one everything keep servicing to But is don't number the about we become we and can our size a out So carrier adding we close capacity, part it. our cost limiting able but terms the that market. XX% to when industry, look factor in to If key be investing continue a and to that's to

think you our from that, creates we today. that ahead sort bogey out where sights we a say keep I can set are So of can further that certainly

Ariel Rosa

that's helpful. quick just Great, on follow-up And a point. really that

to the Or hypothetically center In would have current center handle were XX% that or get if network service service that target? expansion meet to target, get capacity? could to to in that this terms to market you of you footprint, share investments where terms of

Greg Gantt

have We not any by today, couldn't we what handle strat.

So where to to us get years we took of are to That today. capacity. a to have increase would we lot continue

but it's have absolutely we So add a I'm while get share, double to going to take to capacity. would market our to to continue sure

needs. can makes think us. customer our at doing that we're and we We're meet to pace an that adding a that it today. that standpoint, pace we're adding handle I at From a operating continue doesn't it cripple sense

David Congdon

of and so that forth look we our try We've acquire a out at be been selectively. at and it be it range the forward. need more before It run got it and on That's to every going continuously and our look rather long of pressure keep and and capacity. we gauge service larger to ahead methodical can and do and will to so service practice over and land good service center will centers take get we centers, at continue door build a practice

Operator

from our from We'll Buckingham Matt take Brooklier next question Research.

Matthew Brooklier

pricing question. So a

range, you provide contract, could a like X% a your just on of curious terms but a of little this increases? rate for thoughts in could color maybe X% you look for year? what in expectations to bit look in relatively healthy think I your something increases was to If get economy,

Adam Satterfield

our to go cost to try inflation. seek we our that cover and practice increases long-term been out has Generally, --

be think X.X% the mentioned may just inflation cost I that in we range. that So

what will of if point be starting it the be and sort that starting conversations. all like typically the sort increase for it be will, and was new business the took so consistent might into handle. year increases of the environment's we of higher our yield brought that'll had with whatever customers, So to accounts core cases, stronger. basis just which made you some we of a on and general too, that of hundredweight. this get in new revenue addition of will the lot very depends on tied rate some The year, some on those is and But to important point, but and improvement past lot A that accounts increases, the per in was to consistency the cost

that the this part was will. that year, so And increase overall in if of than just yield core that was more X.X% increase price you increases,

Matthew Brooklier

then announced And GRI. the competitors your helpful. have that's Okay, already some of

be the cards could guys? Just curious for hear to GRI you in if

Greg Gantt

not decisions have will -- what made any it to but when. be, as or on as we It to when

Matthew Brooklier

incremental the if going pretty rate. What to the year Okay. to for down then above If your of 'XX it's different $XXX just million But but say, probably deploying thoughts on think it's let's targeted 'XX? $XX little are number right, million And then I in message number And hear bit upon the this question. $XXX thoughts you be your your deploy, I increase look just about to swing. on, that like? a at free could of that, here million, a about environment, $XXX dividend grow look in million. that assuming at I'm have look cash depending $XXX you is what could faster-than-expected potentially last million, ate it's CapEx not a big Wanted up cash flow,

Adam Satterfield

then, primarily and are year, piece we've been cycle units So year. trailer lower baked X.X now. gets fluctuates we've component it's our got the our our on fluctuates in And That this as couple The every that year replacement that replacement CapEx probably obviously, into I have of bit all don't of average every you well. year year age growth improved. a tractor equipments where many the than XX% of it's spending into and every revenue we last and tractor to XX% terms need -- and typically of replacement our the the CapEx truckload. replacement of question, in little of from last the as years if years, about It's kind a think pull, number the will,

improvement So last years. think over we've the there. in in I fleet we're couple of the good nice of had a shape the age And

in So come orders, we with we years this the we volumes typically, and can incentive orders We the go as your past. as anticipate. relationships reason stronger have a but point with OEMs, cancel have well. in done history The we to they and our back to we've don't what for we and weren't -- have strong. of major some than if some increase them We can certainly flexibility

David Congdon

them we of trucks replacement holding our And than should see some equipment, with anticipate. trade example, a in the business we greater onto and flex surge fall, we can longer, the taking in what for

Matthew Brooklier

the authorization. generation cash you Okay. up incremental again about of And what's increase, on this announced talk maybe but kind on for then just repurchase thoughts flow in the your general just year, following the dividend preferences share potential free And there. left

Adam Satterfield

share that know, just capital. quarter you for been felt in and spending priority based the repurchases what the of on depressed, up the fourth was of in like. returning a our repurchases as Well, we of us price compared the year part in we early have the We to lot stepped been terms our being had

what year that low and from XXbX step consistent a increase got with the that pretty be a standpoint kind that in next XX% works year further. stay We share daily dividend buying And The from dividend. of even always and much keeps program basis certainly overall as the increase in our price with a have is where earnings we've payout So been to looked approximately check we've the the buys that and in the past. amount. and percentage continues we're we've to for those prior the are pleased on just the typically were might opportunity what up that level at been way

Operator

Todd our from Capital KeyBanc Markets. from Fowler next question We'll take

Todd Fowler

a the in the And earlier of maybe freights? opportunity you do trade guess, market quality XXXX. at And going and to the truckload the network when gone kind the saw still nontraditional of into up I of David about kind year freight I'm you curious, point. back? pricing Has And just of lot made was trade coming on into freight ability freight maybe was think that relatively your if to that continue tight? curious I'm any a this the comment have freight up just I opportunities network last

Greg Gantt

challenging anyway, to it's operates on always Todd, across I we I account, pricing. to don't improve we certainly try are a costs with shipments those certainly that on up account the try mean, on We'll try Don't high, If that I lot. know if otherwise But and more a there. to know handle all always poor, going the certainly trading lot, term the up it. a basis, we account challenging than a aggressively then you're to we we'll trade use improve some there's it's that is try that take but amount we'll on business something. to that of daily increases things. think run efficient opportunity have

was but at there do think of some low-hanging year, as one in harvest There be to it's much to boom I as will. fruit, it opportunity. nearly not possibly I there's not we any us in probably be big going improve you some time. always that I something this there So a way. is think if should think But for

Todd Fowler

unusual basis you've that going to percent expect it. claims of item can fleet? but I'll on And then an the made a that Adam, are and trading, getting your Or the I then follow-up, speak looks take was revenue, here investments trend on bit it would the how insurance And Okay. a you term It you this was as benefit line absolute for to credit for forward? perspective little anything also just my Great. and quarter? appreciate like from favorable in there you in the there? some of some

Adam Satterfield

a last includes an we Yes, year, about And to through, then when unfavorable. or if every quarter, the favorable quarter adjustment had can which and We the And it actuarial be averaged go an it fourth down during look that the annual adjustment. also year process in you you in X.X%. look was year's unfavorable favorable there adjustment fourth X.X%. that drove we

was that X.X% to up So the in quarter.

cargo our are then components exposure, premiums including the claims liability, that'll two go that ratio. and back. are So I in think auto The there

So X% X.X% range in between and to on the of knock here. is has of as ratio wood range that I type kind auto that claims X.X%, in the been X.X%

forth claims tools type we'd that would range in work same the number in and in made So our we've to quarters I prevention that all tools somewhere first the so way and through year. the expect, of on investments we based of as keep safety trending, think three

Operator

We'll David take from Ross question next Stifel. our from

David Ross

any 'XX. others, talk spend I've about feeling on good? parts the million areas? two second on network looser specific just question $XX any of you tighter can anywhere than questions. Is regional you strength, focused see that for IT of then quick or is One, particularly the any the business And

Adam Satterfield

forth scales million this basically, me other well, that the Other XX hardware the number the is that It's planning IT one year. that year, into total things each year and this switchers, Yes, replace million. all to includes in with higher devices -- center, $XX that be is sorts our put we're let go That's $XX forecast centers this then will first. of about And is and and replaced service our dimensions logging service That for net of so million. of higher. $XX X,XXX-plus address units in other in costs that bit assets so we IT things plan our replace, that there. generally is the a that piece this that and will other assets that component somewhere and so forklifts, about

$XX so And that little why $XX that's IT million. our bit is a normal than piece million, higher

David Ross

the And through or regional the of part just the weakness first question network? strength on

Adam Satterfield

the somewhat for region we years. We're of well. added But capacity of Coast we'd lot on growth I the strong a year, there. It's seeing It a general Dave. that see check. growth the and been and continue bit to fits the through out strong of kind over fact activity that West line-haul we've just us, think has to also be last pretty would been in say, really what the like growth this that keep the to pretty as generally region I have that, of with We've in fortunately, quite couple Midwestern network balanced, that's to of industrial U.S., had in able

hitting year South but continuing all And well. to we've a as will so in nice growth East Gulf Coast the think really this and West and be out CapEx I plan hit where seen Midwest, the -- regions,

board sort the the this across with to year. it's additions just that make we're So of door planning

Operator

our We'll question from Willard Global. next Milby take from Seaport

Willard Milby

down has question I flat already XXXX? from look the from up feel volume ending a what's guess, that changed I comfortable that's headcount was out efficiency point about right for XXXX, or capacity workforce if XX%, assume now we excess in efficiency some hoping angle. slightly XX%-ish. efficiency helps have economy or view? you year-over-year tackle I workforce of with If the headcount that volumes was you I growth different flattish And the a -- you this XXXX, kind headcount back more levels XXXX that of maybe maintaining What for volumes think when up flatter, in

Adam Satterfield

to all the And that not exactly flat get Yes, earlier, back I 'XX, referenced, a centers way you XXX the was workforce it's going look, to revenue XXXX, today year I from mentioned as service easy think right. standpoint. across of think network I a the

careful initially we when little really bit so than we the to went managers, we progressed XXXX, stepped of hesitant making revenue with we hiring center service progressing 'XX, what additional 'XX. and our were and year, flat through the a And were likely and up we a And through year a volumes anticipating. little started the up we as stronger through leave decisions hires as

and we September mean, continued out catch-up quarter why when acceleration we in as as and we use got as at about we've quite we of a we the lost the our that happened also we're bit but productivity, progress it through growth as slow that's progressed material increase XX% to finished XX.X% revenue was had year. And of So some 'XX, 'XX. playing through purchase I that did down. that plus 'XX transportation for to and up fourth

for as anticipated coming through pace. could that were and at up sure set rapid hiring of were what to volumes adding account of we at us we very 'XX an keep what this we reverse same make People of a kind standpoint capacity So are continuing to year. coming was us come with employee

locations little decision some we why locations that on shape, that hiring we steady. were like and as they and And rates other through got be overall that's people may made got the we've that that was attrition fairly you we so an could we in then good significant are as they a fall that heavy that But it be. keep growing things got should some the bit year still in and happening say have and felt normal the progress we at in may are the basis

Willard Milby

Okay.

I So don't if capacity as of an get you efficiency you'll from view. view look maybe a and point it at know point from it of

say kind that You've you above maybe much has more to terminal [indiscernible] maybe get your you think XX%. do you would your of when volumes addressed I put dock XX% towards capacity you that kept to how before is What again? can look at workforce? through mean,

Greg Gantt

like now, We probably those typically the But excess mentioned to months. this is right the got, starting of are earlier, on which the I we've first year, out XX which of centers higher planned capacity service is service the our year. side centers slower open opening

we continue will volume. in grow capacity surges unexpected that those, get open we as to So unless

good. capacity works So now is we'll that out, how have to the but right see

about it's on in side target. moving the it's XX%, talked a higher we've think the XX% what I of or being but

some, others. in on more You got less

and just which facilities struggling for got we've in keep plan And adding. those and where the were have we areas this that's that with focused tied, we're what to we're addressing we doing we're the is we're so where locations where year,

Operator

from Group We'll from Scott Wolfe next our question take Research.

Scott Group

and a think ex fuel. of is can So, amount imagine good Adam, growth do that fuel? XX% deceleration in Jan you us give X% you just that and revenue the Feb, for I the

since numbers, just it's to think have do we it'd maybe in XQ? year-over-year? potential do XQ small about helpful. on be lower think the it you it a like, headwind had those then in if So impact you an And much two fuel, And of as need

Adam Satterfield

pretty prices last to the year. it's where point, average this were comparable, At rate fuel

per from would say, revenue hundredweight those it's in with fuel come much numbers alignment. -- standpoint, and -- a I two back So it's without pretty had

that are now, first year I might and more increasing. price see second how for sequential see, So in they and where was on part price then the quarter -- stay first fuel, rather but that in we prices. if what -- seeing we seeing we it's the the started changes diesel started on where depending or your it in and right increase Maybe second the think last the the average we'll the with forecast then of year, par so quarter comparison in quarter prices in more prior

Scott Group

think correlated? from Okay. some Do think competitive then The that questions. the anything just share you anymore? historically obviously you do YRC versus there? And Are just hearing how pricing is then uncertainty. correlated kind about of you that dynamic, on had a just maybe labor there truckload LTL two And they're customers suggest opportunity

Adam Satterfield

I you won't being is in talked the of there's type in is changed to haven't the think of whole LTL been carriers, and you that constrained additions we think why with XXXX, pricing nature reason health push capacity need do the industry, that of other material truckload. a part there lot I industry in a revenue still has been lack and to that see the as top about a and carriers that probably a for LTL when about look consolidated like the kind I following lot now the believe those that there's way of And the the feel patterns support XX then same to at I And of XX% of continue I increases of with capacity. necessarily the capacity any increases. industry as margins

the when market look that captured our we've the market what last So and seen numbers. little the market's X/X grown for XX share you or I a it of X, the an years at opportunity has over over changed certainly we years, so, in think And created last XX us. over how

going share selling that to in take think you to up we focus our and to continue opportunities and each against go advantage and making the additions the we're competitors. a when of continuing down we we've got advantage those So market board have, of on capacity

we're we through come is Mastio service, And nine that this better. value proud we've years of and at with and piece tried the price grow then our the That's we and have won capacity Quality so that fair customers. a so our Award be to ahead growth believe that's what past our final given able far service for to you've and to as service curve of takes of got stay it to

Scott Group

Did of sort may you it you about the if I said uncertainty, -- like that if labor be some that of share? anything accelerate missed

Adam Satterfield

Yes.

contract us and We haven't Certainly, through have it way planning seen contingency shippers anything that, any at so they material period that always point of as any aware I'm any of forth. around kind this to conversations discuss of. go with kind

chase And No past. so have the in like in any that freight we'd we way. to handle just need

Operator

from our Baird. next from question Ben take We'll Hartford

Benjamin Hartford

range. bit should that question, sort XX% historical of that discussion given the between has been range XXXX some all at the guide? guide percent Obviously, a of as It's anticipated the couple XX% capacity Adam, range? as future guidance about end is just XX% From medium is a the lower talked that coming staying about historical that of a CapEx of forward ago, revert of of back we recent revenue, be CapEx to post? CapEx a of range. end Or the we going has revenue percent of the thinking about of that and ahead longer Should relevant to the -- a XX% to no that. growth, bottom the to that today little back context that's quarters you below

Adam Satterfield

I of of the what got year of of of is the to changed don't these and type millions in and into the mean, certainly can our accelerate a to real with but measured that available we'd the some dependent what's cost estate regard respect continuing complete, team we've facilities areas, that are we're in dollars. with metro projects has many another and know in estate I real costs of that internal healthy tens land how continues expand lot of of upon necessarily to some spend anything area that range. the

real earlier, lower I why change, year we've we be one continue might in network So want the that still have that's as to $XXX got from a little based a that it bit biggest estate we're We've and, equipment and this standpoint to patterns on would of prior that in a that I mentioned replacing the the I less kind average year replacement the little bit say, the we our on on got but think of is million two. a side, own about percent the just But cycles. as the of and priority. number revenue goes than need this on generally less equipment

Operator

from And Bloomberg we'll Lee Klaskow Intelligence. take our final question from

Lee Klaskow

headcount? you and you buying service trailers I Are up you how to trucks when are you resource question guys you Are source you those? employees around? centers, moving reshuffling opening out fully had those how staffed? assets? just to going you quick one and have And the do new facilities new many those? to need also how about a do about employees approach And Are of have new roughly

Greg Gantt

a service We already piece spinoff. spinoffs been certainly town part in that different that a in the service, we've of the of we just late, reshuffle find do and at Of centers employees a property cities typically we opening. our

the to relocated. we but to what move closer in they So we where they cases, of But closer our not employees. our they to In only customers, or relocate closer we're live, lot got employees know saying. and you just

old been new shuffle we in faster tend to equipment, the to shuffle those we typically up. What So happened, fill locations back employees. grow has and ones able we've

mentioned situations So closer we're in old those we in like than our our existing and we growth give able I before, to service standalone to experience get customers, better better facilities. do

It just XX. drivers it's question how reshuffle it from the depends of and XX, many, market. about size XX could to So a anywhere more the the on depends -- of assets be

Operator

question-and-answer I'd Congdon to or back David the session. any turn like to conference for over our additional concludes remarks. closing That

David Congdon

further to of have you a any free thank questions. us and to want for your all We today if Thanks, participation have and your you call questions. Feel great day.

Operator

your And that Thank participation. concludes today's for conference. you

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