TFI International Inc.

Thank you. Bye. . . . . . . Thank you. Good day, ladies and gentlemen.

Thank you for standing by. Welcome to TFI International's first quarter 2026 earnings call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question and answer session. Callers will be limited to one question and one follow-up. Again, that's one question and not a follow-up so that we can get to as many callers as possible. Further instructions for entering the queue will be provided at that time. Please be advised that this conference call will contain statements that are forward-looking in nature and is subject to a number of risks and uncertainties that could cause actual results to differ materially. I would also like to remind everyone that this conference call is being recorded on April 27, 2026. Joining us on the call today are... Alain Bedard, Chairman, President, and Chief Executive Officer, and David Saperstein, Chief Financial Officer. I would now like to turn the call over to Mr. Alain Bedard. Please go ahead, sir.

Well, thank you for the introduction, operator, and welcome everyone to today's call. Within the past hour, we reported our quarterly results, including adjusted diluted EPS of 69 cents. This performance was driven by the tremendous efforts of our talented team members and their relentless focus on efficiency and related operating principles. Taking a step back, a longstanding part of our strategy is to maintain a rock-solid balance sheet that allows us to thoughtfully manage through the cycle. And after generating more than $800 million of free cash flow last year, which was over $10 per share, We produced another $124 million during the first quarter, which further benefited our financial position. Most importantly, this allows us to continue to our track record of strategic capital allocation, investing for the long term regardless of market conditions, while also returning excess capital to shareholders whenever possible. To that point, during the quarter, we paid out $38 million in quarterly dividends. Let's take a closer look at our first quarter financial results. Total revenue before fuel surcharge of $1.7 billion was consistent with the prior year quarter. Our consolidated operating earning of $97 million represented a 5.7% margin and our net cash from operating activity came in at $122 million. Turning to our business segment performance, I'll first mention that we have streamlined our reporting approach in our quarterly report in an effort to reduce complexity for our investors and better align with our peer practices. Therefore, I'll be primarily speaking to the overall results of each of our three segments, beginning with LTL, which represent 38% of our segmented revenue before fuel surcharge. We saw a notable improvement during the quarter as weather improved, with shipments per day in March considerably stronger than January and February, and this trend continued into April. For the first full quarter, the $656 million of revenue before fuel surcharge was down just 3% year-over-year, an improvement from the fourth quarter 10% decline. Our LTL adjusted operating ratio came in at 95.3, and total operating income of $31 million compares to $47 million one year earlier. Lastly, our return invested capital for LTL was $11.6 million, again with notable improvement through the quarter and into April. Turning to our truckload segment, the $673 million of revenue before fuel surcharge was 39% of segmented revenue and grew from $663 million in the prior year first quarter. We were able to grow by 9% our revenue per truck per week, excluding fuel surcharge, while reducing our truck count to 7% as we increase fleet productivity and shed excess equipment. In addition, we continue to see rapid sequential growth from data center construction, although this today is a small part of overall revenue. Truck load is also a segment for which our past acquisition, including Dasky, have increased our exposure to industrial truck load and markets. helping us to overcome industry fundamentals recently characterized by tariff and economic uncertainty, as well as our industry overcapacity. Our quarterly truckload operating income of $56 million was up from $49 million the prior year, and our OR was 92.7, improved by 100 basis points. Lastly, our truckload return investor capital came in at 6%. To round out our segments, logistics accounted for 23% of segmented revenue at $388 million, which was up slightly from the prior year figure of $385 million and also up 8% sequentially. Our logistics operating income of $34 million was also up year-over-year from $31 million and was up from the December quarter as well. This equates to a margin of 8.9%, which was also up both year-over-year and sequentially. Our logistics return on invested capital was 12.4. Moving on to our balance sheet, our strong financial foundation continues to benefit from our free cash flow, another $124 million during the quarter as I mentioned, and we end up month of March with our funded debt to EBITDA ratio at 2.6. Wrapping up my remarks, in terms of our updated outlook for the second quarter of 2026, we expect adjusted diluted EPS to be in the range of $1.50 to $1.60. And net capex excluding real estate for the full year, we're expecting a range of $225 million to $250 million, unchanged from previous expectation. As always, our outlook range assume no significant change, either positive or negative, in the operating environment. And with that, operator, David and I would be happy to take questions. If you could please open the lines.