Swifts' CEO Discusses Q2 2012 Results - Earnings Call Transcript

Swift Transportation Company (SWFT)

Q2 2012 Results Earnings Call

July 20, 2012 11:00 AM ET


Jason Bates – Investor Relations

Jerry Moyes – Founder and CEO

Richard Stocking – President and COO

Ginnie Henkels – Executive Vice President and CFO




Good evening. My name is [Roshanda], and I will be your conference operator today. At this time, I would like to welcome everyone to the Swift Transportation Second Quarter 2012 Q&A call. All lines will remain open throughout the conference call. (Operator Instructions)

Thank you. I would now like to turn the call over to Mr. Jason Bates. Sir, you may begin your conference.

Jason Bates

Thank you, [Roshanda]. We’d like to welcome everyone out to the Swift Transportation second quarter 2012 Q&A session. My name is Jason Bates and I oversee our Investor Relations activities.

As a reminder, we posted a comprehensive letter to stockholders summarizing the results of our second quarter and that’s done on the front page of our IR website, which is ir.swifttrans.com. We will start the call today with our forward-looking statement disclosure.

Today’s call contain statements that may constitute forward-looking statements which are based on information currently available, usually identified by words such as anticipates, believes, estimates, plans, projects, expects, hopes, intends, will, could, may or similar expressions which speak only as of the date the statement was made. Such forward-looking statements are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

Such forward-looking statements are inherently uncertain, are based upon the current beliefs, assumptions and expectations of company management and current market conditions, which are subject to significant risks and uncertainties as set forth in the risk factor section of our annual report, Form 10-K, for the year ended December 31, 2011.

As to the company’s business and financial performance, there are many factors that could cause actual results to differ materially from those in any forward-looking statements.

You should understand that there are many important factors in addition to those discussed and in our filings with the SEC that could impact us financially. As a result of these and other factors, actual results may differ from those set forth in the forward-looking statements, and the price of the company’s securities may fluctuate dramatically.

The company makes no commitment and disclaims any duty to update or revise any forward-looking statements to reflect future events, new information, or changes in these expectations.

In addition to our GAAP results, this presentation also includes certain non-GAAP financial measures as defined by the SEC. The calculation of each measure, including reconciliation to the most closely-related GAAP measure, and the reasons management believes each non-GAAP measure is useful are included in the schedules attached to our letter to stockholders.

So with that out of the way, I’d like to recognize the members of Swift’s management team on the line today. We have Jerry Moyes, our Founder and Chief Executive Officer, who is joining us remotely from one of our terminals; Richard Stocking, our President and Chief Operating Officer; and Ginnie Henkels, our Executive Vice President and Chief Financial Officer. Again, my name is Jason Bates, and I will be moderating today’s Q&A session.

So we appreciate all the questions that were sent in last night. We have grouped them into categories and we’ll try to get through as many of them as possible today.

With that, let’s go and start-off with the few questions on our rates.

Question-and-Answer Session

Jason Bates

Richard, rate improvement of 2.5% was slightly below previous guidance of 3% to 4%. Is this due to softening -- to a softening economic environment? Why did you lower your guidance to 3% to 3.5%? What drove the decline in dedicated pricing per loaded mile?

Richard Stocking

All right. Thanks, Jason, and good morning, everyone. To answer the first question, the lower consolidated rate improvements were actually a result of business mix and in economic environment that was less robust than we had originally anticipated.

As we mentioned in the letter, we achieved rate improvements of 3.3% in the over-the-road linehaul service and we also lowered our guidance to 3%, 3.5% now that we had two quarters of actual results under our belt and have better perspective on the trends, as well as the mix impact of growing our dedicated service offering for the remainder of the year and the decline in dedicated rates was also a result in a change of business mix within the dedicated service offering.

Jason Bates

Can you provide some color on how rates trended throughout the second quarter on a monthly basis?

Richard Stocking

Yeah. Well, again, we don’t disclose the monthly details behind our rate per mile. I can’t say that the trend was positive and that it built throughout the quarter and we will continue to work on that momentum for the remainder of the year.

Jason Bates

What is your view on spot pricing? Are there any regions that pricing has been weaker or stronger?

Richard Stocking

Yeah. As we’ve stated in the past, we really don’t participate very much in the spot market. However, we do provide a service to our customers that’s more in line with repositioning, which we actually charge extra to reposition those trucks.

And we have seen that market remain relatively consistent on a year-over-year basis and we strongly believe that the repositioning need that our customers have will continue in the third and fourth quarter as it did last year.

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