Adjusted Gross Profit (AGP): $658 million, down 4% year-over-year.
NAST AGP: Declined by 7% year-over-year.
Global Forwarding AGP: Increased by 1% year-over-year.
Adjusted EPS: $0.86, excluding $12.9 million of restructuring charges and a $3.1 million tax provision benefit related to those charges.
Personnel Expenses: $371.1 million, down 2.2% year-over-year, excluding restructuring charges.
Capital Expenditures: $22.5 million, down 16.6%.
Returned to Shareholders: $91 million primarily through dividends.
Future Guidance
Personnel Expenses: Expected to be in the range of $1.4 billion to $1.5 billion for 2024, excluding restructuring charges.
SG&A Expenses: Expected to be in the range of $575 million to $625 million for 2024, excluding restructuring charges.
Depreciation and Amortization Expense: Expected to be $90 million to $100 million in 2024.
Capital Expenditures: Expected to be $85 million to $95 million in 2024.
Effective Tax Rate: Expected to be in the range of 17% to 19% for the full year 2024.
Productivity Improvements: Targeting an additional 15% improvement in NAST shipments per person per day and 10% in Global Forwarding shipments per person per month for 2024.
Trends, Market Conditions, Sentiment
Market Conditions: Continuing soft freight market with an oversupply of capacity seen through most of Q1 2024.
New Operating Model: Implementation of a lean-based operating model to improve discipline, transparency, urgency, and consistency in decision-making.
Technology Investments: Leveraging AI technology and other digital capabilities for operational efficiencies and improved client services.
Global Disruptions: Navigating challenges such as conflict in the Red Sea affecting transit times and capacity.
Increased Ocean Rates: Noted sharp increase in Q1 on several trade lines, influenced by global disruptions but expecting stabilization as capacity adjusts.
Productivity Focus: Commitment to process simplification and waste elimination to improve operating leverage and efficiency.
Lean Practices: Emphasis on embedding lean practices to reduce waste and optimize organizational structure.
Customer Experience: High Net Promoter Scores indicating strong customer service and satisfaction levels.
Notable Quotes
David Bozeman, CEO: “Our first quarter results reflect a change in our execution and discipline as we began implementing a new lean-based operating model.”
David Bozeman, CEO: “Our team of logistics experts are the best in the business, and they continue to embrace the innovative technology that is acting as a force multiplier.”
Mike Zechmeister, CFO: “I’m encouraged by our improved execution, the deployment of the new operating model, opportunities for continued market share gains.”
Arun Rajan, COO: “With continued investment in our pricing science, contract management, and digital brokerage technology… we are responding faster than ever to dynamic market conditions.”
David Bozeman, CEO: “As we continue to deploy our new operating model, we’re now monitoring key input metrics and responding faster to air states and changing market conditions with countermeasures that improve our execution.”
