Ryder System (R) 26 Apr 232023 Q1 Earnings call transcript

Please standby, we're about to begin. Good morning, and welcome to the Ryder System First Quarter 2023 Earnings Release Conference Call. All lines are in a listen-only mode until after the presentation. Today's call is being recorded.

If you have any objections, please disconnect at this time.

to like now would introduce Ms. I Vice Candela, President, Investor Ryder. for Relations Calene Ms. you begin. Candela, may

earnings circumstances. Good and from Commission, to Reform competitive, management's non-GAAP you these are and Thank XXXX presentation and the factors factors. based which website. forward-looking information morning, economic, you. welcome the on meaning the in Exchange XXXX. changes expectations call. due presentation, hear filings differ release, Ryder's to each Securities materially to Actual Ryder's in of morning's and measure like these subject These statements measure financial changes are More this earnings the are within earnings Securities market, in results Ryder's business, GAAP and I'd to of may conference and about during on of contained nearest regulatory call current remind Litigation political in expectations reconciliation available that with to a Private and you'll uncertainty some Act is conference detailed this quarter first statements

are Sanchez, today's call Chief Officer. Officer; Vice President Robert Diez, on Chairman and Financial Executive and and Presenting John Chief Executive

Global of Solutions; call and Fleet President Steve Sensing, available and for President and today Havens, Tom Transportation, are Additionally, presentation. the Global of Solutions Chain the Supply Management Dedicated on questions following

to over At call I'll Robert. this the turn time,

first quarter meaningful growth We're by you balanced everyone, We'll begin first with you for I'll environment. progress then pleased delivered Good this the will joining through results results. thanks our our and providing our strong team highlight I'm a on by morning, outlook. discuss demonstrate then strategy, on John which I'll call weaker despite call us. take morning. our the to strategic quarter continuing update. freight a with today's

growth. increasing Regardless significant chain for Let's begin long-term for escalating headwinds, freight we opportunity solutions e-commerce of long-term fulfillment provides Longer-term and growth resiliency, Slide secular X. demand including activity as for view near-shoring these intact. supply trends, demand on near-term ongoing drivers

our and increase on benefits execute – initiatives cycles. to profitable to quarter, business not initiatives positions continue growth. de-risk our the importantly returns, prior more in us long-term also to but results We outperform but Executing on only these drive

Our long-term focused primarily our on are on opportunities dedicated remain strategic growth and higher and businesses. investments growth profitable supply for accelerating chain focused return in

conditions in returns from each which and we as of asset strategy Investor XX% well We're ROE on executing is This generated the higher phase cycle. generate segments. high-teens our the on of earnings enhanced which XX-month actions, our period, in also above These to We market is benefited cost the all our management trailing our shared positioning which focused recovery in business pricing include Day. as strategy, benefits for target, reflecting initiatives well initiatives. FMS elevated during

Our with capacity sheet pursue credit investments shareholders. solid to to strong return as balance and targeted ample investment-grade rating capital as provides and us well acquisitions

$XXX full year remains cash free million. at flow unchanged Our XXXX forecast

growth with value. We increased balanced on cash and balance allows ultimately, line returns which to our to strategy, continue shareholder us progress top free meaningful and flow growth make

Our positioning key growth. and de-risking the cycle business returns long-term strategic over flow our priorities the are profitable and free business model, cash focused for improving on

action pricing estimates as levels. de-risking we to value businesses and As proceeds and and – This also residual achieve it geographies in exited return reliance the low model, reduces used to target we portfolio. underperforming on optimize improves of to relates vehicle our model. optimizing historically our ago, the years to continue lease our used lease the lowered several for profile We've returns

our the to return higher of and completed the we FMS UK substantially proceeds the year, business in Last opportunities. redeployed exit

contracts dedicated In our late product labor are adjust with adjusting also contract insurance renewal in order which us cost customers, multi-year lease and under variability. insulate discontinued XXXX. contract half increases future. negotiated in of line We our new began we facilitate better initiative rate to results also to the We our XXXX, from current is terms with benefiting DTS cost quicker, upon approximately This revenue a to pass-throughs structure. the began more in efficient

executed increase important We also flow. returns initiatives and cash free to

in higher Our XX% higher to initiative expected to the relative is lease returns. FMS, segments. both implemented contributor to in labor be of be to priced benefits a enhanced fully to costs are the growth by as benefit by favorable Pricing million. asset in capital moderate our targeting rental capital-intensive address tractors. incremental and benefiting in XXXX actions expected and this of higher business $XXX in pricing supply due discipline portfolio initiative remaining We're also exercising annual in other investing class total lease capital and trucks growth an expected more key trends to continues to – returns dedicated is chain returns with at with allocation estimated This

chain accelerate from contracts and trends revenue long-term expect growth. XXXX, chain to from also contribute continue Accelerating initiatives to reflecting and higher chain in growth XXXX to Ryder's return and and a long-term our up dedicated is XX% generated was we in supply strong Supply key XXXX of profitable dedicated, customer sales these new will supply driver businesses. which achieving growth of secular growth. to dedicated in profitable XX%

cash progress of Our and organic of balanced key continue ahead our to shareholder continue growth in significant for a with opportunity strong increased chain value. and has expanding balance flow enabled supply capabilities be to as on growth our higher us plenty strategy our Overall, returns, as and investments strategic return accelerate our focused part growth to strategy M&A sheet acquisitions. businesses. fund well to dedicated on we demonstrate

for of that as Mexico Turning approximately XX% chains. and decision-makers nearshoring. their of well number favoring attributed outsourcing strategy Nearshoring supply as Mexico year resiliency increased the to a truck Page XXXX. Market X. increasingly in demand nearshoring space reduce data A The and chain cross-border chain key XXXX, more to per the increased was meaningful crossings secular XX% U.S. activity risk new resiliency. activity the and border industrial supply to logistics increase than since in pursuing of is is in supply Mexico escalating are trend in shows investments has increases in between

a leading As in increased to provider of well is solutions positioned America, meet demand. Ryder Mexico logistics North the

City, manages as as of the the centers. XX operating XX between Mexico long XXX,XXX years The than Golden and about ports key distribution Mexico and company Triangle, Guadalajara. which more border presence annually has With well experience, and currently manages Ryder U.S. also entry Mexico a crossings Monterrey in encompasses

the U.S. differentiator in ability to operations A offer to Canada. Ryder marketplace supply is distribution Mexico, Mexico the services of integrated its full a in and transportation for highly and range key chain

Ryder relationships local provides to visibility customs Mexico export and Ryder Mexico and has shipments. activity support border for manufacturers. in-country to foreign-based with security well long-standing from also as U.S. as proper carriers, leveraged efficient distinctions technology, and movements credentials and brokers all parent secure and the Proprietary benefits companies. perform

over Fortune which has Mexico Ryder XXX U.S.-based customers, are XXX primarily companies.

long-term industrial demonstrated pipeline by to approximately to see is Ryder customer from we're influenced nearshoring increases relationships Mexico in expertise, operational with XX% continue excited We ability Mexico. sales opportunities growth automotive pipeline Ryder leverage related largely verticals. trends, activity to available and and Current the our near-shoring. about for its the near-shoring With to

quarter call the our to over turn John to review performance. first I'll

conditions in from $X.XX were for and by in share the rental X% company in Comparable first in Total year, $X.X DTS. the SCS. Robert. the was and vehicle first reflecting used charge primarily sales and Page continuing in down a quarter, chain quarter Operating from billion Thanks, growth impairment up supply partially the per $X.XX prior earnings first revenue offset higher quarter, on revenue year the results asset share in count X. from earnings reflecting normalizing lower prior operations

well from primary elevated in $XX due Return XX% prior Free metric, proceeds market equipment, UVS sale on cash million generally higher expenditures sale line headquarters the capital conditions our was our the of for remains equity, our first teens of as offset above operating is quarter from were increased with target rentals. by largely financial and year about reflecting to and high building. in flow the property proceeds of the and

X. Page to Turning

segment items segment we've excluded. were we do underlying performance. other We're made of expense primary this measure to assets, amortization a already to segment in to quarter, that driver our from results, performance metric our segment change customer like our this metric. intangible EBT expense EBT Beginning a we highlight excluding addition redefined not because Before segment of consider discussing to intangible exclude I'd amortization of

change. segment a performance the results reflecting Pages recap provide material or XX change XXXX, XXXX and appendix to years The for through trends. the in results this not have did XX impact segment

North than operating by decreased revenue X% SelectCare as Turning Management revenue from America results. to North higher the X% operating offset X% in in X% from America Fleet ChoiceLease and Solutions FMS was impact UK more exits. as negative operating increased a revenue

earnings year Pretax $XXX sales sales offset used partially rental and as million, vehicle lower down due pricing from management Lower prior by fleet anticipated. vehicle primarily the volumes. was were in results in to higher used

of for XX.X% percent of first Rental utilization utilization our XX%, XX-month trailing larger on the in Lower highest on pricing. of as period, of strong year above increase offset but first segment's at record a XX.X% in a power a by strong remained in below fleet the power the fleet X% long-term FMS and representing partially double-digits. levels XX%. was quarter EBT at prior low fleet revenue target our utilization the second the was both level seasonally quarter operating

with proceeds benefit the our decreased while X to challenges in the proceeds Compared elevated conditions tractor vehicle weaker levels to proceeds for Page from in a On for year. X%, vehicle from environment decreased than The our with prior expectations. for America quarter. our vehicle tractors trucks Consistent And proceeds XX%, sales results in highlights ongoing of line used continues conditions, expectations. normalize freight reflective with with declined expectations, sequential truck sales continue used North used for declined basis, availability. better used prior market XX%. year, XX%,

versus historical we activity. This quarter, at of and Used vehicle reflects rental quarter-end inventory levels. up at the our the and de-fleeting lease sequentially used X,XXX higher vehicles, During vehicles sold and increased year. X,XXX replacement lower to prior end remain

as well historical and percent your vehicle original remain estimates proceeds residual proceeds and XX trucks a current used for pricing appendix of purposes. the cost Slide in estimates provides residual sales for information. above used value depreciation tractors declined, Although, value for used

high-tech. revenue Chain Beginning Page organic revenue Slides includes and verticals, mix, omnichannel Turning prior acquisitions XX. higher business, to increased growth. revenue and pricing. Last new volumes visibility to This provide vertical presentation industry revenue big and on with recent Ryder XX% quarter, the increased period. this organic provide the and in XX Operating to to we introduced strong bulky SCS fulfillment, our following presentation growth by in for recast revenue e-commerce vertical retail a and XX Mile all our delivery appendix Supply new better the retail, reflecting three-year

EBT reflecting a to SCS $XX decreased asset XX%, million impairment bankruptcy. charge a related customer

services conveyor be quarter specialized in management took or impairment is Bath California warehouse, Bed locations As for Beyond some supply this chain The warehouse. and which SCS primarily at sortation charge of the this an impairment may the remaining & we for distribution of the charge & which two equipment Bed provides for in terminated Beyond, the early. quarter the filed warehouse Pennsylvania equipment you fourth bankruptcy week. provided aware, In XXXX, Bath for

not customer chain with the operations is mentioned profile we supply as of our investment-grade our from XX% call, of our comes this on companies. As as single typical credit business revenue last approximately customer

have In special equipment most limited addition, investments.

from the vertical, in the growth were automotive chain retail omnichannel weaker EBT impacted X.X% operating revenue Reported the were segment's and offset acquisitions as range. in by as trends in from previously of high the from my percent down prior earnings excludes Supply customer single-digit partially by of vertical. primarily the intangibles amortization revenue chain Supply which was below the noted. also target year results a quarter, EBT

as well for are was and positions for in EBT revenue fill high Dedicated increased of XX. pricing line number to pleased to these operating improvement EBT hiring and growth year continue. trends professional of increased due Page and Operating revenue volumes. XX%, segment's our Dedicated single-digit of second the trying a on Dedicated X%, see increased reflecting drivers improved to to revenue X% professional began percent primarily drivers. in half open We the conditions as in with as see to the target. of last Moving

declined. sales pipeline quarter, consistent has softer activity to in DTS and slowed been Customers and our During the taking have with make freight decisions, contract a environment. longer prospects

on be sectors in stronger trends industry far appears sector as relatively retail. industrial pronounced As go, as sectors more to footing the when negative such

for year contract deep high on the and Dedicated we to range. expect remainder digit Given revenue dedicated track. single the moderate to this remains now sales be our growth of expect target below activity environment, dedicated

single However, to for achieve its segment digit earnings. high pre-tax target

XX. Slide to Turning

First of spending up quarter replacement lease increases was expiring plan due to $XXX in activity vehicle contracts. from capital million, lease lease

capital expect be the For year. generally to a rental rental the line quarter, to with was spending environment. million reflecting of for first prior rental continue down normalizing But full we spending in year capital $XXX

continuing to stronger than tractors. mix shift been our historically more and demand We’re where have resilient trucks those see trends toward vehicle to rental for we

the trucks in approximately XX% from XXXX. By that be North rental year XX% end XXXX, of America up we fleet will expect

XXXX Our is capital full expenditure forecast year unchanged.

fleet year. reflect expect lease the be of vehicles. up X,XXX vehicles replacement We prior X,XXX billion, to higher for X,XXX growth XXXX versus to up Our from $X.X is forecast forecast prior capital ending lease now and to the lease X,XXX capital

This so anticipated require capital is rental will additional be expenditures XXXX. down fleet lease additional from to coming average from slightly fleet rental, we redeployed our is growth year. vehicles, In not this

more expected is X,XXX Our be approximately or deployment rental activity. planned vehicles reflecting now higher down initially to than ending rental fleet X%

remains Our capital year forecast XXXX expenditures full for gross $X at billion.

to related exit. from expect used in sale to of included low XXXX. continue year, million the proceeds The are vehicles the approximately We of $XXX prior XXX which proceeds million UK

Our to full expected capital expenditures XXXX are net $X.X be billion. year

Turning to Slide XX.

cash flow unchanged. flow cash operating for forecast free Our and is

over cash time, approximately trajectory revenue. comprised leased Ryder’s in growth XX% shown, improve As our which continues operating flow contractual dedicated to and our reflecting of chain, supply businesses, the of

profile our flow the cash free implementation balance since Our has significantly changed of strategy. growth

Proceeds business cash as the COVID growth From lower XXXX effects forward, flow. the the benefited lower well under capital in from free free growth also targeted cash FMS higher balance strategy OEM and XXXX. exit of lease spending and in delays as flow resulted UK

million slide generated cash Summary on prior growth. XXX is strong to the to capital, XXX investing the in approximately prior right we flow illustrates free to this free in cash expected fleet million. investing expect business number the to and the be in side growth XXXX, of In generate by flow

growth. to our support to Our continue capital allocation priorities profitable strategy drive long-term

accelerate priorities top invest in in growth. which continue been SCS. growth Our have to organic contributor targeted to pursue continue acquisitions We’ll to key to a

as transform capabilities terms our helped our business, Our chain both rebalancing mix. acquisitions have in expanding supply vertical of well as

capital in balance dividends. credit XX plus. and upgrade inclusive from March our ample organic repurchases with shareholders provides sheet acquisitions to through as Our supported of fund XXX% recent of to Its targeted capacity leverage S&P investment by growth, to well BBB as capacity solid share return ratings

forecast interest incorporates our Finally, rates exposure rate. from limited we a as pricing term medium rising have model lease borrowing

with our life Additionally, the lease matched the towards portfolio. aggregate for contracts aggregate that life is repricing repricing

management playbook back call to enhanced I’ll outlook. asset turn the over to and our discuss Robert the

on which cycle. John. returns asset Thanks, from playbook, optimizing enhanced highlights focused is XX Slide key our management provides the over

stable vehicle to dedicated the our chain from impact sales used proven businesses. transactional underutilized businesses rental rental to sales rental our mitigate than contracts. lease redeploy and supply ability more chain cycle contractual supply to vehicles be to Key have used and the fulfill over demand dedicated vehicle lease actions and and Our include weakening

used by and our digital capturing and XXXX, about adding capacity network focused with increasing us physical chain increased than is The sales retail OEM team our sales, digital we’ve in expanded sales sales solid by our vehicle long cycles. dedicated services sales along prior transformation. transportation in leveraging even providing with we’re lead capacity investments Since opportunities opportunity. the redeployment locations supply retail on times seeing growth our we’re more sales In insight in XX%

historically wholesale sales a at benefits result XX% to proceeds. discount have retail volumes Increasing as proceeds retail been

discussed We’re continuing used earlier. levels relative as to of to inventory maintain vehicle low historical levels

We’re lower may compared the prefer customers with capital vehicles which that also and defer that the commitment lease extending a extension for remaining to new – for lease of contracts need shorter-term leasing lease life to appeals equipment. cost, replacement

higher executing each management in be of impacted Ryder asset by playbook earnings the for will phase freight earnings Although positions enhanced on the cycle our cycle.

Page to XX. Turning

We’re in versus raising reflects XXXX a our EPS to from XXXX modestly low the to forecast expected XXXX higher vehicle used the year. prior than XXXX of full XXXX year sales increase The comparable XXXX end to trends.

second our year our and for that EPS translation XXXX the full UK charge note quarter includes GAAP Please $X.XX related approximately cumulative to currency business. of FMS forecast a exit

a comparable XXX second of quarter We’re to also XXX. versus of year XXX a providing forecast prior EPS

our ROE XXXX is in target. Our high with forecast teens XX% XX% at unchanged to line long-term

earnings vehicle freight to continue used weak impact XXXX conditions but expect sales rental. as We strong reduced in and

contractual supply to on continue to show and growth improvement businesses our expect chain in We our initiatives. lease dedicated based return

is ongoing XX. business multi-year and achieve see positions strong for strategy, targets, to resiliency supported initiatives. profitable changes operational structural our model Turning model our we Page demonstrate Ryder We cycles. outperform by long-term We’ve secular momentum made growth value. shareholder believe continue which trends, well opportunity to We execution prior our significant positioned to increase on and from growth our balance to us believe and increased business to our expertise

committed lot please shareholders. limit our each. one capabilities investing prepared today. will products, and our to remarks. technologies of XX-Q deliver file yourself in value note and expect that That material Please question to concludes We cover remain we We our customers to to had our a today, that later to so

additional the queue, as have welcome we'll to questions, can. you many we in as back you're and If take get

turn At it over this I'll time, operator. the to

and from go first ahead. our with question go Please Research. And Instructions] ahead [Operator take you. Scott Wolfe Group Thank we'll

morning. thanks. Good Hi,

$X.XX from and headwind it's to the – you're Just kept the excluding first the that, right? in – that quick. wanted guide, thing year reflected in not to real earnings, one full bankruptcy, just you $X.XX quarter The that's clarify

correct. That's

clarify that. Let me

which included $X.XX, impairment, asset our the was guidance. QX was So in not

in year our So included in guidance. was included full wasn't in – it had full our in wasn't certainly but QX year, contemplated our included our we

So more if have like you exclude that would reported $X.XX, a X.XXX we [ph].

we core above So that above in well the came – guidance well the business gave.

the guidance. you full year But including it were in

you in going knew be So happening this to was you was and your guide? bankruptcy knew it

We possibility. was it a knew

the like with at year full guidance So the something came up when expect we year over some we in that happen. could the point year,

full quarter. was in year. in the certainly not the included it It So expected was first

were guys you I didn't experts. realize bankruptcy

the rental about Okay. just and on just the of how for And separately, can quarter, QX trended you're rental? throughout quarter it sort through just the trends, utilization talk you what expecting

Sure.

hand me Let that information rental. to over you the to give Tom on

Yes.

saw here sequentially, come we of QX is And would a in utilization, us line the When drop of very from we You the big we highest off of finished utilization. we kind in mid-XXs kind QX right of peaks fairly from quarter when utilization season which say our some our saw expectations. with through a the QX normal into came Christmas. and in in drop high to in terms

to that are we as QX, mentioned John in utilization well, be to expecting to but XXs we're it As expecting mid-XXs to upper we utilization. of kind look de-fleet.

of You we redeploying saw go come lease that expect down. we'll as mix And outservicing to fleet into year, lease well. the a that some with do of And do as our then QX. and that units we in of end-of-life fleet throughout

Helpful. appreciate you it. Thank Okay. I guys.

Scott. Thanks,

from next and ahead Sachs. Jordan Goldman And go Please Instructions] question our with on move to go we'll Alliger [Operator ahead.

Hi.

impacted margins. chain impairment question. that's I there is the know supply a Just

back look think a with sort of sort development? nearshoring, we how there. quarter. in with but we first I sort think margin do of of from about know in cost and the should I chain adjusted cetera, in that I'm saw line Thanks. et guess about you've recovery, mean, supply about done presumably, back know we I top that line? lot lot add when I north back about a then we the can the think thinking, levels moving how opportunities do to And there's it And we at – You of what

operating single-digit good a we've chain supply That's stated, tax – I for as Yes. Jordan. is as revenue. we're high a earnings mean, target percent before of question, our

we remain that. committed So to

into chain see year. of of goal expectation rest As year, the the we to that is the through goal get the our really balance towards that and supply into

the seen good Mile, really that. that delivery slowdown, we big as others last The So bulky about is feel probably more mention and Last we the that. softness around quarter you so over Ryder our heard have the of

get And as trying and some we're business, those adding to of especially e-commerce, to we're up. the that facilities grow then filled working

of into EBT year for operating target the So of percent single-digit a the the to revenue. as though, that back get high is balance

or sort you pipeline but is activity on the faded I this – that of be the the And I last down, the for presentation. couple is as maybe was chain might as mentioned on is of as know years? the it your Okay. coming near-term… said DTS I missed dedicated know as Or pipeline buoyant maybe you supply that how well

Yes.

hand that. over little me Steve Sensing on Let you to color a that give to

the pipeline Yes. campaign pivot here. very And supply demand this is so year-over-year, transportation XX% our seeing still year will Thanks, the couple that in you, chain it truckload every comment, bit did pricing launched Robert. little solutions up we of perspective. is on tell ever a The from sales slowing I'll strong QX. a in a I Jordan, was is vertical very our as actually yes, strong. dedicated on better hit to then coming down, other on is but focus automotive points

that into redirected flow for of our but it kind kind to of take time So pipeline, we some will the just through campaign.

Great, thank you.

Jordan. Thanks,

ahead go Vertical Please question we'll and our next Partners. Kauffman Research ahead. go from take Jeff And with

much. if very going can. in to Thank a sneak you question a here, half I and I'm

just going line I below make want the clarifying. sure one I here. to on what's understand first The is just

about & more earnings If affecting the that's to ask would UK in kind items FMS that adding other about million in bankruptcy. comparability add the the the the you're back exit. very take want Beyond back to division. you taxes reported clear is Bed And was on event, below I FMS the You're of I comparability $XX oddity affected before this Bath the in have line. negatively that that then just an But approach

clarity here. into as rightfully items the to and out, future. will you we So called really Let below The operations tied me give the exit of our your expect line those the continue credits, Jeff, are UK not some

our them comparable So a we've from out perspective. results of taken

So one-time to those and operations. tied are events related not UK the ongoing to

All the goes, to FMS the you've that would being to about and the $XXX EBT understand negatively line. and below reported Is impact the that? million a item, think on added next right. of But the right that so where that's In back different have that is release that affected FMS quarter, we've kind way got the negative identified. UK-related

It's not.

clarity. So let you give me

some related these the that some to the of related all were XXXX. in property last UK exit as we gain gains business. that the the items there in is activity vehicle for continues additional There's We gains. segment outside well So in listed business, recoveries activity, gains that reported as XXXX an gains both from FMS. This the reported all year, profitability as minor Those UK well claims legal one-time as the paid of XXXX. in from

results for numbers have the from XXXX both from UK excluded and performance. segment Those been the XXXX

excluded the QX the from on as translation earnings In from to impact It's we will equity. in the be will take impact from have adjustments that, segment no to a expect well. that noncash item results addition cumulative do equity and UK through

of segment business FMS you the and performance will the what profitability ongoing reflective perform. of for the there have America is the the North So results business to that is continue in

end you're to feet the step just change XX,XXX listen very helpful clarity. at All not is the occurring normalization looking fair I what dedicated little it vehicle that? to bit grows what in then the I that's I on so The much line you're If of a half only like what slower line, positive, with better in so sounds real a raising follow-up, sales, guidance were right. something? And for. assessment? so the outlook the you're range. of That's line expecting. and the the missing that. just But is largely that with you're everything lower Am back to wrong seeing to FMS seeing the and revenue question Am is negative, maybe in out the in saying, you net-net, Is

our bit bit on was right was trends of around of little in tractors, expectation. the sales, Where better this truck we truck was it. Yes, saw but this You're used than a expected in-line around kind the – softness is an quarter terms a not That's why came as a But expecting the we're we second bit better little a doing bottom side mentioned, end. side of year. the we a the in the Dedicated better. also. little raised half little more on sales towards

days So line other what XX we with better. yes, vehicle expected than had generally in in ago used sales came a little bit

questions. my Congratulations. thanks. all That’s Okay,

Okay, thanks Jeff.

go Allison ahead. comes Our from with Poliniak Please Fargo. Wells next question

Hi, to Chain to go back Supply just want good I morning. Services.

place Thanks. that a Bath but grade, mentioned base And incremental of Bed you're customer you these some when know onboarding in they're clarify. controls was really that XX%, unique situation, & XX% accounts? smaller but Any any think investment I I you're color along then putting didn't that? is you of Beyond

Yes.

say, XX% I that one not multi-client clarify, customers. where it's to that we just to would think the operations, of spread customer, said single I what our an we that's many was kind risk, the across operation – is customer of dedicated

So operations those customer. investment-grade those are XX% Yes, those operations were revenue it's are – the companies. a from with of single

equipment limited the in that also those specialized them. have majority say of to important It's

grade. they more limited specialized easily. by And – investment of operations the other the impact are those majority So are to also redeployable

of the unique the took on situation we and in of a risk bit of customer was credit So that facilities. this equipment the a the specialized nature

it? to good it. our learn run there going operation a we analysis way. that at the investment profile Now was time, really automation today. it, think risk worked the different But it's was key they of signed out unfortunately, and retail credit – we I opportunity a They were why felt to hasn't this made do ended a that were at was a high did we velocity able their we to that that with we in point assuming than be up time very

required all So to redeployed. will write-down this that's location the redeployed. equipment taken order moved equipment in is What and be we've to get another that

And you're controls onboarding at we that point, just customers where just you're are? this as given then incremental putting any new

going Yes. the taken generally the the that in that also here with is approach not to This that's investments we've the anomaly. to make the we're not was specialized we Clearly, investment It's any in of a any do really really really equipment. is approach customer around take. lesson bit an future. grade It's

Great, color. the for thanks

Okay. Thank you.

with will Ossenbeck question from ahead. go next Our JPMorgan. Please come Brian

good come like quick. perhaps back slowdowns. going pipeline that Hey, have real to how or targeting in the DTS I of maybe wanted change you market you there what morning. were sounded just a were was caused to to the might It some

driver just the you changes? impacts me. that off what So biggest really actually that people for deceleration? Like bit maybe the a could of were top underlying some What of or clarify projects the of was putting on

trucking a think spot I pretty result, a as It’s as comes Brian, down. it’s simple. Yes, basically rate for

spot have to go That’s spot you who spot or how be that got who that’s that on with rates opportunities dedicated going until if saying, are could margin, we’ve as with the fewer business some rates go dedicated a the are. given what going you – and take truckload operation. now recover. on dedicated will, low chance opposed a those either got customers basically, it’s even and truckload I’m You’ve the or prospects to rates

So it’s through we This happens go not as the freight is what cycle. unexpected.

start recover, to the then spot demand begin again. continue the to couple to dedicated back rates we’ll see maybe And pick be to up that for for pipeline expect next quarters. and I’d So as soft

Understood.

of the So to that back the some you’ve and was that an I perhaps or number the that sort this. in of incremental guess, beforehand deceleration this related update put guidance full is today? of half But into year the considered

the but really considered of was sales Yes, the was in no, next a a There’s year. additional in It because – some those until don’t headwind, I some that forecast. right. most it of really, slight initial not lot whole impact considered we

a year. chance the could still Spot be there’s to to that come good of up. And up there’s year. the here innings of back of back So start the for also pick balance the at rates a sales lot half played

So…

Okay. Thank you much. very

you, Thank Brian.

Subin question Stifel. take next our go with Bert ahead. We’ll Please from

effect? you talked XXXX can and you nearshoring business a good near how you and think be talk or through you innings assuring either Robert, in it’s the and the guidance, the pretty about do that or you’re contributor earnings XXXX, Can still just early think topic. do assessing Hey, morning. about U.S. meaningful thinking Mexico your

like Yes, been on look, for Mexico the mentioned I XX script, years. we’ve I in think,

in operations more We we’ve nearshoring automotive related in What in more in in – and industrials, Mexico. a have are increase pipe strong doing, chain pipeline companies to of very pipeline Mexico are seen is as the nearshoring. especially supply pickup the more, looking operations

profitable supply So business we’re that to continue really would It’s business than say $XXX revenue of out business of for that coming about chain average a excited operation. grow. that currently about and the better seeing within profitability I million us is a opportunity of

advantage this it chain. opportunity we a of of time, over taking trend and as for becoming a secular part really supply So see bigger good

Thank you, Robert.

All right, Bert. Thanks.

comes with question next Long Please Stephens. from ahead. go Our Justin

but picture bigger quick as question, I before a that, well. I had just I get a had clarification to Thanks.

in quarter, that same the first to that related there Going million was separate that I quarter a $XX the to issue? back SCS, impairment think bankruptcy in took was the you impairment or fourth is a

the us Pennsylvania, were two, we’ve the in we for customer Yes, running and This the fourth same were remaining the taken was Beyond. this took because in Justin, in that redeploy location. that we in impairment for that was likely was the two was the the California to warehouses that one And facility that for and one quarter, is on running one canceled now we for customer, and down it was – Bath which Bed their had right bankruptcy liquidation, And the customer them. equipment. based it

companies. back bigger circling from picture we’re cautious other then That’s it. tone more to helpful. question, And lot hearing a the of my transportation Got a

up As end range. to and date, bit guidance actually first at about came low and the your we of April, quarter XXXX trends think the but here the a the EPS little quarter in

year-to-date high expectations can market your market in just to curious, I’m where weaker than isn’t flowing Robert, a freight level, bit expected So the and moved why you used a particularly higher? explain performance, through from little a financial

Yes, that’s Justin. a great question

took to think it right? think we started, others do has really year we I where of the I maybe than with cautious view a more the at beginning did.

a in vehicle were I fourth second used and down expecting the to when quarter half where be and truck in said sales rentals. the recovery the entire [ph] used expected pricings We some year

think I the it point. So just starting was

have were not it, the We the quarter, haven’t our they were others. that think below been expectations I first the in whereas seen by expectations set results below

beginning expectations the the starting that’s think point were than our difference just the lower I our others were. of So is what maybe at year on

the Got it. That time. sense. Thanks makes for

Justin. Thanks,

remarks. this Robert Mr. to for call back over At time, the I’d turn like Sanchez to closing

thank well, company, forward call, the a safe look the for Okay, and interest Thanks to all. your on being soon. you your Have in you seeing day.

for does conclude Thank you today’s call. that that, your With participation.

now You may disconnect.