Knight-Swift Transportation Holdings Inc.

Good afternoon. My name is Ina, and I'll be your conference operator today. At this time, I would like to welcome everyone to the LightSwift Transportation Fourth Quarter 2023 Earnings Call. All lines have been placed on mute to prevent any background noise. If at any time during this call require immediate assistance, please press star zero for the operator. Speakers for today's call will be Dave Jackson, President and CEO, and Adam Miller, CFO. Mr. Miller, the meeting is now yours. Thank you.

Thank you, Ina. And good afternoon, everyone. And thank you for joining our fourth quarter 2023 earnings call. Today, we plan to discuss topics related to the results of the quarter and update on current market conditions and our earnings guidance. We have slides to accompany this call, which are posted on our investor website. Our call is scheduled to last one hour. And following our commentary, we will answer questions related to these topics. In order to get to as many participants as possible, we limit the questions to one per participant. And if you have a second question, please feel free to get back in the queue. We will answer as many questions as time allows. If you're not able to get to your question due to time restrictions, you may call 602-606-6349. So to begin, I'll first refer you to the disclosures on slide two of the presentation and note the following. This conference call and presentation may contain forward-looking statements made by the company that involve risks, assumptions, and uncertainties that are difficult to predict. Investors are directed to the information contained in item 1A, Risk Factors, or part one of the company's annual report on Form 10-K filed with the United States SEC for a discussion of the risks that may affect the company's future operating results. Actual results may differ. Now I'll turn the call over to Dave Jackson for our overview on slide three.

Thank you, Adam, and good afternoon, good evening, everyone. The charts on slide three compare our consolidated fourth quarter revenue and earnings results on a year-over-year basis. Market conditions in the LTL business were strong, while soft demand continues in the truckload space. Revenue, excluding fuel surcharge, increased 11.6%, while our adjusted operating income declined by 78.6%. Gap earnings per diluted share for the fourth quarter of 2023 was a loss of $0.07, and our adjusted EPS was $0.09 per share. These results include a $71.7 million operating loss in our third-party insurance business. We've decided to exit, as we will discuss later on the call. the insurance loss negatively impacted our adjusted EPS by 30 cents. Excluding the loss on the insurance business, our adjusted EPS would have been 39 cents per share. Our results were also negatively impacted on a year-over-year basis by a $17.8 million increase in net interest expense, approximately 8 cents per share. Now on to the next slide. Slide 4 illustrates the revenue and adjusted operating income for each of our segments. Truckload freight demand saw a modest seasonal lift in November before slowing more than anticipated in December. The seasonal lift in November was not enough to offset the productivity disruption we typically experience during the holidays. This not only impacted our truckload business, but logistics and intermodal as well. Freight demand in LTL was strong and led to an 11.9% increase in shipments per day in the quarter. U.S. Express made further progress and achieved positive adjusted operating income in each month of the quarter as revenue and cost per mile both improved over the third quarter. Our existing logistics business navigated significant declines in volume and revenue per load year over year to maintain a low 90s adjusted operating ratio And U.S. Express Logistics continues to close the gap, posting an adjusted operating ratio that was only 150 basis points behind our existing logistics business. I will now turn it to Adam to discuss each segment's operating performance, starting with truckload on slide five.