J.B. Hunt Transport Services (JBHT) 16 Oct 182018 Q3 Earnings call transcript

Company Profile

Participants

David Mee	EVP, Finance & Administration and CFO
Shelley Simpson	Corporate Executive VP, Chief Commercial Officer & President, Highway Services
John Roberts	President, CEO & Director
Terrence Matthews	EVP & President of Intermodal
Nicholas Hobbs	EVP & President of Dedicated Contract Services
Amit Mehrotra	Deutsche Bank AG
Adam Wieschhaus	Cowen and Company
Thomas Wadewitz	UBS Investment Bank
Matthew Reustle	Goldman Sachs Group
Albert Delco	Stephens
Allison Landry	Crédit Suisse AG
Christian Wetherbee	Citigroup
Ravi Shanker	Morgan Stanley
Todd Fowler	KeyBanc Capital Markets
Matthew Brooklier	The Buckingham Research Group Incorporated
Benjamin Hartford	Robert W. Baird & Co.
David Ross	Stifel, Nicolaus & Company
Kenneth Hoexter	Bank of America Merrill Lynch
Bascome Majors	Susquehanna Financial Group
Brian Ossenbeck	JPMorgan Chase & Co.
Scott Group	Wolfe Research
David Vernon	Sanford C. Bernstein & Co.
Brandon Oglenski	Barclays Bank
Don Thoren	American Fuel & Petrochemical Manufacturers
Barry Haimes	Sage Asset Management
Todd Fowler	KeyBanc Capital Markets
Amit Mehrotra	Deutsche Bank AG

Call transcript

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Operator

Ladies and gentlemen, please welcome your speaker for today, Mr. David Mee. Sir, you may begin.

David Mee

Thank you, Donna. Good afternoon, everyone, and thank you for joining us.

Highway Roberts, Hobbs, CEO; Simpson, President Officer President John of Matthews, Chief here, David and Nick myself, Intermodal; of of have President Terry and President Commercial Mee. We and Services; DCS; Shelley

for up, Given have and me follow of to that up then one they the to we'll go let a an make then lines shot like kind and a question a for minutes. end be. they queue we'd open ask return call this I'll to first the at that Q&A. what XX the brief have give before call, will to We questions our format to is opportunity have a do want. The scheduled earnings asking participants of over the everybody opening the statements

this. So And that we that is time during many hope patience, as given your attempted through to we first this questions can as get we the appreciate do time. we've

sure, a As forward, will lot the into we future. I'm more efficient go it be

opening as that areas want I far have two remarks, address. As to I the

the these time performed referred the in not arbitration quarterly exposure, FIN adjustment are last annual discrete and and is in the computation the we earnings item XX compensation. determined to difference the what had reported At of our and primary after-tax rate for after-tax update as a rates charge had tax equity-based amounts. rate week, not announcement first The and between the actual The release. is the the charge the reduced culprits preannounced tax of our reconciliations

anticipate generated. our this XX.X% our will rate of full XXXX will rate be of our current that discrete in XX%. quarter, third quarterly quarter year we So QX instead XX% tax we and fourth estimated of the previous estimate be items that what tax adjustment used the With ultimately our

addressing award the announced, area elephant update. is, on in the the we room, received of the subject as confidentiality XXXX. underlying to the award other The and second we interim October protective And things, interim is arbitration among order, The award contract. X, obviously, the a

were that However, a $XX over period, the for able charge million to award, accrued a in announced. a pretax that issue specific claim was multiple that interim quantifiable we identify we

We b, information panelists also arbitrators award. be additional the practice financial interim we follow issue appropriate that additional at will to pretax final announced or this will press a beyond final impact determine, is any parties which submissions we then, and arbitration needed several going an entire from interim provide any been we our additional submitted Until all additional Once the stated disclosure required time. standard We the additional months. award or submissions in the next the interim the requested determine what awards; award award million financial are process, an is, that during to implications interim any awards, a, final and release has can or what over review further the to $XX say. we the we're said after award. until of cannot award determine of charge, These

we something So similar. answered going be any it with likely no questions arbitration this or we're award confidential is say or will interim the to on on process what comment, said most have all

to our question. Now we're we've take now questions headquarters, that, management as the your businesses. With the and first talk we when visits ready answer our about team assembled do entire Donna, to their investor community

Operator

Instructions]. [Operator

from comes Mr. the Amit first Mehrotra. Your line of question

Amit Mehrotra

quarter could the this understand year number. the does likely First Intermodal quarter, impacted that one basically you you volume the about just is in tight have in fully the talk lever reaccelerate, we can deceleration, volume team, some price growth, given market? impact about which if guys that? But the You imagine pull do derailment truckload you deceleration When I would to I just volume just volumes every expect? the the talk management or over the from did focus

Terrence Matthews

is in next year, XXXX. in XXXX, been seeing a that With focused this in we've Terry involved been been that I continue think as you a as marketplace. have of years approach price, orderly will on and I a and volume, you'll more results between Matthews. and think XX I've go We, and marketplace a most as the volume this to been better price has Yes, It's see the I've obviously, you're hit believe we year. we'll balance balanced I into in I that marketplace Intermodal lot think, we seen the the forward regards look

Amit Mehrotra

Could you in what major quarter? impact from - estimate to five volume the you the the the talk about be what derailments

Terrence Matthews

units. I believe X,XXX, it was around X,XXX

Amit Mehrotra

quarter it Got guess, I to it. just Is over underlying right actions X, next you numbers. over basis. of That's X quarters? the targeting for are kind over in helpful. nice right to guys cycle of incremental some given, Intermodal margins as in incremental level margins the next several a Is sort business quarters, that And that the the was continue third through expect that follow-up, of step as the just pricing XX% the the see kind an up to of the

David Mee

going I Mee. that's David mean, is - think this I

that to calendar effects won't the be pricings fact the until will those of going the the XXXX. we later quarter, the new in result, here that's is but up show given new a that begin fourth in think pricing I

I yes, that say So the pricing set. is would

operations, it, much more you've seen I in wouldn't what if margin expect operationally, of out a here But in QX. little So difference we can will. bit of then we squeeze out

Operator

comes the of line question Mr. Your Seidl. Jason from next

Adam Wieschhaus

for into more XQ guess, on for I of all, Jason. heading is This Dedicated expect then you Adam costs do Contract XXXX? and Services first startup

Nicholas Hobbs

trucks already for I Adam. pipeline would And say, some booked startup Nick, very QX. is and have we see continue is our in strong This would to QX. cost we

tailing continue yes, next of would that So quarters in QX. would say I couple off through the

Adam Wieschhaus

quick a then well. And it. as follow-up Got

way this of which you that of is that spot rates think to Or I pull just these which created because forward maybe out the this off? kind came there's think else an continuing that's fall. about freight, guys mainly rates causing to morning data this think truck Do trucking something spot artificial high, continue to do you seeing we're now work to of at tail fall? a

Shelley Simpson

is Shelley. question. This Great

We have similar questions.

have some I great We that know customers. say but answer have been customers do strategy, a with what a forward We full talking we've our that got can't to that is. question done

we have peak a good expecting season the coming leg as first come retail a into We pretty expect peak have Intermodal, they considering and and are would we are to good after so our that still good confirmed truckload to customers finishing then that. be

Operator

of Tom Wadewitz. line the from comes question next Mr. Your

Thomas Wadewitz

I bit on to But the of us in the prior give wanted And I a you start then, by for growth is, similar low growth October more question. trends, think, little a to freight I and on kind bit Intermodal volume little what month? what in the just, can guess, like year-over-year? the read terms a ask it's look of

David Mee

No, how again for calendar in let current then that's October, get again, stuff, about since down X% too I you Tom, not September are was X% early. affected Terry don't was we - the numbers what's year-over-year, I'll calendar you X% up. up to take the feels far tell what how he was tell I'll not so year-over-year, and it's anyway. calendar August and affected. down July affected, not our X% year-over-year, historical

our should the - pickup seen last week the here As We off in it'd be started December and very the similar normal West expectation through be so strong we're a we've X really next the December how past should thinking Coast possible X is basically far in what weeks tariff it very normal October. as - hitting far as extremely well. seen up in we've also so peak think September, that to and season to peak implications with be has or in the Thanksgiving peak,

Thomas Wadewitz

about next you're that then So spot what seeing and imply between the market you think how year. for and relationship what might do

in spot we but truckload the that a pickup. I it seasonal market, sounds have So good you're like guess, softness expecting seen

stronger I metric. November? later bid some that does that going in into data doesn't to play weakness out as that you get spot kind XXXX? that So you give lose then that and continued leverage Does should October, that the spot negotiations go be if of see we imply guess, you're But season you as the contract for into concern the

Shelley Simpson

implementation. have bid contract would here I know finished third I say getting working customers of in the with towards quarter lot were a business. our customers through more the seasons their

you've were implemented seen a So understood I more that of they rate give happen taken in that it contract think and total. surprise, being and got somewhat fully paid the asset bid needed players fact up, cycle They in willing to higher rate. from part by

Terrence Matthews

look rate over gap you rate has differential as the try Intermodal mention there, thing I a pretty fuel gone other when between The - truck up there. the year. we the job versus with at good the last but And up all-in much that - as is would substantially the surcharge we still a the pretty to truck and this did is what rates, there's the good keep fuel Terry,

So bodes Intermodal. that I think well for

Thomas Wadewitz

Okay.

rate? like about weakness to in overly terms market sounds of concerned it in truck Intermodal So the spot you're impact not

Terrence Matthews

No.

Operator

Reustle. line of next Matt Your question comes the from Mr.

Matthew Reustle

you're more quarter. starting bit in you fourth the your and conversations contract a pricing towards customers type as up and season guiding repricing again rate going? how the those been What you mentioned of Just increases are in on XXXX,

Shelley Simpson

customer by So that I depends think customer.

with creep have customer It lane, We they costs that cycle and that into that and bid came what us. them about depends occurring like. by looks really on really when the talking the is also started with depends by

versus have continue completed bid those year, saw different having cycle bids. that we some last their after the so So we conversations started cost customers and customers with of to we're creep just

Matthew Reustle

above increases I it of way norm? average Is year, next that reasonable different guess, historical expect a asking versus to rate it's Okay. still

Shelley Simpson

have think cost that - we We our challenges. still

number those Historical based to still but expect year in customers more than will coming bids, what really I be market our customers any better to are bid it's and We paying I'm us would pay happening. cost those for much. they still during able to want manage are changes you, about being norm, not being talking that to into sure next not the season. recouping be as But the that as surprised of on is what spot

Matthew Reustle

for quick And then me just rate. on tax follow-up the one

the As look still XX% number there associated? a step down 'XX, into 'XX? to we use for is right is change Or

David Mee

point have XX. change FIN the that is going Stock down have accordingly XX amount going so then will I'm is with price, to that to this we'll by goes that Yes, the items FIN compensation is be in in compensation levels positions time, you down if discrete price stock the and baseline up number. to stock price. stock in. both at tell Again, And XX% the income tax up be or going the with we stock or on based uncertain states affected

predict basis. So it's the to very difficult front-end on

my what out discrete we'll XX% the figure like. budget, look we until exact So use items

Operator

[Operator Instructions].

question of Delco comes Brad next Mr. line from Your the

Albert Delco

Nick. make get forward. talk you we think cost, A to dedicated going that million and question state that's about - XX.X% of you the when don't sort for you I startup startup steady Nick, necessarily OR, $X know in quantified and I add were you the the release back adjustments your could outlined like costs, of but

should you anything what ratio you the and don't kind of can for start-up cadence about So you've QX think quantified the than assuming costs have operating talk QX? the other do, of you

Nicholas Hobbs

Yes. in a pay, around that's you're there's driver in charges, lot of not is thing thing lot training mind, hiring so is those first Brad, to there. right, is normal a cadence. cost startup think, Well, But other the I stuff a of the charges, keep

them range XX% take on is goes margin estimate drag but down an some, you're thing, and Mile that that come to the it you it's little at the they I home OR into so standpoint. Our well business is Not our base of when when does from there bit dilution timing that's grow Final have what and think and would just running. in amount, more that. when the to the a trying bit. to little account go great as other of looking is and with cadence of all out be And to starting dedicated, XX% But a global it

just in at our out of look our performing that's startup, If margins. you base is accepted business it

of And the so a end that a the we of QX, XXX had We to QX added got just bunch end of trucks. is trucks which lot. from we

there, in little put we with that is some million associated that's very of There $X lot that So big that. items. items

and of needed be you'd would in heading them but where different, then we it year QX, one QX think get is back the see and I awards. start big more of as each OR So to next some

Albert Delco

Dave, one from any small The to is us follow-ups. two two then, very quantify been just you to last that's the Can there that that's you bankruptcy which And guys And you related on, Intermodal? if when hit tell I'm if to commented nitpicky for that X,XXX assuming exposure one then you announced, Can number recently load any? follow-up. month in impact year.

David Mee

September, X It's weeks, the major of it had the first bled derailments and but the September. the and mainly XX, when but first week August them went end days that major in Yes, of into but September, the August Pass the Intermodal XX primarily taken led August, the so impact it's lines or three out. was was X Cajon

Nicholas Hobbs

far while, your it that a one most And that Dollar for wasn't business with with And occur at out a them. bankruptcy, either to turned for it of we We've advantageous quite a one in year. point particular this expand grew stores. into us the them decision It as one time. decided but this as Northeast with as customer was then, they and the was the competed store did that had

the any happened, have chance? it no one. as one that far As today, to exposure that virtually We by was

David Mee

follow-up, a September. had and the in Brad, Hurricane we Florence

the in the Carolinas. that from and then to hurricane So September affected we had bleed derailments August

Albert Delco

included X,XXX? the And that in was

Nicholas Hobbs

Yes.

Albert Delco

And September that Harvey, you is you quantified and Irma last think, fair? X,XXX, and then had you

Nicholas Hobbs

Correct.

Operator

Your next the Allison Mr. question Landry. of from comes line

Allison Landry

from wanted rolled being on in thoughts railroading impacts I to initially the and what ask about the potentially your U.S. are out precision long-term potential across short rail?

Terrence Matthews

that Terry seeing - is precision is Hunter you're their obviously, the is this taking going what And precision in railroading, bits Harrison implement things each railroad I maybe CSX what pieces The they think regards within is overboard pioneer the and of that that. going in fit Yes, again. think, to the did the out CSX trying is to with railroads railroading. without the and all

could They in or some in that focused railroad? discontinued, that exactly are like that things and shorter I options there Can the does a to Some I figure and But different on. will the mean? on, to some Can long it have - the be of where this Can we dray? use where that have probably less a the few effects I be the of probably it January, think goes all big be that more, think get markets, service form and we rationalization of ramp? hopefully we're longer that'll we back is announced, out to happen - what we use and expect they a trying be fashion. believe thing different want some a will they trains there that's key than

Allison Landry

up, us following sense this, - purchase all? 'XX? expectations margins And does a rail then role give at the your color if on in could for then maybe some on in JBI? how for initial a your initial you And Okay. for And trends thoughts XXX play

Shelley Simpson

we'll dray piece JBI So the XXXX. the be into platform integrating on in

come And year. online of so our to XXX shipments, scheduled we that dray XX%-or-so mid-year be our will which platform carriers that's will be with, any contracting through do about next

Nicholas Hobbs

to traditionally, XX% Yes, margin. to been the JBI, have we've trying XX%

to think hope hopefully, I now that that and we're range be we upon can improve that. we somewhere in continue and able

be going box you or any and we with on equipment the in year, for to far what's don't As yet as have hard numbers budgeting really XXXX. to we're tell orders able next process,

Allison Landry

you noise. the yes, have do XXXX? background - that next Any for rail on does sorry, thoughts - any the year And versus cost Okay.

Nicholas Hobbs

than No. I in at there's point, mean, this it each past. increases. it year rail different doesn't And cost any the has look years what

Operator

question next comes line the Chris from of Your Wetherbee.

Christian Wetherbee

I about the ask wanted segment. to DCS

in the get be shippers So likely to sort would continued capacity. that for I environment XXXX I'm and push about we're that there's thinking seem a guess, of to

segment, strong get a growth you maybe move the the you're conversion just how you is, you can get still really of of to question stabilize So I think sort good looks of fleet think margins I'm context, potential amount relationship in margins sense of higher. that do if and a about experiencing guess, can revenue if upward trying growth. in moving that XXXX. you

Nicholas Hobbs

on on Yes, much focus I convergence. think private - fleet capacity try is to to plan our our not really don't We try focus focus as we - get fleets.

We will little trucks as year. our of adding we of many probably not this next get But customers. I think, a plan legacy that historical added as will capacity bit we on some year with

good than that, This is I trucks our down of and year. between X,XXX year. the what more to a call slow to for next is add going and be part number from will a help margins that's the the next in to lot to wave for it the will we're middle going end X,XXX, think year, add so better probably some think us plan and and I of we carry 'XX it of whole

So implementing, we've to our our signed now see X,XXX But in signed pipeline I to signed up bit - deals year. those that's of X,XXX we come and this think, little where year happen the we next you it if trucks that another improvement. margin in is right drag. over if of a be little some plan could large along, middle get for a other big we've But deal truck XXX deal up, some will

Christian Wetherbee

Okay.

of service run lower been then I And there's number, play really Okay, that some sustainable of and that into the and large it you I more away growth of see Do trends really pace quarter year, 'XX when that's volume to are and sort they the other I'm more saw course that traditional and should expect those all have at behind middle with Intermodal, the the potentially volume are and Or of growth. since lower that of there these of these have that we rail gotten beyond, last network? helpful. derailments sort issues, the move go than seem sort ability back this about in so sort your that the know you of the what clearly, conceptually we I run have guess, forces are played a has I some rates be structurally that of factors thinking here guess, grow appreciate might over to in in out up. could helpful. on your move lower of think you 'XX rate think out, so you kind growth of specific, been that would we segment would factors. volume But as like drivers mathematical

Nicholas Hobbs

our Yes, bid the is millions the than that freight and that buckets warehouse though even bigger of data the loads. being east west, of bucket and in both loads are see the bucket of a in we of in millions maybe portion

when So of and years, transition customers quicker it's over freight it's than some that from comfortable truck others. excuse of moving the me, question feel Intermodal, a just to from - Intermodal a

that because I way the is that comes So the thinking to hesitate - it's ability over, out. it the story say easy

increase and will a think increase. So trucks to rail little cost I in continue of service the

about segment the percentage is of be the to as the good you that maybe ability years. in is our to numbers think Intermodal law still talked for grow upcoming I able not large

Operator

of comes question Shanker. next from Your Ravi the line

Ravi Shanker

here. questions of Couple

And given of how headwind of it? that a what the Is the relatively kind season. it and are balanced you'd Just of of we kind be, like market going aren't tightness year. to given tends seeing to market to you're current the that impact that and does environment, shippers comfortable we'd more a that environment. going of peak really be the have rates than does expect shippers kind using back on into start kind brokers? spot It seem seeing uptake brokerage expect to Since freight the

Shelley Simpson

I August, we So if I how about to customer figure took cost only to capacity hurricanes the position sent to And try in time were was to this trying what out and trying like. last the but to think the happening back also to a think you customers started on a through very them difficult about had as customers budgets. our out network that really really price. the several such shipment talking and truck budget trying understand year, articulate to it to receptive that prices was And customers or And customers season, months year, think this and and chaos out. figure I last look a find to were move came time not guide capacity, in that letter think bid to

are They made I like feel they've comfortable today good had they've think season. that through customers plan. a more because it bid

picked I good successful to themselves really XXXX. reset probably think providers a to they really for

year, cost, the And although still so a happening this understand market less concerned still increased now, customers service, And acceptable specifically customers weren't they sure how at drivers. about cost, be the happening And understand if what's or concerned beginning that really and not. of go. would customer an would wants the they I've conversations service never what's we're high pricing with about in met are having

customers really of were in market they're relationships. back coming what And comfortable they job being I in and have contract out more done the day. So the than think spot good a

Ravi Shanker

through Got about they're quarter do trending costs, quarters? it. the talk you see in of And they've XXX where and sticking with couple kind Can the JB - ICS. how been of just of just them next kind you and

Shelley Simpson

here in started yet increasing. can put have, the on XXXX so, resources. our we for planning with or those next we that that, they're the so month so plan be I want what we start Well, really haven't working from budgeting we'll together

Ravi Shanker

in far, year-over-year? or said to load down you to Dave, Got October, IM just but think comment want follow-up, trends that up didn't seeing in IM I so it. are you're on numbers And just clarify, growth from October one you year-over-year last what

David Mee

that we're has don't and I said, we're just to on say Terry is, but quarter, that chart. that to seeing a expected about things but be, you would bit ahead, scream comment did what we he slightly little off we maybe the run tell where Well, yes, nothing the

Operator

Instructions]. [Operator

Your the of line next question comes Fowler. Mr. from Todd

Todd Fowler

to that environment, expect price carrying Intermodal per forward into come see to 'XX that wanted resetting some and and as you'd If next in thinking XXXX between I think being well? where the could volume the implies the with you're you into comment the to and to about that of pricing single-digit balanced on half volume you year side, revenue Terry, sort our the 'XX the comments seeing per trends back of side. having contract kind a see pricing the about and I the of made about that mid- in back growth maybe similar that XXXX, more it is load decent high that comment load me still to revenue of Intermodal on about

Terrence Matthews

any mentioned, that. I on out numbers I haven't given As

half next we cycle you 'XX for believe mentioned, bid somewhat what to there with was I will than going approach is haven't had do as price. plan again, regards year. of the Dave XXXX. But - But as first what be put more we balanced that together our this extrapolate going think, year I for the can maybe mentioned, into I to

Todd Fowler

that's forward that least pricing about of and fact to are at it's half XXXX next about second per year, year, that into positive to but it at is directionally carry environment, into think the a the load decent the resetting you Okay. this that point? in still fair And revenue of get way think to rates if - this

Terrence Matthews

you're correct. Yes,

Todd Fowler

normal the we go and what for a about quarter, kind of Okay, for good. maybe anything the think for high is fourth of coming we should quarter, be Or here quarter But the If into you think level. cost the normally there rest we additional either fourth trends of a kind else At in and is quarter rail and how to of seasonality about third quarter. about today something factoring see on see should this typical sit there about maybe question of the quarter - to we service as the David from quarter. that some think year, quarter charges this wouldn't of fourth into seasonally as through adjust or point fair maybe why is the fourth it then And think kind to our back, we kind this versus third we assumptions? kind just here we if about you you, is think side? as third short-term

David Mee

Well, should trend yes, I think for the Intermodal consistent. be fairly general

I expectation, peak. a going is the like there telling we are our us customers said, be think that normalized to

uptick QX to inside pay and direct DCS And bit of is probably up, You're - some not well normal, of a operations going ICS the have as spite to get show expect - that and expect it year. cross-selling, freight would rise, to than so because a big the little or inside they get a in speaking. there big backfill bunch so robbing actually its Peter to normal a lost is very yet, last we're to but is item. this a little don't seasonal one of Michael we in then the perform of DCS wave market, seasonal to activity come to In starting to of Paul, not DCS. truckload seasonal obviously, counting their to in, the their year's going of relatively more so Dedicated, I could think, contract big the seasonal it seasonal they hurricane result just was on see considering they'll it The gave ICS their an frankly,

that cost again I did couldn't I'm as So you it that I the I trend be the we're is think the tell covers on hoping pricing trend that so predicted, any as the trend but going okay. to horizon, hoping abnormal see XQ. is

Todd Fowler

think the about and of on biggest I seasonality, that side between like that the DCS, of as really when sense. on think fourth that interplay that's we the the the and that piece is sounds drive just Intermodal that that's Okay, some typically quarter. fourth kind on makes see that, really Yes, you quarter track OR in the it ICS and helpful improved

Operator

of question Brooklier. line next from comes Your the Matt

Matthew Brooklier

many So Could you you. another talk to DCS for expect trucks how in you fourth to question quarter? add

Nicholas Hobbs

Yes, of number we'll the XX, XXX to XX, books. we should XXX the see up year the in end go total our where with trucks is on range

Matthew Brooklier

helpful. and would it maybe your a DCS taking and tackling Okay, growth the function fleets competitors, of a just you're private of it And trying then of think we truck also you level year. for overall that competitive blocking to that's converting to How get continuation tighter If of market? this higher how versus attribute the on about feel incremental this, some seeing of versus market is kind a a the question. much truckload side much a from share tighter overall

Nicholas Hobbs

it Yes, tackling of basic stuff. would is more say I probably XX% fleet private blocking and

is we base of other but longer radius XXX growing. going of is our probably just The expanding tightening We're trucks service from out that. we're from stuff ICS market also of us, with, up because XXX got so of time capacity up, going periods to because our are one-way with because for contract some the like, XX% with a that's long-term into fleets the signing

that's So - growing and I extending that miles longer for get some fleet. of base that's where out to longer our

ballpark. a that's So

Operator

next Your of Hartford. question line Ben from comes the

Benjamin Hartford

that term the is I it extent is circle is to we XX% the one? mentioned over you up know to capital call that that you to that so XX% to a assume nonasset-based to DCS that twofold, nonasset-based it's long on it acknowledged grow, five maybe on core target, business think or invested network, the think as margin. is the the on had then you that this fair should about next lower-margin does two, assume return How years Final DCS And legacy network, Mile XX% scaling a still business? I business? Want had than higher the margin that, back to the XX% a question. So

Nicholas Hobbs

pricing we on all do is Yes, it so way the guidelines. ROIC based and our of

that, have about Mile, the higher reverse much And nonasset start that does of so portion I'll a the of ROIC. talk Final

it's a to higher base that, it be going grow we So smaller growing but as a percent. from

and basis have be pull overall and much we bit price XX% But anywhere we fast starting with within maintain XX our each capital still DCS, I forward. ROIC a some based can in XX grow dilute it little of the of DCS to on XX%, our But we'll how could targets. how hitting ROIC we think from that put to can our the we as depends we go on more deals on that to Dedicated, got even margin. we to dilution, one still points So

feel you to drag about those we very guardrails, still so will if Final XX% to on have hit will, able Mile good it'll some that. should of - it, But have And within we but be XX%.

Benjamin Hartford

to was the inventory sit the based higher if had these any the helpful. where relates and real could back to some now, strong there any in passing all, Has that's have on circle across on quick But on X. customers as there could mentioned tariffs? the if XQ customers? of January to have been to that Okay, XX%, channel, And it outlook on what December tariffs. looming as do at aggregate levels the and relates I ahead any front tariff impact forward And then, it is customers quite pull to you inventory there XX% extent be costs they of given in that saying the to demand - experienced the - issue 'XX are

Shelley Simpson

customers specifically because about could own talk that think I our are not their about to I'm tariffs, trying strategy. sure also

will and most that's recent it is visits from them strategy, an So our in their on impact total. make what sourcing

Operator

comes Ross. next of David line Your question the from

David Ross

well JBT, change. a performing segment elaborate? that truckload the you is actually for mentioned Could you Dave,

David Mee

that meant they've a - Shelley should yes, the I I from Well, her standpoint, an is room been that the off look from direction. think let I - But trend that and I'm let moving dirty opportunity the actually really they've got I'm for to they're hook. her describe improve, in not because right I answering question. getting -

So go ahead, Shelley.

Shelley Simpson

CFO That think, happen often. doing that okay. from So is But Truckload the doesn't Truckload, performing. acknowledgment I'll first, take our very is I

and comfortable and And in forward interact Our of platform. our prices We direction mix they in how third moving feel the can Truckload we quarter. operate feel our here our with really power through also segment. came inside comfortable really XXX

well we into coming XXXX. plan integrate So as to that's something that

David Ross

on drayage? year driver talk about you Truckload, can into do up then increase so bit how you a side, much 'XX? this are And wages And next Dedicated, communicated been driver little the wages similar across a expect Or far year? what's

Nicholas Hobbs

months, about bit up wages our XX% than Probably in talk XX about to XX This is or the that. more I'll are driver a little Yes. last Dedicated. Nick.

it what as and far on and is it price tight going that market. how in is is where deal As we each particular demand the depends forward,

been price we drivers. to So take our drivers this that on the deals because for of of one well drivers. what we've think we would our price to recruiting in based it able very We've the been market recruit pay difficult our each deals into individual

So We're deal what next I by pricing pay. to going just on it's do can't speculate really year driver deal.

Terrence Matthews

Yes.

Our driver wages are...

David Ross

wage the terms XX% side different trucker, Wages in inflation? drayage on of

Shelley Simpson

seeing driver I double-digit double-digit. in is we We've in to done it that entrants job nice are trending but say we the increases So segment Truckload, in difficult turnover in are the more in wages. job market. new attract overall a would

Terrence Matthews

to have the around as increase had year. increase Intermodal, the books already In we've wages year. on next early we for increases will plans wages next We the

So we year to was. anticipate what will similar next this year be

David Ross

the contract loads? where spot network the fair contracts with and of earlier a this in out to terms market coming Are and commit on it of year for mentioned readjust to that into those them of is they truck then abused And the of under Shelley certain my business. customers getting if - also got about give contract number commitments volume they question, J.B. them, any put you're going

Shelley Simpson

that they balance. of know was don't I first, market, out Well, the network got the In abused. completely spot

loss and up be of need customer. up at trying street. to our to do and have do intend doing adding their a total never conversation more to that's best that. really and for and based doing as service are their the crystal to things so very to they they the so a not it's job come they the such neither driver planning, the a customers. I demand really created commitment. We for in trying needed any don't and forecasting that resent think ball what of for foggy loss of was market volume move, us two-way good It they're importantly, is very our to so planning, people doesn't If commit live our as And in to carriers and do don't foggy of to much do their their how we, estimating commitment, well. Customers a with with customers, on customers

Operator

Your next line question Ken from of Hoexter. comes the

Kenneth Hoexter

to Just Intermodal. to I turn back want

particularly aggressive Your - Transcon is Is - up costs comments negative, rail to is in on Or on market side. being of turning I that something understand, aggressive the you're in the on being because going because the want the growth more rates? specifically? rail that you're and the more it

Terrence Matthews

little half we about happened a not there's Transcon, we events by X freight the the we then September. that was regards weather and of difficult. talked quite and freight. And price Transcon to of were so and West as Last customers up Coast mentioned, as previously August bit the robust the to we the I almost lost with in comp long some to on point the would And our that pricing the first the X in the we've One, drays, or due probably the derailments of was things Well, you some to. X% mentioned. lastly, be not did year,

Kenneth Hoexter

turning outlook? Okay. you if Or mention is that to - if that what where you process? are in mentioned you the you And saw did October that's when understand you

Terrence Matthews

that the us. strong help now, only think into I Well, the XX quarter. It's West Coast should days so certainly is

alluding So should has to what be. was as West normal as a Coast the strong I peak been that's

Kenneth Hoexter

brokerage, And that Or the XXX, of a and then, mentioned a the brokerage for and at terms rates LTL the J.B. that shift about driving in growth? you on guess, DCS? Shelley, Great. there brokerage is bit your I negative up, of thoughts at follow-up, on more focus growth talked in the you LTL ramp-up is shift between ramping

Shelley Simpson

that that's We're say at. more the that would pleased continuing customers. that the I for big certainly, LTL contractual on and side us. relationship we services into side, our growth a with XXX we're been where more that's cross-sell No, expand grew And have a to on we're

and us carrier customer somewhat, statistics that moving XXXX. the promise side and Our gives the good into

Operator

Instructions]. [Operator

Bascome of line the from Majors. comes question next Your

Bascome Majors

award know happened, to about need changes little. that end the of lot range lower that think some have little talked the then, to XX% to, Intermodal if the expectation or dates going or Terry, last has margins Can you that's just March. interim regional, XX%, explicitly? you with said a range higher preferences, I at shifts happened a back customer that to both good an range since of think, referring - that of And forward maybe Clearly, what long-term we Dave from et bad we in or much maybe in a talk of mix, you believe that business in about more some the supplier pretty Intermodal inflation, right largest today. expand based to be And about earlier, in on both that on cetera. and I your and say

Terrence Matthews

out part last a in little we the of year, I range last we've back latter of in Well, think are range into gotten I think the quarter. and that that

and you I we forward. that the to - whether be forward. but on it's And or that, we'll higher lower So in moving think range that within give any anticipate be direction going or in range can't I middle,

Bascome Majors

experienced. mean you're How history gross favor? in All seemed a of the brokerage you one's guys which profit fairly contractual overall seasonal gap, versus the we that on earning the The little sequentially that gross what is Can bit for you wide right. the margins of to forward? improve on that move have season? on as margin business. on basis transactional side today the coming does out talk margin based And a bid one And about business Shelley, the just

Shelley Simpson

on carriers more Well, a business, we our contractual through recouping been on going that business costs repairing out real-time that basis. and we've to paid

the margins progressed. as has year So have improved certainly, those

better that's in margin in to out-of-pattern load typically per to definitely and in length XX% the revenue published longer and generally forward. total, moved A total, then our Our higher XX% margins to quarter is We be shipments. in the as fall, stay tend spot continued on margin the spot volatile. of less spot repair more range slightly because pricing

Operator

from comes Ossenbeck. Brian question next the line Your of

Brian Ossenbeck

So you Terry, volume the more Intermodal just on for one side.

on with been into especially You made the normal able the network more any the there rails this get the demanding e-commerce we've the that capacity some - to tailored Has comments some and should car about freight on, stronger Transcon parcel on well? as limitation being you're or taking sort stronger Coast of West flat be peak. the running But it seen for off base is there.

Terrence Matthews

this - But caused maybe be it's year. service terms their think successful a here there. to the trains, get our little able and I and customers I in on loads believe a few that in ramps, of to in being doing we'll able congestion be a

Brian Ossenbeck

other the And one Okay. for Nick.

convergence, sort make big you majority fleet of now the people you the a private to drivers you're As look is you same been the freight? getting difficult retaining hang it when those you same Or are on running you're those finding convergence? do to How at chunk of a conversion? when right - has because easier which it the it folks is getting - now. it what Does

Nicholas Hobbs

No. that easier, We and We conversations go and to With time. we're to lot comparisons contingent know aligned. make ahead private talk them. on ability because it can decision-makers to on how align fleets, have the our we a benefits. conversion pay want the sure of makes And we those have to with we do

drivers, something, we do. pass over or doing But a the tests to based much on because So like - majority of come transition. we're but our the lot some the in get we vast of those

bit get quicker. And makes that go quicker, so little and profitability the startups we a to

Brian Ossenbeck

Okay.

quarter, off contracts big of XQ any million $X the that this depending confirm on? guess, the continue that signed to and I expected is charge sort on, the tail from are bumpiness to new Just quarter basically of second, into and then in first

Nicholas Hobbs

million didn't I other think that's up to at I a Again, that's a were there. of way items, lot in just way think probably $X it. it. that in good to roll there there's a smaller things look we good the look But that Yes, at big bucket

Operator

Your from line the comes of question Group. next Scott

Scott Group

A things of here. couple quick

XX% like third being if sounds quarter third. including the talking for Can environment? to of maybe XX% winning, clarify it opportunities comment? Dedicated quarter on fourth pricing then or talked better about And just as about you you're are the that that - Dedicated in you're side, you with to excluding you, better given Nick, business the you're be the new some Or that on pricing you So on that margins? than you see do charges

Nicholas Hobbs

I say mean pricing better. we're given the I a environment, would it touch

I if was or go first we for the look for margins, And at pricing in business is what Terry? Our our versus were then me 'XX. on better price in that part, 'XX back than 'XX, it

Scott Group

than it Dave a for fourth third quarter guess about I Dedicated. who quarter was better in being made comment

Nicholas Hobbs

the might But just it Okay. a I same lighter, but going we're first quarter. it's that of million think those I is the cost, be quarter. $X might to forward, going going lighter it be startup carry a have the off fourth some touch say in to to I think touch tail then would in

Scott Group

at know it comment, just reflects to this captures I to margin that to Okay. you XX% or as right? want XX% Terry, back going to the Intermodal just that sure, that relates is arbitration, make anything point,

David Mee

try, about don't Nice because don't Scott. have comments we We any know. arbitration

Scott Group

more sure, I still he's... make we want to know XX% saying XX%, if than And want make - to just do, Terry's to I sure you're just I right? you But guess

David Mee

XX% XX% to XX% is. target is XX% is what still to our target. our

Scott Group

Okay. on And then brokerage side. the one last

the load of you revenue when a than have growth all improving, better direction So gross quarter? or add on you revenue up, net Shelley, per view is decelerating accelerating, gross going do margins revenue in forward? worse net falling, you that thought the And

Shelley Simpson

fourth have fourth a somewhat quarter, would needed. net but good to revenue quarter through come spot expect revenue a we'll expected. is moving still growth revenue. year-over-year. We better I would good net than And have I into net growth think say I season, And was in bid

Operator

of Vernon. question next from the line comes Your David

David Vernon

Intermodal in you comment more all of on it progressing rail how of yards of accommodate the of traffic, the well can in you service or for growth. as the It as of Can shippers Question the that the ability so is help about constraining like market. grow network increase kind the industry drayage network Intermodal really your kind some to kind at need and actually and to what rail feels growth? that of are do kind to fluidity

Terrence Matthews

degraded. question, customers want and not two-part Yes. history, you they - service railroad's That's it's not kind at the But services where their Dave. it. when where certainly of look we of if It's where The wanted. rail kind it, a isn't want the

able than commodities at more - to and don't going of so with they things make that. see that as And it the to to velocity velocity. they months, next better key do they'll I precision I XX recover. looking know a railroading. there's slow typically more velocity hopefully, year than they've on out them they money up a always The normally of of think, with as especially You start start XX coming lot railroads with is been variety with

have railroads be to about us will with quicker, deliver the customers your the in the and to and answer will that question more have allow flexibility able open be So the lower terminals the and be the the to to to windows what the that quickly XX/X able there better, to - do, rail can to regards fluidity customers pull clear deliver those then terminals allow freight can will that system. it and and freight, them able deliver they it to -

David Vernon

kind into about concerning on growth of then? you're railroads worried not So capacity 'XX

Terrence Matthews

point, this no. at Not

to I and with will up to think with get they're their and get work freight work going delivered appropriate the we those plans, and terminals customers make accordingly. to them picked

David Vernon

do year, spending as then about like think associated start-ups. And that's feels with little right. think follow, a as bit a maybe maybe Dave, the CapEx you All up? where you end And to just you're for the it going more, we're

color that of helpful. versus much going be on be backstopped how the to contract some would year and added us can is assets you give that out spend this shareholders on If is hook the may as for downturn,

David Mee

end Nick boatload we in of all where I probably this spending is Now think contract. up point are of time, probably $XXX At is shy just a million. money. under Those will

less downturn But in about those at So we're this concerned end that's going to think environments. risk up we're where particular point I that's time. in

Operator

Oglenski. Your next of question the line Brandon from comes

Brandon Oglenski

seems bit I platform. - we late, jumped maybe how shift XXX should Or Dedicated think I little investors company? interpret on on the technology you CapEx, a on little bit more that But the the a the some more already shift? that? so long-term Intermodal like apologize strategically the and more if of capital strategic effort, discussed and it that this. might following view - should segments? Is within behind other A do How we how focus less putting question be I I about

John Roberts

less to we're say wouldn't better need much I and people John. as doing and to more focus on focused the that how building it's doing any connection Intermodal on it. as we're is we're doing quickly we this increased and what and how reach platforms Hey, automate efficiently an

it's we've today. that held been far we're seeing the connect some that so we're a We've that. the pretty of - any of to places really think businesses ourselves I a true business. where part high we found all doing think we're the connect can through making, pretty than and standard on out always better I deemphasis not return, to of things probably But investments

Terrence Matthews

I The is Intermodal. that other adds mention grows, loads just XXX it would more thing as to

Brandon Oglenski

that it I going company is to very Should a we well? be is thinking Because be think looking as way forward, characterize the or that wrong any Dedicated, way when think asset-intensive. to more in this capital-intensive I

David Mee

intensive. with no, be can - any this Intermodal model. generate Dedicated their And or nonasset I that returns with asset have contracts can think ICS the think I might the is say, with we an that delusions It Dave. approach, light that asset don't somewhat even

than Dedicated a capital say it at is going basis. there. to But traditional look would the like it what that And or from - ones a that hold from to a model I to invested not return that ROIC one they're can out - we in to out in thresholds on Or where a past on not public and be. traditional but we like or down better held see only information break can be - Brandon, what - what least we normal. standard look Dedicated see Truckload is at going However, at going that is we've Truckload priced return what standpoint, we least we asset, model the there operated is see a late to consolidated or the

Operator

next line Your Thoren. of question from comes the Donald

Don Thoren

quick. Listen, months, equipped, make better right, got you look also can years, coming lesson you If history business little quarters about sure I've a we Real and in think so history display to of and us for strategically to can at the be years. how all that my

relationship Your With actually ago? ongoing many Santa Fe, that agreement the the correct? how is BN what, decades an with began

Nicholas Hobbs

XXXX.

Don Thoren

charge price, else the in. revenue-sharing can a that's net in Yes. the resulting And absolute it's to agreement. be The correct? system, anybody minimum SF

David Mee

under a said confidentiality earlier is Well, I contract think agreement. that I

is that a I think known is fairly it it well revenue-sharing agreement.

Don Thoren

confidentiality out basis, it Well, When was both split. a an on you there. revenue what percentage the - you renegotiated And under agreement, ongoing wasn't certainly you that's yes. -

that before, the anybody to this, best the come. with your in both other anything business are into fear reason and to of each is to years parties? rational You've Am litigation the to partners it's the decades to for than relationship. reality continue been but be other just involved business and overstating going I in Or of no interest prosperous for continue inject BN you to the There's expect for both minor that?

David Mee

what that. sure not us I want you to on guess say I'm

Don Thoren

Well...

David Mee

I at the you - about ask If then without that would have comment question same to that not to - I'm sounds I'm had that speaking And both it us for asked them. answer and question time. like BN,

Don Thoren

for it's strategically, them, expect business not something to You prosperous vantage that decades should continuing unreasonable you for for to speak years your - and but be do can come? point, us them with from it's that to

David Mee

that I sign create that any prosperous type contract or would expect we provider of we out contract, think any would to supplier, with yes, yes. of business that

Don Thoren

not that by happens the an being means, any then All now right. Well, that was is the you. ongoing point This headed, right. this I and between new news it? is Yes, fully - thing where two isn't but of

David Mee

news. new isn't It

particular and again. in arbitration we before been this once time that think are we in have arbitration I

Don Thoren

you, Thank those is right. and take being that live quite more All has already needed the level being willing And the questions, frankly, by that, to industry. a transparency else Fantastic. everyone gentlemen. in and you to host shows expressed call appreciate conference of accountability of willing and

So for and thanks that it. appreciate greatly

Operator

[Operator Instructions].

line comes Haimes. Barry next Your of question from the

Barry Haimes

me hear okay? you Can

David Mee

here. We're

Barry Haimes

provider, Truckload had which wondering, are from less behavior that. for do I seeing question that, that of them, shipper And one changes has will, shifted, How with you a one shipper you just expect doing rates - or I'm good of probably doing a when is, if behavior you businesses. of get? and many have in question around of how to power question. better has And just And those much gut as job? now across seen guys have many And around. you to lot do were any a behavior color your have happened a change? would issues, also tolerance are shipper How So job? so, of others, you feel, productivity shipper the those not - a benefit question great. Great, over waiting it's, or the drivers year been and the guys Intermodal as maybe, course, the moved up last

Shelley Simpson

Hunt, thinking that - so and wanting and become have look dock. to they with and are facilities industry things a want are new what and to to of about driver trying customers say, a drivers J.B. as shippers would greatest Shippers large as drivers be think like. choice about way our they part of the I awareness on probably amenities knowledgeable I their we can know specifically what shipper more treat of an where do They for help. the they are at have

companies' And of have has say gotten to so other transportation press that. past? we've the I cost I seen Could way has percentage as our releases, a reached all it movement of what customers. - C-suite in think the the up the attention,

customers' that have locations those was primarily just out, are completely locations cost. manage manage over the managed were don't and to past, so are And trying our figure In also the to trying so cost separate. you transportation it to transportation trying

interested work making I heightened past would a because great percentage. driver Did the they of cost not So friendly. very earnings in locations anything releases, in the are out in their of ordinary very say the of as today

Operator

Next question of Fowler. Todd comes the from line

Todd Fowler

weather the press the that Intermodal I know in quantified loads release. the impact you of

the some the quarter had weather number year? third cost think year 'XX. side in I year, on weather a expense around you the side for of you this similar Do that this what for given last was have color you think

Terrence Matthews

No.

David Mee

you There There Right. Right. go. you go.

Todd Fowler

back to it. calls. Come happy I'm about do I these take everything on. said I

David Mee

cost don't yes, costs. I not weather had If component we hurricane remember admit, I'm to year, we know I are but than have year's. I only of did talked the we was apologize, have That's have the tried And I I it, lost. was more this also to we it hurricane talked one quantify no. on don't an that. event last the know have effect about about year. probably Last And forming, don't that. the derailments, loads why some because which they was sure I I Yes. quantify count said events, load just but Terry

Todd Fowler

Okay.

David Mee

That's said why Terry no.

Todd Fowler

it won't personally. I take

Okay.

our wasn't was point. I and at maybe then it so think we specific had that number notes, in that some released a

David Mee

It could have been.

Operator

Mehrotra. Amit of line the from comes question last Your

Amit Mehrotra

Okay.

last The great. and one, the first one

was could for year. about the truck it's I pricing the half But ones think cycle outlook quick probably it pricing One I terms for truck crystal strong. I a here. plays have how - of just over about So when some of had year, out. all guess been the but had little truck know appropriately Intermodal. your in imagine talk of the orders year was orders next bit there record is, ball if rolling few that I for you orders the out and volume this view quite several a more earlier new level And at how last would Obviously, question, effect second weren't at Intermodal next the and trajectory they you months. had changed a would just

Terrence Matthews

little think early Yes, I a tell that. to it's on

call earlier include price As the in widened. that price I truck the the and you mentioned between when fuel the differential Intermodal has

most widened. fuel made up the but kept - in cost cases, think line-haul price the we with may that it have has I

time truck So versus this the and has gap Intermodal last between year widened.

be, So the pressures the you down? truck truck. rate come down. all does have the that don't will come I question seeing then are that But on perceive

is 'XX, and little on So I early see truck truck and truck to large we'll just gap it which any you pricing. - and think with Even comes down between wait don't a and have what I should believe Intermodal. there's going to have still in bit, with pricing effect, really if regards don't happens happen, to a

Amit Mehrotra

Okay.

negative. Let David. comp, September If if me comp overall just thought I I I'm think the was know said volume heard the ask correctly, one you in Intermodal follow-up mistaken, don't I this not actually I in but - easy? Can It year. that so about despite plus just wrong - comp being was September September negative why turned September was be easy. last X% unless I could the pretty talk comp but you for

Terrence Matthews

September showing plus retain, final had to as happened Yes, and last had was the there that started was I what X it early not drays that weather major implemented September, derailments The Coast bids - The able were in weren't year. on in August X of of were that or what in some events we happened the Pass the the earlier. long and things September. that mentioned as West course, robust affected Cajon up

Amit Mehrotra

it. Got

obviously, mean, be me in there Okay. bulk that business. be last organic - on guess, Would to, growth been via up I Would there Dedicated any far. appetite the the then have so business one acquisitions? And one I for initiatives

Terrence Matthews

a got And of salespeople out on pipelines side, XX-plus roster the are I think there. we've full. Dedicated our

grow premium organically. can it no go see pay I so And when we a reason to do to

Operator

from have Majors. We Bascome It question. another comes

Bascome Majors

about here, about historically to $XXX in million year." all on based CapEx been in closer know Dave, able Dedicated from closer this look the a we you've boost we $XXX that did I think the down the How that spending with you close "normal to what or to today? year far $XXX talked million you've year million growth talked next to achieve

David Mee

probably I I up going and inside I Yes, growth what our I'm number norm the referring Intermodal you're be. general to X growth probably of is next - million think add to fleet. and would normal million. look $XXX a have or years CapEx to the normal off what and a where Bascome. say "fleet," looks from what the then cycle give old I I size. for you up is our size about look consolidated the million to and X given to you going when is Well, think if my as guess yes, that just million years $XXX that fleet is at on closer consider would for But Dedicated couple see inching moved trade the talk We've $XXX we've that to replacement CapEx my anyway, wait the of its last inching But way been CapEx normal like combined $XXX to that and

Bascome Majors

And XX% historically? on generated from return profile capital kind you've targeting it of, the has Understood. the you're returns straight call

David Mee

hasn't. it has It not. No,

off Intermodal As record-type return not diluting ICS those of Dedicated, what a solid growth profiles we're though profile numbers profile be. even that growth should fact, of seeing is are the matter and numbers return return inside that throwing

that ROIC at I the to this willing I move for So consolidated would point time, - XX% say off group. throw in the not dart of we're

Operator

question. Hoexter. last from your have It We comes Mr. Ken

Kenneth Hoexter

CapEx, Dave, from of outlook CapEx your the changing were the I the going - just that, Intermodal. kind the have all growth on deceleration target given did you Intermodal just me on Bascome to so Intermodal for on - of there ask round just is let an question out side? portion it specific or on was you at to

David Mee

that. have in bringing bring as In our this kind during frankly, not quarter our for planned. bring wanted we current from box as deviating we've training, plans. Ken, Frankly, the deviated with count not no, returns to we the expected dray been and them we sticking well that many are on from period, on, of trucks of that The The because the to need we're greatest. not on we group,

So don't want give because we up box we we boxes certainly have an to extra growth just ourselves don't opportunity or shorted for accordingly.

I go and make yet. that modifications think 'XX we will budget haven't into we those made determinations the process,

Kenneth Hoexter

Or you're mean when service - need got Well, you just to spend more? much you've you to say improves, extra might you modifications, because clarify, as to need not might going you the boxes? if

David Mee

If Both, it and that a from target satisfied already have target we could that go make we way. think have the we can may we decision. our elasticity growth then either be equipment, growth the in

a into On from steady target well. an period see we're is that going the as be standpoint, I downturn a time, this economic growth of us wouldn't actual X-year we anticipate if than that boxes not not more heading showing yes, growth other to in 'XX an hand,

Kenneth Hoexter

for leverage the buyback? and then me, of pace the just lastly And thoughts on your

David Mee

has attitude think Leverage, I our same. remained the

we up I lever pause - our EBITDA, seeing excess but I active a any accelerate Xx we've And could debt material any than higher to additional way. another see as substantially that, any our we over levels. safe, EBITDA EBITDA of one I start that certainly as from be the on consider we the bit Xx prudent we period, levels. think bit wouldn't little lower but real As unwritten see - if to expect been always share back towards us period come in get that a rule, don't we've Naturally, kind in repurchase, deviate And if and targeted a relative, don't in lower EBITDA and Xx little reason target. us I debt in that or always cash. we

Operator

no questions are There at Please this continue. time.

David Mee

this writing if their everybody's and reports, send people to they these here. work Well, Donna, certainly to. can back all want off get let we've to answered if terminate And I we questions, can everybody around

a for think if and Okay, it call evening. Thank - all you good joining that think early. we'll quits and I Donna, I the it us, case, that's then call early have

Operator

This concludes today's conference call.

may now disconnect. You

David Mee

you. Thank

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