Schneider National, Inc.

Greetings and welcome to Schneider National Incorporated first quarter 2023 earnings conference call. At this time, all participants are on a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference to your host, Mr. Steve Bendis. Thank you. You may begin.

Thank you, Operator, and good morning, everyone. Joining me on the call today are Mark Lark, President and Chief Executive Officer, Steve Bruffet, Executive Vice President and Chief Financial Officer, and Jim Filter, Executive Vice President and Group President of Transportation and Logistics. Earlier today, the company issued an earnings press release. This release and an investor presentation are available on the investor relations section of our website at Schneider.com. Our call will include remarks about future expectations, forecasts, plans, and prospects for Schneider. These constitute forward-looking statements for the purposes of the safe harbor provisions under applicable federal securities laws. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from current expectations. The company urges investors to review the risks and uncertainties discussed in our SEC filings including but not limited to our most recent annual report on Form 10-K and those risks identified in today's earnings release. All forward-looking statements are made as of the date of this call, and Schneider disclaims any duty to update such statements except as required by law. In addition, pursuant to Regulation G, a reconciliation of any non-GAAP financial measures referenced during today's call can be found in our earnings release and investor presentation. which includes reconciliations to the most directly comparable gap measures. Now I'd like to turn the call over to our CFO, Steve Bruffet.

Thank you, Steve, and welcome to each of you. I'll begin with a financial recap of our first quarter results, and then Mark will provide his insights on the start to the year and what we see ahead of us across the remainder of 2023. I'll return to comment on our full year 2023 guidance, and then we'll open up the call for your questions. As usual, we will endeavor to get to as many of you as possible in the allotted time. Our refreshed investor presentation is available for your reference and can be found on our website. Slides 21 through 26 are specific to our first quarter results and our full year guidance. Our first quarter revenues, excluding fuel, were down $205 million to $1.25 billion. $164 million, or 80% of the decline, was in our logistics segment. And it's important to note that their purchase transportation cost decreased in proportion. And that's the primary reason that our consolidated purchase transportation costs were down $177 million year over year. Regarding our quarterly earnings, we obviously had a tough year-over-year comparison as last year was our most profitable first quarter in company history with adjusted operating earnings of $148 million. Contrast that with the challenging freight market conditions of this year's first quarter, which were characterized by soft volumes, the absence of month-end surges, and increasing pricing pressures. Given that context, Our first quarter 2023 operating earnings of $115 million represented solid performance and our second best first quarter. Inherent in our results are some of the benefits of the portfolio restructuring we have strategically pursued and invested in over the past couple of years. Adjusted diluted earnings per share for the first quarter was $0.55, compared to $0.57 in the first quarter of 2022. As noted in our earnings release, our results included a $0.07 equity gain related to our strategic investments. When looking at the line items of our income statement, please note that last year's first quarter included a few sizable non-GAAP items that at first glance can create odd-looking year-over-year comparisons. The first item is the $51 million net property gain, which reduced the operating supplies and expenses line, and the other items were legal settlements totaling $64 million, most of which flowed through the other general expenses line. Regarding our cash flows and net capex in particular, Equipment deliveries have been much closer to being on schedule this year than they have been for the past couple of years. As such, our first quarter net CapEx is in line with our expectations, and we expect that to continue throughout the rest of the year. In addition, we announced our $150 million share repurchase authorization earlier this year. We now have established the program and expect repurchase activity to begin in the second quarter. And I will now hand it over to Mark for his comments.