Old Dominion Freight Line, Inc.

Good morning and welcome to the Old Dominion second quarter 2021 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Drew Anderson. Please go ahead.

Thank you. Good morning and welcome to the second quarter 2021 conference call for Old Dominion Freight Line. Today's call is being recorded and will be available for replay beginning today and through August 4th, 2021 by dialing 877-344-7000. 7529, access code 10158075. The replay of the webcast may also be accessed for 30 days at the company's website. 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 Old Dominion's expected financial and operating performance. For this purpose, any statements made during this call that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words 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 that are set forth in Old Dominion's filings with the Securities and Exchange Commission and in this morning's news release. And consequently, actual operations and results may differ materially from the results discussed in the forward-looking statement. The company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise. As a final note, before we begin, We welcome your questions today, but we do ask, in fairness to all, that you limit yourselves to just a couple of questions at a time before returning to the queue. Thank you for your cooperation. At this time, for opening remarks, I would like to turn the conference over to the company's President and Chief Executive Officer, Mr. Greg Gant. Please go ahead, sir.

Thank you. Good morning, and welcome to our second quarter conference call. With me on the call today is Adam Satterfield, our CFO. After some brief remarks, we'll be glad to take your questions. The OD team produced another record-breaking quarter and established new company records for quarterly revenue, operating ratio, and earnings per deleted share. While the comparison of our numbers with the second quarter of 2020 is somewhat skewed due to the impact of the pandemic-related shutdowns last year, Our second quarter business momentum this year helped drive the improvement in our revenue and profitability. Our revenue grew 47.2% to 1.3 billion, and our operating ratio improved 550 basis points to 72.3%. As a result, our earnings per diluted share grew 84.8% to $2.31. We achieved these results by continuing to execute on our long-term strategic plan. This plan has guided us through many economic cycles, and it is currently driving impressive growth in this strong market. Two key elements of this plan are delivering superior service at a fair price and consistently investing in capacity to help ensure that our network is never a limiting factor to our growth. discuss our unwavering commitment to providing our customers with superior service. This quarter, I would like to offer a deeper dive into how we think about capacity, given its relevance to the current environment. There are three major elements of capacity within LTL. Doors at our service centers, our equipment, and our people. Doors can be the most limiting form of capacity in the short term. which is why we try to stay several years ahead of our anticipated growth curve. We have invested $1.7 billion in our service center network over the past 10 years, which has allowed us to expand our door count by over 50%. Our current capital expenditure plan includes $275 million to further expand the capacity of our service center network but we are willing to spend even more if we identify properties that are included in our long-term plan. Our commitment to the ongoing expansion of our service center network is important regardless of the macroeconomic environment due to the strong returns on capital for our business. We have consistently invested in Old Dominion's expansion, even in years when our market share trends have been flattish. due to the confidence we have in our long-term market share potential. Although expanding the capacity of service centers takes a significant amount of time, demand trends can change very quickly in our industry, which is why we have historically been proactive with respect to our expansion efforts. This unique strategy has created a large capacity advantage for us in the marketplace, which becomes most apparent to shippers in tight environments like this year. We estimate that we currently have 15% to 20% excess capacity within our service center network, and we expect to open several new facilities during the second half of this year. As a result, the capacity of our overall service center network is in good shape, although we continue to focus on the needs of certain locations to help ensure we are keeping up with increased opportunities for growth. We are prepared to address these needs as well as any other elements of capacity that need to be expanded. As it appears, that current demand trends will continue into 2022. We believe the domestic economy is strengthening for both our industrial and retail-related customers, and we expect additional growth in volumes based on current economic forecasts as well as customer feedback. We also continue to see accelerating trends with our revenue. We have exceeded our normal sequential trends for each quarter since the cliff event that affected the second quarter of 2020. This outperformance has continued with our month-to-date revenue for July 2021 as well. While we feel good about our service center network, we have faced challenges with the other elements of capacity this year. There have been some delays with equipment deliveries that have caused us to continue to operate older units that were intended to be replaced. We are fortunate to have this as an option due to the fact that we have one of the youngest fleets in our industry. While our suppliers are somewhat behind schedule, we do believe that we will receive each unit that we have ordered this year. These new units will supplement our current pool of equipment and are expected to satisfy our equipment needs through the second half of this year. The capacity of our people continues to be our biggest need to support ongoing growth. We were successful during the second quarter with our hiring efforts and actually exceeded our goal for the period. We added over 1,100 full-time employees between March and June. and we expect to add another 1,000 full-time employees during the third quarter of this year. We will continue to use third-party purchase transportation to supplement the capacity of our people and our fleet until those two elements of capacity catch up with the growth in our volume. Regardless of whether it is our employees and equipment or a third-party moving the freight, we remain focused on providing best-in-class service to our customers. As I previously said, providing superior service at a fair price and having capacity to stay ahead of our growth curve are two key pillars to our long-term strategic plan. The centerpiece of our plan, though, remains our people. Our OD family of employees is committed to servicing our customers while also growing our business. As a result, we believe we are better positioned than any other carrier to take advantage of the opportunity for further profitable growth and increased shareholder value over the long term. Thank you for joining us this morning, and now Adam will discuss our second quarter financial results in greater detail.