XPO Logistics (XPO) 15 Feb 192018 Q4 Earnings call transcript

Welcome to the XPO Logistics Fourth Quarter 2018 Earnings Conference Call and Webcast. My name is Melissa, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] Please note that this conference is being recorded.

let company a the regarding non-GAAP measures. begins, behalf statement use call financial the of forward-looking the me brief read on of Before statements and

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also comparable refer earnings certain financial the are of During tables. and this SEC to under may financial Reconciliations in the to contained measures measures call, related most non-GAAP the as such measures rules. non-GAAP release applicable defined GAAP company company's the financial

you earnings find the call measures statements over to release, You the begin. I Jacobs, regarding turn now may section Jacobs, website. will the contains of a of information can Investors and additional important copy in which financial company's forward-looking non-GAAP the Mr. company's Brad

- XX.X%. quarter. it, France X.X% of American our In the fourth miscalculated XXXX XXX record best XXX in to XX.X% implement less-than-truckload start-ups, for segment up start-ups In December, system, XX our facilities adjusted from we faster the Fassler, Well, said, December quarter quarter now. In their significant missed years XXXX. record postal of before With technology. we We U.K. with very one Direct Tavio in realized is we needs. Chief the customers there's the full and year. adjusted growth you, This revenue in Investor our ratio XX.X%. in affected in been Thank Strategy morning, by mile. December, last another XPO have the grew operating in That good XPO North reached Matt generated growth Director to warehouse it And developed A back more a business, to part own quarter. That fourth logistics That's to we points organic critical weakness our other than and logistics largest our XX our a Thanks and way over look, our impact years. of our in our our ago, in distribution large organic our which business, XX completed We've we national driven in growth wouldn't network operator, our at and our of profitability. Relations. Senior EBITDA We in injection adjusted revenue say December. no Headley, me few pulled customer joining ratio management grown improved had delivered mass and In revenue we Direct EBITDA basis XXX by everyone. Greenwich are for we call. than possible Officer

transportation we buyback, of earlier capabilities $X offer: access labor, contract which technology, the logistics, and We storage billion to the XPO of Direct. in Also our Last board customers Mile, variable solutions month. to have completed backlog this stock cost get authorized a hungry December, blue-chip a we

As to we board authorized yesterday, up announced buyback the additional has billion. of an $X.X

is acquiring shareholder right will now create that most value acquisition the M&A, love we stock. our While the

of to largest should customer bulk its in the resources for business not of We redeployed But we fact logistics. two next great. thirds XXXX. these over numbers mile the saw great can't capacity We that this in the curtailing and customer And the be then ignore believe down the us. brokerage, the dedicated release, you with had Europe, there's couple macro our substantial in As about we last of brought quarters. is

the a strategic to chains. may that’s at On with account Europe to our very organization help have degree in bright good complex side we this volatility. supply getting customers across with message And new large some

are expansion tailwinds we substantial. up we expect can for the number Q&A. of e-commerce through there our more get working XXXX. of LTL XXXX high Also from hubs record We demand projects of many pricing benefits started a mile our for in of into number last us full-year our is and other we services There's logistics which have in technology, and and a them our the

that to us employees. the has the category. honored place I'd like the of in hat were to tip that to and by row U.K. also work in the our our magazine Company Admired naming year one third-best Most created They've survey Finally, taken World's Fortune culture We're my Glassdoor. XXX,XXX led we in awarded Most to Admired for a second Companies in a the a

employees U.K and I in the appreciate enthusiasm. that XX,XXX their we share have enthusiasm We and

value. him I'm shareholder more in numbers create to Matt with a to handle excited much that, have a plenty working on significant to in you team. I fantastic ask to as and been as do. our We firm Matt's XXXX, With I enjoy be hope add I'll the the confident detail. Matt? review about ability

in many be ahead. months to XPO amazing on of Brad. look I'm organization. an you to delighted And is the and on the to weeks those forward Thanks, I the team. meeting call

in focus of transportation operating our billion. quarter transportation business of you the strategic We Adjusted inclusive to the segment. grew backdrop X.X% and numbers, the $XXX EBITDA unit. our Now to grew revenue by Starting by income I'll million. XX%, $X.X a by by charges. through with number from declined X% walk GAAP

fuel, expanded year. North for LTL, American and disciplined a costs declined X.X% X.X% our haul. rose to decline tonnage QX, revenue target higher we our pricing our per adjusted margin weight, of as from X.X% did initiatives freight. growth quarter and While the hundred with reflecting EBITDA In the continued length were moderating in profitable shipment excluding for Revenue more shorter moderated, we we as rate per

increase in contract both a also leveraging labor improving are renewals. X.X% We're contributing performance We more which with rate claims profitability of our achieved efficiently to and better our LTL.

to Turning freight brokerage.

conditions us quarter. technology mixed market the Our helped navigate in

on the revenue. have we than revenue more We're registered increased increased digital has our Within In continuing digits season the brokerage more digital doubled counteroffer market that on decline the our by and year-over-year was our in the In revenue low attribute Mile, feature, and to revenue Our in number XPO strong. brokerage, technology of keep bit factor deploy our to million Intermodal With than quarter recently We conditions. of QX margins. year-over-year. our based carriers in more XX%. net four Connect subdued transportation footprint declined by of but compared automatically tracked increased This to to through which bids booked our mind conversion we've flat with real-life revenue down negotiates Connect freight business. and the three. by and grown We've a more. drivers Intermodal, also Last The despite a across poised kind. by number we're market or much the fourth XPO success the XX,XXX multimodal led of volume peak move gross revenue loosens, as bids more was double with capitalize brokerage better net in Pricing the become times than is any transactions of we've truck submitted X.X% seeking truck digital loads. X.X% now freight marketplace to of $XX market gross

in Last our This delivered largest North Mile directly our business and of part is we the consumers performing network. Last we're and context, consumer to business with national behalf is our contracts This goods and well supported dedicated win of business the is is which undisputed are brands. major Mile by For continuing core to on service retailers new heavy core America. leader

and freight excited us the system. North Mile in growth. to Last Mile that of hubs Last direct of part into have We for have postal smaller for capacity America XX is injection A we're

to impact lower welcome goods. decided fourth and we curtail its to We business, postal the major through has be largest While than it's in heavy had differentiated We'll a XXXX. injection. entry less barriers cycling it quarter in customer this when our this

was revenue than disruption, we slower LTLs business which Our basis have This third-quarter and put yellow European generated to In on quarter, presence, the it trend brokerage organic where on our the EBITDA. an equates growth so dedicated a largest weighed of speak, and growth. European vest X.X% truckload. to transportation France our damper X.X% in on

revenue in main Through per more grew in and the story of EBITDA In North on terrific. e-commerce. and organically, tailwind customer averaged growth Operating was U.S. quarter Europe e-commerce. prior XX% one XX% organic revenue higher year. an than in the globally our Turning from our revenue and adjusted ongoing week segment, in from $XXX the to beverage logistics America, packaged XX% other goods, in growth each the was income remains start-up Segment the strength In reflects consumer XXXX, Europe. with basis. million food QX X% up and of $XX million, coming logistics and was up we

and good of long-term a have we XXXX, visibility. active in Now pipeline robust bids logistics

new million in logistics uncertainty off cash from definitively Companywide We operations but start-ups segment some The in was year. is Europe and cash flow $XXX overall expect free million. secular of was an the coming be in $XXX the pace strong could growth a mode. factor, quarter moderation flow the exceptionally in

cash For cash year, $XXX substantially of free million target. operations of generated above billion was $X.X which from the flow full flow and we

It million. to $XXX million restructuring asset taxes. cost. for of charge of the Our after This I $XXX This $XX CapEx mention was million growth and $XX sales we million. severance was want net included reported. million largely CapEx fourth or was $XXX quarter

about to $XX expect of annualized million. We savings realize

in Before as I a focus quarter for two I'll did brought on controlling capital working working company initiatives. of third fourth forward. quarter, the wrap we good our capital job was up, This up the In a minute management. through a going the call spend

The factoring. first is

business. extended same of factoring relates factoring become insights. capital. which use majority large require and in business logistics payment uses is of Our with QX contract logistics our these provide At some in customers our you time, I fast The more of want growing the to terms. our more customers Most working significant to

for a plus It's funding source our year-over-year is a LIBOR from factoring factoring LIBOR plus million. our for cases, flow low-cost good also basis incremental to XXX was So here. points. The of cash from us. In benefit XX most free $XXX strategy ranges about cost

outperformed we has operating our own collections. management. focus on our a been flow. is cash up This in initiative progress big of capital free With and second QX for speeding flow expectations The cash collections working

customer For represents XXXX $X.XX to be adjusted we'll business that range billion reflect significant which $X.XXX This from in the X% we're to fact managing guiding reduction benefits through growth. of from also EBITDA increasing billion to we're of the largest XX% taking the do think postal of our back internal in Europe. cautious We our the see half injection. view beyond initiatives year. a we'll And more growth

range full and million year, This $XXX of from D&A million $XXX million XX% cash expecting EBITDA we in December. planning million [ph] with we're We to shared for with $XXX the of we're XX% million. For free program. flow to the rate million. of expense repurchase million to our rate we CapEx tax adjusted the reflects to of funding new cash of to higher range expense and $XXX $XXX of the interest It compares share lower $XXX taxes target $XXX We're expect using $XXX million growth interest and million net a cash million we to $XXX you $XXX the to the million. expect $XXX in in anticipate

users to of with with cash the free building our quarter, over first of in year flow We the course typical the cash be consistent expect free seasonality.

growth. There profitability, note growth for impact but So that we of in focused down a and year of are on will marketplace. many strong part a opportunities ending was across the on us are XXXX summary, XXXX,

innovator. of a positions questions. to of for With solutions broad the it industry we'll range integrated turn leading We a fast take I'll an operator, and strong that, and back growing have the your in as track areas customers, record

Instructions] comes [Operator question Inc. Atkins with your from line Jack Stephens, with Our Thank proceed question. Please of the you first

questions. my guys, very and you morning taking Hey, good for thank much

Jack. Morning,

us I help appreciate And So see of why Brad, - I it's choosing case challenges. liquidity guess, is companies the on now additional I first do years? through I receivable around the does we that. really can't to XPO? you that of with the And is think know, And you're commentary guess, kind another you and other to in versus manage that, prior I logistics one company the there. guess, that do can But here does that when transportation that think factoring,

our on Matt. is customers, is Jack, Sure. I'm with them. factoring our logistics of peers. believe that it's majority business. accustomed contract among factoring, money with factoring with place that fairly And associated contract to And common happy banks our factoring facilities Most transactions the that of we or our question. are our to working around logistics in centered oftentimes, have take

fund at discretion. We ability have our ample evidenced by liquidity, capital allocation to our as buyback and our

despite when why strong That's in to EBITDA in secular not a three freight you XXXX message a during them from outlook guess was Brad change seen you to of Okay. this the could excess and second cycle. that the sustainable outlook you, double-digit told in drive in the And company really future, were the do picture question a How senior story? investing the significant XXXX you supposed question. was that XPO bigger regardless step and extremely growth to guys Thank taking you, so Matt. explain last your doing. leaders over guys profits mid-teens you big what reduction the be reinvesting But yourself expect for or months. EBITDA your expect growth for - for that surge growth function is profits We've cycle folks I color

Fair question, Jack.

development year quarter softened. The quarters still we be ago there macro we what the $XXX a was that that would limited of XX%. at saw access the we least is business big short that business, on we place, And our people guidance very we geographies in. have turn the customers. level. had capacity, optimistic XX%, excellent growing other guidance. at largest that's down another had have where service. down when brought We've in the down said gave had macro we that softening, same pulled other we service on just stays had place, that is, I back the business I We as we from give strong, that as if at, that's asked notice. from we XX% several of in particularly to We when of our to to And U.K don't. We revenue got guidance growing am the the business to brought we excellent We now would technology When it we development. and we resources. we customer strong because to not to were down a customer. I business France get for it done back we macro because customers had way grow a So EBITDA there's XX% the will significant And was deteriorating thirds at? same you that had that XX% their the in level. If XX% which million ago, saw was and bring lose brought macro We our two no when level you can't to

half to and redeploy of next utilized going second in that quarters the the believe they'll couple are of those be I over We year. resources the

Fair thanks the enough. Brad, again time. Okay. for

Thank you, Jack.

Thank you.

line your the Ariel Please of Merrill of from Lynch. comes question next Our Bank proceed with question. Rosa America with

morning, Good Hey. guys.

to wanted about concentration. customer talking start I So

row on some put in one XPO customer One particular quarters of we've not But I about from particular shifted on they have has - concentration where focused investors or would the in from news any your maybe kind its it's of dent a or has that kind here I touted how real is customer. you which a think disappointing of has of a talk thoughts the that to two seen really customer that I strengths should want as to results. overly things six it And maybe thinking is perception differently want about ago? base, customer to changing maybe extent be months get your how manage

of customers that in has of in thirds business about however our XX% represented X% XXXX customer you The that. of top Two gone and largest revenue Well, five represented K. roughly about saw the that away. X%,

about body a question that's blow, no it. So

with forward top customer that that Going we of represent having our will XXXX downsized, about in anticipate X% five customers revenue.

customer’s when So you lose business, top be customer nothing will concentration - of majority say, hurts. it's your positive that you Nothing negative. you your when there's positive, But can lose only the less.

And that's as a as quarter. bankruptcy. revenue I not that the it loss as don't That from rebound the of House million. we of in was earnings. the really that It $X.X business the I don't anywhere significant was of a also million from thing. our an mentioned $XX of I is $XX as us in it year Fraser second million view of significant write-off near $XXX We But that We take a big that customer. third back. miss the cost miss. as of when $XXX view deducted thing half add did as view top billion losing full You a will year. this from significant million

you That's they feel note of can sufficient that's this question. on a is it color. I'm could about customer just point that quickly question. And lot talk Obviously IT kind really see a wanted Maybe as if that see I the apart puts just recurring you away that. side to do talk departure I Or customer? technology this business fairly that tag about stepping Brad, from customers? helpful wondering differentiation about see thing With the still other impact forward? XPO's with margin peers? of make a this great. the feel present could they maybe obviously then replicate against if is how Okay, maybe your maybe second that going talk, guys to you capabilities. you And to we'll on you the your that defensible risk a if moat could from then that

view has have to tech, year. go million like if million spent things We labor are tech we opportunities And a every those out as last too. tech ROIs as of we we too have 'XX. many what $XXX there the of terms spend would in not base We'll of tools tools. dollars labor managing X%. positively. more like in in in LTL do big in in a that logistics productivity impact. we On billions contract little, productivity we and our of that transferring When and in over carefully. rightsizing over we this in And we between tech our $XXX headcount, rolled employee technology the about do, to, year extremely about investments not tech I tech. costs we innovations labor our a billions lot too the And has of labor very much, wanted productivity What big a have company I deploy and And are to managing terms productivity X% overtime, improved

we in new addition Again, So rolled to differentiate last contract labor our year. ourselves inventory us competitors. from management productivity helps in further logistics tools tools, out

Continued sign with ups We've Connect XPO XX,XXX continues. to-date. traction got carriers

AI-based bypass many optimization key, from business, of bunch automation other dynamic load route country in pricing a a very very, course rolled of And algorithms models features. every key advance to automation, that of you is trajectory over line out every the to XXXX in linehaul been whole have technology And company fast. we So at the look if LTL building focus. and to there's the

contract in back just keep and places thousands that is robots have real the of in particularly many thousands we effect rolling robotic We our office, logistics. out automation having a process In of positive organization.

to very the largest customer, moat. we is I us. strong reasons are gives Yes, one technology bear. us XX,XXX the our feel that about choose we bring our very other an customers extremely customers. So technology and two-thirds main have of think in strong And but It's we've of lost we competitive

and technology. importantly, our value very the customers they More feel strongly

Okay, great. the And impact? the margin quickly

Yes.

take it's So Ariel, Matt, I'll that.

associated So you business we away. about flowing through you contribution should margin corporate erodes, lose that When to that about lose margin. think expense the right we with that, necessarily think don't business, not because have

company So slightly average think margin. flowing about that through. It's EBITDA than higher

in the that have Now defray what business half place obviously, you. That everything evident on doing can be told in W some in EBITDA the we e're it's first we And would the then, see in keep in part the of year, so second of you expansion EBITDA adjusted a our margin the now to to steps embedded second margin more to the we've adjusted based flattish, impact. lot expect half margin the the to flattish EBITDA plan year. do certainly would of year. the

half of of recovery in that's of postal injection second the associated some Fraser House QX, with cycling the direct of we the capacity But the we it's year. expect of impact particularly in also as cycling the Some painful the QX. in general business redeploy

it. Got

for thank time. Okay, you the

Ariel. Thanks,

Thank you.

question from with Citi. with line next proceed of comes Chris question. Wetherbee your Our Please the

Hi might it of on be? the organic lion's for about Thanks the from? question. the growth. cadence come guys, I it's to you to And what of that for ask expect do wanted share taking Where Chris. James

was the cadence growth? of second part organic What question the of the second your

Correct.

be going the start-ups growth The majority visibility highest Sure. to we're year that the this weighted the is nature should in the the about the course The new largest we transport of supply that business where due the business our to customer have It's come XXXX. and organic to losing we segment. of over spoke chain. more with of contractual

organic growth. on where more to that's can So see you pressure

is is about to difference as through year. a we way And should point year difference growth That function is you basis. year of this organic and make that reported think growth a year, looking the what FX, in narrow there your revenue fuel, dollar. based the plus As of the strength point full looking the rule which know gap at thumb of bigger at and first on on you of between the one part

I'll add on that. to

contract at juggernaut. a secular If growth and XXXX, logistics In market chain remain organic taking globally logistics mode remains in we you QX, was in share our look mode. revenue supply It start-ups start-ups logistics up And averaging XXX XXXX, more than growth XX contract been did the a number in and fourth we've of quarter. week in XX.X%. we record including was a in two definitely

So contract we that throughout in the logistics of we'll those all full-year XXXX. those XXX layered start-ups XXXX, in here get contribution

Thanks. bit we And more Europe, on should XXXX? the focusing see little expect we then a that net to decline should grow? across Or in revenues

Well, answer is to Brexit to you for out for France. your question, figure order in what that assumption got and

business a negative. But X% be into So in our French and the U. commitments this way a they A their and going was it ends positive continuing, a go the what positive. status and was Brexit I into remain doesn't it In the to with everyone soft be jacket assuming openings Obviously, on events France, right new use X%, the expansions we've quo. way baked is ago. tone from depending that's be If different to negotiating Brexit, a if malaise, if forget but event Obviously, change was a becomes just a level quo now. year, in Troy whole That longer in that and or there's if And yellow there's say And their both be in to negative and our about a continues annual ago a year we're that that also GDP it the would assuming doesn't guidance a positive. and would and year up. would Brexit Macron's hard is France agree they for a bragging period change France, keep of President that quite time positive, And to France given. of that that K, with that's positive they the status an we've about leaders. positive. perspective in negative, position give lot that there's you We're would was that'd go extremely where significant Brexit of subdued. if keep neutral. if Brexit GDP CapEx. us to extension going be - recession their than new went went just in a it into in it But recession. representing word, numbers,

in these in things all the situations. things control. taking control, are can for we those we best we to There’s can can't we things we can we position But There's outcome control. actions ourselves eventuality. with Now regards even don't and react the

France about we've Greenwich here And were who impressed weeks Jean-Emmanuel middle-management fantastic ago. Wehbe have upgraded and Mongnot executives, Bernard added a just in us very, replaced So two in and them. with very - two-thirds for of I'm week they a few their with teams.

in on deal senior level capable, and middle time. long to there top-line are experienced very on had with growth. U.K. And cost competent strong and a the So team types economies. it's fantastic very not we Brexit, dealing And - we've there's Obviously, lot of long, focused in they're control when all a of very a morale. It's a a with we're agile, for and strong group. in

taking question. for Thanks the

Thank you.

Thank you.

from question Amit the next line comes Deutsche Bank. of Our of Mehrotra

has the four missed expectations two last in brought times down Thanks It's company quarters guidance operator. months. a Brad, in row. three the

what you should $XXX underpin near-term and with that, what EBITDA I why assuming the an the there's free are understand, down existing think flow months in assumptions record, why that to customer the a and the we robust it's what's that? important to confident are real remains likelihood are that you cash believe number? another million two XXXX? and question from And achieving that how at the - company XXXX Just then flat that guidance And now, how it looking for we're for related today. question guidance is given about think I track And the

Okay.

- good is there questions are ones. all plenty Let and they me of

Let me unpack them.

First down. agree and row question brought missed a I two is of first in all, the in gee, with you quarters the guidance that you've implication

seven skepticism quarters we good. having record. there a peel accurately in for So And our you We understandable. the quarter. whatever row, we two been is said believe performance twice. track a Not guidance slipped that, Having and is then has years. was don't forecasted not who third not on in a are. is exactly banana And we This our this why missed in reason our

our been and write-off of good And we went they House we of – went had Fraser $XX had had One bankrupt until a bankrupt. they million customer there. customers a

capacity they were significant of and a business people. turned And we like kept to wasn't into the lost Christmas don't the factor what in another really getting And be pulling exposure lot customer that We it turned business. nothing December, December. close notified loss So that. fourth that. all profit significant customer in that's was we also that have do in December has unfortunate. was the largest have of reason it main was we the bankruptcy, we've so go ready to simple just injection and had and up happened who the largest In And we into and money to quarter, a we was middle controls, were to to a it's utilized And and missed. that as postal the a expected tightened our in by the with our our

that's So what But those the the they injection. unfortunate U.K. are things are. France real that are big the Look killer results and happened. the blew But happened the a things was all softer. and that postal little unfortunate quarter. And were

was We it's given guidance about that bulk It forward. guidance, been on asked It's changed that down a we've significantly. week and a notified of well up going lot The that we brought reasonable, the it's going because were considered, has been we hit pressure it's down that guidance. this bottoms million Tuesday can believe You tested. $XXX away. brought of

in that to you've could. on in. guidance we So we little regaining had that we've miss a a or internally year, we feel few and people traction given we’ll overnight. first going guidance year, redeploy certain the we've the But time we that revise days overall have quarters. little our the it's a bit And reposition from our human. about out the guidance that because hit. can brought we've take of and those we the while the materials, that guidance half believe we're We to believe of our going beat not had It's We're second those is put guidance especially to lost. to good down for we a within going noticed resources, But Are to the have happen business I the to of half lines? couple

he's whole positive we the assigned logistics in four from layered that strategy XX before, hired now We've we'll copied on strategic that XX% of organization sales winning more As Europe. the contact person excuse we them. organization's versus in DHL, top North hub been a year. the DB XXXX to through mile and year managers strategic of and XXXX. in XX contribution November, I of closed have from In lot we've him. wons increased SAMs get a Schenker year. Similarly, of did get year we formed me We've full full the manager from hired great I the that It's account mentioned point expectations the team The benefit we'll XXX fire. start-ups to that customers XXX The go. and so a American the under single account successful last

than does. half first second half has comps easier the the So

mile we we'll lapped of last The contract. have second - lapped lap quarter Defense loss. that write-off. the that half House Fraser We'll Department of have won't We'll fourth

happened back as build I that on that half and three that second with what - you of the million So all that events of year. years. life are gets the business lap this $XXX not other the Most to we business, but but I'm that sorry that assuming lost we we easier interrupt contracts remains asked under of you, money-losing we in over these customer. that the expire next is also business that long-term

we've business that will assumed assumed it of of haven't So be we all risk, stay. might and of away. it business all And There's shouldn't that go it. contractually that parts go some other not away, at of could

Okay.

the of lot the There's Just the the customer of own follow-up. by businesses out, faster-growing for isn't implied of of the discount business my business. moving largest valuation the in LTL model. business being complexity on it's valuable merits, a that the whether impacted suffering conglomerate obviously like is the logistics a their But highly assets from

float in over possible to months deserve? management valuation own fact, last allow then new at So more would get parts more and that occurred what's businesses just given willing the be Is six the that's those something that of that their those spin-off certain you bring on maybe now? light business of they just to in to the business,

the think think I don't action. several there's one, a customers Number that their customer wire and reasons. ours. a who don't reason from the And to from forget, course I it's be wise perspective, - money that of accounts would

to customers in for having basis. ratio We have So on had supply of delight than It's to just us what's rather more year-over-year years. single to income officers on operating our big. always going supply consultative us of solution going a levels a the business. is provider in On the decisions what's based ratio a XXX do package please fourth is quarter really And the by could in XXXX, chain ratio customer, the our best RFPs. adjusted basis our big. that operating each customers, what's business customer. make solutions operating makes year-over-year XX going be ingratiate We on the contact ourselves improved bidder in We more and with the to strong. improved by total on to quarter going our LTL, talking what's to basis. that XX% grew going having chain operating In customers a we big senior of points. us most and It's a gets give point

we're going on So I where about good feel LTL.

We have more opportunity of to us. it improve ahead

that of be would less our and customers I as our if to shareholders, is think then, than valuable separate, organization. an business part therefore was it it

all of them modes many using one other that look them customers uses are almost top of of you think I in can't at LTL, of just our if So LTL. our business well. as

can top over, managers XX SAMs, many at update for how outsource users all look they technology, to use you how when can I accounts how six LTL we - how can big can If modes we average inventory, they're more And on their of change we how use our our different five of our can them, very or we mean, they you their than in going services. there's money, that meetings, predictive those they the us and would with analytics, meeting help meetings. those them customers, conversations, where If are separate in customer be account proposition to those do can never how pockets, several-hour better And have strategic value we the weaker. save redeploy making? would company we're things our we can people are have our those you from your

of I Now, stock we what is for? to do cash what in our our use acquisition is, the have Because use want want there: our capital value for for. address and the stock. other like so own that part want we confidence the that's the to I'd out capital What best long-term we use to to is our

taking right. it. Appreciate it. Got All for my you questions. Thank

Amit. you, Thank

Thank you.

Shanker with question. Our Ravi Stanley. line question comes proceed your of Please Morgan next with from the

of Or months, mean more think warehouses you between you I facilities? in of and this last kind give of just Thanks. with with Good one you an color - one in there? largest loss guys loss was the business a unnamed the of I guys. moving some us customer, customer. couple of morning, that Verizon were as addition to Brad, couple Could your closed business well?

We contract logistics closing are always opening facilities. and

in up year, fourth when press this. we - We The we a quarter. So put including last open facility, XX up release. on opened out press pick don't XXX the did we usually doesn’t

usually close lot notice last put out of number locations facility, certain the warn attention. employees, gets have becomes we But you closed notice, couple assuming number could and we they and hands. a just we do, on a don't. we that of a they When a year W-A-R-N of distributed widely called what's Sometimes of count

in we're the growth Growth remains very logistics. strong mode contract So clearly in there.

and America North XX%. the growth is and e-com, goods that growth strength revenue beverage And fourth in in our in food saw and You in organic is - in consumer places. these accelerating packaged quarter

bullish very, of supply very Now business. strong. part I our the about very, feel It’s very chain

sure that was year been the mentioned Now coming had one closing. couple the press them in-house The Midwest many with or whatever customer got I that of up to that they one they Coast, respect the And renewal the decided for end in so for facilities for a But and those customer East you lot for they want them. were decide don't customer, not. do decision. our Two whatever king ending. is largest contracts contracts which of contract we with brought know to chose to those. were And or can whether of the that a they in do them, and were with

of we the chain. an have transition supply a goes more with a to important wish big Tennessee evaluating many in supply You country back company global Verizons. their in its always of decision had close them of Verizon It's Verizon the chain, parts relationship have amazing other We partner facility decades. great And Memphis supply several ours. they're the It's We did and chain. it's Verizon. one an distribution facility; around complex and serve We They mentioned because think products we love It They're out strong. made is we them. a the to a supply a chain. wireless centers distribution country. of we they

So of that is process. just ongoing their one part

as And looks I'd that build insource they've made - network. you helpful. out it Got aggressively That's mean largest some over time maybe even see just competitor network customer, I a follow-up say do on And your I like their the out? build them to logistics they logistics. on moves it. really own becoming a mean pretty

and business. 'competitor'. have are them their customers trucks, for business their our fleet. and and part get their And the Look outsource. And they business spot they most our a dedicated largely And irregular own Most we of challenging of own backhaul most themselves. do the large difficult of lot their

headhaul, have repetitive don't and So a have they they're backhaul. running a loads they

backhaul. the for ourselves like XPL ad use they So

not customers in-house it's a - blend. or - not them outsourcing, are are like there's customers So in all most most are of all

others. And some outsourced than more

the those time. insource to is some their and is of over of to more some time trend outsource And customers, more over strategy

provide that in trillion we're and $X market. the less X% The at Europe got North here. even addressable And $XX the $X services of addressable ocean trillion. exact $XX market than for even So we total we swimming just we we've billion have is between have America billion,

needs our can we be changing move flexible, fro can our with and to we So agile, be of can we and customers.

Great. Thanks, guys.

Thank you.

you. Thank

Scott next Oppenheimer proceed of comes Company. question. your Our with line Please and Schneeberger question with from the

you're that XXXX. a if Brad, guess LTL ratio, how on how for it look touched curious, moment. I for XXXX? focus is much driver we on performed volume, in thinking was ilk of guidance? morning. what Good I could the that into about as you operating yield, we Thanks. price things a And of for

I will continue. think on LTL, strategy the we've that had

process And as and calling I system that multi-year modes freight. the many almost call that, We'll bad, good with it take LTL all a emphasizing a the yield we've of been use out more make mentioned we've profit practice had runs that on. long all our for interested of customers We're of price. can don't tonnage and And our not business. in early we other matches a get So tonnage. We at tonnage than tonnage. like in as we reasonable improvements

without can't the parts other just of having fire we So business. influences a on customer

and in reasonable ago, It's and And to it we're a going of good. is other been getting improvements good. going great was see yield that strategy still been tonnage. industrial with year we've participate and growing to customers - we at We're sacrifice customers It's that's those that So and sometimes positive still is continue. like but growth. not economy the

other us of how it give much a gears, feel maybe how injection then contribution Thanks. the are? other what of to large shifting sizable. million, but that sense the right. business? And then, get Thanks. and And going was away the $XXX of was how that's upon was the business the wanted but Matt just the touched margin, Could for much asked was million you parts a postal And about remaining injection? All that postal $XXX is parts

financial out where the through play in injection gross in down postal last business is year was. most the for which come are you mile able that is of the to the So see this segment, statements because likely revenue

about go $XXX very as think it the in earlier arena, bit level as of but with associated arena. the third the of The years on transportation maybe best or of period. a should impact in million and high would its ballpark You it to be we that it any a quantify rest the business smattering we'll so intermodal. And of most do our transportation. Elsewhere in the of transportation in the brokerage, said it some in of in contract little it a given logistics business in

very Thanks right. much. All

you, Thank Scott.

you. Thank

Global line of your Seaport question comes question. Securities. with proceed Sterling Kevin the with Our Please next from

and Thank Tavio. Matt Brad, Good morning, you.

morning. Good

morning. Good

morning. Good

here can us quick gears CFO going? the Switching you is Brad, search real update how

going given should in companies what said, is be report stock the the we valuation pivot buying well. quite We went a the our did be bit. buying hey, discrepancy. specs We come short than had the search we December when out, stock seller rather we CFO should The down

we and were So looking invested we in time who fair amount hopefully much CFO had of least more company size acquisition of of a CFO that our for a amount public of a at the was activity given planning.

valuation's pivoted has deal integration our is we looking for our experience, multiyear experience. should lot with company. stock another that - we someone come – were and down, a therefore So of CFO. And a different we we back okay lot When buy our come be to, doing type buying reality a of that's than rather of has need down stock transformation who have and price stock M&A to our we

ones in who've search much M&A So December. we than a XX is more CFOs or experience. less restarted been that's Fortune news of wider the pool The had who candidates good

time candidates. on flow. a candidate So but you frame we've that CFO big can a put we've got I it, tell big uptick good in I can seen a upflow,

Got you.

your Or out. acquisition in a always last guess Okay. too of was with customer, largest grown of on you customer recently the XPD? question had got When I this you guys mile it is just XPD just grown large to XPD understanding it they been a them? Thank had just business customer with you. And had customer is always this had just with of pulling customer with this or my - - but customer I recently? dwell the much, that's the business don't want you

that. one. I'm if were were customer certain or not not small think I a a a they there XPD were But XXX% they of that of

it. do to hasn't we and maybe vendors. think is grew ever to to business that them a it come and that they lot an ever, of chance downsized. to going an stated customer’s the should so something come don't prove really terms fair. your been and of with suspected it that going And to because respects get forever up come chance and So have and wasn't abruptly. important It's years so think more end. still were grown We was back We of out counting last quickly. and want an them? to them second that in with And we end the to that a didn’t relationships new we we should we come is Customers for in direction part we customers. business their those that have rule business the a possibly could they've a that of over that question we business. different because their be we're We're Yes, of they can forever get and in with with plan resources particular the end stay some help for any but And to not on customer transactional that's counting their don't vendors. and few them We most I that redeploying gone going have have can some kind on approach back,

LTL and last companies some Okay. see opportunity that reduction you within an seeing shake industry possible bankruptcies. Thank some up as with some Are capacity question here, consolidation Brad. we further are We're you. LTL? in And in the seeing struggling there

the your the To in the we for customers. good recently Northeast carrier LTL. announced their is in see LTL to pretty answer surprised was from market given environment question, have bankruptcy that an seen yes I uptick inquiries

doesn't. network replacement LTL freight customers were were lighting this happy in was matches from there. We it to - and capacity week we're basically and it of a other that our freight others meeting take earlier and of the looking actually in part phones Some and for up

Thank Okay. morning. all had. Well time that's I this for you your

you. Thank

you. Thank

Allison from Our the question. comes next of Landry line with question Please Credit proceed Suisse. your with

Thanks. Good morning.

where you the your or rather wanted the ability hurting to is of terms a on loss last lower? a related I the this utilization redeploy to what And In resources? capacity excess thoughts then sense get those loss, carriers plan segments customer attract presumably also lot give you now your to is to mile, contract could of in business whether of since us

few a your Hi, transportation was Allison. warehouses. its logistics. more The answer first segment, is really In to than of it part question logistics the far

logistics of business the America, The the transportation, contractual other nature end In So, parts side. long-term almost is the and significant. not And that with in the have with geography, on entirely. North world. of we of respect very Europe to customer

mile. our last ability You asked another carriers in attract contract to question about

lots The for from putting was We what postal and business for big pallets putting on the heavy the getting the wrap going are customer a that part middle business this and and night of that customer into it doing of in zipping great last us. in that them, to we office. truck over That around the and mile putting bulky. was injection, meaning, fulfillment of different removed did shrink for goods, parcels centers post and and than left is to the

So still bulky we business, the substantially decreased. very one. are our big business has largest been and In that

steady us. love any business, extremely healthy. Carriers working But we like gain we including customers one. customers, and The that overall lose that can with business. customers When have business repeatable get do that's is Our feedback is customers we you us, that from a in our positive.

goods entry about the mile talked also has or heavy so. months FedEx - XX into in last maybe then And in next Okay.

curious competitive know you're you're how and about how to risk. thinking just that handicapping the So

FedEx. have amount a respect of for I huge

an company. they're competitor I and run and great of amazingly vendor think is ours. And FedEx a customer

They the transportation force. brand. a have relationship amazing be particular And to They So case, to In to we're FedEx. run a this we how honorable have competitive. be we're market. sales They have been competitors, amazing going in good with going know competing business.

We the very they're see So critical to to They're the test arena. in I'm we've the competitive do going and that very, mass. like going sure gotten we'll them like positioning well. pilot

And coming move balance of a customer FedEx. right, business company business have another also not They If technology. and We business levels has anyone pricing. the that high that's rational. the that made because a that's takes a make company. satisfaction. copy to last is us that Hunt to competitors, can fantastic On business, out the for And in P&L. J.B. extremely to They're in be we're the customers in like mile demand a and know They’re they having how it mile they're a business we a do for have in we Ryder company. seeing it figure run don't well-run money. honorable. another get marketplace. sloppy competent big It's only how know the well-run run mile, the long like competitor They get We would a last time last long-term. to right.

we So we like and in mile. here position welcome last our competition the

Okay. That's you. really helpful. Thank

you. Thank

Thank you.

from Please question. your comes with Our Ossenbeck Brian line of JPMorgan. next proceed with question the

good Hey, taking Thanks for questions. morning. the

some maybe the just restructuring remarks. the Matt, severance to that cost mentioned ones two quick you in back there prepared of structure, here So on--going the

to million baked and of clarity the full for that's inventory like as some management. ongoing $XX It labor rate productivity the guidance? get XXXX it’s to kind wanted is into seems from separate a Just run

you just little to picture bit So take And more to or here? macro the there have detail. think big could any cooperate cost if there's flex run in time barriers will if from perspective, a you are doesn't that the a just through more down structure

that. start I'll Sure. with

is a we like but quite year, that the severance outset you We're economy labor in if But not from largely our there that peers. in we're did our this we're facing inflation. the approximately And labor or we likely a offset an but everyone proceeds, was modeling business, our earnings there rate tactically as mind to of rate. of execute for number soon. on the That not the inflation that think wage modeling that. competitors the will, run in from to process, benefits that business, to the counter inflation charge reality with the the of the about you So somewhat is rate of will at in an annualized associated if way took headcount marketplace. run the million $XX And there’s reasonably run to labor inflation make this of Keep restructuring experiencing of the the the else. we're restructuring and that aid underlying

you question second You're if again would please?

Yes, sure.

it where volume hit adjust or unions think little the that On the hit agreements - any you to guidance could time doesn't would take the structural more impediments labor bit whether it's mark if a be?

here any not have only labor to don't applicable We us. in That's America. North in measure That's agreements in Europe. significant

follow-up you, Are just here program market portfolio. understand I dry And see road? buying one that for announced of some you you deal Okay. the coming then last is kind fairly Just you When do the how on think completed? the in which and the which telling what envision powder the completed just is heels down the you keep rolling to do other another maybe of watching is you're on back you out be XPO right market? the now, think company Obviously the buyback. one And quick quickly. best is you the there you'd

discussion, up to down use then X.X, $X $X.X Well, the we back that to down pay And billion leverage buy months our of out in net If our our if another that we would ended X.X. X.X, of bring coming, the X.X let's in X.X. to back debt-to-EBITDA. it debt, leverage the will so bring flow we billion the say, year for or about cash sake

But And take into If economic opportunistic others. So economic more a range. better, at we'd conditions. be leverage also conditions be into levels. more take consideration worsen, than levels, take we're would we'll various we'll be if cautious. little consideration And bit conditions we And consideration price. more aggressive. into comfortable economic in that get we'd stock we'd And the

I also think Brian. you M&A, something mentioned about

yes, love I is As said intimated, M&A. earlier and M&A no you question There's in that. DNA. about our corporate We

a that's we're We that, we M&A the today, our stock. have good significant a not external for But resources candidates, a search time acquiring value though future, we lot of of target long concluding where own M&A best for and very going to is the the track through even foreseeable getting good And M&A. deploy on now for creating close M&A. record were shareholder very spent to

Okay. Thanks for color. it. Appreciate the

Thank you.

Thank final and with our Please Markets. comes morning Capital Fowler with this question from you. of gentlemen, the Ladies KeyBanc proceed line Todd question. your

a they We this that I this outside of put Great. couple you fact lines the the of of of help customer, sense decision around the that the move happened can and around large but freight your to maybe a have did? time and quarter some a season. they in guess at what different made bid Do across Hey, downsizing and you is Brad, the why lot, fourth see service good Thanks specifically contextualize. with context morning. just

their exit and don't with In that's the are move insourcing I do competitor mouth I business, out to leave as a or to sure And to do, we with planning. if curtains their that's road or the I know. two And going the and speak here we of take their they know are we another they it fully the to curtain, I part, continue third And wants can't give make we respect to us can't try customer us. to and speak do is when want their prefer the while we to high in choice. out way and the good a first customer want reasoning. term they ours, door whether What them. they I direction, did very more taste different whether to king. of them their the they when act long can't respectful the speak because in is timing. on we'll customer what

the last, just significant that. the it them has timing the going. suitable was we unfortunate knowing this guidance put and business about In we without terms news the timing. this, significantly can the the literally impacted We December then few But respect rest and had control our for was an injection days choice. a out week, customer in of - actions of that’s customer’s that postal it within on here XXth we by customer just timing, the had And

trying this I if unique move or freight get a guess, I Yeah. just couple service lines that there I of around it’s I supply in service a and just know, some chain something I change or to something, again, we of and that, understand see time. was at cost haven't because, was where issues, context different experienced like it's

hour. the roughly XXXX. idea EBITDA that's you is like close, looking The million to improvement. of it know, EBITDA the some to to let's helpful. give that see with I could the into question where I though $XX against still looks for to you're maybe $XXX So if buckets you'd Look up it we're us expect ask did want incremental of Maybe just guidance, call million EBITDA

$XXX that the LTL previously think some facing? of you're about buckets into of Can of over you’re give expecting couple the headwinds years. I EBITDA improvement you've million of some of you given to a XXXX us talked showing where grow

in where in bulk away growth got be The biggest well. revenues headwind going of on biggest transportation, the segment. the this headwinds the is North EBITDA where because the America to going all as And going of the is almost business and in We've is went away. logistics it that's to be driver most,

the of year we're where Look going lot full resources. we're we in well expect strong. of positioned the see the business. growth But resilient, half from we second those the to growth redeploying biggest year. to see for in We're the very that's rebound So as a you're

very, excellent have We very employees. high. is Morale a

of satisfaction, technology. have levels high we We have fantastic extremely customer

very well positioned We are future. the for

through that's headwind next headwinds, I have the work that how see of significant And We couple quarters. ourselves it. over a will

Thanks [ph] candor Okay. Good. today. Appreciate everybody's taking questions in it. the for

Todd. much very you Thank

and Thanks any full Okay. answer the and all upcoming you. any questions. a for Have of you your your few and conferences next great everyone questions. available all and to days over Thank We're of at day. the to with meet

concludes teleconference. today's This you. Thank

You this for time. may disconnect your lines participation. your at Thank you