Financial Data and Key Metrics Changes - Fourth quarter revenues totaled $738 million, down 2% year-over-year, with full-year revenues also declining by 2% [26] - Adjusted operating income was $11.3 million, and adjusted operating margin was 1.5% [26] - Adjusted EPS was $0.05, with consolidated gains on sale of property and equipment totaling $2.4 million, down from $6.5 million in the prior year [27] Business Line Data and Key Metrics Changes - Truckload transportation services revenue for the quarter was $513 million, down 3%, with revenues net of fuel surcharges also declining by 3% year-over-year [27] - Dedicated fleet revenue net of fuel was $292 million, up 1%, representing 65% of TTS trucking revenue, up from 63% a year ago [28] - One-way trucking revenue net of fuel was $156 million, a decrease of 8%, with average trucks decreasing by 10% year-over-year [30] Market Data and Key Metrics Changes - Logistics revenue was $208 million, representing 28% of total fourth quarter revenues, with revenues decreasing 3% year-over-year [34] - Intermodal revenues increased 24% almost entirely from higher volume, while final mile revenues increased 4% year-over-year [35] - The overall portfolio is increasingly more durable and resilient, improving revenue stability and enhancing the ability to produce steady revenue and earnings growth [21] Company Strategy and Development Direction - The company is focused on executing its strategy to position the business for revenue and earnings growth as demand returns, including restructuring its one-way trucking business [6][9] - The acquisition of FirstFleet is expected to enhance the company's dedicated business and provide a more scalable platform for sustainable growth [7][18] - The company aims to drive growth in core business, operational excellence, and capital efficiency as part of its strategic priorities [12][15] Management's Comments on Operating Environment and Future Outlook - Management sees signs of encouragement for the industry and expects a more positive outlook for 2026 due to ongoing capacity attrition and early signs of demand improvement [6][21] - The company acknowledges challenges in the first quarter due to significant storms and ongoing restructuring but anticipates a material inflection in earnings by Q2 [55][103] - Management remains confident in the company's strategy and execution, focusing on controlling what can be controlled to create long-term value [46] Other Important Information - The company has reduced costs by approximately $150 million over the last three years, with a focus on structural and sustainable savings [14] - The acquisition of FirstFleet was completed for a total purchase price of $282.8 million, expected to be cash flow accretive [39] - The average age of the truck and trailer fleet at the end of the fourth quarter was 2.7 and 5.6 years, respectively [44] Q&A Session Summary Question: What is the normalized earnings power expected for the company? - Management acknowledges the complexity of the current situation but sees opportunities for earnings growth in 2026, particularly from the restructuring and the acquisition of FirstFleet [50][52] Question: Can you elaborate on the one-way restructuring and its impact on rates? - Management explains that contract rate renewals have a lag effect, and the guidance reflects this. The focus is on yield and optimizing the fleet for better service outcomes [60][62] Question: What are the expected benefits from the FirstFleet acquisition? - Management anticipates $18 million in cost synergies, with a significant portion expected to be realized within 2026, leading to margin improvements [78][80] Question: How does the company view the industrial markets in 2026? - Management expresses optimism about the industrial markets, particularly in relation to the Mexico cross-border business, which is expected to perform well [95] Question: What are the expectations for Q1 margins and operating income? - Management acknowledges challenges in Q1 due to weather and restructuring but views these as temporary and expects improvements as the year progresses [102][103]

Financial Data and Key Metrics Changes - Fourth quarter revenues totaled $738 million, down 2% year-over-year, with full-year revenues also declining by 2% [19] - Adjusted operating income was $11.3 million, and adjusted operating margin was 1.5% [19] - Adjusted EPS was $0.05, with consolidated gains on sale of property and equipment totaling $2.4 million, down from $6.5 million in the prior year [19] Business Line Data and Key Metrics Changes - Truckload transportation services revenue for the quarter was $513 million, down 3%, with revenues net of fuel surcharges also declining by 3% year-over-year [19] - Dedicated fleet revenue net of fuel was $292 million, up 1%, representing 65% of TTS trucking revenue, an increase from 63% a year ago [21] - One-way trucking revenue net of fuel was $156 million, a decrease of 8%, with average trucks decreasing by 10% year-over-year [22] Market Data and Key Metrics Changes - The dedicated business continues to perform well, with a strong pipeline of opportunities and early realization of rate increases [6] - Logistics revenue was $208 million, representing 28% of total fourth quarter revenues, with intermodal revenues increasing by 24% [25] - Spot rates performed consistent with seasonal trends, with expectations for an upward trend throughout the year as capacity exits and demand improves [17] Company Strategy and Development Direction - The company is focusing on restructuring its one-way trucking business to enhance profitability and fleet utilization [24] - The acquisition of FirstFleet is expected to accelerate the shift towards higher-margin, more resilient dedicated business [14] - The company aims to drive growth in core business, operational excellence, and capital efficiency as part of its strategic priorities [10] Management's Comments on Operating Environment and Future Outlook - Management sees a more positive outlook for 2026, with signs of demand improvement and ongoing capacity attrition [4] - The restructuring actions taken are expected to result in noticeable profitability enhancements by the second quarter of 2026 [6] - Management acknowledges the challenges posed by recent storms but remains optimistic about the company's ability to adapt and grow [63] Other Important Information - The company has reduced costs by approximately $150 million over the last three years, with a focus on structural and sustainable savings [10] - The total purchase price for FirstFleet was $282.8 million, funded through a combination of cash and debt [29] - The average age of the truck and trailer fleet at the end of the fourth quarter was 2.7 and 5.6 years, respectively [32] Q&A Session Summary Question: What is the normalized earnings power expected for 2026? - Management sees opportunities for earnings growth and believes the restructuring will lead to a more agile operation, complemented by the acquisition of FirstFleet [37] Question: Can you explain the one-way restructuring and its impact on rates? - The restructuring is aimed at improving profitability and fleet utilization, with a focus on specialized services [40] Question: What is the expected impact of FirstFleet on profitability? - FirstFleet's margins are lower than the company's dedicated margins, but identified cost synergies of $18 million are expected to improve margins significantly over time [50] Question: How does the company view the industrial markets in 2026? - Management expresses optimism about the industrial markets, particularly in relation to packaging and e-commerce, which are expected to drive demand [60]

Financial Data and Key Metrics Changes - For Q4 2025, revenue decreased by 2% year-over-year, while operating income improved by 19% and diluted earnings per share increased by 24% compared to the prior year period [10] - For the fiscal year 2025, revenue declined by 1%, while operating income increased by 4% [11] - The company executed over $25 million in tracked savings in Q4, achieving a run rate of over $100 million in annualized cost savings [13] Business Line Data and Key Metrics Changes - The final mile business experienced soft market demand, particularly in furniture, exercise equipment, and appliances, while fulfillment business saw positive demand driven by off-price retail channels [20] - The dedicated business maintained flat operating income compared to 2024 results despite a lower fleet count, with strong new truck sales in Q4 [26] - Intermodal service volumes were down 2% year-over-year, with transcontinental volumes down 6% in the quarter, while eastern loads were up 5% [33] Market Data and Key Metrics Changes - Demand in Q4 aligned with expectations, with a tightening market observed around Thanksgiving continuing through year-end [15] - Customers view recent market tightening as temporary or seasonal rather than a structural shift, with many consolidating logistics providers [17] - The freight market is described as fragile, with limited elasticity in supply, indicating that small increases in demand could create significant market changes [40] Company Strategy and Development Direction - The company is focused on disciplined growth through operational excellence and leveraging investments in people, technology, and capacity [7][8] - A commitment to repairing margins to drive long-term value for shareholders is emphasized, with a focus on maintaining operational excellence [9] - The company is actively pursuing opportunities to convert highway truckload shipments to intermodal, positioning itself as a primary participant in intermodal discussions [32] Management's Comments on Operating Environment and Future Outlook - Management acknowledges ongoing inflationary cost pressures but highlights successful cost management and operational efficiencies [11] - The company enters 2026 with solid momentum operationally and financially, with a focus on maintaining a disciplined approach to growth [14] - Management expresses cautious optimism regarding market conditions, emphasizing the need for continued customer engagement and feedback [53] Other Important Information - The company spent $575 million on capital reinvestment in 2025 and executed a record $923 million in share repurchases [11][12] - The balance sheet remains healthy, with leverage just under the target of one times trailing 12-month EBITDA [12] Q&A Session All Questions and Answers Question: Can you elaborate on what you mean by the freight market being fragile? - Management indicates that the supply side has not changed significantly since Thanksgiving, and small increases in demand could create larger ripples in the market due to limited elasticity [39][40] Question: What is the opportunity for cost savings in 2026? - Management expresses confidence in exceeding the $100 million target for cost savings, citing successful execution of various cost initiatives [46] Question: How does the recent tighter capacity freight market impact expectations for dedicated sales? - Management acknowledges that while it is too early to see significant changes, there is optimism due to strong new customer acquisitions and a robust sales pipeline [69]

Financial Data and Key Metrics Changes - Revenue was roughly flat year over year, while operating income improved by 8% and diluted earnings per share improved by 18% compared to the prior year period [10][11] - Despite inflation in insurance, wages, employee benefits, and equipment costs, productivity and cost management efforts offset these headwinds [10][11] Business Line Data and Key Metrics Changes - Intermodal volumes declined by 1% year over year, but the company outperformed the broader truckload market decline due to customers converting freight to intermodal [15][32] - The final mile business faced challenges with soft demand for furniture, exercise equipment, and appliances, but positive demand was noted in the fulfillment network driven by off-price retail [20][21] - Integrated Capacity Solutions (ICS) saw modest sequential improvement in volumes, with rates up low to mid-single digits and winning volume with new customers [22] Market Data and Key Metrics Changes - Overall demand trended below normal seasonality for much of the quarter, with truckload capacity continuing to exit the market [14] - Truckload spot rates remained under pressure throughout the quarter, but recent regulatory developments are impacting capacity [14][66] Company Strategy and Development Direction - The company is focused on operational excellence, scaling investments, and repairing margins to drive stronger financial performance [5][6] - A significant emphasis is placed on lowering the cost to serve, with a goal of removing $100 million in structural costs from the business [12][13] - The company aims to leverage its reputation for service excellence to drive strategic growth and maximize returns on investments [6][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to adapt to rail consolidation and emphasized the importance of long-term agreements with major rail providers [7][31] - The company expects to continue generating significant cash flow and remains focused on strong returns with deployed capital [12][13] - Management acknowledged the challenges in the current market but remains optimistic about future growth opportunities [10][34] Other Important Information - The company has made progress in its initiative to lower costs, having eliminated over $20 million in the quarter [12] - The company is leveraging technology and automation to improve operational efficiency and customer satisfaction [81][84] Q&A Session Questions and Answers Question: Can you provide details on the $20 million cost savings and how it played out by segment? - Management indicated progress across all areas of the business, with improvements in efficiency and productivity noted in intermodal and dedicated services [37] Question: What is the outlook for pricing and how does it relate to the cost savings initiative? - Management clarified that while the rate environment has been challenging, the cost savings initiative is expected to enhance performance durability when the market improves [44][46] Question: How do you expect loads and volumes to trend in the upcoming quarter? - Management noted that while the ocean peak season may have ended, domestic demand is expected to remain strong as customers prepare for the holiday season [75]