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ODFL Old Dominion Freight Line

Participants
Greg Gantt President & Chief Executive Officer
Adam Satterfield Chief Financial Officer
Jack Atkins Stephens
Chris Wetherbee Citi
Amit Mehrotra Deutsche Bank
Jason Seidl Cowen and Company
Ravi Shanker Morgan Stanley
Jordan Alliger Goldman Sachs
Scott Group Wolfe Research
Allison Landry Credit Suisse
Ari Rosa Bank of America
Todd Fowler KeyBanc Capital Markets
Ben Hartford Baird
David Ross Stifel
Call transcript
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Operator

Good morning and welcome to the Fourth Quarter 2019 Conference Call for Old Dominion Freight Line. Today's call is being recorded and will be available for replay beginning today and through February 14th, 2020 by dialing 719-457-0820. The replay passcode is 8210669. The replay of the webcast may also be accessed for 30 days 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

these that news forth the Commission set may be Old and and release. Exchange Dominion's filings in cautioned important hereby affected among morning's factors are statements You Securities this others in by with the

in whether discussed forward-looking And publicly information, materially result operations from otherwise. company consequently no statements. of or and differ undertakes results actual The may update results the any as new the obligation to events, forward-looking future statements a

final a you for but just to yourself a your to Thank before fairness time welcome the couple queue. you we questions ask, questions of before limit As a today returning at we to note, your begin, in all, cooperation. that

Chief conference Gantt. turn the At company's would like sir. this to and Officer, remarks, I time over to for go ahead Executive the Mr. opening President Please Greg

Greg Gantt

your to and we is today With call. on me CFO. morning quarter to conference our call Good Satterfield, glad take be some brief the our will After remarks, Adam fourth questions. welcome

and period fourth relentless focus revenue on a quarter, the part pleased conditions, maintained our reflect domestic our economic are we controls another with performance. our was economy. results revenue reduction service For and in due the slight with consistent that to large in Despite financial cost these quality

due $XX.X increase share partially cost our in Plan. pretax fourth of driven benefit Phantom decrease quarter changes diluted a that our earnings the million to per primarily was by XXXX, While as decreased fringe was to compared our Stock in income the to

earnings the XXXX prevent our more Phantom Plan from Adam future December in to amendments but detail, periods. these will materially fluctuations our impacting should plans in price in in share the expense address Stock

line XXXX. most quarter We environment of see XXXX. seasonality the with perform won't we compared in we although to trend. seasonal year volumes first decrease normal the normal experienced quarter that terms again to in were in when to of similar our fourth what our with The pleased line This overall the this felt LTL continue in with operating time for were was the we third

We election during the as are XXXX, volume economy encouraged by trend risk as cognizant well political year. forecast this are of we in improve with economic increased an -- although associated for to industrial

our Regardless managing This we political control. focus economic of fair we to our controlling delivering price to superior at service continue can starts environment, steadfast will with or the also things cost. commitment that on the diligently while a

generally our this Providing XX% X.X% Our and in density of on-time periods level for productivity cargo with was results in reduced performance the ratio operating of loss and the was operating increased fourth cost. service superior claims quarter.

We great quarter. operate with efficiency in fourth the

both by However, P&D improve per and X.X% per shipments hour shipments our X.X% and and respectively. platform hour

of dependent a in before We that yield both support environment. density require which consistent improvement many of our and upon positive is times operating ratio have said improvements the in macroeconomic long-term

our While we consistent a lower by our approach the help lot expected pricing didn't than cost-based and from to XXXX, yields maintaining improved get of supported economy a our service. we volumes for by were superior

in totaled center our expenditures ongoing share over softer allowed service years volumes the XXXX, Long-term investments capital our $XXX goals. improvement million we and of our commitment to significant the has support expansion in network. our Despite yields make to market to maintained us the our

avoid operating officially that them service increased several open only our we Although, cost. to of increased the count by the facilities did in one center XXXX, operating construction finished we not other

to our and to We including our in the not already completed door ensure that it factor ones should been believe XXXX intend centers network have capacity service growth. that limiting eight to open be that six will to a adding

be, records proud not per it If operating XXXX and that expected our in we share annual team for our diluted the year year stock is XX.X% company we expense improved for with were the of share. was revenue We would increase the it our not plan ratio. earnings associated also price, While to phantom finished financial the our with results. have

I family Dominion these our solid So in challenging produced for environment. Old would that thank execution their like of employees a to results

to many greater XXXX, continue through firmly our and we can managing value that, on forward fundamental even As customers served on We execute focus we and deliver for believe to us that to adhere if has the business, our aspects continue shareholders. business economic the model we cycles. of can this look to well will same we plan,

Thank you will And morning. discuss quarter financial fourth this for greater joining now in our results us detail. Adam

Adam Satterfield

the for Old company you, fourth $X.X X.X% from to revenue Dominion's Thank good Greg, and X.X% of prior billion. billion, increased year for Revenue XXXX a a year. the morning. the decrease $X.X quarter which was new record of was

the point due quarter, our decrease For our to ratio. operating combination increase decreased diluted share in the fourth in and earnings revenue the to of X.X% per $X.XX, XXX basis

diluted a per the which share for also year increased Earnings $X.XX, company record. to X.X% was

X.X% in the offset tons hundredweight. per Our the revenue in quarter results by revenue reduction that partially the for reflect increase LTL LTL X.X% was

which in day hundredweight Excluding seasonality. sequential fuel which a is line our was revenue normal as increased third quarter, X%, X.X% On the surcharges, decreased to with line compared expectations. tons in per with LTL basis, LTL per

X.X% per X.X%. shipments basis, the a below was were decrease LTL of day on just average slightly sequential down which XX-year

increased day to For January, our compared per January XXXX. X.X% as of revenue

tons surcharges, fringe ratio day. in our quarter and LTL offset excluding the fourth in to increased per compared. are annual the fuel The X.X% periods per to decrease attributable for operating in benefit increases increases X.X% cost Revenue both hundredweight our

disclosed stock XXXX that $X.X was changes The reduction benefit For fourth to XX.X% that share an plans primarily in decrease from resulted the this period. in cost million expense. as during phantom This in to quarter quarter. of increase fringe well quarter due salaries of fourth compares for wages the expense in from $XX.X fourth price of due the that in to the XX.X% increased million in as XXXX, to and our our these quarter, amendments XXXX share quarter fourth our the of previously expense of the to price included

All expenses of our wages. revenue to supplies improved improvements able percent a insurance increases with in and depreciation as of salaries for other combined quarter. operating and cost were and and in We offset the the

nice team revenue current of to improving trends, also matching did Our a labor productivity. job while

workforce believe down as our the shipment was to appropriately as Our decrease shipments. that in for current and is is sized in well. compared our average good X.X% LTL fleet trends headcount We X.X% currently shape

workforce our year. As improve, levels begin need to shipment we to add will likely however, this to

same cash $XXX.X $XXX.X $XXX $XX.X Dominion's fourth the $XXX.X the million totaled for for expenditures million our million flow million million periods. capital for Old during capital We the and quarter operations while for year. returned the and million fourth of the quarter were from and respective $XXX.X year, shareholders to

XX.X% prospects XXXX. share $X.XX in in affirms commitment and total the repurchases This returning Board's pleased our $XXX for Board For our capital shareholders. this to per first dividend continued the XXXX, of dividends. approved to our of action quarter growth commencing million our in confidence consisted reflects Directors quarterly share of that of in cash the increase a million and were We in $XX.X

was of fourth fourth XX.X% in Our effective quarter XX% XXXX. compared XXXX as tax of for rate the to quarter the

expect year, rate XX.X%. the tax XX.X% currently was for tax For rate effective our We an of effective XXXX.

for the our Operator, be floor remarks questions at open happy to we'll this This morning. prepared this time. concludes

Question-and-Answer Session

Operator

you. with Thank Instructions] [Operator go first we'll And Stephens. Jack to Atkins

Jack Atkins

questions. my taking for you Thank guys. morning, Good

Adam Satterfield

Good morning, Jack.

Jack Atkins

I there, if could on on added to your quarter. well. the the Greg, around to I'd January. as I appreciate But, comments your love first month thoughts color Adam, go So And back just the get of this,

to is could sort how you a week. five just better-than-expected the earlier it, you to sort got PMI Obviously, or little four If bit expand weeks we of of first year? this call market of print, bit feeling the the a guys about

we then, these offsets have with but some Boeing happening of this halted global there And with things trade. and some -- production

your take the today? get are curious market to it be in seasonality? just how continuing relative normal would you your stabilization view So, And to see on feels to

Greg Gantt

to and commentary be for positive. most I've communications It the to that seem had them, Jack. the be the customers seem And stabilizing. our does part from with Thanks,

positive we're on are. So, forward. where we we going look And like what

does the of it improve the rest that hope let's year. So,

Jack Atkins

and That's hear. of takes, for about great. you puts great side we when And think OR. progression the Okay. to That's then, guess of cost think could sequential I the a the help through us Adam, on kind moment,

picture on thinking shipment of a a the I lot about, per pieces how from I moving know inflation And XXXX? perspective, fourth guess basis, in quarter. there a bigger you guys are in cost are

Adam Satterfield

for we out dealt that the and item expense. phantom the was fourth stock that Sure. -- in Obviously, biggest quarter the adjustment with called the

that big headwind So a was you if will.

consider of points points talked year neighborhood quarter XXX somewhere And XXXX we that many included XXX in opposite especially about fourth had you rather, went that to those ratio, of probably the And how credits the last kind last way. the operating help of when basis so year. basis

are So I couple one see. things think the that, a probably quarter, to unusual. that of one in probably is our that Obviously, out that the insurance other benefits line. for stand were line a fringe this was little in we've There got that easiest

quarter. And usually annual make We had -- fourth those we adjustments our go the assessment. in through actuarial

up X.X% revenue, of throughout X.X%, is the that's ratio averages X.X%. ticked to X.X%, which our typically that year. claims cargo So around And

exposure. unfavorable see that of to are the don't actuarial offset is that balance that some then And unfavorable, of typically in our annual other there an are our had adjustment lines. the What we some related assessment credits you there. kind is But auto

favorable other expenses benefit the, our the Some liabilities, operating workers' supplies that to had comp line. assessment line credits on the adjustment and we in those are some a of related same are actuarial fringe in

takes individually, to first other next one way some things the and in but just quarter would most of of those normalize, the we year. all kind that So had or other progress puts nothing likely into other call lines material as those out,

Jack Atkins

Okay. the That's helpful. time. Thanks for very much

Adam Satterfield

Thanks, Jack.

Operator

to Citi. next We'll go with Chris Wetherbee

Chris Wetherbee

wanted morning. could I good it. tonnage through little the did see thanks through you apologize if if you the go have missed a saw that I that might elaborate quarter? you bit on trends Hey, to I

comes guess you just until us give here December sort sort out Q a it But the any little to bit. this of like or how know month. K, particularly thoughts, wait the trending to the in XQ? current case looks directionally And on in of I are But like things it I improved early

Adam Satterfield

that, Yeah. Well did we And were that our quarter to quarter, for that start normal tonnage side. overall with to line on typically we were both for pleased are. fourth the what we in with trends the see sequential the

has guess I in general, revenue performed. performed as just the average And of kind XX-year

was that to year. happened So really this that that's first it's And time good see. the

And back well. last really trend back seeing year, the of a goes into started as little in bit unfavorable we half

that So see. to was good

January, the into transitioned number. we we As gave

were the year-over-year X.X%, January flat. tons But down the revenue

So we're per a basis. about day progression, down to that fourth was the third a day the the less -- where we the on were bit quarter starting X.X% per in in little was down quarter, basis, a revenue see on

flattish. slightly it's kind just being the we're see now But And on good trends, all positive, flat, of of developing. to good so, side

Chris Wetherbee

Okay.

to tailwind what to terms Okay. there'll XXXX? as I think year at of tailwind, growth That's going you sort into the sum be for we In sort phantom into it a helpful. and year potentially entire were the that in guess means when of the we just about up of And I appreciate recurring. you stock, just number the so be won't the think look XXXX cost can full what I about then that. from But total very is, transition clean if the you when that we that incurred know XXXX? that

Adam Satterfield

Yes.

that that back remarks, volatility this I as talked of had be to XX% It and the and that program. years of as our year. we've kind last to increased with increased the through along go And this that share progressed as progress or went it's did, and up think share it's Greg has we been trending prepared about we in down that but doing always through and year. say we've our like just able frankly, XX% nice couple the price price over

that expense. resulted accounting the that was But it way on program, the in --

we expense in So stock that we go phantom about to in $X of you million XXXX, had compared when to and XXXX total -- $XX had about back only million.

if overall benefit you So a number big will, went overall but into line. that headwind, fringe the

I think a year. see bit for improvement that we'll little this of there

XX% total bogey but the that some salaries we that phantom our of to of neighborhood being at progress continue won't -- probably face XX% have of were stock costs XXXX. But pharmacy of health increase. overall we that I'm related for cost XXXX somewhere still north into in and looking we'll still because wages inflation to as We expense, programs,

So see into we'll of those I as think that rate other on of the that program some well that inflation lines. that go fringe increased benefit as costs

Greg Gantt

it Chris That's that. behind for And is us behind sure.

Chris Wetherbee

It's definitely it. for very the much enough have, but Yes. time. high-class rearview. to spot Thanks Appreciate a problem in the to

Operator

next go Deutsche We'll Amit to Bank. Mehrotra with

Amit Mehrotra

the the Thanks, operator. taking or you then of headcount with makes as productive labor a us that talked Hi, Adam were up going helping about Thanks percentage quarter everybody. increase shipment revenue? questions. trending sense. in my for just I what and obviously And costs just know up

that headcount? in XXXX? And to growth? just D&A think just And about increase the just see a that's step-up X% would X% last kind want it about help know should increase Is in very expect it question in I you relative what then think shipment right of we if proportional, way helpful. in headcount could I on you think shipment be But to is, took to if big what growth, the of specific kind XXXX. us

Adam Satterfield

I can questions. All right. I'll if try to all see remember those

Amit Mehrotra

That was by were way. just three the parts. one There Yes. question

Adam Satterfield

We compared. a at to the one. fourth but costs I actually last -- don't all XX.X% questions thing. look want compared good our that's costs productive flat of of Three were in anyways direct both I to pretty the in year, operating labor quarter the periods combined. for But guess,

period in little XQ our fuel average a XXXX. where the when prices XXXX a were got costs over down of were fuel fluctuating And was you've are and down, versus price down X% --

typically fuel revenue fuel your So expenses. as as that impacts well surcharge obviously

your the of but going revenue So you of slightly as operating a a percent the drop expenses down up fuel as down in -- going labor go and supplies result price, typically see would revenue.

got So benefit. we've think I that

And wages sort trend overall the can that that benefits of out. kind playing and in you see salary I line, of think

One line compensation couple fact frankly benefit that this that the year that relates of fourth and the was lower down a for sort was quarter the revenue things -- that performance-based things the operating of ratio lower. and of that just was to

our Those bonus are kind of most two programs. into ingredients that of go

sequential got you quarter. into it versus if third increase was will an the from headcount the in quarter, Our fourth the down fourth. the third Typically, you've a -- increase

I we headcount we of so, shape first on good in in now prepared And the like the we're the pretty said right typically with see quarter comments flattish quarter kind where that and on headcount. average trends fourth think that is

in to play that a trends likely later would thing these volumes And start actually. that can we mean our headcount to continue would our Obviously If be to grow would then be adding see the we that year. out. good

well. position that as comments that the addressed prepared the kind that We but we're in hope of with fleet in we workforce,

in we're anticipating mid single shape. digit last of kind growth. that year good orders think I We made

we volume mid-single-digit ended And tons. and up in with side decrease on the

So probably maintenance as heavy in there's bit and of little fleet. and that heavier carrying cost as the both on we're depreciation costs lot a well repair line, the a

So those XXXX. that hopefully as into will that grow the things we are through progress we fleet have

Amit Mehrotra

Yes.

XXXX? in more the more D&A on came when but, I it equipment in, flattish flattish I guess, guess So revenue in XXXX, depends

Adam Satterfield

side, CapEx but Well, still we've as the much it's got million. not on program, a decent-sized $XXX equipment still

period. technology, that of be has Some shorter a will which depreciation

the CapEx bit you it's percentage in kind think, So a or change when overall rate, in range the average for kind of you of depreciation look annual term, at with get year. of that. budget the Longer of somewhere more X hit rather, little the the I

got continuation plan. continue we've than to on we'd of it of progress the as lower real be the the certainly and to then estate real execute plan, since CapEx making up estate CapEx year and a But that. the majority expect we it certainly that the be increasing, through But should

Amit Mehrotra

bit of Right. phantom guess, will have price share impact on share fringe count it the and how XXX,XXX it stock so going you're that the I increase benefit me, last the the that for it thing in the just Is And count. then, -- the simply to to little count? Is question a share count, works? the now variability the works? no share way a add like is cost --

Adam Satterfield

be we'll back were Yes. the we kind reflect that The will should those give given too there. impact XX-K of look quarter, if that into diluted XX-K in that you shares diluted can made timing diluted program Not forward. shares that as fourth at our kind But that, of outstanding will that detail that and go that last and the of certainly, the share year's impact lot filing, go you are but and will of you count, or outstanding will, shares if that change, shares when see will. going to well a when that

Amit Mehrotra

it. Got

Okay. my Appreciate it. Very for questions. you good. Thank taking

Operator

with go and next Seidl to We'll Company. Jason Cowen

Jason Seidl

guys pricing? you out for to what touch still Could the operator. LTL stable and feels communicating you, in pretty bit there sort how a XXXX? marketplace sort you, of it's little of, Thank expect shippers on, to are like It

Adam Satterfield

Yes.

about it quarter. it's was be the that we and, think in with quarter would trend in what call would for thought play I And, that pretty fourth it on think, line I what how the much we stable talked out. third been certainly,

half I than go -- were had you down if continue bid but will. So losses process the there we to revenue and more through with continue overall, of year, back guess, wins, our wins, to obviously and last

yield the March-April through own I of call seeing half just went in competitors' year. that that quarter And, of back kind they after first the our frame transition think, was and a of So as you've some compress their went bit year, of that talked I time bid last we of into competitive response last the we year we probably numbers this little of seen as through. think, started kind situations as

And the for the public that out. numbers competitive played pretty carriers well. disclosed it in think I much yield out that were And as played

expect to consistent type year continue our and and to approach out. So year this we we've that get execute cost-based of try in would to had continue to on pricing

a asked underlying contractual per into somewhere our I we for projections, that inflation and kind go think, probably basis earlier of on around Jack the about of, so, this our we when shipment point customers And go X% well. the costs thinking becomes with for baseline cost to GRI -- that a conversations business have our will announcing as and our get the tariff-based for year,

Jason Seidl

other Okay. any the your thing, from That's any of color. And reaction great customers?

Adam Satterfield

Can that? you repeat

Jason Seidl

No. about think No, your the how no. all on supply out? customers first Yes. out of impacts might trying Any their the reactions chains? Just to from at coronavirus quarter work

Greg Gantt

my Jason, not knowledge. to

far, haven't thankfully. negative We related heard so that anything to

Jason Seidl

Okay. Gentlemen, knocking for me on you It's time. wood. thank your

Greg Gantt

Okay.

Operator

We'll with go Shanker Stanley. Morgan next to Ravi

Ravi Shanker

gentlemen. morning, Good Thanks.

of there for follow-up comments helpful. you Just color And, mean, amazing particular it like what's you, operators any want Was bad And, if that insurance a you spike you obviously, think, color kind mean, hit? actuarial remarks. said there be rest are ratio. industry? that to the of I'm I such in guys a the this had rates. the surprised would have I on that? our in insurance incident for drove some it's for really historical claims your low and prepared such the thanks I seeing a

Adam Satterfield

that where all claims years. the one annual particular through back the the process at for open necessarily all quarter. We fourth go going actuaries drove look accident in hit Not the Yeah. an

quarter, have years to some And development. back period. a the we that go in positive in positive in When have last development, adjustment year did have some you you years, you fourth unfavorable

X.X% our year. trend X.X%, first where think of quarters revenue, X.X% of three at or expenses it the I were so for did the

development was year just to unfavorable this open still are claims that So several had that some them.

that also you had then the accidents that applied for was we this expense at year. look And the

long-term should that in safety the to is protocol of favorable a over safety expect things technology focus lot we got we'd to units continuing drivers. the continuing back the our on year. and next get training that in trend that for reason to invest so on And that we've invest have and normal on And our the proper

the as and of kind the side. on kind think expense that of premium We're be long-term in auto that's facing And -- But of in our to of midst carriers, this ratios, year. other of played the renegotiating frequency the that severity our have some I trends. out is seen piece fund. related well as we will the accident of many inflation we've we self-insured that general majority But the we the improvement like

hook look we'll we'll hit that then inflation to increased for. So have the just we're continue the and mitigate hopefully self-insured manage, any premiums. on And to on on piece the

Ravi Shanker

it. Got

been you like didn't the you deck? would do So feel have worse the inflation much if have

Adam Satterfield

-- Obviously, that the it to a the the and avoidance and detection evaluating helped. we technology the we lot of now spent has place put cameras hard forward-facing say in years technology but got systems the as in one-for-one, Sure. the good forth. we It's and certainly through accident systems going so feel collision we've we trucks, over have but like we time technology,

continue but one us would severities is years, with hopefully, ultimate objective, accident accidents Certainly, benefit preventing the we see out expect a over certainly and would be to the all. play severity the to that reduced to lessening

Ravi Shanker

think look it such. different? one a most do like or What And this to now? it's of we looks and Do volatile doesn't one. you and think it. today, where it similar last kind like views have The your new space? you better, looks to are consolidation time. Got the going years space And in where last that LTL like are do probably think entrants the from five you looks on long industry get with meaningfully seen been It the changes much few just especially in years has e-commerce

Greg Gantt

of much us. Well, LTL we I'm not sure in Ravi, that of any the point see space change ahead at this

lost relatively the don't but I in future. near of we so, relatively think it's stable last carriers a and think year would competition the stable. see We smaller that couple that been been change anything I or in our has

as But certainly, we've the now. you I it's good spot a years But think competitors know. I think to lost we're some in degree over right

we're well think positioned. I

standpoint I a done don't expansion see from from a I standpoint changes. think we've an good puts from in the competitive think us standpoint, things a that we'll but that spot, capacity many

Ravi Shanker

Very good. Thank you.

Operator

next go Alliger Jordan We'll to Sachs. with Goldman

Jordan Alliger

outlook. Hi. the I XXXX, sort is key sort get run to just do think know OR. the production I'm improving declines up Good year-over-year basis on given of to an make volume you we to saw a XXXX? of Yeah. growth say? industrial it magnitude and morning. you. Is of that we to would industrial What it sort the need impact curious certain density over you the of for just long on improving again a in in hopefully order you OR in something? and Is Thank as LTL start ahead inflection tonnage

Adam Satterfield

when were And number. have costs I the we proved necessarily are seeing the inherent and second revenue this offset need to Certainly, some we growth you revenue to in that some in and our that network. year got you first volume not still think quarters a There's high fixed weakness.

still able second we growth were ratio still operating so when we day in this little a basis quarter X.X% was and of that of about year saw a improvement. on our to produce bit the per And revenue

XX%, made of and kind X% you at about long-term been side volume rates growth when look yield. So our required. then shipment balance the up of to long of so the XX% revenue balance or there's in a on over it's that's kind run, the of And

of service capacity that into to density so important, with the us And that investment network built. grow the density continued always is in that gives the and certainly ahead center but we've ability the -- staying

XX in got basis we've And shipment XXX a you've look get long an basis an have points improvement around the year. in to you of yield that's higher points place average shipment on basis And the when a X.X% average higher basis points basis. of basis X.X% a -- XXX somewhere our that's as in able of been consistent cost on per year. on around over to per points a on the kind a And than But the process our revenue to long-term run, of the basis management -- XX than improvement somewhere well. a on trend shipment of per of cost kind long-term trend to

place as so down do as have in we're delta and unit keep you support in got the investments to our And try that making can. center things high-dollar that investments inflation to per all though cost that to to in want to service network to we that technology we support much

So there's unfortunately of of balance lot density had nice into a over factors years. really go we've a that it. yield And and the

Jordan Alliger

you. Thank

Adam Satterfield

Thank you

Operator

Research. next with Wolfe go We'll Scott to Group

Scott Group

Thanks. Hey. guys. Morning,

Adam Satterfield

morning, Good Scott.

Scott Group

wondering -- December-January other So look you when I relative a all any or in is a a recovery at they I'm the worse? the competitive little to thoughts environment LTLs guys. to your looks sign bit tonnage maybe like trends at are seeing more this getting of

Adam Satterfield

can't increase the line will mentioned in you feel on getting what side. you year. customers kind if we're the this comment seen a with back volume there's to now worse And of clarity we're maybe the from if will. good And got of production industrial haven't forecast feel that We've some done. Greg I like signs hearing deals some that as still doing. can on for positive trade lot any comments we trends see come to carriers are other comment things We on mean, only what seeing. We of I

there's to so transition as of we lot this reasons into a be year. And positive

received we've as revenue pretty And now that quarter first that the satisfied customers still I the bids increases think get the the well I service other that with on of our once we over lost comp thing the lost. that the we and some the we'd inherent healthy see bit line all they've of like hope to as see to some competitors through have of competitor XX-months the that got cost we'll of satisfied started for guess a increased level come increasing the with through in business the If business we XX-month might with maybe some start aren't some start seeing getting or past perhaps once start many that maybe and discounting quarter, our of is yield our first with to competitors. ratio some we that rates more not period price lower back of we those point little a by and where we and truckload a operating regaining but and get of

of things start to to XXXX. we lot look as of a into sort So progressing forward

Scott Group

wondering some normal? worse mentioned that year. you Adam than we cost to we when in Any starting I hopefully year? a how X% incremental margin? then the terms Is more And should on normal and Okay. that get revenue I'm growth second of is in think quarter. So get inflation better revenue think cost this meaningful growth inflation we -- about or back thoughts

Adam Satterfield

we to we things might increase we're the revenue wage can That a the on think of should got that is insurance. underlying mentioned I X%. Yes. cost other our anticipating that Obviously, ourselves ourselves. kind the those of going But some to been. north having probably going things that conversation do what Most one There based do X% some the last increases start employees in is fleet are of lot trends line certainly to the we've that number have we help. is need like everything But of with premiums year and able health to we are of but kind help to the into that should that be again. of up grow that in can help move on longer-term

bit a we was a thinking to It that probably volume higher but into And than X.X%. than that little last year was of lot was year little our the the a weakness. higher number came X% bit

a are So what shipment per on you've expect. cost higher you got overhead than that basis would going

we revenue be if we able So can't get the there. get some leverage growth, to should

that of really significant units headwinds side you're the did fleet. where year all adding earlier we utilization not face still repair power this On I the like, we of maintaining the maximizing that there all and mentioned some cost miles and

as side have leverage of So we some fleet the should get well. if we kind into that grow on that

be on we the certainly, progress through we some that get as areas year. So able to some should leverage

Scott Group

the something CapEx on trailer year The a holiday Okay. a And lot. this we sort quickly. six or or longer? Should about or so think lowest one as just down one think years seven guidance in equipment I last of it's tractor

Adam Satterfield

No.

year I tonnage of we and kind And we into growth went being mid have down. it's a the deal. last ended up single-digit would think again, one-year somewhere in of thinking kind it that

fleet want and gives that think how stewards trying grow be capital us I to kind it. the and of we of And past into what think well. we to go evaluate our expect obviously So been pick-up we to where in can as is we And to do and it. able good we if volumes than life might have can that certainly into room more then respond

are with what expenditures pretty just So And necessary. make revenue and we'll for real spend you and evaluate XXXX. be with changes -- the a year we But in we'll on at of estate in this past. side, of when going we CapEx. to think feel into like and This percent seen XX% holiday the are fleet are get whatever that a we've need to then typically probably where one revenue on year of much we the will as about the the sort what of of I breakdown XX% we line our sort look end

Scott Group

guys. Okay. Appreciate the Thank time you.

Operator

go to Landry Suisse. We'll next with Credit Allison

Allison Landry

morning. Good Thanks.

about advantage in customers business and terms to more your be So, see you I talked just of recapturing trends. last that I in may what to and share think some wanted seasonal Because stability from volume the go started that contributed rates to normal left to of comments to gains? you take lower earlier year about quarter had back

happen this So come just trying you in in to in And to this extent also of out know which I if basically just the played curious seeing change advance pace was these would recovery. back, that a that in QX? gauge it did, you're any normally see there was to something whether is customers the

Greg Gantt

last Allison, that we year, have over prior. come some business Earlier see for that to price us see continued our return we have we to business back continued service. lost to

it see We which share change to don't seen gain numbers the continue there's completely. economic slowed continue diminished huge in other actually so But slightly far, we've the year in see, or cycles slightly. was over think I did because this share a to our gain So, our increase good year, trend. to down where increase that

thing. are to what that measure At we We don't It's a that's back we of bids and think we things. kind winning gauge. I pace? But hard those good So, some still -- we're gaining lost. business are some

are that'll gains and anyway still. -- So, having some we

Allison Landry

I'm if the per helpful. us QX Adam, walk through That's then could Great. weight trends in that earlier if said the shipment in January. and sorry missed that Okay. I And you you call. monthly

Adam Satterfield

or tonnage the shipment? weight The per

Allison Landry

The shipment. weight per

Adam Satterfield

Okay.

just seeing shipment, another we weight bit point shipment and go a give And August little there. low back year. bit our is kind bit of if into of we points per you hit in of of one XXXX. us back this So little But north a confidence kind on a recall going that of the on those to of little started per a weight then movement this

a down. had X,XXX when look at back hit time X% the year-over-year on in quarter pounds down in August. on fourth and around positive it, sort a in then the by basis year-over-year We X.X% basis, still we down to But mark and December. X.X% were of were November So, We came in that we the November It October. through December frame. X,XXX trends

down we XX-year of with versus it’s development I January for normal than of our like those where what certainly trend moved most down the the much about in line in XXXX, for might kind -- of sort were of a kind tandem So quarter would be, sequentially but pretty moved average. say with it's positive sequential but

So, we're January pounds of XXXX. this back X,XXX to in

up and and weight sequential shipment I stay per a the trend seeing little we'll pretty we good side shipment weakness. improvements like held a progress of hopefully of per steady kind on January the some in year. through feel we're we that The year before weight spot bit see last there, in started see some steady

Allison Landry

you, guys. Thank Perfect.

Operator

next to Ari We'll of America. Bank go with Rosa

Ari Rosa

morning, good guys. Hey,

there. I'm sounds you causing different just like from something maybe more unique I wanted kind the truckload to I hearing So think about that so, really next are a that's optimistic tough of carriers that's some you're first a attention the that outlook what of quarter to -- about it make correctly? saying sure environment, recovery, guys diverted environment. or second little of kind dynamic? in off, LTL, there's truckload your half hear But but And a operating you when do

Adam Satterfield

anything I be about in the growth this any and are think how what little to it's first is home to aspire long-term in that it easier turn pre-tax to so being the like write Yeah. there's forth, of bit. guess just not growth been able income we that you seeing we've are because And know the But And improvement of and about the different. I if flat generate revenue and a don't feels to be will. half. that to not kind we're in starting we numbers back frankly, better should than half say year first we're there half, when things

takes developments here And it hold. see We'll and there's there. just kind little of positive as

have there we're the speaking election slightly volumes risks, still be historically cognizant have in political years. kind we election that seasonality that think fact are of to an in And and of year. underperformed I

with all So anything expectations to mind finally probably like have positive back and our XX of of like more customers customers above conversations. than from we – we go but just growth negative our it's they're not continue kind that that in we're that its but or conversations keep there saw are robust ISM

first optimistic of probably cautiously that's year the way the we're is through So best to the we as cautious optimism. it go part and describe

Ari Rosa

you in just you of times you're in terms specifically, a about to question. of entertained bit Do is split consumer maybe strategic the or second various something book a economy or versus mentioned consumer-oriented of that's industrial space, being you look more what business an And Okay. your then maybe That's just between really talk for more And the helpful. in could customers? industrial compelling a couple seeing some reasons? weakness then too there's think of of a the that it to idea is that a not opportunity, is something much build

Adam Satterfield

really change year. Yes past whole didn't the a our book – this of business lot

Our of numbers the were pretty industrial. terms consistent retail and breakout in of

code to to that the of XX%. from it's the basis to closer then between And industrial on XX% retail XX% SRC the go So of kind closer XX% XX% range XX% the kind about then of and to from hodgepodge things side an there.

our by and product avoid are to chargebacks fines of our growth trends and full fits and supplying years like in retailers that placing retail-related some gets that And service retailers right vendors e-commerce wheelhouse couple the on longer-term that forth as the distribution of more over I customers and of we of centers. business. seen and the that time these help kind in and in that importance last maybe costs to some delivering We've of our think are on the some can so into

with benefits it We think standpoint. the it's a transportation total we're can charge price. from level I that of consistent one of And fair was a But providing. cost service that

want from up retailer. us costs of secondary avoiding some that those end because the come to that customers use Our they may

things and that exists just in get for maybe a other So avenue definitely attention growth. in last we're standpoint and a of space mile now. that it good something interested as really corporate that across is creates doing deliveries win-win is But it scenarios the right not more from strategy threshold

Ari Rosa

or in But I That's space, that industrial something should into split XX% an e-commerce? to to or of kind is of retail there final mile is out understandable. of not was particularly opportunity my going No. that But entirely or XX% LTL growth within is question in we that of retail an grow given XX% staying to Obviously guess kind sort. there XX%, the e-commerce, expect business opportunity the continue?

Greg Gantt

answer. participate. or industrial those But it that's retail certainly huge to a entire be opportunities economy sales got as we've present question try And force hard whatever. themselves a That's to working we'll the

think I had competitors some retail on we've have aggressive far we side. than that more the been have

solution be certainly that's and they for themselves customers service or it So will looking if probably we'll is. need. as those we'll for better a our have be the hopefully if there. there competitors like But why they're be opportunities the our And percentage present for is

Ari Rosa

of a time. makes lot for Thanks That sense. Terrific. the

Operator

Todd KeyBanc go with Markets. We'll Fowler next to Capital

Todd Fowler

for a maybe right the to to into around the basis else Phantom insurance Adam from point XQ basis stock XQ? something excuse just XQ conversation little way think comp put about margin particularly and and the off there about normalize into sequentially whatever expense typical adjust think Is and was good sequential bow is XXX incentive bit first the to quarter. that? need over a on then the we of Great. the change or Thanks quarter fourth change for me morning. impact or – Is about margins, XXX the a for points think to

Adam Satterfield

credits and stands that but other see of the there increase well. we will there line to I think, progress that's insurance only Because some your thing out of the at I line yes you XQ normalize this one the on and I mentioned really look most as thing items the and as as stock sort that only into would the offsetting normalize points adjust for. Phantom really are as of I some think

some being fringe so benefit as the supplies line, of well. expenses of within some being that and operating in the And kind

the points. And things offset average So XXX thing stock sequential quarter. is kind into the of from you would of only the as of of you did XXX, well about look is sort basis mentioned, quarter fourth a sort in get XXX The that in kind lot really we points with change kind And a first. basis I good fourth expense normalization that the say though then the as of you it of becomes those of categories. just Phantom

hiring, we've at a do change different when if from into oftentimes, the really had at be XQ look do start where it pace. of we If was oftentimes like kind you what periods well. will that have XQ to And we

And costs little up than so maybe you be be bit maybe a below next. trend there you're higher as quarter higher could end kind of might one some that a

might if a necessarily than normalized sequential surprise, trend basis if bit normal be a a So little on what that higher that be, we're that wouldn't sense? makes

Todd Fowler

Yes, it does.

because we so But sounds see like from normal you're not think may earlier probably if it that's the you're also trends saying little hiring indication what if an we think about XQ that is, how up? XQ is better. versus is that call, I XQ, bit tonnage change a headcount picking in

Adam Satterfield

Correct.

Todd Fowler

typically just about can you high then right the capacity. see now. competitors you of model follow-up, really And available think have And maybe incremental being for Okay. capacity some your freight network additional I back talk can't. my in your available about the do to that in that you tonnage drive come margins that you when built And can can that because coming handle

network? So see around in with can back is? coming available And more the process where thought just network And with a the how the leverage just you sense capacity you of tonnage give you think handle? the in us the much you'd tonnage can

Greg Gantt

what definitely particularly significant with We've I our capital year. were capacity -- some last were in think they built know expenditures you XXXX the

So we having capacity flat built such definitely year. a some

go and this out we have be build into to continue we where network the know continuing we needs future. As in the flat year, we'll we're and build to

in of from and It's ago have the were better able when think shape accomplish but couple a those to set back is? to XX% do we're we we've standpoint. had really capacity We've we we're some in we really really, point and we had needs that needs time, what it the addressed the we that probably for where a We've this future. of XX%, been addressed today. Exactly and busy. even well than I years maybe at some So good capacity like hard but I are say,

Todd Fowler

Thanks lot Sounds time good. morning. a for this the

Operator

We'll Hartford Baird. with Ben to go next

Ben Hartford

the room to of do dividend forward? how And next in. shareholders sheet you a but balance think has the Thanks for like your just so to returns lot if several you mean, higher stepping allocation about payout going flow getting not, higher. Adam if carry me at in cash or ratio -- leverage? a move up, level to the has of looks changes been the this the And Any about It to think appetite as I to continue over years.

address you maybe Thanks. as well? that So could

Adam Satterfield

That at be and to continue we're we going were we evaluate able look certainly as that XXXX. XX-plus Sure. to pleased is and to increase into another something percent produce

it on dividend And of ratio we earnings a to the looked had out target we threshold had forth. earnings. strong first we year make payout sure the to really So sort it our we since continue prior program that wanted started our that of so that kind we and of prior about kind the have year growth because And the room had really to started to not we was side be. conservative been XX% -- so not of increase reached want that had the of program at we when implemented that to and basis

cash moved at execute an try flow we'll up that that we've on I of that year I ratio and to plan. then this to think be was And address kind bit strategically And of standpoint as achieve of that. would And good the opportunities coming to and the that stepped look got well other to dividend overall advantage north least on kind may year we goal we in the increasing we've operations, also So taking side program I spend continue that think themselves the little buyback on increase as expenditures planned forward. from do continue bit at real that a side. looking from we'll sort and that what of a payout last think move we little capital cash the a at on to present are estate to share balance

did little planned had to few we available more in of became originally up ended spending we that of a us. bit than We And and kind a opportunities XXXX.

at sense. continue our kind to as just to an and capital of to those. excess we'll balance and are kind balances we got trying So our just look from cash we of of think I overall stay standpoint sort projections shareholders positioning overall And makes to it then where return true cash to

Ben Hartford

or XXXX note? of are projects horizon beyond in One that Any the IT final either specific on one.

Adam Satterfield

projects to get management that behind us. excited at an system to look on. And can try on we're that we're always our systems, we a we will year. have. working at several created the going We're continue human you this We're got those so been to operating which We've thing converting implementation looking be capital a I -- And to all new that improve us. And think, how of systems good in-house. when have incrementally, for

we've may places of got plug-ins, products interface some and And where have off-the-shelf that kind with assist.

years that the and trying of one in operate efficiently competitors to regard. But that we reasons over in the of stay is we've ahead our so systems the invested

always at evaluating other system think making So, help programs be going to looking to will that incremental us. any improvements we we're and those

should that assume a should system, But accounted an we we along on that risk we any project expenses, And rather any and think and in return return there's make a is that or that any the we investment it something And investment. for go be with incurred expense. as that's that well.

So, of a baseline that's we that the on of to the decision pull trigger kind project. when make

going investments those And continue investments. so, on to we're making getting look returns at to hopefully and

Ben Hartford

Appreciate the time.

Operator

We'll Stifel. go Ross David next with to

David Ross

was AOBRDs that a business, behind Real about ELDs. there quick, I the assuming? Is any that in wanted costs all bit the since to you little you. have to Yes. the impact from permanent transition to doing Thank you network, were you talk And the made the that? fully from now I'm grandfathered

Greg Gantt

hard about. material, But fall, impact lot accomplish Obviously, I that of to us. folks us. big We it back behind behind it's behind our work in project completed time talk think it nothing a don’t they and at the us. material it all. is in from David, it to did. have completely But but effort No to glad the that took a

David Ross

And grow CapEx exceed tractor then would question current for volume to last expectations? Adam. have to this how much I year guess your

Adam Satterfield

this David, a got now some without a nowhere We've it's near accomplish year, I'll absolute we've We're got and the time to I levels level amount. at near equipment but our fair We've peak that looked some right doubt. capacity. peak. our slow right mean nowhere equipment now. peak we're We of obviously, got say recently. capacity

and we're -- sitting heavy We're we a good there. in we're if anything Maybe equipment as a or in equipments think, certainly trailing little bit good So position. tractor on shape still well.

David Ross

Good. Thank you.

Operator

turn I'd are today's no closing there to queue. it additional remarks. And to over currently speakers for further back or like in any questions

Greg Gantt

and participation have you a today. Thanks Thank to We a appreciate you, your have if all your for great questions and further. day. give us free call, please feel anything

Operator

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

You may now disconnect.