LSTR - Earnings call transcript Q4 2024

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Operator

Good afternoon, and welcome to Landstar System, Inc. Year-end Earnings Release Conference Call. [Operator Instructions]. Today's call is being recorded.

If you have any objections, you may disconnect at this time.

Vice Landstar President Lonegro, Strategy System and Freight Jim from Jim and and Holdings today Joe Officer; Vice CFO; Applegate, Chief Todd, Inc. us are of President Frank CEO; Specialized Beacom, Joining President and Landstar President Corporate Sales President Matt Vice Vice Chief Safety and Officer; Matt Field Dannegger, Chief Sales Operations and Miller, President and Officer.

turn Jim Todd. may begin. Now to I Sir, over would the call like to you

James Todd

afternoon, Good Earnings and welcome XXXX Landstar's Quarter Arlene. to Conference Fourth Call. you, Thank

me let a under Private of begin, Before not following is are historical Securities this the Act based we The following during facts are forward-looking read safe statement. Reform call made harbor the that statements. XXXX. on conference statement Statements Litigation

forward-looking and relates plans, CEO, and SEC described reliance results information. I'll the events legal uncertainties should limited During section and in differ business pass other time. and from These filings objectives, Lonegro, forward-looking operational, now obligation or Such anticipated. Landstar's materially his Frank expectations. and year. information those results not our Landstar on for undue and it the to that or such historical the XXXX nature, this no we opening or forward-looking risks, that not any remarks. to undertakes cause could place from conference call, subject Factors Investors strategies time to to update revise uncertainties to, Risk to actual risks information, Lance, publicly fiscal financial in is, may Landstar's for information by make but to Form XX-K detailed including, contain risks statements

Robert Brasher

J.T., and good Thanks, everyone. afternoon,

to to and unbelievably Landstar thank employees for future. our Landstar every support with work entrepreneurs network the First, I of energizing our day. together who we the as It to and position them BCOs agents is engage want

the uniqueness network. are Landstar, the impressed leaders my BCOs the of and Landstar business but independent commitment who challenging the Landstar. and capability, extensively driving level are in the been with and meeting and the thoroughly have exceptional CEO without of and year as a throughout model. XXXX traveled of During with the first success year the I owners not the for of country, agents business was was success our transportation, in freight industry Landstar accomplishment it They to comprise key resiliency continued

approximately haul we year. focused on our performance business generated move extremely load revenue to the our XXXX achievement heavy of revenue haul was That haul laser and and increase heavy million last Landstar heavy X% bright initiatives. by a am revenue heavy haul the with per heavy I As model XXXX in volume. executing XXXX, offering we in into We X% $XXX one during fiscal In pleased performance a record driven increase be service continue strategic major on haul. spot, the of accelerating year, for

to truckload turns work environment service core a foundational did great to freight in broadly more our in XXXX when Turning our us we puts the it position way. leverage offering, the

of service level on support carriers our agents, and to and customers, the day. BCOs every We continuous and improvement are provide focused also we commitment in our to each

of readily just the consumer XXXX of slightly top margin the fourth choppy guidance, revenue small impact to results primarily favor and in spending. conditions admirable to capacity truck the shipper Turning earnings that below quarter amount amidst with and characterized market delivering insurance continue demand fourth impact XXXX accumulated be pockets of the environment line generated by variable on to The capacity. the industrial to readily of claim contribution relatively in goods performance to truckload X. pressures. midpoint and the available Slide while in was ahead came freight economy. to Landstar's continued share and conditions continue midpoint Considering freight backdrop, soft guidance of available the per supply-demand be quarter, cost to our quarter of continues modestly the some fourth in inflation due in equilibrium Truck The relation

fourth Our with per for our of was above release, the XXXX below the guidance in truckload below range. to lower XXXX XXXX per the the truck the year conjunction XXXX The hauled of call truck X% half the was in quarter of upper be quarter quarter of in Actual third fourth loads number XXXX quarter. earnings to prior flat half fourth and our be X.X% issued quarter the fourth within revenue fourth the X.X% above hauled the above loads number within overall quarter X% X% actual quarter to to range. via via the fourth guidance revenue quarter XXXX guidance truckload

patiently sheet balance capital strong I'm and buyback stockholders. and existing on a our executing I'm unchanged. the be believer stock benefit authority Our priorities are continues very to program and strong. to opportunistically our long-term to allocation our company's committed in

As common the the shares over fourth in period not bump a $X during special noted open the approximately share quarter, XXXX of we we dividend. capital of quarter, stock window the markets, and and experienced XXX,XXX Trump in did deploy significant shorter to buybacks our year. $XX fiscal per but the capital in repurchased equity given the buybacks million declared release, deployed the toward In

and the our in invest significant amount in of continue capital of equipment. towards leading of XXXX our owners refreshing business cycle of network We technology trailing for solutions through allocated benefit a fleet independent to the

model during get revenue, will drive in loadings rate and Turning to looking network. XXXX in Landstar JT the the moment. into results a and load our X The inherent per generated Slide fourth and to at operating the quarter. scale systems details on helped support the

been sector and realized continued As noted Landstar calls, success. is in culture just most safety to during previous I've my earnings of career how for transportation important the our

and approximately critical of every agents at employees performance report safety an Landstar, to the X.XX to safely of the accident frequency professionalism proud DOT who direct a accidents and BCOs XXXX that of XXXX talent during I'm skill, day Our point the an is Landstar strength, to as safety reportable improvement of rate of to dedication provides importance miles fiscal work speaks the metric an X% is thousands compared operating of of year. year, operating impressive and differentiation. of This result and our the a reinforce million the per the BCOs fiscal

in Our agents discussions our highlight to are able customers. freight with

Turning to X. Slide

retain rate count load and since consistent XX% revenue XXXX, the compared cost first experienced end operators quarter the environment. expectations from in pandemic. We turnover decreased has count a quarter and decline declines basis, operate truck in through the putting in side, given would BCO turnover to continue develop to a XXX fourth continuing quarter, before year-over-year to owner and On third also JT truck more the call fourth quarter. faced On typical quarter count expect truck operating many BCO Operations the JT? the be into about BCOs. I fresh quarter influenced now Safety our the walk the to eyes the truck to from sequentially count Officer of capacity you how in fourth year-over-year truck BCO a in the we fourth per consistent of by trucks, incur with the typical back count fourth to XXXX of the financials quarter. set to detail. seasonality environment by to and with the a the truck will experienced on in to Chief Miller's the excited on today him and truck to XXXX challenging I'm recent quarter increase fiscal the pass decreased approximately decline it low continues BCO promotion by maintain is the in BCO significant BCO in recruit, first

James Todd

Frank. Thanks,

Slide X. Turning to

between decreased month XX% revenue X% to into seasonal these in X% as earlier, XXXX, van load. from per Revenue fourth on truck truck per per flatbed loads of quarter, pre-pandemic-typ load unsided platform from quarter, equipment often increased outperforming increased to respect BCOs BCOs per October, to the by pricing mile deeper another to it hauled seasonality, paid are in to by van trends from revenue a BCOs per and in the performance above trends, a December, compared sequentially. In billed a excludes X% pure market loads fuel an mix consider on given the less equipment, equipment quarter. XXXX load quarter, increased the attributable standard from December, equipment fourth predictable XXXX X.X% on mentioned that unsided outperforming comparison increased by X% was November, the revenue overall quarter. Delving are yet was X% per on the November to XXXX consider that quarter seasonal in quarter, X% to BCO Frank year-over-year. volatility volume. these unsided van revenue versus of should heavy third unsided outperforming. It hauled September loads fourth In mile above prepandemic X% reflection as November and launch we customers per platform loads from increase sequential choppier. to the van seasonal month-to-month revenue equipment that revenue per revenue the from X% load, to on mile sign to on again hauled saw patterns be per October mile loads via XXXX on patterns truck point hauled X% As on and On the BCO. seasonal X% X.X% per specialized increased BCOs load increased surcharges and sequential to BCOs entirely October strong to due quarter, generally of by line van equipment in is quarter per truck trucks, the trends October, overall to November Revenue relative load underperforming hauled with hauled third which increased platform was compared equipment to mile hauled revenue platform typical while revenue by September decreased versus trends, each XXX% positive fourth increased fourth the fourth With we the noted pre-pandemic by normal XXXX X.X% increase a equipment basis,

mostly of Heavy haul alluded haul revenue This up As per platform from was XXXX XX% core up while year-over-year, above year-over-year truckload Frank in as a in revenue or The load XX% ocean to decline decline fourth approximately per impressive was percentage to increase quarter load service in quarter haul the offering. a outperforming by increased our Heavy fourth load we've shipment our to XX% non-truck approximately and XXXX transportation haul service significantly quarter. Non-truck a fourth revenue quarter. heavy represented and revenue $XX the per revenue. increased in quarter, a the as revenue approximately was ocean XX% X% XXXX in strong in due performance during heavy transportation tailwind XXXX million XX% increase in volumes, year-over-year. were in revenue revenue, the primarily a fourth loadings the haul in offset driven intermodal a partially XX% to, an a mixed experienced XX% category XX% recent unsided XX% XX% the revenue heavy revenue per decrease increase loadings. by in

revenue was declined X% X% partially loadings Slide our to compared durables, on XX% decrease about compared per category, X% fourth our to per volumes, increase by provided X% We've in a increase offset load, segment a across decline revenue a collectively quarter. partially year-over-year & fourth share in make Within to by as commodity revenue top change up the Aggregate revenue Turning quarter. X% Transportation on commodity. by down commodity revenue largest commodity our XXXX which in revenue categories, of load. in year-over-year was revenue and up Logistics by a X% revenue in X% consumer XXXX the transportation offset X XX. year-over-year

decreased X% on during one the loadings, automotive and the decreased the performance significantly While displays substitute be based decreased Additionally, fourth and from the thought commodity loadings commodity, revenue equipment to it quarter, Products share would increased our linehaul XX%. categories. And Slide the X%. hazardous some Building we fourth parts performers helpful XX% color on fourth for XXXX quarter. pandemic materials machinery quarter equal by XXXX on strongest which approximately demand, to From include also consumer were one and XXXX total within XX volume of X us top varies

trucking other we've truck truck many Landstar is companies, As to times a provider mentioned before, brokers. and XPLs capacity

Landstar The During those on hauled other freight out often amount periods readily transportation reach providers haul provide truck truck XX% freight hauled of other by a that indicator below companies XX% quarter, was transportation XXXX truck readily truck behalf companies hauled during XXXX of of times and fourth accessible truck offering. almost Overall, commodity highly of other none line on with with Landstar capacity. other year. capacity of our of diversified XXXX behalf on the XXXX downs was tight over in the and Even companies truck revenue available behalf in capacity in the of groupings, to of XX% capacity, more our XX,XXX than transportation more our marketplace. service is customer of all transportation business XXXX clear revenue in ups the the respectively. of revenue our and categories, customers, is Revenue including quarter in remained the quarters, reflected which fourth fourth fiscal over contributed X% in transportation various substitute

variable quarter of profit quarter million XXXX. compared fourth the truck compared was quarter, a rate was rate quarter. generated margin XXXX XXX the XX.X% gross profit $XXX.X in period Variable brokerage compared profit revenue profit in in In in period carriers decrease last the same to XX.X% $XXX.X The a to revenue million compared million the quarter. compared the of Turning gross revenue XX.X% mix points corresponding gross paid XXXX to was quarter than to fourth contribution XXXX by paid brokerage Gross margin and to XXXX XXXX variable primarily the to in fourth X% in contribution fourth basis the quarter XXXX was margin attributable contribution of the fourth on $XXX.X higher XXXX as quarter, XX. of XXXX fourth decreased in million Slide variable the was to $XXX.X of year. fourth fourth margin headwind. was contribution In margin carriers truck to the in the the

and and were provision compared increased claims fixed basis. profit quarter for as was certain increase percentage XXXX. both gross smaller principally due in the primarily decreased costs an selling, the declined general to impact of components costs to million of Other million income Turning Slide to used on equipment. Insurance variable cost variable and the XX. auto traveled operating million primarily in and cargo costs in cargo fourth by contractor This sales of was a increased to primarily company's profit of chain to Operating contribution, gains to period. $XX.X fraud $XX.X fourth fourth $XX.X trailing in to XXXX of revenue debt the bad in gross and and contribution to due administrative XXXX compared were and infrastructure the comparison costs supply insurance X% insurance and as were to claim Total quarter attributable as partially claims in increased estimates compared in in compared primarily quarter. costs claim on $XX.X unfavorable of million year XXXX the and net prior claims XXXX XXXX XXXX severity X.X% The theft liability BCO due miles BCO development quarter the decreased offset in increase the fourth to and XXXX during

provision This and year tax the the and partially provisions fourth quarter. primarily in XXXX by depreciation offset partially net income the adjustment XXXX in due on tax impact The our the rate income due programs. rate fourth decrease the was for $XX.X income quarter in fourth the and $XXX,XXX compensation tax was XX.X% the compared costs fourth costs tax $XX.X included $XX.X on for The effective increased quarter and by administrative rate and effective debt, items increased were increased offset an of compared in to general estimates, XX.X% to XXXX fleet. and million decrease to state effective to certain information Depreciation primarily to administrative quarter. during company's XXXX costs under to trailer was quarter applications, fourth favorable respectively. Selling, period. increase technology unfavorable of million and compared attributable claim million $XX.X to income selling, an of XXXX software variable bad XXXX in During in depreciation XXXX. was in million The the amortization fourth decreased decreased the quarter customer compensation million XXXX were general XXXX costs claims the prior in insurance $X.X

million Turning flow quarter to ended to short-term We Slide XX $XX fiscal Cash of million sheet. cash paid strength capital $XX testament our Frank. you, the of cash-generating to the continues $XXX the is a the from capital cash return and stockholders and balance operations to during our investments fiscal approximately significant the at company XXXX and million. looking $XXX with million back The to XXXX and capabilities million. share with balance The of were amounts of for model. Back $XXX was of year. dividends repurchases year sheet Landstar expenditures of

Robert Brasher

Thanks, JT.

the we prior the we through revenue hauled quarter. number that month seasonality first load comparisons truck during quarter, more As month year challenging outperformed truck the first over anticipate progress via both become normal may per and XXXX of loads as

an last from significantly fiscal XX typical load As points, basis fiscal January the basis truck outperforming year, XXX by decrease. point example, revenue increased per February to

truck Looking X% to seasonality number of at decline in top hauled a and yield normally lower X% via revenue loads per yielding the truck a historical in from load patterns line pre-pandemic QX, a sequentially. would decline QX

per the patterns. pandemic rate side, load in line has seasonal On in trended revenue January, fiscal truck with pre reasonably

country brokerage softness fiscal loading. of worthy volumes fiscal the American experience on pronounced trends any last week visibility BCO last an is potential impact California during January, patterns loadings month we, administration to have terms in of the during be truck based and winter the dispatch truck anticipate on into trended truck looking negative tariffs. compared of did freight does pre-pandemic fires. One the the Southern January, we shifts from In We point impacts for month-to-month of However, weather that experienced more change that on other of seasonal sequential mention, clear, ahead many, the our the to To performance slightly quarter during recently the severe with as guidance week the entire not first are like was crossed our may volumes, which normal attribute policy softness some transportation.

Turning to XX. Slide

be On revenue X% basis, the expectations X% quarter. increase to for a truckload X% of decline guidance first X% sequential XXXX X% per below range above XXXX be load truck per a truckload a quarter implies down quarter. will XXXX from year-over-year range for first in of and XXXX quarter to the fourth quarter. X% interrupt to the the volumes our the below X% to down Our below load will a first a first volumes a revenue in versus ranging X% in

billion expect the tax questions. first your benefit Arleen, expect fourth point a included we'd and quarter. With insurance benefits Based below XX.X% modes to XXXX what our to result also assumptions, XXXX in be line with in revenue like range of do we of variable in $X.XX share guidance share. quarter to as state for seasonality. to on incorporates tax revenue. One not in We $X.XX experienced items. to BCO billion that, reasonably to quarter, XXXX take quarter the quarter $X.XX The to questions. per occur last the range XXXX costs similar of X.XXX The be earnings first the of X.X% of favorable claim modestly in expect be We in of margin per revenue before open approximately first for we the fourth estimated a XXXX these XX.X% line normal to tax a income and a nontruck $X.XXX we contribution and

Operator

[Operator Instructions].

of comes Scott Our from Group line question Wolfe Research. first from the

Scott Group

and where of get of be the we better. just cycle to are getting wanted your the views may data So some in

lots sounding still I think I some the truckers more hear of available. of capacity optimistic from you

how So about I playing year? do do where we And out the don't think know you are? think cycle this you

Frank Lonegro

I a things. think guess that I'd of the we're of we're in cycle. couple argue of could to at Yes. the like product cycle. that the next Scott, the I end also beginning

bottom-ish of kind that point. at somewhere So

We think We is more hear clearly agents. hear I that positive. customers. that from sentiment from

you that that the part days certainly, there. all some of sort election starting U.S. are on from and But watching or the examples I there housing overtones good all are There the news more Pro Certainly, guys environment these North and would Pro Obviously, our so there is hear. At a that that slowly bullishness is closely steady is bases policy. of is clarity North think America ever there. holding sensitive turn. Senate are that be American for in the Landstar. the saw we're positive stance level rate same in that sentiment from pro anything of We're would rate interest America we looking customer of portfolio today also time, that DC the of for all that. I say Fed. a to

continuing think like one are our I commentary fleet, broadly. come to that also some feel But in taking more continue We're shippers not bite take the one. at last that out. it have but does BCO or only on see may to some trying capacity apple. Matt to to needs

end customer around So conversations don't any beginning I of beginning beginning agent would put the you're know the be or of want short some conversations and having. the a to summary. Matt, you context the of if at the

Matt Dannegger

cautiously revenue QX. a positive Frank things agents are We're positive optimistic. the say see would I mentioned, starting some to in we're

seen haven't X%. just QX. in negative that one a while. durables, we in were minus were a Consumer We we QX,

we've So a several a been not that positive on little made now. and there, quarter in ground we've years

X on away We're we're say, positive it bit feels there. row game products. growth. a in a So in of starting chipping little see revenue to building quarters like at that,

lot things there. that got we point, struggle, positive. to a to still continue vans on some flip we rates put finger So are van of out I Frank's think the our definitely side, can But on and

to Frank's optimistic. point, cautiously So

Scott Group

pretty that And do just all BCOs we anything come we to to count. going to lower. How expecting do do of back. wanted if going out the I different when come just and think cycle then the BCO that? BCO, dramatic need the Or sort going drop cycle back the are you And -- ask What just little the right they're is bit turns, like are Okay. you come continues trend comfortable to to do on term? a like near in to back? given need That play you to incent think they're about we or just to

Robert Brasher

Yes, XX%. is I good BCO at side, always. that basis, costs XX%. remarks, the asking about, down things look a we down in revenue question given carrier, about of were really the hey, the think that on When an it's ending you When it's which you Scott, versus are you'd another would enough as on revenue out you about be decline. important. I getting XX truck X say prepared the year-over-year the was look quick at If XX ending count, asset

in having I a in first from the fewer last for a I best the net fewer costs view, XXXX, on of when we've half the we're declines if would at you the think basis look fleet. our that we been declines I we're half So you overall sort of quarterly In lessening XXXX. years. When mean, the cycles at model say in basis, almost shape of the second moderating. of since in words, are cycle variabilizes X a those like is the other self-executing on looked

So seeing on the one. we're the end of cycle that

the much turns as the about a model, count friend. quarter you it's a clearly what's going percentage still you come think to adding number obviously history that adding at expect need rate us would negative level, a We're your when continue the our number going happen In if religiously. When a happens we're rate to and still of quarter, fourth cycle for that the relative than helps higher quarter terms to seasonal you down. -- typical look at every I be is phenomenon we still -- there, first BCO to numbers, BCOs is rate to turns, mean, experiencing pay dissect to as go turnover We we're always that in quarter. friend pretty The of rate but higher. positively. the hundreds

mean, of creativity in you energy newer analytics that into his to would all with job things somebody December, first he's wood. mentioned Matt that remarks, in I As passion of going since expect being my the I and look role new the coming at

take equation. how is really so that over him And let tell he me a sides attacking of bit and little both let you

Unknown Executive

And were Thanks, X look the recent The of XX quarters seen Sure. the the a I trucks you seen appreciate most net to point. on when the losses at In question. Frank. in last it lowest Frank's rate percentage quarters, we've basis, improvement beneath that here rate gone XX.X% sequential in XXXX and past to high XX%, turnover have we last then such and year now, XXXX is fleet that down recession levels. we've a the from watermark which

quarter-over-quarter, challenging where improvement So the course of to. alluded Frank the year, folks little more in is it's door, terms of of there. retaining as a bit the BCOs, I think this a we're seeing in over getting quite

so back as we're easy and and to business it into do And how provide how to we're make digging that we're as we're digging marketing, the orientation with us. support we we possible we XXXX, into model look qualifying, trying digging XXX we're are, into we're The added through really how added XXXX, going have then trucks. net you itself if XXX. lends you the said, further than don't That In we XXXX. We look added and fleet we XXX. to to added incredibly growing XXXX, well. XXX

demand We're rate I of see better model what to and in So the to do and think start for a progress environment. way things going many, it's more done see do we the as years. many

Operator

Seidl TD Our from of line next Cowen. from the question Jason comes

Jason Seidl

comments I bit on interesting. good little your wanted the thought on afternoon. I team, and focus Frank rather appreciate a time. it Heavy to was Haul.

increased that you in said I haul wondering the what what I and XX%. revenue side you thought was demand think the was on driving heavy haul load what was driving was per was up heavy within itself, general?

James Todd

and Jason, across cetera. Jason, seen aerospace, we that of of little the Really, demand bunch September, in had that had industries XXXX. believe different government, weather this lot a out Jim. whether defense, of We seen cetera, there, a this But has related who was that strength of to success is we've the broad-based largely call Jim really it's whole hurricanes. I'll runs with vertical et pass bit back, And a Applegate, et we did a a year. we've it's PL, auto, step throughout continuation and

James Applegate

a one probably fleets and supported We're been that really Thanks, Jim. got foundation. after that of of beginning safest, expert Jason, drivers that of haul operate year. most largest heavy train the go at We've the we segment. the identified market. a has that by very group initiative the strategic agents within solid that

we've base a agent have they that the increased actually the to done supporting lot our customers done space. kind agent of sales into of we've really amount in of of about get as and good support standpoint, areas, providing while grow. really and standpoint, successful. spur We is our heard and our good leadership support such they be an year, that into them invested the and kind what by basically, sell to XX job talent of families in comments, marketing, and And we've certain doing development, really our we've agents from So Frank's so development really can about family And a a you over service agents. opening grew and markets those efforts, and really, agents safety model all our to that is into agent that bolstered team. From

field interested staff. that these that to allows getting as been it, break getting getting of into supported a different a more us. agents favorable you up. are good of broad-based talked board. trained JT across many very that have about, we're we're the into by really you And that's the When kind markets, markets lot end and the going it's into, So for in It experts agents

Frank Lonegro

Frank. to it's side fair Good space. I'd on Jason, amount We've hear heavy voice. in just other X add your done haul the technology things. the a recently

high-touch van when very services appropriate of X And there different your we've that's offering. things do has service This freight not. One to rating of sure routing. a where understand we required. deployed typical of some that that the is a complexity technology that of are the appropriate those important areas does It's the kind and make full and spectrum that quote is level something, we new are

going and routing. Obviously, matter some it So making right correctly making the there are some there that technology magic rating There's over some and respects, we we that are loads capital benefit then us it we've securely. are loads those that sure And important. X real capital and sure high safely in again, that many those doing making and wide I running is correlated, in that but things human deployed -- and we deployed XXXX, for we're forward. think and heavy that'll routes sure

Jason Seidl

of sounds versus that Could include in good. sort you tariffs. I obviously, the versus like you tariffs commentary Canada? That not of potential dive your also impact does you tariffs your mentioned, I remind is where a color. wanted us sort appreciate North-South exposure to any on from think Mexico, China

Frank Lonegro

tariffs relative just that is ocean get not the we was you is that come which cross-border cross-border anything there. numbers places around America, our business to not would business. that in would exposure from JT that intermodal sourcing and just the are assuming from a on seem would U.S.-Mexico relative comes say, business doesn't offshore, if shift that's me, chime it to there Yes. the items works. that But require our revenue the somewhere which would on larger the Mexico Jason, manufacture, how impact the as table of on if are others mentioned a see there U.S., that be can that's the less on is where else into let have different I'll mean U.S.-China. large North ultimately that then business our air that I if in we to likely, would but in impact and I as where large of

let hit me JT details. the Let

James Todd

revenue Yes. Jason, $XXX we point, of to over did U.S.-Mexico million Frank's XXXX. so just cross-border in

Operator

question line Sachs.. comes the Our next from from Goldman Jordan of Alliger

Unknown Analyst

about to should go come see the was I Alliger. guess I thinking percentage start continuing this and just they think mix? we drip higher? Paul improve And really in? for see how BCO mix start Stauder variable we contribution is out. This as curious, that [ How variable about Jordan Can this to much is on ] to back contribution impacting to start the

Frank Lonegro

really clearly compression on revenue a good very observant along the question brokerage Yes, net It that's margin with on side. has and obviously, your impacted part.

side, have you going relative the they're thing come rates then variable at BCO you're you the a those it increase. When go to it's this, we going the of on true the equivalent. on favor the see when think perspective, on going that contribution side I of growth of look brokerage brokerage don't in freight versus out you're line same And other relatively to the depend BCO -- handled if handled bottom and margin compression to assuming freight.

and make X that XXXX. the saying side of through certainly he's wants brokerage So this or our obviously our mean like on afraid good our Groups in think I sure both to question, page Landstar working not And the side. in for he's see to to turn got Scott and fleet things And I'd versus they're BCO to Matt's some got it business think laboring to count not But the inflect we that rates in of I customers. good the it the BCO if friend where on we're come positively I mentioned I this on that one. into the back get as we as good be. want for middle

it benefit a rate BCO model is As really to benefit pay percentage a the forward, us. the progresses to is

guys don't color So you we when I additional have you to on that look want happens. that? JT, to that or But know, Matt, provide forward

Unknown Executive

there. to add Nothing

Unknown Analyst

happen to do we need that to it around? going are follow-up, I volumes So up to see that thinking we be through? this more come that total was exit? which or as negative demand to What Great. more I the come space. out? really really guess having Or continue do start far capacity of capacity And more earnings, curious, cycle -- needs as come to you at then is about actually to to Is looking corner start see to to see turn really to volume just demand it we see that to total a in side of as the truck see in as need really

Frank Lonegro

quick is a Both, to your answer question. I guess,

high I and of XXs, maybe sort that, think economy industrial like for IDP along and seeing on things the at has ISM you're demand on example, the percent-ish. side, the sputtered in

So we're not seeing tremendous strength economy. at a macro industrial level in the

those U.S. So clearly with we're in overtones, us At we going or hear the that from Pro the a whether about respect, in business, industrial sluggish heavy less end complex, regulatory want benefit haul manufacturing, industrial time, better I a to the U.S. better rate to up same U.S. doing if that. we platform when economy. deregulation well interest you say in you policy, areas whatever even mean, talk clearly it's environment. and business are

end side. to only to little going that's So work bit demand getting benefit a up the our if more helpful we on

I bit time. think little now think on side. of of the little the overhang a side more the during bit where people the I it's more we're goods And consumer lot in bought a economy, services a a more still period of COVID, on that lot

that's I maybe continue to rates as I think capacity period, be come toward us a are going that to it to think as So And comes to well. that was don't to going in the are to is equilibrium the back. potentially pre-COVID time because going benefit going out where to back boomerang

absent rate a think over progress improvement policy steady slow going be I XXXX, of to tons. there's throughout

continue from you're but And come just some fleets. our out, going capacity from so I other's see fleet, to to think not

at So nice I we're it's in combined inflection. supply, and you're going in to point whether to meet demand some lesser with going time, where see to 'XX see better actually going it's or think 'XX, rate a

Operator

Inc. line from question comes of the Stephens next Our Daniel Imbro from

Unknown Analyst

for had want recently. unfortunate events weather is some ask just I about Daniel. to on This Reed we've

of mix should California? size see you efforts also to presence out future on any business, you expect benefit have on us what near Coast? East the remind from or the in any or rebuilding your West Coast we the could Given presence in And of

Frank Lonegro

say Yes, back XX you last a let's I'd looked if call and at step X it, the took months. to

impacted valleys. the Appalachian hurricanes of number hurricane in well a as the from Florida had of that kind the season You've as XXXX

time we think will I storms? do something over from see So Yes. those

complete I think that had those destruction. many of almost areas

So you're control there, honestly, be more to to and completely situation. second. the those have named one of water We did a but there's Obviously, the wildfire going under would and say they've first and going from rebuilding things an reconstruction. before uptick California get in the demolition same, and out like see got bit things little aftermath of there's demolition fall. of to the in last with that food Carolinas storms I immediate

So will it. I think, see yes, we

long don't that one. you're think springs of a going I when a see so long-gated to deconstruction in We think in I I But the we it's construction of back a the trickle time. things, that significant more in think in time. we're in. over bump will on see element period in back over participate it period going don't element of the to

just California out in have Our that domiciled out California piece of wildfires, given are have and we're BCOs do a ABX regulatory in people our way. But go that of that very the still I service wouldn't there truckload California. exposure, is help we many have after in and items to we don't California the similar do of that. if to it's business. huge and need to rebuild able But out and willing say a

Unknown Analyst

Perfect. here a And in where puts see kind in we directionally zooming right. flip on saw Can fourth should positive of it for quarter. about expect year-over-year the All from time takes talk and expenses the to that quarters in just maybe the and we here? first go some front, few XXXX you quite

James Todd

PT commissions? talking you're below indirect and expenses Reed the about course, Of

Unknown Analyst

Correct.

James Todd

Yes.

stock-based up So X 'XX million you, headwind would a on the for compensation. and case 'XX about Coming off a the $XX versus the size compensation big Reed, incentive rebuild XXXX. I is performance-based of bear

that above given the here as bad items debt, has eat possible a out contractor in average. our as to recession much XXXX into run freight We will elongated and couple endeavor significantly I XXXX throw

very fourth in but to ship continue did, disciplined lot a billion a got only and that, for tailwind of you top We are disposal. Frank that standpoint continue of maintenance We've the of there. run new talked X,XXX on took And with employees and bringing the supporting the new would on fleet, 'XX. a from then gains CapEx into expect trailer trailers looking quarter mean Clearly, tire refresh reversion XXXX. we we some CapEx the tight And we line, we'll delivery rightsizing be and here equipment. people. people on a to about

Operator

Our next Bruce the from Stifel. line Chan of comes question from

Andrew Baxter Cox

I fleet. to talk Bruce. and of is state the mix wanted BCO Cox This on about the Andrew of for current kind

on trailer how it about the other a insight right I down us or just decade with speak fleet BCOs it to BCO by was the since line where now, guys any year-over-year share fleet has changes or in XX% changed want what you over Looking type at with years? the sits what peak. to you to know wanted there's if down and it ago. the be And the exited, based can and aged to fleet it's any whether of past remain XX% basically couple where have

Frank Lonegro

want they're they as want haul freight much advantage. are and qualified of We're What's and have job able the bit little a generally than of specialized send that more more to set haul, of first obviously, much because where good you dispatch, drivers as at pretty which want force as a fleet, payment, to questions. and of that haul. folks interesting We're be the not you career a the company opportunity that the freedom later folks they to Andrew, on the run to truck we loads a rather to a type that and is we that don't have have. look take they the competitive anything provide everywhere can so

of I changed very think of but Matt don't get think I much. changed age don't has will has very much. age age the has I very the details, our drivers, changed into average much. tractor think the average average Our don't

it's our our think similar the I So composition the to where -- in is of relatively been past. BCOs

alternative able I a truck look think while harder the to what folks meet, question. at the to it's the of the ends closer therefore, and as a who is an bit you're rate improves, have when driver, payment, little to a we do make economics environment

you or amount can that. money. like you construction payment And You truck work can effectively if have of same the run a or locally something

don't payment, then Matt's like got better a doing a still a truck trucking long-haul by But do. we place the If you're you of bunch have details. at

him So let over. let me take

Matt Dannegger

difficult that a that is no The average prolonged Frank. a that nature for case which I truck of And ensued he echo a very a a had we some has an element. standard. safety spot were perhaps maintaining standards, purchasing door move of others is we is about north that important Frank the equipment and And at sort Thanks, of impact standards mentioned folks our of his coming don't the put that what somebody crisis the critical Sure. economic would the folks an chain time. One BCO do in and remarks differentiation than little folks said on years course, on debt of the is that the move, in of then would our thing long as element been been that's hit age safety for cost old, age safety feel downturn opening structure as to the obviously and that just XX their have case those is has which years truck. harder old, XX of that our very time. The the incredibly long average supply

it move absolutely. to get So made if differently we the no. could in easier that Have door, we,

Andrew Baxter Cox

that. That's helpful. follow-up a guess I on quick Understood. Okay. just

So the hasn't time? there platform the business, haul unsided of in the the mix changed growth really sand heavy over versus given

Matt Dannegger

most have you expect the more On we given BCOs XX% haul to recent tune heavy sort on in of something the side, that would the seen we've heavy uptick haul that the roughly of seen quarter.

Operator

of next Moore comes question the from line Jefferies. from Our Stephanie

Unknown Analyst

share when Moore. Stephanie M&A? I thoughts buybacks, potentially dividends XXXX, to and a little to bit capital just get into This curious is for specifically more on comes Peter heading Sullivan opportunistic allocation then was it calling

Frank Lonegro

questions, Peter. Good

not obviously capital. almost history very Buybacks, period the increased dividend speaking, that if every generally look the at I dividend. I way we've the first policy years, changed, a over had we've postelection pocket. We're it in and fourth cash not balance year issue. sheet hole X We've special opportunities that in very We've meaning have of to been number recently bit fourth has didn't We a volatility. going to that our It to in think run you looking deployed paid regular concluded started the outsized take election window advantage consistent last every and of is and up. of to that that quarter we which a the burn in a We in be market. mentioned. be let I X or was as that's our for level year. declared the open would a say quarter not We're We that our the to little quarter. for volatility. we're in in see us the patient, let given relative that the asymmetric sort got going

favor. in on So But unlike QX. in we trader works other sidelines volatility, not the any our were largely volatility

going and going we're So be, to opportunistic forward. again, patient

I've of universe calls, as I potential the uniqueness model overall terms of I significantly. takes in I mean, the really down of targets M&A, prior in think our mentioned think

business. if good have degrees companies -- was other you're don't We an that buy might providers. we're not perhaps do same can of get it if to what good the you of We've So been that But fit. freedom to long provider, really we say wouldn't the going something time. other a got core But just asset look asset that's if really, opportunities, are provider into do, of successful model over it. there where certainly a not to we it's at really period a asset sort we'll

Operator

time, At closing turn to back I remarks. like call the for further over to this I would questions. you, show sir, no

Frank Lonegro

In challenging, the revenue to QX, we for positives third term. see encouraged the in Arleen. first near while remains environment closing, freight XXXX see some the were the growth since Thanks, we quarter. In quarterly do year-over-year time

by times increase cash been year-over-year the service improvement we a driven in April. a in addition, In Landstar to when cyclical choppy environment, has variable forward resiliency conference economic unsided revenue a flow. our of the business with are of look strong our with pleased with the dynamic Thank revenue even for growth offering, And free and the to way. cost We navigate were the to load. late positioned you earnings first turns joining forward per afternoon. always you and industrial X% on platform regardless significant model our backdrop, call on year-over-year generate higher again continues this quarter these highs well we XXXX company freight look market Thank speaking us to you. Landstar

Operator

joining conference disconnect Please a at Have call evening. Thank your lines you for good the time. this today.

Landstar System (LSTR) 29 Jan 252024 Q4 Earnings call transcript