Landstar System (LSTR) 31 Jan 192018 Q4 Earnings call transcript

Good morning and welcome to Landstar System Incorporation's Year End 2018 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 have any objections, 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 and quarter you, morning Thank operator. welcome call. earnings Landstar's conference fourth XXXX

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

financial differ anticipated. forward-looking place historical or or cause from results materially from revise business risks, that objectives, we results call Landstar make any that per record fourth financial and information, relates records. to, may to reliance and those Such risks could described or XXXX gross fourth operating to three operational, revenue, quarters diluted Fourth XX-K the Landstar's through set to time. the information undue no information. forward-looking is, to for detailed XXXX during Landstar's uncertainties not strategies, undertakes events During and nature, this conference information the publicly filings in XXXX the plans, actual contain continued obligation quarter. and in statements update Landstar's income profit, not should share on and to expectations. Form Investors time including quarter legal and risks performance Factors subject forward-looking each limited section These year by fiscal Risk earnings the uncertainties but SEC first and of quarter other such

Revenue to margin XX.X%. XXXX the XX% fourth the our XXXX a fourth in Actual billion XX% XXXX to conference profit in $X.XXX the quarter fourth to third for third quarter call quarter was provided gross a to during fourth gross in revenue XXXX XXXX range of margin above quarter XXXX remarks be be quarter of earnings approximately was our range My During in the billion, XX.X%. $X.XXX quarter. profit fourth our quarter conference anticipated included earnings prepared $X.XXX billion. we guidance call

for be Actual Our per quarter share range $X.XX. guidance to earnings to $X.XX. per diluted of was earnings fourth called share fourth quarter the diluted in $X.XX

guidance During - of our favorably XX.X%. the per tax quarter in tax impacted included taxes fourth which effective an The $X.XX. quarter XXXX quarter, items of income not rate earnings XXXX the guidance, reflected XXXX fourth guidance fourth fourth diluted share by certain quarter anticipated

Our load XXXX XXXX XXXX the to loads fourth in volume revenue truck truck X% hauled above quarter to fourth X% of XX% quarter increased over number quarter. fourth year anticipated be guidance quarter. the a via prior fourth

the XXXX and fourth in X%, year During X% over by X% increased quarter, loadings and December respectively. month November prior October, the truck

anticipated an Revenue per exceed load via increased over load loads Our the X% XXXX range. fourth in hauled truck revenue quarter on on upper-single-digit year hauled quarter. truck via guidance prior XXXX in to loads the per quarter, fourth fourth

XX%, agents above from within in new who $XXX was Revenue rail X seasonal ocean our As a in X% earnings and rate via continued XXXX, air driven revenue and fiscal loads XXXX since move seasonal X% highest of was in ocean agents we X% softness. loads difficult number joined loads of December ocean increase XXXX last The fourth slowing attributable by the defined year-over-year over air to respectively. entirely the growth hauled more comparisons almost by through was carries and XXXX on or The carriers air X% quarter normal as million in truck mentioned ocean the and quarter. rail, load loads. and was was slight year quarter. XXXX. hauled decrease years fourth offset per revenue annual rail, air from first XX% the load third in The XXXX slightly past increased the few per as release, above per below and Revenue via increase Nevertheless, truck October weeks new of patterns. revenue a November was load X% in October, quarter agents trending the loads, and

million to quarter. $XX.X added the agents of New fourth revenue XXXX

We continue and agent the qualified to remains pipeline candidates the model full. to attract agent

our In by record operate net XXXX fact during our carriers with revenue. XXXX trucks The or count. $X BCO generate of owners, annual business behalf on a during We the the of year XX,XXX capacity we record the highest quarter number was XXXX, fiscal number had a XXX increase trucks provided fiscal record trucks Landstar on XXXX ended third-party our in of increase. XXX had ever net more a year. million agents above end We

Our network XX% qualified million to truck profit attract and capacity. $XX third-party continues fourth owner-operators other increased compared XXXX is to Gross strong, quarter. the or

quarter Here fourth information. other is Kevin with of his financial review

number agents respectively, compensation increased was partially the in XXXX XXXX. million BCO claims bad a favorably the equipment The fourth increase trailing of versus million XX.X% quarter to incentive were to or transportation effective in the increased performance-based as due stock rates quarter quarter $XX.X The compensation in Stock million to X.X% revenue Thanks, revenue, truck and Operating XXXX. quarter XXXX primarily increase the of expense in tax Tax fourth profit, and resolution in financial Jim. Selling, income due due slight certain cover compensation million in the the as increased administrative primarily brokerage insurance from expense, federal and items, The revenue purchased profit The brokerage carriers loads income trailers. of in fourth SG&A in Gross and was points quarter as increased revenue periods. in to XXXX. fourth gross the XXXX. million release. with million XXXX. profit, of XXXX quarters of the in fourth in provision a press of was and tax decreased Jim tax the to of the were XXXX primarily compared transportation in XX.X% $X.X $XX increase margin, resulting paid was tax company-owned amortization effective has million paid as an $X.X The fourth was quarter. expense was agents in of compared XXXX in cost was covered XXXX other to basis cost margin was from XXXX were the compensation I The million to truck $XX.X to claims carriers. compared of Cuts operating to various equity in X.X% fourth increase than was certain gross included $XX.X tax its for revenue percentage operating to costs was quarter and Depreciation income and on gross year-over-year. due increased revenue of information $XX carriers. by agents impacted and decrease in to in the in was or XXXX. XX% our paid costs the less effective a purchased in reduced as the year XXXX X.X% of earnings to rate due rate both information million brokerage XX.X% $XX.X due was of compensation compared Commissions lower rate increased in as increase fourth million compensation the Act increase by divided revenue purchased million costs quarter, XX.X% the to XX.X% in SG&A $X.X less The mostly increased to percent the will on in Operating quarter revenue fourth general plans, of of by the impact in XXXX the offset compared $XX.X quarter fourth transportation Jobs period. XXXX in driven The favorably in represented quarter. fourth prior decreased decrease XXX in truck XXXX This an increase to rate XXXX in quarter fourth defined the compared in compared mostly increased in transportation to costs million the Insurance a XXXX. the XXXX purchased claims percent quarter insurance so in both in was the in from to to the in million The arrangements. XXXX. primarily provision and $X.X fourth to attributable $X.X million decrease on in act million XX% by revenue XXXX compared The the quarter, or for Total of versus in arrangements XXXX to periods by hauled XXXX gross XXXX XXXX benefits commissions as of to December commissions severity XXXX. cost compared XXXX. fourth equity The was XX.X% and XXXX revenue was revenue for versus company's XX% Quarterly to to XX.X% the XX% compared income cost rate to and of was claims million the to profit. and $XXX.X the increased incentive quarter XXXX This increase Other a $XX.X $XXX.X $X.X quarter and wages. debt. contractor costs our X.X% income net under XXXX XX% was enacted profit XXXX. the XXXX. in in XX% bonuses in fourth impacting

provision by Additionally, quarterly of was of Act. the the a deferred Tax favorably liabilities the the result enactment taxes the XXXX of tax as revaluation affected for significantly income

the $XX XXXX Back and cash There shares $XXX million purchase Cash to are ended capital stock programs. company's we available expenditures you, for $XXX the with sheet, million. operations flow under was investments cash were balance of from million. X for currently our at purchase Looking million Jim. quarter short-term and

almost X% immediately fourth preceding anomaly load XXXX to XXXX, truck load the a decreased fourth Thanks, X% generally quarter. was per we from a The quarter first load XXXX truck an and quarter the seasonal quarters, In Kevin. per first growing range quarter. the decrease fourth XXXX from sequential from from X% revenue quarter. with the of experienced in in revenue to trend per Seasonally, revenue truck XXXX first

first with of truck the per two in revenue of the first the normal via loads XXXX, seasonal the pattern weeks trends show XXXX. signs the load of on first XXXX quarters and quarter, During hauled XXXX experience consistent

respect load trends year-over-year in quarter quarters. percentage XXXX first range. volumes, volume in both low-single-digit per be first to the a significant current truck growth I expect With Assuming truckload below truck XXXX revenue XXXX continue Landstar quarter, to to XXXX the first achieved and

first become XXXX first the In volume. lower demand year-over-year XXXX than growth strong quarter fact, XXXX quarter XX% truckload is in volume was quarters volume quarter XXXX more XXXX and and to comparisons of I have as first compared as first difficult. as expect greater rate the not

During two XXXX. growth truckload of the first year-over-year comparable the slightly volume growth higher of was weeks experienced in load volume period than January,

significant first no exceed be hauled revenue $X.XXX for from are remainder million. will during on expect in low-single-digit a of a first of revenue there incentive billion of XXXX first lower by be disruptions XXXX anticipate number recent freight quarter than percentage the I provision range. of via trends, comp quarter to to quarter, to normalized truck first XXXX more $X.XXX in continuation to I in anticipate Based Assuming quarter, loads load weather the XXXX approximately the currently XXXX quarter the in $X I severe first which the first quarter XXXX billion. range

XXXX, first and rate quarter of were rate anticipated the insurance to X.X% is than assumes were share expect operational truck to a of estimated records, which effective claims lower profit Landstar our BCO effective trucks and revenue income, while year revenue tax financial records. guidance all our be and Our load by gross gross annual to earnings while income BCOs Revenue $X.XX. million. another XXXX tax annual XX.X%, first those due and stock XXXX historic by diluted via to for per annual of profit, on in based many arrangements highlighted $X.XX operational cost anticipate operating I over all revenue truck, diluted earnings Revenue, $XXX XXXX a provided compensation financial to tax were assumptions, excess loads the hauled a number be grew million net share per on first range per specific of quarter records. benefits Based grew quarter. number $XXX and was

related approximately million to generate a to when balance XX% our incremental excluding gross most returns sheet was XX, demonstrated significant operating XXXX, totaling and the company $X During resulting flow of XX%, over in Once income, million. incremental profit and margin $XXX borrowings again had of $XXX the with model short-term in of available cash the passed environments. Landstar's technology economic million costs XXXX an operating cash light-asset that outstanding facility December credit revolver investments and business At based strong of under initiatives.

for historical continues exceptional by capacity historical million record pricing and been we will market During million. appears a line XXXX Landstar trends. expect once financial X again XXXX, cost to that purchased XXXX and spot in as back-to-back standards. of has environment at shares environment be available be more with stock to of seasonal its It We the robust we in truck $XXX overall highs. the strong XXXX. the the XXXX in believe XXXX be follows of total to at difficult performance as With moving common overall to experienced said, readily marketplace during be

We expect and buybacks load and we successful capacity our of XXXX value focused to And via will year to delivering stockholders investing on be remained that, available take growth, questions. dividends. our loads, volume to another increasing as in with haul technology we share Landstar those profitable

very [Operator Cowen of from much, this comes At sir. Seidl Company. time, will Our question session. begin first question-and-answer we you Thank the Jason and Instructions]

is Your now line open.

for Jason. you our on Adam question. is this for Hi, taking Thank

Yeah, Adam. sure,

for just has just recruit rate as of in? harder now last I guess, guys kind given falling that has four so to or of is, first months, been this we're you I been BCOs through question environment simply kind it guess, spot

Adam, this really. is No, Joe. not

our seen way XXXX, in any attraction both paid the the the each as in what's the really XXXX, XXXX recruiting the rates XXXX on due rate for And But their have say, percentage. them think of as retention happening initiatives last on been we've part of initiatives impact I impacted - the by And well few our to in big clearly they're in to the a been model early a large not in BCOs, that's win weeks. environment, as of market. own. and

a BCO we to - perspective, mean, And in was put revenue record that's record. XXXX, $XXX,XXX. I there in over had it per

to I think a from going deter pull little us. onboard the BCOs back is with staying not or coming

quick guess, bid on follow-up expectations that. guys you see season broadly from what little in just Thank bit here in it. then, for guys, do see. Got you, pricing as And well. I is I guys of for higher maybe guess, vantage pricing How your looking just level a point? you that a XXXX? terms guys' Just maybe on

uptick wasn't October, more ticking we throughout would - Our remainder as on based it into January, we the - expectation some year consistency, be we think are our as into softness as January assumption consistent And XXXX it assumption maybe the - hold going we going the and it's we pull we're low-single-digit looking the month-to-month Coming was. looks rates rate. But up it but what below for November, in the we pricing at. in see volatility like mid-single-digits that said, and but is we're rates, low where January, to would what now somewhere, you be. would if that historically the the the a be high as on in seen an spot had into we of we know December, seasonal still

you, it. guys, time. Thank Got the for so much

you. Thank

Our of Jack next Stephens. question from comes Atkins

is line Your open. now

Joe, guys. for the morning, Pat, Kevin, Jim, time. Thanks good

Jack. Sure,

Jack. Hi,

Good morning, Jack.

just concern saw get And you're verticals, I customer specific But, a forward. strong where things if the levels to I out feel be you into feeling seeing Pat, in would for get you as in of some in and a side. But a maybe XXXX. we on of are the what then, particular think love seeing I'd freight any just lot customer Obviously, the pull that? perhaps weakness. start of well we curious and year with perspective? maybe of on there was you could, Jim, what there about weigh freight macro I seen you're versus terms from So kind question strength Have are going a Jim to moderating indications

of has that moving that softened. We I than system more so in do drives decelerating think would we demand it's a is capacity Clearly, hard say. a to point freight. and there But It today, industry a growth to side. a probably customer more right, rate expect was, specific the our supply we're diverse, very demand it's or specific

can other we So don't have comps. through But we're feel driving tough some trends. off I we overall coming volume slowdown really economic specific what's like a and put real anything then on the still than

an way dive, diverse we're kind but all industry country of standpoint, from the maybe standpoint, of typically may more who economic a a Pat dispersed the have on effect. are the overall so So agents and geographic the geographically then more industrial production an industries. based different we're - deeper around It's and

Got you.

particular - in said and - if - that at think XX% look at Jim more Jack, it we're comps Jim this driven it's to opening Jim in of say I the nature if of our quarter, driven of a to his period. again, demand what diverse look versus two-year I I that, say very agree versus echo XXXX the industry. what about excuse Again, agent think when case kind with also you well said, I is XXXX this a are would that supply you than me would think you base, what difficult remarks, quarter here. about up

So if market. It's was a little still it, think it softer. a about robust you pretty

backdrop things if aren't as even still Yeah. driving from growth robust a And you're perspective. volume just

Right.

right, that's All great. Okay.

you initiatives, But the your sort update the terms system give feedback are we you could technology new comments. initial in Jim, mentioned of on on rollout thus far? been that of and your prepared question, technology in agents what's where just us and for the operating your an Second of

It's all mean, we I anticipated. positive. it's longer taking than

five we're call doing we're was the is I jumped agents, feedback. say That on we four we past is looking over a are break And you positive operating years we're tools mostly going agent other we suite positive, originally our that better manage get going the - as we it year is anticipate It's XXXXs boards TMS it like customer analytics to one the that a to the be. first some or business. The the would whole where and agents system. more there project we're on X really looking, agents categories. it the we order on our can Year XXXX. area this spend tools as launched robust and system things using we to $X that into down in. negative tools, over doesn't of and a the But the of on And mostly and convert tools and agent about one to we pricing to system rolling million have. delivery probably a for our XXX Clearly, the that it about three because And technology project. into take out, five take more Now, complexity things - would investing And we're specific another working that probably putting systems that order all $XX system than to system. four, our ago, or the well. X is all - is have so legacy it's load of feedback. today. thought mean, on in I about million. year-and-a-half capabilities probably current entry get delivered has it's we it some five going delivery putting complex three to It's entry we to an But agents years little

TMS. are of important us those some to And tools more than -

or feedback. of air the ever maybe we've for that, better the say guys in truth, I And out - in tell recruiting BCOs the and time positive to a that is the yeah, reason it's capacity the got heard our balls getting rolled lot tools are very right our of staying we more because So Maximizer. load available longer Landstar first you one now

squeeze hear. preliminary us sense. XXXX? for cash it's makes XXXX for flow Kevin, That for That could cash sense thoughts flow Okay. a in Kevin. quick definitely ended good if last, - any one and for free one give One where on to could last free I you

$XXX Yeah, out million payments the free take we in XXXX. the if capital cash flow for that XXXX lease made about you was

low-end as, a as So sitting say million XXXX, $XXX million $XXX for $XXX I'd for here million guess probably is the XXXX. in to January,

Okay, Thanks time. that's hear. great to for the again

Jack. Sure,

you. Thank

of question Morgan comes Stanley. next from Our Shanker Ravi

line Your now open. is

Ravi. loads What Hi, question the about actually exactly here seasonality Shaked just for drove per a Is to this is something I per or ask BCO. deceleration BCO? else? wanted loads quick it on

think don't seasonality. it's I necessarily

the very I think it's strong a of year. function

heard mention the you think truck I Jim year. in $XXX,XXX per BCO

towards I fact think very down the the just had that they year. - function of And of it things slowed just the back-half good a a year. they was

in Got market it. very even another rates? load, it into entirely strong XQ? a dry can your that van rev rates this about And the you're quarter. can spot there explain as was decelerated lag why noted, for versus spot pricing Considering both flatbed is and expect though that you we you per question And

as tend to not be Yeah, we volatile.

them spot contracts longer have to downturn we of market, capacity We is in in market. cycle, - spot access hold with And Although tend the contract into if that customers some we're there a price. they our even do rates. have a

- have our drop business XX% hook. We and about is of

there, of have price have their get tend they - a $X.XX. kick drop at us an in shippers we trailer and - not by $X.XX locations trailers we to at want or because to just they out So

a pricing Heavy in true rates it So special some the stuff, to haul market. when of than spot firm that that comes into we're cycle more too, now. a little stay right a more the we're sticky little

stick we're also a a a with of business, little contracts yes, lot - of not bit it's a into we cycle. why, mix customers our little we're downturn but longer of a that's and a bit have spot So

how your business So did much Or… you of see is contract?

XX% We customer of - contracts in guarantee work, our a our we guess right. But to would pricing some have don't XX% truck, mechanism. I

people be in what where that goes haul at environment, and of price spot. a to carrier happens us We'll capacity will not why months. it, that's XXX% there. but in refer do to truck regardless give it XX So the the don't shipper a generally the We $X a the dedicate mile you price, going is at for gets a different

time. makes It sense. Thank for you your

Sure.

Thank you.

Our of from comes Todd next Fowler KeyBanc Capital question Markets.

Your now line open. is

morning, good Hey, Great. everyone.

Good morning.

was do you things, in if end mean, growth then, XXXX? the able at I you're I first, you're talk you for some bit that XXXX? growth agents what's a I How remarks of being think place? into experiencing you Jim, of in put the share can that taking to think Hey, little hoping, been you just incentivize the that do made prepared focusing on comments in that of growth and volume on secondly, focused load you've guess about kind the a profitable you about volume to your market? mechanism couple And do about enforce

Jim make in things you there we maximizing we opportunities that sure are agent better are one say market is whether management some we markets field of to do the would of we couple obligation perspective talked tools that their in that on things, Todd, now business. have, to the analytics their we from the think to accounts. whether inside these business. think mechanisms side, certain each the are about that, about the and on business growth can that and opportunity to look taking volume a we that's able platform are a where sales agents that's the to A I van Pat. if I the this management identify that certain share, And are have the grow dedicated have

if share you'll well. those note about look we're If in that very execution at well valued, you release, think commodity expertise And inside we exhibits list the that, in very requirements world, accounts. our the do we able there, you with whether were the it's the market is in the automotive for do accounts example, are and that because industry that to taking those

going a is, is turning what's concerned act are fast one agents on, and deals. much better get down, they is that There the about don't doing we thing looking it, that another we better enough, for too pricing thing We're shippers when a ago information that load. starts rolled don't job, realize pricing react available they readily holding their this to can here's to industry so seeing, in months hey, environment. more can them react. of, on they the what's $X trends They're and are not They're XX of we the give seeing going in

and of you So losing less. load, the the renegotiate pricing haul instead you for

been So a there's - we've we've information the confidence got little bit of sharing. there too based on

data. we pricing And tool out rolled better the to so that

can react market to conditions. changing they So

Got it.

Okay.

you've it's hey, not volume you're better manage that to the and the so been saying, got business place after becomes one tools giving go you've of the So in byproducts, to that experiencing? volume, them the growth

about and them Correct. Better marketplace share. to market the knowledge grow capture allows

gross since my just probably on quarter some for I on mix whether that of there It it feels Jim, agent wanted follow-up, your expectations should comments margins was little give it. a for profit trend Got then then in usually like profit some share a how be was for broker And you if would some freight margin throughout margins? maybe pushed thought quarter gross commissions. up that expectations higher basis. the to quarterly And think, net Okay. first the XXXX? revenue of a shift, your What fourth on bit on

quarter about first the we're probably to Yeah, sitting XX. XX

Okay.

cycle little a quarter less. I is there little bit carries charge in because are the a business, think first upstream, the generally And more little bit BCO the broker and softer

of quarter. cycle in little to on if from first going XX the I a down I you're wouldn't - but So the XX I guess first that bit would have don't generally and quarter - history, the point tends the from it after the if that follow you see you maybe the little gross quarter. even rest historical to anything the raise that year. that for capacity holding the loosens more. through up trends the the Yeah, while follow I even change that second from would unless for a might that expect don't point margin

Okay. rest for That that little bit something directional helps. just year, the sense. for so looking Yeah. of makes more the was I

warm guys. stay So

here freezing. morning, XX Almost this we're

Yeah, all right.

a yeah, So, lot. thanks

Todd. sure, Yeah,

Thank you.

question Our Benjamin comes from next SunTrust. Stephanie of

now is open. Your line

and Hi, the good your was related really Thanks. could loads for fourth great? on an color if hoping expectations, of would XXXX e-commerce XQ that just question. I the really be morning. Thank during or update this compared quarter kind provide just to any you your performance there you how

Stephanie, this is Pat.

peak business XXXX. was in robust as quarter fourth as not it Our was

it. the Got of or of tougher that's any change just kind any did shift that? think you nature Or you see And for comps?

It shift of a one more account. in was

Well, All for right. question - question. much the thanks Great. for your so

Thank you.

comes question next Brooklier Our from Matt Buckingham. of

is open. line now Your

morning. Good thanks. Hey,

per I'm when fuel So you from for guidance that you your first there's low-single-digits. out some have think, Do expected assuming quarter axe number down. revenue being I down to load be, surcharge? surcharge impact also fuel

to very We change don't that. much a of wouldn't assumed fuel. Matt. have We No, have with respect

that. from range. assumed what, $XX, QX we Yeah, is, I to have wouldn't on think, any $XX that in QX barrel delta somewhere to

freight And is the doesn't the BCO excluded of so half you remember, fuel have it. if fuel freight, even from in

on the included but Right, brokerage side?

change We anticipate Yeah. to from the a big first quarter fourth don't quarter.

for price fuel some to expected like be down. looks productions just is year-over-year It Okay.

if in just a contributing bit right, for to this of quarter expected sense it's like Did seems much expenses if still million? in the little was negative a up second away, was potentially you your program first that? you fourth drastic in to IT that maybe something the And question, in shift, is it how in Jim, quarter what weighing yield like then mentioned a pretty the to XXXX talk we're think trying guidance, terms that you midst to I the fuel I get taking it maybe rollout. that's just then and around $X on XXXX, So put going of because

little again we're million going while. $XX about this for year. to million It's to looking out Yeah, $X go a probably

that in just tools the here keep we of the want good a agents advancing for lot to technology We BCO. on going our have and things the

XXXX million $XX So we plan sorry. I'm XXXX, what to $X million for is -

time. Okay, the appreciate great. I

Thank you.

of Our Group next Scott Wolfe question comes Research. from

Your now is line open.

guys. thanks. morning, Good Hey,

morning. Good

big revenue of continues even revenue? rest the that of So that earnings revenue of quarter all you the Do if flat year? think Is flattish this mid-single-digit year revenue, maintain maybe negative profit growth. growth of sort slightly double-digit environment sort can picture, profit, you

is $XX on reason X%, hope that. million count have And or - you've insurance, there's XXXX, but be I tailwinds in That of share some it unfavorable Yes. I in but whether of we the about And XXXX don't bunch don't see incentive XXXX, we I had comp. It's have so into equity - don't why count you a whole we think XXXX development in down unpredictable, in through our of got XXXX. push again. so comp

income can understand a variable model, So is model, fade business and the when to and things money bonus lot thinking if we're going cost gross who those line, the growth the kind for go just in are on agents people making EPS through our away. if still operating all you're the of drive model. yeah, drive you're profit we either because a way flat of through the you we be and And

we model of So line of through variability comp kind too. right the goes the the

so has first to note, year. But we of year estimates benefit out, and that comp, a that's of equity lot comp for if and and good the with and call like just the analyst XXXX, a consensus the we of in have how first incentive the that's consensus the down, comfortable number model a comes slows we're XXXX get So the down, works. call

know impact seeing helpful. very but sort about maybe talk early, I do a you more the That's this it's the market? have can out there. of you you're sort impact the on think can of then, that from is And event Okay. weather And prolonged

may this it push quarter. unless freight in the being we're - have the the is it load reports. later of But end our make might And quarter, affect be it's this right X.X in of down, some believers environment, now, could comments still right we shutdown back couple that eliminated our get first actually We're might And opportunities but be to the production, I wasn't thousand in but volumes. anticipate of going opening now, comes and - think the short we load volume. plants is we which get freight week, if have those days there be since week, Clearly, plants week impacting the this into shut daily weather. by always lost it's we're happening up sitting, freight on plant that so be planned the some back a to running month load up and included in was that, it because this couple the and of and the

couple in we're days thinking thousand couple loads going come lost of don't I last to that think, of So the back. the isn't we've

And prolonged really market other thinking impact rates? is this higher have retighten terms I of way, in from maybe the to in the you like think do and a was enough

there's or but freight you I quarter market, a some schedule turns believe days. guys maybe. of because now and on trucks are the into didn't I a the the for who sport schedule couple - affect get got on probably long-term. But sitting to moved because don't do prolonged, a it don't know think rates more on if I there's sideline, short-term routes but it's when that short-term of possibly freight go probably spot impact, the get and it's holding route,

the time, guys. for you Thank Okay.

you. Thank

Amit from is Bank. Next Deutsche of Mehrotra

Your is now open. line

guys. Thanks. Good How you? morning, are

Good.

in degrees New It's York today. X

any we'll day. take So [aXXa] [ph]

in suit, here a it'd fabulous. down be bathing it'd be Yeah,

But maybe volume it in paid Obviously, could should that Landstar a the profit towards your revenue that take at XX% level, it mid maybe said. how you mix possible structure as the wanted carriers I thoughts growth maybe the cost the just the about can carriers it that variability evolves of you where model allows conceptually less to of maybe is offset conceptually. more back gross environment that as to whether or bit the volume rate gross a go to that? really as gross How there broker how little of about think it's some think question headwinds? we to wondering, how environment, XXXX so brokerage Any we was the weaker have you the back that beauty that profit in - come in the slows?

We'd We to the margin, you have that XX% hauling. we're through means that because really the actually truth. gross system and preferred don't are margin a focus on BCOs so driving tell revenue more much the brokerage still

margin put margin at works, because BCOs - that's gross now, if environment look our with business the brokerage our gross can over we more XX.X%, hauled an more of and that the model. was dealing you XXXX, way When the profit freight. If our in we're margin the

XX% the But infrastructure there the go or a to XX%. because see not yeah. okay, cost lot will that's We of is for brokerage XX.X% freight,

agent to So basically you we've below freight, line. pay receivables when not of gross truck, got then infrastructure third-party doing there's truck excess some pay lot profit but flow, we're the you the a and the cost here

see BCO of of time how you was the on the mix, of it's So we and margin look when that's how much much most the was it, depending and move, because kind how brokerage. at

grow more brokerage our can BCO maintain BCO our or fleet we the push fleet. and So extent,

that a climbing gross that continue means, margin but because way, in a standpoint. drop, profit's to You'll see dollar good from

just XX% the you've our Does it of at And change about margins? that just of goes EBIT volume it said? the just all way incremental that, talked you and what environment on I lower in of change at about the based the think, mix expectations that could you Right. think go all that seems higher in the revenue. net Okay. terms guys

Yeah.

XXXX, some of on able moves with - of our - comp the be our but and - incentive comp. should year, of should growth operating XXXX should equity XX% XX% should right, a because significantly expectation XX% growth in out taking operating because prior if operating in a you're even comparative to be year, profit, about in flat amount we a Our the of kind those in push climb. up income not to it higher, XX%, income, we It gross it's costs had to margin that significant

Got it.

maybe market, that is thought the maybe things of bit ELDs excess maybe higher, they go little owner-operators more people now Okay. service that trucking being rerated bit a But one believe on be the miles and from per market are may and sustainability are lower does the can't And up is, because then ELD. fact that prior we independent their I obviously, obviously with see do of more bullish cycle. question conceptually the rules, rate that mean, structurally drive the the the to it hearing you? sense more in of mile the a make in of marketplace? another we're would maybe maybe that it cycles, of And kind that make some spot have a over you the in thesis to to have to hours of little seeing

is Joe. Hey, Amit. This

any which the it from think, think play forthcoming any role, of change minimal you'd we at be of or end is kind does think the don't material price. ELDs I productivity, the could some impact But XXXX. of affect of in change see It productivity its more The I would rules. only that movement ELDs. conveyance the wouldn't this in impact pricing and from real just its AOBRDs very that's that would I thing little ELDs bit. does think a probably I impact on exaggeration impact productivity to saw of be personal year, a that and the on

that's relative the what the what but either maybe could was in we I past in ELDs and Well, change that's just yet, but cycles perspective just they too evidence question tightness of enough statement, that guess, were of now raise of kind my was point floor, haven't rates the really do to about. a be It's big trough seen not market. the

you're saying. and have see we'll to guess, I what wait I Yeah. Conceptually, see.

the I as declining productivity, impact of the it the purchased think to be. so and I it extent, awareness yeah, did think what - transportation of should expectations did to some maybe raise that raise

to little on just off believe. Can because bit fourth have last environment? that one about or hopped on mean, question the up about I the XX% they versus quarter, And you'd you addressed in the where a October, talked expected, they I implication late. this way volume of I before, volumes you - kind But in X% ask I talked I just you the end the ended before might hop

haven't the big there Can seems you December there And what like the drove in to a was over if large maybe that of last the and your cadence seemingly already? deceleration of maybe volume the year? expectations. drop-off give you us couple relative growth in of quarter, So November months just

plus was range that and the anticipation would quarter we bottom to X%. was that November caused environment. our our and one low-end X%, into I like X% was hit of Yeah, a stronger And dropped X%. our was of have customer customer about e-commerce that think there was going was December XX% one X% the October And XX% off. miss, that we

Right, okay.

Not dropped off, just the [ph]. [loads]

as strong three last demand years plus combination we the or So that had for a it's four not on of the we've single anticipated, a e-commerce customer. near was as

very that's it. Okay, appreciate much helpful. very guys. Thanks I

you. Thank

Our next Chan question of from Stifel. comes Bruce

is Your now open. line

morning, gentlemen. good Yes,

Good morning.

think - business of truck think strategy on to was wondering sort said affects I mind if trailing the business percentage know generally drop of And that roughly and XX% seemed which loosens is right have now, far the a on your and the the quarter. hook from that I'm as that you're here follow-up good. earlier. the you capacity. how be of plan drop-and-hook sequentially you I third flat quick whether question around business, deploying over mix as returns a environment floating Just I target as Jim, as in guys you capacity pretty that

BCOs you have our to many haul BCOs drop-and-hook. and have trailers. our X,XXX…? how And, we X,XXX, customer haul demand the Well, Not our Kevin, really that business ties then do of all drop-and-hook number,

About X,XXX.

freight. X,XXX of It's BCOs, the drop-and-hook about haul our who

you then but side, the capacity, one on the customer - demand So side. other have the we availability on you got

- X,XXX drop-and-hook got XX,XXX those more have to BCOs push the we freight. love to of We and have if X in BCOs We'd of that business the one haul shipments. trailers every can we So network. we trailers add for more more get

we're highest haul we don't drop-and-hook there get is no no - providing BCOs have and it try But - mix. opportunities. our we're is a a But our a trailer there and bit we when revenue. put But is targeted yeah, is providing actually is because best, part plan a the the more business, drop-and-hook you business, more So, our trailers. of and you margin percent more and it in get little to freight of it value coordinate it

the and Okay, buckets. about can great. back And remind as got you if I at, And especially margins? appreciate should be back-office anything that. to have that I'm to mentioned that us, That's you on the wondering relates looking how the that talked you But side, it TMS also technology deployment coming few you've up just helpful. then, side, especially other is we there the is a going meaningful there. corporate you

it's say we I only have employees. - X,XXX related the margins on look, to corporate wouldn't

seeing the had we So tools - we're identify attacking. putting we flexibility we need better And the is we But better build always not that's information way see to And we've efficiencies systems might like share like we're experience, up lot right? tools loads, experience. more It's to experience this same them the we're saying, a probably and you there agent not to attacking But you we of customer is really front-end, really the capacity the for the we're want products and to boards and the what access hey, this. we of one this had is within our kind in see and our opportunities What effective like, use better the stuff. attacking. loading as BCOs all like too. opposed the make the they So grow, network. that as people, can that always load, you they load we've number of still

business tools intelligence yesterday, day-to-day BCOs, a with stuff the thing. - better and simply XX none using, agents - where how the out what out too building business, the dealing of stats we're just to what on agents their information watch what kind So that with. that their to not like almost give the data share did can - they're what - artificial see push it's but they capacity with that and come happened we're customers today, customers That's their yesterday, on they're loads even

there or it? been that you that then agents. And are mention need that still to some that still great. pricing Is deployed get - did to has Okay, or tool network-wide

sales But deployed side. in off it in build is you it you by side, was fully a then of started beginning Then buy there XXXX. confidence a basic build - with just level. then Yeah, the

that stuff constantly better better we're tools. So on working give to and all

time. the appreciate Perfect,

Yeah.

you. Thank

Our Bascome from next comes question of Majors Susquehanna.

now line is Your open.

you've exceptional Jim, was the the of teen to time. your years Yeah, EPS for thanks as over targeting for over clearly my But for low growth questions, about the Landstar the here. some talked taking question in business you business. acknowledged mid in closing remarks, XXXX really

threshold annual As would to of growth to or we you comp sorry, - expectation low-double-digit are thresholds that XXXX longer-tem a payout how XXXX, your look need kind I'm acknowledging incentive was? really flattish get you with aligned earnings

the with longer-term aligned goals. They're

okay. right, All

and don't Yeah, we - pay - a we it's then flat have plan so… not don't yeah, significant bonuses, a

That's great Well, news there. guys. you hope get you. we Thank

be great It for might you.

you. for Great

you. for great Yeah,

okay. in talk we'll Yeah, XQ,

next of comes Brooklier Thank from Buckingham. you. [Operator question Matt Instructions] Our

Your now open. line is

some customer, for that get away question, shift that a sounded follow-up a it to indicated you. just sense when volume that happened. just you from so they customer, e-commerce trying I'm Yeah, shifted the like

talk I guess was you much And for how a way is there monthly the given any to think the us. that impact numbers can from gave perspective? I about entire a then, quarter revenue - the make just for

so you that you if gives idea tell of they in-sourced, who can that it is. We an

Okay.

me generally customer don't share And give We second. individual information. a just

like we're moderating. and seems you call through kind it environment the overall just impactful of about going I the was It questions. talking are guys mean, as more asking

Yeah, yeah, yeah.

that. contributor a if that's number pretty it Yeah, to big Can sounds like they offline I were the easier? get

million so customer don't year-over-year. $XX No, was - that we're no, no, but customers about it dropped so talk why much, one we diverse, because

the it in it generally December and year-over-year. happened impacted So quarter November, have would

for was $XX total the quarter? million the

prior the reduction from the year. change, The

Thank you. it. Got Okay.

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

XXXX All right, currently you, earnings Have to quarter scheduled our good and first conference a again with XX. thank day. look call. on It's speaking forward I for April you

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