Old Dominion Freight Line (ODFL) 23 Oct 242024 Q3 Earnings call transcript

Company Profile

Participants

Jack Atkins	executive
Kevin Freeman	executive
Adam Satterfield	executive
Eric Morgan	analyst
Jason Seidl	analyst
Daniel Imbro	analyst
Scott Group	analyst
Jordan Alliger	analyst
Jonathan Chappell	analyst
Ken Hoexter	analyst
Ravi Shanker	analyst
Christian Wetherbee	analyst
Brian Ossenbeck	analyst
Ariel Rosa	analyst
Stephanie Benjamin Moore	analyst
Bascome Majors	analyst
Thomas Wadewitz	analyst
J. Bruce Chan	analyst
Jeffrey Kauffman	analyst

Call transcript

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Operator

Good day, and welcome to the Old Dominion Freight Line Third Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Jack Atkins, Director of Finance, Investor Relations. Please go ahead.

Jack Atkins

Thank you, operator, and good morning, everyone. Quarter Call Third Freight Old the Line. to XXXX for Conference Dominion Welcome being be dialing and beginning call recorded Today's is will access XXXXXXX. through XX, XXX-XXXX, today October available XXXX, (XXX) by X code and replay for also A accessed days for website. be replay company's webcast the XX the of may at

Old statements performance. call Act statements, including of forward-looking meaning Dominion's financial the operating within regarding and expected conference This contain Private of XXXX, among the may Securities Reform others, Litigation

this during be call, are For limiting this expressions made purpose, to forward-looking may anticipates, to statements of are statements deemed the believes, identify fact, similar statements. forward-looking that historical expects words any not Without and plans, intended foregoing, be the statements.

from the filings among Old company this You actual forth in publicly the the important may with morning's or in set consequently, the are Commission otherwise. future differ cautioned affected discussed factors, news these and events hereby forward-looking others, and Dominion's any that of update no operations and undertakes a statements new Securities statements, whether Exchange may information, materially results And result in results release. by as The obligation be statements. forward-looking to

you your at As questions just to before returning We time we ask to that a before final question begin. limit a today, note welcome yourself but one the queue.

Marty, Chief Officer. turn over to conference Executive the Marty go time, this to company's I opening for President the like At ahead, and would remarks, Freeman, sir. please

Kevin Freeman

the with to location. we today quarter our glad we issues. separate take any if Therefore, After the today Satterfield, there call taking our questions be when morning, CFO. am are questions. a connectivity please Good I from on and remarks, brief is to conference bear are joining your call. me us third call With welcome some Adam will

economy. the Old softness Dominion's quarter in domestic the reflect results in financial third continued

volume the share although revenue diluted a our year-over-year and during on and share of trends consistent the first with per declined the remained basis quarter, half Our earnings relatively market both year.

many challenging, be to team costs, job our and managing While decrease of revenue. as was the cost to the increase also revenue, from primary This the continue categories discretionary our however, to the in spending. a of our increase operating effect percent good our driver did control a in our of to environment for third caused a operating variable XX.X% The deleveraging the continued quarter. we ratio in

consistency of consistent historical in have which We share cycle. is our our this the the with economic been parts slower during with year, pleased market experience

strong new we retention have customer also and to trends, are winning continue We business.

Our customers remained simply quality market a our share few have at of long-term also and of our that service of shipments weight that to shipment plan. continues strategic per supported customers. foundational These us. they had our average the by The stability to of lows. has value we our be overall fewer elements historical offer the our to contender And are

was the X.X%. our of employees quarter, was XX% ratio our cargo on-time execute continue these and service The third during OD principles core family as claims on to

like customers' our you incredibly service freight these remind service up While also simply claims that we free. are we and on proud more would much and of time statistics, delivering means superior picking than to

shippers responsiveness that selecting doing business of the attributes representatives. customer such ease carriers other of as and of carrier, trustworthiness, plenty are There consider and when service a quality

its of results different comes of be service. the #X week, a & XX attributes and annual measured value-related XX Company Mastio measured sizable published named and against as it competition we XXXX XXth and honored of its year. XX the of and consecutive of finished shipper Mastio the in service the were last national our maintained study lead overall by logistic when the professionals. recent #X to LTL fact, categories survey provider In quality evaluated for OD Mastio to part

employees for achievement. our family like our OD the commitment on this entire company this remarkable outstanding team their I And customers. congratulate like to I to and would of to would thank also

quality believe to differentiated in term growth. our service our driven continue marketplace has that of We consistency over long long-term and the Dominion the profitable and Old

of While perspective. accomplishment assure becoming standard our best put with carrier that was to that customers Every in of highest XX motivated of business carrier and can the member to an each straight the team is delivering provide success, and has is in hard, keep for our played OD in incredibly hard our us best you a the the remaining the service. years to is part incredible I promises

and continuing our also day year to are and after maintain disciplined our to customers service pricing. able By to year, we provide to approach after day long-term best-in-class

for has We which continue on investments created our additional our our industry-leading ongoing many in and support and yields value in These to cost focus inflation offset value further to proposition. investments have consistently ways, improving customers sufficiently our technology. enhanced incremental capacity

Our customers over able value which of earn and to allowed us more to our their be time, have more business. recognized proposition has

share we any years XX in a than the As result, carrier have won over more our industry. market past

While will the better we improves. sluggish in the ever inflection respond occur eventual than for that to as economic demand economy longer environment ever are we much positioned anticipated, believe the remained has than to we

the improving most to capacity, people committed the fleet importantly, environment. of the economic have team of We advantage take and an

the recent to we market the the well gives biggest tremendous as unique have we can company of each as the our be also excellence study most and confidence results by conversations employee's next the ongoing XX with confidence me This Mastio years. customers. winner commitment over bolstered that share Our culture is

confident for on in opportunities additional for focused to additional remain our profitable By we growth, long-term staying shareholders. value ability create our

morning, detail. you third our greater us and Thank in the this now will joining Adam call for quarter on discuss

Adam Satterfield

the decrease decrease morning. of the year. from Thank X.X% that by one offset in was XXXX, you, the reflect totaled hundredweight. a We per tons third good the of prior X.X% for day quarter Dominion's the in basis was Old X.X% revenue results increase Marty, so the per and had partially quarter year, per billion on decrease revenue $X.XX workday was extra These a third LTL which LTL revenue in X.X%. this day

On decreased basis, per a X.X% decreasing third day compared the quarter XXXX, X.X% sequential when day tons the per LTL second per for shipments day LTL to revenue our decreasing X.X%. quarter of with and

per change and per X.X% LTL metrics the day. comparison, per increase XX-year of shipments an an average X.X% of includes these For revenue in an in in LTL sequential day X.X% tons of increase day, increase for

a third X.X% August. X.X% September. as decrease compared for X.X% to changes as follows: August an average increase respective July of months X.X% LTL of quarter these change to to August The compared per is in X.X% in and monthly decreased tons an decreased July, as in September during sequential The increase were in as XX-year and compared June, of X.X% increased day the July,

XX.X% we a to X.X% of October, our per XXXX, expect For decrease per approximately day day. with XX.X% X.X% tons revenue when our approximately to compared will by October to decrease in LTL

Form our will for quarter provide October the in third usual, As revenue related actual XX-Q. details we

XXX third quarter Our basis the points XXXX. for XX.X% of operating to increased ratio

expenses the cost as revenue our revenue. had As operating the decrease a basis percent contributed to our point increase This deleveraging a of many quarter. overhead in the our XXX Marty during effect of on mentioned, in

primarily and time also the a to as to the operating same an first for due addition, revenue percent operating when this a The was increased quarter prior as year, the dental in of our of revenue health In associated our with percent of direct group year. in cost costs direct compared increase our and plans. increase cost

As period year. XX.X% and employee of of the in prior our of a benefit the increased same costs quarter result, to third wages the XX.X% from XXXX salaries during

expenditures $XXX.X Dominion's XXXX, for the the periods. for were X the from million operations billion totaled flow Old quarter while $X.X and respectively, $XXX.X million and same third of cash million first months $XXX.X for capital

We the million utilized cash same our and the program quarter and of months $XX.X $XXX.X $XXX.X of dividends million third X totaled repurchase respectively, and our XXXX, $XXX.X cash periods. first during while million for for share million

effective effective quarter quarter. rate be was XX.X% XX.X% for as to third fourth XXXX. the quarter for the XX.X% of of third tax Our in the to We our expect rate tax XXXX compared currently

prepared be at have to happy floor time. for concludes the this our this questions we'll remarks morning. Operator, This

Operator

And our Instructions] [Operator Eric Morgan question first Barclays. of today comes from

Eric Morgan

to on near worse relative just start sounds tonnage term. declines the wanted guess October little I a It like to I bit getting September.

recently? here, would So coming shipping into you be that and the has operating then kind driven here And helpful. trend are how thinking of ratio end being your weights about been lower, by

Adam Satterfield

to left how down obviously, is more the about Yes. of October, the midpoint rest tonnage so we've the we'll From year-over-year volume a finish see do. range than would gave and we little of up in gave, a is, And X.X%. be finishes many take normally of a got this month month, that days range that we we the why bit standpoint,

X.X%, But XX-year you is The October, average about decrease of sequential call change in take October midpoint if that's got our September. it X.X%. that's that, versus and the down, just a sequential of

we've is to encouraging in first actually that so normal quarter. first changes what to been, trends been time the far I say, this it's of have been. month month our would So close what relatively sequential the the This see our have volume

yield volumes strength we've are So performance our continued as seen good how about we feel pretty trending and well. that in

watch to that. continue So we'll

year-over-year, had if some competitor the -- had the just freight if we is recall, system, that you issue a I by and skewed some cybersecurity temporary think, year, bit But into coming a will. had you last we

a there outperformance October good a about freight far there we've now, that incremental thus but feeling that seasonality standpoint bit picked was not caused is obviously some So trend. unusual, up the and right from

Eric Morgan

ratio operating if side And it. you just that, appreciate mind, the I of wouldn't

Adam Satterfield

going Those big one. for into to leave to someone was I try questions else. that are maybe packed Yes, X

to try questions just one. to I keep So

XQ to But any that's that adjustments. The ahead to we deterioration, know anyways. progression be and basis it's a going normal because just to question about to XXX point and XXX XQ excluding a insurance go is address

in an do assessment quarter year. fourth We actuarial the every

last about think had we basis are good guys, an adjustment Sometimes headwind XX adjustment when it year. unfavorable is like actuarial came those a sometimes to point I the last year,

going gave about kind end XX of call. call So continued expenses into I Revenue basis we out result, that just for slide what a about kind quarter XQ. overhead saw scale be that that ought conservatively, to the play the that overhead risk back expenses. revenue were second would from came points. reason our of as XXX third impact to quarter, end standpoint the think second basis would we we think fourth and about of And than on that headwind We thinking probably in at have a the when of the the And the had higher in I just softer. the up going quarter, guidance points at the anticipated quarter this

our risk the for higher And last had quarter. think have a this Those year to what the then than year what in I been higher continued with period we cost. were benefit fringe the and trend also has been they same respect than third

And that could trend a a But bit so in I there's quarter. those things risk both of better. may fourth little stay something continued the those think higher are

have, I volume we think standpoint. pretty trend out the like I October good mentioned a is earlier, if from starting

conservative I in if if you just some right give But think be pluses can we'll terms And closer probably then up revenues stand scale things a obviously, now. seasonality, and minuses. mid-quarter our our So there. where that get And updates, slide from just we to better favorability to can of some there standpoint, back will.

Operator

from Our TD next today Seidl question Jason with Cowen. comes

Jason Seidl

not looking sort that by of in up last tonnage as the December, they and issues get down October at of October? 'XX. You sort of as numbers we in beyond SD's of drove really tonnage so year then easier, we're that that had Should comps for brought normal expect seeing you much November sort we're probably

Adam Satterfield

that's think I Yes, fair.

average our November December we XX-year at October was year's the then X.X% our outperformed, definitely I a versus [ toughest the 'XX tonnage were performance X%. December sequential 'XX. of look and of down XX-year average back increase. And in versus there ], I in last X.X% is is November think down October, go The is there X.X% and comp. When

the some the probably So that how depending of this I given kind the in October, if of if trends, toughest and but get tough in think we on we then, But business, a holidays on, will, you is comp, is of everyone December back we obviously, whatnot. November quarter acceleration if hang the for always outperformance a there. had month little and can bit

tougher bit So -- be a that little will November. versus December will

encouraged But we're we this quarter, getting fourth to about we to is ]. also days We're thus I go think far on [ the finally whole, like through floor through good hope how quarter a things mean, And what you've tough. performance obviously, as is sequential got this many feels XQ are in see trending. It's the and get October. this to I

But we've sequential standpoint, to a been think about underperforming picture now. about from X.X trends big for years normal

So the we these go We've finally election interest through end coming I declining. it to quarters, behind certainly got the of rates soon. like the finally a to uncertainty pretty but are feels we're respect have think, traction with this to cycle. tough We'll have seen, of

most shines brightest the seeing our starts get to the to for some growth share. that's to our the for deposits, model And industry we inflect the we so and hopefully, when back win typically industry which when

forward final year, is out strength. the hope in good here looking a to this quarter year and through we starting in we're So getting next

Jason Seidl

hope year-over-year remind [ I And the that it. with in out weight us? all? October too, comp impact ], at SEs No, of did so Could per you the shipment for

Adam Satterfield

per what with would normal line our weight average much be. shipment right last it The was in year, pretty XX-year

in a per [ down year, you'll the what -- little shipment in ] an quarter would and X.X% get Typically, were of to October about from we weight were bit performed quarter. then shipment pretty we third weight trend. So increase normal last alignment the in fourth per much with

little bit weight actually shipment the us July, July of in a back we've seeing average, kind surprise it ticked speaking of was September, increase. somewhat but then a an was that's in per for a in down our underperformed And consistent something this bit came are quarter, the what XX-year be. point, but this And actually, our little would overall third further I'm at it But August, consistent. pretty bit. year dropped in weight October, that a bit now, of a of with was

average the is October, XX-year typically, So just said, I X.X% [ ]. like in down

that's shipment thing going seeing generally So If a higher as a increase, an little for obviously if more we're a shipment, per revenue getting weight of that we're improved well, we're drives well. to per bit little bit business have productivity as also. good and

as So hopefully, and the a hope that sign has -- generally to well. been economy of with respect

for we to start continue to that see to be us. another will to So metric watch if things see pick up

Operator

Inc. Our comes Daniel from question today with Stephens next Imbro

Daniel Imbro

to want maybe on follow near-term the I trend. up

this guess it appreciate So Adam, your some remains it I any guys if going realization guess, inflation? above to into you make the to the customers? would you how bit broadly, that price increases the see And here shaping you like seems fourth macro you realizing market moderated is as week, update yields to expect the for in up harder has price I keep how irrationality talk LTL yield Or do color a tonnage October. growth you share across then the quarter? more could on industry. I see for

Adam Satterfield

having out yield performance to our year And service achieve quarter. Yes. through it third performance. consistently we're a I takes what the from support to able superior yield pleased and in was year with

gap And of between that, hopefully, to to so Mastio repeat, XXth of really, we've for been our metrics bed faults we're straight closed. service And the that just the put year, has the landing deliver. really and able some that competitors proud has award to us

see to performance that results. pleased really we're so And year's this with

and excluding came X% talked with have put But normal hundredweight, the us to fuel call, had little quarter. a I revenue in weight as respect that would lower end the range. I shipment the seasonality for last to think And the at in end referencing And per we at of our top range bit just third granted, we that surcharges, per of X.X% Jason. about was we the

to helped the But But performance the per would and does -- like we that's that expect. to certainly seem continue consistent me, what so revenue through hundredweight. quarter, it

and that technologies is -- to support cost investments offset our process Our in long-term network yield take so our our consistent continued and forth. and management a and inflation we in tries approach

that quarter, to the of that for as And out X.X% would plays excluding watch go up seen to throughout fourth seasonality the per range. normal type throughout if to we increases. hundredweight continue in that last So X.X% to fuel put we X.X revenue years We're it. and this but through, expect the in period. seeing get We've continue year we've been economic really it weak that we'll this

we go same we the on execute would getting And same as expectation this through we through we're and just as year go increases consistent bid year and that renewals, continue through well. be as so and as that be to go would philosophy, next the

Operator

Our Group with Wolfe Scott from next comes today Research. question

Scott Group

that I just question. up on want last to follow

So And up, call yield I it, yields total that think, I ex negative. guess Adam, X%. your October were about update talking fuel you're is

fuel this just I is in that's that is drop-off entirely So this right. -- know but make is yield -- fuel? want I sure to down

just then are pricing? like are or I about in rational guys -- seeing now. pricing you certainly or seeing to right competition that of more like ask There's you market directly, more it sort it And just concern not? the

Adam Satterfield

Yes.

down to but The of year. with you a back Just is down, give we but about per to trending exact this October can address, lot fuel-related. last of that Fuel and fuel number, October, right into the at hundredweight XX% is it. now revenue didn't point compared kind is of

will, we compared a drop, what just you So the quarter. in saw bigger to if third

last was averaging year ] through XX but year. X [ moderate we ] ] the quarter. up should October, last XX a of progress for ended [ as the [ about And fourth It about in X that fourth quarter gallon full

a something that that's So bit. will moderate

issues looking that we last had forth. trends on and time some you so mix disruption well, month that one given as had year, some And going any at of

see expect still sequential trend play like up that X.X% being I X.X%, that mix to constant. assuming stays would out ex mentioned, and just in overall yields we So fuel to

weight increase but that If continued shipment, on would good some a the we per thing. reported a be per pressure in see that hundredweight, could yields, that put revenue

So that's what we'll continue watch. to

we only to pretty that I the respect what wait with is us. the I But overall the all our year. has with consistent and can able that But have carriers we've their think proves environment And increases, for and get being I shippers other we'll continue been whole environment, that approach. been offer things can what commentary to considered and think this and like. report proposition stable, what to to see value our we the and have speak

So it hasn't impacted market impacted our us, share. hasn't

Our has period. what economic flattish, been we see Marty it's market share which, through slower mentioned as a earlier, typically

little And we're to an a a a well economic operating feels feel for what this we've years ratio page to about cost, couple the like against I having positioned and last of our managed tailwinds our time so and from economic now, we good back done, win with positioning running managed of It standpoint. bit turn our of how we've give feel ready little we're for turn around we've us the executed, through can see change. to bit things help start long a like been and whenever

Operator

And with comes from question Goldman Sachs. our Jordan today Alliger next

Jordan Alliger

perspective. not we pretty much the a being there I'm where to I some are pockets a manufacturing, your you is case? bottoming or wholesale standpoint, maybe volume? know could it distributor, curious, Or high-level point retail, just be trend of it whether any favorable even are base, from customer hopefully, from

the tonnage we quarter? seasonality of a then quarter, if October. think balance secondly, shake of there If for year-over-year normal the October, September this normal way aggregate is where out to could kind from normal think about we And through running to we're seasonality have run in I

Adam Satterfield

can to industry-related better as breakdown of which, of revenue XX% the our The seeing mean, weakness I industrial and a is customers, from Yes. our with customers for base, performance imagine, -- revenue. we're continued our retail-related you with us XX%

last XX I decrease we've ISM faced XX, ] months we [ challenge over numbers couple and showing think So now, seen. But that the period. been has down this year in that's certainly the of that's been our for that and

the bit and our actually little customers. would But better. X/X our you some if the Really, for the our revenue, revenue XPL retail one thing of growth spot has we look XPL saw with a that bright third quarter. third-party customers logistics in represents performed be a probably

doors. So has feel there's to we've like especially quarters would happening because say, shift competitor been when good last in me, over that some we year that the, their trend that's talked a modal been large recent I that closed

I And the modes think ended LTL for and find to many truckload a in And have freight. a especially XPLs. people lot back just see up in of the many that shipments we'll cases, between trying times, with world. might home were forth movement

of And tide whatever coming so outflow is an that we're I finally going, back seeing influx now business the in, back coming was think in.

can that XXXX. we if out there, thing good and a we a so as project about continuation mean see start should And thinking

So spot brightest base. probably to different the customer that's pick through the

Jordan Alliger

out again, seasonality on balance of quarter? for shake from for then normal could quarter, whole any And here maybe that where the of volume the just the kind thoughts

Adam Satterfield

it's I a we're from long ways Yes. there. mean --

but hit put to quarter. for -- were down would if per So that day to X.X% tonnage full seasonality, like the normal X% we

just I been would mentioned, years. underperforming for about day seasonality billion. we've look And seasonality, couple you bigger per of revenue revenue, $X.X be like the of picture at at If kind last at

of if least where normal you we of the what billion. underperformance, rate like it'd third down kind that be in quarter, at So were take $X.XX

progress through quarter and the to just full we our So mind as keep give it's updates. in something

all clean as things models there. revenue the that October worst. overall should our get from And per better standpoint November, we'll and the up you mid-quarter into hopefully, from Obviously, will start comp give your we day a in help update look to looking then

Operator

comes our with John Evercore today Chappell And question Instructions] next ISI. from [Operator

Jonathan Chappell

little maybe certainty. answers, of until election. just uncertainty of that one heard is we've Adam, And mentioned a of you more about end of narrative the shippers this kind recently a little the kind your there's a bit at around pausing the bit

but several way a diverse for customers, end pause of macro been be there what you've that last a quarters? out headwinds industrial the any temporary versus very kind the market frame have to you kind of may just ongoing is of know I facing

Adam Satterfield

Yes.

think in in best the And recent have time, look they you in I history. that freight obviously, at years, years, when haven't election been you typically, uncertainty. least

headlines I conversations well, we've know people right things so of bit there business to like customer may what that take. may had impact plenty as and being where now. And think they policy look are have new what until been a directions and conservative And their

that's that things have So to is at expand do some the at grow to I people think for something that temporary, ultimately especially create to that they looking right now, creates get business point, opportunities freight us. how how figure to their back and and but and want will got out

I of just get more uncertainty, holding last think the so. something quarter that level once economy the has this kind one can of that's or that been at we potentially that's least thing So for back

we a there's interest and rate people taking So get effect, to consumer-driven consumer be point. get we back have if balances long I think and down, things, as that will taking And replenishment drawn at economy. some people a start healthy cuts buying are got as past inventory get we're and

pick inventory be that has will, been bit renormalize, scale And we if we'll of quite drawn we'd to so able sort feel down. a And expect freight. once of like that we up you

Operator

And comes Bank today question America. next Hoexter from our Ken with of

Ken Hoexter

Is those bearing or excess at anything a but do capacity, shed some can are costs top like sounds down seems that's line, maybe costs, run. to want in consistent you and to this fixed industry? Marty, point Adam there the like it to starting cut So

XXX XX ] comment, ] that about to [ [ of fourth the XX.X type talking So deterioration? point And just quarter? you're low was OR XXX to clarify sequential your for basis to number a

Adam Satterfield

and times, correct, in that lesson don't to every times in start the action keep are you years I quarter cost, that's that's But you good guidance bad. to if cost think I look, belts Yes, taking in and that day, know Ken. year how out, know if we're range. you manage learned tough, our don't and think don't probably a sequential and good tight ago. I when manage where we That in And was times the from year

So that's for an our us ongoing team. and focus

that metrics lack has and stay you've that of regard, system, we a year top a little been density opening top in effective expanded a very seeing standpoint this And we've and on And terminals on X the especially we're when the from always of. our this X year. have got system productivity team bit, in or

in especially, we shipments per had had third hour. the hour. delivery So pickup in our improvement our shipments in an per platform quarter, We improvement an

the despite So some third improvements there weakness. quarter in volume the

the Our load to volume factor with in that's in is weight weakness, again, down some shipment decrease from pretty a was linehaul But face pressure. alignment standpoint -- it's per continue and much was.

not So it's performance. atypical to see of that type

our a ever. slower little important schedules, can giving and to service why in periods, important and create service than we think most of cost keep a keep headwind thing But giving bit but that's the to us, to run more in it's us, is for it now

so And value has that time. proposition the certainly over supported

million $XXX and to million look we year, overhead to and $XXX about have ways respect at our each this quarter control those With spending. been yes, cost, discretionary

back in cutting was believe the that we on capacity still got ahead, we executed to out that a and term. and expanded for in think growth CapEx we eye I year. want like to the plan that on this for keep long runway fact did regards And a our we've long we why

can over up next be, some go the market due expenditures back things cost network year potential add just grow we'd our some but expect, into into and we of to help that back, that will to as the that, continue share and we time, cut our that our we'll capital Probably, have, confidence we this capacity cut to will other probably to look do like fleet forward. we what have with and tighten but

years and through But be thing it's whether get growth. 'XX, getting XXXX whenever pays cycle. usually biggest growth a had into do XXXX, where when you coming just the will upswing, about significant at be the years, X an revenue think look going look we've performance, biggest and you some back historical us. we this we that's XXXX, to And investment when down XXXX, for And at dividends 'XX, cycle out to of the revenue

down get we've charges of So to as feel outperformance back operating revenue. with to to a get can seen get it market percent to stronger we scaling and is economy share a overhead our to I back like good about if back respect today been in really those ratio the past, having and where where where the they've

X operating revenue a percent higher than XXXX. points, were, about overhead we say, We're as back in of where costs

us So get of we annual lot path ratio to have. on there's that sub-XX goal operating that opportunity right achieve back a to still

Operator

question next Stanley. with Our comes Ravi from Shanker Morgan today

Ravi Shanker

share take much from if on this the survey? you some do and a service close? is happens risk maybe kind mean, long are that out more I as maybe Mastio much details on guys see you're and you've the closing as of few others kind not competitive gap gap said to your that you hearing your that narratives closing thoughts they're -- Can get more from up as to you customers the on there, So a that of what results there or that does here? of service, not well. for this can time think in But they price as on the

Adam Satterfield

their gap our why we others I sizable think and we've This other and was results. And performance the don't and were, not heard that's know year they pleased between that carriers. that, are were the the a maintained. what with strategies for I what and question that's

and And not sit so going we're on our laurels. rest to around

to just to can Marty earlier, just more look delivering service better. So up time. there's -- than that like on for than we're picking we freight going get And and continue to said ways

XX different And we that want Mastio the be and measures, each so best attributes of in there's to those.

we'll working so keep solutions And hard deliver our customers. for to

going And so type for many that us executing and on we produced worked many, we've growth strategic strategy model to that for a value profitable of same has that keep and years, plan the had proven time. and long-term has the same producing over shareholder keep want

able carriers make, we've as decisions future. it that and temporary And dealt work it's to I think we work we'll for other something with continue be in we forward. years, continues it the go I to whatever against think -- to

Operator

next Wells Fargo. Wetherbee with comes our question And from Chris

Christian Wetherbee

cycle? to historically and saw LTL share We've truckload truckload quarter. Or you to think And guess, But Adam, is share and relationship the XPLs you you pretty maybe it's truckload. move TL does I was through ask third mentioned the back between LTL that as obviously, this your back through wanted it cycle, that in it a as terms the in more into next little a dynamic seems and to relative between guess, has moved bit normal LTL? about back pricing price. the I wide about seen than interesting. maybe to forth. really comments be I that happening upturn up significant do change been doesn't of anything push the Obviously, in take that of able volume like

Just kind that of these think about curious relationship days. you how

Adam Satterfield

Yes.

and it's happened how fragmented very world was that the think year pretty unusual because the help support forth. I the is. and and to gets so last obviously, with of what industry volatile that respect volumes pricing with And think I truckload

And created so freight some that opportunity.

Yellow that it hauling one And a that, but well. as carriers, hand, well. LTL that moved shipments freight had to had the freight their to remaining delivering was felt lot I It get of somewhere. into go went much truckload day, world went as to the picking per like pretty of up, per XX,XXX day, on XX,XXX And shipments customers just and --

about in makes people end to in if the the go LTL those to shipment skipping And from they stop really it. they're truckload A XX,XXX that a some be the think makes can that truckload really try there. full carriers time day, we've doing world. take fee designed to of at But doing freight to don't it us with environment using advantage different love I could and of shipments for multi-stops, will charge than trailer. is they come to less back lower off sense pounds, rate And a to B for more that talking a But zone consolidating when things due heard that, and if sense

maybe seen aggressively than little freight through back that world, a into cycles. what think does I the more economic So LTL swing we've prior probably

peak on XX% we When universe, second the the shipments in data get quarter the down, of from at overall that is down I are the look LTL about XXXX. tonnage

of shift and of we've economic some that model I this So some think seen that was as well. but loss, it is heard about

as I us. but going it that directly, and then existing as in, those for something But that having of be is with usually come customers indirectly will opportunity whenever will to customers end many think be competitors, service other good So to I that those up think well. issues kind starts of wave and well, back a coming competitors that us

a So think fronts standpoint. this inflection, help that I us whenever I we've think multiple that cycle volume got from should we see

Operator

Our today comes from Ossenbeck next Brian with question JPMorgan.

Brian Ossenbeck

Did pick of should clarification. from back the either impact in start your here any perhaps on customers? network, the And or up you fourth see some hurricanes quarter? Quick that to the yours

changes to the next at into looking way year, at making NMFDA looking class then ] some system. look [ And guess, another to pricing, the is I

I think It's perhaps terms based. for that for in next of the industry effect on the early comments know I related any the as in if year. don't dimensional got well? to and implications of middle yourselves, the more it's shippers you going

Adam Satterfield

everything from to were some got everything understand presents Yes. standpoint. employees property We definitely well And it of the We related as some we hurricane. health that had well. as pleased as all revenue challenges okay standpoint from through, our loss a operationally, initially

Our fine as network was well.

the in were properties of any I damage. really none lucky sense of think we our significant suffered

disruption continue have some before have systems Carolina, which are that ongoing typical to is year through, And for some We that be but move nicely. will North like were major you will some of to recovered those big impacted in repaired. though, when roadways interstate the operationally, of up Western down storms bit, there perhaps since a be a

that has California does seamlessly standards. how Carolina team looking point something rework we've if to and freight any within something we between, got in that going our in out job, though system Eastern of line-haul move picked that's get our need service up and our to operating we a that North freight and the management So phenomenal figuring team to make that sure

with that storms from the how team responded those So to to challenges respect pleased came the through.

was what the part second And remind question? me of again, the

Brian Ossenbeck

NMFDA, at we're looking for system looking just It's class the mid-XXXX, at changes Yes. the some thoughts on that.

Adam Satterfield

us. XX% -- That's, our dimensioners freight our and probably of a already already major good we're I think, we've for dimensioning We today. most of in service got centers, opportunity

to already something effectively be we're to that up accommodate. set that's so able And

to provide continue that strategic another customers got through for we'll year, that us advantage competitors. we'll those next and bit work but able little So changes with of delayed a something into against some our be that's to handle may

Operator

question today Citigroup. comes Rosa from with our next And Ari

Ariel Rosa

hear Adam, curious just from a up the to It's Marty, quite on buyback. Jack, thoughts bit last your year.

management price And a there obviously as yield, You modest they towards buyback curious fairly any dividend capital undervalued? the under for indication saying of the the buyback is is dividend? what think you're over that X% still at dividend. like and essentially opposed favoring the is it that logic have the directing to share the most just looks your is I'm

Adam Satterfield

and on at excess that cash, we program cash capital XX%. for buyback Well, and we would the Yes. that type and in today we first back flow reinvesting XXXX, the company the model we of our capital the generating use return be with for the started still have was were invested changing, look cash when was of strong in that was first returns

tax-efficient all returning and be as is of buyback you the the But a with. means XXXX and And buybacks, of then we requests, just to we started will, was, out of with said, flexibility implemented But provides respect the that kind lot respective capital. preferences what to round different would dividend program if I the and secondly in shareholders. obviously a

on still we've us, When of CapEx expenditures quite to market meaningfully we're the needed we bit will share step flexibility a up capital to, like to be. buyback demands us and year, were generally our still every continue investment based on and number what XX% that of having to allow XX% trends feel of spending volume we got that if on ahead revenues but

really most when the quarter in was on -- we we the the spent second yes, this buyback But year.

due the out, to weakness. And approach a stock of sort the grid-based make. take consistent consistent that are pretty in investment some we quarter generally of with that but and was quarter just We

big in But spending up we ended when then we period. stock's like did $XXX when when capital. and in returning weakness second less Buy lower need we'll it's and quarter, step in more consistently higher, some million as see the but be over that we

what year stock with buyback And was we where billion we consistent as back the on and XXXX pressure, that $X.X that in did under program. well, the [ ] was spent

cash would capital always what So from what operations that like going and would what what somewhat look strategy the more some buyback -- each years may on be is and to year, forward. some forecast be target our a the less that then spend looking we're the at We'll we CapEx of fixed we program like outward dividend years at be seeing becomes but year. look balance needs and flow this for think and

Operator

from Moore comes with question next Stephanie Our Jefferies.

Stephanie Benjamin Moore

truckload, are some seeing pricing with the and you that just not of obviously, So potential high hoping largely throw the about thinking driven, demand the cyclical guys you pretty capacity down shed was I of maybe think kind it LTL obviously, dynamics, could so down, COVID we've light really where it I on also but talked soft, Yellow. playing comps much be the on but to freight was obviously, upside? and front, seems you that's bankruptcy through from

line we what could of would returning to an think up-cycle, or about kind in kind of of volume evidence demand? growth? we trend kind see of So Or see actually kind or that just of you seeing suggest above-average you eventual normal that are you this inflection kind simply we as or think a are

Adam Satterfield

Yes.

that in we've per with per and seeing, generally as at one down would we high historical shipment things now. think our weight weight past. that start something I lows, been our We've first that's that down is been pounds shipment below X,XXX as of X,XXX the pounds

are customers' And picking seeing for that's orders Generally, weight shipment. products our so an per in up. we start increase

so multiple is indicator you then quantities But side. shipment, eventually, into start there's that's that you the it on widgets be weight And go and more seeing from shipments, every so will. where will to the And if on there first sufficient usually there. turns

Stephanie Benjamin Moore

it. Got

I you isn't that and normalization should reacceleration some see So a saying do guess multiyear what you pattern? just here this you're is believe

Adam Satterfield

I skewed, for it's you mean another in somewhat period, XXXX. we a in I we've revenue to we X when any billion probably that, is billion Typically, by XXXX cycle $X be lot quarters a long a X as of anticipated. and into down to grew been of of revenue this $X Well, and ever mentioned, so sure, for through than acceleration. think now us go in longer COVID, creating slow of

we've So industry I a second through maybe big cycle that now XX% we're down. like about But things XXXX. -- there. cycle slow The I up mentioned, gone is longer seeing from after down quarter a think of

continues see to path go The from growth And 'XX, that 'XX industry, back it 'XX, to on shoring reshoring that freight well. LTL. that believe opportunities if as growth of And If with demand chains. that to a and activities, near a pretty lot over e-commerce you for continue and effect supply for opportunity creates there's we we've on consistent LTL. time and ATA developing to we trends seen was suggest the

trends. and time the benefit that industry And will from so would over and those that benefited expect ourselves from we both

grow grow think we market all have then as and that we'll I see continue to based we some And there, So we expect the feedback right think continue of will, from the our we've got we'd continuing out to those will on I to from get that industry to back and share the well. normalization. come ditch, and customers conversations,

XX% increased at share share. in We And to were back about X% And we're today. market at our XX% XXXX. we've

what And share. increase to years. and really So been is biggest share significantly we've wins XX market share been over last winner service able the the

have capacity lot to only the capacity, thus the of have half been been talk But that centers there's got facilities in far. have shift reallocated. You about about service a from and been those reallocated of Yellow

our winning recovers, to that But into capacity-constrained think demand going future. and you're more industry the share see once service, I a us for again

there invest network. to center we're curve. That's committed that's And on our got why that service to our of programs. in would more excess than we And So right typically have capacity. now. ahead CapEx we're XX% about executing We've trying

we that's produce us we the and gives in can strong that confidence operating growth growing strong past those inflection incremental those take a and once able to to get that ratio margins growth. start again, really improvement. the before been profitable in lot we've economy can it's of that trends what back revenue we But see produce But to going seeing

Stephanie Benjamin Moore

sorry, I'm if you real mind? Adam, don't just operating quick, days in XQ,

Adam Satterfield

versus days we this XX of XQ XX year have Yes, in 'XX.

Operator

our from today Bascome comes next And Majors Susquehanna. question with

Bascome Majors

the would about lot that's think of Can some demand first quite we earlier. noted check from and the view subseasonal we you at models? you level best for can just set quarter, times, as year, as as what second world Adam, a standpoint profitability a now business seasonal a been in the the even quarter and get we of be so a time performance margin seasonal in into our of next your

Adam Satterfield

Yes.

ratio the and the generally, where that's but -- standpoint, XQ go that's And of first And the basis for then typically the typically accelerating XXX And an in points second there's normalizing second no again, is revenue XXX quarter quarter where adjustment that. is we insurance versus major The the XXX to if first. adjustments improves kind real is points increase. to get quarter improvement. actuarial we in operating our from basis through that

gives when get but growth, into XXXX, a if into calling you and you -- have above environment, more period where that obviously, I'm few for years where into can not we And sequential if now, an a get like revenue this go you example, if get it back we opportunity.

now out the put our and overhead revenue our direct the to it recent in our third and most were XX% bottom as of XX% the the percent quarter, between line, split were quarter structure cost XX%. about To cost costs way a in is

operating in year we into you when you of or get outperforming growth generally costs those ratio the leverage normal environment up that X will, cycle. if that seasonality, allows it's that So all have you're revenue when swing first that in on that fixed those to

Operator

our And comes today question next with Wadewitz from Tom UBS.

Thomas Wadewitz

Great. Yes.

pricing may So then some cycle? margins. been some could source you on kind I seems of and is inflation this think if if It bottoms on differently see that's wanted of acting offer thoughts be to a where you pressure like

to about So you X% what Or think or order into like next how shipments, like any if we cost getting a stay cycles? you backdrop that see in you you get X%, you if spread -- flat would do go down price about just is need it's we in margin? is when help keep on stabilize need about in stability shipments Again, to just price got prior on easing? it you question you do maybe inflation a think relative to maybe think year,

Adam Satterfield

I revenue and over mean of price cost with ratio basis to And that's Yes. so targeted XXX to operating trying Tom. annual That's reconciled that a XXX capacity to what forth. observation, per the long-term of effectively technology has over in well. and support good variance shipment as points been per improvement our we've cost investment achieve and spread shipment time, in

in. earlier volumes saying just was benefit that of was I the what first the of get coming recovery, year Kind you of

leverage. all shipment from side, -- the per overhead helps on it so that an And you standpoint, start cost a getting you from

But inflation per had after we this some year, cost started on seeing out, shipment.

cost ] for averaging see think Our end for we'll inflation shipment this in shipment that's cost year the up the target And core, X.X% range. year. where for to was I per X% to [

back And will. you to so if we're kind normal, of

has average X.X% X%. longer-term to been Our

And continue on to us been. so that what execute has trend we'll the of north But volume tad basis. bid-by-bid weakness has kept a longer-term

and I at are their will and cost the customer come look look of inflation. increases try for profitability opportunities the bids that each our to mean our as offset at is the what and philosophy ask to due accounts

have, conversations that's And so starts. that what year that -- to up those have are continue we'd and to we the the cycle expect whatever

board. is that usually, And stronger revenue yield and and are on a that new customers we the trend usually drives really as The well. coming performance little how bit that benefit strong have all

some we'll actually that will we those seeing we're for And into part cycle be things that eventually so look do where whenever get next the increases. of

like year. think don't just your done about look we've this we to I the every question floor, But quarter at

mix the year, we increases aren't down. we're going As costs is progress through for looking because our constant,

And so sequentially see to what that's we're looking to after and increases, we'd get quarter quarter. expect

Thomas Wadewitz

a this see think kind is what reason saw of versus year you inflation don't year? you to And different next

Adam Satterfield

that's that going get think to happen. I volume we've No, thing the the shipment again, it if be a got just that best into opportunity we will and looking at on some per basis, can recovery,

is I ingredients: main by operating improvement mean produced and X ratio density long-term yield.

can on some side. last coming costs we that those through and the performance has with We've consistent the margins. So of density that should supported what low. the yield density our we've couple lacked once been But is our from the get network, contribution of keep years,

managing a job phenomenal of mean, done team cost costs, lower percent first we It had a our in direct second I those environment, as comes through direct has was of through -- as earlier, our quarter, in I service revenue. our metrics density keeping the And improvement a keeping high. in referencing and

But through managing job great in a a opportunity. the lot done we've down this of to of going cycle. So part that's create

the got well. be higher going up the same. is move as across per when to dock pick cost to performance consistent revenue weight is shipment probably cost The to that's you If per shipment, more the

they that and [ outperforming factors if we XX% when get had the couple inflation offset ], benefits. of into And kind wages those in go the of and -- will those the shipment we've we generally per cycle. all years. parts they of last are those So salaries, see over why our cost will longer-term costs are [ of the tremendous ] average,

that's and So that's efficient that's we run the biggest and our driver. time fuel. from miles network But as can system, an eliminate

tremendous the But new cost of we've inflation equipment. with had

our that many go mean We've Our digits. these are industry, but been that have we've significantly. line premium double to the a basis, maintenance a higher repair we're have income and facing, year. and of been in bit per on line this mile costs something they've better little items immune is it, to carriers you by cost efficiencies up on fortunate statement. that seen when operating to all But this insurance managed I offset cost, inflationary not we've been

Operator

comes Our Bruce from with today Chan question next Stifel.

J. Bruce Chan

been Marty, Is for that, the were skids that's customer pockets weight market to here. Are improving related want wrap customer. may share, to per as any sense per you shipment that you mentioned Just wallet service? of up you your be they've discussion fewer gunning softness? others seeing especially getting all

And this a then incentives little in with comments can force bit weeds, sales you new customers but existing business from maybe be the at is share accounts that more us? that any aimed on may versus

Kevin Freeman

definitely Sure. boxes skid. Yes. The on shipment reduction weight is our a in shipping just customers per less

you up. Adam in fourth said, quite around So positive -- and shipping coming and quarter Christmas we see we're up that that pick of -- a holiday as first maybe as the comes got the will bit

optimistic cautiously we're So for that.

and on on ratio our as incent growth, incentives, quarterly sales as basis we a And based operating reps service. far revenue

So quarter. we and pay out in quarter, paid out to in this look the last we

that's business, to So ] goals. they're main their and increase their [ well incented pretty

got shipments. go sell sales confidence I've proposition gain in to our team and additional So value our and out there

Operator

our Partners. today comes Kauffman And Research Vertical next from with question Jeff

Jeffrey Kauffman

Congratulations Mastio on accolades. the

all some was tonnage. down the part bit follow stronger. part good okay, of quarter, railroads little a of say, think little this drill industries they asked this a I'd at like economy this a little on questions been economy point, and other but have the We weaker do the well, I this where to

multi-stop if lighter I you product. know stuff. But look is truckload activity? customers ship the some stuff, stronger-than-expected ship industrial Where that are your you customer more is assuming comment mix of customer of but activity you a pockets pockets your your Where across some weaker-than-expected customers base? an was of in seeing are consistent, I'm versus heavier base, seeing retail

Adam Satterfield

just we've that we Yes. seen our business that it I varied group don't try we anything to [ look together be. ] our and as slice with generally -- how by retail. that I with granular expectations has greatly don't very would -- at industrial code know that know get SIC what But and generally

activity. to were indicated. some -- some getting of that have just the But customer probably holding than think customers, weaker. up like Last to was mentioned the it new we was would the trend I think I the win been little than of were better bit I performance some ISM earlier, due of we has industrial a and that what year, continuing new --

in And we're new we're reporting win continuing we've continuing look and and to we've to the accounts. customers every get We that our lost, new that month. business won at or

so been maybe why that those on And and has supported have outperformed. retail more retail some side, the of

nature. But to going hold, the going food to we've consistent obviously pharmaceuticals, got certain stay, things we those be that are commodities cycle, that through hauling products, of a or few that are

seen so related we've performance pretty what consistent And we'd to expect.

We've customer really Probably lost not has that really not lanes been been of been positive the pleased accounts. the customers. thing most consistency any from that has our share. lost I've market And we've

keep those to able been relationships we've intact. So

dropping and will thing order full getting instead increased account, they've we're customers activity. of the those again XX orders and and kind start trailer manufacturing X up, a into if how X making X all of trail per of whenever product a we pick week, take back that's the a X ready their seeing to turn got once sudden, and primed stock, load to those a this we're call And outbound to X for shipments from products of off when

But we're it's We've stay think, there. to And time, some in to continued engaged. take get I -- had primed position. but going to

time right our we very is develop needs detailed through. strategic Our a and We this sales going We're the year planning are. that of year bottoms-up where to what the help in -- next like. will to customers midst prepare build now the process their team understand look to forecast with what of and does our for what

needs our we're customers XXXX. so now with their will look into us engaged like right very what go as understand from And to we

to an woods have not yet, seasonality on what there like speak, say what in are to trends those are multiple that looked been September, tonnage weight for we've of able that's the of optimistic kind out holds. and like what there's rest October time said first for for to And response based positive Being year to indicators. shipment, quarter October. respect in be to that to thus next of to the then some -- but reasons questions, versus our all we'll in come we're I've the of and But see far closer may some time so with per increase the this fourth see

Operator

to question-and-answer our concludes remarks. Adam to for turn conference This like any closing I back session. the would over Satterfield

Adam Satterfield

your and anything today. participation to you Thanks, appreciate your have We feel give Well, thank all great call us a you for have day. questions, further. and if free a

Operator

The today's now concluded. has Thank presentation. attending for conference you

now may You disconnect.

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