Saia (SAIA) 3 Feb 202019 Q4 Earnings call transcript

Company Profile

Participants

Richard O'Dell	Chief Executive Officer
Douglas Col	Vice President and Chief Financial Officer
Frederick Holzgrefe	President and Chief Operating Officer
Jack Atkins	Stephens Inc
Todd Fowler	KeyBanc Capital Markets
Scott Group	Wolfe Research
Amit Mehrotra	Deutsche Bank
David Ross	Stifel
Jason Seidl	Cowen & Company
Stephanie Benjamin	SunTrust
Tyler Brown	Raymond James

Call transcript

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Operator

Good day, and welcome to the SAIA Incorporated hosted Fourth Quarter and Full Year 2019 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Doug Col. Please go ahead, sir.

Douglas Col

Brenda. you, Thank everyone. Good morning, SAIA's fourth call. to XXXX quarter Welcome conference

are SAIA's our Chief With & me Officer; O'Dell, call today's Holzgrefe, for Executive Richard and Operating Officer. Chief President Frederick

you this within the might other of call begin, Before of during Reform Securities statements call be meaning not know statements XXXX. some statements make that These the the forward-looking we that forward-looking are we should Litigation may on Act Private risks are and exact your for made and our that all most subject may to actual materially. facts press on our risk of differ number historical could cause results uncertainties, results a and the more that information filings actual differ. We to to factors recent refer and SEC release

to to Executive over like I'd the call the Rick Officer, turn Chief O'Dell. company's Now,

Richard O'Dell

thank Good for a the to disappointing. was I report XXXX am full somewhat we us. fourth year pleased joining with closed results despite out that record morning. that And quarter you

Our record Operating revenue $X.X record record income to also X% in X%. $XXX year's last a by XXXX by billion, grew surpassing was million. a

Our in negatively by which financial opening fourth million. relocation record a accident and as as review. more cover impacted detail costs, well in Doug terminal results quarter's will quarter severity, was The revenue were $XXX a

last reduce both throughout haul miles others But And and in weight our per revenue average. Despite three as in modestly declining a period, by the transportation XX.X% in full our percent to line fourth new X.X% results year. XX.X% miles to line quarter actually able of a percent year line a to for improved as terminals led to the from productivity and the operations challenges and the decline were dock of load dropped associated slight with haul purchase relocating total shipment cost city we haul year three the the opening operations.

improved both year-over-year terminal on-time growth delivery workflows. pickup and despite the our to and metrics of the activity on-time report I'm that pleased all

slightly Our cargo new X.XX claims employees. ratio last year, for the terminals was again the the full despite and all new up improved from X.XX year all

begin, we've May across new new Northeastern operates XX locations having terminals states Since XXXX, markets of in X XXX US. SAIA As XXXX. opened in XXXX across XX open terminals the new

Our resonated expanded over has our raising service annualized and value offering run proposition quality we're to quickly of With an geographic service exiting our consistent with fourth markets. offering $XXX base out and we're customer million on and the into our these customers. reliability, new rate enhanced and of quarter

rose making year-over-year Our the in quarter yield X.X% fourth our consecutive improvement. XXth

quarter over highlights. I will for full of now turn financial the key review fourth and Doug call to year

Douglas Col

the from per $XXX year-over-year and was Rick. improvement respectively shipment in revenue decline a the of to the I'll start the quarter. mentioned, up quarter. Fuel Revenue X.X% Along also growth rose review of yield weight fourth and X.X% was Rick with Thanks X.X% haul. and million. rose per total yield in a X.X% $XXX revenue growth of from tonnage revenue. revenue shipment, our with benefiting Despite length and the increase our to from XX% benefited shipment in also X.X% X.X% of surcharge X.X%

terminal with new with quarter. terminal Operating was three much fourth the and in Along which income XX% stemming insurance with openings in with associated severity. reserves associated quarter down relocations from of $XXmillion year-over-year increased major the at costs occurred of accident decline three

the quarter X% color Additionally, higher average Salaries, on and cost little year. benefits employee a by as the bit approximately count the more run, prior offer rose I our on XX.X% than follows. wages can reflecting being

continued was increase wage Our July X.X% healthcare inflationary and approximately cost.

growth from increased year-over-year in miles growth XX.X% in and of Purchase X.X% PT mileage. a combination costs XX.X% purchase transportation rail

of X.X% the fell diesel miles were the by as were total quarter of X.X% in prices fourth Fuel national Our year. to last to year. quarter to overall expense miles X% X.X% compared quarter miles in the lower throughout compared average last total PT X%

gallon with miles improve as offset approximately the per to help across growth fleet and the mileage fuel costs our well to X%. continues Our of associated

and primarily by XX% expense in Claims insurance accident the spiked severity. due quarter to

The expense Our our benefit five ago, training revenue million years. continuous was technology. produce quarter saw trend of XX% cargo now the ratio through with than in of associates. X.XX% up throughout year our properties to age improved investments higher quarter we from year a newest year claims began equipment, a as is last of tractors the our was matching X.XX% in the also efforts average dock and but reflects the than Depreciation and $XX.X less

grew the X.X% XX.X% expenses compared our year growth fourth revenue to quarter in ago. and ratio operating quarter, Overall, operating to a by outpacing XX.X XX.X deteriorated

XXXX Our impacted by the tax to tax the fourth of fuel covered credit that quarter to EPS alternative periods. earnings for tax The quarter rate was by $X.XX. to year. rate positively prior $X.XX fourth fuel share were enactment the the XX.X% benefited quarter $X.XX was reporting previously compared diluted fourth XX.X% XXXX year. mentioned The and Fourth quarter an per compared tax in last credit

a our record. and for was also and Moving billion year income the full XXXX. million $X.X operating was on record to financial $XXX annual an highlights Revenue

flat at held ratio XX.X%. operating in Our XXXX

earnings full the the $X.XX again, tax of alternative share of by enactment XXXX, a fuel as benefited $X.XX the $X.XX And versus XXXX. our diluted year XXXX mentioned previously reported result per credit. For EPS were the in

to in be and expenditures This of XX.X% were $XXX and $XXX in million capital At million continued of we December $XXX total In to real This infrastructure with forecast Net expenditures capital equipment to XXXX, technology. terminal to net improvement projects, XXXX fleet our investments expenditures net in $XXX leases. in capital debt including capital XX, XXXX. of investments acquired debt compares to debt total net are approximately was our capital capital XX.X%. net including XXXX, million at total estate, XXXX. December XX, and million compares $XXX million was debt

Before closing for remarks. some questions, I'd Frederick we Holzgrefe line open the for the to turn call to up like over

Frederick Holzgrefe

Thanks Doug.

nine openings like we to would in better mentioned for us our the I that XXXX, and I'm Rick company's year like how network. pleased we position into and terminal positions operating completed margins, with with new While also shared our but some terminal stronger is the gains XXXX. the certainly highlight to relocation out company's major moved growth all service across long-term trajectory close in

markets the will In to service January upgrades come in in Other as larger we terminals both the occurred in where terminal terminal terminals Indianapolis relocated terminals major years we into facility counts markets new relocated owned at our of last opened past outgrown essentially a two than New market. Northeastern the moved within major new The for we facility door In a our doubling location in and lease Phoenix in the in the more that we Pennsylvania Philadelphia those new doubling the size former break year and Harrisburg, locations. owned both York, US. Newburgh, that years.

count slated capital door be we The one calls fleet. year. in the Northeast for total plan have in directed towards first opening our In for and our the share terminal lion XXXX, once of a current then again XXXX. Our XXX% relocation new handful of our by balance expenditures quarter in the XXXX in of grew will

comes with of than average of new years in planned now based tractors age the with Doug below should a four our and fuel that five on purchases. suite tractor XXXX new greater safety reliability dip technology age As of fleet lowering in-cab our and fleet Improved all less benefits is years are the mentioned, buys. mileage, full

And softest our we view to months In seasonally one in respect continue business. finally the as freight the current muted. with environment, somewhat freight of is January fairness, to activity

months don't X.X%. weight into one with comps, much X,XXX process. pounds Against want January in line grew last per as per couple shipment per December. the to and saw The shipment in January most over Weight seems in we be shipments day trend what trend was the to while bottoming I So is in day November encouraging the read month. grew the easing X% tonnage per too

excited about to the investments We're date.

in they we feel and XXXX share beyond. As us margin improvement and position for

With ahead like to that the open Operator? questions. for and call go said, I'd

Operator

Instructions] [Operator

with Jack Our Incorporated. Stephens first comes question Atkins from

JackAtkins

for my Good for Thanks questions. morning. much taking

your weeks update things us you tonnage there? guess like couple And of off, and start to months that? going function I to just the Could do then, there's Fritz, over by up here you begun do what improve tonnage demand maybe a January. maybe what to you that were? in ship December just in of on bit purely think comment in sort sort market. to the last last curious like last out And it back just been So or on step underlying of feel freight the metrics December a eight seems comps and driving a to and the six is easier Is stabilize just have of judging

RichardO'Dell

been I'll up through and against that, picked guys shipments and December And In was up the up tonnage positive. tonnage start November tonnage we'll Shipments with October, as our X.X% take was up tonnage year first shipment X.X% take you December shipments part up up X% tonnage then Jack, October, November little quarter. the of XX%. year in ago. November, shipments and and comparison And negative X.X% mentioned I'll a you had was that growth our up bit, throughout and and and things a X.X%. were the shipments were a ago up were

easier. So the comps did get

saying. In terms are in environmental it's down mean industrial same mean I saying. of was numbers production you're December. the we I

turn fourth six once been the five have The was last trends was of that they where six think down. now for negative. or months I PMI it out the negative months

now say weakest of because it's So anyway. the to seasonally than the month quarter tough more that any January

hard seasonally month. So when any pace out environment it's it's the of in our of to of kind difference kind call softest

JackAtkins

spread saw above Okay. news January good is just it. in XX you. The Got here you. to we just PMI Got

that's So encouraging.

update So for I OR improvement your in just Could up to the on guess moment. shifting a you us front margin for XXXX. outlook gears

investments. us XXX improvements think And younger age? get the year-over-year of basis you XXXX all And in fleet margin points number a versus whether productivity to from I on to a perspective help improvement were expect that of these third call, plan? the you can just still its then of saying XXXX. the that leverage XXX quarter having you from Is sort to bridge sort that then

number be will helping very for to I think to to bridge would that helpful folks. just that be

RichardO'Dell

Fritz, or like of be We be rest probably the Okay. we again, I'll deterioration points. outlook And And and top-line a maybe, XXX And revenue what insurance current quarter. seasonality would modest XQ ability a historical don't talked kind volatility XQ terminal but in I to as basis XQ modest in up our XQ in at think in forward point comments range to have weather the our start XX given the as some this well self that is going points. OR would exposure, time. expect then always outlook, historically about cost are that OR that to And at had over and some would Historically, apply from to carry know about performance, improvements we're basis we've some there improvement OR we our to but well. get of January a point openings. this again, time Doug. confident and have the

add to want else, something Fritz? You

FrederickHolzgrefe

actually we've as made have cover. to that depreciation up we're thing year into only fleet that this creates pretty several would in last The last step that the a to Jack, that, over year-over-year big is Yes. we I and improvements to add year know going years

quite would be have all investments see. ready costs productivity city fleet But going but You docks, tracking in in inflation on you ways of across also improvement operations. our line the only haul where thing. then we said, our to and we're to wage that It's can we to think give all the not early to highlights benefit we're some inflationary technology on and not typically drive of areas costs, planning but the systems going operations and it, for sort look are obviously with market-based that that

XXXX we are the beyond. in in that improvement And investments frankly those helped we and that would hope have to last several quarters made see that drive margin

the know As we us into those the --as those drive year. improvements or moved we these markets, margin help benefits markets into as we certainly have productivity and Northeast coming will are high-cost sort

JackAtkins

Got you.

of points is So XXXX. XXX still in the plan XXX basis to margin improvement

RichardO'Dell

think this be I think is yes. think show mean I a we we've fair, investments which an We've won't and it lot expect strategically realized that's that's incremental would expectation. me the I a get mean on to made year. quarters, But it. across be some the linear But is terminals. correct decision adequate I I clearly --that right. return to our of mean we open I made

Operator

Todd with from comes question Capital KeyBanc next Fowler Our Markets.

ToddFowler

congratulations about rational. maybe the seen Thanks comments I and a third start Maybe behavior you were good that. the morning. to you officially just And new hoping where can attributed are quarter. the And, release Doug, about to for role. pricing the just on Ad in maybe on you've was expand from in any quarter environment remaining in changes some right now. if fourth contract renewals comments some

DouglasCol

Yes.

we've environment to pricing. end the and of with the inflationary seen or be mean of XXXX got deal next competitive everybody's rational year So kind to the the year cost. around I

we that we people And same you time I backdrop. marketplace, So continuous competitive the be think performing at but I rationally. the that are see see people think in --have as them

to good of our a and good thing, strategy that part our right So be continues now. market

X.X%. renewals contractual quarter the in Our were

ToddFowler

Okay.

So think, in are that's around pretty X.X third -- consistent, quarter the they I so

DouglasCol

Yes.

ToddFowler

in I cycle maybe guess but would just of mid-single pricing sounds you're kind put behavior seeing a we're with renewals? contract what at a the those expect, bowline, still bit like you it digit of little that where is to

DouglasCol

Yes.

So far.

ToddFowler

Good. to it in there's expansion, be gears just like to going the sounds talk opening XXXX. that Okay. and terminal And one then about shift

I XX in brings think you about that to total.

you've Northeast forward XX about some number is a of that just change the pulled Is talked you in in need timing previously it where growth XXXX. XX. the You'd of into terminals the a there to or

from begin a breather then about accelerates geographic think standpoint? expansion take Can at and a help number You us the of XXXX. XXXX of terminals you in in where just kind and you're

RichardO'Dell

talked I opportunities. would good time. we we think an up terminals pretty when characterize launched allows about the we is to XX I organic probably about is the expansion us Northeast the it, coverage plan, as speed our us to XX back if Todd, thing go And to that slowdown gives way it great over or see you

saw opportunities so and a an But absolutely results. as at we that our we're the had had investment. and year, looking impact So QX QX sort timing last pace on this we long-term of accelerated

the So that's part the it, nature quarter-to-quarter of profile. investment of

But XX to -- as evolves I think provide in mean us. XX we I same is see probably longer-term at you as Northeast, the may think as look of numbers I incremental time, business to we in that opportunities that coverage could the reasonable. sort for other that market market develops

XXXX. at date think the generate of it's don't I we've say opportunistic to know a six market the that market. to all months continue XXXX, look So we're end really that on at in but to we this investments an we year I as particularly made we that where are But I in those be the in would return in opportunity last

ToddFowler

relative those do million a the is margin and made. you the thinking And profile opportunity then that investment of you on the to that drag the genesis that's lines, of share run-rate to of and Got Okay. in makes Northeast, question That obviously the maybe question where you the it. of is but happening you've kind the about that care can me what along revenue for And sense know kind Thanks. leverage as of go the for business? the last sense. it's just $XXX the

RichardO'Dell

Yes.

in the that period. quarter incremental the but and was network same think at the in in think time, benefits is I to it also our at does the the We rest in the balance I over impact OR investment with to it's be a is this line that an I will will the OR company. drive able I the we Northeast way touches time as of know all impact specifically that company going XXX would that our of at up the for If of what full over Northeast that fourth know But that over overall more of characterize was that in something the of the all-in drive overall; well. the growth company. we a growth region corners those the those So business, looked

intact. of year. we just out can of think last still I the drive doesn't pretty that the expenses So The were change. the that area in happy -- It's what half that value

ToddFowler

No. makes on Got it. halo That with sense impact especially region. the the other

So in the the back I'll Thanks jump time. queue. for

Operator

Our next question comes Wolfe with from Scott Research. Group

ScottGroup

Hey. guys. Thanks. Good morning,

follow to OR So year full want commentary. on up I I wanted the

imply doesn't margins. twice So first quarter flattish

is that comps there of costs throughout the builds Is easier or toughest quarter is lot anything want that year? a that understand OR sort Second got trajectory. the comp the the to year anything or loaded. just the for are back-end that Just about so improvement

RichardO'Dell

I of mean well. better or having, I revenue with combination set weren't going margins -- comps first combination And that the insurance think year growth back easier of investment quarter the commented things, we than some the we some it's comps, The it expect A And were think we've it's of improvements. quarter right. as half but primarily a self kind well targeted I particularly We had with great is we we you after just was, that cost fourth we're by performance. But the forward making of volatility. weren't either the quarter, in the investments. would back know, was certainly our driven our did. but is and pleased an of as -- some back operate do wasn't year to half.

ScottGroup

understand of the is offset picking is sort or can slowing just either or any us revenue yield the terms year? in start or sort of yield to tonnage day anything? there any there to then give trends And up is the you obviously per Okay. want of I the

RichardO'Dell

from our perspective. going improvement to month but -- it's get tonnage can to I like it's we you're -- revenue. quoted you similar as the in in assume first right we going trends were a And one yield into just the and quarter had first the the number, similar fourth quarter the take an

ScottGroup

up on just last of per the question do that? shipment. higher? my think any TL you what then the rated pick is And weight anything Is Okay. or the driving if in it up pick What tell there sort is economy? weight per you freight Can driving shipment is in

RichardO'Dell

kind not like just something or it's that There's there specific say for would out that. or I Scott, of a vertical market broad-based. a call So, really

going identifying we're focused that's helping the always, the on I our margin efforts pretty As best be to maybe are to to incremental some have broad-based. freight but driving business drive overall there or that there drive think that, characteristics are going in and that that it's

ScottGroup

But try or to with business you're up some TL network the a push making not anything. fill and

RichardO'Dell

more normally than any Not take advantage No. we that. of

Operator

next question with Deutsche Bank. Our from Amit comes Mehrotra

AmitMehrotra

Thanks everybody. Doug well. operator. Congrats Hi, as

obviously in any I of opening and terminal expense a know a quarterly? center depreciation or in up, the XXXX XXXX. additional you flat rate there. quite one opening up assume service in follow-up, got help terms stepped What's new but run quick a it's up the Just I bit tab.

RichardO'Dell

XXXX come but Yes. another be CapEx the is I up projected was XX% would in XX% likely just say the to year revenue over depreciation mean to almost number total heavy for say, is or And the probably on I year-over-year. down of depreciation in I guess it I'd in being XXXX I with XX%. up equipment, XXXX XX% mean, full

AmitMehrotra

year-over-year? up From XX% to XX%

RichardO'Dell

Yes.

DouglasCol

Yes.

effect in have comes the equipment what last online to plus the year new of lapping added we going XXXX. You're that

AmitMehrotra

Okay, interesting.

I wrong just I expected, would That's than have something there. a lot but higher maybe did Okay.

Okay. question -- And then one

RichardO'Dell

six ones don't mean relocated opened and but Amit, think into new wrong, four opened anything's I facilities. other We mid-September. new we terminals I since

those there mean equipment plus the investment I all in of a that So facilities. goes lot

it run So rate like, I mean Fritz, said, the --

AmitMehrotra

fault. It on bit weight Yes. about quarter. when a outlier the looks I as per a it my ask the per just little Yes. decline but weight just of in modeled looking being know modeled wrong. And I backward think Northeast wrong. just it I shipment -- question like little just bit to, not just a shipment. in want it I It's you then to modeled I I especially it's it's to dilutive really want an

I the in think that you past. before said

I I Houston month in talked guess o-patch market, headwinds were November know So maybe any quarter? in a about the mix weak of and market. being there particularly out you

is at I reverted as --did month obviously, started that or the at Just November pretty you big talk revert about the that it So, has all was drag that it very and all year? a the in of least. what guess

DouglasCol

a lessen, the the No. the year-over-year quarter call I'm in right. weight year prior shipment, from declines actually throughout per

So per shipment per per weight was X.X%; shipment than was weight weight less shipment was then October X.X%; X%. and November down down down December

things mentioned, December January. per So at we Rick, be here year-over-year right mentioned I seem actually quarter along bouncing the and to I to November little is I saw mean bottom weight we in get the mean stronger or seem shipment here. and much it a mean earlier, like, be where pretty Fritz was

AmitMehrotra

Rick precision anything, more is oversight of structural the or I the gives Okay. an doing guess you guys margin doing the bit is it's in that you doing perspective year raid your operational operational in there or different that guys in of past? I just realize a you're I the-- given the if guess guess oversight in guys cost to actually or mean maybe execution something perspective Right. for years. that. over or terms confidence anything for broadening a opportunity or intensity terms little just And of is what going and XX-months that's realized? schedule, from confidence to higher ability to be of, that see past more that like next it's relative margin this You XXXX, kind picture you opportunity then kind I one Fritz, me. are question from, bigger absorption I guess improvement unique

RichardO'Dell

pretty couple over in drive incremental across drivers are --we're cost feel have our in sort think elements got a network which operating excited all of around earlier we the made I help like that we technology margins. we major about. those mentioned we've and the were year Well, that investments course will us the that we're that building I momentum of

we've lot I that in past quite we mature. that invested see quarter we also to industrial, those pace where this leverage operations analytics into I that and as and to or will beyond as fourth that in frankly should think that to some position will dealt New new be of they group to a an and we relative sorry of see be continue part think clearly accelerated our the I strategy a year. engineering what we there I our the think our -- the east, where think Northeast to there's help. group execute assets benefits Those compared the into England XXXX of and the will benefit start simply with third at that in we've

So combination I over those drive of time. it's sorts that and incremental a think technology of people help investment returns us will

FrederickHolzgrefe

responsible opening the Amit, same, some kind of the terminals our operations those that doing people and for comment and in engineering all thing. was of just would the same leadership I Yes. training

to that You then those Northeast opposed terminals. focus training costs don't executing some of people geography on and as the opening and to of doing of throughout more have the of and our those is team traveling

AmitMehrotra

just kind on does right the falling back the in very or the Is run and Yes. current of of first the point. No, the And Does that's it quick one cadence then step continues the XXXX? up to a normalize just half back that from thing course DNA. rate it step to up then half? good in

RichardO'Dell

to say I'd throughout say, I'd trend year Yes. are my options. up It's little the those bit. going a

going equipment as a delivery couple --we've we've it of just -- real year. couple got shops. up making a opening more a estate this few new We've projects take we got are got We and on relocations

So year through I'd that number. the say to it'll trend up

Operator

question with next comes David Stifel. Ross Our from

DavidRoss

gentlemen. your Yes. accidents Good you and any XXXX things wanted lot and look the side to increase. point? imagine of touch coming a days. it's at a a on do potential When up have thorn truckload attention on of been side it's you for insurance, helping morning, premium I on, in these at renewal these I can't while decent getting off a any are

insurance you do Year? think how about So into the move as costs New we

RichardO'Dell

Hey, tight I'd last a case it, two side. That's David. seat, mean the we did auto in are an or QX from three say insurance our the I of market on while mentioned we referring though, you high you're looking very been for the mean truckers severity I that's accident to in years Obviously, for have in on list. terms liability that

meetings at claims days. really few to would good of I've imagine. got the a meeting best-in-class tractors sitting after a these approach think these years a would lot been any kind terms safety And of last our we've I in a of that insurance in technology we be as putting as I over some Our on prospective road experience the companies. the has lot been with of

will for Our of with level economy. they full first suite what to as two loaded new that facing cameras blind year spot everything come mentioned, this tractors the have inward detection we call in buying be they from buys the and Fritz forward time

that on more than don't doing front are. we nobody's think So I

positioned So deductible process the our or X into again, get renewal, continue at inflation a retention up renewal successful I as is better well and some a I is we're our than March to we're is tower with inflationary. tower. changing, underway. don't hold $X for renewal we out We'll think but most the you although see look building million. But that

DavidRoss

expense severity accident increase of and better even terms you insurance with insurance the and hold year-over-year. flat year have in you frequency if So experience could this claims think you

RichardO'Dell

mean terms a going I us abnormal be year program. in we an down It'll didn't the in had is have structured up. though a mean we're No. for part lower good we of severity. the thing -- tower of I in

in most of great some expensive So tower. consistency the we've the got part

we're is seeing inflation where that tower there's higher the at less up dollar So the premium risk.

DavidRoss

Okay. And about the the Indian Rick I facilities. then business Fritz, Phoenix you back talked just guess and for to expanding turning

which is country about expansion your do the portfolio? time. consumed rest What Where of the As there? you parts like you weaker? opportunities? outside is think What growth business of are you Northeast the the of stronger, the the a seeing across How look lot of rest looking of are

RichardO'Dell

Yes.

David, So, door sort what or our footprint. our replace need pressure of expand closely footprint to pretty our we is we typically we either do try monitor might where operational

of process. that's ongoing So an kind

have markets We coverage. time pointed out have don't key also probably in the of appropriate over that level we

Atlanta So an be would example.

one We side. Atlanta. at the on terminal It's have south

going start will terminal it, kind likely and this it'll to year our add most normal a of into on not replacing be add be opening most side. It's facility north Memphis We'll that's XXXX we likely. a course. We will in XXXX and

We footprint, around expand drive particularly an efficiency operation to there. opportunity see some that break a

So our the in ongoing, to throughout something our we can which we certainly look size but areas also better that the add market at growth if geography. think you mean, if incremental highlight And look can in you it's capacity of legacy there that's at we the Northeast, I kind we, are geography, service customers.

Operator

Company. Seidl from question next with Cowen comes Jason & Our

JasonSeidl

wanted Thanks trends. operator. back I circle morning, numbers. January Good good pretty Obviously, to everybody. your to

please? looking tonnage remind easier You XXXX versus Could comps us for both comps. mentioned, and they were you how are shipments, up against the

DouglasCol

Sure.

X.X%. in walk -- to the And shipments moving shipment X.X% into last mean per first the through QX-- the down So declines quarter were in I down the yes on flat just And year about first quarter. was tonnage quarter weight

JasonSeidl

on Doug, monthly basis.

DouglasCol

last February And down were if shipments and January; ago year shipments down was X.X%; tonnage, down February and were a a about talking down in X.X% shipments we're in were down X.X% X.X% tonnage X.X%. March up January X.X%; March. Okay.

JasonSeidl

to me expect. gives good a Okay. That what of sense

at rates moved As around. your I look obviously, model here, the tax

the the at You for What news we some and in be had modeling XXXX and of XXXX both should for year good end tax XXXX credits. some beyond?

DouglasCol

mean we walk of what I Yes. I XXXX. XXXX into think we'll kind expecting in did

for to in right I a using fuel XX.X% up the think the Last we're full coming year at year. it's rate with credit, XX.X%, tax think model this year at about year. XX.X% I the but ended full

JasonSeidl

at it credit big at you're very share that. upwards to at drag to of been That's and looking above get to of on potentially on obviously, to out normal the the $X you you earnings. in into the get money But had that a conceptually already. I sort money been it from going you we little look more grow to Also your as grow that Is the the a a paces that earnings Northeast. bigger the well guys market bit a assume Okay. right lost, Northeast, sort expansions picture, to it has a of what going that of --continue could swing

DouglasCol

in XQ, --the there, just but to Northeast. we half. mean went the little better a breakeven and second I'm of all not gotten then had beginning you'll that remember terminals math a in And than bunch sure the EPS new in bit of your I laid we in

not potential all but sure So build up I'm the these accretion, point we the with starting to term you're certainly in using a long- made that investments horizon mind.

line last but cadence we or September, I'm trying earnings. or are the the maybe XXXX go bit that [Multiple sure a terminals can middle Speakers] to off of open the first optimize half of XXXX not We I little since through six would We

JasonSeidl

sort looking We differential. modest of looking need then the line more the was then But Appreciate you're to the an the what in do $XXX now. Yes. and loss we little that that growing million Sure. and bit on can a get OR then go of at time. the coming in assuming whole and a I don't out-years company for offline. just to

RichardO'Dell

They OR what to the is of I'd see know we for impediment. business, trend balance the about just you entire, we couldn't right. the the an the add there, Jason, Northeast see do get don't that

continues opportunity for think we that be to great us. a So that

you we our think OR it. representatives that on then share put that So I in get market

interesting us. it's I pretty for think

Operator

comes with question SunTrust. from next Benjamin Stephanie Our

StephanieBenjamin

Hi. to only morning. side, focus been for about the Thanks to want question. a you doing a talk data analytics what can a just bit you've on from on a I to side, talk also Good little internally little that. bit maybe but continue pricing really not pricing

having you you're can just to that So go just continue conversations improvement. and yields see forward, through nice

receive of helpful. any Thanks. kind of there we So can we would kind color that can be

FrederickHolzgrefe

a XX line cadence that cost to cost I What business got what our identifying you do what Stephanie. of company customers inflation in are. And line those, to related do sense network. our that? we'd returns and expand a to analytics we get. how time about we is the makes -- the which exactly network. really drivers that if the in this that always what Thanks network. opportunity in book that the to understand state drivers the Identifying refinement to drive understanding mean area our get are being around got like haul an continuing network our further in then a within business freight Sure. into that haul you've We really is What or refine price effectively of as it's to that is the evolves

refine continue quite structure very, claims and us the to as has and those being the carrier frankly, we we we over have the gives as and continue time accordingly. be our have our or as it. evolve national And evolve, a to drive on allows us more where time around we to also a opportunity our in quality opportunity balance improve in we to that of that freight to pursue national That cost then And can price continued opportunity analytics, on to decisions. being more bid to competitive our position footprint ratio pricing very drive both

because customer leveraged we not the might We're service want. out don't the have

that that our this find highlighted in best things. that And to those freight --at to combination quite those it's drive in are frankly it's this analytics about continuing of but works things know get we've a stage, So I network. time, those that, of sort over incremental all really

StephanieBenjamin

up on a specifically just guess follow analytics. I that on And the focusing and

of a up and been frame the some a that's we in to how more something start or year see recent terms big could has that really in Thanks. initiative of return. innings last or XXXX step at So in that maybe were what

FrederickHolzgrefe

Yes.

several process for I think us been over it's ongoing years. an

think the in pretty invested as I I is highlighted we've I earlier will. if exciting think you one is which that things of technology around cost, our

so operational better cost, line drivers most the opportunities pricing be best us cost the operation and and and that planning. competitively better margins. to are with we around for haul planning what optimize grasp can are Our dock costs and Those

as time opportunity over data to think continue drive enhance to analytics I the those we of margins. us So that sorts gives

Operator

Brown with from Raymond James. Our comes next question Tyler

TylerBrown

Good be legacy quantify Hey. or piece? mentioned dock Rick, network to that I in your Hey, you the are think Can morning, speaking you is clear, And and entire guys. to you that? P&D just up productivity the XXXX. was just

RichardO'Dell

the modestly. up It's to entire within range. No. was The just X% network -- X% year-over-year

TylerBrown

Okay.

to you Northeastern parse terms are behind maybe to them If how XX Where were out in far those of would say want productivity? get steady-state? facilities, labor they you

RichardO'Dell

more it's than company -- the there below average. And XX%

TylerBrown

Okay.

It's Okay. opportunity there. lot a of

of lower and putting I network? know to head capacity across roll volume or say was think X% but that be you grow you you for QX together Doug shipments? think rate do can dependent, I Do maybe than going mentioned in but as but up head there's that kind Fritz, QX feel So count at you a it's a you labor say those in you bit latent in the count saturate facilities technology maybe here

FrederickHolzgrefe

Yes. think Particularly so. Northeast, in We right. the

many than that provide productive, in and we're to makes most cases right. rather markets staffed be service those in sense if So

at So we're capacity. aren't operations -- our P&D

improvements. that think OR; total terminals, rest Northeast an operations. if compare think you that really you is, some the that drag opportunity real around you'd mentioned us about to there's say full productivity of we a year, there for just as there there's into company we've opportunity is particularly the to drive drive the in newest I there that's a the those a So market that Maybe and allocated grow some incremental for to fully

DouglasCol

we're line for percentage because run build density just a you as and haul a city then whole. partials comment I you not schedules of in it's too partials the And would in service are with running your smaller the dock

TylerBrown

the Okay. sense. still, opportunity That you But in that that makes they're it as feel even labor well. call do that legacy piece latent

FrederickHolzgrefe

Yes.

TylerBrown

dock, guess. all I three it Call aspects

FrederickHolzgrefe

I would yes. agree,

Q&A of End

Operator

conclude will I our session. question-and-answer

the Mr. now turn remark. back will I Col over Doug Now for conference closing to

Douglas Col

get after forward you. chatting to thank stronger everybody then month joining for the And the Well, again winter us on and the QX. we through of call. Thank look We you, year. to

Operator

This concludes today's your participation. call. you Thank for

You may now disconnect.

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