Old Dominion Freight Line, Inc.

Hello and welcome to the Old Dominion Fourth Quarter Earnings Conference Call-In Webcast. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. 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 from the question queue, please press star then two. I would now like to hand the call over to Drew Anderson. Please go ahead.

Thank you. Good morning and welcome to the fourth quarter and full year 2023 conference call for Old Dominion Freight Line. Today's call is being recorded and will be available for replay beginning today and through February 7th, 2024 by dialing 1-877-344-7529, access code 2607922. 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, 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 statements. 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 ask in fairness to all that you limit yourself to just one question 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. Marty Freeman. Please go ahead, sir.

Good morning and welcome to our fourth quarter conference call. With me today is Adam Satterfield, our CFO. After some brief remarks, we will be glad to take your questions. Old Dominion's fourth quarter financial results reflect continued softness in the domestic economy. which is similar to how the economic environment felt throughout much of 2023. As a result, the rebound in volumes that we had anticipated back in the spring never fully materialized. Despite the softness in the economy and weaker than expected volumes, the OD team faithfully executed on the same long-term strategic plan that has guided us through the ups and downs of the economic cycle many times before. During the fourth quarter, our LTL tons per day decreased 2% as compared to the fourth quarter of 2022. Although our LTL shipments per day and overall market share improved, we also improved the quality of our revenue during the quarter as well, which contributed to an increase in both our quarterly revenue and earnings per diluted share for the first time in 2023. We believe that underlying demand for our LTL service remained consistent in the quarter, which corresponds to the consistency in our volume trends. The stability of our volumes also reflects our ongoing ability to deliver best-in-class value proposition. We were pleased to provide an on-time service performance of 99% and a cargo claims ratio of 0.1% during the quarter, which also supported the ongoing execution of our yield management initiatives. We have said many times before that long-term improvement in our operating ratio is dependent upon a consistent improvement in density and yield, both of which generally require the support of a positive macro environment. While our network density was challenged this year, we improved our yield by maintaining our consistent cost-based approach to our pricing. This approach focuses on improving the profitability of each customer through yield increases that are designed to offset our cost inflation and support further investments in capacity and technology. We continue to invest significantly during the 2023 as we remain confident in our ability to win market share over the long term. Our capital expenditures totaled $757.3 million for the year, of which $291.1 million was spent for the ongoing expansion of our service center network. We opened two new service centers in 2023 and have several others under construction and nearly complete that could be opened quickly once the demand environment improves. Our team knows firsthand how quickly the demand environment can change in the LTL industry, and we are very experienced at growing our company without sacrificing the quality of our service. To do so, however, requires us to maintain certain amount of excess capacity in our service center network. We are pleased to currently have approximately 30% excess capacity in our network, and we have the ability to expand it further as needed to help ensure our network is never limiting factor to our growth. While the investments in our service center network, our equipment, and our technology further improve the overall quality of our service in 2023, The best investment we made was in the OD family of employees. We improved the capabilities of our team and strengthened our unique company culture, which has defined OD for many years. Our long-term strategic plan may sound simple on the surface, but no one in our industry has been able to replicate our success because they do not have our people or our culture. Our team is fully committed to our proven business model, and as a result, we believe we are strongly positioned to respond to a positive inflection in demand once the domestic economy begins to improve. We are confident in the opportunities that lie ahead, and it is our belief our team's focus on delivering superior service at a fair price will support our ability to produce further profitable growth while increasing shareholder value. I want to thank you today for joining us this morning. And now Adam will discuss our fourth quarter financial results in greater detail.