Saia - Q4 2016

Transcript

Operator (participant)

Good day, everyone, and welcome to the Saia Incorporated Fourth Quarter 2016 Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Doug Col. Please go ahead.

Doug Col (VP Treasury)

Thanks, April. Good morning, everyone. Welcome to Saia's Fourth Quarter 2016 conference call. Hosting today's call are Rick O'Dell, Saia's President and Chief Executive Officer, and Fritz Holzgrefe, our Vice President, Finance and Chief Financial Officer. Before we get started, you should know that during this call, we may make some forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, and all other statements that might be made on this call that are not historical facts, are subject to a number of risks and uncertainties, and actual results may differ materially. We refer you to our press release and our most recent SEC filings for more information on the exact risk factors that could cause actual results to differ. With that said, I'd like to turn the call over to Rick O'Dell.

Rick O'Dell (CEO)

Well, good morning, and thank you for joining us to discuss Saia's results. This morning, we announced our fourth quarter and year-end 2016 earnings, with fourth quarter diluted earnings per share of $0.40 compared to $0.45 in the fourth quarter of last year. For the full year 2016, diluted earnings per share were $1.87, which compares to record annual diluted earnings per share of $2.16 achieved in 2015. Fourth quarter represented our 26th consecutive quarter of year-over-year improvement in our reported LTL yield. Our pricing negotiations with contractual customers continue to be fruitful, with average agreed-upon pricing rising 5.2% during the quarter. The fourth quarter also marked the first time since the fourth quarter of 2014, where we saw both LTL shipments and tonnage per workday rise on a year-over-year basis, which is an encouraging statistic.

Some other comparisons for the fourth quarter compared to the prior year's quarter were: LTL revenue per hundredweight increased 5.1%, LTL shipments per workday rose 2.1%, LTL tonnage per workday rose 1.4%, LTL weight per shipment fell by 0.7%, but was actually up slightly sequentially from weight per shipment in the third quarter. Our dock productivity, as measured by bills per hour, improved 2.2%. P&D productivity improved 2.3%. Our cargo claims ratio of 0.74% represented another nice improvement from 0.97% in the fourth quarter of last year. Just a couple of comments now on the full-year result, results before I turn it over to Fritz to review some additional financial details.

LTL yield improved by 3.2%, and revenue per shipment increased by 1.5%, despite a weight per shipment being down 1.7%. In 2016, our claims, cargo claims ratio improved by 15%, and the number of claims filed per day was down 12%. Investment in dimensioners continues to support our yield improvement initiatives. At year-end, we're utilizing 32 dimensioners across our network, and we plan to add at least two more this year. Purchase transportation spend fell by 20.2% in 2016. Purchase transportation miles were 7.7% of total line haul miles, compared to 10.1% last year. We continue to manage our line haul network effectively to ensure we're being properly compensated for lane imbalances.

Depreciation and amortization expenses as a percent of revenue increased to 6.3% versus 5.3% in 2015, a reflection of our continued investment in tractors and trailers. The increased depreciation expense is offset in part by maintenance savings and better fuel economy. In 2016, our average fuel economy improved to 6.8 miles per gallon from 6.7 last year. Our cargo claims expense was down 9% for the year, demonstrating that investments in training and equipment to reduce claims are generating a solid return for shareholders and are a key driver of our yield improvements. With that, I'm going to go ahead and turn over the call to Fritz.

Fritz Holzgrefe (CFO)

Thanks, Rick, and good morning, everyone. We generated total revenue of $300 million in the fourth quarter, compared to $288 million in the fourth quarter last year, a 4.4% increase. Revenue benefited from positive shipment and tonnage trends, continued positive pricing, and a year-over-year increase in fuel surcharge revenue, offset by one less workday in the period versus the prior year. Operating income fell by 2.4% to $17.2 million, compared to the $17.6 million earned in the fourth quarter of 2015. As Rick mentioned, fourth quarter LTL yield rose 5.1%, reflecting the positive impact of our continued pricing actions and positive fuel surcharge contribution versus last year's fourth quarter. Fuel surcharge revenue was up 4.4% from last year's fourth quarter.

I'd like to mention a few key expense items and how they impacted fourth quarter results on a year-over-year basis. Salary, wages, and benefits rose 4.1% to $171.2 million in the fourth quarter, reflecting the impact of an average wage increase of 3% in July and additional labor to handle increased year-over-year shipments in the quarter. Purchase transportation expense in the fourth quarter rose by 3.7% to $13.9 million, and was 4.6% of revenue versus 4.7% last year. Purchase transportation miles in the fourth quarter were 7.4% of total line haul miles, flat with last year.

Outside maintenance and parts expense were down 26% in the fourth quarter compared to the last year, as we continue to see savings associated with operating a newer fleet of tractors, trailers, and forklifts. The newer tractor fleet continues to benefit fuel costs, and miles per gallon increased by 1.9% in the fourth quarter to an average of 6.82. Claims and insurance expense in the fourth quarter increased by $4.2 million versus the prior year to $10.7 million. Depreciation and amortization of $19.3 million compares to $16.5 million in the prior year quarter and reflects our continued investments in tractors, trailers, and forklifts.

Our effective tax rate was 36.3% for the fourth quarter of 2016, compared to 31.9% in the fourth quarter of 2015. Q4 2015 included 12 months of the alternative fuel tax credit, whereas in 2016, the credit was reflected ratably during the year. For the full year, revenue was essentially flat at $1.2 billion, but operating income declined 12% to $79 million. Net income in 2016 was $48 million, compared to $55 million earned in 2015. Diluted earnings per share of $1.87 were down from the record earnings of $2.16 in 2015.

Our effective tax rate was 35.9% for the full year, compared to 36% in 2015. At December 31, 2016, total debt was $73.8 million. Net debt to total capital was 13%. This compares to total debt of $69 million and net debt to total capital of 13.9% at December 31, 2015. Net capital expenditures for 2016 were $152 million, including equipment acquired with capital leases. This compares to $113 million of net capital expenditures in 2015, which included equipment acquired with capital leases but excluded our purchase of LinkEx.

In 2017, net capital expenditures are forecast to be approximately $200 million, including investments in terminal infrastructure improvements, as well as continued investments made to lower the age of our tractor, trailer, and forklift fleets. Now, I'd like to turn the call back to Rick.

Rick O'Dell (CEO)

Thanks, Fritz. Before we open it up for questions, I'd like to give everyone an update on first quarter trends. In January, our LTL shipments per workday were up 1.9%, and LTL tonnage per workday rose 1.5% compared to January of last year. Finally, I'm pleased to report that our property acquisition and hiring activities related to previously announced second quarter expansion into select markets in Pennsylvania and New Jersey are on track. We've hired leadership positions and sales personnel and secured facilities in Pittsburgh, Philadelphia, Harrisburg, and Newark. We're excited about these initial steps in our multiyear strategy aimed at offering 48 state coverage to our customers. Our customers are providing us a lot of positive feedback regarding the expansion, and we look forward to serving them in additional markets as we open new service centers.

As always, we remain opportunistic toward any acquisition opportunity that may allow us to speed up the process or otherwise allow us to fill in an unserved geographic market. As Fritz mentioned, our total capital expenditures in 2017 will exceed $200 million, of which a good portion is real estate improvements in our existing terminal network and support our service, both from an equipment and facility standpoint in new geographies. The news of the expansion has been well received by our employees, and we've filled a number of positions for the new service centers from our existing base of employees. We're really excited about these transfers, as these folks will help jumpstart the development of the SYNE culture in the new geography. With these comments, we're now ready to answer your questions.

Operator (participant)

Thank you. If you would like to ask a question, simply press the star key followed by the digit one on your telephone keypad. Also, if you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Once again, press star one at this time. We'll pause for a moment. We'll first hear from Jason Seidl of Cowen.

Jason Seidl (Managing Director)

Hey, Rick. Hey, Fritz, hey, team. Couple questions. The contractual renewals in the quarter, 5.2%, still very impressive. What are you guys thinking about 1Q? Should we see about the same? Is it going to start to come in a little bit? Because you guys have been, what I would call, above market for a while.

Rick O'Dell (CEO)

Yeah, but we've targeted. We're gonna target kind of similar increases. But again, it kind of depends on, you know, the customer and how certain lanes operate. But I'd say something in the four-five range.

Jason Seidl (Managing Director)

In the four-five range. That, that's very helpful. Thank you. Also, getting back to your expansion, were there any costs in 4Q, or should we expect any additional costs in 1Q as you guys start to ramp that up? And if so, could you just sort of give us a range?

Rick O'Dell (CEO)

Yeah, so it was pretty minimal in 4Q. We've hired a couple of regional leadership positions late in the quarter, so you know, it was immaterial. And so as of today, we have probably 15 employees, and there'll be some incremental costs associated with them and securing, you know, some of the facilities. So but it's, it's not gonna be a lot, maybe $500,000.

Jason Seidl (Managing Director)

$500,000. Okay, no, that's helpful as well. Also, could you talk a little bit about the insurance costs going forward? It seems like that this is gonna be sort of an ongoing thing, I think, not only for you, but for the trucking industry, with fewer people, you know, providing insurance services. How should we look at insurance expense going forward for you?

Fritz Holzgrefe (CFO)

You know, you're right, Jason, it's a, it's a challenge. I think that in the quarter, you know, we saw some frequency develop, that impacted us. In other words, accidents within the quarter that were a challenge. You know, not an individual major accident, but what we're seeing, and I think broadly, people see, is the average cost to settle these or resolve these are increasing over time. So I think that if, you know, if I were. You know, as we look at it, you know, the recent history reflects unfavorable development of, you know, sort of older claims, as well as the increases in the current cost of claims associated with current accidents.

So, you know, I think it's probably reasonable to consider sort of the recent activity and trend line as the kind of world that we live in now.

Jason Seidl (Managing Director)

Okay. That's, that's helpful. Also, Rick, could you talk a little-

Rick O'Dell (CEO)

I would just also just like to comment on the safety side. You know, we continue to invest in every technology and modern training that we can to avoid accidents on the prevention side. I think that's really the only thing you can do. You know, the kind of cost per claim, even for the smaller claims, has obviously had a big inflationary item. And then, as an example, last year, we put some driver-facing cameras in some of the equipment that we purchased, and this year, we're actually gonna put it in every piece of equipment that we purchased, and also kind of retrofit the rest of our line, hopefully. That's a major investment.

And then we're also investing in the Bose Ride seats for the new tractors that we're purchasing, which, you know, have shown data to dramatically reduce fatigue and also kind of just help the drivers focus because he's not, he's not bouncing around as much in the cab. So those are just a couple of examples that we continue to make the investments that we can. That's really the only way we can fight this thing at this point in time.

Jason Seidl (Managing Director)

Right. If I could switch it up for the last question. Rick, can you talk a little bit about your exposure to the energy side? Because we've been hearing that demand on the energy side for trucking has really started to pick up in the last month.

Rick O'Dell (CEO)

Yeah, no, I think it feels a little better. I mean, even for the fourth quarter, the geography where we have that concentration in South Texas, Oklahoma, et cetera, I mean, the revenue turned positive there, so it's not as much of a headwind. So I guess the question is, if it continues to come back, I think it certainly feels better off of a pretty low base, but I would agree with that.

Jason Seidl (Managing Director)

Okay. That's all I have, guys. Thanks for the time. As always, appreciate it.

Rick O'Dell (CEO)

Sure.

Operator (participant)

Next, we'll hear from Scott Group of Wolfe Research.

Scott Group (Managing Director)

Hey, thanks. Morning, guys.

Rick O'Dell (CEO)

Morning.

Fritz Holzgrefe (CFO)

Morning.

Scott Group (Managing Director)

So, I got the 1.5% tonnage for January. Did you give the monthlies for fourth quarter?

Fritz Holzgrefe (CFO)

No, I can give those to you, Scott. So, I'll start with tonnage, October, November, December. 0.1% positive, tonnage October. November, 1.5% positive. December, 2.5% positive. Shipments, for the same three months, plus 1.9%, plus 1.3%, plus 2.9%.

Scott Group (Managing Director)

Okay, so that kind of slight deceleration from December to January, is that the comp or anything you attribute that to?

Rick O'Dell (CEO)

This is Rick. I would just say a lot of that, I think, was the comp and the way the holidays fell. You know, New Year's Eve wasn't on a Friday, it was on the weekend, and so more people stayed open for a full day, for instance.

Scott Group (Managing Director)

Okay. Okay. So, Rick, you usually give us kind of some perspective on kind of sequential margins. Maybe, maybe if you can give us some thoughts on, on first quarter, and then just given the, the expansion into the Northeast, maybe just some thoughts on margins for the full year.

Rick O'Dell (CEO)

Yeah, I mean, I think if you normalize for safety and kind of the timing of the general rate increase, et cetera, first quarter operating ratios average kind of flat to 4Q. And I think, you know, obviously, we're not overly pleased with our fourth quarter performance and certainly seeking out our opportunities to improve on that. But so kind of in spite of the fact that GRI was a little earlier this year and about $500,000 in Northeast startup costs in 1Q, we think it's reasonable to achieve a flat type OR in the first quarter.

Scott Group (Managing Director)

You're saying flat with the 94.3 in the fourth quarter?

Rick O'Dell (CEO)

Correct.

Scott Group (Managing Director)

Okay. And maybe just some thoughts on the year. So that implies a slight kind of year-over-year decline. Just some. Your thoughts on the full year.

Rick O'Dell (CEO)

Yeah, we certainly seek to improve. You know, there's gonna be some incremental startup costs associated with the Northeast, but you're also going to gain density across the rest of our network going into that geography. You know, it's a little hard to predict all those moving parts associated with that, but we, you know, our goal is to improve the operating ratio year over year. I think it's achievable.

Scott Group (Managing Director)

Okay. And just last question. So I know last quarter, we talked about Northeast. Comments this quarter say all 48 states, so that implies more than the Northeast. Or is this? Are we gonna do multiple regions at once, or is it Northeast first, see how that goes, and then other regions later?

Rick O'Dell (CEO)

It's Northeast first, and then basically, right, I mean, the rest of our coverage, we just don't have Montana and Wyoming, so we wouldn't necessarily prioritize that.

Scott Group (Managing Director)

Okay. Okay, perfect. All right. Thank you, guys.

Rick O'Dell (CEO)

Sure.

Fritz Holzgrefe (CFO)

Thanks, Scott.

Operator (participant)

Our next question comes from Todd Fowler of KeyBanc Capital Markets.

Todd Fowler (Managing Director)

Great. Thanks. Good morning.

Fritz Holzgrefe (CFO)

Good morning, Todd.

Todd Fowler (Managing Director)

Good morning, guys. Just on the increase in salaries here during the quarter, it sounds like a lot of that was tied to the increase in shipment counts, which is obviously positive, and you've got weight per shipment moving up sequentially. But can you talk about just the employee productivity and what your expectation would be from a salaries, if you're going to continue to see the shipment count increase as we move through 2017?

Fritz Holzgrefe (CFO)

Yeah. So I think you, the key driver year over year, as you point out, you've got the shipment count up, tonnage count up. So that, that's going to drive those sort of interim short-term increases. The other piece that you got to consider is that we did put the wage increase in in July, so that's going to be part of the variation year over year. It's also going to be a little bit more weighted to the folks that are the variable part of that salary and benefits or the salary line or wage line, right? Because that's going to be our where our hourly folks are. We had to. We mentioned in earlier calls that we actually increased above the 3% around our mechanics and some of the driver markets and so forth.

So that, you know, it's not—I don't know that you can apply just a 3% sort of salary increase if you look at the variable piece year over year. So but on average, it was 3, but for the folks, there may be folks that are actually a little bit higher than that. You know, as we look into the coming year, I mean, we've always have got our productivity initiatives in place, and that'll mitigate, you know, part of that cost or, you know, as we increase in tonnage and shipments, that'll—we'll get some benefit out of that. On the flip side of it, we'll be a little bit less efficient because we're going to be adding new terminals and sort of lower density to start with.

Todd Fowler (Managing Director)

Sure.

Fritz Holzgrefe (CFO)

So, you know, it's going to be a little bit of a mixed piece there.

Todd Fowler (Managing Director)

Okay. So but, I mean, should we think about it that if weight per shipment is increasing until, or excuse me, if shipments are increasing, but until weight per shipment turns positive, maybe that continues to be a little bit of a drag just on the personnel cost side?

Fritz Holzgrefe (CFO)

It could be.

Todd Fowler (Managing Director)

Okay. Rick, on the contract renewals, I think in the third quarter, you talked about, you know, contract renewals were up 5.7, but excluding the profile changes, it was up around 4%. Do you have a similar number for the fourth quarter if you normalize for the changes in your mix, kind of where contract renewals would be?

Rick O'Dell (CEO)

To total, total yield, so contract plus, you know, tariff general rate increase type business-

Todd Fowler (Managing Director)

Mm-hmm.

Rick O'Dell (CEO)

Was up almost 5%. Now, a little bit of that was the acceleration of the general rate increase-

Todd Fowler (Managing Director)

Right.

Rick O'Dell (CEO)

Which went to October third from early December the prior year. But it- it's up in the, It's up, the number that we estimated was about 4.8%, so it's almost 5%.

Todd Fowler (Managing Director)

Okay. And then just a couple of other last ones. So you talked a little bit to the last questions about, you know, the expenses and the margin progression through 2017. What's the expectation? It sounds like that you're going to be. Volume would start to come in, in the second half of the year. How should we think about tonnage or volume associated with the Northeast expansion as you move through 2017 and expectations for maybe earnings contribution in, you know, in 2017? Is it net neutral, or do you start to see some accretion in the back half of the year? Is it really more 2018?

Fritz Holzgrefe (CFO)

I think that what we've talked about this previously, we thought it would be sort of positive in Q1 of 2018 for our newest territories or newest terminals. I don't think we've really changed from that. I think that we like to think that we can keep it minimal impact on 2017, but I think they become additive, sort of, in that sort of time frame into 2018.

Todd Fowler (Managing Director)

But Fritz, you'd start to see some of the tonnage start to flow through in the second part of this year, right?

Fritz Holzgrefe (CFO)

Oh, you, you would.

Rick O'Dell (CEO)

Yeah, that's correct.

Fritz Holzgrefe (CFO)

That's correct. But I think the key thing there, Todd, is you're in a startup mode. You're probably not going to get quite the density you want right out of the, right from the beginning, right?

Todd Fowler (Managing Director)

Understood. Yep, that makes sense. Okay, and then do you have expectations, and I apologize if I missed this, but for depreciation for this year and also for interest expense for this year? That's all I had.

Fritz Holzgrefe (CFO)

Yeah. So we, you know, we're going to spend about $200 million in capital. Of that $200 million, about half of it is going to be vehicles that are largely going to be added to our fleet in the first kind of second quarter, and then the probably 10-ish million dollars of technology spend with the balance of real estate, which will be more, you know, of the two, real estate is more second half loaded, probably in terms of spending. So we haven't given guidance specifically on depreciation, but I think if you use that sort of guideline, it should give you a pretty decent feel as to how that depreciation expense would work.

Todd Fowler (Managing Director)

Okay. Any comments on interest expense?

Fritz Holzgrefe (CFO)

You know, what you'll see, you will lever up a little bit in the first quarter as we take delivery of the equipment, and then we'll start paying down during the year, actually. So, that's what you'll see. And, you know, your call on what you expect interest rates to be, but, you know, we'll borrow more first half, and we'll be in pay down in the second half of the year.

Todd Fowler (Managing Director)

I'm just, I'm just trying to figure out if the Falcons are going to be able to pull one out in the Super Bowl this weekend, let alone interest rates.

Fritz Holzgrefe (CFO)

Yeah, that's going to happen. Who we are?

Todd Fowler (Managing Director)

I like the confidence. All right, guys. Thanks for the time today.

Fritz Holzgrefe (CFO)

Thanks.

Operator (participant)

Next, we'll hear from David Ross of Stifel.

David Ross (Managing Director)

Yes, good morning, gentlemen.

Rick O'Dell (CEO)

Morning, David.

David Ross (Managing Director)

Hey, Rick, can you talk a little bit about, I guess, your mix of business? How much is now concentrated with, you know, what we would call large accounts or national accounts versus field accounts and three PLs? Yeah, kind of however you look at it, where it is today versus where it was a few years ago, and any view on, you know, what an optimal mix might be.

Rick O'Dell (CEO)

Well, you know, I guess I'm not opposed to national accounts as long as they pay their share, right? So, but today it's about about 40% field business. Ten percent is what I would call transactional 3PL. So there's incremental business that we do where the 3PL manages it, but it's really kind of like a national account, right? And so I, I kind of put that in the national account category and about 50% national account. This year, we grew field and 3PL revenue grew, and national account revenue was down a little bit. So we're, we're seeing some improvement in our mix, and obviously, that's contributing to the yield as well.

David Ross (Managing Director)

And is that a target for the sales force? I mean, obviously, every account has their OR, and you want the national account or the 115 to be at a 95. But, you know, is there any concerted effort on growing field business or, you know, eliminating national account business?

Rick O'Dell (CEO)

I guess, you know, we're willing to put national account business at risk that doesn't operate well and isn't contributing like it should, right? And that, that's the way I would say, I, I would say it, but, you know, like you said, if it operates at whatever, 92, 95, that's. I'm, I'm okay with that, when you, particularly when you look at the fixed cost coverage and backhaul lanes, right? And field business, obviously, I think we've talked about, we have invested in some field incremental field sales resources, and probably more so than that, we've continued to make investments in our in our inside sales organization, which basically provides, the biggest function they're doing is providing leads to the, to, to the small, to the field accounts so that the people, the reps can be more efficient.

And then, we do have a project we're working on, called Project Ignite, and what we've done is we went and looked at all of our terminals where we have a below average market share and said, you know, we should be all of our sales and marketing efforts are particularly concentrated in those markets to get our share up to where we are from a company standpoint, right? We're pretty mature in all of our existing markets today. Why should we have materially different share in certain markets, right? So it's a pretty exciting project. And again, we've got applying both sales resources, inside sales, and some targeted marketing efforts and making sure we're properly represented in the marketplace.

David Ross (Managing Director)

That all makes sense and is very helpful. On the expansion front, you mentioned that you got a few terminals, you know, identified that you're going to first grow into. Where did you pick those up from? Are they from other LTL carriers who outgrew them and had to go to a bigger facility, so they left one vacant? Are these facilities that were not being used in an LTL function before? I don't think any of them are new builds.

Rick O'Dell (CEO)

No, none of them are new builds, although we may move where. We may move into initial terminal in a couple situations and then relocate. So we might. Well, we'll probably have to build a break in Harrisburg because there wasn't one available. But two of the other facilities were vacant LTL terminals, and one terminal was being used in a non-LTL by a non-LTL carrier that's coming that we're going to move into.

David Ross (Managing Director)

Excellent. Well, thank you.

Rick O'Dell (CEO)

Sure.

Operator (participant)

As a reminder, if you would like to ask a question or make a comment, press star one at this time. Next, we'll hear from Ravi Shanker of Morgan Stanley.

Ravi Shanker (Managing Director)

Thanks, morning, guys. Just to follow up on the Northeast comments, I mean, as soon as the last quarter you announced, how have your customers reacted to this? I mean, are they saying, "We can't wait until you guys get up and running because we could use another player here?" Or, do you think it might be a little harder to break in?

Rick O'Dell (CEO)

You know, I guess it's never easy. The magnitude of success we have will kind of depend on kind of our core execution. But yeah, we're receiving a lot of positive feedback from our customer base about it. I think we'll be successful and, you know, historically, when we've gone into expanded markets, whether it was kind of organic or through acquisition, we subsequently, you know, went to market with cross sales to our existing geography, and we tend to kind of gain share at a rate of about 1% per year. So we've modeled this as a little bit less than that, and I think what you'll see is we'll probably have more success selling from our existing customers into that geography on the inbound side to start with.

You know, where you got some, you know, some of the players up there don't, you know, may not know us, or customers may not know us, and it'll take a little more time to kind of get the outbound. But we expect to, you know, have kind of similar success to what we've had in the past.

Ravi Shanker (Managing Director)

Got it. That's fair. And another big picture question. The school of thought out there that during times of weak freight, customers move from prioritizing service to prioritizing price and kind of flip back when things get better. I'm wondering if you guys have seen that, too, especially in 2016.

Rick O'Dell (CEO)

Yeah, I don't. You know, to me, it's kind of, it's all- that's a lot customer specific, you know? So, I think your example is fair. Like, if you look at some of the oil field companies that have done huge layoffs and are way down, you know, it's more difficult to get pricing from those players at this point in time. Whereas, you know, in some other markets, you know, that like the West Coast, where, you know, the market's pretty good out there, then, you know, we're having more success raising rates in certain geographies and industries.

Ravi Shanker (Managing Director)

Great. Thank you.

Operator (participant)

At this time, there are no further questions. I would like to turn the conference back over to Rick O'Dell for any additional or closing comments.

Rick O'Dell (CEO)

All right. Thank you for your continued interest in Saia. We appreciate it.

Operator (participant)

That does conclude today's conference. Thank you all for your participation. You may now disconnect.