Landstar System (LSTR) 25 Jul 192019 Q2 Earnings call transcript

Good morning, and welcome to Landstar System's Second Quarter 2019 Earnings Release Conference Call. [Operator Instructions] 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; Rob Brasher, Vice President and Chief Commercial Officer; and Mr. 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 you, morning. Thank Missy.

begin, me the we a Reform Before let of safe following statement. Act harbor is The statement under XXXX. Private Litigation read Securities the following

are this are historical that statements. based on Statements made call not during conference facts forward-looking

XXXX but is make and conference business detailed and Factors in strategies objectives, may contain results or limited Landstar's by subject differ information uncertainties fiscal from statements risks not Form year information SEC actual anticipated. to other those could in nature this including, XX-K time Risk operational, to During legal we for that the forward-looking risks, results section uncertainties plans, expectations. from that time. events risks These the call, and financial materially the relates Landstar's to, historical filings to Such described and cause to and or

undue and XXXX by results on comparisons. available via financial loads year-over-year growth revenue for market. and no rate load truck the increased truckload information, per quarter spot softening exceptional truck the place in Landstar on forward-looking opened with reliance XXXX were capacity. such publicly not made volumes the of of believe truck year-over-year Both has any increased growth hauled information. market pressure revise decelerating U.S. a to very been production slowing volume should or manufacturing faced impacted obligation pricing. Investors it forward-looking on continued undertakes of second Landstar and Also, and We update spot the have difficult due to

conference revenue $X.XXX to provided billion. was earnings $X.XXX first-quarter billion. on call XXXX we of second-quarter April billion revenue $X.XXX XXXX guidance our XXth, During

April a earnings the Landstar there diluted revenue the per in our to low per guidance Xth, We X-K second-quarter risk second-quarter was earnings first-quarter on during $X.XX to guidance filed achieving conference was also and of we SEC share $X.XX. announced earnings that call. Form June with XXth. earnings XXXX $X.XX On our of provided end provided share

early in our May guidance per of updated was below fell load June result expectations. a revenue Our truck that

warned, and fell short second-quarter standards, by a during earnings share June our conference of we diluted environment revenue earnings Nevertheless, call. relatively first-quarter our provided levels. we remain with historical at As perform update freight guidance solid high continuing Landstar in the to per

XXXX gross XXXX company's history $XX highest gross quarter. $XX second than lower second-quarter million second-quarter second-quarter the quarter XXXX XX%. XXXX the While quarter, exceeding the million the XXXX income million profit other profit or second operating far was by in history previously XXXX second-quarter was gross than profit company's second $XX.X the second in quarter, exceeded any second other also

diluted highest of earnings second quarter. per second history, in earnings share XXXX even Landstar exceeding share second quarter the per was And diluted $X.XX quarter in of of the that any the XXXX

XX% on basis second XXXX truck April. loads truck the January, decrease to per to beginning quarter quarter. of and revenue on in Overall, year-over-year revenue a Turning line, of year-over-year environment with per revenue to to the began load of top loads number via revenue toward XXXX. decelerate truck the per in XXXX in load number year-over-year basis than into continued a load hauled decrease was back the the both end second weakening and This hauled beginning growth via XXXX in lower

increased increasingly than month difficult sequential each the as consistent XXXX. over seasonal with with month from loads prior-year corresponding basis, the comps on per due during May half XX% X%, increase quarter. more spot year the per June in lower XX% XXXX event year-over-year X%, historical available capacity readily XXXX the quarter, load of was a second a somewhat load patterns. rate somewhat market via truck through -- a softer of at along January, shortfall During to of X%, moved On with and we effects month revenue first was The truck at and beginning to hauled X%, revenue prior to

was below partially Our to volume truckload guidance the attributable anticipated to guidance. revenue volume our was that the XX actual also shortfall April in slightly

had year-over-year truckload a of difficult also with XXXX in volume XXXX second quarter that the X% We comparison second volume below quarter.

but XXXX X% strong. month the continued prior-year a highest From revenue per of volumes XXXX. second month X%, standpoint, above truck half March and history. January, June in of be first second-quarter per over was XXXX load generally Truck the January, April truckload Landstar February and X% below the revenue in and quarter X% volume May was load XXXX, to During XXXX our beginning historical X% truckload load below and and per in truck revenue among with

in respect over has increased annual to in three excess with X%. past the loads over truck And XX% number to the of rate hauled volumes, years, XXXX second of accumulative via quarter, growth comparison

fixed services contributed of under margin variable XXXX and second XX% the provided arrangements respectively. profit and During quarter, XX% revenue, gross

profit the are During profit fixed quarter rates quarter. to improve at readily compared on XXXX second-quarter second contracted gross XXXX to gross the to available increased XX.X% second margin capacity the on compared a services in margin the XXXX margin while XX.X% profit gross truck more quarter, ship provided second company arrangements. lead as to Overall, they reduced to lower under margins services that profit gross gross variable XXXX

increase equity financial designed and revenue cost nature the arrangements a the in variable margin with profit company's are increase coincide under was with performance to of a gross and track model. our programs compensation variable annual in The carriers. to due margin a lower vary profit rate of transportation gross purchased of brokerage due XX-basis-point nature to on incentive mostly The mostly paid

in compensation XXXX second-quarter quarter. the As was the provided far XXXX expected, equity second amounts and incentive below

persist Assuming XXXX, continue. remainder for expect conditions trend we to current of that market the

no softening and increased to I in would variable exception. performance XXXX cycles, began in compared XXXX business of are XX.X% comparisons quarter As through say in to business will to well the we XXXX late XXXX the continue remain margin cost quarter. of and demonstrate performs with difficult Year-over-year the Operating very XXXX. environment the generally that freight outstanding results XX.X% given less the the second third of quarter model changes second

conditions June with the normal line difficult long-term to trends our with has spot market, patterns. more May it's indicate forecast patterns in generally pricing and seasonal to trends recent Although that pricing to pricing June in to normal July return

more entering the XXXX capacity However, June market or quarter. In fluctuations continue truck normal unfavorable near and the could early demand trends experienced third seasonal through the reduced additional and in expect to in result recent July we term, patterns. the

truck of XXXX the third to range quarter below hauled expect truck we to revenue per low a such, number quarter be a in load percentage via and loads As and double-digit third XXXX the the the quarter quarter to third in to revenue below be billion anticipate billion. XXXX low of be to the single-digit in percentage XXXX I $X.XXX third expectations, $X.XXX Based range. those range on

anticipate environment the XXXX share of difficult freight of Assuming be range in knew XXXX. range $X.XX. exceptional We results to to year-over-year comparisons extraordinary diluted in earnings per of that in $X.XX estimated the I and we'd the financial company due to revenue, be facing

company's believe become freight demand XXXX, in relatively be slowed more freight compared a we is compared those environment. to If impressive results from of and exceeded the ago. second-quarter years results continue as has Although of I look healthy it again second how readily capacity quarter, our to to services we XXXX has to much note just available the performance two XXXX at

our second loads. I XXXX mentioned, quarter exceeded truck in to operating second XX,XXX and revenue volumes in truck XXXX second the growth volumes the XX% $XXX or XXXX second income quarter X% addition unless In quarter previously the in XXXX quarter in by gross by or profit the almost exceeded million

volume to on haul load continue our loads. profitable growth focus those capacity increasing to and We available

the and We provide also XXXX to our year We remain in independent at and another support network. to sales Landstar industry-leading on look priority business Landstar. forward technology owners focused being successful operations enhanced all to

to on Kevin XXXX quarter. Here's second additional provide the commentary

revenue will press on profit, included revenue release. so XXXX various to X% cost cost or purchased Jim XXXX other the agents, commissions of as Thanks, and XX.X% in The Gross of second revenue XX.X% in certain the revenue of to XXXX. of $XXX.X in decreased second-quarter XXXX. to defined our quarter purchased XX.X% compared covered was $XXX million has XX.X% information million information transportation and in second transportation versus quarter, the the represented Jim. quarter of in financial XXXX I less cover

versus in paid The to quarter second compared due second of truck of to quarter. revenue second carriers. primarily hauled XXXX divided basis by a revenue decrease and revenue costs truck brokerage X% lower BCO by carriers quarter X.X% rate an purchased XXXX carriers on in paid to paid rate of points the cost by XXXX percentage margin, XXX contractors. in Commissions the rate brokerage revenue to the revenue $X.X increased percent purchased in XXXX than of XXXX transportation brokerage in million an second operating were as loads $X.X net XXXX. increase the The the was in decrease the transportation the in due to revenue in in Other million contributed independent truck was was agents a to less quarter

compared of X.X% Total increased costs compared and at net in BCO in X.X% due debt. was bad in as insurance to in for million equipment XXXX the insurance cost $XX.X claims reduced and prior-year of were to quarter revenue to was trailing claims increase to claims XXXX. decrease million were claims The development and to the compared XXXX. primarily XXXX quarter contractor costs second This in and due XXXX. unfavorable Insurance increased XXXX $XX.X

in and quarters, general XXXX in company's plans earnings compensation development for the million compensation provision in incentive bonuses expense $X.X The was the was cost in the quarters, were compensation Unfavorable respectively, was the $XX and million second decreased due equity the quarter million and million respectively. second expense. to $X.X million compared stock attributable in decrease our on the to $XX.X $X.X and a costs impact under XXXX. decreased decrease mostly XXXX administrative of Stock in of XXXX and variable Selling, arrangements. SG&A $X.X to XXXX claims compensation second million and prior-year cost XXXX

prior and quarter primarily increase profit was compensation Depreciation $X.X information on to company-owned increase XXXX due XXXX. the quarter. the second expense increased The quarter the SG&A trailers. in the in XXXX. in second year and from gross the XX.X% hardware compared million Quarterly depreciation $XX the of XX.X% amortization technology percent to provision to number for compared second million of to and the in XXXX a as incentive $XX.X This software was in in million $XXX,XXX in XXXX decreased was

The the year. The XXXX was rate XXXX. in the over in profit XX.X% Operating effective tax tax from to versus income both employee $XX.X periods effective profit million rate decreased gross in quarter income tax million income in resulting $XX.X Operating of or compensation X% was XXXX. or income XX.X% gross XX.X% quarter of was in XX.X% compared XXXX programs. equity benefits by impacted second favorably year

sheet, date cash Looking of and balance cash expenditures at and short-term flow we capital $XXX XXXX from the $XXX to million. our cash was quarter million investments Year were for ended million. $X with operations

second purchased During the an of at stock purchase under company shares available million. the $XX quarter, common aggregate XXX,XXX approximately are stock company's approximately programs. its the XXXX purchase currently cost X,XXX,XXX There shares for of

Jim. you, to Back

Missy, questions. open Kevin. up right, we to All will now

first line Jason Seidl Our question Instructions] [Operator and Company. of the Cowen of from is

now open. is line Your

side. little Hey, good pricing you, morning, bit wanted Thank talk a I about the Operator. just to gentlemen.

You mentioned in looking or capacity. return gave an more for but increase obviously a seasonal reduced to a demand patterns, you caveat

market? have come looking capacity increased the seen in you terms marketplace into capacity of in there? What out Are marketplace this for you in the

think decrease point, much is I going a don't way Jason, Joe. of at the we're it to lot doesn't like increase, -- in we've this Yeah. this of look I but see don't seen either.

standpoint, I'd consistent where be say been of in kind capacity would it's a QX. it from So with

Okay. That's color. good

Obviously, more see looked can had strength thing, other about the I a like little wanted you in The the talk that to business. if quarter. it unsided/platform bit more

that for think you coming sort business? outlook is and from your Where portion of of particular demand that the

Hey, Jason, this Rob. is

Rob. Hey,

at Yeah. The this does point. looks platform stronger side

pull level platform as the actually van. heavy If a the you haul is performing out, about same

of kind number. So the that that's you're in influx more that side heavy participate, seeing on haul project we where where

you the half And sort it's how into year that? the outlook in for is view right haul Do since now stuff? of project-type big of the back any a more have heavy

side. We -- year don't of of any We feel it's haul back the heavy kind that Most that. of toward project-driven, half highs, stabilized lows now. on the good any we we've pretty going is but got see feel the into right a

more that year one harder mean should lot 'XX? much and it going it squeeze in back forward? a off a in in me about comps it's been you lot of and insurance on terms lightened the cost. view Let in as year the How down I Obviously, as half talked the you we first in claims. wasn't -- was of half have

Yeah, we unfavorable Jason. knows, is had everyone This Kevin. a year, last development year. Last as year bad

We is best model the your into continue number put of to and that QX your BCO for believe revenue X.X% QX. to

Gentlemen, Fantastic. time as it to for the thank always. somebody turn you else. I'll over

you so Thank much.

Our from of Group next Scott Research. the question is line of Wolfe

open. Your line is now

morning, Good thanks. guys. Hey,

not to carrier that to maybe quarter? but big make early and that do sign the for market, starting know don't what think happen. change, said maybe BCO sequentially. an but just the What capacity third starting is count I expect BCO the you of slightly to it's the count expect be maybe So happen, down you a to TL that trends you you exiting seem it's do

on Just questions. curious those

Scott, Yes, Joe. Sure. is this

seen deal trucks great we've there us Landstar. So BCO quarter. you XX of the pipeline but strong, in a ads is are strong, also full, saw very very are and The determinations our in lose interest

in think try then flattish that have an forward but would the period So there we're think approved. going I of our necessarily, loads view, boards the seeing decline carriers going I necessarily kind not seen expecting but what in fewer retention maintain that And carrier a is carriers the the quarter. to on, there's the third-party the is side of that that market. adjustment count. being environment, are going to where side in truck on to carriers, I but on leaving things know we interest, price, environment, is We capacity I change focused the third in think be is really still loads see don't coming total we're the change we've posting function leaving where market, and in our of unapproved a to

decline, So count But that approved about less you volume decline than count. postings the to in our from XXX if externally prior. see load active of tend carriers is X%, of level off some carrier

comment So that that's leaving not we what come the is evidence market. up we're the really capacity The with here. seeing

saying. where we'll taking actually occurs, we're I capacity whether I understand read whether and bankruptcy guys from that is But what some guess other some sitting see. of the are and stuff be seems hold, today, guess somewhat wait of I to flattish overall.

to risk So get then down taking of do you rates we see another step will place where exit the capacity see market? to the

capacity price. I of there where don't maybe meaningful flat, be that, much little if it movement on a right? think to to bit of a some stays I hard sort to pricing see stays -- It's catalyst to know. a is kind change in -- way have of more

unpredictability remarks then with from for X.X%, unexpected. I in guidance had I to to spot at consistent We you the they're think when if And slightly are a trends the second history. the about May put quarter, dropped dropped about pretty end off April bit -- up and about was May, that you a think X-year of at we opening when a I when disclaimer look rates off. our negative of we little April sitting out of -- when put my markets, generally

in to the So spot going market. predict it's hard to really what's happen

stuff the consumer you of We're Like not manufacturing side. we side. Joe heavy side, some capacity said, got on it's key also the -- to kind good you is of do. But when a demand U.S. got the

there, X%. and growing it's manufacturing at at look you on than what's the I less mean And going U.S.

analysis to up. we unpredictable little it's that end going just know there's where don't So there

through little the So disclaimer that's unpredictable now May off, almost and right April. we why we the spot dropped in anticipate that market because didn't are

And But share signals be moving was truck and the builds market had some to think around. I of you've there's mixed the makers, from I forecast also maybe think one on so what some I that of see. -- rise

are decline that moderate at seeing just per in -- little over to we've just load year you your bit, all? then shop the And Okay. a start and year seen year-over-year spots rev

-- Yes, is seeing X% which sequential to pattern Jim like said, June up to Scott. X%. we're July, consistent up -- for We're from pricing going

seen numbers but increases we've yet. just the not we're seeing other So there, huge out a

June remember The XX%, June -- I similar. Yeah. I said was off, think July looks

we're but lot the a I doesn't gives think of least spot seeing two some now So me really a months right pricing stabilized months. The it comfort, on at two giving based comfort. last

much. you so Thank

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

open. Your line is now

first I demand Thanks, the wanted yes, questions. ask, foremost, to Operator. Hey, the Appreciate on and environment. everybody.

I you've kind know bit talked about business market, guys of spot operate of the volume relationship-based and that's more are lot past but a maybe of kind -- in think, loads you the little Jim, type I your in a stickier.

context, terms. absolute where So half kind that to half, Obviously, respect of What some kind and levels lackluster peak back the is in with first of aspects had kind back of inventory around your for there stickier volumes volumes volumes year. in season. of of the selling but snap But in in we've half healthy the is optimism the any I in beheaded, optimism talking back about any guess are? in business pretty reason some still the

I think that points the today. given just that in will helpful kind we're be data of fast-moving

Yeah.

things that's us. look the to important is of at One we

little Unfortunately, before the that is the coming on early right? start drop on do in the our -- As hook for you So and a trailer, summer, until volumes know, end business. don't -- with so business they request XX% of we our we're that. of those

softer year fourth maybe in for coming any we probably the quarter. see -- trailers in a coming don't spot a request see bit consistent we little But this

government don't manufacturing going it's cross-border, of just heavy automotive and growth, strange drop move in expedite sluggish the see some year the we to trend sits the anything through a it like stuff unless kind going haul dynamic think I the to other We on see The way of be rest or see it's today. or off U.S. the

Yeah, more brokers, invest of platforms. more digital in kind And asset-based freight-matching more digital carriers and Okay. sense. and we're and about heard some that makes seeing then more we've just

is something pressure for that out know from does have one, strategy operating of So change but or been your you've start and whether the guys all drop-through it's or income? standpoint investment connect platforms a temporarily call at marketplace? maximize to an kind focused I maybe the more anything you give something in been more to to the while, on as digital traction and what

we well price-competitive. not we're the agents they just No. of -- what it, well make we and pricing I a aware their from that the got plan. our our to a at stay capability the what that agents We be have But would of pricing right? and lot And do, agents, in have, game they're they -- game, right? do say You that's that we're hearing there. it's aware

We've in of scenarios an it's out right? not one special you'd we like back freight do, belief show just mean then that. world, up. don't that us handling because into And and digital We're have trucks guys put trucks other the they hear and come our scenarios those a dealing to with case, the this of one up of of app I heard stuff our lot a out I there's think where because show there gotten couple stuff where just you customers. But

it's little world. different bit So a

And -- way the freight would seeing the going feel in. But trying get we game. we spreads anticipate few that brokerage do we're scale? you and prepared next pressure in it our our where put But that, of on not -- build the for pricing to into I'm we're on the kind are we're years But today, to have -- to the eventually, might it's -- that. trending they environment over pricing I Absolutely.

there. unusual not There's

ready right we're So a I now, think technology standpoint. from

can just go and We whether his we that to sure want both. they they matching shipper's to digital on have, do have all freight the tools when deciding the got we Landstar, make

of plus stays and profile, guys and the you is I then may net would protected kind the of minus pretty imagine. be Landstar the trend model impacted still And kind XX% I kind the the would by consistent, gross of revenue guess well numbers. But that's drop-through, uniqueness margin gross where margin incremental or yield the operating that be the and that margin of XX%

to That's putting We got our Yes. the lot -- to you make are people. to more just our system through through system. push a through start true. got capable get And systems volume look, think squeezed, I margin volume of more without adding if

it's Yes, getting we the volume have just pushed. automated systems, so

just it squeezed, of through, that's more process push kind get volume and going thought margins As forward. our

so much. you Thank

Jack Our next Atkins the Stephens. question of is from of line

Your now is line open.

Kevin, Jim, Joe, morning. good

morniing. Good

on congratulations the promotion. Rob,

Good morning, and you. thank

help just that your kind we of up cross-border more looks component you questions more of sort would your revenue of you if remind different through of pretty your a that changing brokerage these of manages business competition Landstar drop sort of a moment, couple thinking Can be of us how following business. sort business, or Can and your market just us So overall guys through like? stream. for makes Amit's on terms there in of dynamic significant years. some be over portions disrupted a digital up see That think the hook what of to could kind next from of where I'm brokers, not what

one, business. of is XX% which is Well, the example, for platform, our

You got government. automotive and

wrong. definite, on You got on right, goes going phone something you're someone getting the probably to and time rely not where app you'll if an

that business drop conducive So be sticky automotive some say talking between wouldn't cross-border government, where probably XX% I you're definite, it of to an hook, about and of cross-border kind app. is Canada, would Mexico our time

Okay.

what I that's Now, thought.

I sense. think, it makes

folks. of kind worth it's for think, I clarifying

subsets this on I could if a but I'd you on to you Jim too, kind take to you'd expand of get talked about particular a been maybe chime of mode, Rob, or guess your an could you've like in vertical it's where business downside it. of -- just bit, strength. or demand if go it. in if there's your it's I Maybe conversely if area love customer you -- a the mean surprised or of where terms maybe some to been into

as out of you're the what seeing curious across sort Just you there business. look

Yes, Rob. this is

we to business On benefit the not that do us a the decision sectors, us side, of didn't as agent automotive made in a base an and company. lot as

surprised So we been haven't the really some in of volumes of in decrease the some particular. and by automotive the

We haven't by been surprised that.

side, haul provide we're heavy service the company. a project-driven We On that very can. few people

that and when capitalize scale we continue that's to So can on with. that grow we

look kind touch, that So of as we our do, and in sticky the the guess of things that to the model some protects a refers board. us forward things of we we across some Jim I that

Okay. Definitely, an Can cash makes how sense. free you're question, outlook you your thinking year? for update XXXX, give Last just on for Kevin, that sort us of for that flow you. the about

numbers, flow slowed was -- in it second million the operating QX cash $XXX QX. about million The cash In but year-to-date the $XX round million, in had $XXX free we flow. into million $XXX quarter. Yeah, and

to So the going I slow a continue trend think bit. to is

So $XXX million is a million year-to-date to number let's $XXX still my say, basis. million on -- $XXX

much. so you Thank

Todd is Our the Markets. line KeyBanc Fowler question of Capital from of next

Your now line is open.

good Great. Thanks, morning.

morning. Good

Is I in we thinking side, share demand difficult and mean something and so the of color volumes the there's think seeing spot some the and your you would comparisons van going macro? business guys on a more is about reflection maybe Or the Obviously, on, come little the be just side? here the spot you Can a comps? Jim. in think difficult van Hey, more quarter? on on macro, there's I do Or but understand provide it exposure, what's that's van having that there that in. bit happening in the the just volumes

look touch things off, that can there. that's on van all one much volumes. if being was couple that you a One pretty at foodstuffs is We Yeah. customer

So that's one it. of

of one the quarter things. actually still also. That That's first was in the

and looking a trucks you as not brokers out gets and stuff to when business for and more when world in carriers are The party, other little XXXX That have softer basically they other XPLs third to come just us vans. that you're us put kind other for our on XPLs, thing trucks, little can't is our find there working accessible. of at

was I would actually that point two or down. -- that So one, say a that you to actually, third automotive, spots add can we I'll saw

the to if which little XPLs then take softer have not think van, find having the year. is bit to were and come driving trucks to you van the find a which to that automotive easy a than than volumes the find primarily and is us them, I So things foodstuffs those to are three or it and -- prior van they the they to compared little prior

fourth quarters, years, shipments done then, really I some in you've Good. e-commerce Jim, you've ramp the Okay. thinking half And helpful. some for type retailers. of more That's about the second last several some of or the the year, think loads had the in

Based second that half Do sort demand the you where your that move year? lift in as visibility into of of on be have quarter? any you onto the would that of you expectation today, see sit fourth some the you

here I quarter that's similar on now. So the it's third comparative sense in we -- going going -- as I would of QX to right I didn't that basis, similar. a to sit feel look It's right? we're e-commerce just necessarily see expect QX, not going are say going to were the fourth that I I stay quarter we're soft. type kind to companies softer, did a 'XX. just that won't look ramp-up Those to

other operating costs the step-up. a Okay. million, quarter, Good. That's helpful. on $XX quick during And Kevin, then last one, just about which was one the

remarks, prepared expect should item bad line debt, But for trailing we the through a maybe the I rest you was that over can in and going think again about list year? what equipment of some of some and you that go made for that then kind the there. comments

the Sure, have that you and Todd. And I'd maintenance year was going abnormally on trailer than costs XXX say QX Yeah, the contractor in then average year low higher you're last up to bad trailers debt delta so year, got this it's more so over about were in tires number year, there. those.

So that. that's what's driving

between I'd evenly the it trailers. bad on split the maintenance probably debt contractor and

the in the let's year, the that's, going we rest third event event as far As hits million. that round $X of in -- have say, an quarter, numbers, BCO

and contractor in similar debt. So pretty million $X to let's going QX million QX. normalized to bad $XXX QX number lighter to We're a get assume and probably

so you Thank much.

question Our of the from Scott Oppenheimer. of is line next Schneeberger

now is line open. Your

Thanks very morning, much. everyone. Good

morning. Good

historically, business cycles, crossroads like back of look just to we're looking going kind It could what XXXX perhaps give come, pull conditions what's frame? to clear right just historical from? the for the like anyone, now but sounds or Jim not you feel versus it's where at a us past anything time

my rapidly it's Texas. Well, because the similar was I that to until the when to felt you'll the recall, comments, but third climbing about that because at up of similar prior quarter, if storms it to not but talking opening in third-quarter pretty XXXX, XXXX hit rates started going feel end the

not there. very I So now. strong. where was really a are we little that 'XX think sure 'XX, bit where than isn't I'm softer was comp 'XX

when some pretty soft. maybe of special a -- of 'XX contract. had freight bit little there 'XX, we We that part was 'XX automotive in That had flow, kind

that's pin like, difficult you nine so kind it it's quarter, first you 'XX expect to probably sitting, I look to fourth we're to and truth, the all what it's tried but I going at a like. use think we're of to looks tell when of to it flat. was what 'XX looked for So What months, -- the now back it, quarter third -- we're kind and would have I I

transportation maybe looks. Thanks. how Thanks. on forward, margin gross Thoughts Appreciate previous that going perspective.

Say that again?

on recently? going trends on thoughts margin expectations gross you've forward Just the seen

bps the rate margin. said prepared modeling to Obviously, buy that, the Like Yeah. in to the to was that but quarter. would going my expect on brokerage QX. I something XX remarks, in impact I'm the profit in range QX I again XX is down XXX third similar in pricing in gross

question Our [Operator the of from Bascome is Susquehanna. Instructions] Majors next on of line queue

now is Your line open.

Thanks.

coming those back the volumes to any parts of How a the sense than of were normally talked into tracking in volume-driven, the You typical heading of July. expect that's you latter performed clear dig pretty whether of in for little the what and or more seasonality month-over-month and XQ? end guys or that was into And typically you revenue rates rate-driven XQ quarter about Can shortfall above versus Landstar? bit? other you have part below

It's slightly seen. tracking what years actually have five Yeah. the slower than trends last

the go to when would April May, from numbers, X.X June, the -- in have have months. I of what growth looked don't see at point rate about specific basis and but you we're you it, when typically those been I May to off So

basis, So month as -- you move from it it has sequential slowed a to has somewhat. month,

on Okay. us the year for and And can full for the as on a the stock comp, and accrued XQ, outlook in where incentive shortfall let you Kevin, XQ with for basis comp know cash you're well? maybe Thanks.

QX the similar year. number be that was booked comp comp Yeah, and QX in to and I rest stock-based in will QX. that million And QX the into on again expect the in to the Bascome. $X not about number continue $X.X million QX, the We of incentives $XXX,XXX QX.

was $XXX were lastly, to average $XX trading fairly million comfortable you It I being active looks range? price on quarter, the active And where $XXX, the closer $XXX, yesterday. $XXX you than buyback Okay. the at you in like Do were still or so. think

price QX. $XXX in average The was Yeah.

$XXX was QX. got it and X think we million in shares QX, $XXX I at in

So on indication that should of our you share heads good where give a are pretty buybacks.

be chance there's a we've that one Yes. kind time. But at -- counting of not -- active We're out. we to

-- and on look maybe getting at from just the in that not we -- the stop what's it volatility of of So going market, saw. volumes we're you the watch rate, and kind it's wouldn't kind

very you guys. much, Thank

time, I Thank Gattoni, much. the remarks. this so Mr. you no you, turn to would your I show At back closing over call for further to questions. like

a I Missy. our good scheduled Well, third-quarter XXth. you Have thank currently forward speaking to conference look you, call for And thank with day. you, again XXXX October on and earnings

joining call disconnect time. you for today, the morning, this conference a Thank great your lines have at please