XPO Logistics (XPO) 9 Feb 232022 Q4 Earnings call transcript

Company Profile

Participants

Mario Harik	Chief Executive Officer
Carl Anderson	Chief Financial Officer
Stephanie Moore	Jefferies
Scott Schneeberger	Oppenheimer
Chris Wetherbee	Citigroup
Jordan Alliger	Goldman Sachs
Brandon Oglenski	Barclays
Scott Group	Wolfe Research
Allison Poliniak	Wells Fargo
Tom Wadewitz	UBS
Ken Hoexter	Bank of America
Jeff Kauffman	Vertical Research Partners
Brian Ossenbeck	JPMorgan
Jason Seidl	Cowen & Company
Jack Atkins	Stephens Inc.

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to the XPO Fourth Quarter 2022 Earnings Conference Call and Webcast. My name is Melissa and I will be your operator for today’s call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] Please note that this conference is being recorded.

let company a the regarding non-GAAP measures. begins, behalf statement use call financial the of forward-looking the me brief read on of Before statements and

statements company which to laws, their differ actual projected other nature of those making During factors applicable number by will in a materially statements. uncertainties call, meaning of from the certain this the results forward-looking risks, within involve that the securities cause be forward-looking and could

release actual results well A differ factors earnings discussion the forward-looking required could extent law. except are cause company’s the call company to as statements of contained is today filings release. in the by has or as to no in update on earnings and these statements of that obligation this materially its company’s of made the The only made to SEC forward-looking as in any

financial under and such website. this the are certain financial company may also GAAP release comparable the measures Reconciliations contained or on of tables to related refer rules. measures in defined company’s measures non-GAAP non-GAAP the most SEC earnings During the as to financial its call, applicable

statements find in company’s important company’s contains the You information copy financial the website. non-GAAP earnings which regarding release, a can Investors of section the forward-looking and measures additional of

may turn over will Officer, to you call Mr. the Harik, begin. I Mario now XPO's Chief Harik. Executive

Mario Harik

executive also Q&A. Ali year our cover simplified Greenwich growing and LTL focuses following our will Chief Ali Faghri a our Strategy Thanks joining to it results, the with the CFO, hear excited model for talk and our our business everyone. I'm in and of Anderson, the morning about spin-off for addition Carl We're network. full value great Good fourth he's on and new team. of call. Officer the is us resources who our have how with we quarter RXO to

That environment. soft segments North for company of of solid also statement as growth American the in and European Yesterday a reportable macro us quarter and a report two saw whole Transportation. is LTL you a true our for

revenue growth growth we generated XXth quarter. of consensus revenue year-over-year grew far our and we Company-wide, billion X%, reflecting the by beat of XX%, adjusted outpace straight for and $X.X which EBITDA year-over-year

the generated $X in our business. of For had adjusted for major billion XXXX. full exceeded we target year, over a EBITDA set LTL This we

Looking want to industry the focus LTL segment, at plan. pressure, our tied that to year-over-year a shipment North the LTL tonnage. XPO, in saw quarter, In due by grew I key shipment volumes and at to count some America and directly on the decline fourth macro business results growth our in we but

best-in-class to growth providing back market we earn demand share positive call in by ties capacity which of X.X, invest Our the LTL profitable tonnage plan to and is ahead service.

more business, onboarding and We us to new business. time with have typical up mix continue who signing success blue or from quarter, in the our including up for first their seasonality. strategic us in tonnage more than volumes chip giving either change drove our a This trended of customers great are the

these us macro. We the also day, gave wait base, more had to local per in softer shipment a and however, high declined for margin customers shipments

our the end in yield lower of outlook. result, a came As at our

a become should mix macro to as Our and recovers. tailwind the us both volume for yield

service. an damage example. their no quarter, lowest for service secured we is the helping XX% our on especially year-over-year we outperforming In we're quality carriers damage top as by we hearing that the us intense more and our are and of tonnage, rank six as that fourth frequency from improved of you focus reason doubt customers I'll one LTL second is The years. service, you give frequency There's to

sharply, up effect employee satisfaction, on ripple satisfaction survey, more dock standards. our is Customer indication year-end the highest team our a is than was and including of like this and service and an feedback And taking entire a decade. Employee our which drivers has is our pride workers organization. the

full days, were target an including XX there a operating setting executing network XX to open operating year in we puts our In estate perspective, We XXX capitalize doors like the net gains and openings. City, rebound, excluding Lake Atlanta, progress to we our like takes, plan was expect another the new from next in of XXXX, net on the Dallas. up Strategically, the when levers made of which With short we lot macro. our in terminal improved the growth the new added volumes for doors ratio, Salt and real ratio the we For points basis good adjusted positioning. by software XXX our six year, and with range. new

by house. to levers also the extension. We're by XX% within our pulling drive help unique have manufacturing X,XXX in our than fleet more we we increased trailers over our company line haul XXXX, In

over at advantages We drivers last our execution tangible X.X, our plan have the schools. long-term are LTL for they're training also and These trained driver ground. of year X,XXX in truck we gaining

in perform to Spain. expectations organic Europe U.K. with to the business particularly growth, This ahead increased X%. constant fourth year-over-year Europe. and currency solid of quarter At in by Turning continues revenue

sales Despite year-over-year win existing there, customers. robust. in was business the Our uncertainty to up continues we're QX to pricing with continuing new be and pipeline our macro very and in Europe

segments to customer focused trajectory We going wrap RXO successfully value our of the exciting know markets two business my spin-off with model. remarks with November, into they which the best. now summarizing strong want in by in XXXX. simplified We I created the highly completed business propositions up have

above is This new is And doors target XXX projected performing our we we invest $X to and we network earlier. quality the with and we're plan. growth carrying net billion business good market growth the to investment expectations. industry with capacity. adjusted our America, momentum we intend winning and Europe, on open in service We're through drove ended of our the QX, above and in our year in the continue We're over into making North growth. we on XXXX, tonnage years LTL track five In EBITDA, set in to of share remainder in also LTL the

focused shareholder we'll deliver XXXX an confident value. and excellence sustainable to most and on XXX We is cover through we on that them, CAGR know of the operational every EBITDA XXXX, world of the ratio X% CAGR that periods least of of being targets adjusted set move adjusted our financial improvement from X%, revenue our targets to three These and aspect combination the toward business, for in class we operating of this we're deliver LTL as at outsize way to We're an basis points. XX% business. XX%,

discuss our and I'm to you. it Carl, our to Carl over Now, over sheet. hand results to to balance going

Carl Anderson

you, results, full and good balance everyone. Thank Today, Mario and discuss year liquidity. morning quarter I'll fourth sheet and our

we X% the and impact of and $X.X I'll growth where delivered year-over-year FX quarter and Organic year-over-year. Revenue for EBITDA earnings start additional contributed the strong diluted quarter prices the adjusted billion, fourth and was adjusted point of net the an with quarter share. X%, growth. revenue fuel up growth in per was

by XX% million of from $XX our We estate up EBITDA or primarily year-over-year. million includes million. which year to $XX was year-over-year This XX% grew EBITDA $XXX million, was by adjusted by gain driven a increased business, North $XX which a ago. adjusted American LTL This real

in $XX had spin-off. million corporate rationalize we a we as overhead our Additionally, expense, after to reduction continue the

adjusted year-over-year EBITDA a was margin points. Our representing XXX basis XX.X%, of improvement

In was ratio segment, our XX.X%. LTL the fourth quarter operating

is XX.X%, and excluding ratio, estate gains operating year which a from improvement was real adjusted a sales, basis point Our XX ago.

with business performance Please up continued Our year-over-year note we this solid call. addressing currency European potential business European our a a also of constant X% sale on won't on revenue its be that basis.

million from incurred net representing of fourth $X.XX. includes connection loss primarily per quarter, in impacts, to share the a loss a the income year continuing The compares per quarter, million share of reported $XX earnings November. spin-off with and This RXO operations $X.XX a ago. XXXX in of net fourth loss three diluted of $XX completed We in

a single was in for at $XX impairment segment that, European unit, First, we following was goodwill goodwill related that reporting to spin-off. our structure evaluated the to the change impairment business transportation non-cash a level. a Prior and had charge million

the is testing business disaggregated new of is resulting in units, comprised to charge a reporting four of and performed Following impairment be units, the the transportation quarter. on required European this basis the spin, for each

the second plan corporate to million step related the $XX to integration in of had charges, The we and transaction impact spin million down finally, costs. was due mostly restructuring costs. of the $XX And

million of a increase On per ago. was adjusted $X.XX, EBITDA flow from quarter continuing million asset diluted an was our CapEx rate. operations, our year flow from This lower and and million was basis, resulted spent planned LTL earnings $XXX $XXX share was by tax cash expanding our received proceeds driven X% for higher a and of driven sales. $XXX free CapEx by primarily generated which effective gross Gross million. $XX network. We the up $XX from This up adjusted cash adjusted investments strong on in million year-over-year, of

delivered $X.X XX% $XXX primarily a million million EBITDA up in our increase full expense. in XX was business Adjusted of a EBITDA in Turning in the corporate to $XXX X%. XXXX, was reflecting revenue LTL year driven million XXXX. This year from ago. of a We adjusted billion, increase year-over-year a by and reduction

at in flow per continuing flow for per share And this was $X.XX cash earnings cash generated free operating year. by year. $XXX prior the coming XXXX. share XX%, of XX% million, from which up operations diluted Adjusted from activities We $XXX million from increased of

ago, targets. doubled the investments Our from support almost a business CapEx to as of our growth long-term year our investments million we $XXX accelerated in

Our the real to prior XX from LTL improved estate, year points adjusted excluding basis XX.X%. ratio, by operating

liquidity We under sheet. us This combined $XXX $XXX borrowing Moving to borrowing with the committed of quarter cash. year-end. cash million available at capacity balance the of with facilities ended million gave

X.X at our received borrowings double adjusted and the from spin-off. recently our no year-end times extended times debt had B a to plus. from previously prior was a We basis and EBITDA net we week on we S&P double outstanding from credit X.X to RXO B upgrade year leverage This our XXXX, to reported ABL down ago maturity under a ABL facility

XXXX. Turning into the first quarter

We the anticipates million unallocated to $X expect This adjusted in low and the quarter. the million EBITDA $XX generate corporate in costs double-digits. company to growth of year-over-year

of of course that, these reminder exclude expect and the the incremental with our adjusted over year. to include the costs down corporate pension a quarter, income. ratio will starting wind finally, the operating And current costs We allocation

for reconciliation historical in a presentation. find our You'll investor this

million providing we're approximately and expense assumptions XXXX in are of $XXX million; a XX% of interest year to CapEx of addition, of rate million; $XXX are In we for our These $XXX effective with results $XX help of forward. planning. gross as XXXX tax with pension your full to account $XXX XX%; excited the million million pleased about million; shares. to prospects and we're XXX move and and growth diluted Overall, our share income

your line. questions. Operator, the We'll now open take please

Operator

Thank [Operator Instructions] you.

first Stephanie question proceed question. comes line with of Moore Jefferies. from with Our your the Please

Stephanie Moore

Good Thank Hi. morning. you.

Mario Harik

Stephanie. Thanks

Stephanie Moore

bit out, -- you're how to I which in does range lot digit single of would be terms appears you're provide was you Any color thinking peers start now how your which LTL, low where kind quarter be about more you. Thank of that To -- a pricing, helpful. more particular now for mid a high. color and are in of there thanks. in thinking first hoping Could about little the

Mario Harik

mentioned to earlier. EBITDA Carl we Thanks double-digits company-wide Well, quarter low the for first Stephanie. be expect as adjusted up

either depending first environment in driver LTL we a of happens adjusted the slightly up quarter you the which March, us. demand in down as month For big for to EBITDA is what the specifically, or for expect on know, be slightly

to point into better expect seasonality the in quarter. seasonality typical XX a first From deterioration us we from fourth be perspective, the quarter Typically, for basis first the than a quarter. OR is going

start we're month great -- in here the up the January. of set Now, to a

tonnage and with typical in than is our is Our ex seasonality. yield the well. up line better fourth fuel And as quarter

the see today, results the pickup of rest so the based demand at back will we're more entire But of are we in strength and volume what hopefully are about quarter. But cautiously obviously, quarter gives the we you from environment, the a on we'll do. look when Now on this color quarter, what we -- seeing all half the seeing perspective. the on our of optimistic

Stephanie Moore

pricing just can. you maybe the And side it of if well, as on

Mario Harik

impacted in the the -- CAGR to the January, a expect be On we fourth pricing the that in case. quarter, opposed accounts here environment the continue some dynamics. by We We our here our fourth with will last January Sure. but we prepared we did GRI line in of in take being some Yeah. did first quarter. remarks for quarter, the we continue to was in quarter, what be the But the first mentioned of of to to see next as the of month month rational. local that

Stephanie Moore

then the fourth then on first question. again, modeling more forward And should year? Understood. provide in in Thank quarter, corporate what and like kind moving Could a kind you. of it the of expenses more quarter look color bit the throughout just you the on and

Carl Anderson

Carl It's that. take Stephanie. I Hey, Anderson. -- I'll can

So, if fourth corporate LTL be begin million we you million. to look quarter, at $XX quarter. was starting $XX first allocated the as the in expense will our of XXXX, that And

million -- the left a in -- about $XX million million I course the as you throughout make as far with our remarks, in And importantly, expense in wind corporate what expect year. to to So, said with that down to leaves prepared we range of to quarter the it first adjustment. we really as $X we saw around line the And $X pure expense. corporate expect

Stephanie Moore

Great. Thank you so much.

Carl Anderson

Thank you.

Operator

you. Thank

next line Our comes question question. Scott Please of proceed your with with Oppenheimer. Schneeberger from

Scott Schneeberger

up Thanks takes the expectations just Thanks. your follow puts in Good what occurred and of quarter, that. of trends versus and very morning. internal to tonnage then you talk much. Could kind I'll on

Mario Harik

Sure, Scott.

So, the in we outlook, obviously our and higher on counts being quarter, the than lower shipment also of fourth came our being end but bucked in trends terms tonnage. tonnage industry our our of up in tonnage

plus at tonnage Our roughly for came quarter. the in X%

half December month the soft of was of terms back December. weather impacted was trends the quarter, the by quarter, the which within the of in in Now,

So more the for of we what that saw than was softer the remainder quarter.

numbers. we of customers, onboarded strong lot fourth though, our we difficult from customers through mentioned quarter of better the the XXXX. seasonality a Now, course a as than I -- it's saw earlier seeing up, January than is well. And And as better the especially demand new we're

Scott Schneeberger

to that quarter, were Thanks thanks And in in was just ratio you operating Mario. items expectations? your an for the hit Appreciate fourth fourth internal the that. And Could Appreciate there. then quarter on provided. the impact weather with like the of that. regard kind main impactful versus guidance sounds the

on quarter fourth what just focusing So, of kind and occurred. Thanks.

Mario Harik

Yeah.

You got it.

all quarter, the of expectation fourth the the in for of outcome predominantly came by short in So, driven month tonnage our December.

on of December, of would our fourth take weather in quarter. back the So, our the out fourth have if impact you exceeded the to we half expectation improvement for

Scott Schneeberger

Were Thanks Mario. any there quarter weather. It was worth in calling headwind purely the other were impacts the that out? Thanks.

Mario Harik

driven had the when you Yeah. on was Not discussed last elevated by when maintenance expected. the outside already labor more last together what had than on for we higher we we but about But inflation which costs, factors that earnings and think cost call. call, expenses got

Scott Schneeberger

Thanks. it. Got

strategies? enter Is your fourth Thanks. that the So, has impacting as it other what shape this sounds fairly solid factors was and to isolated XXXX you cost those just inflation. quarter other with in pricing the in -- that coming

Mario Harik

Yeah.

support the a head inflation you at the the on inflation, And fourth overall two to of for were growth seeing and off look the one-third X.X% the fourth we given taper the of had in into transportation. wages fourth other and on these two-thirds categories cost. up field. was was as So, that labor purchase in year-on-year roughly are When XX% us, of folks basis we our starting we our for quarter, quarter XXXX, to additional And in terms the based cost have that shipment we're wages, in big obviously, wage quarter.

was third-party XX% transportation so providers, that fourth line down than you purchase had were effectively that rates the -- of in more the quarter. also as actually down the appreciate that the cost, fourth That but for part the that in fuel On was quarter.

wages, especially Now, we but obviously thing transportation as we become them tailwind we up not they up, on in XXXX. that same And at saw of the inflation year. will head XXXX into as course XXXX, through subside, is expect cost stronger to side, as purchase the to starting in that be were on the

Scott Schneeberger

Great. it Thanks turn over. Mario. I

Mario Harik

you. Thank

Operator

Thank you.

question. Wetherbee with with line proceed next comes your Chris Please Citigroup. from Our question of

Chris Wetherbee

Hey. Thanks. versus on of Maybe Good around the the morning, accounts local on your strategy some side. the national starting guys. customers LTL

maybe last over I customers to over I to dealing think kind I base of customer the the course just improve maybe understand course wanted and operator and ratio that, of make go the guess there right post I through -- guess, the most best, the integration, strong do and and profitable you time. sizes you're the several that with period of sure better Con-way was a So, of then years effort obviously

how do you curious strategy speaking and of to So, think sort ultimately, I really does operating of what what I'm be? maybe kind ratio broadly of can to profitability, the work left benefits potential the much guess, your is and entail, do

Mario Harik

Chris. Thanks

mix impact a mix through and national as And you calls driven was think larger you were channel we'll the have back half fourth back about to but density discussed at step our in quarter, the look But which yield, build and a you when in did talk quarter, If walk strategic that dynamic think then beyond. by these that in on prior onboarding about network. and we channel and the well. of XXXX fourth so the lanes I'll had you accounts we on important XXXX, our in

higher they we Again, but mid basis. that's up the these weight the tonnage in however through was have that customers our Now for smaller driven also freight channel typically softness per accounts type we where shipping lower segment shipment on market single business. taken in particular on yielding where quarter gained digit, that share the of are in the a more fourth that local count predominantly shipping. and were side, down was are customers, And these shipment were macro

the would as those And drive becomes and macro higher covers, weight that the both shipment shipments per for us seeing we're the in moving local commensurate would for up volume that forward. with network. So, have tonnage tailwind tonnage accounts yield of for a

So between and the local. national dynamic that's

Chris Wetherbee

last of And how sort you've impact versus sort understand in I operating several the I -- of I the were course terms thought Because years. the what making guess over sure trying the different might doing. now of impact you I optimize, think that what's that you mix to mean of been and the customer ratio

Mario Harik

Yeah.

a density similar LTL still on a it's when called accounts overall, your a share. again, also at switch important. internally they a So, an but is to national operation, gaining you from And market which in And that's basis, around -- the LTL balance, use to strategy overall lane create we X.X, which strategy, in stronger very a factor accretive for margins. metric as mixed you we when per network, perspective lane get balance lane lane the closer is our as look

onboard that lane when network, and the So, the good we have we are improving for capacity a account the say in balance, national using fit and network. they available we they're that

market, volume -- softer Now demand, recovers as a but and both nationals you that as would see freight over obviously and channel current the yield. time we in for is local well that there that tailwind the pickup we onboarded, be that as in

will as the well. of cost management impact OR many OR, Now, obviously on in will include a depend yield combination because and terms volume, of on factor that

but at on by to award improved by XXX outcome, to is going XXXX So, least confident these ratio points we're goal obviously and deliver basis we're to our operating need that. of our all have

Chris Wetherbee

helpful. quick clarification. That's real And then just Okay.

well, million flat being costs up EBITDA your us to? bit. around given then sure guidance quarter $XX of can business, unallocated the LPL what make first base I of or comparing $X of little double-digits, you're For thinking million adjusted to that clean want And that. for number EBITDA give down you're when breakup the you the what is I a to understand the that includes as about or a Obviously, adjusted the up

Carl Anderson

Yeah.

previously cost think that I as ago, far a that million, that -- you referenced the year that then of $XX it's allocating additional corporate we LTL we be comparing is that in that QX corp would said about if as million. $XXX it corporate It Chris, bucket. still part $X be So, to will in approximately not And be previous range base to of million as will have LTL. $XX will it. million

Chris Wetherbee

Thank the very you much. Appreciate time.

Carl Anderson

Thank you.

Operator

Thank you.

with comes question. proceed line Jordan question to of Please with Our Sachs. Alliger Goldman next your

Jordan Alliger

technology PT. At Analyst versus Hi. you your give it's your Day, maybe reducing pricing implementation about on Can and with dynamic talked expectations? to you haul, an Thanks. how up update line that, like Yeah. and help costs shaping other

Mario Harik

the progress We're of rollout proprietary Jordan. on great technology. our Thanks making

our cost pieces the shipments proprietary This our and discussed As in Day, there of drive results. year upgrading our this that a we how call, with progress Starting in made -- tech have price of to cost discussed number on us we helps and efficiently. Investor are and our more last we've initiatives we and modeling allocate great we pricing. how

are the more in makes in this technology to quick that platform a and through RFPs driving have we And analysts it of these is sales price a our are our that the salesforce we our things. for very having business with essential. that team pricing enabling easy is record we've turnaround And So, and investing system. environment, numbers had

mentioned dynamic you on A as pricing. thing, similar

business more Our to to more spot to business, and the react platform enabling on us being to onboard side environment. is the be quickly able able

on the pickup optimize for we with then us finally, labor our On similarly the operate getting. them shifts volume solutions planners and technology we make the great and management how progress dock are how commensurate And smart haul in dispatchers. dock and with improve haul our to our platform enables made efficiency, the both line side, cost for delivery runs, line we've we platform platform and our

progress the our with board tech. great across So,

Jordan Alliger

Thank you.

Operator

Thank you.

Barclays. Brandon Please in question from comes next proceed question. Oglenski Our your with line -- with with

Brandon Oglenski

between just Hey, was and XXXX like can going the if network, Could what that's [technical be adjusted May comparable difficulty]. the corporate everyone. LTL EBITDA. margin [technical good difficulty] corporate we for in taking helpful Thanks adjusted help on for morning you so just here, us question. there's because

Mario Harik

We try the a you're and choppy. what hear very in coming and as well. expenses XXXX ask you're couldn't XXXX, -- you well, are but let moving layering of corporate to question baseline Brandon, me how asking forward about

Brandon Oglenski

That's Yeah. right.

Mario Harik

Yeah.

did the that you the I for a of as XX, the segment specifically quarter we look, year on by page presentation as LTL in a as think, for include year-over-year and kind well detailed reconciliation Brandon, pretty walks of historical differences investor all XXXX, XXXX. full on basis

Brandon Oglenski

Yeah.

since guess think I XQ, guys said LTL you for correct? I EBITDA that So, adjusted looking this either down is slightly,

Mario Harik

correct. That's

expect For in March. slightly, LTL month up EBITDA, be down environment we depending it or the to on slightly demand of the either

Brandon Oglenski

know I'm presentation, XXXX? difficulty] numbers sorry, I you that in [technical for is have what XQ the the but

Mario Harik

Yeah.

allocated So, QX it's we've XXXX, $XX for million that QX LTL to of be for EBITDA XXXX. would $XXX of be million, the going now

Brandon Oglenski

Okay.

be difficulty] [technical we should So, this maybe quarter? thinking for

Mario Harik

correct. That's

Brandon Oglenski

Okay.

thank you. difficulty] [technical So,

Mario Harik

Okay. Thank you.

Carl Anderson

you. Thank

Operator

Thank you.

Our line Scott comes question. Group the next Research. of question from with with Please your Wolfe proceed

Scott Group

Thanks. guys. Hey,

about ago, year XQ So, are thoughts a you year? LTL? XQ to XX% thinking on operating any of QX and OR year the for newly adjusted how OR And full ratio relative this

Mario Harik

Yeah.

So, what first, on year. full I'll the start --

obviously, had and with the was old corporate year, Carl of when the pension mentioned with, last you definition -- because the look earlier on removal So, Scott, updated as allocations that income. we

and allocation the -- in year's been for last And account of corporate the OR income XX.X%. have that number you So, would of the exclusion XX% pension change and was OR. when

this a will OR but obviously the improve is macro. the given year, guiding we're XXXX, for on not depend path to are full year, there full things this Now but for year year, it the where of

from stronger earlier. seasonality, our as of about the you volume optimistic macro on customers is cautiously demand feel into And we're We demand seeing is. everybody outlook, better results, back optimism like and else as and the head again, up obviously, from based half customers. I the But today spring is what And the and watching we're we're than mentioned we're year. our seeing hearing the

quarter, feedback some demand sequential the fourth normal but buying more Now manufacturing inventory now hear of specifically auto, we in -- the different areas retailers through that the the seen XXXX. like we're seeing but XXXX. outlining gone robust retail a been we've now where declines And segments and that some industrial, the are has have in the softness, short-term that that cycle the seasonal environment, are had more we're short see in to in patterns strength machinery, going

cost So, of our the the And are initiatives depending what does at the obviously, driving rest dictate would year yield. OR what do. on the lot are environment we're there on dynamics of And that there would there company-specific for is a to these And outcome. on XXXX, side XXXX like outcome again, dictate variables in-sourcing a these will out all But all line that of the lead variables improve to for OR. path would in but of haul.

deterioration And to we is For from I a see we to basis better typically, OR QX seasonally do XX mentioned the expect and expect quarter. first to earlier, QX, than seasonality than fourth points first quarter, what better as we be typical from the quarter that's the that. to

Scott Group

think sure numbers And so we're there's now, new don't little with confused all a -- because the just seasonality. really I we not we're

saying XX.X% be methodology, did on XXXX, and QX, that? in XX OR basis QX a worse you So, be just did maybe but should of you're to better -- XX% in -- points it it's typically, you the it's than QX new to something QX, going clear, to be

Mario Harik

EBITDA be Correct. an an you end high improvement first think OR that the if of Scott, for of range, would for the And quarter. the improvement on the quarter,

Scott Group

or OR year-over-year? sequentially improvement

Mario Harik

terms EBITDA would seasonality. a deterioration, down, year-on-year being range the the No, but year-over-year, that slightly in of low be on than end better of

an where on a high-end the range OR would the year-on-year basis. first On EBITDA that of improved slightly improvement in quarter, be the

Scott Group

in back If take tonnage. step a then picture, you're outperforming like I everybody looks on And Okay. just bigger right? model, the it really

You're really underperforming yield. on

that the So, sacrificing in happening doing here is -- some that what but it looks what get Is seems we're what's volume. maybe is model, like to price it here? like just

Mario Harik

No, sacrificing were volume fourth to price the impacted buy we're There in that not quarter with us. dynamics price. a few

Scott, year. of took GRI early The one, in is were we QX last lapping we first that

of channel on, network, month strategic those on mid which the customary we single shipment While time this onboarded January, is yielding accounts the is taking the dynamic our market count their yield digits, so year, mentioned local that for share. we're mix higher the we yet accounts, And so line. I that are earlier up in usually our took national again

seen shipment overall to decline a in down. weight that weight that the per be caused we've channel However,

impacted effectively So that dynamic is what yield.

And also imports our has life freight to through of onboarded two-day coming we correlation quarter, the a which yield. next where then network. fourth saw shipments in quarter and lesser for down haul was the And California day more X.X% direct less finally, lanes to we outbound

Now our the back, existing to in we were us a And price quarter from business. take pricing you up That's overall we very business. continue how for rational the roughly X%. industry, contract the in if renewals in step see

Scott Group

guys. you, Thank

Mario Harik

You got Thanks it. Scott.

Operator

you. Thank

Our next question. Wells Poliniak from comes of Allison the question your Please with with line Fargo. proceed

Allison Poliniak

morning. Good Hi.

talk wanted CapEx about Just for year. the the to

If you terms you're to, of would more. that go how relative discipline down the with in around through can the we thinking say, And year I maybe available talk that? adds, bit Thanks. about the today a then little maybe capacity investment break of terms door new in as

Carl Anderson

Yeah. Thanks Allison.

XX% last guide XXXX, total it be our XXXX, And CapEx you at of up to our million. for expect LTL planning over from midpoint at was can CapEx, year. that as is the $XXX about our what look the About business. you relates see the If do to assumptions for we company

that I how should think it. percentage about think again, and between Europe So same -- LTL you mix and is

Mario Harik

customers. were X.X XXX where so, -- when demand on lower of we areas we plan, started new line based to the up from we sight our obviously, on side, goal And LTL the doors. these have open was on And

the that markets from customers. know that seeing we and we that already So, we go come we're need demand a capacity of lot after,

days, we over to So, we're the next opening Lake up well. to doors XXX doors, be open those need up in we in in plan XX doors going Dallas, additional capacity. new the the Salt where that Atlanta have in as through and a City, of year remainder Texas more net markets And

going the we're where very market have operating to is we a stores we those Houston than up be a open looking for we've for market being all we're capacity add. in more better to how need opened example, But Florida For that great and is terminals disciplined been great expectations. up us, us.

Allison Poliniak

of just Just this on it then we assuming it. Or higher be Thanks. digit And sort year? up the single Got for follow-up or is cost Should than lower color. that? shipment a mid inflation. any

Mario Harik

the digit, quarter us haul truckload is it are This -- will code line will balance mid around the have rates would roughly the for ZIP it do but because depend single in for be year. miles truck on the of a we depend of the what outsourced. It what our of

the a good on in half us expect tailwind half environment for the We the and be this but demand the year, back it depends that to here in first of translates. how

digits, expect the be territory. On the we to in sub it side, but [ph] mid wages that single in

Allison Poliniak

it. Got you. Thank

Mario Harik

You got you. Thank it.

Operator

Thank you.

Our next UBS. of your with with Tom question comes from Wadewitz question. proceed Please the line

Tom Wadewitz

what's could I guess, tell you on if how in wondering was relative that's kind Yeah. of just Good trying that? strategy on? to if I strategy, What morning. you're going in what's terms some tonnage -- Thank bit accretive price of broader -- a to you I and for tonnage what you overall more versus be to bring the build Mario, OR harder price of you. freight had us a of what much the know type push mix, on to you've trying kind of are terms matters bit. price questions the

Mario Harik

Sure.

for we look for, starting we can type with our build first, that the network. So, in freight freight that density of look

fit are terms are of going freight type dock-to-dock after. that of So, these primary BXB in is well that effectively, typically network, shipments going type that -- we're an in LTL XXxXX the skids

creates to after around We that freight also density our terminals. go look

that are So, freight we think pickups well. think proximity we our to the terminals of and is in about relates about quality the network as how to our it the way another

are Now local of in looking channel. build both channel density, channel international mix, terms we and to the

prior just in customers. service. right. we're strides success we want the great to the able onboarding customers driven our earlier, we to of is freight two, type service type main with from the of these are business. areas are And a that we of both sales, is onboarding. from I capacity handle XX,XXX customers, year, making having of hearing we're new and feedback of And year And and focus. investments up One, mentioned And I the accounts to quality mentioned. to which This lot customers the these great of in on and we be As channel, number that it's grow was in new by with channels ended making X,XXX up profile the in local local two with were of our XX,XXX the

Tom Wadewitz

the growth And with in the I just growth the primary I greater weight hundred guess, guess, kind Is really per peers. just of versus the revenue -- accounts? then, emphasis national driver from or is on that more look, account that So, of the forward? think revenue a remains single you bit tonnage? Or per a look low would effect mix would you you that of with forward digit it hundred kind your given would accelerate think national weight moderate as

Mario Harik

the combination So, all earlier on. it's mentioned I a of things

the channels And the become mix on But up, it's macro is on our would down recover to being the the lot things of being weight, deposit as recovers of these and environment as trade as one So, shipments that [ph] bank -- items a of but demand a the component. And through obviously, the course XXXX. tailwind. other going well. that's also local GRI

strategic lift accounts, term the for national go would fact And yield. macro be up tonnage getting a to go you as the and we're shipments back this the longer as shipments start would the overall recovers, see for that to we're up, going wafer up are Now our relationship. that would at which that in looking local channel channel, then

tenure XX an top customer to Just you is the give of years. today example, our XX average

going to be So, these we're we that customers are over fine-tuning business them with do the time.

expect freight stronger. expect our as overall, to strategy again, we remain and our positive, like positioning. to recovered pay yield the and environment gets And we dividends the So, macro we

Tom Wadewitz

of that acceleration cyclical seeing So, per revenue in terms in it's probably hundred weight.

Mario Harik

Yes.

Tom Wadewitz

Right.

Okay. Thanks for the time.

Mario Harik

Thanks Tom.

Operator

Thank you.

from of America. with line Our the next question. question Please Bank with Ken proceed Hoexter of comes your

Ken Hoexter

and team. morning good just Hey, I'll it there. throw out Mario

a think of here. discussion lot I

and rebuilt another coming it with year. I alone next and sounds model this reallocation times like this think I've ones year other four

forward there consistency going forward. the to looking So,

fourth this, full quarter But at about a just just LTL, at XX%. understand OR year the the now I you're base think level XX% in

a before about the accounts, a now but sounded little about, You you've is a what, you XX% talk away points to Con-way know was were key sounds national improving it I like get you that shifting was and bit a from which at, that bought bit readding driver move XXX it at how years. like you're talked get key little it a few to because there? talking strategy in another OR. And about of basis Maybe

start to with maybe So, that.

clarification the on know OR. that just to the leave -- to think you've and Carl, million? the $XXX the then, in And Is $XX on million included I EBITDA? did of But a should that out million to million adjustments the we EBITDA. that $XX get you way about $XX

Carl Anderson

Yeah.

Ken. million, the kind of $XX I you that, through On walked

I'm the million, not $XX question. guess, understanding the I On

Ken Hoexter

EBITDA, out you to million $XX corporate of do the both that get but guess, income, costs? just You adjusted out Well, to $XX take the income, the you I of don't the million million -- operating income pension on right? readd $XX and take

Carl Anderson

I go about income, will EBITDA, we as Overall Well, -- be no. though, has mean, think pension excluded. as forward pension we pension income.

as for year. showed as expectations said we kind you were million the we the being assumptions, as and full the planning pension income of -- in So approximately for far what XXXX $XX

Ken Hoexter

Okay.

Mario Harik

And back on OR your to Ken, definition. going question

had closed structure an than OR corporate well. year which one line XX.X%, had as a they and of So, last with obviously of we Con-way more business,

and had business. business business, was they truckload which warehousing had business. the they So, the Menlo the former They had LTL

a we think in that OR XXXX. changed XX.X% back business the -- And the acquired that on you do at XXXX. definition year-end haven't we basis, and what on Now reporting since was

this forward, we company, as are corporate mentioned moving Investor putting of are find is LTL corporate that we Day, become new the structure. And $X LTL million $XX course we What would of year there where for kicks that effectively. as Now earlier down third cost just be quarter substituting that the we unallocated million in we the rationalize the and costs on, them and to Carl standalone taking our a into in definition back the place. the

OR basis get would with XXXX go forward, from new time Now XX.X% definition with by as the we least perspective move to improve points obviously, and XXXX. XXX at in the I an by we through

Ken Hoexter

Yeah.

LTL which the all Con-way, just about of allocations. talking was section I clarify, the had to Just

years Con-way having XX followed So, it believe I before like-to-like for was that.

know little as just because I get now thus talk the doesn't a more then focus about maybe returning Fassler -- national moving lot that detriment that your just going to talked density. margins better up, needed serve Mario, to I accounts you I So, strategic to believe understand chase on with just and Maybe and can not Matt about to to you a more toward a national that's used where mix. pricing on accounts. better local follow bit you've accounts, is want

sounds it us to a profitable again, optically lot to density, it do with fill because at a like and we're the focus, how LTLs, density detriment are other but not to questions OR. listen we chasing at the help price, struggling a a sounds When historically to optics, I typically it's maybe but like understand it's fill just understand coming really at -- network a desire -- to so you of just that that all the because has just lower think been

fill us are maybe that's misunderstanding So, of where I in markets some think just you from thinking. because the the

Mario Harik

actually both. Sure. Ken, doing we're

service goal the very So, our the profitable mean, national when about when you have efforts, capacity investments think made grow improvements in we accounts in salesforce, investments I is profitable in business local the to again you well. think and sales about the and as and our account

mid an the up fourth with when digit. as count look shipment is quarter, example, at single the accounts, you So, local

on accounts But higher local make a are to the time. to factor actually are the onboarding more with over And both. into I able we very of the balance remain the and that will accounts, are at we well. be to internally over that both margins -- the metrics which freight going we you So, look disciplined profitable drive time balance we we mentioned is factor improve as need enables is a after lane of one business type national of us network. for earlier combination getting the and

Operator

you. Thank

Our next question. your line Please proceed comes of with Research the Vertical question from Jeff with Kauffman Partners.

Jeff Kauffman

because when I Good through very a and you was spun much. I out. about about everybody. morning months number that with the XX freight of away And of in-sourcing of your kind struggled back network a network you purchase customer years, quarters. want we GXO for quarter transportation were had think XX, maybe the of that mentioned, steered couple the network from want as tenure lens. ago, a And where talk back to to XX LTL service Thank customers, average go and -- different we

box improved until in staffing You guys got service the and at levels. has were you appropriate penalty driver

bring want needs recovered there it needs that kind improved? of relative at that look where curious you say the better? were talking that understand the different where give what's we XX the where damage didn't I that's it ago, versus you a network network much. network Mario, were? you in now just I that be, yet some Just how know where are aftermath, customer but it looking where were today I'm just of ago, If all through about year is back? where is not -- frequency didn't much that you freight service lose slightly the XX service months still out you we're maybe to and I there kind Have was has the not about away levels They you to are look ever. got were a best And it relative terms gained of at ago. to the customer be you've in issue where from business, customers you. months the where one In steered Is lens to But metrics pre to freight. back aftermath kind the as that so of talk of that, what of in to of and

Mario Harik

six the quarter, service it's at frequency our year-on-year quarter mentioned my in so, in been Yeah. XX% years. of our Jeff, levels, six opening in remarks, you has best and years this damage when fourth look improved I any the in it's

basis at records we that of only perspective, from quality the year-on-year look service really similarly, terms that from on a up get in on a And was you XX but not on-time now path company to offer the fourth our in quarter. our XX when the to we're ago, months So, covered to obviously, back it customers. points

satisfaction customers of in we the live of company and a this record ago customer shipping customers. terms Now when we do weekly December taking started the surveys with doing that basis, a are our in satisfaction. couple quarter, these on And years a was the fourth month exiting of

So, the we hear our the has and improvement it improvement has dramatic very been and been effective, from customers.

existing could some obviously, that amount quarter, are where the Now when onboard going amount I onboarded revenue last is we of recently do we the the of they we're used business of back the we on an we with to volume pre a was customers doing mentioned mean, we business, and a amount expanding That prior that of amount improvements. -- of lost, that XX example, a have it give us more revenue you with. your question To to now new talking was I customer that those do with customer. XXx is small than multiple. us customers

customers and bigger us So, more as wanting the we're giving we service of share a us between give see well. improvements correlation and in wallet business a direct making to

Jeff Kauffman

year-on-year relative that? levels, oh, that that Are just And I quarters. should we see always And is a remember price I a to healing. like still still early push service because the group a yield peer between bit been little closing a was feels XXXX, is -- the that it on XXXX? for basis, make service second. with something the can peer now at group. it the we customer XPO these improvement can't you relative About early that versus the like could I gains gap that And mean, past maybe XXXX, follow-up really is in is you there are gap last few there's If on

Mario Harik

Yes.

to large top customers get past service. feedback when that we onboarded, again, that of I are our of I talk one And we've in are We the of consistently quality. carriers in the service terms terms

currently, continuous providing But existing impact they service grow we -- the best-in-class focus issues about right time have could obviously, are and of of us Now and the them the be in when well. as and these service to takes improvement of think some past, share to close the with we it. trajectory wallet that that back, the customers as generally, on with up come we to to to service, due left that able of

Jeff Kauffman

you. Okay. Thank

Mario Harik

You got it. Thanks Jeff.

Operator

Thank you.

Brian from Our Please proceed next question. JPMorgan. Ossenbeck your of question comes with the with line

Brian Ossenbeck

CapEx. year? morning. terms Hey, us give XX% estate? so a the Can for terminals you maybe range for breakdown wrap question. What's of a Carl sense of XX-K give that's what for know long. I percent that see a on just you are into of Thanks the expectations leased What's the good can then, real And for flow tractors versus and or before in the owned? to you in we'll LTO? free that Maybe taking Can too cash the trailers? follow-up

Carl Anderson

Yeah. Sure.

about another real purchase and for about if XX% XX%. there you between owned. in estate owned weighted -- of and as mix pretty The bit or remaining There's breakdown CapEx So, is really of amount the planning XX% for we're that split if much And and leased, little excuse XX% probably of adds -- tractors the things. between a at between look kind is it's about other trailers which is you equally. well, lease kind me between and think the

Brian Ossenbeck

thoughts out on cash and any shakes flow, free to--? And that all what

Carl Anderson

fair I think yeah, question. look -- Yeah. a I it's mean, at as we

the we CapEx trucks new at of be planning we going look really are expenditures. As of our it's really availability the first based to off And getting quarter, accelerate to in.

a chance spend XX% of could in we first to can availability quarter, have the subject of the now. up our right occur there's seeing CapEx to So, what obviously we're

sales one, us. as interest any we XXXX. other planning additionally, would cash two, we -- in costs estate think, a as I we should in expect as have higher flow, And to real factor for for cash not do are cash kind of your points well into far numbers point the that couple flow free of

Brian Ossenbeck

on of just the then, it. the this of Got And one year, we'll impact follow-up be at fuel. variables other looking a

fuel at where you surcharge the it that. more can So, if go affect that throughout Mario LTL mentioned year? OR at how component and does purchase fuel on the Obviously, there's than look stays is, curve we transportation expense. as EBIT But

Mario Harik

fuel, at the it's been look you When LTL economics always part of of an carrier.

to is pay all carriers. customers when fuel services, have So, our us and price a inclusive they that similar of

when of today, Now per upwards year price that roughly the in in at $X.X $X the gallon you of basis, -- full last the range. while on year current per diesel a we gallon look was is price

more is yield ex being be more most have at type if But So, side that associated economic simulate to some see year strength that. of that does. obviously, positive likely fuel the stays the current well. related level and pressure the obviously, how we'll will And would levels, to as though fuel activity also lower with going

from we the see We perspective what are like year we'll our focused that as obviously the and levers looks on control develops. the year can

Brian Ossenbeck

Okay. Thanks for that.

Mario Harik

you. Thank

Carl Anderson

you. Thank

Operator

you. Thank

your Seidl question line the of Cowen Company. next question. proceed with Jason comes Our & from Please with

Jason Seidl

Thanks talk at I operator, quarter? pricing think to this. pricing team. what about and contracts Can don't the you and you're to Mario new yield get back wanted I I the in heard side.

Mario Harik

For quarter, we at X%. the fourth were roughly

Jason Seidl

right. All Okay.

your And you ex were from that out yields to help about comments assuming about about So, going XQ. Mario, said maybe here an flat. they believe sequential you commentary? fuel XQ I'm me could be I to was

Mario Harik

correct. That's

Jason Seidl

Okay.

repricing your in or up, is quarter, there it why another to would to at it assume you're massive again also happen in would drive moved to January. that mix So, I XQ? just be X% flat going when going is GRI the shift

Mario Harik

have sequential. seen the ex of seen we in you month January. And the first is the When the at up to fuel. yeah, what year-on-year expect you be look When in we this quarter, for quarter fourth similar what look first the to -- we've at

of which our fourth And weight the in the local of are beginning mix the what saw quarter in the between still in impacted yield far so first the dynamics we the dynamic for per and similar sell-through -- quarter. the the of it fourth quarter, first change the national local. a some has quarter Now here shipment, that includes at

change we the the that is and change mix fourth The quarter. from January. of changed dynamic So not GRI the only month has that in took

accounts typically, our of roughly our are Now business. quarter local a

to total took about haul that's system there's on, -- on local flow same call associated January. X% the in dynamic yield we well. flow still X% obviously, of the But through as yield dynamics to for for impactful shift first in on X% it, length So, the again, are through national GRI and with quarter a

Jason Seidl

Okay. And -- all right.

down equal, offline So, per other look shipment, I this just at guess, at all because least. I'll help when take going should I things weight being yield

network about Questions the here.

fantastic. six some rates nice damage numbers best years. quarter, You That's the in had in

where numbers? point have sort on-time historic You what you've you XX on-time does been improvement So, performance gave your put the the Could old on versus that you of level improvement. a year-over-year, on-time a historically? compare you

Mario Harik

piece, is another back and six internally So, on-time to were use best these pre-COVID we pre-COVID frequency to network in to-date. back are quality, on ability, to we back what damage we numbers we what call the levels And which we're for in the is metric are we years.

Jason Seidl

know right at I terminals your And where everything. adding and and now network look when you you're

excess to add capacity and is the going how down? that as you just So, you then take is eventually terminals much increase in network? And that

Mario Harik

So, the capacity network. network, roughly across we're in available XX% overall of capacity the in terms the in

markets on, in a considerably markets, already that up -- some Atlanta, seen volume opened in. the we for and we we had the the up in However, opening were space. XXXX, had through customers, needed course we physical tapped example, market over we've the on demand, out in When we more uptick of earlier mentioned I capacity. because terminal

around and that's doors you we're volume the XXX more at to X% year X.X already set adding per two started of customers. out it look our new through roughly LTL of when where we is our adding for capacity, handle capacity since our in on Now the plan, course we were plan net more markets years and

Jason Seidl

the and as guys. Appreciate time always color

Mario Harik

Thank you.

Operator

of line question and Jack proceed Thank our with Inc. Please with your Stephens final this the you. Ladies gentlemen, from question. comes morning Atkins

Jack Atkins

when it. years, network kind kind earlier just about and network think of XX% Okay. squeezing going I back I Great. me appreciate of mean, of three the here. to up or in I EBIT maybe of Thank so. you investments. last for I an Mario, the and guess, your LTL sort questioning line on is

peers Your up in timeframe. XXX% LTL are average that over about on

to are really to an performance capacity network, the of would guess, deserve idea to capital improve capacity conceptually sort expansion when the when existing network to haven't improved price, that's we're we So, improve and more on adding the you not be Why the appropriate lane why I does think balance. getting the return in capital already able justify the place? invest strategically, of I able into already would in be been place?

Carl Anderson

Carl. It's Jack. Hey,

a at we a a on as are return as invested we -- we running on -- at investment it's capital. look actually if very we if return getting return. capital It's just on perspective, from far So, probably look what XX% did sizable

is So, benefit is the -- relates what reinvesting a pretty very into investments. as for getting network, big obviously, it to those we're

Jack Atkins

the And underperformance peers? versus

Mario Harik

network. Yeah. had this into back When the the bit, quite discussed capacity we went look A a we lot to of we over, and in Jack, it past.

XXXX. happened CapEx we And obviously, add all to maintenance end XXXX, more a what discussed of quite amount amount but pre-COVID capacity business so we was of refresh the on have invested based these can of into handle volume. the back in the the bit equipment, a So, way dynamics. were through not to we capital And on

these solving forward, all things. of moving for we're Now

yes so we say of we capacity, So, customer in more often and capital are ahead the can to investing demand.

through very are we focused in customers. on And will these We in our through continuous in XXXX. terms both pay margin improvements of plans returns offer our higher and best-in-class to the be time dividends service service expansion over

Jack Atkins

ask you Thank allowing to the question. for me

Mario Harik

you. Thank

Operator

gentlemen, the final any turn Mr. to for Harik floor concludes that for allowed comments. our Thank you. I'll Ladies back and questions. time

Mario Harik

progress morning. everyone thank business. this delivered I also not we've just the And for to you for they've results members us for the I'm proud team made, across we but joining Thank that want solid XX,XXX And our created. the momentum

confident service our look be and LTL you have year optimizing of parts upcoming we through share will make organization conferences. three We're this to operations and And technology. pure-play this full we year bringing of a pricing we'll market America, a carrier. with all capacity to strategy, these best-in-class the first high investing strong forward energy earn of providing North In demand, who's ahead three in our network as all our more seeing growth to progress and that at objectives,

close please line. Operator, the

Operator

This concludes you. today's call. Thank conference

time. your may at this your for Thank disconnect you lines participation. You

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.