Hub (HUBG) 2 Aug 202020 Q2 Earnings call transcript

Company Profile

Participants

David Yeager	Chairman & CEO
Geoffrey DeMartino	CFO & Treasurer
Phillip Yeager	President & COO
Justin Long	Stephens Inc.,
Benjamin Hartford	Robert W. Baird & Co
Scott Group	Wolfe Research
David Ross	Stifel, Nicolaus & Company
Todd Fowler	KeyBanc Capital Markets
Jason Seidl	Cowen and Company
Bascome Majors	Susquehanna Financial Group
Brian Ossenbeck	JPMorgan
Thomas Wadewitz	UBS

Call transcript

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Operator

Hello, and welcome to Hub Group's Second Quarter 2020 Earnings Conference Call. Dave Yeager, Hub's CEO; Phil Yeager, Hub's President and Chief Operating Officer; and Geoff DeMartino, Hub's CFO, are joining me on the call [Operator Instructions]. Any forward-looking statements made during the course of the call are contained in the release represent the company's best good faith judgment as to what may happen in the future. Statements is forward-looking can be identified by the use of the words such as believe, expect, anticipate, and project and variations of these words. Please review the cautionary statements in the release.

differ refer other disclosures that SEC the results should Form the could you projected actual and those XX-K filings to addition, to forward-looking in the company's cause in In these from statements. materially regarding factors

this reminder, recorded. being to is my your host, It over the call conference to now Dave pleasure a As is turn Yeager.

You may now begin.

David Yeager

Operating I'm Hub's and Hub Hub's Officer. Group's employees earnings by for Chief call. during masterfully in President DeMartino, you Yeager, second our recognizing performed Phil participating joined this and pandemic. for thank by Chief Good I'd afternoon, begin today Geoff like Hub's Officer; and the clients have quarter Financial who to call

be of front in on essential goods staff valued our delivering the while office Our to to operate lines, support continues effectively, customers. continue our drivers

support We drivers they supplies with as ensure necessary safe as staff during PPE and that training the pandemic. to remain continue well to our

decreased challenging second the quarter anticipated, revenue As year-over-year. be proved very as by to XX%

All intermodal depleted of pressures. will see as in replenished lines however, regions to that, due With over with did, We with our revenue our demand, certain in coupled lines. turn review improved exhibiting soft the business strong pricing sequentially, businesses July Phil, demand our I call to inventories. volumes declined business to

Phillip Yeager

each still pandemic. on entire service the and Thank are maintaining to I still continue serving communities we to ramp XXX quarter team volume unit XXXX now facilities Group Hub priorities for up XXX environment our our We've that Dave's as of and echoing somewhat are which we could by competitive rail and our since key of their the pandemic. over drive improving thank either X% east customers, XX% demand Dave. Intermodal you, impacted volumes commitment and and volumes by our a in with the would like cost by impacted I not seen business determined to performance back XX% will our in down improved focus and environment, over as differentiated were revenue remarks April, base intermodal unwavering accounted to an for will declined production declined start the points other. street or was which XX% performance. by compressed reviewed which customer lower markets a of basis sales X% our for structure, Local our growth. long-term Transcon pricing cost the reopened, of participated amplified impacted declined full improved In closures. as significantly gross an margin closed is their that percentage remainder end Today, environment, offset competitive as were and XX% increases. truckload April, volumes and a we X%, customers, west local top discuss and

However, up June. in volume throughout improved the X% quarter and was

revenue. we had a over and an saw We demand plan bid fleet to and XXX bid margin quarter XX%, customers But growth continued drayage sales seen rail start tractors. improvement performed Due in during operations that gross provide enhancement as decline season. the our points to customers have superior to percentage basis execution well season, margin while demand also returns. by impacted pandemic, had by strong which year-over-year. us We in X,XXX our drove well revenue in in were in XXX service and third we significantly several CaseStack. our Logistics enhanced strength are to as our our improved the very grow The positioning have service declined of containers to and

were the wins offset of by the with partially a small customers new We in that pandemic. had onboardings losses and number impacted was several quarter, during have this by negatively

have and growth profitable on an focused are excellent pipeline. We

Brokerage of is becoming sales grow percentage service new basis XX% while margin as year-over-year. improved productive our XXX our more provide while we us a points customers. gross the positioning which declined excellent team to to and technology investments, Our volume structure is for through quarter,

and spot We lower volumes truckload. have in LTL

trend improved into volumes sequentially However, July, new selling success are the throughout having quarter. we contractual has This extended in awards. and

improved through of XX%, successfully service have and for We a percentage margin and points our our Dedicated new quarter sales providing structure XXX operating basis while declined gross revenue levels. as superior productivity year-over-year. technology, improved the

our unprofitable demand profitable shedding and several of onboarded products surge focused new consumer effort offset a and supported our from of successfully These helped business. customers to retail have We on wins. several wins

our We progress. the We our I are still for it hand while service. improvement, to ample now opportunity have improving focus maintaining discuss we financial profitability on with will pleased of over impact are to our Geoff performance. seeing our great but

Geoffrey DeMartino

Thank hello, you, Phil, and everyone.

for QX. the revenue Our XX.X% saw throughout gross of expanded We business well performed despite of up improve very all margin revenue, lines to service in percent margin was QX four from quarter, QX. macroeconomic XX.X% conditions. compared revenue quarter unprecedented a as the in gross and

we operating million million the during the EBITDA results over model of of Our resilience of generated activities net $XX $XX demonstrated and cash over as our from quarter. operating

We continue control. to exhibit cost strong

track XX% non-driver of our Our initiatives. improvement is XX months, to the and achieve headcount the down we last profit on over are benefits

the prior $XX higher expenses. utilization expense the and improving and and our reducing headcount and to down expense. bonus Salaries as was lower year, million operating our driven by trucking driving are compared lower by We quarter for benefits operations, costs over

$X.X incurred refrigerated donations we of trailers of for quarter, to expense responders. the COVID-XX emergency During million

our drive G&A with $X.X million is were now up We our complete. spent to improvement consultants year-over-year. engagement who also costs $X.X million This worked in trucking operations. on team

reduced second implementation these were earnings as spending $X.XX the freight $X.X driven travel of including market, This the profit costs and of down initiatives. by costs was the EPS million $X.XX. of of impact competition consulting improvement and truckload, share and This Excluding the XXXX. consulting Intermodal by our donation includes the several within in per our to savings the The COVID-XX offset including per was we earnings costs. in from diluted areas, Group's diluted in quarter and severance. soft expense, compares related by and partially decrease Hub $X.XX quarter for IT donation, share to

quarter, revolving on of March. we credit facility $XXX repaid the the borrowed During cash. million had we our with in we $XXX the ended And million quarter over

to solid levels liquidity have continue We and debt. of net low

growth the on business. of remainder million expect $XX the the to between in million $XX For year, expenditures, to spend we capital support primarily and

are intermodal We remarks. tractors, and to XXX our to for and you grow over closing X,XXX refresh back fleet. Dave, containers purchasing

David Yeager

you, Thank Geoff.

expect the with But logistics improved we are to businesses all questions. the restock half the the year that Americans. as challenging will inventories, was reflect and see second lives their businesses for With demand of second we we quite of down The quarter disrupted come the volumes. as that, nonessential we'll beginning economy encouraged the services open to pandemic line are back locked growing and up the

Operator

[Operator our And Instructions] Long first Stephens. question Justin from from comes

is line Your open.

Justin Long

and Good the quarter. congrats Thanks. afternoon on

Geoffrey DeMartino

you. Thank

Justin Long

how market July? get your June thoughts reflected you've this is we've that you're then So on share to much if you X%. in pickup June And on love were of bid in or what volumes volumes season. July. the after us XQ, in up and would side you've intermodal could won maybe you And that I throughout that seen won monthly during seeing that, do you mentioned bids give in was wondering

Geoffrey DeMartino

the month, of Geoff, Justin. for X%. April in digits Sure. down And we're This and year down single intermodal XX%, June is then high XX%, date, was rest the up was volume. was X%, expect By May to up July, we in

Phillip Yeager

And Phil. Great. this Justin, is

through pandemic and that in are the of that's did to this somewhat on larger from completed But we and point. Just It It strong very hope and the complete, customers actually us some the is well, seeing those that extremely gives performing perform Still peak some in perspective. seeing And are renewals. there, what a will generate. that will results very our competitive that demand, at to for been we to but that bids surges have the somewhat a during of confidence a continue, of our the XXXX bid perspective. still bid pricing grow invest though, we've fleet. are larger and feeling from good pandemic with in up out aggressive was set well with season. very intermodal XX% customers their tightness us continuing in signs ones We able but

Justin Long

we And could and Great. gross see you as volume that third half, for the around thoughts the back Okay. think forecast any in about are sequentially progression margins quarter? fourth and that intermodal there

David Yeager

as Sure. that -- will kind whole closer number. I for a down of QX that whole, do for mean, the to sequentially, margins the expect come business we

that of some increase our of second the the to do as are half hit repricing business We more fully the start going impact rail numbers to is We more year. have see in cost of online. the

profit with we expect are We in in in half. line. the and going our expenses the the gross But improvement cost second also that margin margins line work gross the and be do lower initiatives, to to will offset both

Phillip Yeager

good well. to add feeling drayage with And as Justin, improvement results on to the we just cost very productivity load those in for and to that, side see continuing are our and on

offset we're going forward So push continue those to costs. to help to that

Justin Long

I Okay. two. I’ll time. appreciate those Great, leave the at

Phillip Yeager

Thanks.

Operator

Hartford next Baird. And Benjamin comes our from from question

open. Your is line

Benjamin Hartford

salary loop as cost you on have sense Good just the these evening, direction the close Maybe the G&A, of where half type Do any of in benefits and trend back will well? in guys. expenses the or of to some operating kind some elements. of year

Phillip Yeager

Sure. Yes.

the good out number which use. we and point you kind of pretty donation, the out, starting items forward. If number going the specific back QX expect a and which called of all we as expense, to consulting use that's Think don't the a is the severance

Benjamin Hartford

of elsewhere, Okay. that is, going now That’s how in what on back for it as see asked relates are is particular to your A this place. to it in times half on of of today, right perspective, the reasons as what's into mind, the we move concerned starting year? you And it Dave, interested are particular, up just into experience unusual a we're Coast, rail that set unusual, that, Thanks. how for different transactional surcharges as West tight in in couple put where in but service service, variety you helpful. seems I've some but your the peak?

David Yeager

be Well, to good. thus very far, service rail continues

the have PSR, partners think been lot did rail help the did quite our a so I think, of an they really I awful work And with bit.

a confident to is off strong, go with, we're seen. lot Coast. of to the being levels going that West through surges shifts, I service, very customers in the the that through quickest apparently Coast the the they mass. it's no elevated we've spoken again, in right we're business now believe question that this that There's sitting very of these inventory of do have I've so going now. we're the And is the acceleration From going Coast, lot West on been think of replenishment. West warehouses, in seeing peak A shipped And some

we'll take definitely going as through. so maybe inventory this But through though are restocking it the And is time depleted. beyond. maybe see I would quite August hope through November, levels seems to some as

Phillip Yeager

would And Ben, that. I just to add

I the reaction think the is pleased how past. we've things of most nimble kind perspective more from the been that these have spikes of with than seen rail in when much times partners one we are and our a rail

and and So fast partners very even to we're putting place response times the challenges, support be can into rail that fixes our fluid. our though are customers with there very the

sets us think so during to our peak. And that well clients up serve we

Benjamin Hartford

of just thought It where looks you like That's unit you in the on that complete provide That's like given release. revenue there Thanks. that think a dedicated. can us talked sit Okay. a momentum status growth maybe from just get then to back the that to do helpful. press little Can and update pipeline operationally? about stands Phil, When a you And what an good. positive of you operationally? standpoint bit looks your where

Phillip Yeager

Yes, are Sure. we making progress.

do the can but numbers have stride. We technology operationally are that it and making to in once some are but making want we certainly progress. the again, we where still on to you see be We long-term, not front, work

the through We But on, long-term, about are of will of be unprofitable strong there business half of will think quarter us. costs. very that start-up the up feel be that third the we're will and The start to the very wins we good some business, obviously, that. majority bringing loss show and in for second

XXXX, in is, business margins growth hope my positive so in And a returns. getting that and strong to with we're trajectory

Benjamin Hartford

Okay. to Thank turn you. over somebody I’ll it else.

Operator

And question from next from the comes Group Wolfe Scott Research.

Scott Group

trends it, the but if gross Good afternoon, business by missed I margin I did Hey thanks. you guys. in give quarter? apologize the

David Yeager

We I you to didn't, can those but give now.

So pull let just me here. up

year-over-year and up basis about XXX. XXX; basis, down up was XXX; a XXX intermodal logistics, brokerage points; by up on was So dedicated,

Scott Group

volume And that's do market? share that Okay. of you through then Or the -- growth sorry, a you mid in intermodal, of about or -- market function is bid single-digit your that's talk do high when gains season? think you think view

Phillip Yeager

I would say a combination.

certainly have did showings the some share some bid who of we customers have drive in our shifts. larger So strong ability to with

seeing us the we're be will in now of we did also And market right on really shift customers on think plans we've set. truckload. mark well there and meeting lot come some focusing that peak seeing share support. from and to for we're tightness think now, additional perform peak a of we there, the them the we're focused with that hitting and So some the I commitments

have We And a are that's to why to support we're and the with of going the stuck who big focusing really we're fleet. us, clients, them. on continue expanding part supporting

Scott Group

just, then volumes the get worse. getting little gross it pricing And worse the mean, bit a sounds accelerating, I Okay. but is margins maybe are Phil, like because the

on shift of yield bit is sort in a refocusing little how And quickly less more on a can you market? yield? tightening of and of that on growth So sort turn this back lever a

Phillip Yeager

want do on to We Sure. growth. focus

focus going to trajectory to continue on to We in get intermodal. are need to a We growth strong growth. back

extremely So profitability XXXX the sets market well of We seeing that ours. bid up an do now, is if for up. we're continues to get believe season that in back a and the that us ability and right tightness that grow focus

Scott Group

to just about next from increase well? of as this is run think Or quick. The real into going be? pull rate sort And continuing what Okay. this is question a last in to CapEx, year new forward next year was

David Yeager

we out a not particularly see responsive there, it's supportive intermodal. of it's and that No, in forward, just pull growth

purchasing, to On that's really return higher a the by -- containers. for strong -- some older the strong refreshing opportunity tractors a models. The we're cost generate

Phillip Yeager

that Group drayage share the a And just intermodal that trucking our we or make drayage, grow. side business add sure I need maintaining we're our would that drayage managing even we portion fleet our significant business, as of Hub so of within to our of the that intermodal is

maintain that we that share. So need to will continue in to invest to

Scott Group

Okay. guys. Thank you,

Phillip Yeager

Scott. Thanks,

Operator

David from And Stifel. the next from question comes Ross

Your is line open.

David Ross

Yes.

at percentage the this What on what's the follow-up to there. Just drayage comment point? And is company target? dray

David Yeager

-- time, QX, up our like XX% Sure. did we on in Right XX%. assets. to own closer we're now, we'd get XX% That from was last Over that year. to

Geoffrey DeMartino

business. that I look terminal we have, would Geoff. our add it's That actually overall that we XX% to have is do at just -- locations of where if you

David Ross

in Okay. seems now are the That’s got it constraints And to Because that? capital. the helpful. getting and driver balance right there you've like the sheet market any

seeding the to wanted trucks, matter So the of drivers. if you just buy trucks a it's the with

up? how So on you about time line thinking that the getting are

Phillip Yeager

and time drivers. of our in of a improving invested lot We've effort productivity Yes. the

that one. really step was So

We have improved our also retention.

we about very tightness more as being more It of market drivers. the good point, market. that competitive the going somewhat aggressive this is feel in in after getting seeing we're at So some

support help Some drivers them night. proposition bring towards search moving independent about They're model tend very we very own to every time. the and that their good We walk to them. we value living home But or getting a to drivers. really strong during that feel an make

So I add to think we're going to able drivers. be

sure to well. supported the drivers and as We with staying we wages have are happy have competitive stay make that and

David Ross

their do the time what in then Or focus? of takeaways them there? And mentioned points on last to the you it What just key were with trucking. Well, tell to from were the what consultants, sounds good. you question bringing

Phillip Yeager

It's investment Yes, it's us. healthy. great a for been

of executed we think we've opportunities lot on recognized I a of the a lot for organization, and those.

few areas. So I highlight a would

First, network. strides in per those what's the earlier, made driver significant really think productivity retention. drayage load and and and we've cost mentioned I there, I our reducing that's

of everything focus we procurements our fuel a purchase we purchase our containers, part huge a or how and our we assets big think making we organization. in in expenses, really to was investments maintenance to Our maintenance big or tractors fleet in area down then program network. a big that's another are of And the And that, it fleet, have progress we're goes had the in maintenance continuing to in our that drive and we was improve own our other tractor a runway our whether really opportunities our lot make swing of the also there. huge for taking and and to and area

they stuff lot that So a really help support. good of

David Yeager

that add late a since of and the the $XX improvement initiatives drayage profit at was year. about improvements would talking component just million trucking big been of I both dedicated last we've

that we certainly So executing part of it. are on

David Ross

very much. you Thank Thanks.

Operator

KeyBanc. comes Todd question next the Fowler And from from

Your open. line is

Todd Fowler

share Great. almost you're through all everyone. Thanks good bid season evening and you that this -- the Phil, point. the at can way I'm assuming

fourth can in now just where to pricing in positive the on out? look maybe quarter. the you're to year, some the truck XXXX assuming bids to should be market of flip seeing second Is as shook market? to pricing And I'm you a then share half being the for in late going point where So you contract intermodal tightness what the initial the based there's contract

Phillip Yeager

Yes, Sure. great question.

XX% done and awarded. are So we

we plan intermodal has we play. about but see pricing the will renewal our tightness to them rate a move actions but a I before very make a of really through So We to is rates, continue, tightness on bit the are customers made good I and that contract to still those. But think, support that sure out out, executed we continues there bids moving that basis, ones think I direction. is, been try may it the right some out, say on to that. inflection, that solid for we've bid in are continue people XXXX we've period, pricing in we're the to season. sets still up moving longer at a the if a XX-month for the commitments some little We feeling We sizable need have take in out but start pushing it good if could a that competitive very how though, there, -- really signs market

Todd Fowler

Yes.

of at? do kind digits? say mean, And that? came Okay. low to do I to the it fair Is put a to in kind care That of around makes XX% sense. number where around a then want range you Or you single share

Phillip Yeager

it Yes, digit. single low would be

Todd Fowler

Great.

that Okay. you And numbers that going then I'm the the do just you next was forward how the what in bit So out the there out can and of that number, that's $XX side, big push a a was number bucket there you that, I horizon? right further? on I targeted it I year, expect we that then And forward? the XXXX out curious or that's laid cost think Geoff, for already anything this now? million is $XX in little guess, much still see think move that would that million, a Is

Geoffrey DeMartino

what Sure. that I in the on got kind initiatives said of Yes, expect think, those at having we run very to once place. We're in rate $XX close, to be largely place. a we've initiatives the million, we've is all

that starting we're to So recognize now.

recognizing XXXX, $XX in last million the And about year year, of executed that of we're course, recognize that in about the calendar part of of so half year. million. latter $XX still we full on the For we'll then

of initiative. by for that's our function. Elevate really $XX forward, a IT of driven our going implementation million A continued As lot that's the

but dependent So coming those projects looking be something year. that at into the next on of for play, timing we're that's IT will million $XX

Todd Fowler

And me. just one it. Got last Okay. the for then

parts. With the maybe -- two guess, I

of awards lost the First, the those parameters be half that have to to year in you're the of do as the of back buying Thanks. you are Are of those the split? kind this XXX then on start lap the Are first some the year. -- in are some saw dedicated? you business? intermodal? growth year, that for based part where And tractors And revenue going those dedicated those you

David Yeager

tractors, be we going the growth that early of There's then well. a for dedicated back And Yes, of of the year. half some last Sure. the drayage. this the are those are year, vast exits dedicated revenue the year, still majority to in cycling happened site few late as

contribute. is will we on, winning but to revenue those be down sites before are and that starting do new business, really can We new that, to come expect start

Todd Fowler

Great.

so much time thanks tonight. Okay, the for

David Yeager

Thanks.

Operator

And Seidl from next our Jason comes from Cowen. question

Your line is open.

Jason Seidl

to as more in we the sort we low pricing the we're back out at this can to that tightness XXXX, intermodal if this the we number should look looking mid-single-digit something of single-digit side, Getting now, marketplace, be continues getting if anticipate range? towards

Phillip Yeager

the tightness obviously, back in need I need of that certainly that demand yes, pandemic would If that we're we -- market a to we're in think, not there any economy would Yes. further continue. dynamics equal, continue. now, does all Sure. disruptions. moving a being But pricing be the hopeful seeing at the We of hopeful right gets that. the I the anticipate see does strong environment. and given to But drive that direction positive would

Jason Seidl

just intermodal it'd more type you side, the those. be details the initiatives cost side if drive you your might whether guys forward? could just could dedicated And some give savings have was or on some Okay. that I wondering even follow-up, what you going the drayage of about some on initiatives. technology talked us of side And

Phillip Yeager

Sure.

our for have associates. optimization the seen as improvements both of our our And the the single retiring implementing is we in productivity process And in miles driver of biggest organization, in to moving are done we've of and significant loaded we systems. benefits test the as we for drivers well legacy what sites our the platform of tool. So productivity really that one are

for day are able their a spend things on our time preplan more value-added clients. they and really So to

making the capital, out the to of also expense productive, So to it in. that less put more enhancement, productivity our be in getting bucket having will is we're of be both larger putting going more but headcount drivers dollars a

Jason Seidl

to be rolled that when And going XXX% out? is

Phillip Yeager

That will XXXX be a rollout.

Jason Seidl

as Appreciate Okay. the time, always.

Phillip Yeager

Thank you.

Operator

comes our next Susquehanna. from question Majors And Bascome from

open. Your is line

Bascome Majors

If Yes, you you thanks the was there to -- follow-up raised reduced you or I delayed was the for your was taking gave February pretty similar in building, that today, the had range adjustment. on which expansion it recall, I initial my questions. it, CapEx you I $XX guys wanted of but it to headquarters million $XX million. to before what think

So it dollar could you Thanks. whether unpack headquarters similar expansion spend might though how the that and the in you beyond? of even terms, today, different nature that in be it's on to or in renew uses not plan and XXXX opine

David Yeager

Sure. This Dave. is

on put we have complete have We to expense fire idle and time. this but the protection it's the as it in at point hold. this some HVAC was in sitting There quarter did

allow things. one, are not a fewer may would us people we in, the in building. We're may densely sure We be we several to in populated government the which to are if, regulations have see to Number waiting fact, put -- relatively headquarters building. able if

also for. very working week from sell it can you going waiting the determine it, need combination we now. two, rent finish have of inhabit fact, the X process fact, closely if, that's building, home. because that And or possibly in the is through going work the we're we at space And are four overall. they or in we're it So that one ultimately, to when -- home so we're or thing functions it We're looking from many days a how can

code right but it's of idle months a would it now, still fully chose we're within lot up to we could unknowns, be there's but so. and sitting if do -- X is finished, I probably to say, So

Geoffrey DeMartino

Geoff. This the I could you give Yes. breakdown. is

You're correct.

Included million million $XX for February guidance of was CapEx. in building. about that $XXX was $XXX the original back to Our million in

So million if $XX first $XX $XX to million half the said the second and is we million. about outlook half for -- take you then the in the

we're approximately. back kind to million of So $XXX that range,

$XX on million building, year million $XX So little $XX million the then that million of is a full is tractors over on of be and on trailers, going IT. to containers, rest kind $XX about is around the to and

Bascome Majors

had. That’s that. I for you Thank Thank all what you.

Operator

question our from from next JPMorgan. And Brian Ossenbeck comes

Brian Ossenbeck

service, I that new A -- you additions. wanted also some announced to mentioned earlier this week. about ask seeing rail one couple but you're were

West maybe just just the grow to in Your for that and offer of things then the had guess, gains of can term point? partner And at how container about. these fleet, expect continue? your to they was see business? market the long talking that down wanted I any to implications sort it's were some you flowing thoughts share growth. had deciding you I that early that on expect near little term, to just if some this at Or Did too a pace to if

Phillip Yeager

that our which of great it allows went business and Yes, and lanes to we The you, Brian. additional is us clients, down is back during reopening we're pushing -- are truck. get those, some always Thank great. excited looking partners We're large to at services. they rail servicing PSR, lost that some that we're

very go and we're the truck seasons reopen capacity as So to excited and bid back opportunity that after about tighten. those hopefully

we're think them it going rail opportunities that with hope to work to to to partners drive and that we So from certainly, is continues, that new fantastic. growth. We continue find stands our

Brian Ossenbeck

Okay.

was like fleet replacement question when you separate from other to much all because are that's get I of growth? still is, it how incremental these So that container pretty sounds And some those containers? do the guess of expect new. the versus

Phillip Yeager

we'll November. incremental, from the August until of start season and November, getting those shifting will It throughout early peak be really be

But would continue some those really successful corridors, this new -- would say, And in to for are make in fleet. in So turns the to get invest of we want new on if those continuing obviously we we we made I yes, year. the to sure independent can grow to offerings. that then decision we

Brian Ossenbeck

Okay.

of one the your seen type can you company, doing would over well us with, that one change what competitors think on as restocking you're probably with to going customers have anything the update a there growing has since perspective? it bought I share again, outperformed to you've pretty CaseStack, well. you perspective And expectations those growth market the new volume Or if guess, Do performing? think if in give the in anything how terms in from more, from I Just it bigger seeing a larger it's now logistics it. that's of an footprint? to serves. you But the of I to the that

David Yeager

When been when And They, CaseStack, believe think retailers. into -- that we space. acquired going this they are we -- of their consistently. CPG are Well, it's you forecasts premier company surpassed very they've customers -- were and is they in essential that are Dave. did the Right. course, their we correct, serving still absolutely acquired

so that management has very, the panel a market has COVID very job really, the done the growth the candidly good of really also virus. in team and And strong. in been impacts The

nothing Hub but organization. the they've and lot a as to value team, kudos to of added So overall an

Phillip Yeager

that playbook the that our the that continue but markets just is to we've add, expand existing would really We been has that good to add we very business, as will I locations running. have we in we or and been we national the about footprints continue feel footprint. may have, -- we the

really that grow driving also the We that programs, legacy is is highlight would growth. amount would new to to continue highlight pleased then of with awards to plan And was one other that the that That we're be Hub we cross-sell. of are the The part which a other that. and adding is of that, really good also fruition. winning piece that larger was come that would I deal able uses we're really to retail I has we customers,

through So that another gone we've great acquisition. win that

Brian Ossenbeck

you Thank the Great. time. for

Operator

And our from comes [Operator Tom UBS. from question Wadewitz Instructions] next

Thomas Wadewitz

if -- but as seems It I in the had commented look missed don't obviously, to see margin like but performance to think the apologize half. you've I Wanted gross second up. on good you I tightened you brokerage quarter, market's this,

pressure, a know have And you of So can quarter? your to in kind on don't some how if you brokerage quickly the perform it you peak get any margin would expect I is do through how if if strong pressure how business, you third have gross maybe thoughts of season? there

Phillip Yeager

Phil. is Sure. This

is and of living primarily support we've committed business clients commitments to brokerage our are to where our those committed The awards up set contractual the our and with in aware, probably us you're as that that business. is So with and carriers -- customers. continuing carriers majority

it sourcing we compression seeing that. from to feel is a customer are committed we very good when that we a prior were is tightness. about line So the some really Where transactionally

some And so see is to where compression. that going we're

prior with we're spot demand to working that get market working are side a the also capacity ensuring perspective to into understand the from the our spot seeing tightened higher-margin perspective. We The that compression business. customers rate from volumes and they a on

market we believe load that now are So opportunities spot do activity board the spot is increasing, increasing.

the half. gross we in back at piece going to the pressure as do our profitability we The good has is a we're that some given level, though project pandemic. slowed to really keep So margins high be down we'll able typically feel highlight business other run we but only see have I'd that some

an our doing offset a methodology. with in of customers good somewhat we're that procurement work continuing very will as well. We're our We're our be supporting think well. job very carriers. But to So I

on focused we're the growth so really and continuing market. well in And buy to

David Yeager

add or place just our much would process changes going efficient have years and reps carrier to made I than they put used back be, X.X more in X technology we've that the ago. years

on the as seeing bottom that well. benefit we're so line And

Thomas Wadewitz

Great.

to the some type with color to wanted Okay. transcontinental? skewed to winning. that new in, you're respect you've it East, if that on there's bringing the is business the it intermodal, been the of be I is And just business in West, see then

David Yeager

A were -- and but with other We kind and of the intermodal majority were Transcon of Transcon. of our truckload East, local the still very really Western West both those competitive Sure. wins lot competitors, it's in with and wins based.

Thomas Wadewitz

Great.

Okay, Thank for you great. the time.

Operator

And from question Hartford our next from comes Baird. Benjamin

Your line is open.

Benjamin Hartford

looking? you Thanks. us said severance, did Geoff, Did The expenses consulting, items if you the we're follow-up. out I it. donations, which et missed line this, specifically, the called tell cetera, various quick you -- from

Geoffrey DeMartino

in benefits donation in salaries were then and Severances both expense sure. and and the G&A. Yes, Sure. consulting

Benjamin Hartford

it Okay. update you relates you provide acquisitions environment. said on this guys And then an to update in evaluating us as there? where Can an

David Yeager

our services, and want more to to those to cross-sell to of we've to done. acquisitions do We customers the new service of intermodal have we've had Absolutely. opportunities M&A. want get of our success expand lines in look Yes, good we suite continue to larger where pretty

really management non-asset-based freight targeting kind are add expand XPL under verticals. value-added of our new the type can service, businesses businesses, customer new into we We of where lines and/or get

So would this we we've year. been I looking done all year. a We -- thought at deal one get point,

the to things here. we're but evaluating March at hopeful opportunities back June think on to hold timeframe, done and through Obviously, we it, in had I one of kind hopeful get we are go still can.

Benjamin Hartford

meantime, potential the that share it repurchases your And mindset as in or does sit in relates the to hierarchy?

David Yeager

evaluate the mean discussion. be we've earlier repurchases revolver year. I'm obviously, We on always our board I we conservative, pretty always a this will -- got one Sure. those quarterly topic share it of coming $XXX sure meetings, up, at million taking of do been down and

Benjamin Hartford

you And the can little gross we have the the in And can what some of the XXXX, included feather and or might about back may think then incentive bit you not comp margin the as of half in may talk year. how that to beneath how modeling parameters to even lastly, through provided you expenses, as move about but think year? about a been some operating line, XQ in

David Yeager

when happens. very and I not little are Obviously, to compensation that is QX. designed incentive incentive to Yes, our pay year-over-year, going Sure. in think our earnings be down comp program

Benjamin Hartford

appreciated. Okay, that’s helpful. Thank you,

Operator

And our Majors comes from next Susquehanna. Bascome question

Your open. line is

Bascome Majors

wanted Is just you do dividend I follow-up. as you if to, goes cash there. could quickly like special position a a doesn't a follow-up follow-up hope looks assuming come M&A to? should if that -- certainly, is the through possibility? year. as wanted rising. next Is the to even Thank guys net again balance something you for Ben's be you Because well, Thanks you all that cash in It you. on

David Yeager

But through and through both those Yes. it's reinvested that a to CapEx off are we table. I in cash or think is business, that's actively priority either be in continue invest are areas as something the to X again, priority. not our excess mean, for looking the acquisitions. And I

Bascome Majors

Thank you.

David Yeager

Thanks, Bascome.

Operator

over concludes Dave to today's call turn question-answer final I'll for And that remarks. Yeager the session.

David Yeager

Well, thank again, afternoon. Great. us this joining for you

any you to have As at questions. Phil, any further Geoff and available always, time. talk I if are

good day. So thank you a again. Have

Geoffrey DeMartino

you. Thank

Operator

Thank you, and for gentlemen. you participating. Thank call. today's conference This ladies concludes

You may disconnect. now

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