Landstar System (LSTR) 24 Oct 192019 Q3 Earnings call transcript

Good morning, and welcome to Landstar System Incorporation's Third 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; Joe Beacom, Vice President and Chief Safety and Operations Officer.

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

you, Eunice. Third to XXXX and Good Earnings Conference morning, Quarter welcome Call. Landstar's Thank

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

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

uncertainties and cause differ or publicly no Investors should update or events and historical or on risks reliance Landstar forward-looking revise information, undue any results could such those to results actual forward-looking undertakes not anticipated. information. from materially to These obligation place

During truckload load volume softening of in truck via the and XXXX, impacted conditions were both the loads hauled per spot on revenue market. months first X by

discussed second on XX, per call the during growth XXXX earnings conference quarter. July hauled revenue number on load began in we both of the decelerate to our year-over-year and loads quarter truck As via XXXX fourth

results XXXX comparisons. the Landstar's hauled number year-over-year Also, believe loads difficult very beginning on a a decrease April. of slowing We per truck truck beginning year-over-year have decrease as in to continued made U.S. January, anticipated trends has load manufacturing with during in to for financial and and capacity. XXXX, this in These a revenue into year, softening beginning of basis exceptional basis the available been on via to we due year-over-year increased

billion revenues During quarter. to call, below third billion quarter. quarter XXXX guidance second XXXX the billion third the earnings XX% quarter XXXX $X.XXX below to or $X.XXX we third XX% our $X.XXX conference revenue of provided or XX% XXXX

or or X% quarter. quarter XXXX XX% share provided diluted $X.XX per also third below We diluted X% earnings share third to $X.XX $X.XX earnings was per below the the to quarter. third XXXX guidance of XXXX

On XX, our of the that filed guidance, guidance third earnings more and quarter share comfortable SEC low were we Form July a the to in X-K at per we low our be the to XX. we September of end announced end provided on revenue below expected

physical end that and Our stated hauled revenue truck via updated of were months at of the trending lower in X load quarter number revenue guidance early truck loads guidance. September per the the first revenue our through of

per tragic a Our softer healthy Landstar than freight in environment. reflected anticipated updated highway and to overall diluted attributable conditions half the we're Through a of XXXX, September. early truck first involved the earnings I believe market BCO accident volumes lower impact that share guidance in the of relatively

to The seasonal led in More in We of of XXXX half conditions, particularly through the especially experienced softness weaker the October. softness weeks Landstar's into have June recently sector in and appeared second half first company's truck manufacturing in though, Landstar's economic best U.S. first-ever first the to the volumes. second of the far September history, performance only to XXXX. was by January

year August and prior truck over X%, of July, month X% September was comparative a and below On X% month basis, volume XXXX.

service company volume strike decision awarded non-profitable the cease an count loadings. offset this to due General increase significant prior the in more extent mostly load year the recently consumer metals U.S. due at Automotive durables providing decrease on X volumes in volumes almost attribute by approximately compared automotive, a by in to count in was to prior quarter. metals XX%, to in issues and to third to XX% unique load fell entirely the who third production. lanes We a load lower resolved certain -- the XXXX XX% the Landstar to decreased customer, Motors lesser driven sector. XXXX was Foodstuff volumes approximately the and partly to sector compared automotive that As quarter, to by sectors, The foodstuffs probably by mostly in load decreased year it approximately truck onetime in and that due been and relates that decrease overall customer. have softness X% not

with On was durables the XX%, was consumer by sector volume year a revenue more positive above the X%. note, down prior although approximately quarter

period near the makes fourth macro term, the trends the below we truckload first of quarter. of weeks long-term unpredictable trend more the we to the XXXX in year. the truckload the the to pricing volume we September, Dispatch experience volume seasonal Although somewhat remainder softness expect environment trending continue variance recent somewhat same compared in to current October through of the expect is through volumes in continue in the

XX% single-digit in show softness, to loadings lower percentage quarter through fluctuated XX% quarter per Based middle On than continue of On revenue lower fourth in third load the was third XX% XXXX via the rates. on and second that a revenue hauled and basis, truck was consistent trends August sequential revenue The truck somewhat October in lower seasonal uptick through seasonal expect rate historical truck quarter. truck than decrease an corresponding XXXX shortfall in of we range. an as continuing due July, the XXXX monthly to XX%, the with month we quarter quarter, be loads basis and Overall, XXXX quarter per September a load in per patterns. beginning comparisons less XXXX than fourth XXXX. of recent September, year-over-year the in in upper was rather of moved compared each the difficult to prior to year month-to-month on load

experienced below year-over-year we comparisons from per due the decrease would XXXX quarter single-digit in XXXX in represent fourth from load to third the range. the XXXX quarter, easier fourth We percentage quarter third fourth in high quarter. be expect quarter improvement mostly a to revenue to the XX% This an XXXX

million on in $X.XXX to anticipate XXXX the expectations, Based of those be range billion. quarter I to $XXX in revenue fourth a

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

third XXXX. have in third our recent exceeded volume shown than million in performance perspective, third quarter softness, XXXX deliver quarter lower put previously behind the million yet to quarter the XXXX third XXXX in the results highest third profit To financial gross in trends Although company's truck quarter, company's second history XXXX X%. or continued $XX XXXX seasonal was the only by quarter, XXXX third the history gross during gross quarter profit historical second-best profit $XX

diluted quarter XXXX third $XX.X other And third any million, per quarter. Landstar the the in history third diluted operating in per third also quarter. company's the was the quarter third in than than quarter history highest XXXX far $X.XX of XXXX quarter the share was share any exceeding other earnings earnings XXXX third of other

the income, in months for exceeded revenue amounts earnings net achieved significantly of first year and during X XXXX Landstar's X second-best ended profit, diluted income previously Similarly, the months XXXX is history. per the that's share gross operating

approach by in I cost line this of believe performing longer-term In XX%. particular, in operating well variable opportunistic context the our months current well returning of business asset intent historical is It also perspective, to to income We're In is stock of the stockholders the with nine our XXXX company's the combination our known environment. first basis. buybacks the continue a of an back exceeded relatively open XXXX model that on stock to on for capital through and market dividends. buy

and positioning to empower to those our focused our balance ongoing Landstar efforts With invest the remains our in healthy business along marketplace. loads. Landstar network with increasing profitable to volume sheet, on load transportation continues and small be logistics within of covering our haul solutions, capacity growth

Here's Kevin additional third provide financials. on commentary to the quarter

cover information has so I third press quarter Jim other our the release. in XXXX third quarter, Jim. Thanks, information certain various covered will on included financial

XXXX percent of cost revenue transportation carriers The cost quarter. BCO truck The XXX rate as in of purchased brokerage commissions versus XXXX rate was a revenue XXXX the of the of in in due defined to XX.X% million purchased XX.X% revenue the Gross the and an in or third less $XXX was truck contractors. third of contributed was to revenue decrease lower paid transportation in XXXX. The paid in than represented to $XXX.X the the in and and by quarter XXXX points decrease to of profit, a quarter quarter basis independent agents, paid purchased the million carriers brokerage of transportation third to primarily percentage increase rate revenue XX% decreased revenue XX.X% XXXX. as in to XX.X% the compared in

carriers. brokerage trailing Other contractor increased XXXX were increased to due equipment million in in $XX.X revenue margin, XXXX Commissions X.X% purchased primarily quarter the net in XXXX to million loads quarter and revenue the operating increase on XXXX. cost revenue due revenue agents of divided This costs $X was by third less hauled versus truck the third X.X% compared bad to increased by was to transportation of costs an in debt.

adverse $X.X to and due XXXX claims during that Unfavorable XXXX claims XXXX. revenue quarter X.X% for in of tragic of Insurance accident and to Landstar compared as were and in prior in third insurance the million claims XXXX The development year in the the the million a were XXXX. of insurance compared quarter unfavorable quarter XXXX. of $XX $X.X quarters, $XX.X XXXX XXXX to BCO XXXX million third year costs development and impact the and and costs in was increase to third claims million claims Total involving respectively. was occurred in prior X.X% compared

general in to third on compensation debt. compared of partially arrangements. compensation decrease expense and were was by to cost million the million a equity our the under XXXX in million reduced XXXX in compensation earnings respectively, to an for in third the variable the to of stock third expense, due $X.X $XX.X impact XXXX Selling, incentive $X.X was quarter company's and compared provision expense $X.X quarter customer compensation XXXX. for XXXX million costs accrual SG&A plans offset $XX.X The bad decreased company's XXXX quarters, quarter. decreased decrease was for third by and million the incentive The the bonuses and mostly provision $XXX,XXX in in compensation Stock in cost increased administrative attributable the

quarter Depreciation decreased XX.X% $XX.X million in SG&A prior was to gross as a expense of to third profit XXXX. million compared to of third effective income rate XX% Quarterly on XXXX. from the XXXX. compared of stock in was profit XX.X% by in rate benefits in income impacted year XX.X% gross the or XX% tax Operating excess the million decreased The tax tax percent income income million XXXX arrangements. XXXX. versus favorably XXXX Operating profit in $XX.X quarter compensation in was XX.X% effective XX.X% or in $XX.X periods $XX.X quarter The gross and in recognized was amortization year-over-year. both the XXXX in

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

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

to you, Back Jim.

for will Alright, we questions. that, Eunice, open With Kevin.

came [Operator Jack the Stephens. line instructions] question of Atkins Our of first from

is Your open. now line

quarter, you that a question start, then that? broader we in function mean load that about Jim, I'd third make I you into deteriorating guess guess, think losses with reading? and economy, in saw a in I to that? as look a versus what get of for count with around in do saw September of the we when And I that's are to the deteriorating of October is curious Or what we PMI what have those impacting your be load how -- step follow-up seeing October? impact just feel a down customer count, I you

more in general a into you the into now and into we're October. than and the that's at rolled drop-off time, volume October when this put to know there that drop-off the manufacturing -- of August customer some -- hands X% our softness. saw August of as U.S. really spoke And of sectors. hard we base negative then that trend softer the where I in and diversified, and is turned volumes. growth saw in we think don't the sector I some load increase you we why we in then specific increase load where decreases we But should was typically, the seasonal July, to think, running negative so in September saw -- we single-digit other it's continuation September it be X% continuation from that of highly into we really into stuffs small to said, But little the know were come piled the in the just like X% driving our And about that we at a diversified sectors. talk October of But a just Look it's September sequentially even we it drive you I from, because mentioned. our specific in to is. that that have higher not most our But our is at volumes were to a carried relate just we're otherwise might And percentage to so clearly, through as sectors it. softness around some sectors manufacturing some how volume spoken, Yes. quarter, that looking

you. basis? Got that specific then count to walked or Okay. customer changed the away foodstuff load supply customers of that year-over-year way there you how sort those it think their And customer a losses, likes chain. Is from when was sounds that's guys you it automotive on whether the impacting about think any about

Yes.

foodstuff the that that in give percentages presentation. On was was one we the just customer. revenue But X that XX%, the side, --

year. first that quarter I think quarter off or rolls fourth next maybe

comp that So better. is

just say XXXX. quarter first Let's

we're parts and -- which out really strike, it's is we it can't so doing stuff volume because automotive doesn't the quantify it, can't much name GM of how put I but we're really the plants. like going that have and got initially that, -- in You've on

So to I my to all run GM. try We to can't bill identify got that. against

strike, stuff other I the talking GM's how part When not in top if at the softness a it production, then customers the day which was, basis. commodities. makes XX%. XX metals were of metals little material on guess, per And is about felt to that's look a I'm automotive loads was something So our we sure XX just but you're you maybe which, or only

one other than not there. that So there's to specific softness

year. then you Okay. Got sequentially look over. carrier you. move through it Got hand follow-up you. One I But broker account, quick your at as I'll active when decreased it this

of the thinking what's Joe, capacity and the as market talking the of and you're on as sign the fringes? capacity sort see I on mean you're starting so, you of And should market, that we guess, of drivers I read of attrition to in front? on about leave of that market? are sort sort to happening side interpret sort what seeing capacity a some Just the that curious

boards bit was maybe loads to hauled that think when and before fewer tend to not our I further less I to that's little bit that that. to Jack, load and a fewer tend qualified come demand with find putting a lower, load you've we're got demand who the because load. and load and reach public that the think out Yes, that it think need to put out, there haul than capacity of little and carriers different it haven't Sure. the then that get publicly like down. out the is just is looked you loads year I fewer ago, a --

especially It an marketplace thing. I both our haven't count truck kind necessarily that -- hear conflicting far. about and of to that of to as attribute information when into you sales just exodus, and would to I active just don't some attribute So our count reach the as well. total that needed we the the

a really need that I capacity think So we been see hasn't our marketplace. -- model of lot the our just exited that's to way there's the there. count satisfy the that to and works don't grow needs that to

Yes. BCO truck at brokerage, X% Jack, we we on down growth look was was but X%. you the -- volume if X% It were up -- volume. were was quarter,

So kind put was than loads brokers a is the ago. just of the it softer on to need year the

Yes.

think of think, X%, a XXX maybe I Jack, like even carriers. not I a count active X/X a Our down went

So out, it's count we're And BCO positive. is growth needing active pretty healthy, as staying -- it. just, is load it's pretty not pointed to expand count our again, Jim

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

Maybe what piece particular can something of on to the the just kind like about we drop the for maybe talk what busier that business? I about could first from you would on requests volumes say the peak to volumes of if is read wanted to some question, talk I ahead imagine of your season start going the or you trailer hook you'd business. -- look related orders getting and season,

Joe. in business on is our that low loadings. mean runs I overall still our of truck This trailer XX%

seen surprise. a trailers have we peak Not the the bit We did than And a into question? rest season was going year little a softer request ago. for your of of a exactly what

understand to getting year-over-year? is trying piece just you if -- is Is I business? the mean, side XX%, more of isolate just the up particular of that XX% it I'm that it business, on that you requests are

say I more on getting spotted like we're would requests trailer the quarter. the not in and business the, drop hook

would We have I that's softer. little a -- bit no, actually say

flat van drop that a van formidable. side be and function see the say would side, of the that it what of that business. well. hook could you BCO it's Some participating year, the BCOs spoke as not of are and of And last was year-over-year lot in I I Jim but the automotive those still on the which in load is on think count that a

the over quarter holds the a drop firm drop ad hauled actually, business type on 'XX the number business. more slightly quarter. the was general your hook little and up hoc the hook And like than Because and 'XX in BCO the and loads of

well. doing relatively that's So still

just you about show then you like understand I XX% minimize of Kevin a talking know kind decremental on have And way to decremental I maybe about there's can think EBIT your profit I'm kind trying way line. quarter. just should ability gross talked Because of incremental but this, thinking declines think SG&A margins the how obviously dropping about the some we don't in profit? if Okay. other it to gross to the one the the in to guys about impressive the margins? about about of think the talk expenses really

you Amit. Yes, the levers don't negative. if comparison. about it lot you we when a gross not when should -- flow-through we the the it's have goal, It's just We over be XX% you to make time a talk -- at because it's a that. can't This XX% pull. do have that we that comparison look Obviously, profit able underneath of to do long impossible though stretch environment is period, can

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

here. and/or and perspective guess shooter growing year recovery bottoming I Jim, a there's you've standpoint, maybe hope is this seems. optimism I earnings it to your cycle been that pretty wanted an next So about the get half straight view from second

Just curious think? you what

probably historical is look that accurate. you at if rather cycles, Well, statement

April. end it see to would You'll months say, or the softness, in And the side not that on strong. started somewhere downturn downturn necessarily start relatively I'd at probably still softness I of then and 'XX XX maybe really, volume about our because our was prior, the XX started say

but think months, I XX you that a So out we turn next you there's summer, if of yes, to things lot going roll if see should -- XX some on. go

that's the on part today. do confidence get going some and the into in U.S., what's do get on look you and sector in investing conditions just Where businesses? on And start economic manufacturing that? back at relief When business owners to politically, what's that the of I how we their think where affects going

the So true way you've -- high, work, if continuously are you how the bankruptcies trucks. I seen orders look think are some cycle a -- but on for side. at down and Sales the usually things on trucking relatively

XX now trucking months. maybe the should X the balance the bit to to balance start see and maybe a next little -- shrink supply you So side maybe out, over

in a on would in resolve going we're of points But to manufacturing one I all to. these side what's we're start really international would how cycle that but that say, in speak to this that, that having, standpoint, anticipate you from and to -- an So going start uptick true summer. issues go I some can't

I -- contemplating, model incentive want results sort then you has to -- model been some next incentive to at we Okay. again year. again comp in If go next That I ask guys makes just operating increases sense. of space the SG&A contemplate nice so your buffer would we're big, do mean, your beginning forward? about at some And so we're in a this year, does year, big say, guys And seeing where separately, down least, cost, other then their year? lower comp in next the that all work going let's with for need

way the up what especially takes Well, the XXXX. looks little to we wouldn't we'll is, We condition third target bit quarter the the the saw that be in year, we speak this a into another here. quarter. drop-off be drop-off -- think the the will it what ended to be will had a target actually will like. up program the based we on be we it That third bonuses earnings small first relatively bonus and bonuses in with set bonus necessarily said we put market for down a But of taking because

or mean the XXXX than lower our target higher doesn't it So number. would be that

you in or So consecutive a a actually could bonus years. have year

program. be not earnings prior the a -- well, year doing of I we're be might some market, should beating still but type think than based the Our there is little market bonus because if lower

there something. excessive, would be wouldn't but It be

don't investments there all creep, we a are year SG&A else money be where everybody bit little up that today it's you're years, you in that incrementally, creep more There's going bonus in I you'll but that -- doing, but than prior and the or From the tech think going XXXX. on yes, investments into next see into side. world is that the of bit were the the into seeing some headwind SG&A a spend the be noticeable little to the may in right? -- into So tech side,

next and Cowen the of line question Company. The is of Jason from Seidl

I about increases lot going as of we little want at in huge of talk push you cost XXXX, a carriers. talk Landstar a to think insurance for look a people model out the BCOs drive look U.S.? to for to about been to the smaller Do that's there's to some

Joe. Yes. Jason, this is

I probably is think there some of that.

I think its hard for us of know that's to how read through much to people's decisions. driving

it's clearly, or look many into a goes clearly think it's you've these think think guys own if the of provides a we something at at come it's else there that had somebody the things. X looking net safety receivables, that, some probably they as going on out the I are to noted authority. business want insurance increase, guys factors out, of host that factor If own and whether forward. and their insurance some small it's truck that their about that owner I of those a multitude does But of out owner-operators, things insurance but it driving is of impact one and cost in other away read they premiums is I Landstar or among on that they're think big it's things,

Okay.

because growing And Or it's increases XXXX, throughout BCO to should as so do tell? potentially early of too those your we see this? as look if move line at we

that environment our of out a the now equation early that's side and But the is seen that too the of think of saw on environment it's truck the out just in, quarter, a to right? in now. I there count decline we're tell. other think some kind And function in we've we and market there -- third think pricing demand the I that's that's I

where bit I doing. going a that in, So in what factor little guys think, and got too and are are these to of you've they

one qualifies keeps on is, too X model kind really we the bring thing it applications guy always that the the network, in every we focus to and safe. X to higher-quality come but we other maybe us its on, it's of and protects the is on And think bringing -- owner-operator which self-limiting, purpose so

That makes your sense. markets. A follow end some of up on

at when been understand, the have you I so quarter? look the that where in customer Just revenues foodstuffs, your were excluding

question. tricky a That's

-- XX% Let's which the XX say, And overall, XX%. mostly the XX, were that customer. down down because and top of it top customers that was that

then? flat So roughly

Yes.

on And lone large of your the the one energy going but it know spot. was since curious bright not I side on percentage it's that was one the business, there Okay. just positive? a what's

This Rob. is

very We positive there. continue to see market

continue at half least the next that of first year. we're We -- trending through

that a see positive we forward. as So moving

go that to you customer been want -- take you even on I foodstuffs that back The foodstuff. would have down if if out.

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

the on a move basis seasonal a levels? like a of fielded pretty you more consistent Jim, this So month-over-month on kind into found sounds is expectations pricing on it But that kind pricing with it like that point spot normal any so the is that here questions lot far much would what feel expectations. floor? trends for market the of at volume performance then be Does I of in the you these spot know your you're from of market, forward definitely function but have pricing thoughts you a do of And as XXXX? moving quarter.

my are, year? or four concern pricing since double and Or June. since we're it early a time, stable tell years. trend okay, into the I the stabilize going when sometime it to The rest next going they does last and drop-off held again to you drop-off, one get I and years be of dip? we're or over we've I'll seven volumes cause seen that The our five stay if that is would where first or would the have five pricing would think months year that's the concern be quarter. throughout see we've So expect where we're volume for holding, but we yes, into May I is the Well, side. you to Over the five see very that, volume seasonal comfortable the

back on Speaking the sector then do we're get increases to pricing the that, manufacturing we halfway hard pick the I the automotive is in come And year. to back the through demand think -- into based it's up? spot to going the cycle half back get predict where from. mid sector Can can we And pick to we'll really normal beyond where see up?

that's versus this side your on No, has helpful. particular, volume guidance, just Good. quarter, the... been to Okay. Yes. mean the it like in more that feels I shortfall relative the

we to drop-off Yes. then Absolutely, that absolutely. to and where the we drop seeing in come X%, was anticipate in didn't we what September going much where was it October. pretty that's in we're in the it thought where off into saw The pricing -- and volumes came

Yes.

against niche having a what a you would more that from competitive the my cycle? of competition bit just could new the little really then seeing entrants seat, what market? the you you that be been And been landscape of part I are the now the transactional be quarter some a your your your little marketplace curious is your in in in competitive different typically early the may the follow-up, there's impact? Or if I'm If of lot earnings here where know right just but up of on is is going any And van in season the third commentary this brokerage within view not brokers, about a at kind purely a Okay. of big point competitive more for the talk you've space. dry bit from see landscape? view than about what If

yes, amount and the there's don't impact some coming traction of stuff is trying market in sell those customers entrants. know that relates think, I there I campaigns. what there. a the as any But XX think lost more they're -- to the it significant we're I'd getting seeing our don't Yes. of as new are focused their they and question can of coming to to think probably I do. our everybody brokerage think kind directly to I last some They marketing of who those I would a digital community. to it are They're of into say, overall they're getting we of on is anything bit the doing it, we've months, But do, to fantastic the refer I them into the on marketing, by little to see business, traction. relates and investment they marketplace. want over guys hitting

I XX%. think these margins over in time, say but get opinion, I against they across my are -- each for other XX% XX% digital one of future think realistic to that going them guys to XX% personal they're And they're in compete to those great to not the to has now, making pricing. come margins are that

drop brokerage the going in going the especially margin heavy Is and long-term, stuff think on and and be about on isn't where believe markets is that that kind probable I I'll van. in because the haul a do they're just possible. that us, on So into hoc that and whole to niche to hook dry It's business be value-added and we're flatbed that the some and top watching of of side. a continue is the necessarily industry the margins And ad we talk that's we our it of is all people future? XX% in for there's

niche and everybody understand of helpful kind I certainly general comment some this Yes. the think No, dialed at something your the into market about given just definitely point, commentary. recent especially are and has the that I of

-- that's I morning. So hey, had this what

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

and the but it, curious -- consumer on consumer that well? measure that know years? season, as of any previous the I I commentary don't year, into head how that then time how e-commerce Just ties how durables, assume you this we compares on into mostly holiday thoughts to it as your And

is Rob. Scott. Yes, This

into peak to of kind to what big some for we like for come that, enter tell about of customers seeing. season, kind year. said what flat us the it earlier kind last ecommerce As we're seeing But we're to the on of And our based their as for orders kind were flat and things expectations we're of still waiting of are trailer and we what year-over-year we're season. request in Joe

still it do or is clarify you're have feel And your end How visibility fourth And consumer into that you economy kind And being maybe consumer market? overall largest the how then fourth just trends seeing beyond? sounds there? you the about you're much question quarter feeling strong. on that quarter in the of durables. Do to solid

the As into diversified standpoint. from customer a visibility highly -- have much is we sector don't that

So the visibility is more general economic.

that So fourth spot, the of is, I unpredictable. expect bright I the do to consumer Coming I until of that a end it that consumer the But and gets it bit -- quarter confident the more going quarter kind on think we confidence based that get have where us little to have there's side hang a little little the will one that on confidence is the quarter. the going through -- if into year-end. say all things are you area we durables you'd of little be think a next, durable we and on,

is The the Brooklier Matt of from next of line Buckingham question Research.

give by it, the missed you I again? apologize but us month, I declines could truck volume

July X%, through X%, It was September. X% and

is said And at running then October X%? you

single-digits. higher Yes,

Do you do for platform what un-sided If have business? those And you not... also the on numbers van?

Yes.

give If it. I got grab Kevin can to can for that think, us he you, you a just get minute,

we're margin Okay. just in that your about are anything, expectations, guess, a model? expectations And your quarter? at in Was your net the then, unique fourth higher what look came function I And your the what is number? your of then of taking that And or yields at gross at yields I guess, the of gross just in kind for there a that cycle? end revenue

Yes.

call a to the during as think capacity it I into what the loosened third we're you'll tight, up we go into saw still really they're good. the is, I bit up cycle the a little that see where little but think, very don't bit year, think rates I but want I quarter,

more bit on time. trucks the unique the quarter. So I more what think coming as don't get a about think into fourth happened see in cyclical. quarter Generally, there's more peak squeeze margins anything the little I we it's busy during the

I from uptick, we saw much PT we in moving coming a the but the quarter. think slight through anticipated nothing third rate

margin flat Yes, are van for flatbed profit here and X%, QX: and put to in X% volumes QX. should XX.X% Matt. platform X% the gross And XX.X% probably the negative, and versus down on We on was X, van negative too. in

Stephanie question Benjamin is of next from SunTrust. The

Your line is open.

of answered, the I the little Just couple can my -- but questions there an when lot pricing on any Or that investments of update maybe talk benefits given a been most up out returns timeline will from start know be helpful? should do done anecdotes, some initiatives of want see years, of a I back think have going we you technology are of about should over to that rolled seeing? standpoint stepped or and just bit to how the the those have take past investments we some provide a you're step even been a about to some forward,

Yes.

there'll think into investments technologies use today. the continue I that we to be

pricing ago, information. about you process rolled pricing users usage As looking you when do as there seconds lane a very manual didn't a through months we a have. didn't get really was on you we we're a in walk prices put have, kind The within which a XX had about week say, mentioned, in -- is, We to that. at which it we'll X,XXX where tool out pricing Landstar tool, I'd really about --

So what's going agent more the efficient, being by making is family put and jobs absorbed tools on just really we these more out, effective. their they're

out loads, downloads, rolled ago. available trucks loadings users did is XX,XXX months see XX I'd was rolled also enhanced out, significant can day. mobile our significantly we we so where what for per -- -- enhancements our to the that also We was XX XX,XXX say, app

XX,XXX better request, were those We managed fleet of We're a into and also given we internally, trailer manage So trailers. electronic activity can of visibility so high volume we on doing -- our that. trailers trailer better. fleet

efficiences So of side on that it. there's

when efficiencies also Another new can the rapidly the for agents X move that deal we automated more for customers, customers. that is can approved on they credit those get a last getting we so they over rapidly approval load months probably so And more on whole with them. process

-- done that wouldn't of I'd measure would a be -- that little that. with is building To staff. move the well, in with questions. [indiscernible] agents, more for answer say the number to more like can would all same environment. I it, say would of they that those so think, results but I be difficult loads more I efficiencies we the can But done it

months the -- run out still actually rolled it the Max capacity we And where continued down we the about that Landstar ago, which have the road, -- we can the is Maximizer, -- XX where as call was you routes. know,

So that origin. up seven be those you give today you Jacksonville what request, of is in They that and said and pick in for in loadings. revenue your put it'll and want they you're into loads a in an you the put available days, I'd say to what -- loads can routing Jacksonville do you guide to

a probably to to project out. We're just is and to from the five rolled we'll took we've The now, We'll years. today, lot a on. get most we've that's three off tweaking functionality and to rolling got TMS. out And that over not go that year, million out 'XXs, X% we there's to them million are those year complex $X forward. IBM million keep running continue about biggest maybe $XX been that. upgrading and and it's good continue of and push high, But the And an a going that today, the very It's $X slowly we to of as over TMS. and on effective there's mainframe continue is all loadings cost to truck roll loadings one $X million probably just out those. thing our to So TMS a out our that to a that, add baseline for we'll

Majors Bascome from is question Next of Susquehanna.

stock finer and Scott's on headwind annual payout? back? the incentive about wanted back today comp follow to return to the growth decline What earnings really flexes clearly net on us and accrual incentive Can comp look and what you XXXX where full that, profits target specifically a in revenue to stock question stands are that for like, of helped might a you the see And been give to annual it the bit need how year come as incentive target off, I point both to for maybe It's the year. this cap the in to we up a of get as the level comp? XXXX cyclically?

Bascome, this the on million got year-to-date. Kevin. accrued We've $X.X is incentive comp

So there. we're of the X/X way

target that are year, for targets incentive be we're earnings for is next So million soon hit to in headwind. be million to range. the million go there. next at year. the the anywhere on running $X a the $X just up. and reset Obviously, and $X all annually, target, year, this comp Stock could year, with that I'd a $X will comps are rate. south number exactly what $XX on are good million would onetime increased see the million hitting if of say, And you is guess, next of number based But would a exactly XXXX end Once the be million it going on million $X assume we payout. should at they I between the that that $X as and

million be it'd a $X quarter. So

growth outside-looking know your million million you I of now a that the wouldn't process, earnings the and information Is your assessment from us fair limited to targets working target target. of And share Okay. anyway, but approaching $XX in the with line kind includes budgeting level that in I for historic internal you're or on suspect $XX here? some with

down at into higher XXXX, it's do think you're think And a we believe you market not okay? what's look may that if at market a is think you're take this conditions. is is have -- going especially is year, we that's this by revenue if higher Well, you is a saying going do heading So that but the So I'm heading first what into, we going true -- what have on, target into we market and look not revenue we would than of than year, not target going prior the saying believe the the we I approach to that's we necessarily we do? do? what

in better, a results what bit performing at line. the even I or top organization think if try the subsequent to are is we're if be the we the little on year should rewarded market lower do

year have other you did in And a So take earnings depending Did bad XXXX? if probably in the consideration. an it pickup an may then things earnings out on, or insurance good and like, into back there's have have hit came to we days. our we or insurance early

So million today. don't you how because I into comp. for take anomaly an it And incentive up at running think we'll million kind $XX came budget then out of -- $XX the consideration million. much you $XX We're it's of got here. that's put to

X in hit have your have going and $X year, you to If targets, a you're you're going to million.

doesn't conditions that actually it items So prior those the lower where of don't I that, the within but are looking or market specific plan than year, mean at kind at. the a recall can't year's you factors the year subsequent that Typically, had look P&L. really happen, yes, we got to was

Bascome, should -- The year's to number something be correct I million. got should number annual $X.X this there.

number that the first. yearend up So way we're to XXXX. the of X/X picked annual number I for

Alright.

year. So $X.X million for full the

Thank you.

Stifel. of Chan Bruce from is question Next

open. is line Your

And responding you're here, California pretty mention get on political how potential ABX Jim, want the update there framework? classification first effects? did you a an to have the how any IC But and how good on updates about thinking I you're to situation. cost but regulatory issue, on thinking do in that? I you the know, you're I'm did shape the maybe about

Bruce, this is Joe.

chance little conversations, their impact exit we authority standpoint, what talk for we're an we obviously, going a well BCO start so us. leave count are they get of have a conversations business would a or to a Once yet, look those as around those not have have and to have to at the that as own might -- we trucks ABX. from better I roughly have understanding to how truck have haven't XXX -- their of harder take affect we'll what are, the a But trucks we'll of or you. We any intentions to BCO individuals those had to aware to we or either and ABX, the determine think system, bit to whether how that

previous the And phase? and a example, are Okay. of Joe, is and good ELDs final for we the That's super for even capacity the clearinghouse benchmarking these conversion or one and AOBRD well, ELD phase then, maybe IMO at drug helpful. against, issues as this maybe look terms in alcohol how but you as of you XXXX, the

that or disruption. was I think, actually -- think from that lot be I some transition of there a midyear -- I move is would AOBRD over would whether to there the severe concern this ELD, think occur

moving right I carriers most I for making on themselves understand -- that forward ready think, recently that are more making and doing conversion. the that thing

AOBRD rule to are don't that think on house, It's potential it's having is program and then I place ELD. think that people sure it's nominal the mean the really, hands again, process a of So if in going others, more moving quite but a the And how just clearing clearinghouse with from see for cost, that. hear the I -- getting and now really they're -- cost it's a significant. really make the disruption forward. impact. I And having to I us, more fairly are more do that you about their cost going the that's would maybe for smaller,

you a in come cost ducks to just not row your comply big having XXXX. again, sure and preparation So that more make

not one we'll you that side, That's in-sourcing lapping I some and thinking Okay. as the of we're pricing And then flat how last great. question I'm replace know some are all on we helpful. of e-com from mistaken, you Amazon business mentioned year, business? final lost here. their Really the just that If but that about

we of last on softened up Actually, Amazon us year. kind -- the business

still lot of price -- the is standpoint for good because of pricing no -- to regardless for else months. fourth pricing And we've in our So impact anticipate on is soft there. the through pressure a fourth that there'll get still is, really some managed how there last they're is more that the this and trucks. won't overall it's putting peak will pricing demand the We just a no or the quarter, how much marketplace, stuff, in everybody e-commerce we and on from a quarter, comparison the keep few peak although when be continue stable for

line Ravi question of Shanker is Next the Stanley. of from Morgan

for Jim, entering flatbed. on new and have like refer far. follow space. the been It competitors comments is dry I flatbed focused up specifically your van the primarily earlier wanted on But right guys thanks of guys the on so now. to sounds entering space are the the new think I new one

you that out in pointed is easy Can of the it new what on little business or really? you "digitize" kind do How specialized will is operation. space? and the not success on more think of this more of kind elaborate this have think that how a to you specialized bit kind a is I entrants

intervention. it's Yes. of human Well, the is flatbed -- the really XX% some heavy business, business our requires flatbed -- which specialized, our

just equipment. flatbed. specialized on equipment heavy regular not It's big putting You're the

our that. So XX% of flatbed is

The on other probably parts is of platform. value-add probably can't the probably then there's to there's go -- very flatbed digital on a that do and flatbed and some again a flatbed, some hoc and freight generic just ad generic isn't

Absolutely, think the to tell in not. take impact it's they So and jump Do can hard over flatbed they that just just have. can we really market? would to we the all --

and value-add guides related bit flatbed little on to and mean think bit that. Rob a more a there's routing of And little to stuff there's that there technology. the side. a not may actually I on like coordination of I lot have about talk

more on flatbed more said, the Ravi, the as get, Yes, specialized side, you Jim are. again, touches there the

permits. got You've

You've got routes.

that it's more most the say hoc going are discussions as there again, the to taken that take can't flatbed but the human don't there You've be automated an I that And can -- human over situation. guess, be the a customers, or a over more an type It's lot are part, markets Jim got It's and the of by -- place job automated feel there -- touches, website side, app. to a over site. that said be on interaction. also we for interaction could ad of space, lot

game. got -- -- pricing you just thing Remember this remember, whole just is to a

We they just undercut come have this. -- will what on. that do It's have eyes the that's and in pricing, they tools we and our to got

you reaching Have new your any that. of on that follow-up out have a just agents or been And guys heard to the Understood. them? partners from

heard we've them heard space. Again, in We've customers. some of of our them possibly in

point We have them that not lost. to business time. We lost feel do we've in this not at any

Thank you.

from Wolfe Next Group question is Scott Research. of

now Your open. line is

just want I with up to follow rates. things. two on So One

sort of you here. to the last they're quarter. months, hold steady move understand, want normal that thought the with that not? in in have saying line You're you'd steady expect I is would see I higher typically holding them or that rates few fourth from to seasonality just

seeing? want just I to So what understand you're

seasonal it continue the been you're May. From it's for last yes, seasonally way standpoint, expect the -- Yes. since we a right, to

my I'm and notes looking So seasonally -- here, typically, at we see...

September. than the were in in we average X% typically is and historical the higher, quarter better Pricing fourth X%

So we landed on pricing. that's where the

Yes.

trend. out seasonal expecting coming basically we're that So We're seasonal.

And saying than seasonality sequentially? Okay. actually point you're normal a that was September better

correct. That's

work in to does rethink mentioned how this of curious sort for and take you your think just impact I'm maybe need of with Okay. fixed more that Good. the you earlier over You've got margins that? How to industry this need rates I margins. -- mean, BCOs of business with parts the gross more you Jim, to agent idea about the model? time. the your this rethink then going think -- are agents? And on some the world? broadly Do Do you head how model lower

because that it's speak of got to BCO mostly percent revenue. we has When No. the a

about also spreads that days of long the type are ad type talk it's there the rates the the hauling using we same. I'm we're haul side. BCOs any on When as hoc and generic when third-party impact So freight truck then hook third-party on I in as or well the I'm flatbed margins, they're at that mostly about at are and about, capacity, that that stuff. drop talking or talk of When more talking about

going unrealistic trying to the brokers into and margins. on in are squeeze to if and pricing don't going higher using that that to I build pressure going to And trucks add the incumbents us the it put put doing. future. scale to believe to process for on guys buy long-term, to the that think are shipper I much be they would are tools think and going margins than a a are and to bit lower normal they're buy going They're try the current the for to than they're bid value try

term? believer that's And in long kind will to going will a Or happens. unrealistic that to the I the believe in it long-term? won't. happen When that, a what market, more over of think is It's come that entrants everybody hold playing end into game. I'm yes, up it

significant cost from have value what to is -- There's markets the the you it's other cargo things I in provides. say, necessarily costs it's think it. XX%, not So service. in a just, there have you everybody today though I free tangled think up There's because give average is but going Absolutely think you about single digits? get not to of risk, that direct you funds, there's before away just that

Fowler question Capital KeyBanc is Markets. Next of from Todd

Great. to make got I want comp Kevin, just sure correct. I've incentive the numbers

want $XXX,XXX. just in -- year-over-year? was I I've was the You that correct. what got sure was said what that in the was? to remarks that quarter Was amount comp prepared it third down I number incentive the make Or

Yes. accrual about down QX. we took That's in the by what $XXX,XXX

Okay.

is expecting through million what year-to-date now full so year, but you're the it quarter? And right the third $X.X for

million, year. the... about $X.X three total whole somewhere then quarters in the its in $X.X and that $X and million for $X.X $X.X million in million, million range say, $X.X million for Let's

the three quarters have of basically year We covered.

Yes.

Jim, just my one, Okay. then follow-up. And as a Got last it.

the that repurchases, I dividend side. With sheet, on didn't you talked special you think I balance about share anything mention the hear

do continue special free great cash. your a right are now? to potential What job guys You thoughts on of the generating dividend

side, buyback like but it's to -- the our always share related on past. has that's had Typically, opportunistic where special where the we be in to been we've something been, we focus and done dividends Well, and -- companies were on capital that. 'XX we tax did the -- taxes we bought -- going dividend thought go in the back a thought we in special gains the up sold to We XXXX.

up We at the year. the didn't XXXX of with buy stock ended in cash and end

coming we on, discussion be the worth a with that of considered. that's it's cash have as now. So And Board I sitting that million clearly will up. We're think don't $XXX Kevin excessive. said, right

the liked wouldn't opportunities -- special, -- continue management doesn't as of 'XX. the team, a I down I But them leans it We've but like buybacks. management So to since on we I We'd buybacks. path. -- like totally the exclude on that clearly

from And our Ben came question the of final Baird. line Hartford of

as might then about about you market next the And in few come the is that the I but X do some versus want three, over landscape, of in what perspective competitive able Two, rolling out incorporate think your in changes of in off-the-shelf going that. the the it is context years? one? field X anything be the they that's to being of regard with the TMS you'll that today? than off-the-shelf, on something to to in might is agents et Is talk bids, how developed to think a the is imagine internally terms you're your competitive back have that point I different cetera, flexible from that you bring that over next years. to view about to to April, more comment going Jim, TMS about come TMS that

TMS, that definitive type visibility to a internally, it's to to include necessarily refer and it's Is soup my does the is, the of TMS, not any little to standpoint, hard system orders stuff. from it I of more pricing, from operating get freight when workflow hands attract of The pricing And our or around TMS Yes. nuts? and that? visibility from place everything like just truck all or

our and many So not us in working get getting in agency third-party play little we it's are longer. and to we to but can a a world and and and process bit But on the talk why TMS a the third-party it's is are call our plug that, that to play world to right? we tool it the various too center highway, technical, fit our visibility The taken when we the into After base. That's capable our freight pricing tool, back It's TMS, plug feed through a vehicle what information middleware. transactions. which information we about softwares. like in forth

they be third-party can tool feedback into So the and software package. and our vendor. or doesn't to It buy out same speak go or have same to can have have buy it we be They tools. visibility to the all TMS don't it to connect pricing in software And the interconnect. the today have can to middleware to -- it speak our we

XX ago. I this any us systems for we've helps or the So last probably done X type middleware over couldn't to type functionality each to all today that any think, put other very of talk is months, of and the we add going fact ability that year that system forward the the our in have to advantageous model

individual have agent's that agent, tool And or with they from other don't perspective them an either an collaboration what agents bring does this today?

manual you efficiencies. think I when mentioned i there's that doing are things of from -- lot really I mainframe -- office. I'd they when a XXXXs -- in their of working Well, it's Clearly, off that IBM we're

fact manual were TMS credit that the provide will trailers for and requests the doing they and requests them. for Just manual

off had Our They they rates. in. older every didn't the actually store a system put key to sheets time rate

have rates in something have. embarrassing that's TMS everything it's yes, a they and in new didn't it So little might the but to have in would has that system the The newer rates 'XX you not necessarily there. a say, has build there,

various of the across brokerage cycles, going what you as do just up assume bid terms into agents into the be months do to is in softness Is they as And still given do few find until how if lot mid broadly to more for competitive relative season? X XXXX you it think expect of we positioning And past kind next of the it space, go our the be but Or perspective normal know year, next an months year? last I over we your bottom? I about mid something continue where and one in that anticipate then supply. competition bottoming next more over does we've year, that available on breath kind if potentially next can industry fundamentals a hold talk in? XQ seasonality Okay. you inflection step one in get the the we to some as of hold absolute discipline this seen to loads

Yes.

going competition or I difficult. we're and think earlier, isn't trucks right a the if market cycle -- coming Where abnormalities, disruptions for I no true are for said with as that you're I -- competition through irregularities now think right? looking back, you no if at trucks

through if think percent automated. XX-something And in where at ago, us, come over accepting XX% of our It's loads, was of you look EDI. year those I probably loads XX%. a it we're

the at we competition then the from So going And for our the standpoint, trucks for competition look what's to what's shippers? be?

Can that it's normalcy we're going cycle, internationally? would of No. based it up I are more and to going really similar and think as lower to tightens more in hope to that's going difficulty swear just market be do But pricing for from little people having than Today, economic to hard of more of summer. of think enough this trucks balanced hit environment we're getting because back the we'll I economic is in anticipate normal those a in and finding not just from where the today next come yes, on bids say, me it's on landing the year, amount what's And next and shippers to happen. just happen what's standpoint market if probably see bit. that's an market. a I But them a we

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

Well, you, you, good I'd And Eunice. look for thank speaking call currently again, to scheduled to conference a on and XXXX and with like January I day. thank have you, XX our earnings forward

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