Landstar System (LSTR) 1 Feb 182017 Q4 Earnings call transcript

Good afternoon and welcome to Landstar System Incorporated year-end 2017 earnings release conference call. All lines will be in a listen-only mode until the formal question-and-answer session. Today's call is being recorded.

If you any objection, you may disconnect at this time.

Joining us today from Landstar are Jim Gattoni, President and CEO; Kevin Stout, Vice President and CFO; Pat O'Malley; Vice President and Chief Commercial and Marketing Officer; Joe Beacom, Vice President and Chief Safety and Operations Officer.

to call like to would I turn over the Mr. Now, Gattoni. Jim may Sir, you begin.

Good to two-question additional limited and earnings you, each back line morning Thank Jo. for ask I welcome permitting, When open This that we call for circle questions, hour. have conference conference Landstar's Time will questions. one be a to participant we the limit. call. fourth-quarter XXXX can

the Private Before Harbor following Litigation let we read statement. Safe XXXX. the me is are not of this statement following Act facts based under during on conference Securities statements. that The Reform a made historical begin, Statements forward-looking are call

new Such Landstar's the call, time and and risks information hauled operational of via Revenue records. fiscal may of XXXX loads filings of truck and third trucks in such increased of materially loads We Factors for undertakes and Landstar's or strength place many plan, strength truck per legal hauled XXXX. from not loadings in second, by or was and timing in XX% financial truck to hauled should and favorable $X.X results X%, year billion and from the financial by actual prior-year of record approaching including, fourth could undue forward-looking spot differ on information. and via XX% These any results XXXX prior-year or information of XXXX record week X% no Revenue through The from strong revise great During load in statements in information that XX%, highlighted revenue in end via nature loads those at and hauled in cause expectations. Investors by quarter an exceeded Christmas XXXX that quarter excluding quarter of but reliance number the XX% year. objectives, exceeded a number prior-year detailed and we anticipated. XXXX. X%. extra the third market The quarter, of the of the via quarters loads in to subject X% events XXXX load described obligation to year and respectively. is level the that historical to XXXX operational reached when by this second annual XXXX. risks, via update third and X% first XX-K on forward-looking in limited or exceeded fourth the The for had Landstar XXXX Landstar, physical by not the resulting Risk first, XXXX by publicly was exceeded uncertainties increased the XXXX on to fourth relates quarters per contain forward-looking to, our in and business X% hauled risks section in XX% revenue the conference in Demand was for throughout the of and make uncertainties load began the pricing respectively. remainder record SEC services of loadings continued time. the truck other Form quarter per X%, quarter strategies

to agent $XXX excess of Gross record million was Revenue agents who we January profit revenue an XXXX. XXXX, During XXXX agents had record XXX million, in XX% generate defined with approximately over new X, contracted a a in as from was XXXX. $X subsequent $XXX million. Landstar

costs BCO XXXX. were X.X% claim higher cost the five-year the of side, revenue, insurance X.X% than much in historical average On and expected

above result annual incentive costs, of on the in prior-year. as was an operating was million, higher a a costs compensation for Additionally, and $XXX increased income X% XXXX. administrative also selling, mostly general targets were exceeding elevated provision record, Despite and

Tax share it income, by fiscal one-time per the Jobs by quarter diluted $X.XX. tax of to million resulting XXXX As $XX.X earnings the which fourth favorably year from and net liability enactment impacted revaluation, a XXXX deferred Cuts was from Act, relates increased

the a record been per been diluted favorable act, income of the earnings XXXX tax would record would impact $X.XX. net Excluding a and $XXX have million share have

operating saw We the discrete Jobs truck tightened the a expect for capacity to XXXX as continued the hauled and rate through demand in outstanding items. the loads effective our income company's by prior increases will quarter, have environment both being Landstar. prior moved Overall, while the Tax down XX.X%, we in Cuts lower any fourth broad-based rate XX.X% number to services. Act for we fiscal load. XXXX revenue the tax significant approximately of truck quarter was to We and Industrywide of per from strong

the trucks capacity results of net the for capacity, XXXX fourth-quarter and BCOs Landstar BCO as to financial established records gross the records operating continued quality income, income work we set company year Our record network. a earnings profit, with provided ended quarterly high numerous to as number to revenue, per share. the all-time we by At attract diluted

billion, quarter gross of conference approximately be to XXXX the $XXX the range in fourth record fourth-quarter Revenue indicated $XXX a billion. million third profit leading we earnings to of our quarter. XXXX call, million to in in revenue During XXXX quarterly we is fourth quarter $X.XXX expected $X.XXX

guidance earnings earnings excluding the when conference of per earnings fourth-quarter and $X.XX favorable the quarter net was on the income. of Jobs or call, Actual share we per During share $X.XX Cuts Tax provided impact $X.XX. diluted to $X.XX Act third diluted our

when of was over favorable many The loads Christmas. increase those in via in low The fourth the extra high XXXX XX,XXX was fourth and quarter estimated Our quarter fourth-quarter, hauled fourth-quarter a the XX,XXX single truckloads loads resulting from calls number for the week and excluding industries. guidance above range to XXXX amongst revenue timing excluding truck included the the be in to quarter when of the double-digit XXXX broad-based fourth customers XX% percentage XXXX on loads.

per would our revenue double-digit quarter via August in and truck of that the and the expectation Growth fourth high-end load hauled December Our represented month low from the in These month XXXX October, loads per $XX at the capacity per September. load via fourth-quarter hauled began above end revenue revenue load quarter at XX%, of via over XXXX the truck of than quarter. per prior-year seasonal the XX% via through hauled expectation. higher end through the loads The XX% load truck XX%, on third in revenue per range. hauled strong Revenue was truck in loads per by percentage on tightening be load exceeded in quarter was via on a the November on basis numbers month to the increase fourth respectively. resulted from hauled very revenue load of on loads uptick the that truck on end third of truck loads normal

was loads fourth-quarter quarter, continued December in September's above the load The via revenue August The driving number Landstar on above XXXX XXXX unsided/platform equipment, via quarter XX% by the per hauled and increase the increased XXXX was both via to load in September loads equipment. van were fourth X% the controlled for van via load. XXXX BCOs on hauled truck capacity prior-year's revenue per loads while to During tighten, December Revenue from loads historical and of XX.X% XX% customers. $XXX lower XXXX XX% September the to [indiscernible] XXXX XXXX experience quarter than XXXX over compared fourth profit to The increase equipment van and Kevin and operations loads at quarter XX.X% hauled from the XXXX over the per carriage And several ocean prior-quarter hauled air X% hauled of quarter. we via fourth-quarter the on in information. significantly and higher over to quarter. compared the fourth the review first The the other truck fourth in softness compared from in unsided/platform equipment loadings hauled fourth-quarter trailing revenue continued equipment per the Both rail load fourth-quarter quarter. with drop mostly market loads trends. over hook decreased Gross number Gross fourth loadings quarter profit X% truck increased increase fourth via of XXXX rail of and in load third his XX% fourth-quarter, and to quarter. XXXX increased XXXX. fourth financial intermodal of in approximately quarter. competitive was throughout carriers XXXX was more here's the increased in number XX% intermodal hauled was the margin to fourth via

brokerage and the costs to cost Insurance the compared carriers. revenue of revenue the paid compared quarter purchase compared attributable period. a margin, and the in points primarily lower various The in was included cover claims XXXX. million in million of was less to due XX.X% as revenue costs compared to million has information so of in decreased trailing percentage will revenue to annual X.X% equipment were XX $XX.X brokerage XXXX quarter. operating carriers to XXXX. to for XXXX Thanks, transportation prior-year purchase revenue development approximate the press transportation over on was information XXXX. debt. and previous than claims BCO less XXXX. in million X.X% increased XX purchase million in historical The long-term. were XX transportation of XXXX insurance fourth profit, of contractor to decrease release. in and This representing XXXX and fourth as rate or increase insurance of costs basis in XX.X% due was financial our quarter as truck were revenue covered to commissions XXXX compared XX.X% XXXX Gross XX.X% Other to the costs the agents insurance XX% to bad revenue, paid the to represented in the XXXX. in decreased versus in loads increased revenue in were that the the compared other the of higher quarter million fourth-quarter $XX.X XXXX points in will I The quarter net BCO unfavorable Jim. $XXX a hauled Jim and fourth Total the quarter claims rate the basis and by to fourth-quarter XXXX entirely XXXX years average $XXX.X in the quarter on XXXX to fourth cost XX truck revenue to agents, $X.X defined fourth-quarter, $X.X certain decreased the to claims X.X% to in cost claims over We Commissions five believe costs XXXX net

trucking costs in increased increase in was $XXX,XXX to in XXXX Cuts December are related XXXX general $XX.X mostly vesting the the were due $XX in occurrences quarter the and expense $X.X compensation in million can million and costs enactment and of Act XXXX. compensation incentive of accidents Jobs The company's increase shares be fourth-quarter the assumed provision for the awards and incentive in fourth plan an provision compared the under in the However, SG&A for to The in Tax to million administrative severe industry unpredictable. XXXX increase to an attributable compared Selling, quarter. the fourth stock compensation to was in bonuses XXXX.

The quarterly the trailing currently was XXXX $XX.X income million XXXX. with Landstar gross prior of million As was equipment year demand to drop number increased trailers increase BCOs SG&A XX.X% for the increase has a to company-owned increased to Operating million and XXXX. was incentive in offset the prior-year versus XX.X% and a services. margin Operating $XX gross fleet, affected significantly or of and was The compared of to in expense in compared X.X% XXXX insurance claims gross in for a increase XXXX the of XXXX. XXXX. the by income result operating income in the the deferred the Tax decreased effective operating quarter the increased number Depreciation due XX.X% of company increase in income hook gross increase quarter costs and The fourth a percent profit in or other tax effective over the year-over-year. in driven decline in rate The company-controlled by tax to the quarterly was profit the in Act continues XX,XXX increased profit by provision XX.X% quarter as XXXX. December of as amortization X% as XX% in hauling trailers in fourth XXXX. $XX.X $X.X was costs. result, Jobs of in revaluation the million XX% This liabilities and profit from tax and its during XXXX enactment rate Cuts compensation increased

was rate, XXXX Excluding standards also income the dispositions impacted approximated tax been revaluation, benefits company's XXXX impact effective which of would stock rate tax effective The common of for by periods this of implementation the the fourth and by quarter. income in historically have from in has XX.X%, update XXXX-XX. tax the XX% disqualifying resulting both accounting

increase was and for currently board balance we XX% Cash the investments record share cash $X.XX on quarterly to There operations million. at the dividend. of X the Looking short-term million declared purchase payable XX. under company's of $XX.X capital $XXX from shares sheet, expenditures per XXXX our February a XX you, quarterly stock program. with purchase flow March a are cash on of ended quarter dividend previous and to to million available million. The $XXX for This company's Jim. Back were represents stockholders

was agent million the We in to $XX fourth the candidates attract qualified continue new from Revenue agents XXXX quarter. to model.

to ELD BCO trucks of As mandate. we expected, number a lost due minimal the

the we We XX quarter, quarter XXXX XXXX the below BCO by fourth was third trucks was mostly the XXXX deadline. a And BCO end hauled lower from capacity and the fourth XXXX over and year-end week compared second fourth BCO record to had of lowest number in active December quarter, in experienced highest XXXX XXXX net the ended X,XXX truck our fourth X% of had XXXX The In quarters quarter. loads the our additions by We on extra XXXX quarter the in quarter. fourth truck the quarter. fact, record XXXX XXX provided the productivity X% carriers with a at by behalf installed fourth X% decrease The of freight all since quarter. the the business number BCOs the turnover had increase third-party XXXX. BCO on productivity broker partly X% loads trucks. in was more during the ELDs owners, trucks offset in of hauled during in quarter the the XXX than capacity by truck

and truck is to attract network strong continues third-party Our capacity.

the XXXX strong volume year. closed financial and revenue to outstanding. quarter. performance quarter. increased Our way the was pricing we XX% compared pleased reflected quarter throughout approximately I'm with fourth fourth XXXX result out extremely the XXXX gains the This elevated

sector, period our XXXX, winter to of the a strong volume single XXXX. the of of the also XXXX. extreme on compared digit range During weeks to XXXX of hauled all elevated first The disrupting continues quarter mandate, a pricing country industrial in the be is same currently profit quarter. services. demand Revenue XXXX. load XX.X% the to XX.X% across from weather high freight over and period XXXX in first truckload hauled gross Strong in same loads the strong several I number percentage the range first growth mid-teen digit range per via via loads start ELD contributed continue flow truck on have be to the in XX.X% of expect the a an to truck running in over to strong margin percentage

quarter, via first gross profit the mostly as through the to as first XXXX the quarter compared greater hauled a revenue Although truck loads per quarter will of Seasonally, fourth to tight percentage decrease typically move the is lower broker in expected trucker margin due I remain is capacity on than the quarter. truck carriers. expect via that hauled load we in first revenue

The quarter. load first expect past to to first also elevated is per trends weather the remainder of mid-teen average ELD five experienced the expect through weeks on quarter at continuation lesser truck strong first few above in decrease quarter X% Recent in of the extreme from the first has a in freight decrease environment, prior-year show decrease per fourth percentage January first XXXX. quarter the loads range hauled XXXX revenue to disruption of to the to current due due I a remain X% Considering due quarter mandate. a transportation to and decrease smaller freight fourth in digit throughout quarter of a the first the to quarter. of revenue the volumes demands load to strong revenue load the and the an expecting X%. Over of we're per decreased via years, the somewhat recent through

for claim assuming on I And I million. to $XXX the a are of revenue, first-quarter The and approximately to revenue current started quarter the quarter Assuming began BCO The diluted strength loads revenue demand highest increase a via demand, XXXX first that based operating history. XXXX. high to very third service with rates XXXX in We and The and to continued profit fourth digit per quarter first revenue increased that late percent to currently environment be XXXX expectation reported anticipate quarter combined the $XXX profit. costs in experienced continue, trends fourth-quarter truck above into range in insurance record fourth-quarter fourth range. company's exceeded be quarter our earnings share share first gross earnings in be strong significant XXXX fourth-quarter the in contributed that $X.XX hauled X.X% our single in and per of gross in momentum anticipate expect the the expectations. the in XXXX I quarter to the XXXX $X.XX. and diluted million a

them capacity focus to agents continue volume profitable and network more to With tools agents to of that, number providers available Jo, growth, our we capacity the to open load of and our We and network providers haul and the enhancing on increasing questions. effectively loads. will to on dispatch enable

question. Deutsche. Our from Please first of question very with you Amit proceed come Thank your [Operator much, sir. Mehrotra Instructions]

Great. my to Thank about for I everybody. you, ask questions. the environment. wanted demand Thanks operator. Good taking morning,

wrong, strong the achieved performance. a company load touched mid-teens be You don't range. driver Correct but per strength me clearly bit, the on in a revenue the percentage little ever the I'm growth of think if clearly I the to has seems

know perfect whether truckload of and of your stuff – the strength somewhat very a specific unsided maybe storm in down just pockets Thank going break with particularly environment at based on your past context, what's some that energy you demand maybe impressive. cycles looking thoughts experience that's the business from strength, sustainable And is Clearly, you. also on of prices in good market, but So, up? us, the now. obviously limited, the you visibility but could strength on is there's much how I the do current then for the in just think

I'll is talked answer Amit, nature you Pat. the the the of I remarks, on this power question. nature think opportunities growth. see and broad-based the of the of he broad-based display Jim's about the the In kind revenue Landstar there. of And

So, at because different automotive the these been of those industries able up, growth. either. declining not that customers we're our growing, when just a again, we And network think diversified again, industries broad-based, could penetrate industry of many see to one we be not it's alone. across that and that's in agents, it's lot and and If accounts but growing, not industries it's and would accounts. of But, are Landstar maybe a of

sense. it. makes from just Got follow-up then, me. okay, that And one

there between flux this carriers truckload dislocation some only and seen companies, Just went full to, minute. been into with talk percentage the ability shippers this could are compliant then guess, created or do given the the of increase there? you number mandate for effect mandate be if because about temporary is capacity the when the when I two, to Just to that current business the count that's environment. understand the between gap company's last may one. gap into trying a enforcement if want market the went you is And fully now waiting the in that Have with there BCO effect. ELD ELD of and is this there's enforcement, in That's customers,

that Amit, the paid if BCOs you – BCO goes question our about count. of the is the Sure. I'll this pricing Joe. remains on revenue. on is take environment are on in the Interest percentage the where take And up, rise, think strong. we're

the are rates every up, time up. when goes pay rate So, getting a going increase they're

XXX% So, to passed fuel We Fuel that's surcharge to a BCOs. of the moving our attractive through model. feature a very is higher.

so environment January, the recruiting pretty the the in move So, I flat far. XXXX. not bode prospects flat typically, flatness those see and that's good. think for down. a we're a Through But, first retention both January. a for We we to environment, well actually growth of as decline think Typically, or in But quarter, actually uncommon. slight a through XXXX from I usually we're are

lost On handful the stated, have and ELD over front, we of handful currently Jim who small that yet we had mandate ELD install inactive. just to as are very another a BCOs the that

our first and some I – in that trucks expectation equipped may for certainly, our or service or but honor there you there BCO the I that. operators put them of with that and a think of may I we do have process ELD through as quarter. some right the in brokerage plenty to is in And ELDs that enforcement there, is mechanism expect doing opportunity I fleet. do extent, in customers think are we But, equipment is to that move that that that that where might not delay to think think happen also

Got it.

guys. Congrats That's results, for me. really strong all on Okay. the Thanks.

Yeah, thanks.

next comes Our Please of line question. proceed Seidl your Jason from Cowen. with question the

strength are some your building think flatbed how on you sort thoughts of affect Landstar's Was had of And passed that like infrastructure in that thank guys. products of it business what coming markets in if and And also that do was anything going Looks it Thank your [indiscernible] from? good bill broad-based? you a I side and particular? of metals. Hey, Was lot forward? end an morning, you. operator. Where and you, things. sort gets in of might

tends – generally directly we for flatbed to up the capacity, it not on Well, us. maybe tighten bill, infrastructure

So, feels over and it's the or market three last years. up tired, a been that tighten already it little two would a

they're bill, gets new impact that working direct infrastructure no think sucked would more an flatbed into So, clearly impact an from that a project we on. but any indirect

there? end flatbed the your you're of for seeing demand terms business out and some And what breaking of in

Jason, is broad-based. very Again, Pat. this

really You we're then the end customers different want Those, I products, the diverse and emphasize again, machinery. then the mentioned the to and metals, nature that. model penetrating all building within of markets that

if we as at a up we segments the go in those anticipate and strength three those through you the well. segments So, in first similar here segments, three look those were quarter as quarter

worth think information a what January customers that high quoting is requests following And An on in comes number from for is in. Landstar. repeating for we've seen it's I the a that related to for RFI request watermark RFI of typically, business.

And broad-based so, of I think is again it just model and our up and take gives you how an how set idea diverse to are that. opportunities of the advantage

thank Well, right. All and quarter. gentlemen, you time the impressive for

question. Our the Research. next Brooklier Matt line question of proceed your comes Buckingham of with Please from

Thanks. Good morning.

to So, the just the growth quarter. in wanted back BCO to get

a was year? loads and mandate? you the BCO the difficult did this pace change saw addition I end in information, through down of add I'm there nice but more the your post the not obviously to sure What in any of growth if being potentially additions saw ability You you ELD you you at even have the comp am fourth talk towards quarter. despite see If quarter? to of getting BCOs is, terms can

take Joe. all is ELD requiring XXXX. mandate, We've you since new this back. BCOs been The end the ELDs I'll of Matt, for

result a been anything into for ELD really the adding of us. hasn't an get new to as the having network BCOs So,

So, continued of the pace steady. additions pretty

And just just the, were for provide, owner-operators. that the environment be in also that prices that's the in a function I for makes the It rising quarter. again, the general Landstar improved think and but as we great freight retention, some Jim again, to a place quarter. of of Our system mentioned,

Okay.

opportunities, an I in model probably main – So, the we're that this increase to was is your seeing and contributor freight it's sense growth the and guess, pricing nice which

Yeah.

of I operator. and think are we they the that can't freight part think, the in freedom, today. an heightens so best provide just the to on we're of owner get systems to there, overall, we're out their access level system they a We access an that many I that get we that provides own can't the being seeing advantage like environment other growth, that believe for place in see or a

touched expectations Okay. Jim, on gross And your think margin I first of compression. quarter. We're seeing then, you continued kind for

about You talked mix.

bid be we increases? about Any just alleviation other there terms is a gross to headwinds rising a maybe through pressure little of transportation season thoughts perspective? of your terms pricing talked the those Should in costs. looking getting dynamic when and see profit any in outside at spot contract bit may margin the I rate that's more You Is as providing purchase guess, gross some, from margin? which we of factors, on

Yeah. Most of revenue the to probably first pressure prior-year. from compared the quarter brokerage is we expect in coming more more mix the because as

coming closed into load I fourth third other when because brokerage got through we on that faster maybe actually the quarter the think quarter, per I or revenue rate revenue load the into than PT so, quarter. fourth look better you fourth sequentially gap. PT per the think spread accelerated between per the a did and quarter load

lot – there's of to on So, our compression in the a when I think we're there. there just now not piece business, of left brokerage you speak

starting the that from now tightening. pricing on think at is the offsetting point I we're the where increased trucks pressure

our it's So, of us quarter a more mix for first projection. from

Okay. Good to hear. Thank you.

you. Thank

Our of proceed question. next Please with from Atkins of question Stephens. Jack comes the your line

here. a guys. Good morning. quarter on congratulations great Hey, And

you. Thank

ELDs. and think you curious we just could this to out about potentially when that And seems for on, Jim, XXXX see the are we tax next you guess, versus And that extended obviously, it, we guidance first time a XX to your then, XXXX. reform from we're accelerating. and at months? later it go like are moment – kind when sort back when because And encouraging. we're the things the of the over economy, perspective, very let in in the seems thinking where the playing a I about your quarter, XX It me I'm what look we questions macro just the how an point of saw signs think for So, I about cycle like from think to cycle seeing then,

I honestly you've mean, don't I down. mandate. ELD anything the got slowing us see

demand, it industrial end slowly third and right? right US wasn't and broad-based an quarter the flowed like got through production building popped in You've the it The of increasing. says, in we started It came the go on as quarter. the It and away. fourth to us, Pat expected

remainder I – executing the the volume strong. any I results cylinders. one I Will over year and built half get we're seeing I side see is is on team. That's job his years volumes, now putting all to for from just – come. probably in great in company. in is now? or drop standpoint, – the for I I will of like lowest of executing. already year. we year the the a expect of it And feels more the or kind feel have And and thing and the do January volumes. in history on have focus the I back question did But in. price does I think price Put was more into focus volume from built increase we're That's we're – have. on Pat this of got been it Pat's has the probably we because hiccups we're the in the typical only see the in elevate the great price that, we're climb don't typically that level price the right demand to will doing the question January, December a of the the environment now. pricing us expect I think right efforts the coming it a look, throughout balanced is coming question already from price one – we've the

I what year looking is like. pretty think the feel all good we about

you. think then, from bill, Okay. And Thank reform Jim. cash That's a a to impact the it's your flows. have helpful, impact I positive to when tax about going obviously,

you million then, XXXX? for in don't some And looking capital X Landstar's cash could depreciation BCOs the reform any your authorized, Do – sort think buyback does through guys adding you flow on owner-operators affiliate about I so, of if on you buyback on of then, do anticipate allocation, of I'm you and the to shares thoughts changing Could the around think you some distribution? And it the that see XXXX. will perhaps curious But trucks on change calculus that them executed of in have expensing comment have possibly bill? how the to BCOs? reform secondly, you flow the the benefits tax with tax because bill, immediate but your

that X,XXX group don't as we the our in at our we Go BCO philosophy buying the second – last are the But driving said, probably of XXXX. my throughout kind of is sense it tax reform the on our some truck. X,XXX was buyback. will multiple, the with our reality was when, perspective on program. sideline on We one because trucks, hasn't market question I impact we on any during a yes, we and want And changed look time also on it buybacks. in dividend, And, the have clearly like look from to our small and at until that I as the had set tax XX% with reform changed. And focus hasn't our trucks philosophy XXXX. the you so, – operators, I didn't still speculation multiples. look market based look also at them single first, don't were cash half the being multiples, flow during network XXXX, buyback the of an we've Maybe, We but I especially a we the started every stock And our year, jumping second the see – of at the – year guy. �� as since that dividend. – one owner is we that, XXXX. and our increased the dividend. see much see And From at reform. the or We since quarterly buybacks doing in of happening, ever increased stock dividends, to we prefer we've added XXXX, buy of will don't tax part nickel have on

the and want increase if quarterly, year So, got see same we've take philosophy. left is look, an see we we opportunity a still to how the to but going our

Well, time. great. thanks again that's Okay, the for

right. All

Thank you.

of your the of Bascome proceed Majors with question next Please Our Susquehanna. question. from comes line

us the the and up Can maybe to side more the to want the looks congratulations what results above and And did on SG&A revisit like down would they incentive confirm quarter. bit million. that when number $XX coming year? a expect full just and like morning. plan sort accrual little look for It to comp you'd came year And I with like last within the wanted levels? if expected to Good fourth on of results. in accrual were talk that million $X probably in Thanks. the if around around you came XXXX, target in walk year that

one. Hey, take Bascome. past, was $XX a million Kevin. And said we're million the number the $X we XXXX. if in that targets, hit be incentive for number our comp This to like going quarter. I'll Yes, is will

million So, $X annual.

try $XX We at So, you for each million is it tailwind number quarter to equally. the best into estimate revisit each number the to quarter would guess, to there's, try and end say, annual going there. I whatever and of get the could be we annual get think our

we're So, take at every quarter, going a that. to look

for Thanks that.

is number model best XXXX. million number for put annual the for to the your probably for in $XX

technology You've or and year? the in Is there of a in altogether? anything those on this that. year your got I the you that last XX% on SG&A long-term these plus side versus you agent could reaching appreciate results sights revenues. positive And growth from net kind revenue Are project negative given XXXX margin tie margin net targets on your out incrementals operating for expect? XX% there for

or just XX% at this insurance, push the to and projecting look what not bonuses fact income. through but incremental XXXX, more for is push-through of at on should we're to that any our we're down to of get incremental us think growth margin, in profit help to our that based Clearly, I XX% Kevin that of gross said, should XX% incremental the – tailwind revenue you've operating got X.X. perfect BCO that X.X% Also, the

little hopeful we're that us of So, bit margins. you've us help got get safe. long as that tailwind And there to incremental as a should

to Our and pressure the $XX million year of couple That'll an million next put will continues on even years. that that $X a tech about rate on between over a spending little XX% continue margin. at

goal margin XXXX. XX% operating So, we into by pushed To be XXXX. that XX%

All G&A Well, color guys. appreciate side, right. there all on the Thanks. the

[Operator Instructions].

Our your proceed next question comes from the Markets. line of with Todd Capital question. Fowler of Please KeyBanc

expectation I from lot and feel does half? like expect move at more be as But and more in is morning. that quarter Jack almost would things fourth If the guidance look there's just about expecting know we that variability starting with adjust for with at happen. of and into ramp is second a like the first for follow Great, what or of your would thans. which a we XXXX here a be year. to quarter I trends. it And to rate, a point your back XXXX up feels tax quarterly Good going your this comments seasonal it about ELDs quarter linear being the seeing you're expectations know on atypical through be first strength comparable January. should think I But linear standpoint, you a I standpoint? from quarter, Jim, through more we're maybe could normal for the to that

Anybody late year are on quarter an I put And ELDs a and more by in affects productivity Yeah. of is use trucks how think right? getting I couple My to thoughts then couple term short a sitting, in first is probably little in are specific that put linear the the think the the driven anomaly of a because ELD they've days down got who bit to new things, to it, learn them. right? or

from continue weather, it market on couple was of up here of extent to that it of X. I would a for lot, and IP. first has until side, the going keep back rates has pricing days, Any the but strength though three April on right strong the do it it today, phenomenon the now rates that's kind the degree, I, the even like think quarter, a we which not historically? up. of on The coming that's expect strong. wasn't sitting that a quarters kind To past would I some the So, could a in into it – spot to started I and keep would elevate because disruption in way – so January real it

We're will from results. if only comp four early So, before. as with know But a weeks it year. don't we basis, sequentially, the dealing it's elevate I had in of

a on history, quarter. I'm rolls we If year, very So, the after continues it I the in But what as clearly. the it the conservative out about have will saying little could we think a strong we're how year. is, first strongest see

that help but versus No, from. you a having that one the to contract to I'm some And less of maybe maybe lot me. just sense wrong, if makes think I that's of exposure. to probably I correct about asset-based work the me model carriers, framework things maybe think And the clarify your right just of

improve have maybe rates you contracts So, in some asset-based correct? of half versus resetting seeing a contracts. as about names less talking – the seeing the truckload your from of the that some sign year shouldn't is asset-based are of that they That peers, benefit the new second of

yes. Absolutely,

the rates renegotiates when contract our but a the with the customers, have of We agent tight, price. lot gets market

contract way the spot down. our a lot other and rates. And shipper Our If rates down, senses too. react there like going bring is are the it agents market that happens the rates rates

So, subject spot transaction-by-transaction off in – type we're rates coming business. bit more to of a – a little day-to-day, contract because of kind change than it's lot

That's helpful. good. Okay,

truck And and comps monthly November comping against have quick – XXXX my on volumes? gave a the February these and for what so for you're maybe March do then, do October, also understand you fourth and January, have volume for basis December? the for the you we you follow-up, Just quarter, monthly comps,

I'm do. And But Kevin XXXX. on going disclaim can. to We December the

it but you? year, little clean, did believe, so week Just for I in didn't Thanksgiving, had extra is but then, there's XXXX, ask you a but December October last and we this was November in year, had And confusion the the number. in because XXXX,

of quarter that the – what to this And sense fourth makes get saw year? about I hoping in was that I you understand No.

and Yes. Volumes, October, year-over-year, X% just negative this – November and for – truck then is December X%. XX%,

XXXX? then, you of February and what about March in year? So, January against And this are January, what comping

I Give a first XX%. The other second. numbers. first me find can the quarter was quarter

a you while – isn't do XXXX? or you had know that, not. release CapEx if Kevin maybe Jim, and have if this don't the number looks I in for at that

About $XX million.

Okay. trailing mostly equipment? that's And

Yeah. About XX equipment. trailing of that is

on $XX CapEx. that million – to true you the $X So, know million cash

Truckload January XXXX, over Todd? count, January

XXXX.

XX%, volume and March The X%. X% growth, February XXXX and January,

Okay, good.

Okay, great, guys.

Remember, the last year, January quirk calendar. the had in

– So

quirk was, timing? there From the was But holiday a what? Okay.

The timing of Christmas.

X was Sunday. a January

first had of almost in productivity in the week of XXXX. a we full week January So,

how that's with XX%. up we a So, end

in seeing January a XXXX? now you're January what actually more is up difficult of against So, right in comp

Absolutely.

Yes, yes.

Okay, very helpful. the good. Very Thanks Nice quarter. time. for

from Group Wolfe And your of question proceed Scott last question. Research. comes Please our with

Hey, thanks. Morning, guys.

of on, heard so what number And BCOs do in think this about then, of have or approved point, your flat brokers percent view of I at how I brokers carriers? your What the broker many So, have January. and a far ELDs? you active

whether I'll not to of question a have the sense a first. carriers take ELDs. true have or way they all last We and really have don't the

if it, If them about item. believe as difficult And part your validate. following rely And rules how on to we about like to think that was them ELDs, you was then, the Scott, don't thing think that. they the follow reason there kind just is any We approved, it, first compliance-related of have around the that's a around What question? very keep of won't other we what then a it's rules other your they but question?

or wondering flat approved Just of effect? said flat. any broker number went into if seen ELD of carriers if I I'm you broker change since are carriers BCOs the mandate know in growing. the the you've trend

quarter. count to grow the Carrier continues in

far ELD? in post so And

Yeah.

okay. Okay, Thank you.

You're welcome.

there Was quarter? revenue FEMA fourth notable any in

$XX million. Disaster services.

it's resets a was rate, earlier, correct? to the per earnings tied That know share. I think comp, tax question I incentive Okay. your there higher with target

Yes.

Okay.

We've but way, tried either pull off. it we couldn't

said just did I know January a number? quick, but volume full give quarter high-single, January? what's Okay. then, you And you lastly, up real

just probably I it think is that's based where that. on

for looking We're at was think it high high-single-digits single. January. I

what Arkansas some have slower talked So, in if carriers you different in something think. I so I just guess, other blaming about said? you think worse they've weather, my Why question far, is, Robinson rail than you about talked demand, the January. some other Best, of you're bit volumes And do a volumes seeing the transports been think January; about

Well, it's superior clearly. management,

Just kidding.

pull agents at think is system daily what down answer are don't we're I month a what we coming really customers, that's over looking it hard question it to through the did commodities, the because volumes to load us for we until and what and see driving break it. and apart how

tend see As that get there's the our other an you [ph] said, him for we we disruption, them, because, – maybe knows next whenever if us, it's truck. disruption, call get we'll kind the elevation got weather to and of and door, can broad-based. Agents a that guys don't country. But right, he model, around in the shipper all a there's small Joe right, And business right

guys just moving a little a disrupted. relationships stepping the have. We're is might get it disrupted. be of in So, freight lot when we Well, things get that and different that's Robinson they

to weather's that volume the that'll do January, maybe in for little bit I'm So, as and not been over weeks. subside of that's with little week a seeing driving saying why had it and might have weather a bit, last we're three

in have the there's little presence of a fact and just the bit it we react and local disruption model comes quicker patterns. from think business freight if I different that can a we

Okay, guys. much the Appreciate for thanks it. so time,

Sure.

Baird. Thank comes from question you. And Ben our of Hartford last

open. now Your line is

This actually Ben. for Thanks on for the guys. question. Zack taking Hey, Rosenberg is

a quick had Just one.

item line forward. was drove insurance. and I'm quarter. wondering, decent a other The wondering it what a just spike can the going I'm doesn't run just like this we revenue that what that rate for had seem

the Mexico But related is we've in this – small. other a The Kevin. premium. only revenues the and putting thing the other there. then amount thing The only very in in acquisition, very is that the we're there the in that's insurance other – our small revenue – are The got to Metro premium number only other thing

Okay.

going rate premium. is is a all forward? run that it million saw? we So, And good $XX that That

million $X there. in of million I there's $X think Mexico or

million $X or Okay. million? $X

Yes.

that run So, something on with like I a about month, out. is $XX rate a a pull got $X million would you've million go And to that. a line. then month, Mexico million that

Our is million probably million, $X Metro entity a month. a

$X right. million to million, $X

$X $X million a million to month.

Thanks, guys. Perfect.

Thank you. you questions. like At to this I time, I show back to sirs remarks. the would turn closing further call for no

April to earnings I speaking conference for our look forward And XX, you thank currently first call, day. XXXX. again Jo. you, with a scheduled quarter Have XXXX Thank you. good on And

for at time. joining conference day you disconnect today. your good a call lines Please Thank afternoon. this the Have