Covenant Logistics (CVLG) 24 Jan 242023 Q4 Earnings call transcript

Welcome to today's Covenant Logistics Group Fourth Quarter Earnings Release Conference Call.

Our host for today's call is Tripp Grant. [Operator Instructions]. I'll now turn the call over to your host. Mr. begin. may you Grant,

and Conference the Call. everyone, Fourth Logistics Quarter XXXX welcome morning, Covenant to Group's Good

which risks As forward-looking actual filings Private Act, and statements reminder, our results under publicly subject a this prepared website review forward-looking statements. risk is the Securities call to of differ most Litigation the our would comments recent uncertainties We that the and additional by any will available www.covenantlogistics.com/investors. I'm materially. Please contain are call cause to undertake SEC Reform A David Paul at revise on no joined on Parker update or obligation Bunn. information or to financial today copy factors. and

as Before quarter's take I'd we moment to the like results, fourth whole. a the to address year a reflect on

it pivotal As was, Covenant. a XXXX for was year challenging as

Thompson and people the of setting to talented achievements are without our by company accretive from the collaborative acquisitions second able of execution of the commitment We share stage adjusted and been and the Son the history, not for planning, through have achieving demonstrate in would teamwork. and many possible years improved model per Transport. These in growth earnings improvement Sims best while Trucking business our durability Lew future

future. we the XXXX, strategic forward progress long-term a do in enter we in resolved As our these upon plan with so commitment results to and improving

in result lingering truckload we weakness the a of a Freight down $X.X Freight from in of or quarter, and on by consolidated Compared the to improved by businesses, to handled quarter, or resulting partially $XX.X was $X.X pleased primarily with year X% partially profitability our despite ago, were overall asset-based declines approximately compared assets. Adjusted in a overflow a segment. our by little count tractor the segment primarily no approximately Managed combined with quarter's decrease our our freight the $X.X revenue now operating XX% rate freight Focusing million Managed to million year freight prior fourth declined year-over-year our to improvement warehousing our results as income the million offset asset-light offset utilization of segment, million environment.

they Truckload Combined XX% were shares to of roughly truckload meaningfully quarter adjusted our program. Key to same X% year fourth average generated compared diluted Trucking adjusted Adjusted XXXX. share with well our The operation to and because $XX.X of operations per earnings $X.XX despite Lew X% and Thompson count decreased XXXX. of a decline XXXX quarter tractor did reductions, net to ago XX% million quarter. Weighted as income repurchase decreased per the the business X.X% and While flat. in decreased opportunities the operations share essentially the to share first combined highlights near-term include, the in rate income in operating approximately average the perform continues grow Son

equipment to months of XXXX. The XXXX. XX, revenue Workers CapEx which and and our at including XX Our our equipment combined mile. Gain for and for for to improved net $XX of CapEx, customer negative pull capital mile the of expenses in in created Truckload scheduled million equipment-related event Within months maintenance-related fixed at age Combined impact expenses, declined per prior months increased a only strike lease September million a fuel and compared XX us operations equipment sale compared lagging average United segments, XX quarter. on XX December for tailwind prior a gains in year Declining fleet $X.X revenue the compared year. costs, year, operations, per and major of to forward $XX by truckload the the in the cyber replacement of on in with CapEx was approximately prior $XX repayment million $XX million poultry-related $X Auto storage $X.XX in investment the in originally for or the XXXX and producing consisting equipment million growth million helped normal XX% rates normal specialized approximately our fuel overcome $X.XX was quarter prices and recovery total total depreciation sale to the quarter,

$X.XX Our company leasing diluted share compared investment $X.XX per TEL produced the period. diluted year share versus to per ago

yielding in was base the the On year-over-year pulling were segment indebtedness December in and is quarter net ratio the XX with an versus income current forward. of equipment Freight on invested our prior XX.X%. growth XX.X% Managed to debt-to-capital adjusted of and of capital approximately leverage Our attributable basis, as reduced ratio decline X.X% acquisitions purchases million, asset-light $XXX.X capital for an associated and Xx average return adjusted year. The increase the operating particularly CapEx invested from

Paul more Now business color on items individual the little the a affecting will segments. provide

results the and the in adjusted Thanks, company XX.X% a reflected expectations equipment Tripp. prices, a customer Expedited the less our impact ratio. profitability this outperformed of in the operations impact largely newer our fleet by quarter. the quarter, was on quarter during fuel operating history. a yielding the another offset major the negative cyber attack fourth a The offsetting Similar with success improvement lagging segment, declining recovery price. fuel negative operating Workers Auto rates In segment principally of XX.X% Dedicated to also, story, in of approximately declining positive has as saw benefits strike our to have best of but United this the a downtime. Dedicated was utilization representing X%. to impact routes a engineered attributable XX%, in ratio approximately in by result for adjusted The add, quarterly yielding declined the improved DOE utilization more

to approach has meet X hard opportunities business. in served exiting towards profitable by at this business return we adding have and feed deploying times, requirements. well clunky Over more the our segment worked unprofitable profitability the capital but us wheat improve that been profitability This and past years, and within has

in freight term. Managed to and continue adjusted segments. Nevertheless, improve a still of significant environment. overflow to remains Freight freight revenue this a environment revenue and of competitive product operating the total We asset-light reduction margin expense and continued numerous anticipate high-margin ratio, a experienced margin adjusted on no in at this business the return competing pressure in profit with consolidated size margin. operating aggressively segment XX.X% our in and XX% the volumes invested expect reduction long are with little quarter. The primarily over operating was the capital an for of generates year-over-year the adjusted profit. nature We XX% brokerage which from asset-based truckload to fourth acceptable at reduction was of the achieved highly the brokers improvement pleased upon to The profitability

XX% new a and to in existing of increase saw with operating start-ups a rate increases Warehouse in as the increase XX combination of adjusted the Our year revenue freight customers over the and customer result segment prior months. a XXX% compared profit last

will improving we the within focus this Although improved we profitability segment, continue pleased customers. on rate to profitability improved labor existing to utilization and the with are increases with

and its declined in to in by earnings business contributed its pretax million a increased tail compared prior a reduced versus Our and quarter resulting fleet year fleet in in of being that income 'XX. the business on income part XXX trucks prepared model, of quarter of the sell. TEL's truck to suppressed XXX the due decreased loss increase increased mileage versus the fourth normal ago million or Due minority depreciation tractors and the X,XXX [indiscernible]. for quarter from X,XXX $X.X approximately quarter of by fluctuate and certain from trailer 'XX on can XX% the to high year earnings to taken to to XXXX $X.X TEL sale the gains pretax quarter-to-quarter. in by was to cause XX% The the investment revenue were largely period. equipment

of TEL we other and included $XX.X cash million $X.X December million to from consolidated balance the assets from in XXXX, $X.X Our and $XX.X is original million in in million. In XXXX, investment TEL received of our XXXX. XX, has received dividends grown at in sheet investment

freight XXXX This model pleased X for in XX but team. different of and outlook a our as the we model extremely performance the Covenant years provided the ago. a and experienced is a team the of challenging years, the with than we environment different are Regarding to future.

but no throughout XXXX. relates strategic it will and continuing in see capacity or operating the macroeconomic attritions industry XXXX, to conditions our plan market believe on we to execute catalysts, As to improvements result immediate incremental in

capital As greater we and the surpass results believe XXXX we'll a free cash Thank result, time, other us and now for alternatives. to share can up you allow questions. allocation with we our indebtedness for higher open exercise call per and/or earnings that reduce our your flow adjusted

from from [Operator first Cowen. Seidl Instructions] question TD comes Our Jason

on bit wanted Thank you, there. to operator. little Paul, touch David, I Tripp. Thompson Lew a

to business related X any in questions. was guys for that there XQ? One costs up are of start-up are you Sort gearing new

inefficiencies, stuff in some capitalized was. and There that was I GAAP. accordance with Jason, then there we could capitalized mean be the

bit So allowed and of accounting to what hit the us to the rules QX, capitalize a little term we over then the were capitalize in inefficiency contract. of able

of early going I they year? more saying And half were I All the did XQ? makes in hear sense. right back opportunities there's That you as right. that the as flowing to thought be

definitely into additional there's in that, on second I trucks the space, there's quarter for we'll average, XXX, and XXX startups say -- would then add probably the yes, half. probably that first

see in to based take term. the say the that's similar most there'll items balance I quarter, moved to activity plan the that start-up are contract year, on will on you will the of just be and out to going just us over time of movement, capitalize first the able it half won't fourth the would the we're full other some be So half. And and customer it second expensed until inefficiencies question some that -- some on playing the getting of probably asked effect probably to a

overall it So guys all year be back of any help the equal, the that stronger you looks for the things being should given like of truckload and without marketplace? from outlook half the

I Jason. Yes, with would agree that,

been ensure one sure are help nothing region both blessing it. committed biggest clip. But is of focused it's that team Thompson Lew we're is on out and these in that this business grown business offering there the region, we're again, think in go has is excited not the be much short Lew this about that in a a successful. are Thompson eyes the initiatives grow it things manner from grow have Covenant and legacy to we've organically Thompson, past. team completely for at his of to some help we of I to year in to the able all He's momentum and Management legacy pretty his and of have the to grow capital outside and people the the Lew we done that

makes sense. That

especially Dedicated, from you demand? to real the you Let Dedicated your bit given of what terms like Looks telling switch a quarter about little are customers me a environment. quick. Can good talk in

would I flattened say Jason, Yes. of it's out. kind

pipeline, but by and a capacity to we've an of the end. There's reductions, the we've trucks, most first pipeline, of got need are had We've XX most And there. need still in, hey, slow. in the New XX think I out but of only it moves I I XX. and pressure business good I trickling and that with only market reductions come got seen or the most mean, quarter some capacity one-way were, far, few XX had that

as tell -- soon across one-way it firms Dedicated And I'd our market the what up, so you, help industry. will here's as

had, the about That are bit them come makes talked for sense. you cyber [indiscernible] [indiscernible] you movements? issues now little the seeing And to business that back a

it there that No, any November, by I pre issues. few of period was was some back we there was weeks volumes. reduced Yes. up mean, had where a to But a where

Last should you Makes end Okay. there. in sense. we question, expect 'XX? CapEx 'XX forward What the in pulled Tripp, of

mix. to So you're going have a

was million maintenance of. range our lot care $XX includes majority I CapEx CapEx in $XX CapEx, which of that of taken of -- I we disclosed think of the release would a is our -- but our some growth to that the million say,

of gated towards So million. And the $XX is may second say half see you the I the $XX year. that thing million other would to

of like things and So some even we just sales equipment may see that.

growth to CapEx. and You're QX. kicking X other in maintenance first going not think QX start much then year, than stuff second of net the quarters half of bit I of in, all CapEx the a of see will the And in XXXX little the

always. Well, Congratulations. gentlemen, impressive times. appreciate listen, in as the difficult quarter that Well, makes time, sense. I

Thank you, Jason.

Next from Research. question Wolfe Group comes from Scott

you of So about seeing getting What days question. with market are the you bid sort Once one-way the do of you market? as are that? one-way season? just Have the the pricing 'XX so bottom last firms, made a of we're think where respect we comment hit in early into we to

a of Scott, things. couple

multiple, I we're we you're about single-digit bouncing for off And creating along increases single had. the up a out are to really are they're bottom. are of think that value amount number yes, folks -- squeeze then kind the where commoditized bounce blood low of of the signed bottom. deal. But the trying think to We've they're -- be environments good digit of in those. last I Customers up to still turn rate the hopefully, really -- them,

And of seeing we're so what there a now. it's kind mix of right out

their seeing throwing truckers, or -- give truckers those people people off, take low going rate I numbers to you're you're can really stuff, and -- trucks The start as partner wanting soon numbers. ones folks so amount XX% start the network, and longer-term going harder for they're medium-sized there's type going to type accounts small had. And direction. base, think to increases as in And not last things you're out really it hard. take have I customer the they against trying big people that get here go another stuff want to been truckers, They're their it coming key some there's and reprice the key are be customer-facing lot out to though set those will Commoditized are servicing conversations really just to not to a around. fence. some -- -- another before and it XX% to of single-digit not other some they

we'll we're X% in for reprice or think I bottom. thing not come they the if at and then this And partnership, year. I I the going real move breakeven with just next business. discussion here pricing the X%, So sophisticated and another know, folks get And think to hey, they're me, to real this want to on time have can

like stuff it But some downward in seeing some the sounds of is Okay. like drive still vanilla pressure.

bit It seeing little is stuff commoditized is of still really, downward a pressure. really -- downward

you know, lot But pieces As our yes. we Scott, of of not in business. it, have, that's a the

Right, right. right,

lower QX. I Was comment, I'm a Your a just sequential comment? sure year-over-year want comment about understanding. earnings that in make to

sequential mean, they're was than a to QX. going doubt be It comment. I lower no

how because all are then could them you XXX accelerated, see the the on be a pressure weighted. year weather. have going that depending on up to trucks the is start-ups we lower out because And it's think analyst I going any more consensus quarter prior a quite starting function where right it. And to in in what some of really inefficiencies And I And we much it quarter. -- kind XXX is get QX, now than than of fall truck won't of frankly, we're much in think put I those we Dedicated. if in count if to first mean more on week, some be more had last it's

we the it as those pull are our especially winter of how season, out and -- getting running to it start-ups, doesn't to pump a much know, pop primed March back. make do take in Some doesn't you make much it there. With but inefficiency it getting go have, it take but to share up, low February, count, those much things

hanging get start-ups them we're So on thing, where here a here's quarter be. get I there's better I to this have feel of head. lot and quarter. we're mean first through we'll and we their excited those think But digested once about get plane, nobody going

we're think going to excited. I be

maybe the earnings it's not think or then see just likely grow think when are know then you back If in this about And positioned earnings? different about the think you earnings? you but which early, do when maybe grow you're -- where year, step to segments, another full when to year? you you overall, Okay. And anywhere? I best ones do And

same, is mean I Expedited probably earnings business. about maybe I higher the think are Yes. governmental depending backwards on Expedited I -- the think

a business back a Some governmental of of quarter, the fourth business. step that volatile and in took piece that's

all expedited back the a probably up. but our that of on -- know, about goes. But little, we'll exposure the Freight growth back because how that's we it's lot say to a that's and a maybe dedicated we've governmental, little talked forward in that So the Managed see I'd Freight, got dependent already pipeline you is moving one-way market. as Managed again, warehousing and starting is forward. bit moving the

-- Sims in absorb We'll of could couple anything I took say then Freight improve. the lot GAAP team of warehousing, I a were is, some effect of think continue... think positive the think will a adjustment little and 'XX the 'XX. And and didn't acquisition part and to improvement in us a they material that that an I small had Managed as I full QX, what out but warehousing combination really has compared We in a is of of year say would of momentum or to we've bit improvement it seeing, call with we're could QX. Freight hits Managed market a the that year-over-year that game, give hit a and would to big it's that I We acquisition. non-GAAP also freight kind the in would the like the theft. And it as as team because say, of the have I

the November X of of months December and were X years best Warehousing's last 'XX.

Okay.

the some businesses X earnings with So X of growth. hopefully,

Yes.

Very helpful.

from from Jack Atkins Stephens. question next comes Our

Great. Okay.

kind just sort are that there of interesting. Do would is I and think -- just your more to your of than of change close take how taking kind market think the comments you move curious really through enough to because you just I season to fundamentals through stage maybe over So you have to shippers see kind are X mean of begin anticipating taking for guys to come Or we I year. as do get exit a maybe be to this I maybe that? that that, needs might around position in improve. the -- they're dynamics months? to out guess going guess has we that's starting back step set I think on the a is here next capacity Paul, bid

a folks trying business. It's Jack, want And the just big they're I'll the a think continuing more bunch thing of kind pushing bids in discussion shippers low ones deal I pretty easy mean now. and this are help, and and to to don't I XX-month are penny mini lower. to digits they a they're and out going with their because They're reiterate running commoditized want single Folks to be all that squeeze monkeying and every right are forth again, of of stuff. back just a that exits the happen. bunch it are focused on of and that for do that still who

saying And fundamentals it. the getting is so to I that crazy change, I think think read into can what is are nobody that with yes, is, you something but slightly starting you're

help capacity mean could we're But it. look of if in would close mean, back that we because markets business, I to you things mean, on getting demand as in to where side? Got the at those indications point at a whether Yes. -- it's of you're tea you to see balance, is are little the change you quickly [indiscernible]. that bit I I leaves -- the starting say signs get are see you some your that a starting some being

Yes. Yes.

is But it and going can an near dimmer conversations it's tail do don't leaves expectations. think I that ever on in be we're going thing. I for to market going I change difficult to and customers to the we're based point, and the our rate to continued watch capacity with the be ever. And We we've the Paul's based there would closer is when just illogical where just with data and switch, mean be to I talking it that to this our And going about based they both going pretty conversations think us, got closer -- value and flips, and they're logically, kind at to And fair I about -- when us -- some we have an we're to relationship think I that that of that some that been be it's a environment, when was business. good, immediate ways. conversations market. the based make the bad. the kind we were of the just going think of It's are. comments talking a you of it goes flip we're tea sure think customers think of market customers having started mean lights value talk on about maybe our exit we're business who things create about turn the we're that fair is want customers to the of gradually going end whole feeling to the fact lot board. of keep accepting And model to than across it's to kind to we overall -- we're I but future, than on. on mean continue. But for that light continue there's it's observing they've having think Jack. think the if some the on And on I if in to wasn't I it think going on customers happen about I switch thing, creating fundamental. are type the I it's

So ...

pressure where really. you've And than engineered broker stuff before, really the broker specialty where world, specialty specialty is to haul. on the any could be we've Jack, a recovery. that America got It's sensitive equipment, networks, customer-facing U-shape certifications And as product going in drivers, at probably that's drivers, said is less is

Okay.

operating we below I'll XXXX? venture line. market couple equipment TEL Okay. in that joint What's But I when about No, helpful. that's and over. of income used think outlook last the There's for lot of about that's questions, there. it concern a a your your the turn guess out

impact curious of that sort your piece that would Just 'XX? in business of how

same Yes, equipment hard on a in interest by But about that material. I credit that and focus I it's -- they don't just some nice they're and that front tank. long and expect good how backwards a that And today the from 'XX, way the excited the to they'll business a There we've And volatility, long-term with to we're is grow their of prospects Covenant, quality if else, it's than but impacted in of you But quality they've their upwards look just but think, year with at has of those think customers think the changing. with a manner. ever don't but maybe and costs them TEL they grow and it market I it step of again, a it don't who just environment. And is time, what kind a I equipment -- like a for of freight big graph leases I like impact hits, think poised maybe because term growth got as some team year-over-year going I carry, them been. part yes, the foundational to do I it's to slightly. to increased the I to have that's model, base business long-term of the and softer full year-over-year see see business hugely that market. But materially term. not growing that they're in materiality -- achieved debt effect performed. on worked need in everybody take long terms don't or

'XX 'XX, the this on big lot in last 'XX in gains 'XX reset look standpoint, point, have a echo from gain sales materially, a expect rate from Tripp's to but they a standpoint, from and we're I of succession -- and sale, people on done truckers standpoint. took opportunistic there a earnings And 'XX. They on a like lot 'XX pretty a lot we from like I to sale not they reset, mean and it year, on standpoint. looking -- getting looking that it's the future the I'll know to sit and to get reset X gains were Jack, -- a primarily to much were was comments. really took continue and some took Tripp's and where just and invest, They big They years the grow sale. to a there. just they're an last

Okay. peers, That's then I trading look going priority program? the down some -- your some cash the substantial And that you opportunistically, into flow, CapEx guys question is just and based for mean CapEx would great. cash. you the stock I for to last be to for forward outlined. repurchase on I numbers just at flow flow just a XXXX I free should pulled guess the pretty is cash discount to here mean, you on that paying of quarter fourth debt? Or guess have guys accelerate given you use strong the cash in where

with your flow have agree point XXXX. I going cash free Yes. nice pretty in some about to completely we're

available, took doubt, plan, we to it -- in a -- get converting been because leases of XX trying we comes in to capital equipment charges 'XX peaked become age of replace to We were that. new the think months. bought they of -- as has bring underperforming. we've Then that, is, without XXXX, is XXXX strategic a our -- our we're exited only to at look because is out mind clunky owned had down it able that word get at on to average equipment. We you trucks those equipment it the hit to leases If we a from operating were I the plan

and we Now over so. bought bought We XXXX just we're half our tractors, of months fleet. about in X,XXX down which is to XX alone,

us. Right pay CapEx that produce to or means you're it. any XXXX of debt or we're that increased now, options or I'll perspective, us the opportunities and may maintenance do going probably or call dividends $XX of we million but for $XXX those that them both gives that's to looking a look And allocation one we of is use things. million what committed for round past, activity so And use capital that's some EBITDA, -- when all. and or exercised other on M&A or $XX at Xx one or levered, to just from of we've it options can stock about we numbers million repurchases in for down We're not to whether I'll

lot, I year. some of said, come of things that a and like cash in of that's excited kind So the focus watching on cash I just one I'm about next

Well, have options. it's to great

that's great time guys. So hear to exactly. Yes, [indiscernible]

Our Vermut question Newland Capital. Michael from comes from next

today? how Guys, of doing you I'm kind Jack So just on was asking. what building are

So the take, XXx, have done, has below what [indiscernible] is Covenant your guys the No trading group year. trading at, one's significantly to or now XXx you of close the come resiliency that is at. that group's the stock had we've this rest done, right, give what

back bottom, a bottom, should at And Lew math you're can Thompson from the at sure really. close expect behind the walk how looking the buyback you it excellent an the bought stock saying we're to year. You much price that what last it how cycle there not the it you're seems doing worse poultry significant us growing here. business and just versus returns Can we get through at the

at trading at Here we've it's that absurd. done at XXx just a cycle, performance that the in with XXx, the I see can't trough

And as can to you at can down years remember X, that, other there's X look X, And recovery of of over business, over of piece that this the in X, those X can add the X. And next how businesses, and then look OR on alone how grow you us building a us business X, the road? the we become no overall and the growing could give and this So math intend think the it you into on financials right? next the you take X/X about organically. Assuming kind if just X business. through to accretive this grow we of how the years, kind the how

'XX we've on customer concentrating XXXX and we one you the really use 'XX. nothing when the let of that we go decreases look not to you our peers But into I that And decreases. that XX Tripp then let's at in the Landair interesting we've business company, even market us anymore slaughtered hunts we well now so, fashion. And we've go in even talk side that at whether refrigerated those or got that operating the into we're the back it's Dedicated out bought been of to And with Paul XX. got Landair long-term of are rate because OTR operations OTR just but 'XX expedited looking in business journey get up we're being bringing acquisition David. to into to correct the of A is you XX% and just our to got comments the and at XX, yesterday, because in ask number, that contracts the company got trading XX them long the I'll back go is this proven portfolio 'XX when XX, solo term. Half business for we couple and any business for or not real dedicated want was there. done really warehousing operating on but the that's accounts of have really the on in want rate rest are in got and Delta a around the grown with was this and 'XX got other out of XX, value this Airlines at XX in that. that Yes, just with of XX% and as logistics

those is not many you more down in about but to test. again, that -- to in that and you when able not is to went the It you 'XX, that got down And team. brother has behind teams. great what farms time, So for we've is the of has I test things buy for an on hard, and anybody rates that? doing any 'XX what XX a it and In Lew company has States similar will what you Well, of And is involved that tremendously. your went get poultry even that doing company X It's because for Thompson, management last just price and Yes. that a pressure did getting is but will that heard business our doing. that's all years this Expedited not largest of years, shareholder is started rate the is XXXX. our years. of adjustment yet the the of into keep since since say is how expert operating get go great we got been true United Board transformed is seen rates want last plants in okay improved all we proud into it into is now, down. value side, trucks do July then everybody to the saying, the on couple the be that it, path. it are blood a It's side. And and test was the keep great that be difficult with on tough. side, folks running And part of to had it I it it's trucks, something Does stock team the virtually our the value be been down. has the this have Warehousing done have it's and that couldn't something the new done go has than of this talked go could, tested to the his been the through doesn't But And has they nothing hard, getting last they doesn't great, things any years. they've everybody those difficulty is. And go over don't. DoD because into and to X more last proven more it. And you're respond stream, Paul it's we few the if No. reacting year no. the commoditized. last something -- And this be want operating of But it's X to few or market we're showing the to be birds doing through good. And will gone Right tested in it kind that's XX just recession? trucks brother done everybody's all Does or [indiscernible] time deep birds at couldn't follow, more Very what this. it time, to had to was and Dedicated done. into the through doing those and and in is what it's are the years was over the got team I the eventually into team trucks the and bringing is that XX been side trucking XX Because doing. And we've deliver as anybody that keep to has for they've year, how weekend a proud is it, thing the I what same to only start

X going love we X that years or love Street the us, of is X, And So started to stock not Wall our X sales. somebody down that to some we're we again, going said changed. either love can us as ago, has or

back 'XX, any that going of love X, bought XX haven't. the different there's with stock last, there or But projected so the in cash don't somebody's options out in flow I to know, haven't we X, that months lot a We again, that and if of that. cherish is if some And not we'll starts and than love us means we need loving Wall Street not be that Street Wall stock then to the take more is us or buying we will us. XXx back that, lone

that up Paul the And bit leading us stuff. and your that, Bunn conversations and say starts little in will So I'll shut questions poultry anyway, on let a XXXX. internal be talk will I that about

Mike, your April back another trucks said, got XXX grow business And mean XXX that. And be it probably of poultry XXX question. based Thompson I contracts just David we based end over trucks I'll it bought I pipeline is It agree it more. with when the of line will trucks and year. of already signed. about go past everything last to specific we've to in by other things this the year could on again, on grow sight Lew

especially good X, good good if our the something a can driver on that triple operates book, base. contracts, So a has X stuff years, volume is win you base in that's in and really well, customer

business. prospects the poultry about excited the more for be couldn't we So

Which could the of our XXX,XXX OR say -- get us like Can of to assume OR fleet, what the is kind we a you it's down just right? the walk What off through [indiscernible]. portion our better of what trucks, what base look OR, than of we're -- margins is let's running. road years significant that overall a right, I X the X,

was on. We returns there good those what of in see. you multiyear one ended think of Yes. mean -- No, of deals it quarter, the some we a probably fourth the in call the some had of wait -- some you have in was would August one I remember, ended you we're was -- what of of we're way saw September. and still combination not poultry, what saw couple did and through accounts I that that yes, XX%, XX% and

a subtraction on addition couple those accounts. by QX So was of

those few left. And so accounts still there's a of

the We've Dedicated. in probably to weed and XX business. margins dedicated space XX... to, So a between combination down I'll got industry get feed might in the of target and best-in-class the say, somewhere the poultry That's and OR

the it's And some All -- our have got and as in trajectory to get in and improved acquired XX.X%. dedicated you Over we're look XXXX, was new emphasize a we the good want I of of poultry. on a fair at that the operations. maintained we're XX%. XXXX, would mean some legacy combination if is well. it's of we've business Then as of that's OR as It's like different we're that shooting or that really XXX%. it to this that improvement. I long few that's just in not and term the the That's short poultry poultry. meaningful pre continued today, -- to growth and the I a well XXXX, that But we've meaningful term it's I fact improvement think continue to we've chart say not things. I just say, what go on a poultry for just combination --

strategic goal to continue from our forward. a standpoint plan is So that path

Okay.

said all So of kind when can around in there? the it's let's it. better. somewhere is and a business [indiscernible]? poultry the say, is trucks mid-XXs But all operated done, is add XXs point we possibly, My [indiscernible],

keep -- Then this it, more Dedicated ago, it's I it's XXX. to XX, thing thing and It then yes. then call X XXX, and over We started we just customer X.X again, to keep was it pushing Tripp. some heading. it again, control. cost and would it mix, ago We're got down agree now we're years going we I was, is of -- this some some poultry, -- some with XX, feed, it of of it's when a -- of where years XX. operates But lot started is of wheat

to continuing get -- to going try be that So multiyear there's things margin. And improve a to to a are there. lot going of effort to that into take it's going to it's go

from poultry things is unbelievable but and you yes, service required. the a more should a from the it got great partnerships that good operating what's demand that, that on perform. We is then out with be is and to customers you've the got And a say our standpoint got I'd couple what demand of there,

didn't it help just and yes, us. And last we predominantly is going of in April what it really is that's mind, done keep to buy So we've until then growing. year

in operate Paul the whole that of have about us operate major in it the Dedicated in seen that's from because side XXs future It think down we're helped, it's help definitely reason. on very be the we since that's ORs, and and Dedicated down getting we Tripp to have the into years. But than involved to talked the has will it XX ORs on because business, costs the got but in what's So operating XX best-in-class. will few numbers been those a there's better going that poultry lot the and we does next in is it's XXX the start-up growth and that happy, the not XXs, but poultry

the look, one for you would have trading the there. earnings, Well, end peers out higher Excellent. stability created the assume All lowest the of the guys you in should be at I than right.

phenomenal job, guys. a So

Haimes question Barry Sage from from next Management. Our comes Asset

I a had now discussion ago? feel much little few give a a are first There's for used than of truck prices. they on lower say, quarter bit one. you a quick Could versus, a

it's miles, It Barry, got the here's up equipment ran XXX,XXX miles that on out. that you. good. equipment mileage all not depends band. tell so what I'd during coming Because pandemic. There's much are Above there a just old of lot

at are would it's hard quarter, really I hard. pretty say, they've big hard of those over don't I shopping buyers so a discounts then to would pretty move if are lot gone but XXX,XXX there, XXX, to still [indiscernible] mile trading, XXX, right are know down [indiscernible] to really they're the pricing XXX to them. a And weak them There's but spot. there they're call any, I trucks what trading say. But XXX,XXX price is at those out XXX XXX And to And it's now. think hitting market. I

in rid they're XXX,XXX unless totally So miles. And to get get you used of not can -- I'd say then you more for the it? tank, over it it's -- can of but what you're

with what hearing question second had good That's customers destock. from you're then it. my Got color. And to around do

love same, a more the that. a is then So have first going in Any from get have love customers in or hear in any the extent, there's lot half assuming lot more you to destock for have any last balance -- maybe XX%? now just it any destock. the but go stayed and again, So might year. Would inventories year. line destocking of to talking we do in? what idea the And percent there them no inning the color you was any feel customers, around when So you to Are this to over? on what of just X%, economy there's we're feel anecdotally freight that know is of

back you last -- a had of and Because pandemic, to patio Yes. furniture and I'll wrong the of destocking. I'll A wrong destock, of restock. just it major coming February go didn't in January stuff out of trees they instead that just had season, When have coming Christmas call so the created in and things. the folks couple year's October. in, in

they they so destocking. then just created the lot of Barry, went And issues, a mix into

way they really think and get customers' as they some where rising most into they're then are. on levels of rates, kind I being the be in for to verticals. it upticks go And kind a -- see the help of will warmer long them one-way I other inventory think there'll a though are it weather, I and then our interest seasonal destocking brokerage little don't May. can restocking in anything material focused freight us. Again, probably with market we between bit April, super

hopefully, know us. there's some for be don't of to I us uptick so when And there'll be a benefits if going it warm. But gets seasonal direct some impact to with indirect the,

And little my question, a then it. last more strategic Got of one. a

how space. and about in Freight there's large is. the obviously, competitive competitors talked very You Managed And some it

in you ROIC the little So businesses and/or better. of see ought to where might that advantage a you're you could maybe you about be your why other of bit sort some talk business in be competitive where versus there the

an extension have I with at of that our our asset a them. If Managed is Yes, just is of space, Barry, it we businesses. our lot customers also think relationships looked about top in asset-based Freight

can And provide to flex Managed we so the in out of is of allows balance markets, business Freight If in business to what markets. capacity. us use rebalance overflow, get the have that do we kind

started that -- grown call augment so it do as number of 'XX back in own have today. They would to I asset-based we've we our that that benefit over was businesses. time. still And a our customers is say well customers and really solutions internally that their business

one overflow degree. done here got X internally, help but on to -- it. competitor We're asset can they've saying was here job segments to be our still so versus some run you, because stay. a freight back their once be internally run asset in good growing businesses. we've It And then to started an And capture and it of it not it giving a of so letting we that And augment a we as business unpack and asset-based the is our We're hopefully, it to basically well. I to on the does again, in [indiscernible] Freight. business Freight will Managed tell own would -- our to operations. that space with sell. hard It our Managed large

lot And of brokerages just large add of and so these brokerages, to even they're like business just lot we're top small to volume, not because to mid a a trying line chasing up. chase top in bought for red top even of the line somebody if the selling goal a operate margin whole to line and at getting they and -- margin, revenue loss

within goal We tightly sell wired. not Our they're to rolled how our operations, asset probably it. just couldn't is sell It's it. up

we to yes, if say, try -- off money And we're else make can somebody it. can money, it. have so we it does, what us that going to to of If allows lose

Our Kauffman Partners. Jeffrey next from question Vertical Research comes from

I'm but squeezing for I thanks back going my asked, lot on of And to items. the the me A X start have wanted to questions circle at been CapEx. end. here with

versus the kind that net at mentioned let's you year give implies right the is David, million million maybe budget million that of the the me you $XX CapEx think some let's of where start Could of in see then to the that maintenance where net. fleet I end shape on to second to freight Expedited. And the of of $XX an and is say and wrong we're things kind we good differentiate happened the based on follow-up kind the fleet about $XX to half, idea is and million of side now rebound. $XX about you tractor say and is, side the Dedicated of the

do the fleet add well, free in may the of we "Okay, to out wiggle to from With fleet? have where to now? much is and might cash, months the flex XX go we be back there terms room How net say, much need how excess

answer that, can Jeff. I

benefits, $XX the million in for are million total our of got of about And kind in XXXX of in CapEx part to month $XX take implies of so maintenance of disclosed tax So year XXXX. the million million to advantage of incentives just that that some expectations CapEx. was we million which $XX call last $XX of the $XX XXXX you to that available it, of included CapEx, into growth $XX remember, brought tax to not million

So those means we $XX CapEx strategically, a would your basis brought kind or some us $XX earlier million, in for purchases that to is of million, which about say, of ongoing the just $XX is on maintenance in neighborhood -- million conservatively. an in-house somewhere I of which

that's you we CapEx capital And are generate couple whether towards additional in or side whatever. part of of our kind And we of M&A think going or because gating. for our I do was growth, the to the like we will. we'll the some last equipment need matter or question, It just year, your availability, if unplanned, debt to that years. And just of of have if it a second plenty the strategy sure. of and of we've done of think wasn't both for funds end I the on ticked additional cash of free allocation flow the up those kind side

goes clunkiness our XXXX. into and declines that think going some number net or CapEx do and opportunity, -- some in the that we absent So sequential do M&A with debt significant other we growth see

side. by and surcharge Okay. And follow-up, that looks like of positive million offset cyberattack the how can. the And were just other I fuel fuel a you minus talking about effects fuel the about management $X.X impact net UAW net-net the X impact In the if it was expense. commentary, on were

have about affected your that a million bit talk bit the have attack of the events, would a business? more $X.X and way think I a that. to little than net thought been if UAW guy X as it? would offset So you how about right it, bad Can cyber And those impact those little you'll

would say, you One, talking about . year-over-year I are

Yes. I'm looking year-over-year.

Yes, yes.

look cybersecurity we little expect QX what we to suppressed and in strike talking about cybersecurity -- fuel well the sequentially knew comments we're about at and was were going as were to or think or we how we kind QX, on kind about were you look and as be thinking we strike the the a of what the QX. reporting both I of of impact we thinking sequential of what incident, UAW if how that to expect QX

comments think of triple do were defined a it, number what were you if So what sequential would those our look what on maybe you double more you I it's -- were and at want -- well earlier? fuel, thinking a I but really it's put I say over kind to don't

Okay. I That's have. Congratulations. all That me. more make to would sense

Thanks.

we this no time, questions. further At have

certainly we next All thank look a everyone, questions, the you, quarter's call. week. right. for Well, and appreciate forward the attending great call, Have and we to Thank you.

attending. for concludes you This Thank today's conference call.