Covenant Logistics Group - Q1 2023

Transcript

Operator (participant)

Welcome to today's Covenant Logistics Group Q1 2023 earnings release conference call. Our host for today's call is Tripp Grant. At this time, all participants will be in a listen-only mode. Later, we will conduct a question-and-answer session. I'll now like to turn the call over to your host. Tripp, you may begin.

Tripp Grant (EVP and CFO)

Yeah. Thank you, Ross. Good morning, everyone, welcome to the Covenant Logistics Group first quarter 2023 conference call. As a reminder, this call will contain forward-looking statements under the Private Securities Litigation Reform Act, which are subject to risks and uncertainties that could cause actual results to differ materially. Please review our SEC filings and most recent risk factors. We undertake no obligation to publicly update or revise any forward-looking statements. A copy of the prepared comments and additional financial information is available on our website at www.covenantlogistics.com/investors. I'm joined on the call today by David Parker, Joey Hogan, and Paul Bunn. First, I'd like to start by welcoming the Lew Thompson & Son Trucking team to the Covenant family.

We pursued this acquisition because it aligns with our strategic plan of becoming a nichier, well-diversified service provider in a market that is less sensitive to typical freight cycles. Lew Thompson & Son Trucking's reputation of providing first-class service to their customers in the poultry industry, combined with opportunities for future growth, added to the attractiveness. Our goal is to maintain their service standard and to provide the financial support required to allow our combined team to grow in their home territory and in territories that they do not currently operate. Their results will be included in our dedicated segments operations. Consistent with our focus on profits and returns on capital, through the first quarter, we had reduced the dedicated fleet by 200 trucks since the first quarter of 2022 by exiting low return contracts.

With today's action, we are regrowing our fleet with Lew Thompson's approximately 225 trucks, which are expected to generate a double-digit return on invested capital and immediate accretion to our earnings per share. Focusing on the first quarter's results. Given the softness in the freight market, we are pleased with our results and how our team responded in a market that quickly transitioned. Compared to a year ago, consolidated freight revenue was down 9%. This decline was expected and related primarily to less overflow freight handled by our managed freight segment due to lower overall demand. The dedicated segment also experienced reductions in freight revenue, primarily as a result of our efforts to carve out underperforming contractual business.

Adjusted operating income fell approximately $12 million or 48% compared to the prior year quarter, primarily as a result of our asset-light managed freight and warehousing segments, which declined approximately $10 million and $1 million, respectively. On the truckload side, we were pleased with the resiliency of our year-over-year margins, particularly in Dedicated, which improved its margin compared to any reportable period in the prior year. Adjusted net income decreased 43% to $12.9 million, and adjusted earnings per share decreased 31% to $0.93 per share compared to the year ago quarter. Weighted average diluted shares decreased as a result of our share repurchase program. The primary adjustment to our reported results exclude the approximately $7.6 million pre-tax gain on sale of the Tennessee-based terminal during the quarter. Proceeds on the transaction were approximately $12.4 million.

Key highlights for the quarter include within our combined truckload operations and maintenance-related expense declined on a cents per total mile basis by $0.02 or 6%. Fixed equipment costs, including leased revenue equipment, depreciation, and gain on sale, decreased year-over-year by over $0.03 per total mile, or 9%, as a result of our equipment replacement plan. Gain on sale of revenue equipment was $1.1 million in the quarter, compared to $0.2 million the prior year. The average age of our fleet at March 31st was 26 months, flat sequentially compared to December 31st, 2022. For the remainder of 2023, based on our current equipment order, we anticipate sequential improvements to the average age of our fleet.

Our TEL leasing company investment produced $0.31 per diluted share compared to $0.30 per share versus a year-ago period. Our net indebtedness at March 31st was $65 million, yielding a leverage ratio of 40.4x and debt-to-equity ratio of 14.9%. Return on invested capital was 19.8% for the current quarter versus 15.7% in the prior year. We purchased approximately 610,000 shares in the quarter, representing approximately 4.5% of the outstanding shares as of December 31st, 2022.

Giving effect to the Lew Thompson transaction, we expect net indebtedness of approximately $165 million, a leverage ratio measured by net indebtedness divided by run rate adjusted EBITDA of approximately 1.2 to 1.1 times, $60 million of remaining liquidity, including cash and availability on our line of credit.

Operator (participant)

Now Paul will provide a little more color on the items affecting the individual business segments.

Paul Bunn (President and COO)

Thanks, Tripp. Taking a moment to dive deeper into what drove the consolidated results for the quarter. Our expedited segment's freight revenue grew 1% compared to the prior year, despite a 2% reduction in the average fleet. The increase was largely driven by a 4% improvement in average total miles per truck, offset with an approximate 1% decrease in average rate per total mile compared to the year ago period. While we were pleased with the segment's utilization improvement, we recognize that year-over-year freight revenue per total mile comparisons will become increasingly challenging as we progress throughout the year. While cost headwinds from salaries and wages and insurance condensed margins, these were somewhat offset with improvements to both fixed and variable-based equipment costs for the quarter. Our aggressive equipment replacement plan, which was initiated in the second quarter of 2022, is beginning to pay off.

We expect this trend to continue as we progress throughout 2023 and the average age of our fleet to decline sequentially. Our dedicated segment experienced a 10% reduction in freight revenue compared to the 2022 quarter as a result of a 194 or 14% reduction in the average number of total trucks, offset by a 5% increase in revenue per truck. The fleet reduction in our dedicated segment aligns with our strategy of replacing unprofitable or underperforming business with business that meets our profitability and return requirements. We were pleased with both year-over-year and sequential improvement to adjusted margin and expect to continue the improvement in this segment's profitability as the year progresses. Managed Freight experienced a 29% reduction in total freight revenue and an 89% reduction in consolidated adjusted operating profit.

The significant reduction in revenue and operating profit was primarily the product of little to no high margin overflow freight from our asset-based truckload segments. In addition, our results include an approximate $2 million cargo-related claim in the period. The environment is highly competitive, with numerous brokers aggressively competing for volumes at the expense of margin. We anticipate continued margin pressure in this environment. Our warehouse segment, although the smallest of all of our segments, saw a 41% increase in freight revenue compared to the year ago period, resulting from the startup of four new customers during the previous 12 months. We are pleased with the top line growth we've achieved in this segment, and the team has done a phenomenal job executing these startups, which are both intense and time-consuming. However, despite the top line growth in the segment, we've seen sequential deterioration in margins.

Our focus for 2023 will be to continue to grow this segment and restore profitability to mid-single digits through improved labor utilization and rate increases with existing customers. Our minority investment in TEL contributed pre-tax net income of $5.9 million for the quarter, compared to $6.8 million for the prior year period. The decline was largely a result of reduced gains on sale of used equipment compared to the year ago period. TEL's revenue in the quarter grew 25%, and pre-tax net income decreased by 11% versus the first quarter of 2022. TEL increased its truck fleet in the quarter versus the year ago period by 128 trucks to 2,201, and grew its trailer fleet by 404 to 7,116.

As a reminder, TEL focuses on managing lease purchase programs, leasing trucks and trailers to small fleets or shippers, and aiding clients in the procurement and disposition of their equipment. Due to its business model, gains and losses on the sale of equipment are the normal part of the business and can cause earnings to fluctuate from quarter to quarter. Our investment in TEL is included in other assets on our consolidated balance sheet and has grown to $61 million as of March 31, 2023 from our original investment of $4.9 million. In 2022, we received $14.7 million in cash dividends from TEL. We anticipate a similar amount during 2023, although we have no confirmation of dividend plans at this time. Regarding our outlook for the future, there is no doubt that 2023 will be challenging.

While we are pleased with our first quarter's results, we also see opportunities to improve upon them and are working diligently to do so. In this environment, we are intensely focused on cost savings to improve our operating cost profile. However, our primary focus is and remains on the long term by continuing to invest in the areas that provide opportunities for us to make forward progress on our strategic plan by investing in new revenue, generating equipment, people, and technology. For the remainder of the year, we expect market headwinds from a softer market as well as continued inflationary pressures. However, based on company specific factors, we expect less earnings volatility than in prior periods of economic weakness. We have worked hard to strategically shift our customer base to less cyclical industries through our full service logistics offering.

Even with a weak freight market, we expect our cash generation, moderate leverage, and available liquidity to continue to provide for a full range of capital allocation opportunities to benefit our shareholders. Thank you for your time. We will now open up the call for questions.

Operator (participant)

If you would like to ask a question, please press star one on your phone now and you'll be placed into the queue in the order received. Please be prepared to ask your question when prompted. Once again, if you would like to ask a question, please press star one on your phone now. Our first question comes from Jack Atkins from Stephens. Please go ahead, Jack.

Jack Atkins (Research Analyst)

Okay, great. Good morning, guys, and congrats on both the acquisition and a really, I think, strong quarter despite all the challenges out there. Congratulations.

David Parker (CEO)

Thanks, Jack.

Jack Atkins (Research Analyst)

I guess maybe if we could start, you know, David or Paul, I'd love to get your take on sort of what's going on out there. It feels like there's just a lot of volatility depending on end market and customer and individual companies. You know, could you maybe talk a little bit about, you know, how you think both the next couple of months could shake out with the spring sort of peak and build up? You know, are you expecting much of a second half build back? I know that was kind of the thought not just from you guys, but from a lot of folks three months ago. Is that view changing at all? If you could maybe kind of give us your market take first.

David Parker (CEO)

Yeah. Hey, Jack. Yes, the market is flat. I really think that what we saw around Thanksgiving and November, the market dropped, and it's just been there. That's where it has been. We have not seen a second downward spiral of economic activity from a business standpoint, freight standpoint, but we have just been on that same level since November. We were anticipating that it would start getting better in the second half, but I think that we're gonna continue in this sluggishness that we're in for the rest of this year, is kind of where I am at in my thoughts.

There is no doubt that I was glad to see first quarter GDP number that inventory levels were reduced because that's what all of us on this call are waiting on, is for inventory levels to be reduced because I don't care what the economy is doing if they're going to have to refill some inventories eventually as that continues to go. That was a bright spot. I think that as we all know, no matter what the economy is doing, as we start grilling out and going to the lake and opening up Coca-Colas, there's gonna be more freight available. That is gonna help, but again, it is a sluggish. I think capacity is in the process of being taken out. That will help.

I think that what we have seen you know, so far this year is that anybody, the onesie, twosie, threesie, foursie that operated, you know, in the spot market, those folks are gone. Those onesie, twosies are gone. That said, that capacity has left, but all those drivers are now driving for us and Werner and Swift and everybody else that filled all of our fleet. Capacity as a whole has not left. It's just. It's been. You know, that just shifted one from one to the other. As we go forward and with some of the pricing that is out there today, carriers cannot stay in business. You cannot operate at $0.20 and $0.30 and $0.40 a mile under your cost, and that's what is happening in a lot of areas today. Capacity is going to be leaving.

We will fill that, but the background of all that is that, I think it's gonna remain sluggish for the remainder of this year.

Jack Atkins (Research Analyst)

Okay. Well, you know, David, I think that makes sense, and I hope things pick up, but I think that's a good base case to have. I guess for my follow-up question, I'd love to dig in some more on the Lew Thompson acquisition. You know, it seems like that's a business that, you know, kind of helps further insulate the company from sort of the volatility of the freight cycle. You know, do you see opportunities to grow that business more, either with existing customers or new customers as you can put some more capital in there? would just love to kind of get you to talk a little bit more about Lew Thompson.

David Parker (CEO)

Yeah, Jack, it's Paul. Yeah, we're really excited. I mean, if you think about it's a true dedicated business, multiyear contracts and with specialized equipment, you know, those businesses are always attractive. The other is, okay, you got a dedicated business with specialized equipment, you start looking at the commodities and the protein, especially the poultry protein space is one that is, you know, I'm not gonna say recession proof, but I would say recession resistant. That, you hit it on the potential for growth.

I mean, we think there are, as Tripp said earlier, opportunities for growth, not only in the region they operate, but expanding that into other regions with the same customers and, new customers because they've just got a stellar reputation, and provide a really great product from a service perspective, and just how that thing's wired up, works really well. We do see the ability to start expanding that in the months to come.

Jack Atkins (Research Analyst)

Okay.

David Parker (CEO)

You know, it'll be a slow grow. I mean, you know, that's not a business that you just, you know, that can take off. But as we've talked about, it's sticky, it's niche-y, and good return on capital business. We couldn't be more excited, as Tripp said, to welcome them to the family.

Jack Atkins (Research Analyst)

Okay. Last question, I'll hand it over. You know, when you kind of think about the acquisition and the incremental accretion from that, you know, maybe a little bit of seasonality in May and June, we'll see, combined with, you know, continued actions to improve profitability of dedicated and some things like that. Do you feel like you can improve earnings quarter-over-quarter, one Q to two Q, or just given the freight backdrop, that it's just too tough of a hill to climb this year?

Paul Bunn (President and COO)

Yes, I think we will improve earnings quarter-over-quarter. I would tell you, we're if you go back to the previous calls, you know, compared to the prior year, we're still in that, with the Lew Thompson acquisition, we're still standing by the we think that we'll be down 25%-30%, from last year's EPS.

Jack Atkins (Research Analyst)

Okay. Thanks, guys.

Operator (participant)

Our next question comes from Bert Subin from Stifel. Please go ahead, Bert.

Bert Subin (Managing Director and Senior Equity Analyst)

Hey, good morning.

Paul Bunn (President and COO)

Hey, Bert.

David Parker (CEO)

Good morning, Bert.

Bert Subin (Managing Director and Senior Equity Analyst)

Paul, maybe just to follow up to that, last answer there. You know, the Lew Thompson and Son acquisition looks like you could add sort of north of 15% to annualized EBITDA, and then your net interest rises something in the ballpark of $5 million, and this is all on a full year basis. You know, just some simple math gets you to roughly $0.30 of EPS for a full year. Do you think that is Like, relative to where we were 90 days ago and sort of the outlook you gave, do you think that offsets the incremental weakness in the market, or do you think that offsets the weakness, and then there's some top-up as that business grows?

Just trying to think about sort of how things have sequentially changed maybe in the last three months, and then layering in the deal to that equation.

Paul Bunn (President and COO)

Well, a couple things. If you think about it, you know, and we talked about it in the release and in the script, we're replacing some, I'll call it unprofitable to marginally profitable business with the Lew Thompson. I think Lew Thompson combined with exiting some marginally profitable business and to your point, Bert, some other things going backwards, I think it's kinda what I just said to Jack.

It's all a big offset, and the combination of all of that still kinda puts us on the same path we were thinking Q2, Q3, and Q4 last year, where we said, "Hey, our goal is, you know, 25% to 30% reduction in year-over-year EPS because that's a lot better than places we've been in the past." I think when it all comes out in the wash and you're still within that kinda same range.

Bert Subin (Managing Director and Senior Equity Analyst)

Okay. That's super helpful, Paul. Maybe to follow up to Jack's other question there and David's response, you know, I think there's been this consensus view that's forming, you know, that 2023 now will be weak. You know, maybe there's a little bit of improvement later in the year, but that's getting discounted, and David sort of noted that. As we think beyond 2023, is it your view that 2024 is the inflection point and then 2025 is better than that? If that is your view on how things unfold, does that make you want to bolster your expedited and managed freight businesses, you know, just as you think about, you know, an impending multi-year upcycle?

David Parker (CEO)

This is David, Bert. Yes, I do. I think that we're here for 2023. I think that 2024 election year will start, you know, getting some better things going on the economy. I think it does set it up for a good 2025. What you said is what I agree with. The cycle I think is going to be good over the next couple of years for all of us, but we will continue to show growth or continue to attempt to grow in all these verticals that, you know, that we've worked. You know, we're going on five years. July third is when we purchased Landair of 2018. You know, so we're going on five years here in a couple of months of truly becoming a logistics.

I don't think of us as a trucking company. I don't think. You know, we're not a OTR carrier. You call, we haul, and I hope that I get enough phone calls today. We are in the niches that we wanna be in, of bringing value to our customers that need what we are giving out there today. That said, our goal is to grow all four of these areas in the next couple of years. I do think that as we come off whatever sluggishness we're in in 2023, and it starts turning around in 2024 and sets up for 2025, I think it presents a lot of great opportunities in all four of those segments.

Paul Bunn (President and COO)

You know, let me add on, Bert, to what David said. Getting big volumes of new business right now is tough just 'cause, you know, a lot of folks don't have it to give. We're still doing really well on adding new badges in expedited, in brokerage, managed trans, in warehousing, and in dedicated. It's exactly what you said. Hey, we may not be getting the exact volumes we want out of these folks right now, but when it turns, we're gonna have a contract set up and a salesperson in there, and, you know, we're gonna have already been working with them. Yes, we're focusing on what you talked about.

Bert Subin (Managing Director and Senior Equity Analyst)

Great. No, great response. Just my final question. You know, a couple quarters ago, Joey had highlighted that he thought expedited could run, you know, at 92 OR sort of in the, you know, the worst of years and, you know, you run in the 80s in good years. As you've seen the bid season start to unfold and, you know, gotten a little bit of a greater appraisal of this freight recession, do you still think that's the case?

Paul Bunn (President and COO)

I think we're still in that range. I mean, we've got a couple contracts left, that have been signed, the effect of them needs to roll in. Yeah, I think we're still in that range of reasonableness.

Bert Subin (Managing Director and Senior Equity Analyst)

Thanks, Paul, and thanks, David.

David Parker (CEO)

Thanks.

Operator (participant)

Our next question comes from Scott Group for Wolfe Research. Please go ahead, Scott.

Scott Group (Managing Director)

Hey, thanks. Morning, guys.

Paul Bunn (President and COO)

Hey, Scott.

Scott Group (Managing Director)

Just wanna follow up on the sequential earnings growth from Q1 to Q2. Can you just maybe go through the different businesses and walk through that and where you expect?

Paul Bunn (President and COO)

Yeah

Scott Group (Managing Director)

... improvement and maybe where not? Yeah.

Paul Bunn (President and COO)

You know, here's what I would tell you. I think expedited, Scott, will be flattish.

David Parker (CEO)

Just based on what we're seeing today, I think dedicated will get a little better. I think warehousing, albeit small, probably same to slightly better. In managed freight, that's the wild card. I mean, that's as you say, that's where we've backed up the most, and we did have the cargo claim in Q2 that negatively affected earnings. I would say that it's softer in April than it was in Q1. I could argue managed freight is flat, warehousing is flat, dedicated is better and expedited is better, or to flat.

Scott Group (Managing Director)

Okay. expedited rate per mile, only down 1%. how does that look like for the year?

David Parker (CEO)

Yeah, here's what I think. I think you're gonna see the expedited rate, probably go down a little bit in Q2. I think you'll see it come back up a little bit in three and four. We're, you know, we don't have hardly any spot market freight, but there's a little bit of broker freight in there. A minute ago, when I started talking about the team adding new badges and stuff, there's some really good stuff in the pipeline. It's just how quick do we get it started up. You know, 'cause we've got a few contractual reductions we'll see the full quarter effect of in Q2.

I think the rate will go down in Q2, but then we'll be working to get that new business on board and replace broker freight, and I think it could come back up a little bit in Q3 or Q4. Can I tell you another thing, Scott? That on that expedited side, you know, over 50% of our business is in long-term agreements. Those that we've got long-term agreements with, they're really holding, and they have been a very good partner with us. We entered those agreements there in 2022 when they couldn't find any trucks, and we made great relationships and partnerships, now they're showing that they really do need our teams. They have not came back to the well saying, "Do this and do that." They've been extraordinary partner.

The other 45% of the volume is where it's gone up and down to only have a 1% negative. We do have a couple, as Paul said, more that are rolling through as we speak. They're gonna be a negative hit to the rate. That said, to give you how bad the as you know this, to give you how bad the brokerage side of the business out there in today's environment is that, you know, our dependent upon brokerage freight has gone from 1% to 4%. You know, we're only doing 4%, but the 4% rates are so bad that it is bringing our total rate down by $0.04 a mile.

As we replace that 4% and get it back down to 1% kind of number, it's almost gonna be like taking a, you know, 2.5%, 3% rate increase. You know, there's some great things and possibilities that we're working on to offset negative rates.

Scott Group (Managing Director)

Yeah. How many you guys seem to be able to have found now two small, nichey, but really profitable trucking companies. How many are there? How many of these can you do? Is one a year the right kind of number? Do you wanna keep doing them?

David Parker (CEO)

You know, here's the thing. I think we're gonna watch leverage. We're hunting for them every day.

Tripp Grant (EVP and CFO)

Scott, I can add on to this. I think we've been really, really disciplined in our approach to how we've looked at M&A over the last few years. You know, just in my position, I get dozens of CIM decks every week, it seems like. You know, we're turning down things just consistently. For about every 100 I get, we'll get three or four that'll kind of pass to the next level we'll talk about, and generally we'll turn those down pretty quickly. Over the last two years, you know, as we've worked harder in identifying some things in our strategic plan on where we wanna look for, it's helped us really identify kind of where we wanna play and where we wanna expand.

These two, you know, out of the hundreds that have showed up, these two transactions have really just popped up. We knew pretty quickly after some diligence that was done, that we wanted to pursue these things. We did all of the legwork and they've been really positive and especially AAT and I think Lew Thompson & Son is just gonna be just as good. We're excited about both of them. I think we're gonna continue to be disciplined. Like Paul said, we're gonna kind of watch leverage. I also think that we've still got a moderately leveraged balance sheet, and we have the opportunity to do more if we need to. Again, we're not gonna lose that discipline of, you know, really sticking to our plan on acquisitions.

We're not just gonna grow to grow.

Scott Group (Managing Director)

Makes sense. You know, I try and never say, congrats on these earnings calls, but, you know, if you were to ask me heading into a pretty nasty trucking downturn, if we'd be talking about $4 of earnings for you guys, I would've said no shot. You know, well done, guys. Kudos.

David Parker (CEO)

Thank you.

Tripp Grant (EVP and CFO)

Thank you, Scott.

David Parker (CEO)

Thank you.

Operator (participant)

Our next question comes from Elliot Alper from TD Cowen. Please go ahead, Elliott.

Elliot Alper (VP)

Great. Thanks, guys. Tractors and dedicated decreased 13.5% in the quarter. I know you talked about some existing business or underperforming business exiting. Can you talk about kind of how far along you are in that process, and if there are any other factors at play? I guess how much of that is customers just needing kind of less trucks given the volume environment?

Paul Bunn (President and COO)

It's a mix, Elliot, of just underperforming business and customers that, you know, "I had 20 now I need 17. I had 35 now I need 31." Here's what I'll tell you. I think we've already absorbed most of the people that we're doing reductions. They kinda know where they are from a-

Elliot Alper (VP)

Mm-hmm.

Paul Bunn (President and COO)

-the demand standpoint. I think we're probably by the end of Q2, we'll be 90%, 95% through this weed and feed effort. As Tripp talked about, truck count came down. Truck count will go back up by the end of Q2, back up to that 1,400 and some odd number. you know, 200 trucks more than we ran this quarter. So we're probably about 90. To answer both your questions, about 90% through the weed and feed process. It's a mix of us weeding and feeding 'cause it just didn't meet profitability requirements and customers that, you know, there's just changes in their demand profile and they've downsized.

Elliot Alper (VP)

Okay, great. Thanks. You bought back a lot less stock in the quarter kinda compared to 2022. How are you thinking about capital allocation going forward? Maybe what should we assume for buybacks? I guess kinda dovetailing on the last question in terms of M&A, kind of is your focus primarily gonna be in dedicated?

Tripp Grant (EVP and CFO)

Well, to answer your first question, you know, we bought back about 610,000 shares during the 2023 quarter. We don't consider that a small amount. It was actually about 4.5% of the shares outstanding from December 31, 2022. We still have an open 10b5-1 plan, but we generally don't comment about any forward kind of plans. You know, the plan itself has certain, you know, non-disclosed purchasing criteria associated with it, so we don't comment on that. You know, what is public is that there is an open 10b5-1 plan out there and, you know, we like what it does for us, but we're gonna stick with what we've got out there today.

In terms of M&A going forward, I think that, you know, we'll continue to look and it would have to be a perfect fit. I think we wanna, first of all, make sure that we are working with Lew Thompson and Son and that new business in a way that will help them understand us and help us understand them. There'll be a lot of attention on that just over the next few months and working with them on some integration stuff. They're gonna continue to operate out of their headquartered operations, no kind of integration plans beyond just trying to work together and understand each other.

We're not actively kind of hungry and looking for immediate M&A opportunities, like Paul had mentioned, you know, they're always crossing our desk and we're always analyzing them for the right deal. If the right thing came along, it could be possible, whether it's in dedicated or, you know, or, you know, one of the other segments. You know, before we had been pretty vocal about not growing the expedited fleet until we came along AAT. AAT met the criteria that we were looking for. It was an opportunity to do something different in expedited that we weren't doing, and it checked all of the boxes of what we look for strategically. There could be something else that comes along like that we would love to look at.

It'd be hard to really tell you, yeah, we're absolutely, we're all in on dedicated. Dedicated is something that we really love and we plan on growing, but, you just never knows what comes up.

Elliot Alper (VP)

Okay, great. Thanks, guys.

Operator (participant)

As a reminder, if you would like to ask a question, please press star one on your phone now. Gentlemen, at this time, there appears to be no further questions.

Tripp Grant (EVP and CFO)

All right. Well, thank you, everybody, for joining us today. We look forward to speaking with you next quarter. Have a good weekend.

Operator (participant)

This concludes today's conference call. Thank you for attending.