Daseke (DSKE) 9 May 232023 Q1 Earnings call transcript

Good morning everyone and thank you for joining today’s conference call to discuss Daseke's Financial Results for the First Quarter ended March 31, 2023. With us today are Jonathan Shepko, Chief Executive Officer and Board member; Aaron Coley, Executive Vice President and Chief Financial Officer; and Adrianne Griffin, Vice President of Investor Relations and Treasurer. After their prepared remarks, the management team will take your questions.

As a reminder, you may now download the PDF of the presentation slides that will accompany the remarks made on today's conference call as indicated in the press release issued earlier today.

You may access these slides in the Investor Relations section of Daseke’s website.

within turn the over that Act Company's cautions forward-looking to who Adrianne provides of like the regarding read of will Safe statements XXXX. would the Litigation to call Griffin, important Private I Securities meaning Reform the Harbor Statement Adrianne, go please ahead.

of today's meaning Litigation Today's Thank contains presentation and of forward-looking everyone. Projected of Harbor Securities Safe XXXX. statements Slide morning Michelle contains including Act and outlook, the the information, also Reform Private forward-looking you are X within our good presentation financial non-GAAP statements. guidance statements.

including respect estimates, uncertainties differ cause actual are those based Forward-looking projections. subject and earnings, materially statements, business other that could from current management's are with and projections, performance, and strategies, risks to prospects and on Daseke's results assumptions revenues, expectations of our aspects that to to

our place read a affect the to to not discussion you on statements. the and for our risks of encourage filings that can any forward undue Exchange and Commission looking with I reliance business Securities

may securities obligation revise future or as required our events statements reflect today, to after except occurring applicable circumstances result undertake to otherwise, as or of under new a We events laws. forward information, looking no be whether

investor press to issued income, of be available of adjusted EBITDA, of included During generally website ratios, the most not comparable limited on income conform both the some adjusted including are accepted GAAP, directly investors operating a the to net EBITDA adjusted flow. operating accounting and will which adjusted in call, cash their items or release tab there Reconciliations also the not to and the U.S. GAAP free non-GAAP of these www.daseke.com. margin, morning, discussion that do adjusted principles are to loss measures or and Daseke this appendix measures presentation

and update our an call prepared our results. actions who the with over review questions. Jonathan our I our priorities. by the and Aaron to conclude call operations terms we our structure an first will updated against capital business will making we our before allocation on are In today, for as your recent start Shepko, remarks Jonathan line provide the execute of progress of will Coley we turning quarter the XXXX outlook open then will strategic

I'll that, Jonathan. call the With hand over to

capacity and point of is Good this of reporting operators industry are year. in this for cycle, the spot near rates, when to time morning, rate call likely an surprise At across high everyone forecasting the than demand experiencing no thank strongest levels, our us this record relocation prompting maintaining same while exit sub industry Smaller every beginning nearly breakeven that weaker vertical. resulting being the today. is at quarters reallocated you pressure into that capacity for it's many listeners at is end were joining our facing markets, remaining the in industry a

inflationary most The prevailing Compound pay lower maintenance of prices in cumulative inflationary driver persistent with the effect weaker driver and current was where strain as a at in for a we're to I'd framing backdrop up the pay and response to this with lagging be year. Despite contextualize rate cost headwinds, the set typically environment. like challenges demand, notably headwinds these to company. challenging fundamentals, sectors our place

first environment, for First transformation of year adjusted our consecutive Daseke. challenges. this and was success better a Despite record of rate us we reported for XXXX our demonstrating the for of of million XXXX different this record third initial a a year's notably drastically was efforts the It favorable quarter EBITDA. year preparing company, performance $XX.X financial

of company's for record first of adjusted history, the quarter achieved frothy best in $X.X quarter second the only our more was in million first this fact, and print our In EBITDA shy XXXX.

durability cycle freight load and of us positive I'd as drive percentage designed. Next, cross we more of XXXX. not reduced but including environments like and our which indicators miles of a which length quarter margin experiences segment, compared total fourth noticed helped only miles our out is first increased flat head] generally of volatility quarter functioning Within haul, relatively [debt adjusted slower as the which percentage as improvement operational, the also of increased count XXXX, an company to point EBITDA with several flatbed to of the load

versus impact of These improvements prior off stave to productivity declines the period. year the helped full the rate

substantial prior our the quarter delivered macro in segment During adjusted flat quarter; light adjusted a accomplishment of first XXXX the and year the specialized of environment. margin to EBITDA EBITDA

available highlight I'd to continue Lastly, we as our like to the still idiosyncratic with Daseke transformation. opportunities

recent these my sharing as technology teams of Daseke that delivers a improvement. introduced streams shareholders, model transformational a of to business coordination will we One creating name the facilitate the durable collective leverage cycles. and profitable practices, One growth series more close across work Daseke. to consistently of culture around letter company while In and efficient, the intended cost the the unite across of initiatives best continuous future It's

to synergies. more revenue are the to efficiency of the integrations deployments And cost forward We the traction improve of integration the the initiatives system integration efforts sustainable subsidiary transformation pull these operating and our re-sequencing long post process. providing out and term extend

additional on still expect in these million focus of Over cumulative operating incremental business. initiatives we revenue excess thereafter, and will the available income quarters optimization of we to coming as our synergy the cost with $XX continue provide opportunities

as our the to totality these adjusted to do our these of streams re-sequencing XXXX. shift headwinds efforts expected is synergies call, referenced we of support XXXX from partially our slightly of rate realization $XX still earnings collective run Daseke XXXX While work offset the in to and One last of late approximately contribute on in expect mid EBITDA million

closing hand prepared I'll to call that, With Aaron? our remarks, the Aaron, over

term operations. decisive this for paying quarter morning, Thank you, of adjusted and toward forma X.XX pro February, cutting ongoing with After times hand, $XX everyone. thus, a we gross balance to good long growth established of normalized times. leverage took X with leverage X.X we on cash from $XX In the our long debt goal, debt target off times Jonathan. expense reducing And end, to to total X.XX interest EBITDA in action term associated million of million debt

addition, In entire hand combined at on of to use and redeem our cash on $X.XX $XX BX million cash quarter of improved These maintained undrawn a revolving of we balance under EPS that first of pro by shares $X.XX dividend; availability including million, cash the million payments. receiving transactions, XX% Series forma class eliminating Pro available actions these also we're million $X.X preferred facility. annual adjusted dividend that or have of annualized. credit basis, level of for forma a $XX.X the liquidity million $XXX.X $XX we that's healthy

outsize to reduce additional adjusted the further for return opportunities the evaluating continue risk gross for current and improving will repayments leverage, prospective We shareholders.

assets these or to in moderated environment remarks, lower our of quarter by million our was $XX.X remind year by highest was Also first due current revenue, $XX.X right reduction rates. to million margin As million. The as of contained not asset we was for all entire declined improving owned fleet. an in on focus to brokerage revenue to impacts. EBITDA on which that quarter the we quarter demand freight Jonathan first our The and as model in year owner the mentioned opening well company. softening $XX.X X% XXXX million immune for adjusted listeners overall headwinds flatbed the freight ever reduction quarter higher the first consolidated this $XXX.X loading of decline company segment continue within was characterized utilization and of company freight his And while as operator were

shift the operator capture company sensitive demand non-correlated revenue We’ve offset rate industrial markets and brokerage equipment security X.X and through cargo market of economic and owner our by in intentional declines. in due symptomatic interest degree impacts a the an higher the realized and uncertainty. to by with transport of the a cargo afforded offset continued of agricultural a allowed broader us in margin freight environment relationship in continued model better The partially pull economy construction to to strength million decrease agriculture of additional high of deliveries

to fell total XXX XX.X% slightly Compared record revenue. quarter increased first to by ratio expenses than points as XXXX, a slowly our operating adjusted more operating of basis

expenses wages benefits and and and realized overall we expense salaries, were maintenance margin. pressured increases lower, that in operations While

the changing dynamics Over the quarters, next the of reflect several however, these expenses cycle. we to begin will current expect

quantum of Transitioning the of common did $XX or rising of interest rates now per quarter In income million period quarter the or million million net current expense interest to $X.X diluted related reoccur prior in decline was to net income. year of from net warrants flat not expiration the on share. a $X.X absolute $X.XX of loss the per quarter earnings floating $X.XX that incremental prior net share the compared an to resulting law debt. income diluted comparative per

decline, Regarding connection in share dividends related November the the interest well $X.X previously were increased XXXX EPS in as associated and expense million warrants as approximately the with the shares issued expiration that to with mentioned period B repurchase. cash of $X.XX of preferred Series of comparative in net founders

representing Despite these improvement from EBITDA headwinds, or quarter. in a adjusted XX.X% the and margin adjusted EBITDA margin in modest year was was prior XX $XX.X XX.X% million

environment. a free $X a $XX.X final consolidated significant than the generated million highlight nearly our of of more a flow in quarter; million year we As difficult results, cash prior achievement

late markets. agriculture a revenue mile. million in well and versus to in acquisition solution company owned company sector our completed Through growth improvement Demand hazardous as partially the offset now rate declines Turning by efforts, specialized was these added segment. from as the which X.X% outpaced revenue waste miles transportation the in in year assets. Revenue These energy higher in were X% gains increased SJ was slightly strength prioritized a focus the prior per as contribution the as $XXX.X and end increase team decline manufacturing to and quarter. construction a our margin company the loading prior freight markets year in

Overall, and income and million the a first segment increase quarter adjusted primarily XX.X%. increased per specialized in the interest the segment to miles, $X.X flat from to $X.X flat million there due year recorded $X.XX expense. rate slight to a XXXX of X.X% quarter roughly In at decline mile was net of OR average prior approximately

this margin operational and Finally, $XX.X EBITDA of slightly segment pleased financial increased very the during with difficult We're and performance a or adjusted quarter. to XX.X%. adjusted EBITDA million

segment loads increase flatbed shifted margin the revenue with fewer increase operators. due million as an market compared by our to prior decline half X.X% an team driven generated to the X.X% of flatbed assets priority miles lower company year $XX.X now and The $XXX.X last X.X demonstrates strategy in a our right loading higher revenue in year versus solution freight which rates adaptability to primarily roughly was owner the the a lower first of time asset segment, company these of brokerage to result Turning of our company in in due this available environment quarter, the driven in nearly than revenue. a million, movements XX% million $XX.X miles to quarter

than for was Segment XX.X period million EBITDA slightly our flatbed the more the in fueling Though we productivity was With end and and adjusted sequential offset prior markets both primarily serve the and adjusted quarter Flatbed adjusted was lower EBITDA by manufacturing solutions OR declines with industrial teams. revenue. to improved XX.X% due market XX.X%. operational margin quarter strengthen markets. support to construction improving

Looking operating is working at right these as results designed. model our asset

on on expect year. We efforts enhancing we which are productivity the our improve to concentrating across

our Jonathan to XXXX back call an for the in outlook. Jonathan? turn update now I'll

realized to Thank navigated second likely anticipated rates seasonal freight quarters, and Well, delayed quarter the uplift beginning XXXX successfully in remainder and revised expectations recovery than which organization the third And X% now line you attenuate made demand. compounded XXXX by remainder be the by to of in forecasts in for we broader the Aaron. and is the to those of at adjustments difficult typically the with industry. it appear first are well our volumes in our of that X% rate lower year the

previous to again, generally X% year XXXX $XXX and of truckload the consistent adjusted in it's of prevail, below recalibrations to full $XXX of our range these million million most quarter. $XXX guidance million anticipate our which If with the announced XX% by expectations is peers EBITDA we this

and influence ultimate could optimization supply seasonality rates stronger recovery, economic with positively revenue performance. to including our continuing and return or fundamentals along cost our initiatives Our financial demand

experience, prepare an million. our property equipment $XXX organic expected be million across to capital of compared We and consistent expenditures to in imperative to million profitability. all net and million driver of sales our believe increasing Our expenses, operating $XXX fleet $XXX to $XXX the is reduced future outlook are fleet cycles discipline as original enhance reinvestment to for

stage history, utilization outperform we've had the recruiting through recent improving. are further cycle. us Our driver largest of the the in is early fleet And positioning our to classes recovery next

processes upcycle. we In in support are to environment growth this technology and profitable investing the in the

prudently costs, to resources performance While controllable term current managing reallocating environment. accelerate and in year this

of Our high and efforts and will when cycle efficiency inevitably of only with support they profile the improvement, new a watermark the continuous the One inflex. in Daseke but practice the model resilience technology, foundation earnings not best our will augment

are Throughout that our term strategy challenges fortunate can near growth knows excellence while the to term this environment. A organization, our across through we have compounding of execution operate that the to at leadership long with channel returns. team how us attractive in

call the back the will your operator to we Now, and take questions. turn

the session. Instructions] of a Bert line your question conduct from Thank First Subin And Bert At open. Stifel. from you. comes will time, is line this answer question we [Operator now

morning. Great. Hey, good

morning. Good

XXXX, thinking But guidance do Hey, seems EBITDA year? left just favorably. some think pretty there the the stage think where case that range, evaluating you the downside. months How if like you the view things. were plus side new on into concern, about this How are the a Jonathan. bear would you year bit to probably more many of be end little ranges? there's at five that you now in off Maybe risks generally investors to I

Yes.

looking looking see downward normal look, seasonality a And noticeable points the utilization, our we're a we two seasonality us, low a during ratios, that for you XX% out about truck And just quarters, lot at of there XX% March rates typically in April the uplift. bag. And I when we're at. the loaded uptick in two really looking those of and trucks being by utilization. to to seasonal XX%. revision really those QX increased of We're to so of of frankly ultimately quarters look, generating We're think trends. We it's data there And a about even April of on our was typically the QX took mixed not lot rates lack from because at because important quarters seeing for think really trend and us. seasonality. EBITDA

And kind so we've at our peers. looked of

firming around that call We pricing as and of we've a recent also, we it's whereby hand have taken assumed at in on we little point. contracts a we up little that industry improvement seeing drive based and looked our at feedback customer actually said not X%, and things pronounced as an like bit kind in the down, on of really improvement it's volumes, shippers we data I as well the volumes. X% increases back a But of which such look, this are of that discussions further get guide we've in a rate a uptick in can bit with based to degradation rates,

just not some might as typically see. think level. It's we seasonality simply at be as be pronounced we going that there So the to

the about underway, pretty are so and efforts, also far, that and we those that got efforts we've the transformation are integration guide feel as performing So, expected. good

of going some freight as the productivity, which have soothsayer, and did the of economists front loads best we we're drive. think this rates. day lot able you if segment, data have was that'll end so we're we we does today. quarter not continue the the us hold, the we mean, we with if holds. things not think productivity, us the continue offset And But drive can doing Southeast to at in to we we're to really a flatbed So improved saw I for

you then for things, the XXX factored of you in Super now. helpful. can help drive into you think sort self to And great XXX the year? can on Maybe guide what's this of highlight confidential That's side ultimately XXXX? what

offset going thinking costs think we're so got transformation last about costs but we Yes. from commenced the we is to The Bert really dissipated. We of were these a last kind of said largely we've benefit have those way lot efforts efforts. that noticeable year, those any year,

of the the million of that year. incremental last roughly from So year. probably an expect kind we to this million XX initiatives we we with And X get benefit year enter undertook

improvements an So that like we're probably teens. high year transformation with those to realize something synergies rate of thinking efforts about the this $XX that exit million related in of we'd feels run

then And we going into there's $XX XXXX, another the think million table. on

total that a XXXX. of XX, exit like So XX an exiting probably cumulative closer to rate XX run feels

kind market timing to which companies. little a telling little systems prepare to the we we've been of a the fall the in around think kind upside as to of the what lifeblood forward timing, primarily are So of TMS, implementations, here, shifted March pole of these we bit think I of on the the is bit said tent some long but the operating

reason we of that So we've there. still of quantum a bit that's the underwritten of is but shift, the think the to opportunity absolutely internally is

just And back last pass and over. I'll follow one want up it

the why in 'XX, sense you down we look that opportunities. incrementally? we're to that we're versus maybe the you make belief reducing have at on here going and we out leverage of highlight CapEx lot is bottoming can think perhaps range, still your cycle a just Is where your 'XX just it are in As range based

around you the fleet? of to to want to maintenance be get of things for you want you Or that? the it out So CapEx prepared is more cost want where side

that a of the stock. mean, the is CapEx, lot, we I rolling And part replace large very, seriously. take of CapEx Yes. to the very

[indiscernible] particularly [tick into more get cycle trouble, disadvantaged. just They're inflect. try that the] companies CapEx think when does the I to

our lot on call, said year, CapEx. CapEx last a a so the the growth eliminated we of And lot of this as we

bit. of is was primarily which CapEx so little tuned kind a replacement at And fine you're what looking

for $X CapEx CapEx XXXX get lead and about some there, that of in There's to for XX wind, forward ahead of plus systems. to in toward in trailers we we reflate million there There's those wanted of time was on latter there. some months, given and which the the go part CapEx pull that expect [shallow]

mean, do CapEx is bottom, size XXXX. Fed we relative bottom. starts ahead I I opportunity XXXX, back seen And do think worsens. what the think is at right the that to there So we're we've market think banking to the the We the the We come in the nearing the set if that us. bottom situation of on speculation does, depending think

see get advantage basis the of up think to no later this want cycle unwinding we year, of that's, going catalyst to the can And rate which but to a be next year, point of kind especially complex, XXX being You matter of ends is what. industrial well you're if take going that massive to the the when the positioned kind does inflex. look to bang that we be economy,

how that's thinking it. we're So about

Jonathan. much. so Thanks

you. Thank

right. All

comes question Craig-Hallum Ryan from Sigdahl Group. next from Our Capital

Thank you. Good here. Staying morning. on guidance

revenue guiding to you previously, So were single flat low up for digits.

I two revenue, You the bit put relative lower please? imply or stakes lead little previous simplistically said through of one to flattish Does to more guess. down a maybe expectations, points kind rates your on revenue,

Yes. Thanks, Ryan.

our guide EBITDA is X% about So on range. the adjusted revenue

revenue X%. of for guiding growth You're

No, I X%. said we're down.

Thank you.

expectations flatbed that. kind missed then X. and can Yes. you year? And Down split of that I Sorry. between for the specialized

is and specialize flatbed down Ryan, XX% X%. is down Sure. Yes.

deterioration better, year seen of we've assume Given a a rest to flatbeds. of a does little just kind specialized kind in hung environment? through I up in flows last maybe through guess, specialized one little the that in that current follow there has specialized more relative of the what on And

Yes, it does.

freight, those and verticals there at to see compression capacity held on chasing through strong look pretty our the some specialized quarter, we enter as sub As markets of while on expect tries we some across markets. other are capacity to your first excess as they've

feels there? one, I it drivers. there, also for any mean, drivers. battle And an been seeing improvements it's Last ongoing are but finding lower some driver I you like many, improvements could you years me, for just or I many wages wage of any know when of timing side inflationary guess – kind kind of side? availability, inflation kind cost see better a the we said wage and inflation potentially then of lag the on on guess, I but on is

side. Yes. We've positive momentum the on actually lot had driver a of

kind Our utilization XX%. probably approaching is of

to a kind pay increased rate XX% [seeing] looked environment XX% XXXX absolutely as of kind It really of around a peak lagging got trucks, of driver the and kind environment. out, we're was So the of early if historically late driver pay as us low rate at as really to pointed was XXXX, as of so XX% percentage really to you the revenue XX%. when for you kind at in expeditiously high

environment started And to then percentage found pay of that really trucking as think as start can half transport driver transport, up back we down do ourselves is so inflect kind February, up they are whereby downward up can we Non setting of environment where XX slightly cautiously catch the started kind increased March. rates to an back kind of to nonfarm market but the a percent, payrolls the for revenue but in in wage of plus carefully. XXXX today, and in decreased of be wages walked to closer

of of So they're kind year-over-year. hanging there kind up X.X% in

excess start so a when walking driver probably rate I start think So doing off, and that can that capacity, got gives you we're a moderate that. of to you've or back, quarter you that fall sign from kind you see so

Thanks. go Great. Yes ahead.

quarter, seeing you the recruiting are and through in am trucks more the continue on the we on and overall remainder expect to seated are truck which to of how Ryan measure we so assuming about we it CD to classes, going seeing year. I do larger a through I X.X% are rates to the pickup to say was X% up truck X% count, X% seeing counts we

thanks. Great,

comes next at Gibas Greg Northland from Our Securities. question

the a function in is demand it's what how in a of versus of the the rate sounded increase Is decline it kind versus up that maybe guess volume you're relatively market regarding rates capacity? I the question better. mostly industry guess holding similar and of you're pressured I like much what weakening seeing being being in seeing

think flatbed a second kind of in load it's you mean, I if The or largest flatbed kind a I think region Yes. higher the country. because we'll volumes, Southeast and flatbeds flatbed better stay correlation. for just bigger, about macro on of market, got

there. pretty good So are good we'll They stay loads and seeing actually pretty volumes.

pretty at you If [indiscernible] as loaded loaded relative, look good If trucks, right? truck over and you look metrics time. though,

you times, If is at when had look be. important QX the QX XXXX, look you which so we the is QX really to think the good then for movement because to year and rest pre-COVID, how QX from let's pretty going here at as bellwether of about QX to is pretty, a

of look anybody the capacity. If and references. coverage or mid XXXX, to you your kind It's listening on not at a and XXs you've it excess a where gets. anything in QX call, of as as really yet QX massively frame kind great to good you, XX, means QX sure number that XXXX I'm capacity to going really in to I relative of substantial but QX as trucking of kind got environment healthy that's mean, XX,

XXXX rates QX QX months truck QX went all rates. see QX few on from XX. a to from to And on signal then extremely down accounts started pressure But you healthy pressure by an to XX in it down. continued later, contract that spot is you XX and went to loaded started see a environment.

teens. the look in we're you where of If at we're year, QX in this at,

Okay.

The kind the everybody was it the freight where we right. our world everything kind we right last XXXX. environment, time of last that QX, recession, the thought COVID I time was mid last going were to was when before mean, in were XXXX had in we teens, shut The of down.

the contracted. teams, we we're job. have I you of what look using with. that great from materials, have share. market, absolute the a market have relatively customers building take you have those investment But our And of whether lumber, we tubing, doing maybe freight, markets the size our think an to what we at market, look steel carriers, us separates if customers is the finding opportunity they're engage absolutely where are the they're are it's a grade the relative smaller some we So piping, steel, it's companies to at customers brands, The at if the doing as doing,

So so, things a speaking hanging which again, means are QX and historically QX and are in you just way up extremely typically tick got from Utilization low. relative rates But to excess actually any those or that there, is okay, loaded you've basis. on the shape not in see any truck they we're ratio form. capacity low seeing

following appreciate I there XX% notice addressed do you this year-over-year tracker understood, you the this expect your to of there. was trend in Okay, softening wanted throughout to just demand? maybe plans but kind quarter. already drivers How here, apologize adding color kind the if that fleet year of in that in

Greg. Can you repeat that question, please?

Yes.

just just the given wondering added this XX% the and Basically, that expecting trend how year, tractor softening in demand? Just regarding year-over-year the you're to I think fleet. you drivers was it throughout

Yes.

I And we delayed. a there's timing were lot truck count, last of about think there. an that order a year a our when difference of you bit trucks think our had

trucks the getting end at So delivery of big year. of last we up ended a

we're start those process of through are of QX, seated the as so largely cycling seeding the of the in And a kind well. those lot disposition now in you process

So last the this just for to trucks what assumed see utilization than see be probably And have those year. it's QX looking of going trucks rest year-over-year XX able had XX we'd ticking We overstated more to more year. to up, we'd driver, we're about the year that if at relative truly in truck you're the more.

this last XX% So kind seated of year to seated XX% we truck year. would felt to go from something that felt XX%, XX% like like that something

again, ahead, trucks We're seeing healthy. they those substantially a seeded, are we've we side And X% so trucks. actually more probably those on of to with well, to need little play absolutely [indiscernible] the of equation we're seeing mentioned so ahead the and comments is right bit some of on because plan, X% in X%, that got the are that Bert, as the driver And going through. assumptions

pretty So we're we're good feeling at. about where

look thing intentional terms other is seeing, asset the switch release of Greg, right press you that in our if company and trucks, our you're The at model.

deploying and trucks company operators. so De-emphasizing brokerage. And we're more owner de-emphasizing owned

of And getting to conversions are so lease company some purchases we trucks.

So the mode. that's mix kind of why you our shift our see of in

And lastly, already could wages. for of the the got big some across guess, seeing Okay, it. that. inflation level wage, But kind categories? maybe of you you driver some color other of just provide wondering cost other Thanks if addressed you're on I

you all as kind a had any rate kind CPI you kind XX% we of got now versus at of and offset still you But of for price XXXX we're look and cost year. seeing that. really headwinds repairs. you've But of going this headwinds increases the cost. look a the some kind improvement, to today, the kind those was adjust real about still we're mean, be I the again, of haven't cost and figure so I of when with CAGR seeing out seeing to of plus environment CAGR XX% of inflationary inflationary Tires the, increases, cost the what of last XXXX. right increases at still We're kind and think pre-pandemic off when XX% up shown on probably X% going of in another faced that I and Yes. in look rate to process were XX%. of think kind of expectation increases increases now, to the are we're it's rates part mean like. that you maintenance you've meeting don't tire on XX% year of maintenance vendors I

kind truly of is it So storm. perfect a

guys. it Appreciate sense. make Okay,

you. Thank

turn over for to remarks. ahead. now That the call for his go concludes answer Shepko I you Thank participation today. question will the closing Mr. session. Shepko, Mr. your

that quarter we're our your we're team Though despite the earnings more you Michelle. for cycle their and focus macro portfolio a dedication. when XXXX and challenging turns XXXX shareholder trough with resilient, of morning. a Thank expand to shareholder industry our up unique thank will diligent operational XX,XXX balance looking remain and you are We productivity, proactive organization. to services a in growth confirmation substantial. quick be brands network agile excellence. drive increased tractors leverage entire to sheet trailers value I'd persons We asset and strong value. this our like a through comes time well-positioned for backdrop, Thank in optimization commitments enhance And and and delivered first all our of inflection revenues,

Thank conference. you in program. your today's for the participation This concludes

now may You disconnect.