Q2 2021 Covenant Logistics Group Inc Earnings Call
Thank you all for joining today's conference will begin in just a few moments. Please remain on the line again. Thank you for joining today's conference will begin in just a few moments.
[music].
Excuse me everyone. We now have all of our speakers in conference. Please be aware that each of your line is in a listen only mode. At the conclusion of today's presentation. We will open the floor for questions instructions for asking questions will be given at that time I would now like to turn the conference over to Joey Hogan. Please go ahead.
Thanks, Olivia welcome to Covenant logistics groups second quarter Conference call. As a reminder, everyone. On this conference call will contain forward looking statements within the meeting of <unk>.
But securities legislation political litigation Reform Act that 295.
Forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward looking statements. Please review, our disclosures and our filings with the FCC, including without limitation the risk factors section in our most recent form 10-K, and our current year form 10, Qs we undertake no.
Jason to publicly update or revise any forward looking statements to reflect subsequent events or circumstances.
Copy of our prepared comments and additional financial information is available on our new website at Www Covenant logistics Dot com in the investors section on.
I'm joined this morning are Bob Hull up on our senior Executive Vice President and Chief Operating Officer trip Grant, our Chief Accounting Officer.
Chairman and CEO, David Parker is a sick today and it's all on the phone, but won't be participating on the call.
First of all.
We will start with an adjusted EPS perspective, we reported our best quarter in our history.
And the team was able to improve on our record first quarter results by 71% to 96 cents per share and significantly versus the difficult second quarter of 2020.
As we discussed in the first quarter, the multiyear transformation into a full service logistics provider.
We began in 2015 is really.
Starting to gain traction.
Second I'd like to take a moment and thank our teammates.
For their contribution to these results.
It's been our most difficult period.
Especially the last year 18 months for everybody in the industry not only our company and I'm very proud to participate in this industry and I think our teammates the industry as a whole.
Performed exceptionally all things considered to keep the economy moving.
And to continue to work hard and supply chain. So we wanted to say thank you to our teammates who are participating on this call.
In summary.
The key highlights of the quarter or our operating freight revenue grew 29% to 232 million compared to the 2020 quarter.
Second our asset based truckload group revenue grew 9% versus the second quarter of 2020 with 369 less trucks.
Are less asset intensive managed freight and warehouse segments grew a combined 89% compared to the second quarter of 2020.
On the safety side, despite rising casualty insurance premiums, we produced another solid quarter.
D O T accidents per mile being 7% below the year ago period, and our total cost down on approximately 3 sets of <unk>.
After a strong first quarter, our tail leasing company investment produced another good quarter contributing an additional 12 cents per share versus the year ago period.
And then lastly, we're able to continue to capitalize on strong cash flows by reducing our net indebtedness of about $35.2 million since the first quarter. This year.
Regarding the business units.
To make a few comments first of all the expedited Division continues its strong performance in the second quarter.
The freight market continues to offer a strong freight market continues to be strong and offers right in line improvement opportunities.
Evidenced by 43% improvement in revenue per truck per week.
Recall that last year, we still had our solar division and the closure of that unit contributed to the 342 reduction in this unit.
The result of mix change is producing some big swings in comparisons, but nevertheless, an outstanding quarter with an 86 of war.
Versus a very weak freight market last year during the second quarter revenue per mile for expedited increased 10%.
Despite the length of haul increasing 31% and miles per truck increased large 31%.
The driver market continues to be a challenge with us instituting a second large driver pay increase in July of this year.
Our overall team count has remained flat versus the first quarter of 'twenty 'twenty 1.
For the future we are working diligently to solidify long term capacity commitments with key expedited customers switched to date, we are very pleased with the results.
Our dedicated division made progress on the second quarter we.
We discussed at length during the first quarter call on improvement plan and we're slightly ahead of that schedule.
There were huge growth in this division throughout 2020, as we merged 3 separate dedicated fleets under common leadership and operating system.
The leadership structure has been resolved in the system merger was complete and May.
Revenue per truck is beginning to move nicely up 10% sequentially versus the first quarter and 17% versus the second quarter of 2020.
All day is giving us great confidence toward reaching our mid to high <unk> or target for the third quarter.
The third quarter includes the results of a lot from the second quarter.
Clues are the results of a lot of execution changes with key customers and we're extremely appreciative of the hard work of our dedicated and equipment management teams as we work through this quarter.
The new business pipeline growth with existing AR targeted accounts is very encouraging which further feeds our optimism regarding our improvement plan.
Our managed freight division doubled its revenue base versus year ago, primarily driven by increases in some of our larger Tms customers and by significant growth in our brokerage freight.
This unit works very closely with our expedited and dedicated divisions, providing both committed and overflow and project capacity.
The robust freight market plus continuing to capitalize on the full enterprise sales and service capabilities excite us as we continue to drive this strategic growth unit.
We are cautious about the long term sustainability of the top line revenue and operating ratio on this unit as gross margins and ball and volumes can be volatile.
The Division leadership team is working diligently with current customers just currently satisfy their needs but also.
Help provide long term stability for this business unit.
Nevertheless, even at lower margins the return on capital is extremely high for this non asset based business.
The warehousing division continues its solid profitable growth we.
We had 1 large startup last year on the second half that is affecting the first test results with revenue being up 33% versus the second quarter of last year.
As a reminder, around the current revenue size the growth from Michigan. It can be choppy as we expect revenue growth versus year ago to level out in the second half unless we have an additional startups in the second half.
We do have a small start up planned early this fall.
Overall, we're very pleased with the direction of this unit and May invest more in this unit in both sales and operations to facilitate faster growth in this high return on assets sort of us.
Regarding our outlook for the recipe here.
Although we're not providing specific earnings guidance, we expect to have a very strong second half of 'twenty, 'twenty, 1 which should.
I mean meaningful improvement over a good second half of 'twenty 'twenty.
And likely continued generation of discretionary cash flow.
It can be allocated across the broad range of growth debt pay down and stockholder return alternatives.
We intend to remain acutely focused on 3 main areas number 1.
Upgrade and improve our dedicated division number 2.
Stabilized and diversify within our managed freight division number 3.
Staying ability on long term capacity plans within our expedited business unit.
We believe all have good accountable plans with each liter changed leadership team focused on results.
Achievement of each of these though will greatly benefit our goal of driving a stronger and more profitable and more predictable business with the opportunity of significant and sustained value creation.
Olivia that's all our prepared comments and now we'll open it up for questions.
At this time, we will open the floor for questions.
He would like to ask a question. Please press star followed by 1 on your telephone keypad questions will be taken in the order in which they are received.
Any time you with like term is yourself on the question on Q Press Star 2.
Again to ask a question press star 1 now.
Okay.
Our first question comes from Jack Atkins with Stephens. Please go ahead.
Okay, great Congrats on a on a great quarter, guys and good morning.
Thanks, Joe Joe on it.
I guess.
Joey going back to your comment on on your outlook and I'm not trying to put you on too much of a spot here. So just bear with me for a minute, but you're on.
Your comment was you expect on a really strong.
Second half of this year relative to last year.
Would you anticipate that that your your results on the second half of this year would be above.
Maybe what you earned in the first half of this year. We're just I'm just trying to get a feel for.
For that just just so everyone can kind of get on the same page in terms of how you guys are thinking about the business.
As we go into the last 6 months of the year and I guess more broadly if you want to kind of add on to that sort of what you're hearing from your customers around peak season, and how how you how you think back on trend this year.
Yeah, Jack I think it's let's start with Pete because I think it impacts some of the answer to the first part of your question.
The peak is it as you all have looked back on let's say over the last 3 or 4 years. Our peak revenue continues to slowly draw. We had 1 year was a pretty big move down.
And that's been intentional as we've kind of dropped back and looked at the overall impact of our capacity plan talent management plan.
Overhang into the first quarter, it's heavy.
It's an opportunity to make some money, but it it's it's it's stressful, let's say it that way on our our management team and you know we're running a business for 52 weeks a year not 6.
And so on.
So as we've talked through that and work through that for years and years and years and been a very appreciative of what we've had we just felt that the the commitment to that and the price you that needs to be even higher so as we lose that hire our volume is it's been slowly decreasing.
Effectively now we're down to 1 key customer that we support on a peak.
Pretty much the capacity commitment has already been made it's going to be less than it was last year, but pricing is higher than it was last year. So you've got a volume.
We will be down on last year, we did probably 15 to 18 million on Wanna say in peak volume in the fourth quarter of last year on a quarter that we're going to do.
200 <unk>.
You know, let's say this year, we did $250 million. So the impact end of the quarter for the fourth quarter is continuing to drop as the business transforms and as we strategically manage it differently. So that's it.
As we look at second half again, we're not giving specific guidance. Thank you for giving me that qualifier.
Your question was do we expect second half to be better than the first half from an earnings standpoint, I would say in <unk>, yes. So.
You know, we we expect to have a good second half of the year.
Okay, that's that's super encouraging to hear and I guess, maybe.
Following up on that and thinking more longer term here you know Joe you guys may have made some comments in your prepared remarks around what youre, what youre doing to.
Not only structurally improve the profitability of the business, we've been seeing those actions over the last 18 months, but but you know in a lot of ways add some sustainability and durability to the strength of the business that we've been seeing this year.
Could you talk a little bit about you know the the efforts that you and your team are taking to tip.
It really kind of lock in and to the extent that you can.
Some of the business that that's come your way this year as you think forward to maybe my time on the freight cycle, that's not as favorable for for covenant.
Hey, Jack This is Paul How're, you doing I'm doing great good to hear you.
Good to talk to you yeah.
You know, we're entering into I would say longer term partnerships with a number of customers with the goal of.
Reducing the ebbs and flows on the volatility in the future really focus on a lot of that on the expedited side, but also on the brokerage side managed freight side, we're doing that with some customers where you know the goal is to probably give up a little bit of margin now but lockean.
More volume you know over the longer term and so you know both of those segments managed freight and expedite or ones that are as you can see doing incredibly well and and so what we're trying to do is make deals where we can minimize volatility in the future where you know it.
Whether its notice periods, whether it's assets for many months, whether it's you know.
Rising commitments or how we're going to agree to price increases or decreases what customers. What we're finding is as a number of of our longer term customers.
Really want to take this opportunity to.
Make sure they have access to capacity.
And and and it's takes on a variety of forms we're being flexible to the needs of each of those shippers and and so we think the the ones we've structured deals with thus far it's it's good for them and good for us.
Okay, that's great to hear Paul and thank you for that for that answer I guess last question from me and I'll turn it over but you.
The balance sheet has come a long way over the last the last couple of years because of the actions that you guys have taken and the higher higher level.
The level of earnings over the last you know year and a half I guess, how are you thinking about cash flow in the second half of this year and then how do you plan on deploying that cash.
Been reducing debt, which I think is great.
But a long term multiple of the company, but you know how.
How are you thinking about maybe buying back stock from here or what's the right debt level for the company as we move forward.
So I you know Janet this trip hope you're doing good.
You know I think we made tremendous progress in the first half of the year with a pay down of a lot of debt.
I think youre going to see cash flow soften in the second half of the years, we bought some new equipment EBITA is still going to be strong.
You're probably going to see free cash flow in the neighborhood of $30 million to $40 million for the rest of the year.
And then in terms of you know debt pay down I think we will continue to pay down some debt, but we're also evaluating a number of alternatives on how we're what we're going to do with that cash flow. So I can't say that it's gonna go all to reduce debt, but you know our mindset right now is to reduce debt as we can.
Get that cash flow and evaluate those options as they are as they materialize.
I mean, Jack I would add to trips comment.
There's no stated goal to be debt free by blank. So we don't have that.
Number 1 number 2.
On the M&A market is very hot we all know that and.
Really excited about some of the things have been done on our last few months. This morning. I mean, you had said it's a it's an exciting time.
And acquisitions have been a part of our history.
At the right time brought now, though as it relates to M&A, but for somebody asked the question.
It's not high on our list right now we feel that there's too much earnings opportunity inside of our existing portfolio.
For the long term with much less risk.
And so we're going to stay focused on that at least through the first half of next year, but kind of what would move that is around the 3 things that pulp well to the things that Paul talked about I'll tell you a third 1 you know get dedicated in the low nineties and then on how are we able to execute this kind of long term.
Inability capacity plan with some key customers and and managed freight and expedite it if we do well on all of those 3 I think you'll see us start to explore.
You know some some growth opportunities at the top line, but I agree 100% with what trips it as far as capital structure, you know, where where we're looking at a lot of things right now yeah, there's been.
A tremendous amount on a week.
Talked about this on previous calls, but there has been a tremendous amount of change and reorganization and offer the betterment in all for the development of our strategic plan and then you know when you think about an acquisition we would be very very picky about an acquisition. It would have to be the exact right thing for us and fit into our strategic plans.
Again, 100% committed to the strategic plan and again also focusing the current business.
On you know where are we going to be in the down trough, where are we going to be when the cycle turns. So we want to make sure that they work in the best possible financial position for when the cycle lands.
All of that makes a ton of sense and I really appreciate the thoughtful response take care guys. Thanks Jack.
Thank you next we go to Scott Group with Wolfe Research. Please go ahead.
Hey, Thanks morning, guys, Hey, Scott Good morning, Scott Good morning.
Can you just share some thoughts for each of the businesses, just directionally, where what you'd expect from margins in back half of the year.
Okay.
Oh, Yeah, Hi, Scott how are you doing be careful about guidance Big Oh.
Expedite it I would say Scott.
Should continue and probably along the same path that it's been on for the first for the first half of the year.
There could be some incremental improvement, but I, probably got more near where we were with me on managed fright.
As long as this.
Freight market stays as hard as hard as it is I think you're going to continue to see about what you've been saying.
If the fright market cools down then you're going to see some some volume and margin reduction in that business warehousing, I think youre going to see probably about what you've been saying.
And then the.
The 1 I know you won't hear about dedicated and I think you're going to continue to see incremental improvement.
From Q2 to Q3 and from Q3 to Q4 on the dedicated side. It's you know.
Getting this thing from running on.
100 on <unk>, if you think about it the last half of last year in the first quarter of this year to the low Ninety's, which is where we're guiding long time on dedicated it's it's taken some time, but there's a plan and and the plan is working and you should see improvement quarter over quarter from the <unk>.
Most of the year.
Let me add on a couple of comments from from Paul on the dedicated cause he made a good point there that's.
I was talking to somebody about it last night, you know dedicated as a strategic business unit. It helps the volatility for our our.
Earnings flow.
It provides an incredible complement from a driver standpoint as far as options to our expedited team members when they're tired of teaming and it just gets its a nice compliment in a lot of different ways and so 16 on your truck fleet in dedicated is a good size our dedicated operations.
So 1 of the things that about it that we really like is stability consistency.
Consistency.
All of that well when it gets into you know a changing time, if you will it's not as quick to move as the OTR side I expedited a regional it's just not as quick to note, we're choosing not to quickest move we could but we're taking a very long term strategic approach.
Industry geography, because we have contracts and so we're working very closely with our customers with our operations team to be as I said very strategic and practical long term focus because we're not I would call. It in a desperation mode. The overall enterprise is performing well so were taken out.
Long term approach.
2.2 addressing dedicated and in that way.
Other thing I would kind of point to backup and managed freight.
There's no question that men are for merch fried is performing exceptionally well.
Cited to see some of our competitors and their logistics groups posting some very strong margins are maybe closer to where we are in.
And that unit, though it just remember a N a slowing freight market a lot of the let's say the brokerage pieces of your managed freight your margins will expand.
So your margins will expand.
Yeah.
Some of the business inside of that is up to twice a day right now we're losing money.
Again, we're taking a very long term strategic approach.
2 those type customers some of them are kind of contractual so as things as things slow whenever that is when everybody's crystal ball says that is those margins will expand net.
There's some in there that are very spotty very project. If you will that's the group that when we're talking about trying to take a very long term capacity plan approach.
With those customers, yes. The margin is good right now on those but we're working on a Taylor I mean, we've got incredible amount of work and time, both on sourcing planning to make that happen and those customers. We're working hard with those customers to make sure that we're satisfying their needs com, while trying to take a long term approach with that.
And let's say solidify a longer term view of that business. So I just wanna comment around that some of that managed freight extra the margin will get better some will probably a road back closer to market.
But then in our dedicated side, we're just taking a very long term strategic view with that business unit as we improve it.
Yeah.
That's helpful. So I guess that leads me to my other question. So maybe this is a tough on but if we think next year is that year, where things start to slow and I'm, not saying recession or anything just not as sort of hard as as it is right now and maybe theres, a little less expedite a little less spot, but to your point dedicated getting better.
Maybe some of the contractual brokerage getting better is it.
That environment, whether you think you can grow earnings next year.
Yeah.
Yeah, Scott I think that's the Chris that's the I think the big question right now.
[laughter].
If you look here's the way I would say at the enterprise has some gas left in the tank Theres No question and I'm on about that and there are several things I would point to.
Now probably as you see it in the financials, let's say, our our our safety program at all in total AR is performing well.
I think too as you think about the transformation, we're kind of and I would say, it's second base relative to what I'll call. The internal financial management system of that I mean, we havent rock all the way around the whole plate yet.
And absorbing a new system.
We got 6 to 800 trucks with Smushed from 4 systems down into 1 I mean, where where just the momentum with the internal energy and the inertia of making change in absorbing and understanding and going that's it's improving month to month I think that the dedicated.
The pipeline's good on dedicated.
But the driver market is extremely difficult extremely difficult.
And this is my 25th year I've never seen it like this before ever.
Never seen it like this I've never seen the market like this before and so.
To have a market that we've never seen before in my opinion that we've ever seen before the natural side to him a night yourself for all of US is when does it go on and what we know what's going on slope. So is it you know I have an opinion.
I don't play so I'm not trying to make is political phone call you got mid terms come in next year.
My gut says we're going to continue to do what we can do to keep things moving with it.
You know at all because I think that that's a that's an important piece to the quote economic question.
So if that's correct.
On our own internal planning has this kind of business as usual at least through the first half.
Possibly starting to moderate maybe in the second half yeah.
So that say I put all that in the Hopper Julian answer My question. He just asked around universe trying to answer my question, we feel really good about what next year could do is it gonna grow over this year.
I think it's too early to say that right now all things considered.
Yes, Scott. This is Paul 1 thing I would say is I would say, we're probably more focused not on weather earnings were up on earnings are down next year, it's more on.
Keep in proven that wall watermark, and you've been around covenant on a long time and depending on all the people on the phone have if you go back to you know kind of 2010 and 11 the whole watermark was break even if you go back to kind of the mid part of the teens. The low watermark was 50.60 cents a share if you go back to last year the low watermark.
It's about a dollar a share we are intently focused on increasing that little watermark win when things are solved and I think that you know, we're still modeling that out and but the low watermark is significantly above where it's been in the past.
Yeah, I think that's a really good point.
If I can just ask 1 more you mentioned it and you referenced it but what are your thoughts on nuber afraid acquiring trans place and just big picture either for you or supply chain broadly you know what if anything you think this means.
Oh God I hadn't had a lot of time at definitely grab my attention I'll still wish we on 10% of transplants, you know, but we don't.
That's not the 10 plus years ago.
Uh huh.
It's definitely.
I'm not going to comment I just.
I think trashed place has done a lot of neat things over the years a very.
Obviously intimate knowledge, all albeit David about.
What what the mission was and so I'm excited.
For the leadership team.
And as far as the impacts of all of that I know Uber seems to have anyway, I better be quiet they've seemed to have taken a few sidesteps over the last couple of years. So this is obviously a big statement. So that's about all I'll say.
Alright, thanks for the time guys I appreciate it thank you Scott.
Thank you. Our next question is coming from birth, Stephen <unk> with Stifel. Please go ahead.
Hey, guys. Good morning, congrats on the solid quarter.
On a bert.
Hey, guys, if it's not.
Really I'm just sort of following up to those comments, if nothing's really changing on the driver side.
It seems like it potentially getting harder in certain pockets you know within your segments. Why do you think things will necessarily worse than on the rate side is that just a function of you been they've been through this before and you know when things get those hot they tend to roll over at some point as access the way Youre looking at it.
Yeah, Hi, Parker Paul.
Here's what I'd tell you you are right in the index.
The driver situation is no better in July than it was in my <unk>.
The equipment situations no better in July than it wasn't in May or June I.
I could argue with.
She might be worse, you know truck long term trucks down on shocks whiting on parts and all kinds of stuff and so.
Here's what I would say to that on the.
Rest of the year.
What do you see it being real similar to what we've seen in the last few months.
Look into next year.
Here's my view on it but historically there has been kind of 1 big.
Variable in the equation and that's been freight volumes in the economy and geopolitical drivers had been on a piece of that but it's you know these cycles that move based on freight volumes in the economy now you've got 3 different variables in the equation.
You've got drivers equipment and the economy.
And so everybody on you know we got 3 Crystal ball is not just 1 and so on the equipment saw on everything we're hearing is it's a year before this equipment cycle.
Sure G ups and labor in the shops and I mean.
Everything we're here, it's a year you can't get it you know you can't get into your trial or you can't get any trials do you think at least 1 you can't rent..1 you can't you know you can give them all yet, but all you can do and so that say with.
Quit my thing you can probably put some boundaries on let's say a protective about a year to get straightened out.
Travelers from flight or the 2 that are out there that those are the wildcards and to your point.
Yeah, I don't think you hear us, saying, we're projecting rates to come to come down where where you know I think I think we're projecting things. Despite high you know day volume start dropping off at some point next year.
It's a you know it's a next year kind of thing from from where we're sitting right now if if man, but it's so far out who knows.
Okay Yeah.
You've got to have 3 crystal balls, but nobody says rights are going down anytime in the near term.
Okay. Yeah I appreciate the thoughts are just just 1 quick follow up on that and then I got 1 more of them on you talked about you know the equipment side.
What do you see as the path forward for you guys on the tractor side. If you now standing at this point at the end of 'twenty 2.
Your larger or smaller than you are today.
Oh, sorry.
But sorry, I mean, and and here's the deal that's more a function of the drive a crystal ball when it is the equivalent Crystal ball, we will we have to get equipment. You know at some point next year. It's you know where you may have to get a good driver to put into sales.
Yep.
Okay or coal our plan is if we can find drivers where we are.
If dedicated gets into the low ninety's closer to 90, we consider girl on with the right customer you know the right industry either on geography. So yes, expedited is doing exceptionally well rocketing towards it goal kind of mid eighties on a sustainable basis.
Getting close and so as they get closer to that target again, assuming we can put 2 people on the truck.
Together with the REIT industry, the right long term capacity commitment we can split without also so but it all comes back to not only overall profitability of the unit, but also getting get somebody willing to handle that job.
Got it yet and that makes that makes sense. Just just 1 last quick 1 if you don't mind still affordable on the theoretical side.
I mean, when you guys look over the next 6 months you know clearly a lot of things going on you've got dedicated moving you've had managed freight you know clearly outperforming.
You stand here today now what do you guys get excited about in the second half and maybe what what what do you think are potential headwinds something you know outside of freight demand suddenly dropping off what are the things we're looking at work.
Yeah.
I would say that.
Driver availability on equipment are are probably the headwinds.
Equipment downtime parts service shops, but if those things continue to stay in place it's going to continue to be a very you know we're not going on with people in the world experiencing those problems and so it's just gone on its it those are just going to extend the cycle that's right because it's going to keep capacity down writes up.
So those are headwinds in the short term, but their cycle extenders on though in the long term.
I'd add 1 you know we disclose this back in the first quarter when we renewed our enchant somebody just for because we disclose it but.
You know, we do have a 3 million dollar deductible now yeah, we can be doing a lot of things great our incident rate could be great.
L T actually it could be bright we have 1 bad 1 and it's just it's just really tough on that happens, but you know that's a lot of earnings that can happen you know all of a sudden I would say but.
Staying focused on reducing your accident rates and make sure your compliance programs, where it needs to pay all of those things, but the critical thing is because we are in our industry that when you have a bad accident. It it gets costly.
You know what am I excited about I mean, I'm just excited about the transformation.
And what I mean by that is as I mentioned, it a little earlier, but the only way you could be here and watch it but it's it's the energy and the momentum of a distributed decision making.
Our management team.
Not all 1 or 2 people, making all the calls and so the teams as time goes by the confidence the speed is the decision the information.
<unk> is getting faster and faster and faster and as well as more strategic more strategic more strategic because when you're on the dish you Gotta do you Gotta go fast and sometimes you're just you're pulling on all kinds of levers just to have to get out of the ditch, but you've been on in the ditch here in the middle of the road and you're right on down. The road you can look really far down and you can really be.
Our strategic about what you're trying to do and so that that's to me from an old Guy it's been here a while I'm on I'm most excited about.
I'd add a little bit to that as the new Guy who's been here for a few years you know looking back at last year and all of the things that we did that.
Barack trucks and payer trucks and I mean, we were just using.
Everything we could do to get it to where we need to be from an operating model perspective, and now I think we're being more strategic and the changes and are laser focused on those items that we're making and we're seeing the improvements hit the bottom line, whereas last year, we were making substantial improvements for the long term.
They were negatively impacting the bottom line. So we've made a lot of progress on our plan and the excitement of the theme that's involved with and are participating in and have transitioned into good results from an earnings perspective, and I'm excited about the upside in dedicated and.
And I think you know for the rest of the business I think it's gonna be a great year, and we're going to continue to focus on our plan and and.
Get it where it needs to be.
Thanks for the time.
Thanks for a nice growth.
Once again, if you would like to ask a question press star 1.
Our next question comes from Jason Seidl with Cowen. Please go ahead.
Hey, Thanks, Operator, Hey, guys. Good morning, I only have 1 here are it's probably a little bit for trip trip you talked a little bit about uses of cash going forward, but you know sort of given the outlook that you provided was that the second half was going to be better than the first half that puts you guys above the $3 a share mark so.
Given that the stock hasn't moved probably quite nearly as much as a true today at least in my opinion would you guys be would you say you were going to be active buyers of your stocks around these levels. Once you get out on the blackout period.
I'd say, we're evaluating evaluating that as a potential as a potential opportunity for us to deploy that cash.
Here's the way that I'm not point to that's all public we had a share repurchase program back in the winter.
We had in the mouth that was approved and disclosed Ah we executed part of that program are and then an expired and so.
That's a fact.
And so that's first and then second.
We feel better today about where we're heading there maybe we did back in the winter.
So I think that.
It's an exciting time and opportunity to know how you look at it.
Got you all read those 2 news well I appreciate the time gentlemen.
Thanks, Jason.
Thank you and gentlemen at this time there are no additional questions. Thank you.
Linear we appreciate your help and thanks, everybody for joining us on the call. If you got any questions. Please don't hesitate to reach out to trip on myself, Paul or David and I will talk to you next quarter. Thanks a lot.
Thank you.
Thank you ladies and gentlemen. This concludes today's teleconference. You may now disconnect.
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Yeah.