Forward Air - Earnings Call - Q3 2016

Transcript

Speaker 0

Ladies and gentlemen, thank you for joining Forward Air Corporation's Third Quarter twenty sixteen Earnings Release Conference Call. Before we begin, I'd like to point out that both the press release and this call are accessible on the Investor Relations section of Forward Air's website at www.forwardair.com. With us this morning are Chairman, President and CEO, Bruce Campbell and Senior Vice President and CFO, Mike Morris. By now, you should have received the press release announcing third quarter twenty sixteen results, which were furnished to the SEC on Form eight ks and on the wire yesterday after market close. Please be aware this conference call may contain forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements, among others, regarding the company's expected future financial performance.

For this purpose, any statements made during this call that are not statements of historical facts may be deemed to be forward looking statements. Without limiting the foregoing, words such as believes, anticipates, plans, expects and similar expressions are intended to identify forward looking statements. You are hereby cautioned that these statements may be affected by the important factors, among others, set forth in our filings with the Securities and Exchange Commission and in the press release issued yesterday, and consequently, actual operations and results may differ materially from the results discussed in the forward looking statements. The company undertakes no obligation to update publicly any forward looking statements, whether as a result of new information, future events or otherwise. And now I'll turn the call over to Mike Morris, Senior Vice President and CFO of Forward Air.

Please go ahead.

Speaker 1

Thank you, Kathy, and good morning, everyone. Before we get to Q and A, I will provide some additional perspective on 2016 for your modeling purposes. First, a reminder that the TQI impairment charge that we took in the second quarter will increase our book tax rate for 2016. We expect that our adjusted rate will remain at 37% for the rest of the year. Regarding capital expenditures, we expect full year net CapEx to be approximately $44,000,000 And finally, regarding shares, our full year diluted share count should be about 30,600,000 shares and that is prior to the effect of any future share repurchases.

With that, I'll turn it over to Kathy to open the line for Q and A. Kathy?

Speaker 0

Thank you. And the floor is now open for questions and comments. Our first question will come from the line of Jack Atkins with Stephens. Go ahead please.

Speaker 2

Hey guys, good morning and thanks for the time.

Speaker 3

Good morning.

Speaker 2

Bruce, I guess if we could kind of start off and just talk about the third quarter and how it progressed. I know from the pre release earlier in the quarter, guys said you hit a bit of an air pocket from a volume perspective in ex Bet LTL. Could you speak to maybe what was driving that? And sort of what are you seeing in terms of business trends thus far in October?

Speaker 3

Actually, we would ask you what caused that because we have no idea. We had a what I would call a decent July, and then we go into August and it really fell off. And then it came back in September. Didn't come back 100%, but much more vibrancy in the market in September. As we are this far into October, you know, we still see what we're calling a sluggish market, a choppy market.

It's not horrible and it's not great. So that's kind of where we're at today.

Speaker 2

Okay. I think when you look at the core line haul yields in the third quarter, pretty impressed with how those held up despite the challenging volume environment. Is that even due to freight mix? Or are you guys pursuing any specific initiatives there? Just kind of curious what's helping keep those strong?

Speaker 3

Well, that's really a drive from the early part of the year that we continued on. We have, in some circumstances, loosened up a little bit, especially on spot pricing, Jack. But beyond that, we're maintaining our yield to the best of our ability. If you give away permanent what I call permanent yield as opposed to spot, it's awfully hard to get back in the future. So you'll see us continue that throughout the year.

Speaker 2

Okay. Great. And then Bruce, I guess when you think about your exposure to the freight forwarding industry, I think it's your primary customer base. Obviously, the bankruptcy of of Hanjin Hanjin at the August is impacting ocean freight activity in the Transpacific. Are you guys seeing any sort of impact to your business from your freight forwarding customers because of Hanjin at all?

Is that really a non issue for you guys?

Speaker 3

It was an issue for us at CST, where Hanjin was a smaller customer. So we took a plus or minus $200 hit on our receivable there, And that's behind us. I think there was disruption in the market without question. Once we get disruption, especially on the West Coast, it does affect all modes. But for the most part, it's been more orderly than we would have thought.

It's actually been pretty well done to this point.

Speaker 2

Okay, great. And one last question for me and I'll turn it over. But just kind of going to the Fort Air Solutions segment for a moment. You know, you've had nice revenue growth this year. I know that there have been some start up costs associated with onboarding new business,

Speaker 4

but

Speaker 2

it feels like we've been onboarding new business for a couple of years now and sort of the operating leverage really hasn't kicked in. Sort of what's the outlook for that business in the fourth quarter? And then at what point, Bruce, would you expect to really start seeing the operating leverage from this all these new business wins really start to show up in terms of operating income?

Speaker 3

Yes. Your points are well made, we agree. Interestingly enough, in the third quarter, we had a fairly large competitor go out of business. So that's the third one, I think in three years. We picked up a significant amount of business.

But if you pick out 15, it's going to cost you a lot to get it up and running initially. And then it becomes a really hopefully good revenue and good profit. We have taken a stance now with our solutions group as we go into Q4 and really into 2017 that we're not really interested in growth. We don't want to move buildings. We don't want to do anything.

We want to fine tune this model and really make it much more profitable. We think we can do that beginning in the fourth quarter and then sustaining that as we go into 2017. So we haven't backed up our words yet. We don't hesitate to share that with anyone. But I think we're finally there.

Speaker 2

Okay, great. Thanks for the opportunity to ask questions. Sure.

Speaker 0

Thank you. Our next question is from Jason Seidl with Cowen and Company. Please go ahead.

Speaker 5

Thank you. This is actually Matt Olcott for Jason. Thanks for taking my question. I wanted to ask about the 4Q guidance. Generally speaking guys, what freight market conditions is your guidance?

Are you what kind of freight market conditions are you assuming into your guidance? Are you assuming an improvement, deterioration, normal seasonality in general terms?

Speaker 1

Thanks, Matt. This is Mike Morris. I would say that it's a continuation of the currently challenging environment is baked into our guidance for the fourth quarter. I mean, we're very cognizant of the macroeconomic and industry dynamics that we're operating in. We recognize in our forecast, particularly in LTL, we're moving into our holiday season.

So we would anticipate some sequential uptick in tonnage, but not to the extent that we saw in the 2015 when the macro conditions were a little more favorable. We think yield will hang in there, but we are also aware of the change in the LTL freight characteristics that we're going to experience as e commerce starts to take on a bigger part of our shipment mix. So we bake that into our thinking. It's kind of a typical fourth quarter, but amidst a tougher macro backdrop.

Speaker 5

Got it. That's very helpful. And as you guys start thinking about 2017, are you starting to shape a view on where you see the overall freight market going in 2017 when you factor in the current conditions, ELDs, election uncertainty? I know there's a lot of variables at play. Do you are you closer to having a view on 2017, more optimistic, less optimistic than 2016?

Speaker 1

We're in the process of developing it. We're in our planning cycle right now. That's something that will continue to evolve, but I can't say we have a firm view right now.

Speaker 5

Okay. And just lastly on the Fair Labor Standards Act, the FL SA that's supposed to kick in in December, have you guys thought about this? Is it going to impact your business? And if so, what percentage of their labor force might be impacted?

Speaker 3

It's actually for us, Matt, a small percentage. It will impact us without question. But we're working to mitigate that impact. And I think as it gets closer and as we get more and more comfortable in having to adapt to that new reg, we'll be in better shape to deal with it.

Speaker 5

So would you say it's less than 10% of the labor force?

Speaker 3

Yes.

Speaker 5

Okay, great. Thank you very much, guys.

Speaker 3

You're welcome.

Speaker 0

Thank you. Our next question comes from Bank Zhu with Wolfe Research. Go ahead please.

Speaker 6

Good morning. Thanks for taking my questions. Just a couple from me. So in your release you noted that the TL capacity environment's loose currently. And I'm just wondering how that capacity situation fell by month in the quarter and into October and if you have any expectations on when they will turn?

Speaker 3

The only change we really saw which you would expect, was at the end of Q3 when it became much tighter for maybe a two week period. Other than that, it was pretty loose throughout the quarter. And it has resumed being loose. Now we'll look real hard at next week at the end of the month and especially since it's the October and watch to see if it doesn't tighten up again. But we don't think there's going to be a whole lot of change in that market going forward.

Okay.

Speaker 6

And just more broadly for both TL and LTL, are you seeing any signs of a peak? Are you expecting any peak this year?

Speaker 3

On the truckload side, I doubt we I think you'll see not only us but most of the carriers get busier. But I don't think it'll be a peak like we've seen in the past. On our LTL side, we will see a little bit of a peak, but again, not to the strength that we've seen in past years.

Speaker 6

Okay. And I guess finally just circling back on the pool distribution side, I'm just wondering have you ever given out like a breakdown between the OR of a kind of existing contract versus a start up? Is there I guess what I'm trying to drill down is what would be the operating ratio if you do not have all the start up business in recent quarters?

Speaker 3

Yes, that's a good question. We've never broken it out like that. We could go back and look. When we bring on a new account, we can identify how quickly it becomes profitable. And it really depends on the account.

Because what we're watching is to make sure our pricing was correct. And we can tell you that within a two, three month period.

Speaker 6

Okay. And typically how long does it take to become profitable?

Speaker 3

Depends on the time of year. The ones that came on this past September and late August, for the most part, are profitable right now.

Speaker 6

Okay. Thanks for your time, guys.

Speaker 3

You're welcome.

Speaker 0

Thank you. We'll go next to Todd Fowler with KeyBanc Capital Markets. Please go ahead.

Speaker 7

Great. Thanks and good morning. Mike, if you have him, could you give us the monthly tonnage trends during the third quarter? And then also what you're expecting in your guidance for the fourth quarter?

Speaker 1

Hi, Todd. So for the third quarter, what I'll give you is the monthly change in the year over year change in the average daily tonnage. This is the outbound tonnage in our network and does not reflect any revenue adjustments that are done for financial reporting purposes. So this is kind of the pure base underlying tonnage that I think is what you're looking for. In the month of July, we were down 3.3.

In the month of August, we were down 7.2%. And in the month of September, we were down 0.1%. And so the total effect on the quarter was down 3%. So it gives you a sense of the order of magnitude of the dip in August and the bounce back in September.

Speaker 7

And Mike, do you have a number for October and kind of thoughts of what we should be thinking about for the fourth quarter and what you have embedded in your guidance?

Speaker 1

I don't have an October number in front of me. And in terms of the fourth quarter, you know, we think it's going to be down a little bit year on year reflective of the current environment. And, you know, Bruce made his comments about our expectations versus for the fourth quarter holiday peak relative to prior peaks. So a little softer than historically is our expectation for the fourth quarter.

Speaker 7

Okay. And then I understand the answer to Jack's question about maybe not a lot of visibility into what happened into August. But do you have any sense, I mean, you think about specific end markets or regions or maybe even Bruce a kind of a broader question, how does the third quarter feel or how does this environment feel compared to previous periods that you've gone through? Is this something that you feel is just kind of a one off? Or is this something that maybe is foreshadowing kind of a change in the environment going forward?

Just curious for kind of your thoughts on what happened in the quarter and kind of how the environment feels right now.

Speaker 3

Yes. And all it is, Todd, are my thoughts. I think August was truly an air pocket. Okay. We talked to a number of customers.

They went through the same thing for the most part, not across the board. And really nobody can explain exactly how or why that occurred. September was, as you can see from the numbers Mike gave you, pretty nice bounce back. And it should be because it's the end of the quarter. It should be a good month.

So it followed pretty much where we thought it would. As we go forward, based on everything we see and all the different sources we use to help us with what we are able to predict with any reliability, we just don't see a very good quarter out there. We don't think it's horrible. It's certainly not 'eight, 'nine. But it's just, you know, sluggish.

Speaker 7

Okay. Look, that helps. I appreciate the thoughts there. Just a couple of other ones. Just maybe a couple of questions about some seasonality in the other Intermodal, we don't have as much history there.

How does that business trend into the fourth quarter? And then if you have any comments around either volume or pricing or kind of what that environment is like, I think that that would be helpful for us.

Speaker 3

Sure. Our intermodal business has basically been flat all year. We've got a little bit of growth from a couple of small acquisitions that we've done. But if we talk to our customers, they're slower than they were a year ago, and they have been all year. Now mean you throw on top of that the smallest disruption caused by Hanjin.

It just hadn't been a great market. As we go into the fourth quarter, we're seeing a slight pickup. We're all real curious to see what that'll do for the balance of the year. But in all honesty, we can't sit here and say we think it's gonna jump again. I think it will remain steady.

It does have a little bit of seasonality to it, not a whole lot. So we should see a better fourth quarter, just not great.

Speaker 7

Got it. Okay, that helps. And then just as far as the purchased transportation costs, I know in the past you've talked about how much of your PT is outside of your network. Where was that in the quarter? I know that that's been very well managed the last couple of quarters.

Any change there?

Speaker 1

It continued to be well managed. In the third quarter, the owner operator miles as a percent of our total miles were 92.4%. And that's really good performance in an absolute basis, but also relative to the volume volatility that was being managed.

Speaker 3

And remember, Todd, that means we had 7% to 8% outside miles.

Speaker 7

Right.

Speaker 3

And it's very difficult, unless the balance dictates, to get it much better than that. Because we may have 60 loads out of LA tonight only have enough inbound to cover 30 of them.

Speaker 7

Yes. You don't want to be at 100%. There's some loads that make sense not to handle with your Exactly. Own Got it. Okay.

And then just one last question on that. As far as retaining or attracting owner operators, do you have the capacity that you need at this point? What's kind of the churn with the owner operator base right now? Anything that we need to be thinking about as we move into 2017 on the cost side with that?

Speaker 3

We've been really fortunate this year. We're basically full is one way I would put it. But we learned, what, three, four years ago, you're never full. You're always recruiting. So, it was a hard lesson to learn.

We haven't forgot it. So a lot of good things going on in our recruiting, a lot of good things in running our owner operators, getting the utilization out of them that they need and we need. So it's been a very positive year there.

Speaker 7

Okay. Just the last one I had and this isn't to be nitpicky, but I'm just curious more than anything, the other operating expenses and I think it's predominantly in the Forward Air segment were higher year over year and higher than where they've been trending through the first couple of quarters. Just curious if there was anything specific there or what might be impacting that line item? Yes,

Speaker 1

Todd, you're looking at the other OpEx on the press release?

Speaker 7

Yes, that's exactly right, Mike.

Speaker 1

The $23,400,000 number compared to the $23,600,000 from the prior period?

Speaker 7

Well, yes. And I guess I was looking in hopefully my numbers are correct more in the Forward Air segment where it's 14 it had been 12 in the first half and 12.7 in the And year if we're too much in the weeds, we can do it offline. I don't want to take up time on the call with it.

Speaker 1

Yes. No, we've had a little increase in our corporate overhead that's been allocated to that segment. That's probably the main driver.

Speaker 7

Okay. Okay, that helps. I appreciate the time this morning guys. Thanks again.

Speaker 3

Thank you.

Speaker 0

Thank you. We have a question from David Ross with Stifel. Go ahead please.

Speaker 4

Yes, good morning gentlemen. Good morning. Good morning. Could you talk first about TLX on the capacity side? What you're seeing in terms of being able to recruit drivers to haul for that segment?

And is it getting easier, more difficult?

Speaker 3

It's been really good. It's easier. I think obviously some carriers are suffering and can't keep their owner operators busy. And that always gives us a little bit of an advantage in recruiting. If we go back to 'nine, David, some of our easiest recruiting years were 'nine and 'eight when other carriers couldn't keep their guys busy.

And we're experiencing that now.

Speaker 4

And as you think about, you know, we're still over a year away from the ELD mandate. What's your general view on how to police, if you will, the third party carriers that are hauling for you? And do you think it's your responsibility to make sure they're compliant? Or is that just up to them and you sign them up?

Speaker 3

We are very interested in that. As you know, we've been ELD compliant for probably six years now. And we have seen the benefits of it. So we don't have a lot of tolerance for people who don't or make the argument that they shouldn't be ELD compliant. The impact of that, in my estimation, most of the people at the ATA disagree with me.

But if people cheat today, they're going to cheat on 01/01/2018. So I don't think this has a whole lot of impact initially unless there is really strict enforcement.

Speaker 4

And then you said the benefits of ELD compliance that you've experienced, what have been the main benefits to Forward Air so far?

Speaker 3

It kind of ties the whole driver and the process that we go through in terms of booking a load, etcetera, etcetera. Now we have the driver who with the ELD, we can determine a day in advance where he needs to brake, when he needs to brake, do we have to get a relief driver in on top of him depending on service. So it kind of tied all that together. And we really think we've benefited from it.

Speaker 4

Excellent. And then a question for Mike on the insurance side. The insurance claims were up a couple million year over year. Was that in any specific segment or due to some bad accidents piercing the self insurance level?

Speaker 1

Inflation and premiums. We've had some underwriters exit the market and insurance premiums have gone up. And we had one accident, but the main driver is just the overall cost of insurance premium.

Speaker 4

Okay. So that should be more of a steady state run rate going forward, just a little bit of a step up in that line?

Speaker 1

I'm hoping it comes down.

Speaker 4

Yes, right. I just got to go and get in the yield.

Speaker 3

It's a hard market as you know.

Speaker 6

Yeah, a tough market.

Speaker 4

Exactly. Well, thank you very much for the time. Hey, that was

Speaker 5

a good article on LTL. It was. Thanks.

Speaker 0

All right, thank you. Our next question will come from Ben Hartford with Baird. Go ahead please.

Speaker 8

Hey, good morning. And Bruce Ford, it's worth that offer the G20 Summit in early September probably attributed to some of the weakness in August. I don't know if you agree or disagree with that.

Speaker 3

We would take any help we could get in understanding that, Ben.

Speaker 8

On that note, obviously, the trends are weak. Mike, you had alluded to some of the mix influence with regard to lighter weight shipments from a pricing standpoint. But how would you describe the pricing environment overall within the expedited LTL business? Obviously, you have town in hand now for twenty one months or so, but truckload pricing continues to be weak and LTL and expedited LTL tends to follow a similar cadence. So what is the outlook from a pricing environment as you look into 2017?

Speaker 1

Well, I'll speak to the fourth quarter in our guidance. The LTL pricing, we're not expecting any significant deterioration. We think yields are going to hold up. We think that on the truckload side, it's going to be more of the same around excess capacity. The softness in our outlook is attributable more to just tonnage and macro effects.

That's really what's driving it. There is one less operating day. That's not a total needle mover, but just to throw that into the mix. And, you know, we're trying to put forward a realistic outlook in light of the environment that we're operating in. And if there's any change to that environment, you know, we're going to benefit from it.

But this is what we see now and we're not ready to handicap any of that change in our outlook.

Speaker 8

Sure, sure. I guess, Bruce, from your own experience, pricing in the industry tends to move in lockstep over a multiyear period. And with truckload rates negative at the moment, it would be unusual for LTL broadly, expedited LTL to continue to remain resilient. But obviously, you've got town potentially as an offset here. So I mean, any way to anticipate what the pricing environment will look like as we go into 2017?

Speaker 3

Let me tell you our view, and I'm not telling you it's necessarily right. But your analogy between truckload and LTL pricing as we've seen historically is correct. But what's happening this time around, the LTLs are hanging tough, shockingly in my opinion. You know, they've continued to announce rate increases. They've continued to hold their yields.

And we haven't seen the pricing wars that we saw back in 'nine, you know, that time. So as a result, we think the yields are going to hold pretty steady. Obviously we'll update that quarter by quarter. But as we view 2017, we have a pretty I would call it a neutral bias on pricing. And the good news about that is it isn't a negative bias.

Speaker 8

Okay. That's good. So again, back to town and the integration. What has the customer receptivity been? How successful have you been in retaining the accounts that you wanted?

And we're going to start to lap some easier comparisons beginning the second quarter. Can we assume a return to that low to mid single digit type revenue growth rate in the segments as we do lap those comps?

Speaker 3

The quick answer on the town side is we're happy with where we're at. We've retained what we wanted to retain. We've cleaned up situations that needed cleaned up. So we don't even hardly think about that anymore. The negative to the whole thing, as we've discussed earlier, what's the macro conditions going to be like?

What's the market going to do? Assuming it's a normal market, then we think you're exactly right. We can go back to that 4% to 6%.

Speaker 8

Okay. That's good. Mike, if I could get a few from you. Tax rate, you said 37% for the fourth quarter next year, 37% as well. Can we plan for that?

Speaker 1

Yes. I think for now, again, these are the this is the adjusted tax rate, but we're in our planning cycle. But nothing's popped up that it would suggest it's going to be any different for next year.

Speaker 8

CapEx in the fourth quarter and any sort of outlook for 2017 at the moment?

Speaker 1

You know, I mentioned 44 on a full year basis. I think for the fourth quarter that probably leaves us about 14 to go. It's not a bad number to use for next year. Most of our CapEx is just ordinary course trailer fleet replenishment. That's about 80% of it and then 15% of it is technology because we're heavy investors in IT.

And after that, it's just some cats and dogs.

Speaker 8

Okay. And then any target for debt paydown, payoff? What's left here with the $43,000,000 or so remaining at the end of the third quarter?

Speaker 1

Yes, that's the term loan is going get paid off relatively quickly. We've got one more payment at the December. And then I think it's the February where we have a bullet which is I think equivalent to about two payments. But we have a revolver available to refinance any portion of that that we need to, meet our cash needs. But we don't really see much in the way of leverage going forward.

Speaker 8

Okay. And then the last one, share repurchase activity. Can we assume this pace that you've had for the previous three quarters? Is that a good run rate on a quarterly basis going forward?

Speaker 1

You know, we're in our planning cycle and looking at our capital needs. So I don't want to jump the gun on that. But our philosophy has been at least to absorb the dilutive effect of equity based compensation.

Speaker 8

Okay. That's great. Thanks for the time guys.

Speaker 6

Thank you.

Speaker 0

Thank you. We'll go next to David Campbell with Thompson Davis and Company. Go ahead please.

Speaker 9

Good morning. Thank you for taking my question. You talked about seasonal growth in the fourth quarter less than last year, but nevertheless, what about on a per day basis? Do you still expect tonnage to be down year to year on a per day basis?

Speaker 1

Yes, David, it's Mike Morris. Just slightly compared to daily tonnage in the 2015.

Speaker 9

Okay. And I didn't read the entire press release. It might be in there. But what are the adjustments that you used to get to adjusted operating income? And what was the operating adjusted operating income?

Speaker 1

Yes. So the primary adjustments relate to the tax rate for the current quarter. The GAAP rules around how we account for the tax impact of the TQI impairment charge lead to like a 54 I think we came in at a 51% tax rate. We think that the more appropriate adjusted rate is about 37%. So that was the main adjustment that was done for the current quarter.

Were no adjustments to operating income in the third quarter.

Speaker 9

Okay. And what about acquisition activity? Bruce, you haven't had any comments on about that and whether you're seeing opportunities and in what areas are you seeing opportunities if you are?

Speaker 3

Yes. Good morning, David. We're pushing primarily through our central stake group. They did make a purchase in the third quarter when we brought on Triumph. We continue to look at opportunities in that market and it continues to be a very good it's laden with opportunities.

So we're excited about that.

Speaker 9

And what was the additional what did that acquisition add in terms of revenues?

Speaker 3

It was small. It was like $10,000,000 It's primarily a Milwaukee based So it added to some density to our existing facility.

Speaker 9

Dollars 2,000,000 revenue on an annual basis or just the third quarter?

Speaker 3

Dollars 10,000,000 annual. Annual.

Speaker 9

Yes. All right. No, so that's where you see opportunities. Not in the LTL expedited business. You don't see any opportunities there?

Speaker 3

We really don't.

Speaker 9

Okay. Thanks for taking my questions good Thank luck in the fourth

Speaker 3

you, sir.

Speaker 0

Thank you. And our next question is from Tyler Brown with Raymond James. Go ahead please.

Speaker 10

Hey, good morning guys. Hey, Hey, just a couple of quick ones. So in intermodal, I realized the revenues were down. I assume it was somewhat from the international intermodal side. And I know that intermodal is what maybe 60% of that business.

But can you guys give us some more color on how specifically that piece breaks down between maybe international and domestic intermodal?

Speaker 3

It's all international. If we do have a domestic, it's probably because we're doing a favor for a customer. But we're 95 at least international.

Speaker 10

Okay, great. That's great color. And then Mike, it seems like you guys are going to have this very high class problem of a strong another year of strong free cash. I know you talked a little bit about the preferred uses of cash. But can you talk about are there some chunkier acquisitions out there, particularly maybe in the intermodal space?

Or are you looking to expand geography there?

Speaker 1

Yes, yes and You know, it's hard to predict M and A. But there are some potential for chunky acquisitions and we've got all the capital we need to do it. If we can't transact because we're not going to overpay, then we've got a Plan B for capital which is to return more to shareholders.

Speaker 10

Right. Okay. Okay.

Speaker 1

Does that answer your Yes.

Speaker 10

No, it does. It feels like there might be some chunkier stuff out there. But, know, obviously who knows what may come of it. And then just a quick housekeeping item though, is the $9,500,000 or so a good placeholder for DNA post the impairment?

Speaker 1

Yeah. Yeah.

Speaker 10

Okay. That's good. And then Bruce, just real quickly maybe to finish up here on the pool side. I mean, I know there's been a lot of struggles there. I'm hopeful of a turn as well.

But does there come a point that you may look to exit that business? I mean, is it overly distracting from a management perspective? Or how should we think about that?

Speaker 3

We view all our businesses monthly, quarterly, annually. Are you paying your way? And solutions is part of that. So we make that assessment, as I said, multiple times. And really beyond that I can't comment.

Speaker 10

Okay. All right. Thanks guys for the time.

Speaker 0

Thank Thank you. And we have no further questions. So that does conclude Forward Air's third quarter twenty sixteen earnings conference call. Please remember the webcast will be available on the IR section of Forward Air's website at www.forwardair.com shortly after this call. Thank you for your participation.

You may now disconnect.